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Chapter 16 - Advertising, Sales Promotion & Public Relations
Chapter 16 - Advertising, Sales Promotion & Public Relations
Advertising,
Sales Promotion, &
Public Relations
LEARNING
OBJECTIVES:
Define the roles of
ADVERTISING, SALES
PROMOTION & PUBLIC
Relations in promotion mix.
Describe the major decisions
involved in developing an
advertising program.
Explains how SALES
PROMOTION CAMPAIGNS
are developed and
implemented.
Explain how companies use
PUBLIC RELATIONS to
communicate with their
publics.
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ADVERTISING
Any paid form of non-personal presentation and promotion of ideas, goods, or
services by an identified sponsor.
Countries in Mediterranean Sea
Romans painted walls to announce gladiator fights
Phoenicians painted pictures promoting their wares on large rocks
along parade routes.
Advertising
Used mostly by business firms.
In CHINA, the nations largest advertisers are the local fast moving
consumer goods (FMCG) firms they account for 80% of all the
advertising expenses.
It is also used by a wide range of not-for-profit organizations,
professionals, and social agencies that advertise their causes to various
target publics throughout Asia.
In JAPAN, the government, educational institutions, and medical
services account for 4.9% of all advertising in the major media.
It is a good way to inform or persuade other people or mainly the
consumers.
Marketing Management
They are responsible in developing an advertising program.
MAJOR ADVERTISING DECISIONS:
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b) Mature products
Requires lower budget as a ratio to sales.
Market share also impacts on the amount of advertising needed: because
building the market or taking share from competitors requires larger
advertising spending than does simply maintaining current share, low
share brands usually need more advertising spending as a percentage of
sales.
Also, brands in market with many competitors and high advertising clutter
must be advertised more heavily to be noticed above the noise in the
market.
Undifferentiated brands those that closely resemble other brands in
their product class (beer, soft drinks, laundry detergents) may require
heavy advertising to set them apart.
When the products differ greatly from competitors, advertising can be
used to point out the differences to consumers.
How does a company know if it spending the right amount?
Some critics charge that large consumer packaged goods
firms tend to spend too much on advertising. They claim that, on
the hand, the large consumer companies use lots of image
advertising without really knowing its effects.
Business to business marketers generally under-spend on
advertising. They just tend to rely too heavily on their sales
forces to bring in orders. They underestimate the power of
company and product image in pre-selling to industrial customer
awareness and knowledge.
3. DEVELOPING ADVERTISING STRATEGY
In the past, companies often viewed media planning as secondary to the
message creation process.
It has two major elements:
1) Creating advertising MESSAGES
2) Selecting advertising MEDIA
1. Creating the Advertising Messages
No matter how big the budget, advertising can succeed only if
commercials gain attention and communicate well. Good advertising
messages are especially important in todays costly a cluttered
advertising environment.
Just to gain and hold attention, todays advertising messages must
be better planned, imaginative, more entertaining and more
rewarding to consumers.
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Television
Direct Mail
Radio
Magazines
Outdoor
Advantages
Flexibility; timeliness; good local
market coverage; broad capability;
high believability
Good mass market coverage; low
cost per exposure; combines sight,
sound, and motion; appealing to the
senses
High audience selectivity; flexibility;
no ad competition within the same
mediums; allows personalization
Good
local
acceptance;
high
geographic
and
demographic
selectivity, low cost
High geographic an demographic
selectivity; credibility and prestige;
high quality reproduction; long life
and good pass along the
readership
Flexibility; high repeat exposure; low
cost; low message competition; good
Disadvantages
Short life; poor reproduction
quality; small pass along
audience
High absolute costs; high clutter;
fleeting exposure; less audience
selectivity
Relatively high cost per exposure;
junk mail image
Audio only, fleeting exposure; low
attention (the half hard
medium); fragmented audiences
Long ad purchase lead time; high
cost; no guarantee of position
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Internet
positional selectivity
High selectivity; low cost; immediacy;
interactive capabilities
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SALES PROMOTION
Advertising and personal selling often work closely with another promotion tool,
sales promotion.
Sales promotion is a short term incentives to encourage the purchase or sale of
a product or services. Whereas advertising and personal selling offer reasons
to buy a product of service, sales promotion offers to buy now. Example of sales
promotions are found everywhere.
