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Chapter 16 - Advertising, Sales Promotion, and Public Relations
16-21
• Three factors must be considered when scheduling a product ad:
a. Buyer turnover.
b. Purchase frequency. The more frequently the product is purchased, the less
repetition is required.
• Most companies follow one of three basic scheduling approaches:
a. Continuous (steady) schedule.
b. Flighting (intermittent) schedule.
• Periods of advertising are scheduled between periods of no advertising to
c. Pulse (burst) schedule.
• Combines flighting and continuous schedules due to…
• Research indicates that:
a. The effectiveness of a particular ad wears out quickly.
b. Many alternative forms of a commercial may be more effective.
Chapter 16 - Advertising, Sales Promotion, and Public Relations
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LEARNING REVIEW
16-5. You see the same ad in Time and Fortune magazines and on billboards and TV.
Is this an example of reach or frequency?
16-6. Why has the Internet become a popular advertising medium?
16-7. Describe three approaches to scheduling advertising.
Answer: The three approaches to scheduling advertising are: (1) a continuous (steady)
schedule, which is when advertising is run at the continuous or steady schedule
III. EXECUTING THE ADVERTISING PROGRAM
• Executing the advertising program involves:
a. Pretesting the advertising copy.
A. Pretesting the Advertising
Pretests:
a. Are conducted before an advertisement is placed in any medium.
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1. Portfolio Tests.
a. Are used to test copy alternatives.
2. Jury Tests.
a. Involve showing the ad copy to a panel of consumers.
3. Theater Tests.
a. Are the most sophisticated form of pretesting.
b. Consumers are invited to view new television shows or movies in which test
commercials are also shown.
c. Viewers register their feelings about the ads:
B. Carrying Out the Advertising Program
The responsibility for actually carrying out the advertising program can be handled in
one of three types of agencies:
• The full-service agency.
a. Provides the most complete range of services, including:
• Market research. • Artwork.
b. Develops and places ads for a client.
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c. Traditionally charged a commission of 15 percent of media costs.
• Limited-service agencies.
a. Specialize in one aspect of the advertising process.
• Provide creative services to develop the advertising copy.
• In-house agencies.
a. Consist of the company’s own advertising staff.
IV. ASSESSING THE ADVERTISING PROGRAM
Ads must be posttested to determine:
• Whether they are achieving their intended objectives.
• If changes must be made in the advertising program.
A. Posttesting the Advertising
Posttests are conducted after an advertisement has been shown to the target audience
to determine whether it accomplished its intended purpose.
1. Aided Recall. The Starch test determines the percentage of the sample who:
a. Remember reading, viewing, or listening to the ad (noted).
2. Unaided Recall.
a. Respondents are asked, “What ads do you remember seeing yesterday?”
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3. Attitude Tests.
a. Respondents are asked questions to measure changes in their attitudes toward
4. Inquiry Tests.
5. Sales Tests.
a. Consist of controlled experiments or consumer purchase tests that:
• Allow a manufacturer, a distributor, or an advertising agency to…
• Measure sales results from a given advertising campaign.
b. Can:
B. Making Needed Changes
Advertising copy posttest results can be used to change the advertising program.
• If the posttest results show that an advertisement is doing poorly in terms of
awareness, cost efficiency, or sales:
a. It may be dropped.
Chapter 16 - Advertising, Sales Promotion, and Public Relations
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LEARNING REVIEW
16-8. Explain the difference between pretesting and posttesting advertising copy.
16-9. What is the difference between aided and unaided recall posttests?
Answer: Aided and unaided recall posttests are conducted after the ads are shown to the
target audience. Aided recall involves showing an ad to respondents who then are asked
V. SALES PROMOTION [LO 16-4]
• Sales promotion is a key element of the promotional mix, which now accounts for
more than $82 billion in annual expenditures.
• In a recent forecast by Zenith Media Services, sales promotion expenditures were
18 percent of all promotional spending:
A. Consumer-Oriented Sales Promotions
Consumer-oriented sales promotions, or simply consumer promotions, consist of
sales tools used to support a company’s advertising and personal selling directed to
ultimate consumers.
1. Coupons.
Chapter 16 - Advertising, Sales Promotion, and Public Relations
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a. Coupons are sales promotions that offer a discounted price to the consumer,
which encourages trial.
b. Selected coupon stats:
c. Firms like P&G, Nestlé, and Kraft have increased their use of coupons.
d. The top retailers for coupon redemption are Walmart, Kroger, and Target.
f. The 12% redemption rate for online coupons is substantially higher than other
forms of coupons.
g. “Daily deal” sites Groupon and LivingSocial have fueled the growth in
couponing.
h. Coupons:
• Are available in almost every product category.
• Are used by men and women of all ages.
i. Coupons are often far more expensive than their face value.
• They can cost three times their face value after paying for the
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2. Deals.
a. Are short-term price reductions, such as a “2 for 1” deal or BOGO (Buy One,
3. Premiums.
a. Consists of merchandise offered free or at a large savings over their retail
4. Contests.
a. Consumers apply their skill or analytical or creative thinking to win a prize.
