ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

(1)

CHAPTER 10 ADVERTISING, SALES

PROMOTION,

PUBLIC RELATIONS, PERSONAL

SELLING,

(2)

Discuss the effects of

advertising on

market share and consumers

(3)

THE EFFECTS OF ADVERTISING

U.S. advertising was almost $300 billion in 2006

In 2005, 32 companies spent over

$1 billion each

The advertising industry is small—only 155,000

employed by the 12,000 advertising agencies

Ad budgets of some firms are almost $4 billion

(4)

THE EFFECTS OF ADVERTISING

Top Ten Leaders by U.S. Advertising Spending

(5)

ADVERTISING AND MARKET SHARE

New brands with a small market share spend

proportionally more for advertising and sales

promotion than those with a large market share

1. Beyond a certain level of spending, diminishing returns

set in.

2. New brands require higher spending to reach a

minimum level of exposure needed to affect purchase habits.

(6)

THE EFFECTS OF ADVERTISING ON

CONSUMERS

The average U.S. citizen is exposed to

hundreds of ads each day.

Advertising may change a consumer’s

negative attitude toward a product, or

reinforce a positive attitude.

Advertising can affect consumer ranking of

a brand’s attributes.

(7)

EFFECT OF ADVERTISING

Reinforce positive attitudes about brand.

Transform Negative attitude toward a product into a positive one.

Measure impact on purchase of products.

Maintain brand awareness & Increase market share.

(8)

EFFECT OF ADVERTISING

Building Goodwill.

Introducing New Products.

Pre-selling a Product.

(9)

REVIEW LEARNING OUTCOME

(10)

Identify the major types

of advertising

(11)

MAJOR TYPES OF ADVERTISING

Institutional

Advertising

Enhances a company’s image rather than promotes a

particular product.

Product Advertising

Advertize the benefits of a specific good or service.

(12)

MAJOR TYPES OF ADVERTISING

Corporate identity Corporate identity Pioneering Pioneering Competitive Competitive Comparative Comparative

Product

Advertising

Product

Advertising

Institutional

Advertising

Institutional

Advertising

Advocacy advertising Advocacy advertising

(13)

PRODUCT ADVERTISING

Pioneering Pioneering Pioneering

Pioneering  Stimulates primary demand for _{new product or category}

 _{Used in the PLC introductory}

stage

Competitive Competitive Competitive

Competitive  Influences demand for brand in _{the growth phase of the PLC}

 _{Often uses emotional appeal}

Comparative Comparative Comparative

Comparative

 _{Compares two or more}

competing brands’ product attributes

 _{Used if growth is sluggish, or if}

(14)

REVIEW LEARNING OUTCOME

(15)

Discuss the creative decisions

in developing an

advertising campaign

CREATIVE DECISIONS IN

ADVERTISING

(16)

CREATIVE DECISIONS IN

ADVERTISING

Advertising Campaign A series of related advertisements focusing on a common theme,

slogan, and set of advertising appeals.

(17)

CREATIVE DECISIONS IN

ADVERTISING

Determine the

advertising objectives

Make creative decisions Make media decisions

(18)

Define target audience

Define desired percentage change

Define the time frame for change

SETTING OBJECTIVES: THE

DAGMAR APPROACH

(19)

CREATIVE DECISIONS

Develop and evaluate advertising appeals Develop and evaluate

advertising appeals Execute the message Execute the message Evaluate the campaign’s effectiveness Evaluate the campaign’s effectiveness Identify product benefits Identify product benefits

(20)



“Sell the Sizzle, not the Steak”



Sell product’s benefits, not its attributes



A benefit should answer

“What’s in it for me?”



Ask “So?” to determine

if it is a benefit

(21)

IDENTIFY PRODUCT BENEFITS

Attribute

Benefit

“Powerade’s new line has been reformulated to combine the scientific benefits of sports

drinks with

B vitamins and to speed up energy metabolism.”

“So, you’ll satisfy your thirst with a great-tasting drink that will power you throughout the

(22)

ADVERTISING APPEALS

Profit Health Love or romance Fear Admiration Convenience

Fun and pleasure Vanity and egotism

Environmental Consciousness

Product saves, makes, or protects money Appeals to body-conscious or health seekers

Used in selling cosmetics and perfumes

Social embarrassment, old age, losing health Reason for use of celebrity spokespeople

Used for fast foods and microwave foods Key to advertising vacations, beer, parks Used for expensive or conspicuous items Centers around environmental protection

(23)

Unique Selling

Proposition A desirable, exclusive,

and believable advertising appeal selected as the theme

for a campaign.

