Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1 Lamb, Hair, McDaniel...

Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1

Lamb, Hair, McDaniel

CHAPTER 17

Advertising and Public Relations

2011-2012

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The Effects of AdvertisingU.S. advertising declined in 2009 due to

economic conditions

In 2008, 37 companies spent more than $1 billion each

850,000 people work in media advertising such as newspapers, magazines, television, radio, and internet media.

More than 100 companies spend over $300 million annually on advertising.

LO1


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.

Beyond a certain level of spending, diminishing returns set in.

New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits.

LO1


The Effects of Advertising on Consumers

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.

LO1


Major Types of Advertising

InstitutionalAdvertising

InstitutionalAdvertising

Enhances a company’s image rather than promote a particular product.

Enhances a company’s image rather than promote a particular product.

ProductAdvertising

ProductAdvertising

Touts the benefits of a specific good or service.

Touts the benefits of a specific good or service.

LO2


Major Types of Advertising

Corporate identityCorporate identity

PioneeringPioneering

CompetitiveCompetitive

ComparativeComparative

ProductAdvertising

ProductAdvertising

InstitutionalAdvertisingInstitutionalAdvertising

Advocacy advertisingAdvocacy advertising

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

LO2


Creative Decisions in Advertising

A series of related

advertisements focusing on a

common theme, slogan, and

set of advertising appeals.

AdvertisingCampaign

AdvertisingCampaign

LO3


Creative Decisions in AdvertisingDetermine the

advertising objectives

Make creative decisions Make media decisions

Evaluate the campaign

LO3


Setting Objectives: The DAGMAR Approach

Define target audience Define target audience

Define desired percentage change Define desired percentage change

Define the time frame for change Define the time frame for change

LO3


Creative Decisions

Develop and evaluate advertising appealsDevelop and evaluate advertising appeals

Execute the messageExecute the message

Evaluate the campaign’s effectivenessEvaluate the campaign’s effectiveness

Identify product benefitsIdentify product benefits

LO3


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 advertising offers attributes or benefits

LO3


Identify Product Benefits

Attribute

Benefit

“With just 10 calories per serving, Propel hydrates and contains

Vitamins C & E, B Vitamins, and antioxidants. Propel is conveniently available in both ready-to-drink and

powder form.”

“Propel fuels real women who are energized and empowered by

physical activity and understand their need to replenish, energize, and

protect in all aspects of their lives.”

“So?”

LO3


LO3

Exhibit 17.1Exhibit 17.1Common Advertising Common Advertising AppealsAppeals


Unique Selling Proposition

A desirable, exclusive, and believable

advertising appeal selected as the

theme for a campaign.

Unique SellingProposition

Unique SellingProposition

LO3


Executing the Message

Mood or Image

Mood or Image

MusicalMusical

Demon-stration

Demon-stration

ScientificScientific

Real/AnimatedProduct

Real/AnimatedProduct

FantasyFantasy

LifestyleLifestyleSlice-of-LifeSlice-of-Life

HumorousHumorous

Spokes-person/

Testimonial

Spokes-person/

Testimonial

LO3

SymbolsSymbols


Media Decisions in Advertising

NewspapersNewspapers

MagazinesMagazines

RadioRadio

TelevisionTelevision

InternetInternet

Outdoor MediaOutdoor Media

Direct MailDirect Mail

Trade ExhibitsTrade Exhibits

Cooperative AdvertisingCooperative Advertising

BrochuresBrochures

CouponsCoupons

CatalogsCatalogs

Special EventsSpecial Events

Monitored MediaMonitored Media Unmonitored MediaUnmonitored Media

LO4


Major Advertising Media

NewspapersNewspapers

MagazinesMagazines

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

InternetInternet

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

LO4


An arrangement in which the

manufacturer and the retailer

split the costs of advertising

the manufacturer’s brand.

Cooperative Advertising

CooperativeAdvertising

CooperativeAdvertising

LO4


Magazines


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

LO4


Radio


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

LO4


Television


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

LO4


Internet


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

LO4


Outdoor Media


Repetition Moderate cost Flexibility Geographic selectivity


Short message Lack of demographic

selectivity High “noise” level

LO4


GGooooggllee’s AdWords (Ads Work!)

Google's total revenue in 2008 was $21.8 billion and of this, $21.1 billion was derived from advertising. At the end of its third quarter in 2009, the company’s total revenue was $16.9 billion, $16.4 billion from advertising.

To appreciate just how much Google has grown, consider this—in 2003 the company's total revenue was $1.46 billion with advertising revenue representing $1.42 billion.

Source: http://investor.google.com/fin_data.html last visited November 12, 2009LO4

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Alternative Media

Ads before MoviesAds before Movies

Interactive KiosksInteractive Kiosks

Computer Screen Savers

Computer Screen Savers

Shopping CartsShopping Carts

DVDs and CDsDVDs and CDs

AdvertainmentsAdvertainments

Cell Phone AdsCell Phone Ads

Subway Tunnel AdsSubway

Tunnel Ads

Floor AdsFloor Ads

Video Game AdsVideo Game Ads

LO4


Media Selection Considerations

Medium FlexibilityMedium Flexibility

Target Audience Considerations

Target Audience Considerations

ReachReach

Cost Per ContactCost Per Contact

FrequencyFrequency Noise LevelNoise Level

Medium Life SpanMedium Life Span


Qualitative Factors in Media Selection

Attention to the commercial and the program

Involvement Program liking Lack of distractions Other audience behaviors

LO4


Media Scheduling

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.

LO4


Public Relations

The element in the promotional

mix that:

Public Relations

Public Relations

evaluates public attitudes

identifies issues of public concern

executes programs to gain public acceptance

LO5


Functions of Public Relations

Press relations Press relations

Product publicityProduct publicity

Corporate communicationCorporate communication

Public affairsPublic affairs

LobbyingLobbying

Employee and investor relationsEmployee and investor relations

Crisis managementCrisis management

LO5


Public Relations Tools

Product placementProduct placement

Consumer educationConsumer education

SponsorshipSponsorship

Company Web sitesCompany Web sites

New product publicityNew product publicity

LO5


Consumer Education Sitesconsumer.gov/idtheft Identity theft

privacyrights.org Consumer privacy rights and responsibilities

annualcreditreport.com One free credit report/consumer each year

consumeraction.gov Broad range of consumer education topics

consumerworld.org Latest consumer news

consumerreports.org/main/home.jsp Unbiased product information

consumer.gov Directs consumers to fed gov’t sites

pueblo.gsa.gov Brochures and pamphlets

ftc.gov/ftc/consumer.htm Unfair and deceptive business practices

fcc.gov Radio, television, satellite, and telephone

motorist.org Lists car repair shops meeting set standards

recall.gov Safety and product recall information

cpsc.gov Safety, toys, nursery equipment, home appliances, furniture, computers, fireworks

nhtsa.gov Defects in automobiles, crash test ratings, safety recalls, air bags and child safety seats

fda.gov Food safety or food products, prescription or over the counter drugs, or medical devices

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Managing Unfavorable Publicity

A coordinated effort to handle the

effects of unfavorable publicity or an

unexpected unfavorable event.

CrisisManagement

CrisisManagement

LO5

Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1 Lamb, Hair, McDaniel...

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