Chapter 15: Advertising & Sales Promotions · • Consumer sales promotion method – Designed to...

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Chapter 15: Advertising & Sales Promotions

Developing Integrated Marketing Communications

Copyright © Cengage Learning. All rights reserved 15 | 1

Chapter Overview


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Learning Objectives

1. Describe integrated marketing communicationscommunications.

2. Understand the role of promotion.3. Explain the purposes of the three types of

advertising.4. Describe the advantages and disadvantages

of the major advertising media.5. Identify the major steps in developing an

advertising campaign.


Learning Objectives (cont’d)

6. Recognize the various kinds of salespersons, the steps in the personal selling process andthe steps in the personal‐selling process, and the major sales management tasks.

7. Describe sales promotion objectives and methods.

8. Understand the types and uses of public l tirelations.

9. Identify the factors that influence the selection of promotion mix ingredients.


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What Is Integrated Marketing Communications?

• Coordination of promotion efforts for maximum informational and persuasive impact oninformational and persuasive impact on customers

• Results in a consistent message to customers, long‐term customer relationships, and the efficient use of promotional resources− Mass media advertising has given way to targeted promotional

l ( bl TV di il d h I )tools (e.g., cable TV, direct mail, and the Internet)− The overall cost of marketing communications has risen

significantly, pressuring managers to make the most efficient use of marketing resources


The Role of Promotion• Promotion

– Commonly the object of two misconceptions• Promotional activities make up the entire field of marketingPromotional activities make up the entire field of marketing• Promotional activities are unnecessary and cause higher prices

• Role of promotion– To facilitate exchanges directly or indirectly by informing

individuals, groups, or organizations and influencing them to accept a firm’s products or to have more positive feelings about the firm

• Convey product and service information directly to target market• Convey product and service information directly to target market segments

• Provide information to interest groups, regulatory agencies, investors, and the general public

– To maintain positive relationships between a company and various groups in the marketing environment


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Information Flows Into andOut of an Organization

• A promotional activity’s effectiveness d d th i f ti il bl tdepends on the information available to marketers


Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 15th ed. (Mason, Ohio: South-Western/Cengage Learning, 2010). Adapted with permission.

The Promotion Mix

• The particular combination of promotion methods a firm uses to reach a target market– Advertising

• A paid nonpersonal message communicated to a select audience through a mass medium

– Personal selling• Personal communication aimed at informing customers and

persuading them to buy a firm’s products– Sales promotion

• The use of activities or materials as direct inducements toThe use of activities or materials as direct inducements to customers or salespersons

– Public relations• Communication activities used to create and maintain favorable

relations between an organization and various public groups, both internal and external


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Possible Ingredients for an Organization’s Promotion Mix



Types of Advertising by Purpose

• Primary‐demand advertising– Used to increase demand for all brands of a product in a specific

industry• Selective‐demand (brand) advertising

– Used to sell a particular brand of product– Immediate‐response advertising

• To persuade customers to buy the product within a short time

– Reminder advertising• To keep the firm’s name fresh in the public’s mind

d– Comparative advertising• Compares specific characteristics of two or more brands to show the

advertiser’s brand is better

• Institutional advertising– Designed to enhance a firm’s image or build its reputation


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Advertising Spending by Media and Total Dollars Spent


Source: Robert Coen, “Insider’s Report,” July 2008, p. 4.

Advertising Media• The forms of communication through

which advertising reaches its audience• Newspapers• Newspapers

– Relatively inexpensive and timely; short life span

• Magazines– Reach a specific market segment; more

prestigious than newspapers; high cost; lack of ltimeliness

• Direct mail– Most selective; effectiveness can be measured;

emailCopyright © Cengage Learning. All

rights reserved 15 | 12

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Advertising Media (cont’d)

• Yellow pages advertising– Print and online; local; purchased for 1 yearp y

• Out‐of‐home advertising– Short promotional messages on billboards, posters,

signs, and vehicles; focuses on geographic area; fairly inexpensive

• Television– The primary medium for larger firms trying to reach

national or regional markets– Network time; local time; sponsoring a show; spot

time; infomercialsCopyright © Cengage Learning. All


Advertising Media (cont’d)