(24)

(25)

REVIEW LEARNING OUTCOME

CREATIVE DECISIONS FOR AD CAMPAIGN

Set advertising objectives Identify benefits Develop appeal Evaluate campaign results Evaluating results helps marketers adjust objectives for future campaigns Execute message

(26)

Describe media evaluation

and

selection techniques

(27)

MEDIA DECISIONS IN ADVERTISING

Newspapers Newspapers Magazines Magazines Yellow Pages Yellow Pages Internet Internet Radio Radio Television Television Outdoor Media Outdoor Media Direct Mail Direct Mail Trade Exhibits Trade Exhibits Cooperative Advertising Cooperative Advertising Brochures Brochures Coupons Coupons Catalogs Catalogs Special Events Special Events Monitored Media

(28)

MAJOR ADVERTISING MEDIA

Newspapers Newspapers Magazines Magazines Radio Radio Television Television Outdoor Media Outdoor Media Yellow Pages Yellow Pages Internet Internet

(29)

NEWSPAPERS

Advantages

 _{Geographic selectivity}  _{Short-term advertiser} commitments

 _{News value and}

nearness

 _{High individual}

market coverage

 _{Co-op and local tie-in}

availability

 _{Short guide time}

Disadvantages

 _{Limited demographic} selectivity  _{Limited color}  _{May be expensive}

(30)

FREE NEWSPAPERS?

SOURCE: Joseph T. Hallinan, “Do New Free Dailies Mean Sun is Setting for Paid

Newspapers?,”

Wall Street Journal, April 5, 2006, B1.

 The new Baltimore Examiner is delivering 250,000

newspapers—at no charge and unsolicited!

 Advertising brings in the revenue for this niche

publication targeting households with income of $73,000 or more.

 The ads are $2,900 for a full page,

compared with $17,000 for

its competition, the Baltimore Sun.

 The Examiner is betting that low ad rates and the target

(31)

Cooperative Advertising

COOPERATIVE ADVERTISING

An arrangement in which the manufacturer and the

retailer

split the costs of advertising the

(32)

MAGAZINES

Advantages

Disadvantages

 _{Good reproduction}

 _{Demographic selectivity}  _{Regional/local selectivity}  _{Long advertising life}

 _{High pass-along rate}

 _{Long-term advertiser}

commitments

 _{Slow audience}

build-up

 _Limited

demonstration capabilities

 _{Lack of urgency}  _{Long lead time}

(33)

RADIO

Advantages

Disadvantages

 _{Low cost}

 _{Immediacy of message}  _{Short notice scheduling}  _{No seasonal audience} change  _{Highly portable}  _{Short-term advertiser} commitments  _{Entertainment carryover}  _{No visual treatment}  _{Short advertising life}  _{High frequency to} generate comprehension and retention  _Background distractions  _{Commercial clutter}

(34)

TELEVISION

Advantages

Disadvantages

 _{Wide, diverse}

audience

 _{Low cost per}

thousand  _Creative opportunities for demonstration  _{Immediacy of} messages  _{Entertainment} carryover  _Demographic

selectivity with cable

 _{Short life of message}  _{Consumer skepticism}  _{High campaign cost}  _{Little demographic}

selectivity with stations

 _{Long-term advertiser}

commitments

 _{Long lead times for}

production

(35)

3

5

TV ADVERTISING: IS LESS MORE?

 The number of ads in TV shows is a longstanding

complaint of viewers and advertisers.

 The media is cluttered

and consumers change channels or speed

through commercials on a DVR.

 Tests are being conducted

to feature shorter commercial pods.

SOURCE: Suzanne Vranica, “TV-Ad Test to Show if Less is More,”

Wall Street Journal, April 5,2006, B3.

Y e a r Commercial Minutes per Hour 13.5 14 14.5 15 15.5 2000 01 02 03 04 05

(36)

OUTDOOR MEDIA

Advantages

Disadvantages

 _Repetition  _{Moderate cost}  _Flexibility  _Geographic selectivity  _{Short message}  _{Lack of demographic} selectivity

(37)

INTERNET

Advantages

Disadvantages

 _{Fast growing}

 _{Ability to reach}

narrow target audience

 _{Short lead time}  _{Moderate cost}

 _{Difficult to measure}

ad effectiveness and ROI

 _{Ad exposure relies on}

“click through” from banner ads

 _{Not all consumers}

have access to Internet

(38)

ALTERNATIVE MEDIA

Ads in Movies Ads in Movies Interactive Kiosks Interactive Kiosks Computer Screen Savers Computer Screen Savers Shopping Carts Shopping Carts DVDs DVDs Advertainments Advertainments

Cell Phone Ads Cell Phone Ads Subway Tunnel Ads Subway Tunnel Ads

Floor Ads Floor Ads

Video Game Ads Video Game Ads

(39)

VIDEOGAME ADVERTISING

SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,”



Microsoft plans to acquire Massive inc., a

start-up that places ads in video games.



