Marketing Chapter 16

advertising

Any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor.

product advertisements

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.

pioneering advertisements

inform the target market, tell people what a product is, what it can do, and where it can be found

competitive (or persuasive) advertisements

persuade the target market to select the firms brand rather than that of a competitor

comparative advertisements

shows one brand’s strengths relative to those of competitors

reminder advertising

used to reinforce previous knowledge of a product

reinforcement advertising

used to assure current users that they made the right choice

institutional advertisements

Advertisements designed to build goodwill or an image for an organization rather than promote a specific product or service.

alternative forms of institutional advertisements are often used:

1. advocacy

2. pioneering institutional

3. competitive institutional

4. reminder institutional

advocacy advertisements

state the position of a company on an issue, used when organizations make a request related to a particular action or behavior

pioneering institutional advertisements

used for announcements about what a company is, what it can do, or where it is located

competitive institutional advertisements

promote the advantages of one product class over another, and are used in markets where different product classes compete for the same buyers

reminder institutional advertisements

bring the company’s name to the attention of the target market again

developing the advertising program

• identifying the target audience

• specifying advertising objectives

• setting the advertising budget

• designing the advertisement

• selecting the right media

• scheduling the advertising

identifying the target audience

understanding the lifestyles, attitudes, and demographics of the target market

specifying advertising objectives

helps advertisers with other choices in the promotion decision process, such as selecting media and evaluating a campaign

designing the advertisement

advertising message usually focuses on the key benefits of the product that are important to a prospective buyer in making trial and adoption decisions

advertising creativity

determined by both the originality and appropriateness of the message used to inform and persuade, including visual or auditory presentation

fear appeals

suggest that the consumer can avoid some negative experience through the purchase and use of a product or service, a change in behavior, or a reduction in the use of a product

sex appeals

suggests to the audience that the product will increase the attractivenedd of the user

humor appeals

directly or subtly tha the product is more fun or exctiting than the competitors offerings

advertising media

the means by which the message is communicated to the target audience (newspapers, magazines, radio, TV)

reach

the number of different people or households exposed to an advertisements

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 advertisements

cost per thousand (CPM)

the cost of reaching 1,000 individuals or households with an advertising message in a given medium

wasted coverage

having people outside the target market for the product see the advertisement

infomercials

Program-length (30-minute) advertisements that take an educational approach to communication with potential customers.

rich media

online advertising also has the unique feature of being interactive, have drop down menus, built in games, or search engines to engage viewers

mobile marketing

The broad set of interactive messaging options that enable organizations to communicate and engage with consumers through any mobile device.

billboards

the most comon form of out of home advertising, often results in good reach and frequency and has been shown to increase purchase rates

transit advertising

media includes messages on the interior exterior of buses, subways and taxis

place based advertising

messages are placed in locations that attract a specific target audience such as airports, doctors offices, grocery stores

factors in scheduling the advertising

• buyer turnover

• purchase frequency

• forgetting rate

buyer turnover

how often new buyers enter the market to buy the product

purchase frequency

the more frequently the product is purchased, the less repetition is required

forgetting rate

the speed with which buyers forget the brand if advertising is not seen

setting schedules basic approaches

1. continuous schedule

2. flighting schedule

3. pulse schedule

continuous (steady) schedule

when seasonal factors are unimportant, advertising is run at a continuous or steady schedule throughout the year

flighting (intermittent) schedule

periods of advertising are scheduled between periods of no advertising to reflect seasonal demand

pulse (burst) schedule

a flighting schedule is combined with a continuous schedule because of increases in demand, heavy periods of promotion, or introduction of a new product

executing the advertising program

pretesting the advertising copy and actually carrying out the advertising program

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.

porfolio tests

used to test copy alternatives, ad is placed with several other ads and stories, and consumers are asked to read through and scale from “very informative” to “not informative”

jury tests

showing the ad copy to a panel of consumers and having them rate how they liked it, how much it drew their attention, and how attractive they thought it was

theater tests

consumers are invited to view new television shows or movies in which test commercials are also shown, and viewers register their feelings about the ad

the responsibility for actually carrying out the advertising program can be handled by three types of agencies

1. full service

2. limited service

3. in house

full service agency

provides the most complete range of services, including marketing research, media selection, copy development, artwork, and production

fee based model

the most common form of compensation for an agency

commission based model

pays a percentage of the value of media costs

incentive based model

link compensation to specific performance goals

limited service agencies

specialize in one aspect of the advertising process, such as providing creative services to develop the advertising copy

in house agencies

made up of the company’s own advertising staff may provide full services or a limited range of services

posttests

Tests conducted after an advertisement has been shown to the target audience to determine whether it accomplished its intended purpose.

common approaches in posttests

• aided recall

• unaided recall

• attitude tests

• inquiry tests

• sales tests

aided recall test

used to measure memory ot awareness by providing prompts or cues to help participants remeber previously encountered info

unaided recall tests

asking participants questions without any prompting to determine whether they saw or heard advertising messages

attitude tests

asking participants questions to measure changes in their attitudes after an advertising campaign

inquiry tests

involve offering additional product info, product samples, or premiums to an ads readers or viewers

sales tests

involve studies such as controlled experiments and consumer purchase tests

kinds of sales promtion

1. consumer-oriented

2. trade oriented

consumer oriented sales promotions

Sales tools used to support a company’s advertising and personal selling directed to ultimate consumers. Also called consumer promotions.

• coupons

• samples

• loyalty programs

coupons

sales promotions that usually offer a discounted price to the consumer

deals

short term price reductions, commonly used to increase trail amon potential customers or to retaliate against a competitors actions

premiums

used with consumers which consists of merchandise offered free or at a significant savings over its retail price

self liquidating

latter type of premium, the cost charged to the consumer covers the cost of the item

contests

encourage consumers to apply their skill or analytical or creative thinking to try to win a prize

sweepstakes

require participants to submit some kind of entry but are purely games of chance requiring no analytical or creative effort

samples

offering the product free or at a greatly reduced price

loyalty programs

encourage and reward repeat purchases by acknowledging each purchase made by a consumer and offering a premium as purchases accumulate

point of purchase displays

advertising signs, which sometimes actually hold or display the product, and are often located in high traffic areas near the cash register or the end of an aisle

rebates

offers the return of money based on proof of purchase

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.

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

encouraging increased purchases by intermediaries

merchandise allowance

reimbursing a retailer for extra in store support or special featuring of the brand

case allowance

a discount on each case ordered during a specific time period

finance allowance

paying retailers for financing costs or financial losses associated with consumer sales promotions

cooperative advertising

Advertising programs whereby a manufacturer pays a percentage of the retailer’s local advertising expense for advertising the manufacturer’s products.

public relations

a form of communication management that seeks to influence the image of an organization and its products and services

publicity tools

Methods of obtaining nonpersonal presentation of an organization, product, or service without direct cost, such as news releases, news conferences, and public service announcements (PSAs).

news release

an announcement regarding changes in the company or the product line

news conference

represntatives of the media are all invited to an informational meeting, and advance materials regarding the content are sent

public service announcements (PSAs)

free space or time donanted by the media