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Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
1
Designed by Eric Brengle B-books, Ltd.
CHAPTER
15
Advertising and Public Relations
Prepared byDeborah Baker
Texas Christian University
MarketingLamb, Hair, McDaniel
9
2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Learning Outcomes
Discuss the effects of advertising on market share and consumers
Identify the major types of advertising
Discuss the creative decisions in developing an advertising campaign
LOI
LO2
LO3
3Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Learning Outcomes
Describe media evaluation and selection techniques
Discuss the role of public relations in the promotional mix
LO5
LO4
4Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Discuss the effects of advertising on
market share and consumers
The Effects of AdvertisingLOI
5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter15
LOI The Effects of Advertising
U.S. advertising was almost $300 billion in 2006
In 2005, 32 companies spent over $1 billion each
The advertising industry is small—only 155,000 employed by the 12,000 advertising agencies
Ad budgets of some firms are almost $4 billion annually
6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15 LOI
The Effects of Advertising
Top Ten Leaders by U.S.Advertising Spending
Top Ten Leaders by U.S.Advertising Spending
7Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LOI Advertising and Market Share
New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share
1. Beyond a certain level of spending, diminishing returns set in.
2. New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits.
8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LOIThe Effects of Advertising on
Consumers
The average U.S. citizen is exposed to hundreds of ads each day.
Advertising may change a consumer’s negative attitude toward a product, or reinforce a positive attitude.
Advertising can affect consumer ranking of a brand’s attributes.
9Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
REVIEW LEARNING OUTCOMEEffects of Advertising
LOI
10Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Identify the major types of advertising
Major Types of AdvertisingLO2
11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Major Types of AdvertisingLO2
InstitutionalAdvertising
InstitutionalAdvertising
Enhances a company’s image rather than promotes a particular product.
Enhances a company’s image rather than promotes a particular product.
ProductAdvertising
ProductAdvertising
Touts the benefits of a specific good or service.
Touts the benefits of a specific good or service.
12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 15
LO2 Major Types of Advertising
Corporate identityCorporate identity
PioneeringPioneering
CompetitiveCompetitive
ComparativeComparative
ProductAdvertising
ProductAdvertising
InstitutionalAdvertisingInstitutionalAdvertising
Advocacy advertisingAdvocacy advertising
13Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 15
LO2 Product Advertising
PioneeringPioneeringPioneeringPioneering Stimulates primary demand for
new product or category Used in the PLC introductory stage
CompetitiveCompetitiveCompetitiveCompetitive Influences demand for brand in the
growth phase of the PLC Often uses emotional appeal
ComparativeComparativeComparativeComparative Compares two or more competing
brands’ product attributes Used if growth is sluggish, or if
competition is strong
Online
http://www.pizzahut.comhttp://www.papajohns.com
14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
REVIEW LEARNING OUTCOMEThe Major Types of Advertising
LO2
15Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Discuss the creative decisions in developing an
advertising campaign
Creative Decisions in AdvertisingLO3
16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Creative Decisions in Advertising
AdvertisingCampaign
AdvertisingCampaign
A series of related
advertisements focusing on a
common theme, slogan, and
set of advertising appeals.
LO3
17Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter15
Creative Decisions in AdvertisingLO3
Determine the advertising objectives
Make creative decisions Make media decisions
Evaluate the campaign
18Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15LO3
Define target audienceDefine target audience
Define desired percentage changeDefine desired percentage change
Define the time frame for change Define the time frame for change
Setting Objectives: The DAGMAR Approach
19Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter15
LO3 Creative Decisions
Develop and evaluateadvertising appeals
Develop and evaluateadvertising appeals
Execute the message
Execute the message
Evaluate thecampaign’s effectiveness
Evaluate thecampaign’s effectiveness
Identify product benefits
Identify product benefits
20Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15 LO3
“Sell the Sizzle, not the Steak”
Sell product’s benefits, not its attributes
A benefit should answer “What’s in it for me?”
Ask “So?” to determine if it is a benefit
Identify Product Benefits
21Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15 LO3
Identify Product Benefits
Attribute
Benefit
“Powerade’s new line has been reformulated to combine the scientific
benefits of sports drinks with B vitamins and to speed up energy
metabolism.”
“So, you’ll satisfy your thirst with a great-tasting drink that will power you
throughout the day.”
- So?
22Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO3 Advertising AppealsProfit
Health
Love or romance
Fear
Admiration
Convenience
Fun and pleasure
Vanity and egotism
Environmental Consciousness
Product saves, makes, or protects money
Appeals to body-conscious or health seekers
Used in selling cosmetics and perfumes
Social embarrassment, old age, losing health
Reason for use of celebrity spokespeople
Used for fast foods and microwave foods
Key to advertising vacations, beer, parks
Used for expensive or conspicuous items
Centers around environmental protection
23Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO3
Unique SellingProposition
Unique SellingProposition
A desirable, exclusive, and
believable advertising
appeal selected as the
theme for a campaign.
Unique Selling Proposition
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1 24
LO3
Executing the Message
Mood or Image
Mood or Image
MusicalMusical
Demon-stration
Demon-stration
ScientificScientific
Real/AnimatedProductSymbols
Real/AnimatedProductSymbols
FantasyFantasy
LifestyleLifestyleSlice-of-LifeSlice-of-Life
HumorousHumorous
Spokes-person/
Testimonial
Spokes-person/
Testimonial
25Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
REVIEW LEARNING OUTCOMECreative Decisions for Ad Campaign
LO3
Setadvertisingobjectives
Identify benefits
Develop appeal
Evaluate campaign results
Evaluatingresults helpsmarketersadjust objectivesfor futurecampaigns
Execute message
26Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Describe media evaluation and
selection techniques
Media Decisions in AdvertisingLO4
27Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 15
LO4 Media Decisions in Advertising
NewspapersNewspapers
MagazinesMagazines
Yellow PagesYellow Pages
InternetInternet
RadioRadio
TelevisionTelevision
Outdoor MediaOutdoor Media
Direct MailDirect Mail
Trade ExhibitsTrade Exhibits
Cooperative AdvertisingCooperative Advertising
BrochuresBrochures
CouponsCoupons
CatalogsCatalogs
Special EventsSpecial Events
Monitored MediaMonitored Media Unmonitored MediaUnmonitored Media
28Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15 LO4
Major Advertising Media
NewspapersNewspapers
MagazinesMagazines
RadioRadio
TelevisionTelevision
Outdoor MediaOutdoor Media
Yellow PagesYellow Pages
InternetInternet
29Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4 Newspapers
AdvantagesAdvantages
Geographic selectivity Short-term advertiser
commitments News value and
immediacy Year-round readership High individual market
coverage Co-op and local tie-in
availability Short lead time
DisadvantagesDisadvantages
Limited demographic selectivity
Limited color Low pass-along rate May be expensive
30Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4 Free Newspapers?
SOURCE: Joseph T. Hallinan, “Do New Free Dailies Mean Sun is Setting for Paid Newspapers?,”
Wall Street Journal, April 5, 2006, B1.
The new Baltimore Examiner is delivering 250,000 newspapers—at no charge and unsolicited!
Advertising brings in the revenue for this niche publication targeting households with income of $73,000 or more.
The ads are $2,900 for a full page, compared with $17,000 for its competition, the Baltimore Sun.
The Examiner is betting that low ad rates and the target market will be a valuable proposition to advertisers.
31Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4
CooperativeAdvertising
CooperativeAdvertising
Cooperative Advertising
An arrangement in which the
manufacturer and the retailer
split the costs of advertising
the manufacturer’s brand.
32Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4 Magazines
AdvantagesAdvantages DisadvantagesDisadvantages
Good reproduction
Demographic selectivity
Regional/local selectivity
Long advertising life
High pass-along rate
Long-term advertiser commitments
Slow audience build-up
Limited demonstration capabilities
Lack of urgency
Long lead time
33Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4 Radio
AdvantagesAdvantages DisadvantagesDisadvantages
Low cost
Immediacy of message
Short notice scheduling
No seasonal audience change
Highly portable
Short-term advertiser commitments
Entertainment carryover
No visual treatment
Short advertising life
High frequency to generate comprehension and retention
Background distractions
Commercial clutter
34Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4 Television
AdvantagesAdvantages DisadvantagesDisadvantages
Wide, diverse audience Low cost per thousand Creative opportunities for
demonstration Immediacy of messages Entertainment carryover Demographic selectivity
with cable
Short life of message Consumer skepticism High campaign cost Little demographic
selectivity with stations Long-term advertiser
commitments Long lead times for
production Commercial clutter
35Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4 TV Advertising: Is Less More?
The number of ads in TV shows is a longstanding complaint of viewers and advertisers.
The media is cluttered and consumers change channels or speed through commercials on a DVR.
Tests are being conducted to feature shorter commercial pods.
SOURCE: Suzanne Vranica, “TV-Ad Test to Show if Less is More,” Wall Street Journal, April 5,2006, B3.
