Lamb, Hair, McDaniel
MKTG2007-2008
15
CHAPTER
Designed by
Amy McGuire, B-books, Ltd.
Chapter 15
Advertising and
Public Relations
Prepared by
Deborah Baker, Texas Christian University
Copyright ©2008 by South-Western, a division of Thomson Learning. 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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
2
Learning Outcomes
LO4
Describe media evaluation
and selection techniques
LO5
Discuss the role of public relations
in the promotional mix
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
3
LO1
The Effects of Advertising
Discuss the effects of
advertising on market
share and consumers
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
4
The Effects of Advertising
 U.S. advertising was almost $300 billion in 2006
 In 2005, 32 companies spent over $1 billion each
 The advertising industry is small—only 155,000
employed by the 12,000 advertising agencies
 Ad budgets of some firms are almost $4 billion
annually
LO1
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
5
The Effects of Advertising
Top Ten
Leaders
by U.S.
Advertising
Spending
LO1
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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 ©2008 by South-Western, a division of Thomson Learning. All rights reserved
8
LO1 REVIEW LEARNING OUTCOME
Effects of Advertising
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
9
LO2 Major Types of Advertising
Identify the major
types of advertising
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
11
Major Types of Advertising
Institutional
Advertising
Corporate identity
Advocacy
advertising
Pioneering
Product
Advertising
LO2
Chapter 15
Competitive
Comparative
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
13
LO2 REVIEW LEARNING OUTCOME
The Major Types of Advertising
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
14
LO3 Creative Decisions in Advertising
Discuss the
creative decisions
in developing an
advertising campaign
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
16
Creative Decisions in
Advertising
Determine the
advertising objectives
Make creative decisions
LO3
Chapter 15
Make media decisions
Evaluate the campaign
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
17
Setting Objectives: The
DAGMAR Approach
Define target audience
Define desired percentage change
Define the time frame for change
LO3
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
18
Creative Decisions
Identify product benefits
Develop and evaluate advertising appeals
Execute the message
Evaluate the campaign’s effectiveness
LO3
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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 ©2008 by South-Western, a division of Thomson Learning. 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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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 ©2008 by South-Western, a division of Thomson Learning. 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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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 ©2008 by South-Western, a division of Thomson Learning. All rights reserved
25
LO4 Media Decisions in Advertising
Describe media
evaluation
and selection
techniques
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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 ©2008 by South-Western, a division of Thomson Learning. All rights reserved
27
Major Advertising Media
Newspapers
Magazines
Radio
Television
Outdoor Media
Yellow Pages
LO4
Chapter 15
Internet
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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 ©2008 by South-Western, a division of Thomson Learning. All rights reserved
29
Beyond the Book
LO4 Free Newspapers?
Chapter 15
 The new Baltimore Examiner is delivering 250,000
newspapers—at no charge and unsolicited!
 Advertising brings in the revenue for this niche
publication targeting households with income of $73,000
or more.
 The ads are $2,900 for a full page, compared with $17,000
for its competition, the
Baltimore Sun.
 The Examiner is betting that
low ad rates and the target
market will be a valuable
proposition to advertisers.
SOURCE: Joseph T. Hallinan, “Do New Free Dailies
Mean Sun is Setting for Paid Newspapers?,” Wall
Street Journal, April 5, 2006, B1.
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
30
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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
31
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
Copyright ©2008 by South-Western, a division of Thomson Learning. 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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
34
Chapter 15
 The number of ads in TV shows is a longstanding
complaint of viewers and advertisers.
 The media is cluttered and consumers change
channels or speed through
05
commercials on
04
a DVR.
 Tests are being
conducted to feature
shorter commercial
pods.
Year
Beyond the Book
LO4 TV Advertising: Is Less More?
03
02
01
2000
13.5
SOURCE: Suzanne Vranica,
“TV-Ad Test to Show if Less is More,”
Wall Street Journal, April 5,2006, B3.
14
14.5
15
15.5
Commercial Minutes
per Hour
Copyright ©2008 by South-Western, a division of Thomson Learning. 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 ©2008 by South-Western, a division of Thomson Learning. All rights reserved
36
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 ©2008 by South-Western, a division of Thomson Learning. All rights reserved
37
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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
38
Beyond the Book
LO4 Videogame Advertising
Chapter 15
 Microsoft plans to acquire Massive inc., a
start-up that places ads in video games.
 Ads are inserted into the game environment.
 Video games could become
a large new medium for
advertising.
SOURCE: Robert A. Guth and Nick Wingfield,
“Microsoft’s ‘Massive’ Move into Game Ads,” Wall
Street Journal, April 26,2006, B1.
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
39
Beyond the Book
LO4 Directory Assistance Advertising
Chapter 15
 Companies are offering free telephone directory
assistance—but there’s an advertisement first.
 The audio ads are narrowly targeted,
and are 10 to 12 seconds.
 The growth of such free services
could represent another change
in the telecom industry.
 Dial 1-800-FREE411 or
1-800-411-METRO
SOURCE: Rebecca Buckman, “Your
Listing, and a Word From Our Sponsor,”
Wall Street Journal, April 20,2006, B1.
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
40
Qualitative Factors in Media Selection
 Attention to the commercial and the program
 Program liking
 Lack of distractions
 Other audience behaviors
LO4
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
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
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
42
Beyond the Book
LO4 Media Scheduling on the Web
Chapter 15
 Competition for Web advertising
spots is driving up prices.
 Some Web advertisers now run
campaigns based on time of day.
Examples:
● McDonald’s: breakfast meals
during morning hours
● Xerox: copier ads during the workday
● Budweiser: beer ads on Friday afternoons
 Scheduling Web ads during prime times is a more
efficient use of ad dollars and more targeted.
SOURCE: David Kesmodel, “More Marketers Place Web Ads
by Time of Day,” Wall Street Journal, June 23, 2006, B1.
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
43
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
Summer
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Fall
44
LO5
Public Relations
Discuss the
role of public
relations in the
promotional mix
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
45
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 ©2008 by South-Western, a division of Thomson Learning. All rights reserved
46
LO5
Functions of Public
Relations
Press relations
Product publicity
Corporate communication
Public affairs
Lobbying
Employee and investor relations
Crisis management
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
47
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 ©2008 by South-Western, a division of Thomson Learning. All rights reserved
48
Beyond the Book
LO5 Example of Consumer Education
Chapter 15
 Corporations are teaching public school students
about personal finance.
 People under age 25 are a fast-growing group for
credit card debt increases and bankruptcy.
 Is it appropriate to use
educational materials with
a corporate identity?
 How should financial literacy
be taught?
SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,”
Wall Street Journal, April 8-9, 2006, B1.
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
49
LO5
Managing Unfavorable
Publicity
Crisis
Management
A coordinated effort to handle the
effects of unfavorable publicity or
of an unfavorable event.
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
50
Biz Flix
LO5
Chapter 15
EdTV
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
51
LO5 REVIEW LEARNING OUTCOME
The Role of Public Relations
Chapter 15
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
52