Lamb, Hair, McDaniel
MKTG2008-2009
15
CHAPTER
Designed by
Amy McGuire, B-books, Ltd.
Chapter 15
Advertising and
Public Relations
Prepared by
Deborah Baker, Texas Christian University
Copyright ©2009 Cengage Learning Inc. All rights reserved
1
Learning Outcomes
LO1
Discuss the effects of advertising
on market share and consumers
LO2
Identify the major types of advertising
LO3
Discuss the creative decisions in
developing an advertising campaign
Chapter 15
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2
Learning Outcomes
LO4
Describe media evaluation
and selection techniques
LO5
Discuss the role of public relations
in the promotional mix
Chapter 15
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3
LO1
The Effects of Advertising
Discuss the effects of
advertising on market
share and consumers
Chapter 15
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4
The Effects of Advertising
 U.S. advertising was almost $300 billion in 2006
 In that same year, 40 U.S. companies spent over $1
billion each
 The advertising industry is small—only 150,000
employed by the 12,000 advertising agencies
 Ad budgets of some firms are almost $4 billion
annually
LO1
Chapter 15
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5
The Effects of Advertising
Top Ten Leaders by U.S. Advertising Spending
Ad Spending In 2006 (in millions)
$0
Chapter 15
$1,000
$1,500
$2,000
$2,500
$3,000
1
Procter & Gamble Co.
2
AT&T
$3,345
3
General Motors Corp.
$3,296
4
Time Warner
5
Verizon Communications
6
Ford Motor Co.
7
GlaxoSmithKline
8
Walt Disney Co.
9
Johnson & Johnson $2,291
10
LO1
$500
Unilever
$3,500
$4,000
$4,500
$5,000
$5,500
$4,898
$3,089
$2,822
$2,577
$2,444
$2,320
$2,098
Source: Advertising Age, June 25, 2007
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6
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.
LO1
Chapter 15
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7
The Effects of Advertising
on Consumers
 The average U.S. citizen
is exposed to hundreds
of ads each day.
 Advertising may change
a consumer’s negative
attitude toward a
product, or reinforce a
positive attitude.
LO1
Chapter 15
 Advertising can affect consumer
ranking of a brand’s attributes.
Copyright ©2009 Cengage Learning Inc. All rights reserved
8
LO1 REVIEW LEARNING OUTCOME
Effects of Advertising
Chapter 15
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9
LO2 Major Types of Advertising
Identify the major
types of advertising
Chapter 15
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10
Major Types of Advertising
Institutional
Advertising
Enhances a company’s image
rather than promotes a
particular product.
Product
Advertising
Touts the benefits of a
specific good or service.
LO2
Chapter 15
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11
Major Types of Advertising
Institutional
Advertising
Corporate identity
Advocacy
advertising
Pioneering
Product
Advertising
LO2
Chapter 15
Competitive
Comparative
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12
Product Advertising
Pioneering
 Stimulates primary demand for new
product or category
 Used in the PLC introductory stage
Competitive
 Influences demand for brand in the
growth phase of the PLC
 Often uses emotional appeal
Comparative
 Compares two or more competing
brands’ product attributes
 Used if growth is sluggish, or if
competition is strong
LO2
http://www.pizzahut.com
http://www.papajohns.com
Online
Chapter 15
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13
LO2 REVIEW LEARNING OUTCOME
The Major Types of Advertising
Chapter 15
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14
LO3 Creative Decisions in Advertising
Discuss the
creative decisions
in developing an
advertising campaign
Chapter 15
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15
Creative Decisions in
Advertising
Advertising
Campaign
A series of related
advertisements focusing on a
common theme, slogan, and set
of advertising appeals.
LO3
Chapter 15
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16
Creative Decisions in
Advertising
Determine the
advertising objectives
Make creative decisions
LO3
Chapter 15
Make media decisions
Evaluate the campaign
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17
Setting Objectives: The
DAGMAR Approach
Define target audience
Define desired percentage change
Define the time frame for change
LO3
Chapter 15
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18
Creative Decisions
Identify product benefits
Develop and evaluate advertising appeals
Execute the message
Evaluate the campaign’s effectiveness
LO3
Chapter 15
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19
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?”
LO3
Chapter 15
 Ask “So?” to determine
if it is a benefit
Copyright ©2009 Cengage Learning Inc. All rights reserved
20
Identify Product Benefits
Attribute
“Powerade’s new line has been
reformulated to combine the scientific
benefits of sports drinks with
B vitamins and to speed up energy
metabolism.”
- So?
Benefit
“So, you’ll satisfy your thirst with a
great-tasting drink that will power you
throughout the day.”
LO3
Chapter 15
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21
Advertising Appeals
LO3
Chapter 15
Profit
Product saves, makes, or protects money
Health
Appeals to body-conscious or health seekers
Love or romance
Used in selling cosmetics and perfumes
Fear
Social embarrassment, old age, losing health
Admiration
Reason for use of celebrity spokespeople
Convenience
Used for fast foods and microwave foods
Fun and pleasure
Key to advertising vacations, beer, parks
Vanity and egotism
Used for expensive or conspicuous items
Environmental
Consciousness
Centers around environmental protection
Copyright ©2009 Cengage Learning Inc. All rights reserved
22
Unique Selling Proposition
Unique Selling
Proposition
A desirable, exclusive, and believable
advertising appeal selected as the
theme for a campaign.
LO3
Chapter 15
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23
Executing the Message
Scientific
Slice-of-Life
Musical
Lifestyle
Spokesperson/
Testimonial
Demonstration
Mood or
Image
LO3
Chapter 15
Fantasy
Real/
Animated
Product
Symbols
Humorous
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24
LO3 REVIEW LEARNING OUTCOME
Creative Decisions for Ad Campaign
Set
advertising
objectives
Identify benefits
Develop appeal
Evaluating
results helps
marketers
adjust objectives
for future
campaigns
Chapter 15
Execute
message
Evaluate
campaign results
Copyright ©2009 Cengage Learning Inc. All rights reserved
25
LO4 Media Decisions in Advertising
Describe media
evaluation
and selection
techniques
Chapter 15
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26
Media Decisions in Advertising
LO4
Chapter 15
Monitored Media
Unmonitored Media
Newspapers
Direct Mail
Magazines
Trade Exhibits
Yellow Pages
Cooperative Advertising
Internet
Brochures
Radio
Coupons
Television
Catalogs
Outdoor Media
Special Events
Copyright ©2009 Cengage Learning Inc. All rights reserved
27
Major Advertising Media
Newspapers
Magazines
Radio
Television
Outdoor Media
Yellow Pages
LO4
Chapter 15
Internet
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28
Newspapers
Advantages


