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Chapter 16 - Managing Mass Communications: Advertising,
Sales Promotions, events and Experiences, and Public
Relations
I..................................... Chapter Overview/Objectives/Outline
A. Overview
Marketing communications is one of the four major elements of the company’s marketing mix.
Marketers must know how to use advertising, sales promotion, direct marketing, public
relations, and personal selling to communicate the product’s existence and value to the target
customers.
The communication process itself consists of nine elements: sender, receiver, encoding,
decoding, message, media, response, feedback, and noise. Marketers must know how to get
through to the target audience in the face of the audience’s tendencies toward selective
attention, distortion, and recall.
Developing the promotion program involves eight steps. The communicator must first identify
the target audience and its characteristics, including the image it carries of the product. Next,
the communicator has to define the communication objective, whether it is to create awareness,
knowledge, liking, preference, conviction, or purchase. A message must be designed containing
an effective content, structure, format, and source. Then communication channels, both
personal and non-personal, are selected. Next, the total promotion budget can be established.
Four common methods are the affordable method, the percentage-of-sales method, the
competitive-parity method, and the objective-and-task method.
The promotion budget should e divided among the main promotional tools, as affected by such
forms (national, regional, local, consumer, industrial, retail, product, brand, institutional, etc.)
designed to achieve a variety of objectives (awareness, interest, preference, brand recognition,
brand insistence).
Advertising decision-making consists of objectives setting, budget decision, message decision,
decision models that are available.
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The message decision calls for generating messages, evaluating and selecting between them,
before, during, and after the advertising.
Sales promotion and public relations are two tools of growing importance in marketing
planning. Sales promotion covers a wide variety of short-term incentive tools designed to
stimulate consumer markets, the trade, and the organization’s own sales force. Sales promotion
expenditures now exceed advertising expenditures and are growing at a faster rate. Consumer
and implementing the sales promotion program; and evaluating the results.
Marketing public relations (MPR) is another important communication/promotion tool.
Traditionally, it has been the least utilized tool but is now recognized for its ability in building
awareness and preference in the marketplace, repositioning products, and defending them.
B. Learning Objectives
Identify the steps required in developing an advertising program.
Determine how to make sales promotion decisions.
Define guidelines for effective brand-building events and experiences.
How to exploit the potential of public relations and publicity.
C. Chapter Outline
sponsor. Five major decisions, known as “the five Ms”: Mission-what are the advertising
objectives? Money-How much and where is money spent?, Message- What should be
sent? Media- what should be used? and Measurement – How to evaluate results? Refer to
Figure 16.1 for a description of the Five Ms.
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discussed in chapter 15.
2. Persuasive advertising attempts to create liking, preference, conviction
advertising. .
services.
4. Reinforcement advertising seeks to minimize or eliminate buyer’s
remorse.
B. Deciding on the Advertising Budget - five factors to consider when setting the
advertising budget:
2. Market share and consumer base- high market share products usually
products requiring larger advertising expenditures
advertising required in order to be heard
advertising expenditure
5. Product substitutability – commodity products require higher advertising
expenditures to support differentiation efforts.
2. Creative development and execution - impact depends not only on what
is said but how it is said (positioning). Creative people must also find a
style, tone, and format for executing the message
3. Legal and Social Issues - make sure the creative advertising does not
overstep social and legal norms
III. Deciding on Media and Measuring Effectiveness
A. Deciding on Reach (R), Frequency (F), and Impact (I)
1. Reach (# of unique exposures) - most important when launching new
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target market
2. Frequency (# of exposures in a specific time-frame) - most important when
resistance or a frequent-purchase cycle.
3. Impact – qualitative value of an exposure through a given medium
B. Choosing Among Major Media Types (refer to table 16.1 for profiles of major
media types
1. Identify capacity or media type to deliver reach, frequency and impact.
Variable to be considered – target audience’s media habits, the product itself,
the message and the cost
C. Alternative Advertising Options
1. Mass advertising less effective due to increasing clutter and increasing
expense
2. Place advertising - an attempt to reach people outside the home, i.e., where
they work and play (e.g. billboards, P.O.S., public places). Challenge is reach
and effectiveness without becoming invasive. Refer to “Marketing Insight:
Playing Games with Brands”
D. Selecting Specific Vehicles –
1. Identify most cost-effective media vehicles within each chosen media type
using estimates on audience size that can be measured
2. Calculate cost per thousand (CPM) on each media, rank each according to
cost, and select media based upon optimal combination of CPM and best
target
3. Adjust the rankings for
c. The medium’s editorial quality
d. Placement policies and extra services
E. Deciding on Media Timing and Allocation
1. Macro scheduling - according to seasonal or business trends
2. Micro scheduling - allocating advertising expenditures within a short period to
obtain the maximum impact
3. Media timing decisions -
items.
