CHAPTER 10
ADVERTISING, SALES
PROMOTION,
PUBLIC RELATIONS, PERSONAL
SELLING,
Discuss the effects of
advertising on
market share and consumers
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
THE EFFECTS OF ADVERTISING
Top Ten Leaders by U.S. Advertising Spending
Top Ten Leaders by U.S. Advertising Spending
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.
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.
EFFECT OF ADVERTISING
Reinforce positive attitudes about brand.
Reinforce positive attitudes about brand.
Transform Negative attitude toward a product into a positive one.
Transform Negative attitude toward a product into a positive one.
Measure impact on purchase of products.
Measure impact on purchase of products.
Maintain brand awareness & Increase market share.
EFFECT OF ADVERTISING
Building Goodwill.
Building Goodwill.
Introducing New Products.
Introducing New Products.
Pre-selling a Product.
Pre-selling a Product.
REVIEW LEARNING OUTCOME
Identify the major types
of advertising
MAJOR TYPES OF ADVERTISING
InstitutionalAdvertising
Enhances a company’s image rather than promotes a
particular product.
Product Advertising
Advertize the benefits of a specific good or service.
MAJOR TYPES OF ADVERTISING
Corporate identity Corporate identity Pioneering Pioneering Competitive Competitive Comparative ComparativeProduct
Advertising
Product
Advertising
Institutional
Advertising
Institutional
Advertising
Advocacy advertising Advocacy advertisingPRODUCT 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
REVIEW LEARNING OUTCOME
Discuss the creative decisions
in developing an
advertising campaign
CREATIVE DECISIONS IN
ADVERTISING
CREATIVE DECISIONS IN
ADVERTISING
Advertising Campaign A series of related advertisements focusing on a common theme,slogan, and set of advertising appeals.
CREATIVE DECISIONS IN
ADVERTISING
Determine the
advertising objectives
Make creative decisions Make media decisions
Define target audience
Define target audience
Define desired percentage change
Define desired percentage change
Define the time frame for change
Define the time frame for change
SETTING OBJECTIVES: THE
DAGMAR APPROACH
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
“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
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
ADVERTISING APPEALS
Profit Health Love or romance Fear Admiration ConvenienceFun 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
Unique Selling
Proposition A desirable, exclusive,
and believable advertising appeal selected as the theme
for a campaign.
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
Describe media evaluation
and
selection techniques
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 MediaMAJOR ADVERTISING MEDIA
Newspapers Newspapers Magazines Magazines Radio Radio Television Television Outdoor Media Outdoor Media Yellow Pages Yellow Pages Internet InternetNEWSPAPERS
Advantages
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
Disadvantages
Limited demographic selectivity Limited color May be expensiveFREE 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
Cooperative Advertising
COOPERATIVE ADVERTISING
An arrangement in which the manufacturer and the
retailer
split the costs of advertising the
MAGAZINES
Advantages
Advantages
Disadvantages
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
RADIO
Advantages
Advantages
Disadvantages
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
TELEVISION
Advantages
Advantages
Disadvantages
Disadvantages
Wide, diverseaudience
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
3
5
TV ADVERTISING: IS LESS MORE?
The number of ads in TV shows is a longstandingcomplaint 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
OUTDOOR MEDIA
Advantages
Advantages
Disadvantages
Disadvantages
Repetition Moderate cost Flexibility Geographic selectivity Short message Lack of demographic selectivity
INTERNET
Advantages
Advantages
Disadvantages
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
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 AdvertainmentsCell Phone Ads Cell Phone Ads Subway Tunnel Ads Subway Tunnel Ads
Floor Ads Floor Ads
Video Game Ads Video Game Ads
VIDEOGAME ADVERTISING
SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,”
Wall Street Journal, April 26,2006, B1.
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.
DIRECTORY ASSISTANCE
ADVERTISING
SOURCE: Rebecca Buckman, “Your Listing, and a Word From Our Sponsor,”
Wall Street Journal, April 20,2006, B1.
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.
QUALITATIVE FACTORS IN MEDIA
SELECTION
Attention to the commercial
and the program
Program liking
Lack of distractions
MEDIA SCHEDULING
Continuous Media Schedule Flighted Media Schedule Pulsing Media Schedule Seasonal Media ScheduleAdvertising 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.
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.
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
Define and state the
objectives of sales promotion
SALES PROMOTION
Sales Promotion
Marketing communication
activities, other than advertising, personal
selling, and public relations, in which a short-term incentive motivates a purchase.
Advertising
SALES PROMOTION
Reason to buy
SALES PROMOTION
Consumer Sales Promotion Consumer Sales Promotion Trade Sales Promotion Trade Sales Promotion Consumer market Marketing channel Drive immediate purchase Influence behavior GoalType 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
REVIEW LEARNING OUTCOME
Discuss the most common
forms of consumer
sales promotion
TOOLS FOR CONSUMER SALES
PROMOTION
Coupons and Rebates
Coupons and Rebates
Premiums
Premiums
Loyalty Marketing Programs
Loyalty Marketing Programs
Contests & Sweepstakes
Contests & Sweepstakes
Sampling
Sampling
Point-of-Purchase Promotion
Point-of-Purchase Promotion
TOOLS FOR CONSUMER SALES
PROMOTION
TOOLS FOR CONSUMER SALES
PROMOTION
Coupon Coupon Rebate Rebate Premium PremiumA 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
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
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
TOOLS FOR CONSUMER SALES
PROMOTION
Sampling
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
Build traffic
Advertise the product
Persuade impulse buying
ONLINE SALES PROMOTION
Free merchandise
Sweepstakes
Free shipping with purchases
Coupons
REVIEW LEARNING OUTCOME
CONSUMER SALES PROMOTION
Coupons and rebates Premiums
Loyalty marketing programs Contests
Sampling P-O-P Online
List the most common forms
of trade sales promotion
TOOLS FOR TRADE SALES
PROMOTION
TRADE SALES PROMOTION
Trade Allowances Trade Allowances Push Money Push Money Training Training Free Merchandise Free Merchandise Store Demonstration Store DemonstrationConventions & Trade Shows
Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.