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





Disadvantages




Limited demographic
selectivity
Limited color
Low pass-along rate
May be expensive
LO4
Chapter 15
Copyright ©2009 Cengage Learning Inc. All rights reserved
29
Cooperative Advertising
Cooperative
Advertising
An arrangement in which the
manufacturer and the retailer
split the costs of advertising
the manufacturer’s brand.
LO4
Chapter 15
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30
Magazines
Advantages





Good reproduction
Demographic selectivity
Regional/local selectivity
Long advertising life
High pass-along rate
Disadvantages





Long-term advertiser
commitments
Slow audience build-up
Limited demonstration
capabilities
Lack of urgency
Long lead time
LO4
Chapter 15
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31
Beyond the Book
LO4 Noise-Free Reading
Chapter 15
{Contents Brought to you by...}
The table of contents (TOC) in a magazine commonly appears
after a dozen—sometimes two dozen—or more pages of
advertisements. To cut through the noise, Philips Electronics
paid $5 million to Time, Inc. to place the TOC on the first page
of four magazines—Time, Fortune, People, and Business 2.0.
In those issues, the TOC appeared on the very first page,
opposite an ad on the inside front cover, reading: “Philips
Electronics is bringing the table of contents to the front of
selected Time, Inc. magazines to make things easier for
readers.”
SOURCE: Brian Steinberg, “Philips and Time Agree
to Keep It Simple,” Wall Street Journal, April 21,
2006, B3.
Copyright ©2009 Cengage Learning Inc. All rights reserved
32
Radio
Advantages




Low cost
Immediacy of message
Short notice scheduling
No seasonal audience
change
Highly portable
Short-term advertiser
commitments
Entertainment carryover



Disadvantages





No visual treatment
Short advertising life
High frequency to
generate comprehension
and retention
Background distractions
Commercial clutter
LO4
Chapter 15
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33
Television
Advantages



Wide, diverse audience
Low cost per thousand
Creative opportunities for
demonstration
Immediacy of messages
Entertainment carryover
Demographic selectivity
with cable



Disadvantages







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 15
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34
Beyond the Book
LO4 Presidential TV Advertising
Chapter 15
When it comes to advertising, presidential hopefuls
continue to favor local TV .
– Nearly 95 percent of presidential campaign ads
between January 1 to October 10, 2007 were aired
on local TV stations
– Mitt Romney led other Republican presidential
candidates with 10,893 TV ads in that time period
– Bill Richardson led Democrats with 5,975 TV ads,
followed by Barack Obama with 4,293 ads
SOURCE: “Candidates Still Bank On Local TV Ads,” Mediaweek, Oct 22, 2007 p22 .
Copyright ©2009 Cengage Learning Inc. All rights reserved
35
Outdoor Media
Advantages




