Mk 201 Chap 16

Advertising

Any paid form of non personal communication by an identified sponsor about an organization or a product

Product Advertisement

Advertisement that focuses on selling a product

Institutional Advertisement

An advertisement designed to build goodwill or a positive image for an organization rather than to promote a specific product

Types of Product Advertisements

Pioneering/Informational

Competitive/Persuasive/Comparative

Reminder/Reinforcement

Pioneering (or Informational) Advertisement

Advertisement used to launch a new product category by informing people what a product is, what it can do, and where it can be found

Used during the introductory stage of the product life cycle

Focuses on developing primary demand, or demand for the product class

Competitive (or Persuasive) Advertisment

Advertisement used to promote a specific brand based on that brand’s features and benefits

Focuses on developing secondary demand, or demand for a specific brand rather than a competitors brand

Comparative Advertisement

Form of a competitive advertisement that shows a brand’s strengths relative to those of competitors

Reminder Advertisement

Advertisement used to reinforce previous knowledge of a product

Used during the maturity stage of their product life cycle

Effective for products that have a well-recognized position

Reinforcement Advertisement

Form of reminder advertisement used to assure users of the product that they made the right choice

Advocacy Advertisement

Advertisement that states a company’s position on an issue

Pioneering Institutional Advertisement

Advertisement used to announce what a company is, what it can do, or where it is located

Competitive Institutional Advertisement

Advertisement that promotes the advantages of one product class over another

Used in markets where different product classes compete for the same buyers

Reminder Institutional Advertisement

Advertisement used to reinforce previous knowledge of a company or organization

Sales Promotion Can Influence

Brand Loyalty

Perceptions of Quality

Purchase Intentions and Sales

2 Major Kinds of Sales Promotion

Consumer-Oriented Sales Promotions

Trade-Oriented Sales Promotions

Consumer-Oriented Sales Promotions (or Consumer Promotions)

Sales tools used to support a company’s advertising and personal selling directed to ultimate consumers

Deals

Short-term price reductions are used to increase trial among potential customers, increase repeat purchases, or respond to competitive actions

Deals reduce consumer risk but can also reduce perceived value

Coupons

A voucher entitling the holder to a discount on a particular product at the time of purchase

Rebate

A partial refund on a product purchase after the purchase is made by submitting proff of purchase

Sample

Product—Usually a smaller, trial-size version—offered for free or at a greatly reduced price

Premium

Item—other than the product being marketed—offered for free or at significant savings with the purchase of the product being marketed

Loyalty Program

Promotion that offers a premium as a customer accumulates purchases

Contest

Game requiring analytical or creative effort to win a prize

Sweepstakes

Games of chance (with no analytical or creative effort required) to win a prize

Types of Prizes Awarded for Contests and Sweepstakes

Value-Based Prizes

Experience-Based Prizes

Point-of-Purchase (POP) Display

Signage or a fixture that displays products in areas where customers make purchase decisions

Product Placement

A consumer sales promotion tool that features the use of a brand-name product in a movie, television show, video game, or other media

Trade-Oriented Sales Promotion (or Trade Promotions)

Sales tools used to support a company’s advertising and personal selling directed to wholesalers, retailers, or distributors

Case Discount

Reduction of the regular price to encourage a reseller to increase its inventory levels during a specific time

Merchandise Allowance

Money refunded to a reseller for extra support of a product —usually a percentage of the amount of the product purchased during the promotional period

Finance Allowance

Payment made to a reseller for financing costs or financial losses associated with a consumer sales promotion

Cooperative Advertising

Advertising program where a manufacturer pays a percentage of a retailer’s local media expense for advertising a manufacturer’s products

Publicity Tools

Methods of obtaining nonpersonal presentation of an organization or its products without direct cost

News Release

Announcement about changes in the comapny or the product line to provide media with an idea for a story

News Conference

Informational meeting with media representatives to announce new products or significant changes in corporate structure or leadership

