Chapter 19: Advertising, Sales Promotions, Public relations

What is the definition of advertising?

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

What are the three forms of product advertisements?

Pioneering (Informational), Competitive (Persuasive), and Reminder.

What is the first step in developing an advertising program?

Identifying the target audience.

What is an advertising objective?

A specific communication task to be accomplished with a specific target audience during a specified time.

What are the primary purposes of advertising objectives?

To inform, persuade, and remind.

What are the methods for setting an advertising budget?

Competitive-Parity, Affordable Method, Percentage-of-Sales, and Objective-and-Task.

What are the two broad options for designing an advertisement?

Informational/Rational Appeals and Emotional Appeals.

What types of emotional appeals can be used in advertising?

Humor, Fear, Sex, Love, and Patriotism.

What are the three aspects of media selection in advertising?

Selecting appropriate media types, selecting specific vehicles within each medium, and deciding media timing.

What is a key advantage of television as an advertising medium?

It communicates with sight, sounds, and motion, reaching 96% of households.

What is a disadvantage of using television for advertising?

High costs and wasted coverage due to ad skipping with DVR.

What is a key characteristic of radio as an advertising medium?

It reaches 88% of adults and is effective during peak drive times.

What is a benefit of using magazines for advertising?

They are very specialized and can reach targeted groups.

What is a disadvantage of outdoor advertising?

There is no audience selectivity and messages need to be short.

What is a characteristic of online advertising?

It utilizes rich media with visual and audio messages and reaches younger consumers.

What does CPM stand for in advertising?

Cost per thousand, which is the cost of reaching 1,000 individuals or households with the advertising message.

What factors should be considered when choosing advertising media?

Media habits of the target audience, product attributes, complexity of the message, cost, and timing.

What are the three media scheduling approaches?

Continuous (steady), Flighting (intermittent), and Pulse (burst) scheduling.

What is the purpose of pretests in advertising?

To test the effectiveness of ads before they are placed.

What are posttests used for in advertising?

To assess the effectiveness of ads after they have run, including aided recall and brand attitude tests.

What is the significance of the Super Bowl for advertisers?

It delivers a huge audience, making it a prime opportunity for advertising if the budget allows.

What is the role of emotional appeals in advertising?

They enhance brand image by tapping into psychological aspects of consumer decision-making.

What is the importance of specifying the advertising objective?

It provides a clear direction for the advertising campaign and helps measure its success.

What does the term 'reach' refer to in advertising metrics?

The number of different people or households exposed to an advertisement.

What does 'frequency' mean in the context of advertising?

The average number of times a person in the target audience is exposed to a message or advertisement.

What are Gross Rating Points (GRPs)?

A number obtained by multiplying reach (as a percentage of the total market) by frequency.

Sales Promotion

A short-term incentive offered to intermediaries or ultimate consumers to increase interest in buying a product or service (e.g., Coupons, Discounts, Rebates, Samples, Displays, Contests, Sweepstakes).

Advantages of Sales Promotion

Often stimulates short-term sales; can attract competitor's customers (switchers).

Disadvantages of Sales Promotion

Can be expensive; sales gains are temporary; easily copied by competitors; can lose effectiveness if used all the time.

Consumer-oriented Sales Promotion

Sales tools used to support a company's advertising and personal selling and is directed to ultimate consumers.

Coupons

Offer discounted prices.

Deals

Short-term price reductions used to increase product trials and as a reaction to competition deals.

Cash Rebates

Refund of a small % of purchase price.

Premiums

Offer merchandise free or at a significant savings; can be self-liquidating.

Contests

Encourage consumers to apply skills or creativity to win prizes.

Sweepstakes

Require participants to submit an entry for value-based or experience-based prizes.

Samples

Put free products in consumer's hands to encourage trying new products.

Loyalty Programs

Encourage and reward repeat purchases; offers greater rewards as purchases accumulate.

Point-of-Purchase Displays

Located in store aisles; one-third of buying decisions happen at the store.

Product Placement

A consumer sales promotion tool that uses a product in a movie, television show, or video game; annual value exceeds $35 billion.

Trade-oriented Sales Promotion

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

Merchandise Allowance

In-store support or funding.

Case Allowance

Discount on each case ordered.

Free Goods

Retailers receive product free based on order.

Finance Allowance

Pays retailers for financing costs of promotion.

Cooperative Advertising

Where manufacturer pays a % of retailer's advertising expense.

Public Relations

Seeks to influence the feelings, opinions, or beliefs held by customers, suppliers, employees, and other stakeholders about a company and its products or services.

Publicity Tools

Used in PR campaigns, including news/press releases and news conferences.

Public Service Announcement (PSA)

Free space from media used in PR.