5. Sweepstakes.
a. Participants submit an entry but there is no analytical or creative effort.
b. Consist of two variations:
6. Samples.
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a. Sampling:
• Is the offering of a product free or at a greatly reduced price.
[ICA 16-3: Valassis Product Sampling Promotions]
7. Loyalty Programs.
a. Are sales promotion tools that:
8. Point-of-Purchase Displays.
a. A point-of-purchase display:
• Takes the form of advertising signs that…
9. Rebates.
a. The cash rebate offers money based on proof of purchase.
b. On lower-priced items:
• Many buyers never mail in proof of purchase to take advantage of it…
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10. Product Placements.
a. Product placements involve the use of a brand-name product in a movie,
television show, video game, or commercial for another product.
b. Examples—Movies: Lexus in Black Panther; Under Armour in Baywatch.
[ICA 16-4: Product Placement in Movies and TV]
B. Trade-Oriented Sales Promotions
Trade-oriented sales promotions, or simply trade promotions, are sales tools used
to support a company’s advertising and personal selling directed to wholesalers,
distributors, or retailers.
1. Allowances and Discounts.
a. Trade promotions often focus on maintaining or increasing inventory levels in
the channel of distribution.
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– Specify the activity to be performed, such as…
– Picture of the product in a newspaper with a coupon good at only one
store.
• Consists of a percentage deduction from the list case price ordered during
d. Case allowances.
• Are discounts on each case ordered during a specific time period.
• Are usually deducted from the invoice.
• The “free goods” approach:
– Is a variation of the case allowance.
e. Finance allowances.
• Pay retailers for financing costs or financial losses associated with
consumer sales promotions.
• Take the form of:
– A floor stock protection program:
* Manufacturers give retailers a case allowance price for products in
2. Cooperative Advertising.
a. Resellers often perform the important function of promoting the
manufacturer’s products at the local level.
b. Cooperative advertising:
• Consists of programs in which a manufacturer pays a percentage of the
retailer’s local advertising expense for advertising the manufacturer’s
products.
c. The manufacturer:
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3. Training of Distributors’ Sales forces.
a. One of the many functions the intermediaries perform is customer contact and
selling for the producers they represent.
b. Both retailers and wholesalers employ and manage their own sales personnel.
d. Training activities include:
• Producing manuals and brochures to educate the reseller’s sales force who
in turn use them in selling situations.
LEARNING REVIEW
16-10. What’s the difference between a coupon and a deal?
Answer: Coupons and deals are consumer-oriented sales promotion tools used to
16-11. Which trade promotion is used on an ongoing basis?
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VI. PUBLIC RELATIONS [LO 16-5]
• Public relations seeks to influence the image of an organization and its products and
services.
• Publicity tools are methods of obtaining nonpersonal presentation of an organization,
product, or service without direct cost.
a. News release.
• Consists of an announcement about changes in the firm or its product line.
b. News conference.
• Is where media representatives are:
– Invited to an informational meeting.
c. Public service announcements (PSAs).
• Are free space or time donated by the media.
LEARNING REVIEW
16-12. What is a news release?
16-13. What type of publicity tool is used most often by nonprofit organizations?
Chapter 16 - Advertising, Sales Promotion, and Public Relations
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APPLYING MARKETING KNOWLEDGE
1. How does competitive product advertising differ from competitive institutional
advertising?
Answer: Competitive product advertising promotes a brand’s specific features and benefits.
2. Suppose you are the advertising manager for a new line of children’s fragrances.
Which form of media would you use for this new product?
3. You have recently been promoted to be director of advertising for the Timkin Tool
Company. In your first meeting with Mr. Timkin, he says, “Advertising is a waste!
We’ve been advertising for six months now and sales haven’t increased. Tell me why
we should continue.” Give your answer to Mr. Timkin.
Answer: It is important to tell Mr. Timkin that it is difficult to measure the effects of
advertising on sales. First, many factors (competitors, the environment, distribution) can
4. A large life insurance company has decided to switch from using a strong fear appeal
to a humorous approach. What are the strengths and weaknesses of such a change in
message strategy?
Chapter 16 - Advertising, Sales Promotion, and Public Relations
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5. Some national advertisers have found that they can have more impact with their
advertising by running a large number of ads for a period and then running no ads at
all for a period. Why might such a flighting schedule be more effective than a
continuous schedule?
Answer: Flighting can be especially effective when seasonal demands exist for the product,
such as for lawn and garden equipment. Also, such periods of advertising can complement
6. Which medium has the lowest cost per thousand (CPM)?
7. Each year, managers at Bausch & Lomb evaluate the many advertising media
alternatives available to them as they develop their advertising program for contact
lenses. What advantages and disadvantages of each alternative should they consider?
Which media would you recommend to them?