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d. Pulsing - continuous advertising at low-weight levels reinforced by periods
of heavier activity to help the audience learn the message more thoroughly
Advertising in Hard times”
1. Communication-effect research - copy testing, consumer feedback, portfolio
and laboratory tests
2. Sales-effect research - share of voice and share of market, historical approach,
and experimental design
3. Measure sales impact
A. Sales Promotion Objectives
1. Attract new customers
2. Reward loyal customers
3. Attempt to persuade existing customers to increase purchase frequency
B. Advertising versus Promotion
1. Promotion expenditures have increased because:
sales tool
b) Number of brands increased
c) Competitors used promotions frequently
d) Many brands were seen as similar
e) Consumers became more price orientated
f) Trade demanded more deals
g) Advertising efficiency declined
budgets of larger competitors
C. Major Decisions
1. Establishing Objectives - larger sized units, trial, attract switchers, etc.
2. Selecting consumer promotion tools - consumer-promotion,
trade-promotion, and/or business and sales force promotion tools
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description of Major Consumer-Promotion Tools
4. Selecting Trade Promotion Tools to persuade intermediary to carry
Major Trade promotion tools)
tool descriptions)
6. Developing the Program - make decisions on the size of the incentive,
conditions for participation, duration of the promotion, distribution
vehicle, timing, and the total sales-promotion budget
7. Implementing and Evaluating the Program
a) Pre-tests can determine whether the tools are appropriate, the
effort.
d) Overall, sales promotions work best when attract competitors’
results
V. Events and Experiences
A Events objectives – number of reasons to sponsor events:
8. Identify with a particular target market or lifestyle
9. Increase salience of company or product name
10. Create or reinforce consumer perceptions of key brand image
associations
11. Enhance corporate image dimensions
12. Create experiences and evoke feelings
13. Express commitment to the community or on social issues
14. Entertain key clients or reward key employees
15. Permit merchandising or promotional opportunities
D. Major Sponsorship Decisions
1. Choosing event opportunities
2. Designing sponsorship programs (Event creation is a particularly
important skill in publicizing fund-raising drives for non-profit
organizations.)
3. Measuring sponsorship opportunities
a) Supply side – focuses on potential exposure to the brand by
assessing the extent of media coverage
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b) Demand side – focuses on reported exposure from consumers
as well as resulting attitudes and intentions toward the
sponsor
E. Creating Experiences - Experiential marketing:
1. Communicate features and benefits
2. Connects a product or service with a unique and interesting experience
VI. Public Relations - Involves a variety of programs designed to promote and/or protect a
company’s image or its individual products. A public is any group that has an actual or
potential interest in or impact on a company’s ability to achieve its objectives. The five
activities of public relations include: press relations, product publicity, corporate
communications, lobbying, and counseling. Increasingly marketing managers are
turning to MPR, which seeks to support marketing objectives
A Marketing Public Relations (MPR) Old name for MPR was publicity. MPR
plays an important role in the following tasks:
3. Launching new products
4. Repositioning anew product
5. Building interest in a product category
6. Influencing specific target groups
7. Defending products that have encountered public problems
8. Building the corporate image in a way that reflects favorably on its
products
F. Major decisions in MPR
1. Establishing the marketing objectives - build awareness, build
credibility, stimulate the sales force and dealers, and hold down
promotion costs
2. Choosing messages and vehicles
3. Implementing and evaluating the plan
a) Easiest method is to measure the number of exposures
b) Better measures are to calculate:
(1) Product awareness
(2) Product comprehension
(3) Product attitude
c) Optimal measurement is sales and profit impact
VII. Executive Summary
II. Lecture(s)
Deciding on Advertising Components Inclusion
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Teaching Objectives
Identify exogenous factors affecting an advertising strategy
Gain an understanding of how competitive forces affect advertising strategy
Learn how emerging technology can facilitate an advertising strategy
Discussion
setting advertising objectives.