Repetition
Moderate cost
Flexibility
Geographic selectivity
Disadvantages



Short message
Lack of demographic
selectivity
High “noise” level
LO4
Chapter 15
Copyright ©2009 Cengage Learning Inc. All rights reserved
36
Chapter <#>
 In 1970, billboards accounted for 80 percent of outdoor
advertising
 In 2006, billboards accounted for 64 percent of outdoor
advertising, public transport for 12 percent (e.g.. buses, trucks,
cars), street furniture for 7 percent (e.g. park benches, bus
kiosks), and 17 percent alternative (outdoor) media
 Some car owners are paid $200-$800/month for driving a car
“wrapped” in the logo and branding of an advertiser
 So far, only 700 of the
450,000 U.S. billboards are
digital (only 40 states allow
their use)
PRNewsFoto/Chick-fil-A, Inc.)
Beyond the Book
LOs Outdoor Advertising
SOURCE: “Us’s Landscape Turns Luminous As Highway Billboards Go Digital,” Marketing Week, October 25, 2007, p22.
Copyright ©2009 Cengage Learning Inc. All rights reserved
37
Internet
Advantages


Fast growing
Ability to reach narrow
target audience
Short lead time
Moderate cost


Disadvantages



LO4
Difficult to measure ad
effectiveness and ROI
Ad exposure relies on
“click through” from
banner ads
Not all consumers have
access to Internet
http://www.fox.com
http://www.abc.com
Online
Chapter 15
Copyright ©2009 Cengage Learning Inc. All rights reserved
38
Beyond the Book
LO4 Privacy Protection
Chapter 15
Third-party ad networks provide most of today’s Web ads. These
ad networks use cookies to track your Web preferences and
usage patterns, then tailor advertising content to your interests.
Network Advertising Initiative (NAI) member companies are self-regulating.
Each has agreed to post a notice on all Web sites served by their
networks. This notice informs consumers that:
1. The ad networks may place a cookie on your computer;
2. The cookie may be used to tailor ad content both on the site you
are visiting as well as other sites within that network that you may
visit in the future.
3. They have provided an "opt-out" mechanism for the targeted ad
programs they provide.
SOURCE: http://networkadvertising.org/managing/principles.asp
Copyright ©2009 Cengage Learning Inc. All rights reserved
39
Alternative Media
Shopping Carts
Floor Ads
Computer
Screen Savers
Subway
Tunnel Ads
DVDs
Video Game Ads
Interactive Kiosks
Cell Phone Ads
Ads in Movies
LO4
Chapter 15
Advertainments
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40
Qualitative Factors in Media Selection
 Attention to the commercial and the program
 Program liking
 Lack of distractions
 Other audience behaviors
LO4
Chapter 15
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41
Media Scheduling
Continuous
Media Schedule
Advertising is run steadily
throughout the period.
Flighted
Media Schedule
Advertising is run heavily every
other month or every two weeks.
Pulsing
Media Schedule
Advertising combines continuous
scheduling with flighting.
Seasonal
Media Schedule
Advertising is run only when the
product is likely to be used.
LO4
Chapter 15
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42
LO4 REVIEW LEARNING OUTCOME
Media Evaluation and Selection
Type: Newspaper
Magazine
Radio
Television
Outdoor
Internet
Alternative
Scheduling:
continuous
flighted
Considerations:
Mix
Cost per contact
Reach
Frequency
Audience
selectivity
How much of each?
How much per person?
How many people?
How often?
How targeted is
audience?
pulsing
seasonal
Winter
Chapter 15
Spring
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Summer
Fall
43
LO5
Public Relations
Discuss the
role of public
relations in the
promotional mix
Chapter 15
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44
LO5 Public Relations
Public
Relations
The element in the promotional
mix that:
 evaluates public attitudes
 identifies issues of public concern
 executes programs to gain public
acceptance
Chapter 15
Copyright ©2009 Cengage Learning Inc. All rights reserved
45
LO5
Functions of Public
Relations
Press relations
Product publicity
Corporate communication
Public affairs
Lobbying
Employee and investor relations
Crisis management
Chapter 15
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46
LO5 Public Relations Tools
New product publicity
Product placement
Consumer education
Event sponsorship
Issue sponsorship
Internet Web sites
http://www.vw.com
http://www.chevrolet.com
Online
Chapter 15
Copyright ©2009 Cengage Learning Inc. All rights reserved
47
Beyond the Book
LO5 Consumer Education Sites
Chapter 15
consumer.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
defects in automobiles, crash test ratings, safety recalls, air bags
nhtsa.gov –
and child safety seats
fda.gov – food safety or food products, prescription or over the counter drugs, or
medical devices
Copyright ©2009 Cengage Learning Inc. All rights reserved
48
LO5
Managing Unfavorable
Publicity
Crisis
Management
A coordinated effort to handle the
effects of unfavorable publicity or
of an unfavorable event.
Chapter 15
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49
Biz Flix
LO5
Chapter 1
EdTV
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50
LO5 REVIEW LEARNING OUTCOME
The Role of Public Relations
Chapter 15
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51
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