978-0134292663 Chapter 13 Lecture Notes Part 2

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Chapter 13: Promotion I: Advertising and Sales Promotion

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3.1 Types of Advertising

The advertisements an organization runs can take many forms.

3.1.1 Product Advertising

With product advertising, the message focuses on a specific good or

service. Most of the advertising we see or hear is product advertising.

3.1.2 Institutional Advertising

Institutional advertising promotes the activities, personality, or point

of view of an organization or company. Corporate advertising

promotes the company as a whole instead of the firm’s individual

products.

Some institutional messages state an organization’s position on an issue

to sway public opinion, a strategy we call advocacy

advertising.

Public service advertisements (PSAs) are advertisements the media

runs free of charge. These messages promote not-for-profit

organizations that serve society in some way, or they champion an issue

such as increasing literacy or discouraging drunk driving.

3.1.3 Retail and Local Advertising

Both major retailers and small, local businesses advertise to encourage

customers to shop at a specific store or use a local service.

Figure 13.7

Snapshot: Types of

Advertising

Exhibit:

Cybermentors

Exhibit:

Geigo

p. 426

3.2 Who Creates Advertising?

An advertising campaign is a coordinated, comprehensive plan

that carries out promotion objectives and results in a series of

advertisements placed in various media over a period. Although a

campaign may be based around a single ad idea, most use multiple

messages with all ads in the campaign having the same look-and-feel.

Although some firms create their own advertising in-house, in many

cases several specialized companies work together to develop an

advertising campaign. Typically, the firm retains one or more outside

advertising agencies to oversee this process. A limited-service

agency provides one or more specialized services, such as media

buying or creative development. In contrast, a full-service

agency supplies most or all of the services a campaign requires,

including research, creation of ad copy and art, media selection, and

production of the final messages.

Big or small, an advertising agency hires a range of specialists to craft a

message and make the communication concept a reality:

Account management: The account executive, or account manager, is

the “soul” of the operation. This person supervises the day-to-day

activities on the account, and is the primary liaison between the agency

Chapter 13: Promotion I: Advertising and Sales Promotion

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and the client. The account executive has to ensure that the client is

happy while he verifies that people within the agency execute the

desired strategy. The account planner combines research and account

strategy to act as the voice of the consumer in creating effective

advertising.

Creative services: Creatives are the “heart” of the communication

effort. These people actually dream up and produce the ads.

Research and marketing services: Researchers are the “brains” of the

campaign. They collect and analyze information that will help account

executives develop a sensible strategy.

Media planning: The media planner is the “legs” of the campaign. He

helps to determine which communication vehicles are the most

effective, and recommends the most efficient means to deliver the ad by

deciding where, when, and how often it will appear.

3.3 User-Generated Advertising Content

The latest promotional craze is to let your customers actually create

your advertising for you. User-generated content (UGC), also known

as consumer-generated media (CGM), includes the

millions of online consumer comments, opinions, advice,

consumer-to-consumer discussions, reviews, photos, images, videos,

podcasts and webcasts and product-related stories available to other

consumers through digital technology. Marketers that embrace this

strategy understand that it is OK to let people have fun with their

products.

Some marketers encourage consumers to contribute their own

do-it-yourself (DIY) ads.

Crowdsourcing is a practice in which firms outsource marketing

activities (such as selecting an ad) to a community of users, i.e., a

crowd. The idea behind crowdsourcing is that if you want to know what

consumers think and what they like, the most logical thing to do is to

ask them.

3.4 Ethical Issues in Advertising

Advertising is manipulative

Advertising is deceptive and untruthful

In addition to fining firms for deceptive advertising, the FTC also has

the power to require firms to run corrective advertising;

messages that clarify or qualify previous claims.

Other ads, although not illegal, may create a biased impression of

products when they use puery—claims of superiority that neither

sponsors nor critics of the ads can prove are true or untrue. Many

consumers today are concerned about greenwashing, a practice in

which companies promote their products as environmentally friendly

when in truth the brand provides little ecological benefit.

