Chapter 16: Advertising, Public Relations, and Sales Promotion

Learning Outcomes

  • At the end of this chapter, you should be able to:

    • Discuss the effects of advertising on market share and consumers.

    • Identify the major types of advertising.

    • Discuss the creative decisions in developing an advertising campaign.

    • Describe media evaluation and selection techniques.

    • Discuss the role of public relations in the promotional mix.

    • Define and state the objectives of sales promotion and the tools used to achieve them.

16-1 The Effects of Advertising

  • Overview of Advertising:

    • Advertising serves as a popular form of promotion, predominantly for consumer packaged goods and services.

    • Promotional spending divides into:

    • Measured Media Ad Spending:

      • Categories include network and cable TV, newspapers, magazines, radio, outdoor, and Internet (excluding paid search and social media).

    • Unmeasured Media Spending:

      • Includes direct marketing, promotions, co-op advertising, coupons, catalogs, product placement, and event marketing.

  • Trends in Advertising:

    • Companies collect extensive data necessitating skilled, creative, web-savvy personnel to interpret data from online and mobile campaigns.

    • Examples of large spenders include Comcast, AT&T, Amazon, GM, and Samsung.

Advertising and Market Share

  • Advertising budgets are primarily allocated for maintaining brand awareness and market share, especially for valuable brands like Apple, Google, Microsoft, Facebook, and Amazon.

  • New brands allocate a higher proportion of their promotional budgets to advertising and sales promotion compared to those with established market shares.

    • Advertising Response Function:

    • The law of diminishing returns applies, indicating that while increased spending initially leads to higher market share and sales, efficiency diminishes after a certain point.

    • A minimum level of exposure is essential to modify purchasing behaviors.

The Effects of Advertising on Consumers

  • Advertising influences consumer lives by:

    • Informing about products and services, thus impacting attitudes and beliefs.

    • Transforming negative perceptions into positive ones.

    • Reinforcing positive attitudes towards brands, leading to customer loyalty and increased market share.

    • Shaping consumers' perceptions of product attributes.

Knowledge Check 1

  • Question: Which group of countries are the top five spenders on advertising?

    • A) China, U.S., Canada, Japan, and Germany

    • B) China, U.S., Japan, Russia, and the United Kingdom

    • C) U.S., China, Japan, the United Kingdom, and India

    • D) U.S., China, Japan, the United Kingdom, and Germany

16-2 Major Types of Advertising

  • A firm’s promotional goals dictate the choice of advertising type:

    • Institutional Advertising:

    • Focuses on enhancing a company's overall image rather than promoting specific products.

    • Product Advertising:

    • Promotes the benefits of individual goods or services.

Details on Institutional Advertising

  • Institutional advertisements aim to:

    • Establish, change, or enhance the corporation’s identity.

    • Maintain a positive public attitude.

    • Advocacy Advertising:

    • A specialized form where organizations take positions on controversial issues, often to mitigate negative public perception, fend off regulatory challenges, or handle litigation backlash.

Product Advertising

  • The type of product advertising depends on the product life cycle stage:

    • Pioneering Advertising:

    • Aims to stimulate primary demand for new products or categories.

    • Heavily utilized in the introductory stage to inform and engage potential consumers.

    • Competitive Advertising:

    • Focuses on influencing demand for a specific brand during the growth phase, emphasizing emotional engagement over informational content.

    • Comparative Advertising:

    • Involves directly comparing competing brands, highlighting specific attributes to differentiate and target consumers.

    • Legally limited to prevent misrepresentation of competitors' products.

Group Activity 1

  • Objective: Form small groups to identify examples of pioneering, competitive, and comparative advertisements from online sources.

  • Discussion Points:

    • Classify each advertisement type based on characteristics observed. Discuss product life cycle stages.

Group Activity 1 Debrief

  • Analyze common traits among advertisement types and identify any difficulties faced during categorization.

16-3 Creative Decisions in Advertising

Overview

  • Advertising Campaign: A series of related advertisements based on a central theme, slogan, and appeals.

  • Advertising Objectives: Clear communication tasks for a specified target audience during a defined timeframe.

    • Identifying objectives is crucial for guiding the creative direction of the campaign.

Identifying Product Benefits

  • Advertising should communicate product benefits instead of attributes, answering the critical question, "What’s in it for me?"

  • Example:

    • Attribute: "Kind Bars are made with healthy ingredients."

    • Benefits: "Kind Bars are healthy snacks that satisfy your sweet cravings."

Developing and Evaluating Advertising Appeals

  • Advertising Appeal: A critical reason for consumers to purchase a product. Must distinguish the brand positively.

  • Appeals derive from consumer insights and emotional data analytics.

  • Unique Selling Proposition (USP): An exclusive advertising appeal forming the focal theme of a campaign.

Common Advertising Appeals (Exhibit 16.1)

  • Profit: Indicates financial savings or gains.

  • Health: Targets body-conscious consumers; connected often with beauty products.

  • Fear: Highlights social embarrassment or health concerns, needing careful execution.

  • Admiration: Often employs celebrity endorsements.

  • Convenience: Common with fast-food and instant meal categories.

  • Fun and Pleasure: Key for tourism, entertainment, and leisure products.

  • Vanity and Egotism: Used for luxury or high-end products.

  • Environmental Consciousness: Appeals to eco-friendly practices and community care.

Executing the Message

  • Message Execution: Reflects how the advertisement conveys information, crucial for grabbing attention, maintaining interest, creating desire, and motivating purchases.

  • Common execution styles include:

    • Slice-of-life, lifestyle, spokesperson/testimonial, fantasy, humor, real/animated symbols, mood/image, demonstration, musical, and scientific.

Post-Campaign Evaluation

  • Campaign evaluation is challenging but necessary using digital and social media data analytics to assess effectiveness.

  • Pre-testing can identify optimal appeals and layouts before launching campaigns.

Discussion 1

  • Examine the importance of stating product benefits versus attributes; provide examples from known advertisements.

Discussion 1 Debrief

  • Share conclusions drawn regarding the focus on benefits from class examples.