LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO:
Explain the differences between product advertising and institutional advertising and the variations within each type.
Describe the steps used to develop, execute, and evaluate an advertising program.
Explain the advantages and disadvantages of alternative advertising media.
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McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.LO2Describe the steps used to develop, execute, and evaluate an advertising program.Explain the advantages and disadvantages of alternative advertising media.LO3LEARNING OBJECTIVES (LO)AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO:Explain the differences between product advertising and institutional advertising and the variations within each type.LO1LO4Discuss the strengths and weaknesses of consumer-oriented and trade-oriented sales promotions.Recognize public relations as an important form of communication.LO5LEARNING OBJECTIVES (LO)AFTER READING CHAPTER 18, YOU SHOULD BE ABLE TO:WHERE CAN YOU WATCH TV?WHERE CAN’T YOU?Online TV (OTV)TYPES OF ADVERTISEMENTSPRODUCT ADVERTISEMENTSLO1AdvertisingPioneering(or Informational)Competitive(or Persuasive)ReminderProduct AdvertisementsComparativeReinforcementCampbell’s, 1&1, and Red BullWhat is the type and purpose of each advertisement?LO1Dial SoapWhat is the type and purpose of this advertisement?LO1TYPES OF ADVERTISEMENTSINSTITUTIONAL ADVERTISEMENTSLO1Institutional AdvertisementsAdvocacyPioneering InstitutionalCompetitive InstitutionalReminder InstitutionalChevron and BridgestoneWhat is the type and purpose of each advertisement?LO1Got Milk? and U.S. ArmyWhat is the type and purpose of each advertisement?LO1DEVELOPING THEADVERTISING PROGRAMLO2Identifying the Target AudienceSpecifying the Advertising ObjectivesSetting the Advertising BudgetFIGURE 18-1 The Super Bowl delivers a huge audience if you can afford the cost of placing an adGOING ONLINESee Your Favorite Super Bowl Ads Again!LO2DEVELOPING THEADVERTISING PROGRAMDESIGNING THE ADVERTISEMENTLO2Message ContentInformationalElementPersuasiveElementTypes of AppealsFear AppealsSex AppealsHumorous AppealsWorld Wide Fund, Candie’s, and GeicoWhat is the appeal and purpose of each advertisement?LO2DEVELOPING THEADVERTISING PROGRAMDESIGNING THE ADVERTISEMENTLO2Creating the Actual MessageCelebrity SpokespeopleIdeas and ArtworkCostDEVELOPING THEADVERTISING PROGRAMSELECTING THE RIGHT MEDIALO2Advertising MediaMaximize ExposureMinimize CostsMedia Planning GoalsFIGURE 18-2 Television, direct mail, and newspapers account for more than 65% of all advertising expenditures (in $millions)DEVELOPING THEADVERTISING PROGRAMSELECTING THE RIGHT MEDIALO2Basic TermsReachRatingFrequencyGross Rating Points (GRPs)Cost per Thousand (CPM)= Reach × FrequencyUSING MARKETING DASHBOARDSWhat is the Best Way to Reach 1,000 Customers?Cost per Thousand (CPM) ImpressionsLO2FIGURE 18-3 Advertisers must consider the advantages and disadvantages of the many media alternativesDEVELOPING THEADVERTISING PROGRAMDIFFERENT MEDIA ALTERNATIVESLO3TelevisionOut-of-Home TVOnline TV (OTV)DEVELOPING THEADVERTISING PROGRAMDIFFERENT MEDIA ALTERNATIVESLO3TelevisionWasted CoverageCable and Satellite TVInfomercialsDEVELOPING THEADVERTISING PROGRAMDIFFERENT MEDIA ALTERNATIVESLO3RadioSatellite RadioDrive TimesDEVELOPING THEADVERTISING PROGRAMDIFFERENT MEDIA ALTERNATIVESLO3Regional IssuesMagazinesDEVELOPING THEADVERTISING PROGRAMDIFFERENT MEDIA ALTERNATIVESLO3NewspapersFalling Circulation & Ad RevenueNew Types of News OrganizationsOnline and MobileDEVELOPING THEADVERTISING PROGRAMDIFFERENT MEDIA ALTERNATIVESLO3Yellow PagesDEVELOPING THEADVERTISING PROGRAMDIFFERENT MEDIA ALTERNATIVESLO3Paid SearchRich MediaInternetBanner/Display AdsAssessmentFIGURE 18-4 Google and Yahoo! have the largest shares of Internet searches and offer opportunities for online advertisingMAKING RESPONSIBLE DECISIONSWho is Responsible for Click Fraud?LO3Pay-to-ReadClick BotsWebtippingDEVELOPING THEADVERTISING PROGRAMOTHER MEDIA ALTERNATIVESLO3OutdoorTransitAdvertisingBillboardsDEVELOPING THEADVERTISING PROGRAMOTHER MEDIA ALTERNATIVESLO3Other MediaPlaced-Based MediaSelection CriteriaMedia HabitsCostProduct AttributesDEVELOPING THEADVERTISING PROGRAMSCHEDULING THE ADVERTISINGLO3Factors to ConsiderBuyer TurnoverForgetting RatePurchase FrequencyDEVELOPING THEADVERTISING PROGRAMSCHEDULING THE ADVERTISINGLO3ApproachesContinuous (Steady) SchedulePulse (Burst) ScheduleFlighting (Intermittent) ScheduleEXECUTING THEADVERTISING PROGRAMPRETESTING THE ADVERTISINGLO3PretestsPortfolio TestsTheater TestsJury TestsEXECUTING THEADVERTISING PROGRAMCARRYING OUT THE ADVERTISING PROGRAMLO3Full-Service AgencyLimited-Service AgenciesIn-House AgenciesFIGURE 18-5 Alternative structures of advertising agencies used to carry out the advertising programASSESSING THEADVERTISING PROGRAMPOSTTESTING THE ADVERTISINGLO3PosttestsAided RecallUnaided RecallNotedRead MostSeen-AssociatedAttitude TestsInquiry TestsSales TestsFIGURE 18-6 Sales promotions can be used to achieve many objectivesSALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTIONLO4Consumer-Oriented Sales PromotionCouponsSALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTIONLO4DealsSALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTIONLO4PremiumsSelf-Liquidating: Free Toy in Happy MealDeal-Prone & Value Seeing ConsumersSALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTIONContestsLO4SALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTIONValue-Based PrizesExperience-Based PrizesLO4SweepstakesSALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTIONLO4SamplesSALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTIONLO4Loyalty ProgramsSALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTIONLO4Point-of-Purchase DisplaysSALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTIONLO4RebatesSALES PROMOTIONCONSUMER-ORIENTED SALES PROMOTIONProduct PlacementLO4SALES PROMOTIONTRADE-ORIENTED SALES PROMOTIONLO4Trade-Oriented Sales PromotionAllowances and DiscountsMerchandise AllowanceFinance AllowanceCase AllowanceFree GoodsFloor Stock ProtectionFreight AllowanceSALES PROMOTIONTRADE-ORIENTED SALES PROMOTIONLO4Cooperative AdvertisingTraining of Distributors’ Salesforces PUBLIC RELATIONSPUBLICITY TOOLSLO5Publicity ToolsPublic RelationsNews ReleaseNews ConferencePublic ServiceAnnouncement (PSA)INCREASING THE VALUEOF PROMOTIONLO5Self-RegulationBuilding Long-Term Relationships with PromotionGOOGLE, INC.: THE RIGHT ADSAT THE RIGHT TIMEVIDEO CASE 18VIDEO CASE 18GOOGLE1. Describe several unique characteristics about Googleand its business practices.VIDEO CASE 18GOOGLE2. What is Google’s philosophy about advertising? How can less advertising be preferred to more advertising?VIDEO CASE 18GOOGLE3. Describe the types of online advertising available today. Which type of advertising does Google currently dominate? Why?VIDEO CASE 18GOOGLE4. How can Google be successfulin the display advertising business? What other areas of growth are likely to be pursuedby Google in the future?AdvertisingAdvertising is any paid formof nonpersonal communicationabout an organization, good, service, or idea by an identified sponsor.Product AdvertisementsProduct advertisements are advertisements that focus on selling a good or service and which take three forms:(1) pioneering (or informational), (2) competitive (or persuasive), and (3) reminder.Institutional AdvertisementsInstitutional advertisementsare advertisements designed to build goodwill or an image for an organization rather than promotea specific good or service.ReachReach is the number of different people or households exposed to an advertisement.RatingA rating is the percentage of households in a market that are tuned to a particular TV show or radio station.FrequencyFrequency is the averagenumber of times a person in the target audience is exposed to a message or an advertisement.Gross Rating Points (GRPs)Gross rating points (GRPs) isa reference number used by advertisers that is obtained by multiplying reach (expressed asa percentage of the total market) by frequency.Cost per Thousand (CPM)Cost per thousand (CPM) isthe cost of reaching 1,000 individuals or households withthe advertising message in a given medium (M is the Roman numeral for 1,000).InfomercialsInfomercials are program-length (30-minute) advertisements that take an educational approach to communication with potential customers.PretestsPretests are tests conducted before an advertisement is placed in any medium to determine whether it communicates the intended message or to select among alternative versions of the advertisement.Full-Service AgencyA full-service agency is an advertising agency that provides the most complete range of services, including market research, media selection, copy development, artwork, and production.Limited-Service AgenciesLimited-service agencies are advertising agencies that specializein one aspect of the advertising process, such as providing creative services to develop the advertising copy, buying previously unpurchased media space, or providing Internet services.In-House AgenciesIn-house agencies consist of the company’s own advertising staff, who may provide full services ora limited range of services.PosttestsPosttests are tests conducted after an advertisement has been shown to the target audience to determine whether it accomplished its intended purpose.Consumer-Oriented Sales PromotionConsumer-oriented sales promotion consists of sales tools used to support a company’s advertising and personal selling directed to ultimate consumers. Also called consumer promotions.Product PlacementProduct placement is a consumer sales promotion tool that uses a brand-name productin a movie, television show, video game, or a commercial for another product.Trade-oriented sales promotions are sales toolsused to support a company’s advertising and personal selling directed to wholesalers, distributors, or retailers. Also called trade promotions.Trade-Oriented Sales PromotionsCooperative AdvertisingCooperative advertisingconsists of advertising programs by which a manufacturer pays a percentage of the retailer’s local advertising expense for advertising the manufacturer’s products.Publicity ToolsPublicity tools are methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost, such as news releases, news conferences, and public service announcements.