CHAPTER ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-2 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Explain the differences between product advertising and institutional advertising and the variations within each type Describe the steps used to develop, execute, and evaluate an advertising program © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-3 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Explain the advantages and disadvantages to alternative advertising media Discuss the strengths and weaknesses of consumer-oriented and trade-oriented sales promotions Recognize public relations as an important form of communication © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-4 TYPES OF ADVERTISEMENTS • Advertising • Paid, non-personal communication through various media by organizations and individuals who are in some way identified in the advertising message • Total advertising volume exceeds $230B yearly © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-6 TYPES OF ADVERTISEMENTS • Product Advertisements – focus on selling a good or service and which take three forms: Pioneering (or Informational) Competitive (or Persuasive) Comparative (relative to competitors) Reminder (reinforce previous knowledge) Reinforcement (made the right choice) © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-6 TYPES OF ADVERTISEMENTS Institutional Advertisements designed to build goodwill or an image for an organization rather than promote a specific good or service – Often used to support the public relations plan or counter adverse publicity © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-17 TYPES OF ADVERTISEMENTS • Institutional Advertisements Advocacy – state the position of a company on an issue Pioneering Institutional – announce what a company is , what it can do, or where it is located Competitive Institutional – promote advantages of one product class over another and used in markets where different product classes compete for same buyers Reminder Institutional – simply bring company’s name to attention of target market again © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-17 DEVELOPING THE ADVERTISING PROGRAM •The promotion decision process can be applied to each of the promotional elements: A Identifying the Target Audience B Specifying Advertising Objectives C Setting the Advertising Budget © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 19-1 Super Bowl, super dollars, super audience © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-28 DEVELOPING THE ADVERTISING PROGRAM • Designing the Advertisement – Message focuses on key benefits of product that are important to prospective buyers – Message depends on general form or appeal used in ad and actual words included in the ad Message Content Creating the Actual Message © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-31 Rating A A rating rating is is the the percentage percentage of of households households in in aa market market that that are are tuned tuned to to aa particular particular TV TV show show or or radio radio station station © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-119 Frequency Frequency Frequency is is the the average average number number of of times times aa person person in in the the target target audience audience is is exposed exposed to to aa message message or or an an advertisement advertisement © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-120 Gross Rating Points Gross Gross rating rating points points (GRPs) (GRPs) is is aa reference reference number number used used by by advertisers advertisers that that is is obtained obtained by by multiplying multiplying reach reach (expressed (expressed as as aa percentage percentage of of the the total total market) market) by by frequency frequency © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-121 Cost per Thousand Cost Cost per per thousand thousand (CPM) (CPM) is is the the cost cost of of reaching reaching 1,000 1,000 individuals individuals or or households households with with the the advertising advertising message message in in aa given given medium medium (M (M is is the the Roman Roman numeral numeral for for 1,000) 1,000) © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-122 Infomercials Infomercials Infomercials are are program-length program-length (30-minute) (30-minute) advertisements advertisements that that take take an an educational educational approach approach to to communication communication with with potential potential customers customers © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-123 Pretests Pretests Pretests are are tests tests conducted conducted before before the the advertisements advertisements are are placed placed in in any any medium medium to to determine determine whether whether itit communicates communicates the the intended intended message message or or to to select select among among alternative alternative versions versions of of the the advertisement advertisement © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-124 Full-Service Agency A A full-service full-service agency agency is is an an advertising advertising agency agency that that provides provides the the most most complete complete range range of of services, services, including including market market research, research, media media selection, selection, copy copy development, development, artwork, artwork, and and production production © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-125 Limited-Service Agencies Limited-service Limited-service agencies agencies are are advertising advertising agencies agencies that that specialize specialize in in one one aspect aspect of of the the advertising advertising process process such such as as providing providing creative creative services services to to develop develop the the advertising advertising copy copy or or buying buying previously previously unpurchased unpurchased media media space space © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-126 In-House Agencies In-house In-house agencies agencies consists consists of of the the company’s company’s own own advertising advertising staff, staff, which which may may provide provide full full services services or or aa limited limited range range of of services services © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-127 Posttests Posttests Posttests are are tests tests conducted conducted after after an an advertisement advertisement has has been been shown shown to to the the target target audience audience to to determine determine whether whether itit accomplished accomplished its its intended intended purpose purpose © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-128 Consumer-Oriented Sales Promotions Consumer-oriented Consumer-oriented sales sales promotions promotions are are sales sales tools tools used used to to support support aa company’s company’s advertising advertising and and personal personal selling selling directed directed to to ultimate ultimate consumers consumers © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-129 Product Placement Product Product placement placement is is aa sales sales promotion promotion tool tool that that uses uses aa brand-name brand-name product product in in aa movie, movie, television television show, show, video, video, or or aa commercial commercial for for another another product product © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-130 Trade-Oriented Sales Promotions Trade-oriented Trade-oriented sales sales promotions promotions are are aa Sales Sales tools tools used used to to support support aa company’s company’s advertising advertising and and personal personal selling selling directed directed to to wholesalers, wholesalers, distributors, distributors, or or retailers retailers Also Also called called trade trade promotions promotions © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-131 Cooperative Advertising Cooperative Cooperative advertising advertising consists consists of of advertising advertising programs programs by by which which aa manufacturer manufacturer pays pays aa percentage percentage of of the the retailer’s retailer’s local local advertising advertising expense expense for for advertising advertising the the manufacturer’s manufacturer’s products products © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-132 Publicity Tools Publicity Publicity tools tools consist consist of of methods methods of of obtaining obtaining nonpersonal nonpersonal presentation presentation of of an an organization, organization, good, good, or or service service without without direct direct cost cost Examples Examples include include news news releases, releases, news news conferences, conferences, and and public public service service announcements announcements © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-133 ... and disadvantages to alternative advertising media Discuss the strengths and weaknesses of consumer-oriented and trade-oriented sales promotions Recognize public relations as an important form... McGraw-Hill/Irwin Slide 19- 39 FIGURE 19- B Top 10 advertising icons of the 20th century © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19- 40 FIGURE 19- 2 U.S advertising expenditures,... McGraw-Hill/Irwin Slide 19- 62 FIGURE 19- 4 Advantages and disadvantages of major advertising media © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19- 48 GLOBAL ADVERTISING Globalism