Answers:
a. The advantages and disadvantages of advertising media (excluding outdoor) for Bausch
& Lomb managers include the following:
Chapter 16 - Advertising, Sales Promotion, and Public Relations
MEDIUM
ADVANTAGES
DISADVANTAGES
Television
• Reaches large audience of
potential contact lens users
• Picture illustrates lens
• Can target contact users
• High cost
• Difficult to convey
complex info about lens
Radio
• Low Cost
• No visual image of lens or
sight component to
message
• Difficult to convey
complex info about lens
Magazines
• Ads convey complex info
• Ads last a long time and
can be saved
• Can select audience
• High-quality color for
colored contact lens line
• High cost
• Long time needed to place
ads
Newspapers
• Coverage of local markets
• Ads can be saved
• Can convey complex info
• Ads compete with other
ads and feature articles
• Short life span
• Poor color
Internet
• Ads can be interactive and
link to Web site
• Can use animation to
explain how to use lens
• Banner ads and pop-up ads
can provide little
information. Depends on
click-through
• Effectiveness of medium
unknown
Direct Mail
• Target specific consumers
• Can convey complex info
• High-quality graphics
• High cost per contact; low
response rates
• Image of being “junk mail”
b. Since contact lens buyers require detailed information about the product and a
relatively long purchase period, magazines are the best advertising medium.
8. What are two advantages and two disadvantages of the advertising posttests
described in the chapter?
Answers: The main advantages and disadvantages for each are listed below:
POSTTEST
METHOD
ADVANTAGES
DISADVANTAGES
Aided Recall
• Measures specific exposure
behaviors
• Easy to conduct
• Inexpensive to conduct
• Does not measure the
effects of advertising
• Subject to the limitations
of people’s memory
• May encourage guessing
• Respondents may provide
what they believe are the
expected answers
Unaided
Recall
• Also measures previous
exposure to advertising
• A more difficult test for the
respondent
• Helps to avoid some of the
guessing
• May miss even more of the
actual exposure due to
people forgetting what they
saw, heard, or read
Attitude
Tests
• Better measure of
advertising effectiveness
than recall tests
• Easy to conduct
• Fairly inexpensive
• Attitudes are complex and
difficult to express
• Favorable attitude does not
mean ultimate purchase
Inquiry
Tests
• Measure the direct
response of the consumer
• Easy to conduct
• Allow for tests of different
variables that motivate the
consumer
• Can only be used for ads
that can logically make use
of an offer to elicit
inquiries
• Can be time consuming
Sales Tests
• Directly measure
marketplace response
• Difficult to tell how
important advertising is in
generating the sale
• Difficult to tell the delayed
effects of advertising
• Can be costly and time
consuming
• Better used to test entire
campaigns rather than
individual ads
Chapter 16 - Advertising, Sales Promotion, and Public Relations
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9. Federated Banks is interested in consumer-oriented sales promotions that would
encourage senior citizens to direct deposit their Social Security checks with the bank.
Evaluate the sales promotion options, and recommend two of them to the bank.
Answers: Sales promotion alternatives such as coupons, contests, sweepstakes, samples,
rebates, and product placement are better suited to consumer products than to this service.
a. Deals. A possible deal might be to offer free checking accounts to all customers already
using or signing up for direct deposit in the next 60 days; all other basic checking
b. Premiums. A possible premium might be a selection of items available free to any
customers signing up for direct deposit over the next 60 days. Items might include
10. How can public relations be used by automobile manufacturers following recall
notices related to faulty airbag inflators?
Answer: The main message for each company to communicate is (1) its regret that anyone
should have died, (2) its determination to track down the cause(s) of the accidents, and (3)
Chapter 16 - Advertising, Sales Promotion, and Public Relations
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BUILDING YOUR MARKETING PLAN
To augment your promotion strategy from Chapter 15:
1. Use Figure 16-2 to select the advertising media you will include in your plan by
analyzing how combinations of media (e.g., television, Internet, radio, and yellow
pages) can complement each other.
3. Specify which trade-oriented sales promotions and public relations tools you will use.
Answer: The feasibility of using each of the five promotion tools varies tremendously
depending on the topic of the marketing plan. Probably nowhere is this truer than in the
Helping with Common Student Problems
As with Chapter 15, students should be encouraged to include some samples of creative
Chapter 16 - Advertising, Sales Promotion, and Public Relations
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TEACHING NOTE FOR VIDEO CASE VC-16
Google, Inc.: The Right Ads at the Right Time
Synopsis
Google, Inc. is a public corporation located in Mountain View, California that earns
revenue from advertising related to its Internet search services. Larry Page and Sergey Brin
founded the company while they were students at Stanford University. Currently, the firm
[Video 16-6: Google Video Case (kerin.tv/cr8e/v16-6)]
Teaching Suggestions
This video case provides a detailed description of the advertising model at Google, Inc., a
name that students will know because of their use of the Google search engine. The case can be
used to generate discussion about why paid search advertising is one of the fastest growing forms
of Internet advertising. The following questions can be used to begin discussion of the video
case:
1. How many of you have used Google to search for something on the Internet? Have any of
you used Yahoo! or Bing?
2. How does Google generate advertising revenue with its search engine?
If Internet access is available, ask students to select a topic or organization, use the search
