Chapter 19: Managing Advertising & Sales Promotion

Otterbein College Winter 2000

05/08/13 19-1

Objective s
Developing & Managing an Advertising Program Deciding on Media & Measuring Effectiveness Sales Promotion Public Relations

05/08/13

19 -2

Major Decisions in Advertising Objectives Objectives Setting Setting Budget Budget Decisions Decisions Message Message Decisions Decisions Media Media Decisions Decisions

05/08/13

Campaign Campaign Evaluation Evaluation

19 -3

Advertising Objectives
Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time
Informative Informative Advertising Advertising
Build Build Primary PrimaryDemand Demand

Persuasive Persuasive Advertising Advertising

Build BuildSelective SelectiveDemand Demand

Comparison Comparison Advertising Advertising

Compares ComparesOne OneBrand Brand to to Another Another

Keeps KeepsConsumers ConsumersThinking Thinking About Abouta aProduct. Product.

Reminder Reminder Advertising Advertising

05/08/13

19 -4

The Five Ms of Advertising

Message Money
Factors to consider:
Generation Evaluation Selection Execution Social-responsibility

Mission
Sales goals Advertising objectives

Stage in PLC Market share & consumer base Competition and clutter Advertising frequency

Measure
Impact: Comm. Sales

Media
Reach Frequency, Impact Media types Specific vehicles Timing Geography

05/08/13

Product substitution

19 -5

Advertising Budget Factors

Market Share & Consumer Base Stage in the Product Life Cycle Competition & Clutter

Product Substitutability 05/08/13

Advertising Frequency 19 -6

Profiles of Major Media Types

Newspapers
Advantages: Flexibility, timeliness; good local market coverage; broad acceptance, high believability Limitations: Short life; poor reproduction quality; small pass-along audience

Television

Advantages: Combines sight, sound, motion; high attention; high reach; appealing to senses Limitations: High absolute costs; high clutter; fleeting exposure; less audience selectivity

Direct Mail

Advantages: Audience selectivity; flexibility, no ad competition within same medium; allows personalization

05/08/13 Limitations: Relative high cost; junk mail image

19 -7

Profiles of Major Media Types

Radio
Advantages: Mass use; high geographic and demographic selectivity; low cost Limitations: Audio only; fleeting exposure; lower attention; nonstandardized rates; fragmented audiences

Magazines

Advantages: High geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life; good pass-along readership Limitations: Long ad purchase lead time; waste circulation; no guarantee of position

Outdoor

Advantages: Flexibility; high repeat exposure; low cost; low message competition 19

-8 Limitations: Little audience selectivity; creative limitations

05/08/13

Classification of Advertising Timing Patterns

Level
Concentrated

Rising (2)

Falling (3)

Alternating (4)

(1)

Continuous

(5)

(6)

(7)

(8)

Intermittent

(9) (9)

(10)

(11)

(12)

No. of messages per month

05/08/13

Month

19 -9

Simplified Rating Sheet for Ads

(Attention) How well does the ad catch the readers attention? (Read-through) How well does the ad lead the reader to read further? (Cognitive) How clear is the central message or benefit? (Affective) How effective is the particular appeal? (Behavior) How well does the ad suggest follow-through action? Total
0 20
Poor 05/08/13 ad

__ 20 __ 20 __ 20 __ 20 __ 20

__
19 10

40

60

80
Good ad

100
Great ad

Mediocre Average ad ad

Advertising Strategy
Message Execution Turning the Big Idea Into an Actual Ad to Capture the Target Markets Attention and Interest.
Testimonial Testimonial Evidence Evidence Scientific Scientific Evidence Evidence Technical Technical Expertise Expertise Personality Personality Symbol Symbol Slice Sliceof ofLife Life Lifestyle Lifestyle Fantasy Fantasy Mood Moodor or Image Image

Typical Typical Message Message Execution Execution Styles Styles

05/08/13

Musical Musical

19 11

Advertising Evaluation
Advertising Advertising Program Program Evaluation Evaluation

Communication Communication Effects Effects

Is Isthe theAd AdCommunicating CommunicatingWell? Well?

