Chapter 16 Advertising and Public Relations PrideFerrell Foundations

Chapter 16: Advertising and Public Relations Pride/Ferrell Foundations of Marketing Fourth Edition Prepared by Milton Pressley University of New Orleans © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Objectives 1. Describe the nature and types of advertising. 2. Explain the major steps in developing an advertising campaign. 3. Identify who is responsible for developing advertising campaigns. 4. Recognize the tools used in public relations. 5. Understand how public relations is used and evaluated. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Advertising • Paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Types of Advertising • Institutional advertising – Promotes organizational images, ideas, and political issues • Advocacy advertising – Promotes a company’s position on a public issues • Product advertising – Promotes products’ uses, features, and benefits • Pioneer advertising – Tries to stimulate demand for a product • • category with information about the product Competitive advertising – Tries to stimulate demand for a product with information about the product’s advantages Comparative advertising – Compares the brand to one or more other brands Reminder advertising – Reminds customers about an established brand’s uses, characteristics, and benefits Reinforcement advertising – Assures users they chose the right brand © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Advertising Campaign • An advertising campaign involves designing a series of advertisements and placing them in various media in order to reach a particular target audience. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Eight Steps to Developing an Advertising Campaign • Designing a series of advertisements and placing them in various advertising media to reach a particular target audience © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Identifying and Analyzing the Target Audience • Target audience - The group of people at whom advertisements are aimed Target Audience LG produces a front-loading, high-efficiency steam washer. Who is the target audience for this ad? © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Discussion Question • By clicking on the @ symbols below, visit the Eddie Bauer and L. L. Bean Web Sites. After reviewing the Sites, identify the target audiences for each. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Steps in Developing an Advertising Campaign • Advertising Objectives - What the firm hopes to accomplish with the campaign Stated clearly Be precise In measurable terms • Advertising Platform - Basic issues or selling points to be included in the advertising campaign © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Advertising Platform An advertising platform normally contains multiple issues or selling points. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Advertising Appropriation • Is the total amount of money a marketer allocates for advertising during a specific period of time. • Is the advertising budget for a specific period © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Advertising Appropriation © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Determining the Advertising Appropriation • Objective-and-task approach - Budgeting for an advertising campaign by determining its objectives and then calculating the cost of all the tasks needed to attain them • Percent-of-sales approach - Budgeting for an advertising campaign by multiplying the firm’s past or expected sales by a standard percentage • Competition-matching approach - Budgeting for an advertising campaign by trying to match competitors’ ad outlays • Arbitrary approach - Budgeting for an advertising campaign as specified by a by highlevel executive in the firm © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Advertising Appropriation © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Discussion Question • In general, do you think advertising is a function of sales OR sales are a function of advertising? • Given your answer, which approach to determining an advertising appropriation do you think is the best approach? © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Developing the Media Plan • Specifies media vehicles and schedule for running the advertisements © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Media Selection Valpak selected magazines as one of the media in its media plan. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Advantages and Disadvantages of Major Advertising Media © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Creating the Advertising Message • Copy - Storyboard • Artwork - Illustrations - Layout Components of a Print Ad This Neutrogena ad contains all of the major components of a print advertisement. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Artwork Black-and-White vs. Color This ad highlights the importance of using color when advertising certain products. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Executing the Campaign • Execution of an advertising campaign requires extensive planning and coordination because many tasks must be completed on time and many people and firms are involved. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Evaluating Advertising Effectiveness • Pretest - Evaluation of ads performed before a campaign begins • Consumer jury - A panel of a product’s actual or potential buyers who pretest ads • Posttest - Evaluation of advertising effectiveness after the campaign © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Evaluating Advertising Effectiveness (cont’d) • Recognition test - Respondents are shown the actual advertisement and asked whether they recognize it • Unaided recall test - Respondents identify advertisements they have seen recently but are not shown any clues to help them remember • Aided recall test - Similar to unaided recall tests but respondents are shown a list of products, brands, company names or trademarks to jog their memories © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Who Develops the Advertising Campaigns? • Internal to the firm: Individuals or advertising groups • External to the firm: Advertising agencies © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Public Relations • Communication efforts used to create and maintain favorable relations between an organization and its stakeholders Annual Reports Annual reports, when appropriately designed, can generate favorable public relations. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Tools: News (Press) Release • A short piece of copy publicizing an event or a product Press Release Press releases are often used to spread news about a company or its products. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Possible Issues for News Releases © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Other Publicity Tools • Feature article – A manuscript of up to 3, 000 words prepared for a specific publication • Captioned photograph – A photo with a brief description of its contents • Press conference – A meeting used to announce a major news event © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Public Relations • Evaluating public relations effectiveness - Environmental monitoring - Public relations audit - Social audit • Dealing with unfavorable public relations - Have predetermined plans - Establish policies and procedures for reducing the adverse impact of news coverage of a crisis - Be forthright with the press and public - respond quickly and honestly © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Discussion Question • Assume that you are responsible for handling negative publicity for Toyota Motor Company, and it is discovered that one model of your vehicles has a hugely disproportionate rate of accidents which seems to be related to the brand of tires installed on those vehicles. The rate of accidents, many of which involved deaths, becomes an international news event. How would you handle this situation? © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

After Reviewing This Chapter You Should: • • • Know the nature and types of advertising. Understand the major steps in developing an advertising campaign. Be able to identify who is responsible for developing advertising campaigns. Recognize the tools used in public relations. Understand how public relations is used and evaluated. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Key Concepts • Advertising • Percent-of-sales approach • Institutional Advertising • Competition-matching approach • Advocacy Advertising • Arbitrary approach • Product advertising • Media plan • Pioneer advertising • Cost comparison indicator • Competitive advertising • Regional issues • Comparative advertising • Copy • Reminder advertising • Storyboard • Reinforcement advertising • Artwork • Advertising campaign • Illustrations • Target audience • Layout • Advertising platform • Pretest • Advertising appropriation • Consumer jury • Objective-and-task approach • Posttest © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Key Concepts (cont’d) • • Recognition test Unaided recall test Public relations Publicity News release Feature article Captioned photograph Press conference © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.