McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.
LEARNING OBJECTIVES (LO)
After reading Chapter 18, you should be able to:
LO1
Explain the differences between product
advertising and institutional advertising
and the variations within each type.
LO2
Describe the steps used to develop,
execute, and evaluate an advertising
program.
LO3
Explain the advantages and disadvantages
of alternative advertising media.
1-2
The Price Foundation
LEARNING OBJECTIVES (LO)
After reading Chapter 18, you should be able to:
LO4
Discuss the strengths and weaknesses of
consumer-oriented and trade-oriented
sales promotions.
LO5
Recognize public relations as an
important form of communication.
1-3
The Price Foundation
A Provocative Advertisement
With a Serious Message
1-4
Opening Story – Robinson’s
Types of Advertisements
Product Advertisements

Product Advertisements
• Pioneering
(or Informational)
• Competitive
(or Persuasive)
• Comparative
• Reminder
• Reinforcement
LO1
1-5
Product Advertising versus Institutional Advertising
Types of Advertisements
What are the purposes of these product advertisements?
LO1
1-6
Product Advertising versus Institutional Advertising
Dial Soap
What is the type and purpose of this Ad?
LO1
1-7
Product Advertising versus Institutional Advertising
Types of Advertisements
Institutional Advertisements

Institutional Advertisements
• Advocacy
• Pioneering Institutional
• Competitive Institutional
• Reminder Institutional
LO1
1-8
Product Advertising versus Institutional Advertising
Developing the Advertising Program
Planning the Program
LO2

Identifying the
Target Audience

Specifying the
Advertising Objectives

Setting the
Advertising Budget
1-9
Developing, Executing & Evaluating an Advertising Program
Developing the Advertising Program
Designing the Advertisement

Message Content
• Informational
Element
• Persuasive
Element
LO2

Types of Appeals
• Fear Appeals
• Sex Appeals
• Humorous Appeals
1-10
Developing, Executing & Evaluating an Advertising Program
National Council against Drug Abuse
What is the appeal & purpose of this advertisement?
LO2
1-11
Developing, Executing & Evaluating an Advertising Program
Developing the Advertising Program
Designing the Advertisement

Creating the Actual Message
• Celebrity Spokespeople
• Ideas and Artwork
• Cost
LO2
1-12
Developing, Executing & Evaluating an Advertising Program
Developing the Advertising Program
Selecting the Right Media


Advertising Media
Media Planning Goals
• Maximize Exposure
• Minimize Costs
LO2
1-13
Developing, Executing & Evaluating an Advertising Program
FIGURE 18-1 Global advertising expenditure
by category, in US$ Millions
LO2
1-14
Developing, Executing & Evaluating an Advertising Program
Developing the Advertising Program
Selecting the Right Media

Basic Terms
• Reach
• Rating
• Frequency
• Gross Rating Points (GRPs)
= Reach × Frequency
• Cost per Thousand (CPM)
LO2
1-15
Developing, Executing & Evaluating an Advertising Program
FIGURE The language of the media buyer
LO2
1-16
Developing, Executing & Evaluating an Advertising Program
Marketing Dashboards
What is the Best Way to reach 1,000 customers?
Cost per Thousand (CPM) Impressions
CPM ($) =
LO2
Advertising Cost ($)
 Impressions Generated (#) 


1,000
1-17
Developing, Executing & Evaluating an Advertising Program
FIGURE 18-2 Advertisers must consider the
advantages and disadvantages of the many media
alternatives
LO3
1-18
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Different Media Alternatives

LO3
Television
1-19
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Different Media Alternatives

Television
• Wasted Coverage
• Cable and satellite TV
• Infomercial
LO3
1-20
Advantages & Disadvantages of Alternative Advertising Media
FIGURE 18-3 Household penetration of
television in selected Asian countries
LO3
1-21
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Different Media Alternatives

LO3
Radio
1-22
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Different Media Alternatives

LO3
Magazines
1-23
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Different Media Alternatives