Exhibit: Land

Rover

Chapter 13: Promotion I: Advertising and Sales Promotion

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Advertising is offensive and in bad taste

Advertising causes people to buy things they don’t

really need

p. 429

3.5. Develop the Advertising Campaign

The following is a description of the steps in creating an advertising

campaign:

3.5.1 Step 1: Understand the Target Audience

The best way to communicate with an audience is to understand as

much as possible about them and what turns them on and off. Marketers

often identify the target audience for an advertising campaign from

research.

Figure 13.8

Process: Steps to

Develop an

Advertising

Campaign

p. 429 3.5.2 Step 2: Establish Message and Budget Objectives

Advertising objectives should be consistent with the overall

communications plan. Advertising objectives will generally include

objectives for both the message and the budget.

Set Message Objectives

Advertising can inform, persuade, and remind.

Set Budget Objectives

Advertising is expensive. An objective of many firms is to

allocate a percentage of the overall communication budget

to advertising.

Use websites here:

www.abercrombie.com

www.hydroxycut.com

Examples of Sex Appeal

p. 430 3.5.3 Step 3: Create the Ads

The creation of the advertising begins when an agency formulates a

creative strategy, which gives the advertising “creative” (art directors,

copywriters, photographers and others) the direction and inspiration

they need to begin the creative process. The strategy is summarized in a

written document known as a creative brief; a rough blueprint that

guides but does not restrict the creative process. It provides only the

most relevant information and insights about the marketing situation,

the advertising objective, the competition, the advertising target and,

most importantly, the message that the advertising must deliver.

Figure 13.9

Snapshot: Creative

Elements of

Advertising

Chapter 13: Promotion I: Advertising and Sales Promotion

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Advertising Appeals

An advertising appeal is the central idea of the ad and the basis of the

advertising messages. It is the approach used to influence the consumer.

Informational appeals are based on a unique selling proposition (USP)

that gives consumers a clear, single-minded reason why the product is

better at solving a problem.

Generally, we think of appeals as informational or emotional. Of course,

not all ads fit into these two appeal categories. Well-established brands

often use reminder advertising just to keep their name in people’s

minds or be sure that consumers repurchase the product as necessary.

Sometimes advertisers use teaser or mystery ads to generate curiosity

and interest in a to-be-introduced product.

Execution Formats

Execution format describes the basic structure of the message. Some

of the more common formats, sometimes used in combination, include:

Comparison: A comparative advertisement explicitly names

one or more competitors.

Demonstration: The ad shows a product “in action” to prove

that it performs as claimed: “It slices, it dices!”

Brand Storytelling: Modern storytelling commercials are like

30-second movies with plots that involve the product in a

peripheral way.

Testimonial: A celebrity, an expert, or a “man in the street”

states the product’s effectiveness. The use of celebrity endorser

is a common but expensive strategy.

Slice of life: A slice-of-life format presents a (dramatized) scene

from everyday life.

Lifestyle: A lifestyle format shows a person or persons

attractive to the target market in an appealing setting. The

advertised product is “part of the scene,” implying that the

person who buys it will attain the lifestyle.

Rich media. Rich media advertising provides digital ads that

have advanced features.

Tonality

Tonality refers to the mood or attitude the message conveys. Some

common tonalities include:

Straightforward: Straightforward ads simply present the

information to the audience in a clear manner.

Humor: Humorous, witty, or outrageous ads can be an effective

way to break through advertising clutter.

Dramatic: A dramatization, like a play, presents a problem and

a solution in a manner that is often exciting and suspenseful—a

difficult challenge in 30 or 60 seconds.

Romantic: Ads that present a romantic situation can be

especially effective at getting consumers’ attention and at

selling products people associate with dating and mating.

Sexy: Some ads appear to sell sex rather than products. Sex

Exhibit: Fresh Step

Chapter 13: Promotion I: Advertising and Sales Promotion

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appeal ads are more likely to be effective when there is a

connection between the product and sex (or at least romance).

Apprehension/fear: Some ads highlight the negative

consequences of not using a product. In general, fear appeals

can be successful if the audience perceives there to be an

appropriate level of intensity in the fear appeal.

Creative Tactics and Techniques

Animation and Art: Not all ads are executed with film or

photography.



