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Chapter 17: Advertising and Public Relations
Prepared by Amit Shah, Frostburg State University
Designed by Eric Brengle, B-books, Ltd.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Learning Outcomes
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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
LO1
LO2
LO3
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Learning Outcomes
3
Describe media evaluation and selection techniques
Discuss the role of public relations in the promotional mix
LO5
LO4
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The Effects of Advertising
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Discuss the effect of advertising on market share
and consumers.
LO1
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The Effects of Advertising
• In recent years, 30 companies spent over $1 billion each
• The advertising and marketing services employ approximately 750,000 people.
• Ad budgets of some firms are almost $4 billion annually.
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The Effects of Advertising
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Top Ten Leaders by U.S.Advertising Spending
Top Ten Leaders by U.S.Advertising Spending
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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.
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The Effects of Advertising on Consumers
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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.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Review Learning OutcomeEffects of Advertising
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LO1
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Major Types of Advertising
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Identify the major types of advertising.
LO2
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Major Types of Advertising
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Institutional Advertising- Enhancesa company’s image rather than promotes a particular product.
Product Advertising- Touts thebenefits of a specific good or
service.
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Major Types of Advertising
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Corporate identityCorporate identity
PioneeringPioneering
CompetitiveCompetitive
ComparativeComparative
ProductAdvertising
ProductAdvertising
InstitutionalAdvertisingInstitutionalAdvertising
Advocacy advertisingAdvocacy advertising
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Product Advertising
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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
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Review Learning OutcomeThe Major Types of Advertising
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LO2
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Creative Decisions in Advertising
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Discuss the creative
decisions in developing an
advertising campaign.
LO3
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Creative Decisions in Advertising
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Advertising Campaign - A series
of related advertisements
focusing on a common theme,
slogan, and set of
advertising appeals.
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Creative Decisions in Advertising
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Determine the advertising objectives
Make creative decisions Make media decisions
Evaluate the campaign
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Setting Objectives: The DAGMAR Approach
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Define target audienceDefine target audience
Define desired percentage changeDefine desired percentage change
Define the time frame for change Define the time frame for change
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Creative Decisions
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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
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Identify Product Benefits
• “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
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Identify Product Benefits
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Attribute
Benefit
“SoBe Life Water has reformulated five delicious, low-calorie flavors,
each infused with essential vitamins and healthy herbal ingredients.”
“SoBe Life Water is not only an enhanced water; it is a lifestyle unto
itself. It provides consumers the healthiest, most fun and refreshing products, delivering the incredibly
positive benefits of hydration.”
- So?
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Advertising Appeals
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Profit
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
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Unique Selling Proposition
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A desirable, exclusive, and
believable advertising appeal
selected as the theme
for a campaign.
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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
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Review Learning OutcomeCreative Decisions for Ad Campaign
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LO3
Setadvertisingobjectives
Identify benefits
Develop appeal
Evaluate campaign results
Evaluatingresults helpsmarketersadjust objectivesfor futurecampaigns
Execute message
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Media Decisions in Advertising
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Describe media evaluation and
selection techniques.
LO4
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Media Decisions in Advertising
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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
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Major Advertising Media
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NewspapersNewspapers
MagazinesMagazines
RadioRadio
TelevisionTelevision
Outdoor MediaOutdoor Media
Yellow PagesYellow Pages
InternetInternet
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Newspapers
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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
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Cooperative Advertising
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An arrangement in which themanufacturer and the retailersplit the costs of advertising
the manufacturer’s brand.
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Magazines
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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
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Radio
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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
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Television
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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
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
TV Advertising: Is Less More?• The number of ads in TV shows is
a longstanding complaint of viewers and advertisers.
• Tests are being conducted to feature shorter commercial pods.
• A significant trend to affect television advertising is the rise in popularity of digital video recorders (DVRs) such as TiVo.
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Outdoor Media
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AdvantagesAdvantages DisadvantagesDisadvantages
Repetition
Moderate cost
Flexibility
Geographic selectivity
Short message
Lack of demographic selectivity
High “noise” level
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Internet
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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
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Videogame Advertising
• In 2006, Microsoft acquired 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.
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SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,”
Wall Street Journal, April 26,2006, B1.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Cell Phones• Newest advertising media.
• Useful for reaching youth market.
• Over 4 billion cell phone users in the world.
• In 2008 cell phone ad sales reached over $1.6 billion in U.S. – nearly $4.4 billion worldwide.
38Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Media Selection• Media Mix – Combination of media to be used
for a promotional campaign
• Cost per contact – The cost of reaching one member of the target market
• Reach – number of target consumers exposed to a commercial at least once during a specific period, usually four weeks
• Frequency – number of times an individual is exposed to a given message during a specific period
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Qualitative Factors in Media Selection
• Attention to the commercial and the program
• Involvement
• Program liking
• Lack of distractions
• Other audience behaviors
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Media Scheduling
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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.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Review Learning OutcomeMedia Evaluation and Selection
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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 FallCopyright 2010 by Cengage Learning Inc. All Rights Reserved
Public Relations
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Discuss the role of public
relations in the promotional mix.
LO5
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Public Relations
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The elements in the promotional mix that:
-evaluate public attitudes,-identify issues of public concern,
-execute programs to gain public acceptance.
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Functions of Public Relations
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Press relations Press relations
Product publicityProduct publicity
Corporate communicationCorporate communication
Public affairsPublic affairs
LobbyingLobbying
Employee and investor relationsEmployee and investor relations
Crisis managementCrisis management
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Public Relations Tools
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Product placementProduct placement
Consumer educationConsumer education
SponsorshipSponsorship
Web sitesWeb sites
New product publicityNew product publicity
Online
http://www.vw.comhttp://www.chevrolet.com
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Example of Consumer Education
• 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?
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SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,”
Wall Street Journal, April 8-9, 2006, B1.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Managing Unfavorable Publicity
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Crisis Management -A coordinated effort to handle
the effects of unfavorablepublicity or of an
unfavorable event.
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Review Learning OutcomeThe Role of Public Relations
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LO5
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