MTS312 Sec 2 & 3

ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS

(Source: Marketing, fourteenth edition, Roger A. Kerin and Steven W. Hartley, McGraw Hill, ISBN: 978-1-260-09211-0)
 LEARNING OBJECTIVES
1. Explain the differences between product advertising and
institutional advertising and the variations within each.
2. Describe the steps used to develop, execute, and evaluate an
advertising program.
3. Explain the advantages and disadvantages of alternative
advertising media.
4. Discuss the strengths and weaknesses of consumer-oriented and
trade-oriented sales promotions.
5. Recognize public relations as an important form of
communication.
FANTASY IS BECOMING REALITY FOR ADVERTISERS!
More than 20 million people have
tried VR and AR technologies
•Used for more than video games! Virtual Reality
https://www.yout
•VR and AR offer unique, immersive ube.com/watch?
experiences to consumers v=qYfNzhLXYGc&f
eature=youtu.be
•New medium for advertisers
•Get consumers’ undivided attention

©Ray Tang/REX/Shutterstock
TYPES OF ADVERTISEMENTS
PRODUCT ADVERTISEMENTS
Product advertisements are advertisements that focus on
selling a product or service and which take three forms:
(1) pioneering (or informational),
(2) competitive (or persuasive), and
(3) reminder.
TYPES OF ADVERTISEMENTS
INSTITUTIONAL ADVERTISEMENTS
Institutional advertisements are Chevon Ad
advertisements designed to build goodwill or
an image for an organization rather than
promote a specific product or service.
https://www.youtube.com/channel/
Four Forms: UC75HjFw2U3ipbrDj3ara7bg
1. Advocacy
2. Pioneering Institutional
3. Competitive Institutional
4. Reminder Institutional
DEVELOPING THE ADVERTISING PROGRAM
1. Identifying the target
audience
2. Specifying the advertising
objectives
3. Setting the advertising
budget
DEVELOPING THE ADVERTISING PROGRAM
DESIGNING THE ADVERTISEMENT
Message Content
• Informational Element
• Persuasive Element Beats by Dre Ad
https://www.youtube.com/user/Officialbeatsbydrdre
Common Types of Appeals
• Fear Appeals – Avoid negative experiences
• Sex Appeals – Increase attractiveness https://www.youtube.
com/watch?v=HsWCm
• Humorous Appeals – Fun and exciting
wd094g&feature=yout
Creating the Actual Message u.be
• Celebrity Spokespeople
• Careful of image over time!
• Cost
• Ideas and artwork
DEVELOPING THE ADVERTISING PROGRAM
SELECTING THE RIGHT MEDIA
1. Advertising Media Choices
• Print
• Radio
• TV
2. Media Selection:
• Audience, Product, Messages, Costs
3. Media Planning Goals
SELECTING THE RIGHT MEDIA
BASIC TERMS
Reach: The number of different people or households exposed
to an advertisement.
Rating: The percentage of households in a market that are
tuned to a particular TV show or radio station.
Frequency: The average number of times a person in the target
audience is exposed to a message or an advertisement.
Gross rating points (GRPs): A reference number used by
advertisers that is obtained by multiplying reach (expressed as a
percentage of the total market) by frequency.
= Reach x Frequency
Cost per thousand (CPM): The cost of reaching 1,000 individuals
or households with the advertising message in a given medium
(M is the Roman numeral for 1,000).
APPLYING MARKETING METRICS
WHAT IS THE BEST WAY TO REACH 1,000 CUSTOMERS?
Cost per Thousand (CPM) Impressions
CPM = (Cost of Ad ÷ Audience size) x 1,000

Media Cost of Ad Audience Size Cost per

Alternative Thousand
Impressions

Time $366,000 3,000,000 $122

(magazine)
USA Today $242,600 1,003,529 $242
(newspaper)
Super Bowl $5,000,000 111,000,000 $45
(television)
Advertisers must
consider the
advantages and
disadvantages of the
many media
alternatives.
TELEVISION
• Reaches 96 percent of households
• Out-of-Home TV in hotels, bars, offices, etc.
• Problems include wasted coverage
• Infomercials are program-length (30-minute) advertisements that take
an educational approach to communication with potential customers.
◦ 30-Minute Advertisements

Jump to Appendix 2 long image description

©Paul Spinelli/AP Images
RADIO MAGAZINES
• Peak times are drive times • Many consumer magazines
• Use limited if products must • Specific topics for segments
be seen
 NEWSPAPERS INTERNET AND ONLINE
ADVERTISING
• Local medium and current events • Audio and Video
• Call for action • Rich Media
• Online and mobile editions • Banner/Display Ads
• New types of news organizations • Mobile Marketing

