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Explain the differences between product advertising and institutional advertising and the variations within each type. (LO1)
- Produce advertisements focus on selling a good or service and take three forms:
- Pioneering advertisements tell people what a product is, what it can do, and where it can be found
- Competitive advertisements persuade the target market to select the firm's brand rather than a competitor's
- Reminder advertisements reinforce previous knowledge of a product; (Reinforcement ad assures current users they made the right choice)
- Institutional advertisements are used to build goodwill or an image for an organization; they include:
- Advocacy advertisements which state the position of a company on an issue
- Pioneering, competitive, and reminder advertisements (similar to product ads, but focused on institution)
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Describe the steps used to develop, execute, and evaluate an advertising program. (LO2)
- The promotion decision process can be applied to each of the promotional elements.
- The steps to develop an advertising program include:
- 1. identify the target audience
- 2. specify the advertising objectives
- 3. set the advertising budget
- 4. design the advertisement
- 5. create the message
- 6. select the media
- 7. schedule the advertising
- Executing the program requires pretesting
- Evaluating the program requires posttesting
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Designing the Advertisement: Message Content
- Made up of both informational and persuasional elements combine in the form of an appeal
- Fear appeals suggest to the consumer that he or she 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 suggest to audience that the product will increase the attractiveness of the user
- Humorous appeals imply either directly or subtly that the product is more fun or exciting than competitors' offerings
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Explain the advantages and disadvantages of alternative advertising media. (LO3)
- Television advertising reaches large audiences and uses picture, print, sound, and motion; disadvantages are that it is expensive and perishable
- Radio advertising is inexpensive and can be placed quickly; no visual element and is perishable
- Magazine advertising targets specific audiences and can convey complex information; takes a long time to place ad and is relatively expensive
- Newspapers provide excellent coverage of local markets and can be changed quickly; short life span and poor color
- Yellow pages advertising long use period and available 24 hours per day; proliferation of directories and cannot be updated frequently
- Internet advertising interactive; effectiveness is difficult to measure
- Outdoor advertising provides repeat exposures; message must be short and simple
- Direct mail targeted at very selective audiences; cost per contact is high
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Scheduling the advertising
- Three factors considered
- - buyer turnover: how often new buyers enter the market to buy the product; higher buyer turnover, greater amount of advertising required
- - purchase frequency: more frequently product is purchased, the less repetition is required
- - forgetting rate: speed with which buyers forget the brand if advertising is not seen
- Three basic approaches
- 1. continuous (steady) schedule: when seasonal factors unimportant, advertising run at continuous/steady schedule throughout year
- 2. flighting (intermittent) schedule: periods of advertising scheduled between periods of no advertising to reflect seasonal demand
- 3. pulse (burst) schedule: flighting schedule combined with continuous schedule because of increases in demand, heavy periods of promotion, or introduction of new product
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Pretesting advertising
- Portfolio tests used to test copy alternatives; test ad placed in a portfolio with several other ads and stories, consumers asked to read through portfolio; subjects later asked for impressions of ads on several evaluative scales (ie: very informative to not very informative)
- Jury tests: involve showing ad copy to panel of consumers and have them rate how they liked it, how much it drew their attention, and how attractive they thought it was; consumer reactions obtained; test ad not hidden within other ads
- Theater tests: consumers invited to view new television shows or movies in which test ads also shown; viewers register feelings about ads either on handheld electronic recording devices used during viewing or on questionnaires afterward; most sophisticated form
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Carrying out advertising program (types of agencies)
- Full-service agency: does research, selects media, develops copy, and produces artwork; coordinates integrated campaigns with all marketing efforts
- Limited-service (specialty) agency: specializes in one aspect of creative process; usually provides creative production work; buys previous unpurchased media space
- In-house agency: provides range of services, depending on company needs
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Posttesting the advertising
- Aided recall: determined percentage of those (1) who remember seeing a specific magazine ad (noted); (2) who saw or read any part of the ad identifying the product or brand (seen-associated); (3) who read any part of the ad's copy (read some); (4) who read at least half of the ad (read most); (Starch test)
- Unaided recall: "What ads do you remember seeing yesterday?" asked without any prompting to determine whether they saw or heard advertising messages
- Attitude tests: questions asked to measure changes in attitudes after an ad campaign (ie: favorable attitude toward product)
- Inquiry tests: ads generating most inquiries presumed to be most effective; addt'l product info, samples, or premiums offered
- Sales tests: involve studies such as controlled experiments and consumer purchase tests
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Discuss the strengths and weaknesses of consumer-oriented and trade-oriented sales promotions. (LO4)
- Coupons encourage retailer support but may delay consumer purchases
- Deals reduce consumer risk but reduce perceived value
- Premiums offer consumers additional merchandise they want, but they may be purchasing only for the premium
- Contests create involvement but require creative thinking
- Sweepstakes encourage repeat purchases, sales drop after sweepstakes
- Samples encourage product trial but are expensive
- Loyalty programs help create loyalty but expensive to run
- Displays provide visibility but are difficult to place in retail space
- Rebates stimulate demand but are easily copied
- Product placement provides positive message in a noncommercial setting but is difficult to control
- Trade-oriented sales promotions include:
- (a) allowances and discounts - increase purchases but may change retailer ordering patterns
- (b) cooperative advertising - encourages local advertising
- (c) salesforce training - helps increase sales by providing salespeople with product information and selling skills
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Trade-oriented sales promotions
- Allowances and discounts
- Case allowance: discount on each case ordered during a specific time period; allowances usually deducted from invoice
- Finance allowance: involves paying retailers for financing costs or financial losses associated with consumer sales promotions
- Cooperative advertising: manufacturer pays a percentage of retailer's local advertising expense for advertising the manufacturer's products
- Salesforce training: reseller's saleforce represents manufacturer's products -> manufacturer help train reseller's saleforce
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Recognize public relations as an important form of communication. (LO5)
- Public relations activities usually focus on communicating positive aspects of the business
- A frequently use public relations tool is publicity
- Publicity tools include new releases and news conferences
- Nonprofit organization often use public service announcements
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Publicity tools
- News release: consists of an announcement regarding changes in the company or the product line; objective is to inform newspaper, radio station, or other medium of an idea for a story
- News conference: representatives of media are all invited to an informational meeting, and advance materials regarding content are sent; new products introduced or significant changes in corporate structure and leadership being made
- Public service announcements (PSAs): free space or time donated by the media
- High-visibility individuals: create visibility for companies, products, and themselves
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