Yea
rCommercial Minutes
per Hour
13.5 14 14.5 15 15.5
2000
01
02
03
04
05
36Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4 Outdoor Media
AdvantagesAdvantages DisadvantagesDisadvantages
Repetition
Moderate cost
Flexibility
Geographic selectivity
Short message
Lack of demographic selectivity
High “noise” level
37Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4 Internet
AdvantagesAdvantages DisadvantagesDisadvantages
Fast growing
Ability to reach narrow target audience
Short lead time
Moderate cost
Difficult to measure ad effectiveness and ROI
Ad exposure relies on “click through” from banner ads
Not all consumers have access to Internet
Online
http://www.fox.comhttp://www.abc.com
38Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter15
LO4 Alternative Media
Ads in MoviesAds in Movies
Interactive KiosksInteractive Kiosks
Computer Screen Savers
Computer Screen Savers
Shopping CartsShopping Carts
DVDsDVDs
AdvertainmentsAdvertainments
Cell Phone AdsCell Phone Ads
Subway Tunnel AdsSubway Tunnel Ads
Floor AdsFloor Ads
Video Game AdsVideo Game Ads
39Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4 Videogame Advertising
SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,”
Wall Street Journal, April 26,2006, B1.
Microsoft plans to acquire Massive inc., a start-up that places ads in video games.
Ads are inserted into the game environment.
Video games could become a large new medium for advertising.
40Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO4 Directory Assistance Advertising
SOURCE: Rebecca Buckman, “Your Listing, and a Word From Our Sponsor,”
Wall Street Journal, April 20,2006, B1.
Companies are offering free telephone directory assistance—but there’s an advertisement first.
The audio ads are narrowly targeted, and are 10 to 12 seconds.
The growth of such free services could represent another change in the telecom industry.
Dial 1-800-FREE411 or 1-800-411-METRO
41Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15 LO4
Qualitative Factors in Media Selection
Attention to the commercial and the program
Program liking
Lack of distractions
Other audience behaviors
42Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Media SchedulingLO4
ContinuousMedia Schedule
Flighted Media Schedule
PulsingMedia Schedule
SeasonalMedia Schedule
Advertising is run steadily throughout the period.
Advertising is run heavily every other month or every two weeks.
Advertising combines continuous scheduling with flighting.
Advertising is run only when the product is likely to be used.
43Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Media Scheduling on the WebLO4
Competition for Web advertising spots is driving up prices.
Some Web advertisers now run campaigns based on time of day. Examples:– McDonald’s: breakfast meals during morning
hours – Xerox: copier ads during the workday– Budweiser: beer ads on Friday afternoons
Scheduling Web ads during prime times is a more efficient use of ad dollars and more targeted.
SOURCE: David Kesmodel, “More Marketers Place Web Ads by Time of Day,” Wall Street Journal, June 23, 2006, B1.
44Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
REVIEW LEARNING OUTCOMEMedia Evaluation and Selection
LO4
Type: NewspaperMagazineRadioTelevisionOutdoorInternetAlternative
Considerations:
Mix How much of each?Cost per contact How much per person?Reach How many people?Frequency How often?Audience selectivity How targeted is audience?
Scheduling: continuous
flighted
pulsing
seasonal
Winter Spring Summer Fall
45Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Discuss the role of public relations
in the promotional mix
Public RelationsLO5
46Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Public RelationsPublic Relations
LO5 Public Relations
The element in the promotional
mix that:
evaluates public attitudes
identifies issues of public concern
executes programs to gain public acceptance
47Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO5
Press relations Press relations
Product publicityProduct publicity
Corporate communicationCorporate communication
Public affairsPublic affairs
LobbyingLobbying
Employee and investor relationsEmployee and investor relations
Crisis managementCrisis management
Functions of Public Relations
48Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO5
Product placementProduct placement
Consumer educationConsumer education
Event sponsorshipEvent sponsorship
Issue sponsorshipIssue sponsorship
Internet Web sitesInternet Web sites
New product publicityNew product publicity
Public Relations Tools
Online
http://www.vw.comhttp://www.chevrolet.com
49Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
LO5 Example of Consumer Education
SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,”
Wall Street Journal, April 8-9, 2006, B1.
Corporations are teaching public school students about personal finance.
People under age 25 are a fast-growing group for credit card debt increases and bankruptcy.
Is it appropriate to use educational materials with a corporate identity?
How should financial literacy be taught?
50Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
CrisisManagement
CrisisManagement
LO5 Managing Unfavorable Publicity
A coordinated effort to handle
the effects of unfavorable
publicity or of an unfavorable
event.
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
Biz Flix
Ed
TV
51
LO5
52Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15
REVIEW LEARNING OUTCOMEThe Role of Public Relations
LO5