Jump to Appendix 5 long image description

 OUTDOOR OTHER MEDIA
• Billboards and digital billboards • Place-Based media
• Transit advertising • Out-of-Home advertising
• Generates $5.97 in sales for (OOH)
every $1.00 spent
• Locations that attract target
• Conditional content changes as
needed
audience
◦ In-Store Campaigns
◦ Airports
◦ Hotels
◦ Health Clubs

Jump to Appendix 9 long image description

DEVELOPING THE ADVERTISING PROGRAM
Factors to Consider:
•Media habits of target audience
•Product attributes may require certain media
to be used
•Complexity of message
•Cost
SCHEDULING THE ADVERTISING
Factors to Consider:
•Buyer Turnover – How often new buyers enter
the market
•Purchase Frequency – How frequently product
is purchased
•Forgetting Rate – Speed that buyers forget the
brand
SCHEDULING APPROACHES
1. Continuous (Steady) Schedule
• Steady, seasons not important
2. Flighting (Intermittent) Schedule
• Intermittent, reflect seasonal demand
3. Pulse (Burst) Schedule
◦ Burst, flighting and continuous, new product
EXECUTING THE ADVERTISING PROGRAM PRETESTING
THE ADVERTISING
Pretests: Tests conducted before an advertisement is
placed in any medium to determine whether it
communicates the intended message or to select among
alternative versions of the advertisement.
• Portfolio Tests
• Test copy alternatives
• Jury Tests
• Show copy to panel of consumers
• Theater Tests
• Consumers view new shows or movies
◦ Recording devices during viewing
Alternative structures
of advertising agencies
used to carry out the
advertising program
J U M P TO A P P E N D I X 1 0 L O N G
IMAGE DESCRIPTION
ASSESSING THE ADVERTISING PROGRAM
Posttests: Tests conducted after Unaided Recall
an advertisement has been
1. Attitude tests
shown to the target audience to
determine whether it 2. Inquiry tests
accomplished its intended 3. Sales tests
purpose.
Then, make any needed changes!
Aided Recall
1. Noted
2. Associated
3. Read any

Courtesy of GfK North America

Sales promotions
can be used to
achieve many
objectives
J U M P TO A P P E N D I X 1 1 L O N G
IMAGE DESCRIPTION
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
Consumer-oriented sales promotion consists of
sales tools used to support a company’s advertising
and personal selling directed to ultimate consumers.
Also called consumer promotions.
Coupons
• Offer discounted prices

Deals
• Short-term price reductions
• Increase trials
• React to competition

©McGraw-Hill Education/Mike Hruby, photographer

SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
Premiums
• Offers items free or at
significant savings
• Self-Liquidating: Free toy
• Encourages frequent buying
Contests
• Encourage consumers to
apply skills or creative
thinking to win a prize
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
Sweepstakes
• Value-based prizes
• Experience-based prizes
Samples
• Free product or trial size
• Encourages consumers to try new things and save money
Loyalty Programs
• Encourages and rewards repeat purchases
• Offers a premium as purchases accumulate

©Editorial Image, LLC

SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
Point-of-Purchase Displays
• Signs hold or display products
• Located in high-traffic areas
Rebates
• Cash rebates with proof of
purchase

©Editorial Image, LLC

 SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
Product placement: A consumer sales
promotion tool that uses a brand-name
product in a movie, television show, video
game, or a commercial for another product.
• Use of brand-name product in movie or TV
• Annual value of product placements exceeds
$6 billion
• Consumer complaints are leading to new
regulations about disclosure

©Howard Harrison/Alamy Stock Photo

SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION (1 of 2)
Trade-oriented sales promotions: Sales tools used to support a
company’s advertising and personal selling directed to wholesalers,
distributors, or retailers. Also called trade promotions.
Allowances and Discounts
• Merchandise Allowance
• Case Allowance
• Free Goods
• Finance Allowance
◦ Floor Stock Protection
◦ Freight Allowance
SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION (2 of 2)
Cooperative advertising consists of advertising programs by which a
manufacturer pays a percentage of the retailer’s local advertising
expense for advertising the manufacturer’s products.
• Manufacturer pays percentage of retailer’s advertising expense
Training of Distributors’ Salesforces
• Success rests on resellers’ salesforce
• Produce manuals, brochures
• National sales meetings
• Recognition programs
PUBLIC RELATIONS
Publicity tools are methods of obtaining nonpersonal American
presentations of an organization, product, or service Red Cross PSA
without direct cost, such as news releases, news
conferences, and public service announcements.
News Release
https://www.youtube.com/
News Conference user/AmRedCross
Public Service Announcement (PSA)
Publicity often provides stronger impact than does
advertising!

©Theo Wargo/NBC/Stringer/Getty Images

INCREASING THE VALUE OF PROMOTION
Building Long-Term Relationships
• Social and mobile media provide for personalized
promotion
• Use interactive technologies
• Integrate new media
Self-Regulation
• By marketers and agencies