A. Rapid Growth of Sales Promotion
Sales Promotion tools used by organizations, including manufacturers,
distributors, retailers, trade associations and not for profit institutions. They
are targeted toward final buyers (consumer promotions), retailers and
wholesalers (trade promotion), business costumers (business promotions),
and members of the sales force (sales force promotion).
Several factors have contributed to the rapid growth of sales promotion
(particularly in consumer packaged goods market).
a. FIRST
Inside the company, product managers face greater pressures to
increase their current sales, and promotion is an effective short
run sales tool.
b. SECOND
Externally, the company faces more competition and competing
brands are less differentiated.
c. THIRD
Advertising efficiency has declined because f rising costs, media
clutter, and legal restraint.
d. FINALLY
Consumers have become more deal oriented, and ever larger
retailers are demanding more deals from manufacturers.
In developing a sales promotion program, a company must first set sales
promotion objectives and then select the best tools for accomplishing these
objectives.
B. Sales Promotion Objectives
Sales promotion objectives vary widely.
Sellers may use consumer promotions to increase short term sales; to
help build long term market share.
Objectives for trade promotion includes the following; a.) getting retailers to
carry new items and more inventory, b.) getting them to advertise the product
and give it more shelf space, c.) getting them to buy ahead.
Sale force include; a.) getting more sales force support for current or new
products or getting salespeople to sign up new accounts.
Sales promotions are usually used together with advertising, personal selling
or other promotion mix tools. Consumer promotions must usually be
advertised and can be add excitement and pulling power to ads. Trade and
sales force promotion supports the firms personal selling process.
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In general, rather than creating only short term sales or temporary brand
switching, sales promotions should help to reinforce the products position and
build long term costumer relationships.
C. Major Sales Promotion Tools
1. Consumer Promotion Tools
a. Sample
A small amount of product offered to consumers for trial.
Some samples are free; for others, the company charges a small
amount to offset its cost.
The sample might be delivered door to door, email, handed in a
store, attached to another product or featured in an ad. Sometimes
it combined into sample packs which can then be used to promote
other products and services.
b. Coupons
Certificate that gives buyers a saving when they purchase a
specified products
It can stimulate sales of mature brand or promote early trial for new
brand.
c. Cash refund offers (REBATES)
Offer to refund part of the purchase price of a product to consumers
who send a proof of purchase to the manufacturer
It is somehow alike with coupon except that the price reduction
occurs after the purchase occurs.
d. Price packs (cents off deals)
Reduced price that is marked by the producer directly on the label
or package.
Buy one Take one.
e. Premiums
Good offered either free or at low cost as an incentive to buy a
product.
Example: figurines outside the product of Jollibee. (Freebies)
f. Advertising Specialties
These are useful articles imprinted with an advertisers name that is
given as gifts to consumers.
Typical items include pens, calendars, key rings, matches, shopping
bags, t-shirts, caps, nail files and coffee mug. Such items can be
very effective.
g. Patronage Rewards
These are cash or other rewards offered for the regular use of a
certain companys products or services.
Example: Airlines (Ticket promos), Petron (earn points)
h. Point of Purchase (POP) Promos
Display and demonstration that takes place at the point of purchase
or sale.
i. Contest, Sweepstakes, Games
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PUBLIC RELATIONS
Building goods with the companys various publics by obtaining favourable
publicity, building up a good corporate image, handling or heading off
unfavourable rumors, stories and events.
PR Department may perform any of the following functions:
a. Press Relations or Press Agentry
Creating and placing newsworthy information in the news media to
attract attention to a person, product or services.
b. Product Publicity
Publicizing specific products
c. Public Affairs
Building and maintaining national or local community relations.
d. Lobbying
Building and maintaining relations with legislators and government
officials to influence legislation and regulation.
e. Investor Relations
Maintaining relationships with shareholders and others in the
financial community.
f. Development
Public relations with donors or members of non profit organizations to
gain financial or volunteer support.
Public relations used to promote brands, products, people, places, ideas,
activities, organization, and even nations.
A. The Role and Impact of Public Relations
Public relations can have a strong impact on public awareness at a much
lower cost than advertising can. The company does not pay for the space or
time in the media. Rather, it pays for a staff to develop and circulate
information and to manage events.
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