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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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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 2
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
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 3
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.
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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 4
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.
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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 5
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.
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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 6
Major Types of Advertising
Corporate identityCorporate identity
PioneeringPioneering
CompetitiveCompetitive
ComparativeComparative
ProductAdvertising
ProductAdvertising
InstitutionalAdvertisingInstitutionalAdvertising
Advocacy advertisingAdvocacy advertising
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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 7
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
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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 8
Creative Decisions in Advertising
A series of related
advertisements focusing on a
common theme, slogan, and
set of advertising appeals.
AdvertisingCampaign
AdvertisingCampaign
LO3
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 9
Creative Decisions in AdvertisingDetermine the
advertising objectives
Make creative decisions Make media decisions
Evaluate the campaign
LO3
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 10
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
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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 11
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
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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 12
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
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 13
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?”
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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 14
LO3
Exhibit 17.1Exhibit 17.1Common Advertising Common Advertising AppealsAppeals
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 15
Unique Selling Proposition
A desirable, exclusive, and believable
advertising appeal selected as the
theme for a campaign.
Unique SellingProposition
Unique SellingProposition
LO3
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 16
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
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SymbolsSymbols
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 17
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
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 18
Major Advertising Media
NewspapersNewspapers
MagazinesMagazines
RadioRadio
TelevisionTelevision
Outdoor MediaOutdoor Media
InternetInternet
LO4
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 19
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
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 20
An arrangement in which the
manufacturer and the retailer
split the costs of advertising
the manufacturer’s brand.
Cooperative Advertising
CooperativeAdvertising
CooperativeAdvertising
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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 21
Magazines
AdvantagesAdvantages
Good reproduction Demographic
selectivity Regional/local
selectivity Long advertising life High pass-along rate
DisadvantagesDisadvantages
Long-term advertiser commitments
Slow audience build-up
Limited demonstration capabilities
Lack of urgency Long lead time
LO4
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 22
Radio
AdvantagesAdvantages
Low cost Immediacy of message Short notice scheduling No seasonal audience
change Highly portable Short-term advertiser
commitments Entertainment carryover
DisadvantagesDisadvantages
No visual treatment Short advertising life High frequency to
generate comprehension and retention
Background distractions Commercial clutter
LO4
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 23
Television
AdvantagesAdvantages
Wide, diverse audience Low cost per thousand Creative opportunities for
demonstration Immediacy of messages Entertainment carryover Demographic selectivity
with cable
DisadvantagesDisadvantages
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
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 24
Internet
AdvantagesAdvantages
Fast growing Ability to reach
narrow target audience
Short lead time Moderate cost
DisadvantagesDisadvantages
Difficult to measure ad effectiveness and ROI
Ad exposure relies on “click through” from banner ads
Not all consumers have access to Internet
LO4
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 25
Outdoor Media
AdvantagesAdvantages
Repetition Moderate cost Flexibility Geographic selectivity
DisadvantagesDisadvantages
Short message Lack of demographic
selectivity High “noise” level
LO4
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 26
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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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 27
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
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 28
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
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 29
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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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 30
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.
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Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 31
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
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 32
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
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 33
Public Relations Tools
Product placementProduct placement
Consumer educationConsumer education
SponsorshipSponsorship
Company Web sitesCompany Web sites
New product publicityNew product publicity
LO5
Chapter 17 Copyright ©2012 by Cengage Learning Inc. All rights reserved 34
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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