Advertising, Public Relations, and Sales Promotion

The Effects of Advertising

• Advertising can:
  • Inform consumers about products and services.
  • Influence attitudes, beliefs, and purchases.
  • Transform negative attitudes into positive ones.
  • Reinforce positive attitudes, leading to loyalty and higher market share.
  • Affect how consumers rank brand attributes.
• Advertising is popular for consumer packaged goods and services.
• Promotional spending is divided into:
  • Measured media: network/cable TV, newspapers, magazines, radio, outdoor, and internet (excluding paid search and social media).
  • Unmeasured media: direct marketing, promotions, co-op, coupons, catalogs, product placement, and event marketing.
• In 2021, the top 25 U.S. advertisers spent over $80.56$ billion.
• Advertising and marketing services employ millions in America, requiring skilled, creative, web-savvy individuals to interpret data from web, mobile, and digital ad campaigns.

Advertising and Market Share

• Advertising budgets for successful brands focus on maintaining brand awareness and market share.
• New brands allocate more of their budget to advertising and sales promotion.
• Advertising response function: spending increases sales or market share to a point, then diminishing returns occur.
• A minimum level of exposure is needed to affect purchase habits.

Major Types of Advertising

• Promotional goals determine the type of advertising.
  • Institutional advertising: enhances a company’s image.
  • Product advertising: touts the benefits of a specific good or service.

Institutional Advertising

• Designed to establish, change, or promote the corporation’s identity.
• Maintains a favorable attitude toward the advertiser and its offerings.
  • Advocacy advertising: expresses views on controversial issues or responds to media attacks.

Product Advertising

• The product's life cycle stage determines the type of product advertising used: pioneering, competitive, or comparative.
  • Pioneering advertising: stimulates primary demand for a new product or category.
    • Heavily used during the introductory stage to inform and create interest.
    • Offers in-depth information about the product class benefits.
  • Competitive advertising: influences demand for a specific brand.
    • Focuses on emotions, subtle differences, brand recall, and favorable attitudes during the growth phase.
  • Comparative advertising: compares two or more named competing brands on specific attributes.
    • Used for products with slow growth or entering the market against strong competitors.
    • Advertisers may use comparative advertising with their own brands.

Creative Decisions in Advertising

• Advertising campaign: a series of related advertisements focusing on a common theme, slogan, and set of advertising appeals.
• Advertising objective: a specific communication task for a target audience during a specified period.
• Creative work begins after defining objectives.

Identifying Product Benefits

• Sell benefits, not attributes; consumers buy benefits.
  • "Sell the sizzle, not the steak."
• A benefit answers the consumer’s question, “What’s in it for me?”
• Benefits include convenience, pleasure, improved health, savings, or relief.

Developing and Evaluating Advertising Appeals

• Advertising appeal: A reason for a person to buy a product.
  • Based on data analytics, playing off emotions or addressing needs/wants.
    • Evaluation criteria: desirability, exclusiveness, and believability.
    • Appeals are general, allowing for subthemes or mini-campaigns using various media.
  • Unique selling proposition: A desirable, exclusive, and believable appeal selected as the theme.

Common Advertising Appeals

• Profit: Appliances that promote energy efficiency.
• Health: Products that appeal to an individual’s wellbeing.
• Fear: Vehicles that discuss safety features for the prevention of an accident.
• Admiration: Ads that utilize celebrity spokespeople.
• Convenience: Ready-to-eat meals and delivery services that promote speed and ease.
• Fun and Pleasure: Experiences and vacations that foster good times.
• Vanity and Egotism: Cars or clothing that are expensive or allow an individual to stand out from the crowd.
• Environmental Consciousness: Products made from recycled materials or reduce the usage of natural resources.

Executing the Message

• Message execution: how an advertisement portrays its information.
  • Should immediately draw attention, hold interest, create desire, and motivate purchase.
  • One of the most creative elements, dictating the type of media employed.

