Marketing chapter 19

  1. 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)
  2. 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
  3. 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
  4. 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
  5. 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
  6. 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
  7. 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
  8. 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
  9. 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
  10. Trade-oriented sales promotions
    • Allowances and discounts
    • Merchandise allowance: reimbursing a retailer for extra in-store support or special featuring of the brand
    • 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
  11. 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
  12. 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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Marketing chapter 19