Newspapers
• Production and Distribution Costs
• Online Newspapers
• Free Tabloids
LO3
1-24
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Different Media Alternatives

LO3
Yellow Pages
1-25
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Different Media Alternatives

Internet
• Rich Media
• Banner Ads
LO3
• Click Fraud
• Permission-Based
Advertising
1-26
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Different Media Alternatives

Outdoor
• Billboards
• Transit
Advertising
LO3
1-27
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Different Media Alternatives

Other Media
• Placed-Based Media

LO3
Selection Criteria
1-28
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Scheduling the Advertising

Factors to Consider
• Buyer Turnover
• Purchase Frequency
• Forgetting Rate
LO3
1-29
Advantages & Disadvantages of Alternative Advertising Media
Developing the Advertising Program
Scheduling the Advertising

Approaches
• Continuous (Steady) Schedule
• Flighting (Intermittent) Schedule
• Pulse (Burst) Schedule
LO3
1-30
Advantages & Disadvantages of Alternative Advertising Media
Making Responsible Decisions: Ethics
Who is Responsible for Click Fraud?
LO3
1-31
Advantages & Disadvantages of Alternative Advertising Media
Executing the Advertising Program
Pretesting the Advertising

Pretests
• Portfolio Tests
• Jury Tests
• Theater Tests
LO3
1-32
Advantages & Disadvantages of Alternative Advertising Media
Executing the Advertising Program
Carrying out the Program
LO3

Full-Service Agency

Limited-Service Agencies

In-House Agencies
1-33
Advantages & Disadvantages of Alternative Advertising Media
FIGURE 18-5 Alternative structures of
advertising agencies used to carry out the
advertising program
LO3
1-34
Advantages & Disadvantages of Alternative Advertising Media
Evaluating the Advertising Program
Posttesting the Advertising

Posttests

Aided Recall
• Noted

• Seen-Associated
• Read Most
LO3
Unaided Recall


Attitude Tests
Inquiry Tests

Sales Tests
1-35
Advantages & Disadvantages of Alternative Advertising Media
FIGURE 18-6 Sales promotions can be
used to achieve many objectives
LO4
1-36
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Consumer-Oriented Sales Promotion
LO4

Consumer-Oriented Sales Promotion

Coupons
1-37
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Consumer-Oriented Sales Promotion

LO4
Deals
1-38
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Consumer-Oriented Sales Promotion

Premiums
• Self-Liquidating
LO4
1-39
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Consumer-Oriented Sales Promotion

LO4
Contests
1-40
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Consumer-Oriented Sales Promotion

Sweepstakes
• Instant-win game
• “Experience”
LO4
1-41
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Consumer-Oriented Sales Promotion

LO4
Samples
1-42
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Consumer-Oriented Sales Promotion

LO4
Loyalty Programs
1-43
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Consumer-Oriented Sales Promotion

LO4
Point-of-Purchase Displays
1-44
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Consumer-Oriented Sales Promotion

LO4
Rebates
1-45
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Consumer-Oriented Sales Promotion

LO4
Product Placement
1-46
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Trade-Oriented Sales Promotion

Trade-Oriented Sales Promotion

Allowances and Discounts
• Merchandise Allowance
• Case Allowance
 Free Goods
• Finance Allowance
 Floor Stock Protection
LO4
 Freight Allowance
1-47
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Sales Promotion
Trade-Oriented Sales Promotion
LO4

Cooperative Advertising

Training of Distributors’ Salesforces
1-48
Strengths & Weaknesses of Consumer- and Trade- Oriented Sales Promotions
Public Relations
Publicity Tools

Public Relations

Publicity Tools
• News Release
LO5
• News Conference
• Public Service
Announcements (PSAs)
1-49
Public Relations: an Important form of Communication
Increasing the Value of Promotion
Publicity Tools
LO5

Building Long-Term Relationships
with Promotion

Self-Regulation
1-50
Public Relations: an Important form of Communication