• Radio– Offers selectivity; most accessible medium; can

be less expensive than other media

• Internet– Increasingly popular; can be expensive;

potentially large audience; can target precisely; effectiveness is questionableq

– Banner and button ads; sponsorship ads; keyword ads; interstitials


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Using the Internet• Advertising Age is the industry’s preeminent

source of marketing, advertising, and media news, information, and analysis.

http://www.adage.com


Major Steps in Developing an Advertising Campaign

1. Identify and analyze the target audience2. Define the advertising objectives3. Create the advertising platform4. Determine the advertising budget5. Develop the media plan6. Create the advertising message7. Execute the campaign8 Evaluate advertising effectiveness8. Evaluate advertising effectiveness


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BMW’s Advertising Campaign


Advertising Agencies• Independent firms that plan, produce, and

place advertising for their clientsplace advertising for their clients

• Large agencies also help with sales promotion and public relations

• Media usually pay a commission to agencies

• Firms may use both in‐house advertising y gdepartments and an independent agency


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Top 10 National Advertisers1. Procter & Gamble Co.2. AT&T3 V i C i ti3. Verizon Communications 4. General Motors 5. Time Warner6. Ford Motor Co.7. GlaxoSmithKline8. Johnson & Johnson9. Walt Disney Co.10. Unilever


Source: Reprinted with permission of June 23, 2008 issue of Advertising Age. Copyright, Crain Communications Inc., 2008.

Top Ten Brands in Product Placement

Brand Occurrences on TVCoca-Cola Soft Drinks 2,99024 Hour Fitness Centers 1,765 Chef Revival Apparel 1,308AT&T Wireless Text Messaging 701Pussycat Dolls Nightclubs 602

Nike Sport Footwear 575Freemotion Fitness Exercise Equipment 409


Source: Nielsen Product Placement, January-June 2008, http://blog.nielsen.com/nielsenwire/consumer/top-10-product-placement-brands-010108-063008/; accessed February 22, 2009.

Chicago Bears Football Team 383Nike Apparel 378Precor Exercise Equipment 374

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Social and Legal Considerations in Advertising

• Criticisms– Advertising is wastefulAdvertising is wasteful

– Advertising is deceptive

• Benefits– Advertising is the most effective and least expensive means of

communicating to a large number of individuals and organizations

Advertising encourages and is a means of competition; it thus– Advertising encourages and is a means of competition; it thus leads to new/better products, more choice, lower prices

– Advertising revenues support our mass communication media

– Advertising provides job opportunities


Debate Issue: Is It Appropriate for Marketers to Advertise to Children?

YES

• Children have billions of

NO

• Television advertising alters ’ f lidollars in discretionary

income and spend almost all of it.

• Children buy regularly.

• Children are heavily influenced by television

one’s sense of reality, making children more prone toward “need gratification” and more susceptible to peer pressure.

• Most purchase decisions are made by parentsinfluenced by television

advertising.

• Children directly influence more than $40 billion in adult purchases each year.

made by parents.

• On certain issues, children are easily deceived.


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Personal Selling• The most adaptable promotion method

• The most expensive promotion method

• Kinds of salespersons

– Order getter• Responsible for creative selling: selling a firm’s products to

new customers and increasing sales to present customers

– Order taker• Handles repeat sales in ways that maintain positive

relationships with customers


Personal Selling (cont’d)

• Kinds of salespersons (cont’d)– Sales support personnel

• Employees who aid in selling but are more involved in locating prospects, educating customers, building goodwill for the firm, and providing follow‐up service

• Missionary salespersons– Visit retailers to encourage an initial purchase of the

manufacturer’s products from wholesalers

• Trade salespersons• Trade salespersons– Work with customers to promote and increase retail sales of

the manufacturer’s products

• Technical salespersons– Assist current customers with technical matters related to the

manufacturer’s productsCopyright © Cengage Learning. All


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The Personal‐Selling Process (cont’d)


Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 15th ed. (Mason, Ohio: South-Western/Cengage Learning,

2010). Adapted with permission.

