Kotler

Managing Advertising, Chapter 19

Sales Promotions and Public Relations
In this chapter, we will address the following
questions:
• What steps are involved in developing an
advertising program?
• What explains the growing use of sales promotion,
and how are sales-promotion decisions made?
• How can companies exploit the marketing potential
of public relations and publicity?

Bonafont

• Woman trying on a dress (or getting on an elevator),

takes a drink of water. Another woman puts on the
dress (or gets on the elevator) in front of the woman,
but must take it off again (or get off of the elevator)
because she does not fit.

• These ads converted Bonafont into a very successful

bottled water company.

1
 Advertising as a Percent of Sales in
the U.S. (Selected Industries)
Advertising as a
Industry percent of sales
Candy 17.4
Watches and Clocks 15.9
Games and Toys 13.1
Books 10.7
Perfumes and Cosmetics 8.5
Apparel 5.8
Farm Machinery 1.0
Construction Machinery & Equipment 0.3
Source: “1997 Advertising to Sales Ratios for the 200 Largest Ad Spending Industries,”
Advertising Age, June 30, 1997. P. 35.

Principle decisions in advertising

Determine
Determine Objectives
Objectives

Decide
Decide
Budget
Budget

Decide
Decide Decide
Decide
Message
Message Media
Media Allocation
Allocation

Evaluation
Evaluation of
of Campaign
Campaign

2
 Determine objectives
Objectives of Advertising:
The task of communicating a specific message
• To a specific target public
• During a specific period

Informative
Informative advertising
advertising
Create
Createprimary
primarydemand
demandand
and
awareness
awareness

Persuasive
Persuasive advertising
advertising
Create
Createselective
selectivedemand
demand

Reminder
Reminder advertising
advertising
Maintain
Maintainthe
theproduct
productin
inthe
themind
mind
of the consumer
of the consumer

Determine the budget

Methods for determining the advertising budget:
Ability to finance, percent of sales, competitive parity
and task-objectives

Stage
Stageinin
Product
Productsubstitutability
substitutability product
productlife
lifecycle
cycle

Factors that
Advertising
determine the
Advertising Market
Marketshare
share
frequency advertising
frequency
budget

Competition
Competition

3
 Advertising message

Message
Messagecreation:
creation:
Concentrate
Concentrateon
onthe
thebenefits
benefitsto
tothe
thecustomer
customer

Content
Contentevaluation
evaluationand
andselection:
selection:
1)
1)Interest;
Interest;2)
2)Distinctiveness;
Distinctiveness;Believability
Believability

Message
Messageexecution:
execution:
Rational
Rationalpositioning
positioningvs.
vs.Emotional
Emotionalpositioning;
positioning;
Creative,
Creative, Memorable,Attention-getting
Memorable, Attention-getting

Social
Socialresponsibility
responsibilityreview:
review:
Do
Donot
notoverstep
overstepsocial
socialor
orlegal
legalnorms
norms

Examples from Mexico

Identify the message in the following ads. Do these messages
concentrate on the benefits to the customer? Do the ads
meet the three desired characteristics in message content:
i) interest; ii) distinctiveness; iii) believability.
1) Hair color product: woman at side of road cannot get a
ride, so she lets down her hair, and a car stops…
2) Axe ad: Man w/ 2 women; mosquito; frog; old man; worm
3) Liverpool ads: Woman walking with Liverpool shopping
bag. Other women are so impressed they spill things.
Contrast this with Palacio de Hierro ads.