Ads are inserted into the

game environment.



Video games could become

a large new medium for

advertising.

(40)

DIRECTORY ASSISTANCE

ADVERTISING

SOURCE: Rebecca Buckman, “Your Listing, and a Word From Our Sponsor,”

 Companies are offering free telephone directory assistance—but there’s an advertisement first.

 The audio ads are narrowly targeted, and are 10 to 12 seconds.

 The growth of such free services

could represent another change in the telecom industry.

(41)

QUALITATIVE FACTORS IN MEDIA

SELECTION



Attention to the commercial

and the program



Program liking



Lack of distractions

(42)

MEDIA SCHEDULING

Continuous Media Schedule Flighted Media Schedule Pulsing Media Schedule Seasonal Media Schedule

Advertising is run steadily throughout the period.

Advertising is run heavily every other month or every two

weeks.

Advertising combines continuous scheduling with

flighting.

Advertising is run only when the product is likely to be used.

(43)

MEDIA SCHEDULING ON THE WEB

 Competition for Web advertising spots is driving up prices.

 Some Web advertisers now run campaigns based on time of day. Examples:

 McDonald’s: breakfast meals during morning hours  Xerox: copier ads during the workday

 Budweiser: beer ads on Friday afternoons

 Scheduling Web ads during prime times is a more efficient use of ad dollars and more targeted.

SOURCE: David Kesmodel, “More Marketers Place Web Ads by Time of Day,” Wall Street Journal, June 23, 2006, B1.

(44)

REVIEW LEARNING OUTCOME

MEDIA EVALUATION AND SELECTION

Type: Newspaper Magazine Radio Television Outdoor Internet Alternative Considerations:

Mix How much of each?

Cost per contact How much per

person?

Reach How many people?

Frequency How often?

Audience selectivity How targeted is audience?

Scheduling: continuous

flighted pulsing

seasonal

(45)

Define and state the

objectives of sales promotion

(46)

SALES PROMOTION

Sales Promotion

Marketing communication

activities, other than advertising, personal

selling, and public relations, in which a short-term incentive motivates a purchase.

(47)

Advertising

SALES PROMOTION

Reason to buy

(48)

SALES PROMOTION

Consumer Sales Promotion Consumer Sales Promotion Trade Sales Promotion Trade Sales Promotion Consumer market Marketing channel Drive immediate purchase Influence behavior Goal

(49)

Type of Buyer Type of Buyer Loyal Customers Competitor’s Customers Brand Switchers Price Buyers Desired Results Desired Results •Reinforce behavior •Increase consumption •Change purchase timing

•Break loyalty

•Persuade to switch •Persuade to buy your

brand more often •Appeal with low

prices

•Supply added value

Sales Promotion Sales Promotion Examples Examples •Loyalty marketing •Bonus packs •Sampling •Sweepstakes, contests, premiums •Price-lowering promotion •Trade deals •Coupons, price-off packages, refunds •Trade deals

(50)

REVIEW LEARNING OUTCOME

(51)

Discuss the most common

forms of consumer

sales promotion

TOOLS FOR CONSUMER SALES

PROMOTION

(52)

Coupons and Rebates

Premiums

Loyalty Marketing Programs

Contests & Sweepstakes

Sampling

Point-of-Purchase Promotion

TOOLS FOR CONSUMER SALES

PROMOTION

(53)

TOOLS FOR CONSUMER SALES

PROMOTION

Coupon Coupon Rebate Rebate Premium Premium

A certificate that entitles consumers to an immediate

price reduction.

A certificate that entitles consumers to an immediate

price reduction.

A cash refund given for the purchase of a product during

a specific period.

A cash refund given for the purchase of a product during

a specific period.

An extra item offered to the consumer, usually in exchange

for some proof of purchase.

An extra item offered to the consumer, usually in exchange

(54)

Loyalty Marketing

Program

A promotional program designed to build long-term, mutually beneficial relationships between

a company and key customers.

Frequent Buyer Program

A loyalty program in which

loyal consumers are rewarded for making multiple purchases.

TOOLS FOR CONSUMER SALES

PROMOTION

(55)

Contests _{or ability to compete for prizes.}Promotions that require skill

Sweepstakes

Promotions that depend on chance or luck, with

free participation.

TOOLS FOR CONSUMER SALES

PROMOTION

(56)

TOOLS FOR CONSUMER SALES

PROMOTION

Sampling

A promotional program that allows the consumer the opportunity to try a product

or service for free.