Managing Personal Selling• Setting sales objectives

– Concrete, quantifiable terms

S ifi d ti i d– Specified time period

– Specified geographic area

• Adjusting the size of the sales force to meet changes in the firm’s marketing plan and the marketing environment

• Attracting and hiring effective salespersons

• Training salespersons

• Compensating salespersons

• Motivating salespersons


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Sales Promotion

• Activities or materials that are direct inducements to customers or salespersons

• Objectives– To draw new customers– To encourage trial of a new product– To invigorate the sales of a mature brand– To boost sales to current customers– To reinforce advertising– To increase traffic in retail stores– To steady irregular sales patterns– To build up reseller inventories– To neutralize competitive promotional efforts– To improve shelf space and displays


Sales Promotion Methods• Consumer sales promotion method

– Designed to attract consumers to particular retail stores and to motivate them to purchase certain new or established products

• Trade sales promotion method– Designed to encourage wholesalers and retailers to stock

and actively promote a manufacturer’s product• Factors influencing the choice of sales promotion method

– Objectives of the sales promotional effortP d t h t i ti– Product characteristics

– Target market profile– Distribution channels– Availability of resellers– Competitive and regulatory forces in the environment


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Sales Promotion Methods (cont’d)

• Rebate– A return of part of the purchase price of a product

• Coupon– Reducing the purchase price of a particular item by a stated

amount at the time of purchase• Sample

– A free product given to customers to encourage trial• Premium

– A gift a producer offers to a customer in return for buying itsA gift a producer offers to a customer in return for buying its product

• Frequent‐user incentives– A program that rewards customers who engage in repeat

(frequent) purchases


Sales Promotion Methods (cont’d)

• Point‐of‐purchase displays– Promotional material in the retail store designed to inform g

customers and encourage purchases• Trade shows

– Industry‐wide exhibits at which many sellers display their products

• Buying allowance– A temporary price reduction to resellers for purchasing specified

titi f d tquantities of a product• Cooperative advertising

– A manufacturer agrees to pay a certain amount of the retailer’s media cost for advertising the manufacturer’s product


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Public Relations

• A broad set of communication activities used to create and maintain favorable relationships between an organization and various public groups, both internal and external– Customers, employees, stockholders, suppliers, educators, the

media, government officials, society in general• Types of public relations tools

– Written and spoken communications• Brochures, newsletters, company magazines, annual reports, news

releases corporate‐identity materials speechesreleases, corporate identity materials, speeches– Event sponsorship

• Special events such as concerts and charity functions that the firm underwrites wholly or partially


Public Relations (cont’d)

• Publicity– Communication in news‐story form about an

organization, its products, or both

News releaseFeature articleCaptioned photograph


p p g pPress conference

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The Uses of Public Relations

• To promote people, places, activities, ideasT h th t ti f th i ti• To enhance the reputation of the organization by increasing awareness of company products and activities

• To create specific positive company images• To maintain the public visibility of the

company• To reduce the effects of negative events on

the company’s reputation


Class Exercise

• For each promotion method listed below, provide an example of a product that could be promoted an example of a product that could be promotedusing that method.– Selective‐demand advertising– Institutional advertising– Primary‐demand advertising– Personal selling– Free sampleFree sample– Coupon– Feature article– Press conference


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Promotion Planning

• Promotional campaign– A plan for combining and using the four

promotional methods—advertising, personal selling, sales promotion, and public relations—in a particular promotion mix to achieve one or more marketing goals

• What will be the role of promotion in the overall• What will be the role of promotion in the overall marketing mix?

• To what extent will each promotional method be used in the promotion mix?


Promotion and Marketing Objectives• Providing product information to target

markets

• Increasing market share by convincing new customers to purchase

• Positioning the product relative to the images customers have of competing products

• Stabilizing sales by increasing sales during slack periods or for products that are declining


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Developing the Promotion Mix• Marketers may use several promotion

mixes at the same time for different dproducts

• The promotion mix ingredients depend on– Organizational resources and objectives

– Target market characteristics

Product characteristics– Product characteristics

– The cost and availability of promotional methods


Chapter Quiz1. “Drink More Milk” and “Got Milk?” are examples of

a) public relations.b) institutional advertisingb) institutional advertising.c) primary-demand advertising.d) publicity.e) selective-demand advertising.