Common Executional Styles

• Slice-of-Life: Depicts people in normal settings.
• Lifestyle: Shows how well the product fits the consumer’s lifestyle.
• Spokesperson/Testimonial: Features a celebrity, company official, typical consumer, or social media influencer making a testimonial or endorsing a product.
• Fantasy: Creates a fantasy for the viewer built around the use of the product.
• Humor: Used by advertisers in their ads.
• Real/Animated Product Symbols: Creates a character that represents the product in advertisements.
• Mood or Image: Builds a mood or image around the product, such as peace, love, or beauty.
• Demonstration: Shows consumers the expected benefit.
• Musical: Conveys the message of the advertisement through song.
• Scientific: Uses research or scientific evidence to give a brand superiority over competitors.

Postcampaign Evaluation

• Evaluating an advertising campaign can be the most demanding task facing advertisers.
• Digital advertising and social media generate more data, enabling marketers to better understand how well campaigns work.
• Testing ad effectiveness can be done before or after the campaign to identify how the campaign might have been more efficient and what factors contributed to its success.

Media Decisions in Advertising

• Creating an ad campaign involves several significant decisions:
  • Medium: the channel used to convey a message to a target market.
  • Media planning: the series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost-effectively communicate the message to the target audience.
• Advertisers use marketing analytics to determine which types of media will best communicate the benefits of their product or service to the target audience and when and for how long the advertisement will run.

Media Types

• Newspapers:
  • Advantages: geographic flexibility and timeliness.
  • Disadvantages: distractions from competing ads and news stories.
  • Good for mass market exposure, but may not be the best vehicle for marketers trying to reach a narrow market.
  • Main revenue sources: local retailers, classified ads, and cooperative advertising.
    • Cooperative advertising: An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand
• Magazines:
  • Cost per contact usually high as compared with the cost of advertising in other media
  • Cost per potential customer may be much lower if magazine is targeted to the appropriate audience, thus reaching more potential customers
• Radio:
  • Advantages: selectivity and audience segmentation, a large out-of-home audience, low unit and production costs, timeliness, and geographic flexibility.
  • Good for local advertisers.
• Television:
  • Includes network television, independent stations, cable television, and direct broadcast satellite television.
  • Can reach very broad, diverse, and highly segmented markets.
  • Can be very expensive, especially for network and popular cable channels.
  • Infomercials useful for presenting complicated information to potential customers.
    • Infomercial – a 30-minute or longer advertisement that looks more like a television talk show than a sales pitch
• Digital:
  • Advertising includes search engine marketing, display advertising, social media advertising, email marketing, and mobile marketing.
  • Programmatic advertising uses technology to match audiences and websites with marketers seeking to purchase advertising.
    • Advertisers can purchase ad space targeting specific groups in real-time, thus maximizing reach and return on investment (ROI).
    • Automation tools and AI platforms allow brands to measure their performance and easily manage their brand campaigns with an emphasis on omnichannel programmatic advertising.
  • Popular internet sites and search engines generally sell advertising space to marketers to promote their goods and services.
  • Advergaming – Placing advertising messages in web-based, mobile, console, or handheld video games to advertise or promote a product, service, organization, or issue
• Social:
  • More than 3.5 billion social media users worldwide; 73 percent of marketers find success by using social advertising.
  • Social media are a cost-effective means of gaining brand awareness.
  • Opting for social advertising should be done with a long-term investment in mind and an understanding that this medium is very time-consuming.
  • Increases to inbound web traffic is the most likely outcome of social advertising.
• Mobile:
  • The fastest-growing platform for digital advertising; mobile ads account for nearly all growth in digital advertising.
  • Expected to make up 70 percent of all U.S. digital advertising by 2026
  • When using mobile advertising, companies have access to customers in real time.
  • Customers can easily opt out.
• Outdoor Media:
  • Outdoor advertising takes a variety of forms: billboards, skywriting, signs in sports arenas, ads painted on cars, etc.
  • Ideal for promoting convenience products and services as well as for directing consumers to local businesses
  • Exposure frequency is very high; the amount of clutter from competing ads is very low
  • Can be customized to local marketing needs
• Alternate Media:
  • Includes shopping carts in grocery stores, computer screen savers, interactive kiosks in department stores, advertisements run before movies at the cinema, posters on bathroom stalls, and advertainments.
  • Marketers are looking for additional innovative ways to reach captive and often bored commuters.