A promotional program that allows the consumer the opportunity to try a product

(57)

(58)



Build traffic



Advertise the product



Persuade impulse buying

(59)

ONLINE SALES PROMOTION



Free merchandise



Sweepstakes



Free shipping with purchases



Coupons

(60)

REVIEW LEARNING OUTCOME

CONSUMER SALES PROMOTION

Coupons and rebates Premiums

Loyalty marketing programs Contests

Sampling P-O-P Online

(61)

List the most common forms

of trade sales promotion

TOOLS FOR TRADE SALES

PROMOTION

(62)

TRADE SALES PROMOTION

Trade Allowances Trade Allowances Push Money Push Money Training Training Free Merchandise Free Merchandise Store Demonstration Store Demonstration

Conventions & Trade Shows

(63)

Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.

TRADE ALLOWANCE

(64)

Push Money Money offered to

channel

intermediaries to encourage them to “push” products--that is, to encourage other

members of the channel to sell the

products.

PUSH MONEY

(65)

BENEFITS OF TRADE PROMOTIONS

Help manufacturers gain new distribution

Obtain wholesaler and retailer support for

consumer sales promotions

Build or reduce dealer inventories

Improve trade relations

(66)

REVIEW LEARNING OUTCOME

(67)

Discuss the role of

public relations

in the promotional mix

(68)

Public Relations

PUBLIC RELATIONS

The element in the promotional mix that:

 _{evaluates public attitudes}  _{identifies issues of public}

concern

 _{executes programs to gain}

(69)

Press relations Press relations Product publicity Product publicity Corporate communication Corporate communication Public affairs Public affairs Lobbying Lobbying

Employee and investor relations

Crisis management

(70)

Product placement

Consumer education

Event sponsorship

Issue sponsorship

Internet Web sites

New product publicity

(71)

EXAMPLE OF CONSUMER EDUCATION

SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,”

Wall Street Journal, April 8-9, 2006, B1.

 Corporations are teaching public school students about personal finance.

 People under age 25 are a

fast-growing group for credit card debt increases and bankruptcy.

 Is it appropriate to use educational materials with a corporate identity?  How should financial literacy be

(72)

Crisis

Management

(73)

REVIEW LEARNING OUTCOME

(74)

Describe personal selling

(75)

PERSONAL SELLING

Personal Selling is more important if...

Customers are concentrated.

Product is

technically complex.Product is

technically complex.

There are few customers.

Product is custom made.

Product has a high value.

Customers are

geographically dispersed.Customers are

geographically dispersed.

Product is

simple to understand.Product is

simple to understand.

There are many customers.

Product is standardized.

Product has a low value.

Advertising & Sales Promotion are more important if...

(76)

REVIEW LEARNING OUTCOME

PERSONAL SELLING

 _{Detailed explanation or}

demonstration

 _{Variable sales message}

 _{Directed to qualified prospects}

 _{Controllable adjustable selling costs}  _{More effective than other}

promotion in obtaining sale and gaining customer satisfaction

Personal Selling Advantages

(77)

Discuss the key differences

between relationship selling

and traditional selling

(78)

Relationship (Consultative)

Selling

RELATIONSHIP SELLING

A sales practice that involves building,

maintaining, and

enhancing interactions with customers in order

to develop long-term satisfaction through

mutually beneficial partnerships.

(79)

TRADITIONAL SELLING AND

RELATIONSHIP SELLING

Sell advice, assistance, counsel Sell products

Traditional

Personal Selling

Focus on closing sales Limited sales planning

Discuss product

Assess “product-specific” needs

“Lone wolf” approach Pricing/product focus Short-term sales follow-up

Focus on customer’s bottom line Sales planning is top priority Build problem-solving environment

Conduct discovery in scope of operations

Team approach

Profit impact and strategic benefit focus

Long-term sales follow-up

Relationship Selling

(80)

REVIEW LEARNING OUTCOME

RELATIONSHIP SELLING VS. TRADITIONAL SELLING

Initial Sales Repeat Sales Successive Sales Traditional Sales Relationship Sales Sales Increases Result From Creating Value

(81)

List the steps in

the selling process

(82)

Generate Leads

Qualify Leads

Probe Customer Needs

Develop Solutions

Handle Objections

Close the Sale

Follow Up

(83)

Key Selling Steps Traditional Selling

Relationship Selling

Generate Leads High Low

Qualify Leads Low High

Probe Needs Low High

Develop Solutions Low High

Handle Objections High Low

Close the sale High Low

Follow-up Low High

TIME SPENT IN KEY STEPS OF

SELLING PROCESS

(84)