2. When Coca-Cola introduced its new Vanilla Coke, it primarily used ____________ advertising in order to quickly reach a national market


quickly reach a national market.a) newspaperb) televisionc) radiod) magazinee) outdoor

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Chapter Quiz (cont’d)

3. The two main complaints about advertising by critics are that it

a) is malicious, and it causes unnecessary competitioncompetition.

b) encourages society to lie and steal.c) is useless, and it is mean.d) wastes financial resources, and consumers are

hurt in the end due to higher prices.e) is wasteful, and it can be deceptive.

4. The first step in the personal‐selling process isa) approaching the prospect.b) h bb) answering the objections.c) making the presentation.d) prospecting.e) closing the sale.


Chapter Quiz (cont’d)

5. The development of a product image in buyers’ minds relative to their image of competing products is called

a) promoting.b) publicizing.c) positioning.d) placing.e) postinge) posting.


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Answers to Chapter Quiz1. “Drink More Milk” and “Got Milk?” are examples of

a) public relations.b) institutional advertising.b) institutional advertising.c) primary-demand advertising. (Correct)d) publicity.e) selective-demand advertising.

2. When Coca-Cola introduced its new Vanilla Coke, it primarily used _______ advertising in order to quickly reach a national market.


q ya) newspaperb) television (Correct)c) radiod) magazinee) outdoor

Answers to Chapter Quiz (cont’d)


a) is malicious, and it causes unnecessary competition.b) l d lb) encourages society to lie and steal.c) is useless, and it is mean.d) wastes financial resources, and consumers are hurt in

the end due to higher prices.e) is wasteful, and it can be deceptive. (Correct)

4. The first step in the personal‐selling process isa) approaching the prospect.b) answering the objectionsb) answering the objections.c) making the presentation.d) prospecting. (Correct)e) closing the sale.


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Answers to Chapter Quiz (cont’d)

5. The development of a product image in buyers’ minds relative to their image of competing products is called

a) promoting.b) publicizing.c) positioning. (Correct)d) placing.e) postinge) posting.


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© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.1 Information Flows Into and Out of an Organization


Info

rma

tion

Flo

ws In

to a

nd

Ou

t of a

n

Org

an

iza

tion

Information about

customers and

the marketing

environment

Organization

Promotion

3768X_15_ch15_p204-216.indd 2043768X_15_ch15_p204-216.indd 204 3/6/09 8:51:28 PM3/6/09 8:51:28 PM

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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.2 Possible Ingredients of a Promotion Mix

Possible Ingredients of a

Promotion Mix


Advertising

Sales promotion

Publicrelations

Personalselling


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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.3 Percent of Ad Dollars Spent on Selected Media

Source: Robert Coen, “Insider’s Report,” July 2008, p. 4.

Perc

en

t of A

d D

olla

rs S

pe

nt o

n

Sele

cte

d M

ed

ia

Television

Direct m

ail

New

spapers

Radio

Yellow Pages

Magazines

Internet

24

.4%

($6

9.8

billion)

21

.7%

($6

1.7

billion)

13

.7%

($3

8.8

billion)

6.6

% ($

18

.7 billion)

5.0

% ($

14

.2 billion)

4.9

% ($

13

.9 billion)

4.1

% ($

11

.8 billion)

Other

19

.6%

($5

6.1

billion)


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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.4 The Six Steps of the Personal-Selling Process

The Six Steps of the Personal-

Selling Process


Prospecting

Approachingthe prospect

Making thepresentation

Answeringobjections

Closing the sale

Following up6

5

4

3

2

1


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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.A Chapter Outline

Chapter 15 Outline

Developing Integrated Marketing Communications

What Is Integrated Marketing Communications?