4
 Media selection
Step
Step1.
1. Decide
Decidereach,
reach,frequency
frequencyand
andimpact
impact

Step
Step2.
2. Choose
Choosemedia
mediaand
andvehicles
vehicles
Media
Mediathat
thatthe
thetarget
targetcustomer
customerare
areused
usedto
toseeing
seeing
Nature
Natureofofproduct
product
Type
Typeofofmessage
message
Costs
Costs
Step
Step3.
3.Choose
Choosetiming
timing
Show
Showadvertisement
advertisementininperiods
periodsof
ofhigh
highdemand
demand
Pattern:
Pattern: continuous, concentrated,intermittent
continuous, concentrated, intermittent

Step
Step4.
4. Geographic
Geographicallocation
allocation
Market
Marketsize
size
Advertising
Advertisingresponse
response
Media
Mediaefficiency
efficiency
Competition
Competition

Media Selection Involves Assessing

Newspapers
Newspapers

Internet
Internet Television
Television
Types
Types
of
of
Magazines
Magazines Media
Media Outdoor
Outdoormedia
media

Yellow
Yellowpages
pages Radio
Radio

5
 Evaluating the advertisement campaign
Effect
Effect of
of communication
communication
Is
Isthe
theadvertisement
advertisementcommunicating
communicatingeffectively?
effectively?

Effect
Effect on
on sales
sales
Is
Isthe
theadvertisement
advertisementincreasing
increasingsales?
sales?

Advertising Share
Shareof
of
Advertising Share
Shareof
of Share
Shareof
of
Expenditures heart
heartand
and
Expenditures Voice
Voice market
market
mind
mind

Sales Promotion
• Sales promotions are demand-stimulating
programs, mostly short-term, designed to
stimulate trial or quicker or greater purchase.
• Sales promotions have increased because:
9Product managers are under greater pressure to
increase current sales.
9There is increased competition.
9The efficiency of advertising has decreased.
9Consumers are more price-oriented.
9Increased power of retailers relative to producers.

6
 Consumer Promotional Tools
Short term incentives for increasing sales
of a good or service.
Objectives of consumer Promotion tools for
promotion consumers

Encourage
Encouragecustomers
customerstoto Free
Freetrials
trialsand
and Prizes
Prizesand
and
try
trynew
newproducts Premiums
products samples
samples Premiums(gift)
(gift)
Attract
Attractcompetition’s
competition’s
customers
customers Coupons Loyalty
Loyaltyawards
awards
Coupons
Attract
Attractpeople
peoplewho
who Money-back
otherwise Money-back
otherwise wouldnot
would notbuy
buy Cash
Cashrefunds
refunds Guarantees
Retain Guarantees
Retainand
andreward
reward
loyal
loyalcustomers
customers Price
Pricepacks
packs Warranties
Warranties

Point
Pointof
ofpurchase
purchase(POP)
(POP)displays
displays

Trade Promotional Tools

Short term incentives directed at
retailers and wholesalers.
Objectives of trade Tools for trade
promotion promotion
Convince
Convinceretailers
retailersand
and Allowances
wholesalers Allowancesforfor
wholesalers tocarry
to carryaabrand
brand advertising
advertisingor
ordisplays
displays
Provide
Providegood
goodshelf
shelfspace
space
for
foraabrand
brand Price
Pricediscounts
discounts
Induce
Induce retailersto
retailers toprovide
provide
displays
displays and pricereductions
and price reductions Repurchase
Repurchaseguarantees
guarantees
Stimulate
Stimulateretailers
retailerstotopush
push
the brand to consumers
the brand to consumers Free
Freegoods
goods

7
 Business- and Sales-Force
Promotional Tools
Short term incentives directed at industrial
customers and your sales force.
Objectives of business and Tools for business and
sales force promotion sales force promotion

Stimulate Trade
Tradeshows
showsand
and
Stimulatesales
sales conventions
conventions
Reward
Rewardbusiness
business
customers Sales
Salescontests
contests
customers

Motivate
Motivatesales
salesforce
force Specialty
Specialtyadvertising
advertising
to
to greatereffort
greater effort (free
(freegifts)
gifts)

Public relations strives to:

promote or protect a company’s image or individual
products. Its principle tools are:
• News: Present news and information about the
organization in the most positive light.
• Publications: To reach and influence target markets.
• Events: Uses news conferences, seminars, etc. to increase
awareness of new products or activities.
• Public Service Activities: Create a positive company
image in the community.
• Lobbying: Deal with legislators and government officials
to promote or defeat legislation and regulation.