Marketing (MRKT220) Chapter 15: Advertising and Public Relations 15.1 Advertising Advertising refers to any paid form of nonperson presentation and promotion of ideas, goods, or services by an identified sponsor Marketing management must make 4 important decisions when developing an advertising program (see figure 15.1 from textbook) Setting advertising objectives Setting the advertising budget Developing advertising strategy (message decisions and media decisions) Evaluating advertising campaigns 15.11 Setting advertising objectives Advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time Advertising objectives can be classified by primary purpose: (see table 15.1 from textbook, possible advertising objectives) To inform To persuade To remind Informative advertising is used heavily when introducing a new product category Persuasive advertising has become comparative advertising, in which a company directly or indirectly compares its brand with one or more other brands Reminder advertising is important for mature products, it helps to maintain customer relationships and keep consumers thinking about the products 1 15.12 Setting the advertising budget Advertising budget refers to the dollars and other resources allocated to a product or company advertising program A brand’s advertising budget often depends on: Its stages in the product life cycle Market share (take market share from competitors requires advertising) Many competitors Undifferentiated brands 15.13 Developing advertising strategy Advertising strategy refers to the strategy by which the company accomplishes its advertising objectives. It consists of 2 major elements: 1. Creating advertising message 2. Selecting advertising media 1) Creating advertising message Advertising can succeed only if advertisements gain attention and communicate well a) Breaking through the clutter: Advertising clutter may bother some consumers, advertisers may break this by enhancing imagination, entertainment and reward to consumer Madison and vine is a term that has come to represent the merging of advertising and entertainment in an effort to break through the clutter and create new avenues for reaching consumers with more engaging messages b) Message strategy 1st step: to plan a message strategy 2nd step: to identify customer benefit 3rd step: to develop a compelling creative concept (big idea) 4th step: to choose the advertising appeals, advertising appeals should have 3 2 characteristics: they should be meaningful (pointing out benefits that make the product more desirable or interesting to consumers) they must be believable (consumers believe that the product or service will deliver the promise benefits) they should be distinctive (tell consumers about how the product is better than the competing brands c) Message execution Turn the big ideas into an actual ad execution Find the best approach, style, tone, words and format for executing the message Any message can be presented in different execution styles such as the following: Slice of life Lifestyle Fantasy Mood or image Musical Personality symbol Technology expertise Scientific evidence Testimonial evidence Choose the tone for the ad Use memorable and attention-getting words in the ad Use good use of format elements to make a difference Print ad: the illustration, the headline, and the copy 2) Selecting advertising media The major steps in advertising selection are: a. deciding on reach, frequency and impact b. choosing among major media types c. selecting specific media vehicles d. deciding on media timing a. deciding on reach, frequency and impact Reach is a measure of percentage of people in the target market who are exposed to the ad campaign during a given period of time Frequency is a measure of how many times the average person in the target market is exposed to the message The advertiser must decide on the desired media impact Desired media impact refers to the qualitative value of message exposure through a given medium The advertiser wants to choose media that will engage consumers rather than simply reach them b. choosing among major media types The major types are televisions, newspapers, direct mail, magazines, radio, outdoor, and the Internet (see table 15.2 from textbook) c. selecting specific media vehicles The media planner must choose the best media vehicles, that is specific media within 3 each media types o e.g. Magazine vehicles include Newsweek, People, and Forbes d. deciding on media timing The advertiser must decide how to schedule the advertising over the course of year. E.g. sales pf product peak in December and drop in March The firm can vary its advertising to follow the seasonal pattern. E.g. Christmas, Easter, and Valentines Day Choose the pattern of ads, continuity and pulsing o Continuity means scheduling ads evenly within a given time period o Pulsing means scheduling ads unevenly over a given time period 15.14 Evaluating advertising effectiveness and return on advertising investment Return on advertising investment refers to the net return on advertising investment divided by the costs of the advertising investment Advertisers should regularly evaluate 2 types of advertising results: o The communication effects o The sales profit effects 15.15 Other advertising considerations How will the company organize its advertising function, who will perform which advertising tasks? How will the company adapt its advertising strategies and programs to the complexities of international market? 1. Organization for advertising Advertising agency is a marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs o It performs the advertising tasks better than the company’s own staff o It brings an outside point of view to solving the company’s problems, along with lots of experience from working with different clients and situations 2. International advertising decision Issue concern: the degree to which global advertising should be adapted to the unique characteristics of various country markets Highly standardized worldwide advertising provides the following: o Benefits: o Lower advertising costs o Greater global advertising coordination o More consistent worldwide image Drawbacks: o Country market differ greater in their culture, demographics, and economic conditions o Cannot be responsive to consumer needs and expectation within local markets o Advertising media come and availability differ vastly from country to country o Extensive systems of laws restriction (to be continued…) 4 15.2 Public relations Building good relationships with the company’s various publics by obtaining favorable publicity, building a good corporate image, and handing or heading off unfavorable rumors, stories, and events Public relations department may perform any or all of the following function: Press relations or press agency: Creating and placing newsworthy information in the news media to attract attention to a person, product, or service Product publicity Publicizing specific products Public affairs Building and maintaining national and local community relations Lobbying Building and maintaining relations with legislators and government officials to influence legislation and regulation Investor relations Maintaining relationships with shareholders and other in the financial community Development Public relations with donors or members of nonprofit organizations to gain financial or volunteer support 15.21 The role and impact of public relations Public relations: dealing with various publics – stockholders, employees, legislators, the press Marketing manager: interested in how advertising and public relations affect brand building, sales and profits, and customer relationships the fall of advertising & the rise of PR 15.22 Major public relations tools News Speeches Special events Written materials Audiovisual materials Corporate identity Public service activities Chapter reference: Principles of Marketing, 12th edition, Kotler & Armstrong, Prentice Hall, 2008. Chapter 15, pp.394-416 5