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1 Chapter 13
2 Advertising, Sales Promotion, and Public Relations
1.1 ETHICAL DIMENSION 13
Ethical Perspective
1. Marketers: Should a marketer be allowed to use information from an individual’s social
networking profile? Is targeted messaging based on analysis of personal information ethical?
2. Teenagers: Should teenagers be able to provide false information to gain access to Web sites
restricted by age or some other characteristic?
1.2 KEY TERMS
advertising wearout When customers become bored with an existing advertising campaign.
advertising response function An effect in which, beyond a certain ad spending level,
diminishing returns tend to set in.
institutional advertising Advertising that promotes industry, company, family of brands, or
some other issues broader than a specific product.
product advertising Advertising designed to increase purchase of a specific offering.
pioneering advertising Advertising intended to stimulate primary demand, typically during the
introductory or early growth stages of an offering.
competitive advertising Advertising intended to build sales of a specific brand through shifting
emotional appeal, persuasion, and providing information.
comparative advertising Advertising in which two or more brands are directly compared
against each other on certain attributes.
reach The percentage of individuals in a defined target market that are exposed to an ad during a
specific time period.
frequency The average number of times a person in the target market is exposed to the message.
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advertising execution The way an advertisement communicates the information and image.
clutter The level of competing messages on a particular medium.
trade show An industry- or company-sponsored event in which booths are set up for the
dissemination of information about offerings to members of a channel.
cooperative advertising and promotion When a manufacturer provides special incentive
money to channel members for certain promotional performance.
publicity An unpaid and relatively less personal form of marketing communications, usually
through news stories and mentions at public events.
buzz Word-of-mouth communication generated about a brand in the marketplace.
event sponsorship Having your brand and company associated with events in the sports, music,
arts, and other entertainment communities.
crisis management A planned, coordinated approach for disseminating information during times
of emergency and for handling the effects of unfavorable publicity.
1.3 APPLICATION QUESTIONS
1. Consider the concept of advertising wearout.
a. What is advertising wearout?
b. What do you think are some causes of the wearout?
c. Come up with as many ads as you can that, for you, are “worn out?” Can you recall how
long each ad interested you before wearout begin to set in?
2. Review Exhibit 13.1 on the Top 20 U.S. Advertisers.
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2 Advertising, Sales Promotion, and Public Relations
a. Look at those whose advertising went down by double digits from the prior year.
Speculate about what might have caused those advertisers’ expenditures to decline.
b. Do the same analysis of those whose advertising went up by double digits from the prior
year. What do you suppose might have caused each to go up?
3. Review the Common Approaches to Advertising Execution (Exhibit 13.2) and Pros and Cons
of Key Advertising Media (Exhibit 13.3). Review some ads in any three of the seven
different types of media identified, watching for examples of the different execution
approaches.
a. Make notes about the ads you reviewed and the different types of media execution you
witnessed. Which ads do you think were the most effective? Why?
b. For the same ads, based on the chapter’s list of pros and cons for each, identify specific
examples of ads for which one or more of the pros and cons apply.
c. Share your findings with another student or with the class.
MANAGEMENT DECISION CASE: Advertising to Gain or Keep Market Share in the
Hypercompetitive Insurance Space
Questions for Consideration:
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1. What types of advertising are being used by these insurance companies? Pick two of the
insurance companies listed, go online and review their current ad campaign, describe their
ads, and then indicate if they are using product, institutional, pioneering, or comparative
advertising. Be sure to justify your selection.
2. Many of the ads for insurance referred to in the case are primarily transmitted to the target
audience using television as the medium. However, the proliferation of DVRs means that
fewer people are actually watching the ads in real time and instead are fast- forwarding
through them to get to the show content. With that in mind, what other media do you
recommend that these companies use to reach their target audience? That is, how should they
integrate the marketing communications?
3. Take a closer look at State Farm. What advertising strategy do you recommend it follow to
distinguish itself from its competitors? Be sure you discuss the type of advertising, the
executional style, and the type of media along with a justification for your choices.
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