Sales Sales Effects Effects

Is Isthe theAd Ad Increasing IncreasingSales? Sales?

05/08/13

19 12

Why the increase in Sales Promotion?

Growing retailer power Declining brand loyalty Increased promotional sensitivity Brand proliferation Fragmentation of consumer market Short-term focus Increased managerial accountability Competition Clutter
19 13

05/08/13

Long-Term Promotion Allocation

60 50 40 30 20 10 0 1986 88 90 92 94 1996 19 14 Year 05/08/13
Cox Direct 19th Annual Survey of Promotional Practices

%t of total - 3 yr.MA

Trade Promo Media Adv Cons. Promo

Channels of Sales Promotions

MANUFACTURER Push Trade Promotions RETAILER Push Retail Promotions CONSUMER 05/08/13 Consumer Promotions Pull

19 15

Consumer Promotion
Consumer-Promotion Objectives Entice EnticeConsumers Consumersto to Try Trya aNew NewProduct Product Lure LureCustomers CustomersAway Away From FromCompetitors CompetitorsProducts Products Get GetConsumers Consumersto toLoad LoadUp Up on a Mature Product on a Mature Product Hold Hold& &Reward Reward Loyal Loyal Customers Customers Consumer ConsumerRelationship Relationship Building Building Consumer-Promotion Tools

Samples Samples Coupons Coupons Cash CashRefunds Refunds Price PricePacks Packs Premiums Premiums

Advertising Advertising Specialties Specialties Patronage Patronage Rewards Rewards Contests Contests Sweepstakes Sweepstakes Games Games

05/08/13

Point-of-Purchase Point-of-Purchase Displays Displays

19 16

Deal Proneness,
Examination of deal proneness among consumers in a supermarket setting Surveys & Grocery Receipts used Eight types of deals:
Cent-off, One-free, Gift, Display, Rebate, Contest, Sale, & Coupon
Liechtenstein, Burton, & Netemeyer, Journal of Retailing, Summer 1997

05/08/13

19 17

Deal Proneness,
Cluster analysis yielded 2 interpretable results:
49% are deal prone, 51% not 24% High Deal prone, 50% intermediate, 26% deal insensitive

Deal-proneness a generalized construct, i.e. crosses type of promotion Younger & less-educated more likely to be deal prone
05/08/13
Liechtenstein, Burton, & Netemeyer

19 18

Trade Promotions
Trade-Promotion Objectives Persuade PersuadeRetailers Retailersor or Wholesalers Wholesalersto toCarry Carrya aBrand Brand Give Givea aBrand BrandShelf ShelfSpace Space Promote Promotea aBrand Brandin in Advertising Advertising Push Pusha aBrand Brandto toConsumers Consumers Trade-Promotion Tools Price-Offs Price-Offs Allowances Allowances Buy-Back Buy-Back Guarantees Guarantees Free FreeGoods Goods Contests Contests Premiums Premiums Patronage Displays Rewards Discounts Discounts Push PushMoney Money Specialty Specialty Advertising Advertising Items Items

05/08/13

19 19

Business-to-Business Promotion
Business-Promotion Objectives
Generate GenerateBusiness BusinessLeads Leads Stimulate StimulatePurchases Purchases Reward RewardCustomers Customers Motivate MotivateSalespeople Salespeople

Business-Promotion Tools
Conventions Conventions Trade TradeShows Shows Sales SalesContests Contests

05/08/13

19 20

Major Public Relations Tools

Web WebSite Site News News

Public Public Service Service Activities Activities

Corporate Corporate Identity Identity Materials Materials

Speeches Speeches

Audiovisual Audiovisual Materials Materials

05/08/13

Written Written Materials Materials

Special Special Events Events

19 21

Taco Bell has purchased the Liberty Bell!

05/08/13

19 22

Next Week ... Direct Marketing

05/08/13

19 23