Media Selection Considerations

• Media mix: the combination of media to be used for a promotional campaign.
• Media mix decisions are typically based on several factors:
  • Cost per contact (cost per thousand [CPM])
  • Target audience considerations
  • Cost per click
  • Flexibility of the medium
  • Reach
  • Noise level
  • Frequency
  • Life span of the medium
• Reach – the number of target consumers exposed to a commercial at least once during a specific period.
• Cost per contact (cost per thousand [CPM]) – the cost of reaching one member of the target market
  • Enables an advertiser to compare the relative costs of specific media vehicles
  • Advertisers pick the vehicle with the lowest cost per contact to maximize advertising punch for the money spent
• Cost per click – the cost associated with a consumer clicking on a display or banner ad
  • Marketers pay only for “engaged” consumers who opt to click on an ad
• Frequency – the number of times an individual is exposed to a given message during a specific period
• Audience selectivity/Target audience considerations– the ability of an advertising medium to reach a precisely defined market
  • a matter of matching the advertising medium with the product’s target market
• Flexibility – ability to schedule or alter an ad in a short amount of time
• Noise level – the amount of distraction experienced by the target audience in a medium
• Life span of the medium – how long the marketing message lasts

Media Scheduling

• After choosing the media for the advertising campaign, advertisers must schedule the ads.
• Media schedule – designation of the media, the specific publications or programs, and the insertion dates of advertising
  • Four types of media schedules include continuous media schedule, flighted media schedule, pulsing media schedule, and seasonal media schedule.
• Continuous media schedule: A media scheduling strategy in which advertising is run steadily throughout the advertising period; used for products in the later stages of the product life cycle
• Flighted media schedule: A media scheduling strategy in which ads are run heavily every other month or every two weeks to achieve a greater impact with an increased frequency and reach at those times
• Pulsing media schedule: A media scheduling strategy that uses continuous scheduling throughout the year coupled with a flighted schedule during the best sales periods
• Seasonal media schedule: A media scheduling strategy that runs advertising only during times of the year when the product is most likely to be used. Research suggests that continuous schedules are more effective than flighted ones at driving sales through television advertisements

Public Relations

• Public relations: the element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern, and executes programs to gain public understanding and acceptance.
  • A vital link in a forward-thinking company’s marketing communication mix
  • Strives to maintain a positive image of the company in the eyes of the public
• Publicity: an effort to capture media attention, often initiated through press releases that further a corporation’s public relations plans

Public Relations Tools

• New-product publicity (press releases, videos)
• Product placement (movie, TV, newspaper, video game)
• Consumer education (seminars, videos)
• Sponsorship (festivals, fairs, sports events)
• Experiential marketing (Red Bull – Felix Baumgartner)
• Company websites

Managing Unfavorable Publicity

• Although marketers try to avoid unpleasant situations, crises do happen.
• In our free-press environment, publicity is not easily controlled, especially in a crisis.
• Crisis management: a coordinated effort to handle all the effects of unfavorable publicity or another unexpected unfavorable event

Sales Promotion

• Sales promotion: marketing communication activities other than advertising, personal selling, and public relations, in which a short-term incentive motivates consumers or members of the distribution channel to purchase a good or service immediately, either by lowering the price or by adding value
• Usually less expensive than advertising and easier to measure because marketers know the precise number of coupons redeemed or the number of contest entries received
• Marketers know the precise number of coupons or coupon codes redeemed or the number of contest entries received.
• Usually has more effect on behavior than on attitudes because it gives the consumer an incentive