Celebrities

Jingles are original words and music written specifically for

advertising executions.

Slogans link the brand to a simple linguistic device that is

memorable (jingles do the same but set the slogan to music).

Activity: Describe some of the different advertising appeals used in

campaigns.

►Marketing Moment In-Class Activity

Ask students to recall an advertisement that used sex appeal. Can students also recall the product category

and brand? Have students notice how many could recall the sex appeal but may not be able to recall the

brand.

Use website here: www.ihop.com IHOP slogan–come hungry, leave happy

►Marketing Moment In-Class Activity

If the instructor is musically inclined, hum some jingles and see if students can identify the product. Ask

students to hum an identifiable jingle. Then, note the large number of students who recognize it (popular

ones include the Oscar Meyer Wiener song and the Coke song).

p. 434 3.5.4 Step 4: Pretest What the Ads Will Say

Advertisers try to minimize mistakes by getting reactions to ad

messages before they actually place them. Much of this pre-testing,

the research that goes on in the early stages of a campaign, centers on

gathering basic information that will help planners be sure they’ve

accurately defined the product’s market, consumers, and competitors.

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p. 435

3.5.5 Step 5: Choose the Media Type(s) and Media Schedule

Media planning is a problem-solving process for getting a message to a

target audience in the most effective way. Planning decisions include

audience selection and where, when, and how frequent the exposure

should be. Thus, the first task for a media planner is to find out when

and where people in the target market are most likely to be exposed to

the communication.

There is no such thing as one perfect medium for advertising.

3.5.6 Step 6: Evaluate the Advertising

With so many messages competing for the attention of frazzled

customers, it is especially important for firms to evaluate their efforts to

increase the impact of their messages.

Posttesting means conducting research on consumers’ responses to

advertising messages they have seen or heard as opposed to pre-testing,

Exhibit: Potato

Goodness

Chapter 13: Promotion I: Advertising and Sales Promotion

which as we have seen collects reactions to messages before they are

actually placed in “the real world.”

Three ways to measure the impact of an advertisement:

Unaided recall tests by telephone survey or personal interview

whether a person remembers seeing an ad during a specified

period without giving the person the name of the brand.

An aided recall test uses the name of the brand and

sometimes other clues to prompt answers.

Attitudinal measures probe a bit more deeply by

testing consumers’ beliefs or feelings about a product before

and after they are exposed to messages about it.

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p. 439

3.6 Where to Say It: Traditional Mass Media

The following is a list of the major categories of media. Table 13.2

summarizes some of the pros and cons of each type.

Television

Radio

Newspapers

Magazines

Directories

Out-of-home media

Internet websites

Place-based media

Branded entertainment

Advergaming

Mobile phones

3.7 Where to Say It: Branded Entertainment

As we noted earlier, more and more marketers rely on paid product

placements in TV shows and movies to grab the attention of consumers

who tune out traditional ad messages as fast as they see them. These

placements are an important form of branded entertainment; a

strategy where marketers integrate products into all sorts of venues

including movies, television shows, videogames, novels and even retail

settings. Beyond movies and television shows, what better way to

promote to the video generation than through brand placements in video

games? The industry calls this technique advergaming. Native

advertising has marketing material that mimics or resembles the

content of the website that it is posted on.

3.8 Where to Say It: Support Media

Support media reach people who may not have been reached by mass

media advertising and these platforms support the messages traditional

media delivers.

Directory advertising

Out-of-home media. In recent years, outdoor advertising has

pushed the technology envelope with digital signage that

enables the source to change the message at will.

Place-based media

Exhibit: Print

media

Table 13.2

Pros and Cons of

Media Vehicles

p. 440 3.9 Where to Say It: Digital Media

Chapter 13: Promotion I: Advertising and Sales Promotion

p. 441

The term digital media refers to any media that are digital rather than

analog. The more popular types of digital media advertisers use today

include e-mail, websites, ads placed on other websites and blogs, social

media sites such as Facebook, search engines such as Google, and

digital video such as YouTube.

Digital media can be classified as owned, paid, and earned:

Owned media are Internet sites, such as websites, blogs,

Facebook, and Twitter accounts, that are owned by an

advertiser.