Exogenous variables are forces beyond an organization’s control. The better an
organization understands these variables and their probability of occurrence, the more
likely they will plan an advertising strategy that can attempt to thwart any negative
impact and hopefully leverage any opportunity the variable presents. Examples of
exogenous variables are:
manufacturer
Government regulation in areas of privacy can affect personalized communication
efforts
Merger and acquisition activity with advertising and media partners can create an
opportunity to exploit new capabilities or may result in new constraints
examples may include:
Competitors who attack with product or service comparison in their advertising
may require a retaliatory strike advertising campaign, a campaign to reinforce
whatever feature (s) the competitor is differentiating on
advertising posing like challenges
Depth and breadth of promotional activity may require the same or more amount
and type of activity to protect value chain relationships and push strategies
Emerging technologies and innovations usually create opportunities in areas of media
types and reach, including cost implications
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challenges of delivery
Increasing consumer use of technologies to avoid TV commercials and fast
forward on DVD rental have created new barriers to advertising communication
Consumer subscriptions to satellite radio have reduced market reach of radio
advertising but also have created potential new opportunities in the future
objectives and subsequent tactical plans.
B. Using events, experience, and PR to promote brand
There are non-direct advertising methods that are not as invasive as traditional
advertising methods. Sponsoring a fundraiser is a way to subtly bond with the
consumer. The fundraiser audience should be the same or similar to the brand
positive, they automatically generate brand awareness.
Teaching Objectives
Identify non-direct advertising efforts
Explore the benefits of free publicity and public relations
Discussion
company and analyze the firm’s effectiveness at using their own web site for public
relations. Other sources of publicity come from financial reporting web sites and
newsletters.
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III. Background Articles
Dominique Hanssens, Marnik Dekimpe
Price promotions will attract consumers to purchase, which precipitates a subsequent
boost in sales. A key issue is whether the increased purchase activity is a short-term
phenomenon that will result in sales volume decreasing to pre-promotion volumes once
the promotion is complete, or is there is a long-term net increase in sales volume directly
short and medium time ranges.
They tracked a 10 cents reduction on a cheese product over three time periods for a total
of 26 weeks. The immediate time period of one week showed a large increase in revenue
as customers bought more of the brand. However they experienced a tremendous loss in
pre-promotion levels and remained stable through week 26.
The authors conclude that promotions of frequently promoted brands tend to have a
positive short-term effect on both retailers’ and manufacturers’ revenues but a negative
impact on retailers’ profit margins. Thus, promotions are tactical and not strategic
initiatives and must be treated as such.
B. Issue: Ineffective TV Commercials
F0504c, by John Kastenholz
This is a brief article that demonstrates how a major packaged goods organization,
Unilever, has attempted to salvage ads that although not failures, were not worthy of
connection to their brands. They utilized a diagnostic technique to reedit just-passable ads
into great ones. Working with a testing company, they attempt to answer the following
questions about their ads:
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They then judge the mediocre ads in terms of whether or not there is a concept problem,
i.e., ad looks great but not exciting, or an execution problem?
They then put the “Spielberg variables” to work:
1. They ensure that the ads employ the same style and storytelling techniques
audience forward emotionally, and convey meaning.
2. Good movies are also born in the editing room, therefore diagnose the ad
looking for flaws at each inflection point and make changes.
3. Cut the ads into frames. Show the ad in its entirety to a test audience. Then
show the frames in random order and ask audience to: a) point out which
benefit of “beauty.”
This approach has helped Unilever optimize their advertising, which enables them to
maximize their ROI in what was once a difficult area to measure.
Some statistics from the article:
Case
Kingsford Charcoal
(HBR Case # 9-506-020, September 19, 2005)
Teaching Perspectives
.
This case can force the students to step into the brand manager’s shoes, analyze the
reasons for the current situation, and come up with recommendations related to pricing,
branding, and advertising, and merchandising and promotion of the Kingsford brand.
Kingsford’s business is seasonal with nearly 60% of consumer purchases occurring
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35% of annual sales. Kingsford often contributes trade money, i.e., promotions, to ensure
optimal inventory on their retail floors during prime grilling season. They felt that display
drives sales. Lab tests proved that Kingsford charcoal was superior over Royal Oak and
private label brands. 60% of surveyed consumers felt that Kingsford was a high-quality
brand relative to 13% for private label.
weakness.
This at the same time that gas grilling providers increased their advertising. This was
further exacerbated by a reduction in promotional activity across the category. Increase
in precipitation was an exogenous variable beyond everyone’s control and it also was a
threat.
history
Questions
1. What are the impacts of seasonality with respect to advertising and promotion strategies?
2. How does a surge in substitute product sales volume fueled by aggressive advertising affect
the original product category advertising and promotional strategies?
advertising?
4. Is the assumption in the case “increased advertising can restore volume losses from
potential price increases” a valid assumption?
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