Sales Promotion Targets

• Sales promotion is usually targeted toward either of two distinctly different markets:
  • Trade sales (B2B) promotion: promotion activities directed to members of the marketing channel, such as wholesalers and retailers
    • Trade allowance: A price reduction offered by manufacturers to intermediaries such as wholesalers and retailers
    • Push money: money offered to channel intermediaries to encourage them to “push” products—that is, to encourage other members of the channel to sell the products
    • Training
    • Free merchandise
    • Store demonstrations
    • Business meetings, conventions, and trade shows
  • Consumer sales (B2C) promotion: promotion activities targeted to the ultimate consumer
    • Generally, there are four types of consumers to consider when creating the objectives for a sales promotion.
      • Loyal customers – people who buy your product most or all of the time
      • Competitor’s customers – people who buy a competitor’s product most or all of the time
      • Brand switchers – people who buy a variety of products in the category
      • Price buyers – people who consistently buy the least expensive brand

Types of Consumers and Sales Promotion Goals

• Loyal customers:
  • Desired Results: Reinforce behavior, increase consumption, change purchase timing
  • Sales Promotion Examples: Loyalty marketing programs, such as frequent buyer cards or frequent shopper clubs; Bonus packs that give loyal consumers an incentive to stock up or premiums offered in return for proofs of purchase
• Competitor's customers:
  • Desired Results: Break loyalty, persuade to switch
  • Sales Promotion Examples: Sampling to introduce your product's superior qualities compared to their brand
• Brand switchers:
  • Desired Results: Persuade to buy your brand more often
  • Sales Promotion Examples: Sweepstakes, contests, or premiums that create interest in the product
• Price buyers:
  • Desired Results: Appeal with low prices or supply added value that makes price less important
  • Sales Promotion Examples: Any promotion that lowers the price of the product, such as coupons, price-off packages, and bonus packs; Trade deals that help make the product more readily available than competing products; Coupons, price-off packages, refunds, or trade deals that reduce the price of the brand to match that of the brand that would have been purchased

Tools for Consumer Sales Promotion

• The sales promotions tools chosen must suit the marketer’s objectives.

Coupons and Rebates

• Coupons and rebates are a particularly good way to encourage product trial and repurchase.
  • Coupon: a certificate that entitles a consumer to an immediate price reduction when the product is purchased
  • Rebate: a cash refund given for the purchase of a product during a specific period

Premiums

• Premium: an extra item offered to the consumer, usually in exchange for some proof of purchase of the promoted product
  • Premiums reinforce the consumer’s purchase decision, increase consumption, and persuade nonusers to switch brands.

Loyalty Marketing Programs

• Loyalty marketing program: a promotional program designed to build long-term, mutually beneficial relationships between a company and its key customers
  • Through loyalty programs, shoppers receive discounts, alerts about new products, and other types of enticing offers.
  • Retailers are able to collect valuable customer data.
  • Frequent-buyer program: a loyalty program in which loyal consumers are rewarded for making multiple purchases of a particular good or service

Contests and Sweepstakes

• Contests and sweepstakes are generally designed to create interest in a good or service and are often used to encourage brand switching.
  • To increase their effectiveness, sales promotion managers must make certain the award will appeal to the target market.

Sampling

• Sampling: a promotional program that allows the consumer the opportunity to try a product or service for free
  • Samples can be directly mailed to the customer, delivered door to door, packaged with another product, demonstrated or distributed at a retail store or service outlet, or offered online by request.
  • Sampling at special events is a popular, effective, and high-profile distribution method.

Point-of-Purchase Promotion

• Point-of-purchase (POP) display: a promotional display set up at the retailer’s location to build traffic, advertise the product, or induce impulse buying
  • One big advantage of the POP display is that it offers manufacturers a captive audience in retail stores, which is where about 82 percent of all retail purchase decisions are made.

Trends in Sales Promotion

• Promotions based on social media, email, and websites have expanded dramatically in recent years.
  • Marketers are now spending billions of dollars annually on such promotions.
  • Consumers who like to redeem coupons are increasingly inclined to make use of digital offers.
• Online versions of loyalty programs are also popping up.
• Another major trend in sales promotion is the utilization of sales promotions at the point of purchase.