Paid media are Internet media, such as display ads,

sponsorships, and paid key word searches, that are paid for by

an advertiser.

Earned media are word-of-mouth or buzz using social media

where the advertiser has no control.

3.9.1 Website Advertising

Online advertising offers several advantages over other media

platforms. First, the Internet provides new ways to finely target

customers. Web user registrations and cookies allow sites to track user

preferences and deliver ads based on previous Internet behavior. In

addition, because the website can track how many times an ad is

“clicked,” advertisers can measure in real time how people respond to

specific online messages.

The following is a description of forms of Internet advertising:

Banners, rectangular graphics at the top or bottom of web

pages, were the first form of web advertising.

Buttons are small banner-type advertisements that a

company can place anywhere on a page.

A pop-up ad is an advertisement that appears on the screen

while a web page loads or after it has loaded.

3.9.2 E-Mail Advertising

E-mail advertising that transmits messages to very large numbers of

inboxes simultaneously is one of the easiest ways to communicate with

consumers—it is the same price whether you send ten messages or ten

thousand. One downside to this platform is spam, sending unsolicited

e-mail to five or more people not known to the sender. Many websites

offer the opportunity to refuse unsolicited e-mail via ad blocking. This

permission marketing strategy gives the consumer the power to opt in

or opt out.

3.9.3 Search Engines

Search engines are Internet programs that search for documents with

specified key words. Search marketing refers to marketing strategies

that involve the use of Internet search engines. With search engine

marketing (SEM), the search engine company charges marketers to

display sponsored search ads that appear at the top or beside the search

Chapter 13: Promotion I: Advertising and Sales Promotion

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results.

►ETHICS CHECK

Find out what other students taking this course would do and why at

www.mymtklab.com. Is it ethical for marketers to pay for links on

websites in order to obtain higher rankings on search engines?

3.9.4 Mobile Advertising

The Mobile Marketing Association defines mobile advertising as “a

form of advertising that is communicated to the consumer via a handset.

Mobile marketing offers advertisers a variety of ways to speak to

customers (ideally with the customer’s permission), including mobile

websites, mobile applications or apps, text message ads, and mobile

video and TV. Developers of mobile apps must find some way to

monetize their product. The best strategy for in-app advertising is to

use advertising that creates revenue and entertains and engages the user.

QR code advertising offers another way to engage consumers via their

mobile phones.

3.9.5 Video Sharing: Check It Out on YouTube

Video sharing describes the strategy of uploading video recordings or

vlogs (pronounced vee-logs) to Internet sites such as YouTube so that

thousands or even millions of other Internet users can check them out.

For marketers, YouTube provides vast opportunities to build

relationships with consumers

Ripped from the

Headlines

Ethical/

Sustainable

Decisions in the

Real World

p. 443 3.10 When and How Often to Say It: Media Scheduling

After he or she chooses the advertising media, the planner then creates a

media schedule that specifies the exact media the campaign will

use as well as when and how often the message should appear. The

media schedule outlines the planner’s best estimate of which media will

be most effective to attain the advertising objective(s) and which

specific media vehicles will do the most effective job.

A continuous schedule maintains a steady stream of advertising

throughout the year. This is most appropriate for products that we buy

on a regular basis.

A pulsing schedule varies the amount of advertising throughout the

year based on when the product is likely to be in demand. Flighting is

an extreme form of pulsing in which advertising appears in short,

intense bursts alternating with periods of little to no activity. It can

produce as much brand awareness as a steady dose of advertising at a

much lower cost if the messages from the previous flight were noticed

and made an impact.

Figure 13.10

Snapshot: Media

Schedule for a

Video Game

Chapter 13: Promotion I: Advertising and Sales Promotion

p. 444

►METRICS MOMENT

Media planners use a number of quantitative factors to develop

the media schedule.

Reach is the percentage of the target market that will be

exposed to the media vehicle at least once during a given period

of time, usually four weeks.

Frequency is simply the average number of times that an

period of time, usually four weeks.

Frequency is simply the average number of times that an

individual or a household will be exposed to the message.

Gross rating points (GRPs) are a measure of the quantity of

media included in the media plan.