TRADE ALLOWANCE
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
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
REVIEW LEARNING OUTCOME
Discuss the role of
public relations
in the promotional mix
Public Relations
PUBLIC RELATIONS
The element in the promotional mix that:
evaluates public attitudes identifies issues of public
concern
executes programs to gain
Press relations Press relations Product publicity Product publicity Corporate communication Corporate communication Public affairs Public affairs Lobbying Lobbying
Employee and investor relations
Employee and investor relations
Crisis management
Crisis management
Product placement
Product placement
Consumer education
Consumer education
Event sponsorship
Event sponsorship
Issue sponsorship
Issue sponsorship
Internet Web sites
Internet Web sites
New product publicity
New product publicity
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
Crisis
Management
REVIEW LEARNING OUTCOME
Describe personal selling
PERSONAL SELLING
Personal Selling is more important if...
Customers are concentrated.
Customers are concentrated.
Product is
technically complex.Product is
technically complex.
There are few customers.
There are few customers.
Product is custom made.
Product is custom made.
Product has a high value.
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.
There are many customers.
Product is standardized.
Product is standardized.
Product has a low value.
Product has a low value.
Advertising & Sales Promotion are more important if...
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
Discuss the key differences
between relationship selling
and traditional selling
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.
TRADITIONAL SELLING AND
RELATIONSHIP SELLING
Sell advice, assistance, counsel Sell products
Traditional
Traditional
Personal Selling
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
REVIEW LEARNING OUTCOME
RELATIONSHIP SELLING VS. TRADITIONAL SELLING
Initial Sales Repeat Sales Successive Sales Traditional Sales Relationship Sales Sales Increases Result From Creating Value
List the steps in
the selling process
Generate Leads
Generate Leads
Qualify Leads
Qualify Leads
Probe Customer Needs
Probe Customer Needs
Develop Solutions
Develop Solutions
Handle Objections
Handle Objections
Close the Sale
Close the Sale
Follow Up
Follow Up
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
Advertising
Advertising PublicityPublicity 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
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
Recognized need Recognized need Buying power Buying power Receptivity and accessibility Receptivity and accessibility
QUALIFYING LEADS
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.
Product or service Product or service Customers Customers Competition Competition Industry Industry Salesperson must know everything about... Salesperson must know everything about...
DEVELOPING AND PROPOSING
SOLUTIONS
Sales Proposal Sales Proposal Sales Presentation Sales PresentationBe 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!
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
CLOSING THE SALE
Negotiate
Negotiate
Keep an open mind
Keep an open mind
Look for
customer signals
Look for
customer signals
Tailor to each market
REVIEW LEARNING OUTCOME
Describe the functions
of sales management
Evaluate sales force
Evaluate sales force
Compensate and motivate sales force
Compensate and motivate sales force
Recruit and train sales force
Recruit and train sales force
Determine sales force structure
Determine sales force structure
Define sales goals and sales process
Define sales goals and sales process
SALES MANAGEMENT
Clear Clear Precise Precise Measurable Measurable Time Specific Time Specific
DEFINING SALES GOALS
Sales Volume
Market Share
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.
SALES FORCE STRUCTURE
Individual client
or account
Individual client
or account
Market or industry
Market or industry
Marketing function
Marketing function
Product line
Product line
Geographic region
Geographic region
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
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
COMPENSATING THE SALES FORCE
Commission Commission Salary Salary Combination Plans Combination PlansStraight Commission
The salesperson is paid some percentage when
a sale is made.
Straight Salary
The salesperson receives a salary regardless of
sales productivity.
MOTIVATING THE SALES FORCE
Ceremonies Plaques Vacations Merchandise Pay raises Cash bonuses Stock options Tuition assistance Product discountsKEY PERSONALITY TRAITS OF SALES
LEADERS
Effective Sales Leaders are… Are confident
Are confident
Possess ego drive
Possess ego drive
Possess ego strength
Possess ego strength
Take risks
Take risks
Are innovative
Are innovative
Have a sense of urgency
Have a sense of urgency
Are empathetic
EVALUATING THE SALES
FORCE
Contribution to profit
Contribution to profit
Calls per order
Calls per order
Sales or profits per call
Sales or profits per call
Call percentage achieving goals
Call percentage achieving goals
Sales volume
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.
THE IMPACT OF TECHNOLOGY ON
PERSONAL SELLING
Cell phones Cell phones Laptops Laptops Pagers Pagers E-Mail E-Mail Electronic organizers Electronic organizers Internet InternetREVIEW LEARNING OUTCOME
Direct marketing
(direct-response marketing)
Direct Marketing
DIRECT MARKETING
Techniques used to get consumers to make a purchase from
their home, office, or another nonretail