The Role of Promotion

The Promotion Mix: An Overview

Advertising

– Types of Advertising by Purpose

– Advertising Media

– Major Steps in Developing an Advertising

Campaign

– Advertising Agencies

– Social and Legal Considerations in Advertising

Personal Selling

– Kinds of Salespersons

– The Personal-Selling Process

– Managing Personal Selling

Sales Promotion

– Sales Promotion Objectives

– Sales Promotion Methods

Public Relations

– Types of Public Relations Tools

– The Uses of Public Relations

Promotion Planning

– Promotion and Marketing Objectives

– Developing the Promotion Mix


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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.B Class Exercise

Class Exercise

In Chapter 15, a number of different promotional

methods are described along with examples of

goods or services that could be promoted using

them. For each promotion method listed below,

provide an example of a product that could be

promoted using that method.

Promotion Method Example of Good or

Service

1. Selective demand

advertising

2. Institutional

advertising

3. Primary-demand

advertising

4. Personal selling

5. Free sample

6. Coupon

7. Feature article

8. Press conference


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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.C Debate Issue

Debate Issue

Is it appropriate for marketers to

advertise to children?

YES

• Children have

billions of dollars

in discretionary

income and spend

almost all of it.

• Children buy

regularly.

• Children are

heavily infl uenced

by television

advertising.

• Children directly

infl uence more than

$40 billion in adult

purchases each

year.

NO

• Television

advertising alters

one’s sense of

reality, making

children more prone

toward “need

gratifi cation” and

more susceptible to

peer pressure.

• Most purchase

decisions are made

by parents.

• On certain issues,

children are easily

deceived.


211


Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.D Chapter Quiz

Chapter Quiz

1. “Drink More Milk” and “Got Milk?” are examples of

a. public relations.

b. institutional advertising.

c. primary-demand advertising.

d. publicity.

e. Selective-demand advertising.

2. When Coca-Cola introduced its new Vanilla Coke, it primarily

used____________advertising in order to quickly reach a national

market.

a. newspaper

b. television

c. radio

d. magazine

e. outdoor


a. is malicious, and it causes unnecessary competition.

b. encourages society to lie and steal.

c. is useless, and it is mean.

d. wastes fi nancial resources, and consumers are hurt in the

end due to higher prices.

e. is wasteful, and it can be deceptive.

4. The fi rst step in the personal-selling process is

a. approaching the prospect.

b. answering the objections.

c. making the presentation.

d. prospecting.

e. closing the sale.

5. The development of a product image in buyers’ minds relative to

their image of competing products is called

a. promoting.

b. publicizing.

c. positioning.

d. placing.

e. posting.


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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.E Types of Advertising

Types of Advertising

SELECTIVE (OR BRAND)

ADVERTISING

Advertising that is used to sell

a particular brand of product

INSTITUTIONAL ADVERTISING

Advertising designed to enhance a fi rm’s image or

reputation

PRIMARY-DEMAND

ADVERTISING

Advertising whose purpose is to increase the demand for all

brands of a good or service


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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.F General Steps for Developing and Implementing an

Advertising Campaign

Gen

era

l Ste

ps fo

r Develo

pin

g a

nd

Imp

lem

en

ting

an

Ad

vertis

ing

Ca

mp

aig

n


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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.G Major Publicity-Based Public Relations Tools

Publicity-Based Public

Relations Tools

• News releases

• Feature articles

• Captioned photographs

• Press conferences

• Interviews


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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.H Factors That Affect a Firm’s Promotional Mix Composition

Factors Affecting Promotional Mix

• Campaign objectives

• Available resources

• Target market

• Product

• Demographics

• Price

3768X_15_ch15_p204-216.indd 2153768X_15_ch15_p204-216.indd 215 3/7/09 4:14:34 AM3/7/09 4:14:34 AM

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Pride/Hughes/Kapoor, BUSINESS, 10th editionFigure 15.I Definition of Promotion

PROMOTION

Communication about an

organization and its

products that is intended to

inform, persuade, or remind

target market members


Chapter 15: Advertising & Sales Promotions · • Consumer sales promotion method – Designed to...

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