Advertising

Advertising Publicity_Publicity _TelemarketinDirect Mail/ g

Direct Mail/ Telemarketin

g

Cold Calling

Cold Calling Internet Web Site

Internet Web

Site ReferralsReferrals

Trade Shows/ Conventions Trade Shows/ Conventions Networking Networking Company Records Company Records

GENERATING LEADS

(85)

Cold Calling

COLD CALLING

A form of lead generation in which the salesperson

approaches potential buyers without any prior

knowledge of the prospects’ needs or

(86)

Recognized need Recognized need Buying power Buying power Receptivity and accessibility Receptivity and accessibility

QUALIFYING LEADS

(87)

Needs Assessment

NEEDS ASSESSMENT

A determination of the customer’s specific needs and wants and the range of options a

customer has for satisfying them.

(88)

Product or service Product or service Customers Customers Competition Competition Industry Industry Salesperson must know everything about... Salesperson must know everything about...

(89)

DEVELOPING AND PROPOSING

SOLUTIONS

Sales Proposal Sales Proposal Sales Presentation Sales Presentation

(90)

Be well prepared Use eye contact

Ask open-ended questions Be poised

Use hand gestures and voice inflection Focus on the customer needs

Incorporate visual elements

Know how to operate the A/V equipment Make sure the equipment works

PRACTICE, PRACTICE, PRACTICE!

(91)

 _{View objections as requests for}

information

 _{Anticipate specific objections}  _{Investigate the objection with the}

customer

 _{Be aware of competitors’ products}  _{Stay calm}

 _{Use the objection to close the sale}

(92)

CLOSING THE SALE

Negotiate

Keep an open mind

Look for

customer signals

Look for

customer signals

Tailor to each market

(93)

REVIEW LEARNING OUTCOME

(94)

Describe the functions

of sales management

(95)

Evaluate sales force

Compensate and motivate sales force

Recruit and train sales force

Determine sales force structure

Define sales goals and sales process

SALES MANAGEMENT

(96)

Clear Clear Precise Precise Measurable Measurable Time Specific Time Specific

DEFINING SALES GOALS

Sales Volume

Market Share

(97)

Quota _{individual salesperson’s}A statement of the

sales objectives, usually based on sales volume

alone but sometimes including key accounts,

new accounts, repeat sales, and specific

products.

(98)

SALES FORCE STRUCTURE

Individual client

or account

Individual client

or account

Market or industry

Marketing function

Product line

Geographic region

(99)

CHARACTER OF TOP SALES

PERFORMERS

 Strong, healthy self esteem  Can bounce back from rejection

 Sense of urgency and competitiveness  Persuasive

 Self-confident  Sociable

 Willing to take risks

 Understand complex concepts  Creative in developing solutions

(100)

Training includes... Training includes... Nonselling duties Nonselling duties

Industry and customer characteristics

Industry and customer characteristics Product knowledge Product knowledge Selling techniques Selling techniques Company policies and practice Company policies and practice

(101)

COMPENSATING THE SALES FORCE

Commission Commission Salary Salary Combination Plans Combination Plans

(102)

Straight Commission

The salesperson is paid some percentage when

a sale is made.

Straight Salary

The salesperson receives a salary regardless of

sales productivity.

(103)

MOTIVATING THE SALES FORCE

 _Ceremonies  _Plaques  _Vacations  _Merchandise  _{Pay raises}  _{Cash bonuses}  _{Stock options}  _{Tuition assistance}  _{Product discounts}

(104)

KEY PERSONALITY TRAITS OF SALES

LEADERS

Effective Sales Leaders are… Are confident

Are confident

Possess ego drive

Possess ego strength

Take risks

Are innovative

Have a sense of urgency

Are empathetic

(105)

EVALUATING THE SALES

FORCE

Contribution to profit

Calls per order

Sales or profits per call

Call percentage achieving goals

Sales volume

(106)

WOMEN IN CAR SALES

SOURCE: Jennifer Saranow, “Car Dealers Recruit Saleswomen at the Mall,”

Wall Street Journal, April 12, 2006, B1.

 For its Florida and Texas dealerships, Asbury

Automotive Group is actively recruiting saleswomen– at shopping malls.

 11% of the automotive sales force is female. In

contrast, 50% of retail-industry employees are women.

 Women influence 81% of new auto purchases,

and women may even be better at selling cars than men.

(107)

THE IMPACT OF TECHNOLOGY ON

PERSONAL SELLING

Cell phones Cell phones Laptops Laptops Pagers Pagers E-Mail E-Mail Electronic organizers Electronic organizers Internet Internet