Public Service Announcement (PSA)

A message that is broadcast on radio, television, or social media using space or time donated by the media channel

Target Audience

The group of prospective buyers toward which a promotional program is directed

All aspects of an advertising program are influenced by the characteristics of the target audience

Understanding the lifestyles, attitudes, and demographics of the target market is essential

Objectives Influence

Budget

Design of the Advertisement

Selection of Media

Schedule the Advertisement

Evaluation of Ads and the Overall Advertising Program

Message Content

Informational Element

Persuasive Element

Types of Appeals

Fear Appeal

Sex Appeal

Humorous Appeal

Fear Appeal

An approach to communication that suggests consumers can avoid some negative experience through the purchase and use of a product, a change in behavior, or a reduction in the use of a product

Must be strong enough to grab audience but not so strong that consumers tune out the message out

Sex Appeal

An approach to communication that suggests a product will increase the attractiveness of the user

Growing interest in positive messages

Humorous Appeal

An approach to communication that implies the product is more fun or exciting than competitors’ offerings

Can improve the effectiveness of ads but can wear out quickly

Advertising Medium

A means of communicating an advertising message to the target audience

Advertising Vechicle

A specific program, publication, or other outlet within an advertising medium

Factors in Media Selection

Media Habits of the Target Audience

Product Attributes

Nature and Complexity of the Message

Timing and Cost of the Advertising Campaigns

Reach

The number of different people or households exposed to an advertisement

Rating

The percentage of households in a market that watch a particular TV show or listen to a particular radio program

Frequency

The average number of times a person in the target audience is exposed to an advertisement

Gross Rating Points (GRPs)

Reach (expressed as a percentage of the total market) multiplied by frequency

Cost Per Thousand (CPM)

The cost of reaching 1,000 individuals or households with the advertising message using a specific vehicle

CPM = (Cost of the ad/audience size) x 1000

Buyer Turnover

Frequency that new buyers enter the market

Purchase Frequency

Rate at which a product is bought

Forgetting Rate

Speed that buyers forget about a brand or product

Continuous (or Steady) Schedule

Advertising is run on a steady schedule throughout the year

Flighting (or Intermittent) Schedule

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

Pulse (or Burst) Schedule

A flighting schedule is combined with a continuous schedule to reflect increases in demand, heavy periods of promotion, or the introduction of a new product

Pretest

Test conducted before an advertisement runs to determine if the ad communicates the intended message or to select among alternatives versions of the ad

Jury Test

A method of pretesting ads where a panel of consumers is asked to compare, rank, and otherwise evaluate the ads

Portfolio Test

A method of pretesting an ad where the test ad and other ads are embedded in a collection of news or entertainment content

Theatar Test

A method of pretesting commercials where consumers view a new TV program including ads and record their impressions of the ads

Full-Service Agency

An agency that provides a complete range of advertising services, including marketing research, media selection, copy development, artwork, and production

Limited-Service Agency

An agency that specializes in one aspect of advertising, such as creative work, media, or digital advertisng

In-House Agency

A company’s own staff providing a limited range or full range of advertising services

Posttest

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

Approaches to Posttesting

Aided Recall

Unaided Recall

Attitude Tests

Inquiry Tests

Sales Tests

Aided Recall

Ad testing technique where respondents are shows an advertisement and asked about their exposure to the ad

Unaided Recall

Ad testing technique used to determine how well a respondents remembers an advertisement without any external prompts of visuals

Attitude Tests

Questionnaire research method to measure changes in respondents’ attitudes toward a product after an advertising campaign

Inquiry Test

Method of testing ads using different ad executions or media choices, each including an offer for additional product information, samples, or premiums—requests for information, samples, or premiums are used to measure the success of each ad manipulation

Sales Test

Controlled experiment using different ad executions or media choices in different test markets—sales in those test markets are used to measure the success of each ad manipulation