To compare the relative cost-effectiveness of different media,

planners use cost per thousand CPM), which reflects the cost

to deliver a message to 1,000 people.

Applying the Metrics

You have a choice of commercials during NCIS or ads in the Wall Street

Journal. NCIS reaches 30 million members of the target audience, while

WSJ reaches 15 million members. CBS is quoting you $500,000 per

30-second spot; WSJ charges $200,000 for a full-page four-color ad.

Calculate the CPM for each option.

Which one is the better financial deal?

p. 445

4. SALES PROMOTION

Sales promotions are programs that marketers design to build interest

in or encourage purchase of a good or service during a specified time.

Marketers today place an increasing amount of their total marketing

communication budget into sales promotion due to growth of channels

power and declining brand loyalty. Marketers target sales promotion

activities either to ultimate consumers or to members of the channel

such as retailers that sell their products. Thus, we divide sales

promotion into two major categories: consumer-oriented sales

promotion and trade-oriented sales promotion.

4.1 Sales Promotion Directed toward Consumers

For consumer sales promotion, the major reason for this is that most

promotions temporarily change the price/value relationships.

4.1.1 Price-Based Consumer Sales Promotion

Many sales promotions emphasize short-term price reductions or

rebates that encourage people to choose a brand, during the deal period.

If used too frequently, consumers become conditioned to purchase only

when the product is at a low promotional price.

Coupons are certificates redeemable for money off on a

purchase and are the most common price promotion.

Price deals, refunds, and rebates are temporary price reductions

to stimulate sales. This price deal may be printed on the

package itself, or it may be a price-off flag or banner on the

Table 13.3

Consumer Sales

Promotion

Techniques: A

Sampler

Figure 13.11

Snapshot: Types of

Consumer Sales

Promotion

Chapter 13: Promotion I: Advertising and Sales Promotion

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p. 448

store shelf. Alternatively, companies may offer rebates that

allow the consumer to recover part of the purchase price via

mail-ins to the manufacturer.

Frequency programs, also called loyalty or continuity

programs, offer a consumer a discount or a free product for

multiple purchases over time.

Special/bonus packs involve giving the shopper more products

instead of lowering the price. A special pack also can be in the

form of a unique package such as a reusable decorator dispenser

for hand soap.

4.1.2 Attention-Getting Consumer Sales Promotions

Attention-getting consumer promotions stimulate interest in a

company’s products. Some typical types of attention-getting promotions

include the following:

Contests and sweepstakes: a contest is a test of skill, while a

sweepstake is based on chance.

Premiums are items offered free to people who have bought a

product.

Product sampling encourages people to try a product by

distributing trial-size and sometimes regular-size versions in

stores, in public places such as student unions, or through the

mail. Many marketers now distribute free samples through sites

on the Internet.

Use websites here: Online coupon consolidators:

coupons.smartsource.com

Student Project: Discuss some of your favorite sales promotions. Did

the sales promotion actually cause you to buy the product being

promoted? Explain how the promotion worked. Why did it work? What

has been the impact on your future buying behavior?

4.2 Trade Sales Promotion: Targeting the B2B Customer

Sales promotions target the B2B customer—located somewhere within

the supply chain. Such entities are traditionally referred to as “the

trade.”

4.2.1 Discount Promotions

Discount promotions (deals) reduce the cost of the product to the

distributor or retailer or help defray its advertising expenses.

4.2.2 Co-Op Advertising

Another type of trade allowance is co-op advertising. These programs

offer to pay a portion, usually 50 percent, of the cost of any retailer

advertising that features the manufacturer’s product.

4.2.3 Sales Promotion Designed to Increase Industry

Visibility

Figure 13.12

Snapshot: Trade

Sales Promotions

Table 13.4

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p. 449

Other types of trade sales promotions increase the visibility of a

manufacturer’s products to channel partners within the industry.

Forms of sales promotion include the following:



Trade shows



Promotional products



Point-of-purchase displays

Incentive programs

Characteristics of

Trade Sales

Promotion

Approaches

Real People, Real Choices: Here’s My Choice at the Pitch Agency

Sarah chose option #2.