Chapter 15 Advertising

Advertising any paid form of nonpersonal presentation and promotion of

ideas, goods, services by an identified sponsor.

4 Decisions of developing an advertising program:

1. Setting an Advertising Objective
Advertising Objective - a specific communication task to be
accomplished with a specific target audience during a specified period
of time. 3 Purposes
Persuade, inform, remind
Informative Advertising used when introducing a new product
category. Seeks to build demand.
Ex. HD TVs had to inform viewers about increased picture
quality
Persuasive Advertising More important as competition increases.
Persuading to use your product.
Ex. After HD TV established, Sony argued they gave best quality
for the money
Comparative (Attack) Advertising directly comparing your brand
to the competitor. Should be used with caution because they
sometimes bring competitor response.
Ex. Verizon used Can you hear me now? to attack ATT spotty
service.
Reminder Advertising important for mature products and
maintains customer relationships and keeps people thinking about the
product
Ex. Coke polar bear ad. Just maintains relationship and image

Direct Response urging people to take action. Pick up the phone

now and call!
Long Term Nike showing athletes wearing their stuff but with no
sale. Focuses more on shaping how people view their brand.
2. Setting the Advertising Budget
Advertising Budget dollars and resources allocated to a product or
company advertising program
Budget Factors:
Product Life Cycle stage in this life cycle affects advertising budget
New Products need large advertising budget to build
awareness and gain trust
Mature Products lower budgets as a ratio to sales
Market Share building the market or taking market share requires
larger budget than simply maintaining does. Low-share requires more
advertising
Market Clutter- brands with lots of competitors and/or lots of
advertising must be advertised more heavily to set them apart. When
product is different than competitor, must focus on showing differences
Consumer Package Goods firms said to overspend on advertising.
Use lots of image advertising without knowing its effect. Overspend as
insurance against not spending enough
Business to Business said to underspend on advertising. Rely too
heavily on sales forces to bring in orders. Underestimate power of
product image.
ADVERTISING CUTS DO LITTLE SHORT-TERM HARM TO SALES AND IS
EASY TO CUT. HOWEVER, IT MAY CAUSE LONG TERM DAMAGE TO
IMAGE AND MARKET SHARE. MAINTAING OR INCREASING WHILE
OTHERS CUT GAINS COMPETITVE ADVANTAGE.
EX. AUDI INCREASED ADVERTISING DURING RECESSION AND
AWARENESS REACHED RECORD LEVELS
3. Creating an Advertising Strategy

Advertising Strategy strategy by which a company accomplishes

its advertising objectives. The medium may be just as important as the
message itself. Consists of two major elements:
a. Creating Advertising Messages ads can only succeed if they
gain attention and communicate well. Consumers exposed to
3,000-5,000 ads per day. Must fight to gain attention due to
streaming and DVR and you cant simply disrupt them. 70% of
people think there are too many ads. 69% of advertisers agree.
b. Madison & Vine 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
customers with more engaging messages.
Advertainment ads so entertaining or useful that people want
to watch them
Branded Entertainment making the brand inseperable part
of some other form of entertainment. Ex. Product placements.
MW3 Jeep Wrangler
Message Strategy the general message you will communicate to
consumers. You want
customers to react in a certain way. There are steps.
1. Identify Customer Benefits customers will only react if it
benefits them. Ideally it will align with company positioning
and value creation strategies.
2. Create Creative Concept big idea that brings the
message strategy to life in a distinctive and memorable way.
Copywriter and art director team up to generate many
creative concepts. Must cover the 3 advertising appeals
a. Must be Meaningful points out the benefits to
consumers
b. Must be Believable consumers must believe that
product will deliver whats been promised
c. Must Be Distinctive shows how product is better
than competitors

3. Message Execution the advertiser must turn the big idea

into an actual ad that captures the target audiences interest.
Must find best approach, style, tone, words and format for the
message using various execution styles:
a. Slice of life typical people using the product in
normal setting. Ex. Adults eating cheerios in the
morning
b. Lifestyle shows how product fits with a particular
lifestyle. Sportswear ad shows someone running in
harsh terrain.
c. Fantasy creates fantasy around product. Ex. Car in
jack and the bean stock commericial
d. Mood/Image builds mood around product. Ex. Nestle
ad shows daughter and mother hugging while baking
e. Musical People singing about product. Ex. JD
Wentworth 877cash now
f. Personality Sample Creates a character
representing the product. Ex. Geico Gecko, Ronald
McDonald
g. Technical Experts shows company expertise in
making the product. Ex. Sam Adams showing how
methodical the beer is made
h. Scientific Evidence Uses survey/evidence that brand
is better. Ex. Crest using data to show it cleans teeth
better.
i. Testimonial Evidence/Endorsement
believeable/likeable source supporting product. Ex.
Michael Phelps for Subway
j. TONE ex. P&G uses positive tone while Bud Light is
edgy
k. FORMAT illustration must draw people in, headline
must entice them to read, and the copy (main text)
must be simple yet effective.

Consumer-Generated Messaging consumers come up with

advertising ideas. Ex. Doritos super bowl contest
4. Selecting Advertising Media
Advertising Media the vehicles through which advertising
messages are delivered to their intended audiences.
FOUR STEPS: 1: determining reach, frequency, and impact. 2:
choosing from major media types. 3: Selecting specific media vehicles.
4: Choosing media timing
1. Determining Reach, Frequency, and Intent:
a. Reach measure of the percentage of people in the target
market who will be exposed
b. Frequency how many times the average person in the
target market is exposed to it
c. Impact qualitative value of the message exposure through
a given medium. Some mediums are more believable than
others and some engage more.
i. Ex. Products that need to be demonstrated are
better for TV
ii. Ford selects TV programs based on viewed
engagement ratings
Consumer Impressions how people hear, see, read an ad
Consumer Expressions a like on facebook, a tweet.
2. Choosing Among Major Media Types
Major Media Types:
Television pro: good coverage, low cost per exposure, sense
appeal
Con: high total cost, high clutter, less audience
selection
Internet pro: high selectivity, low cost, immediate, interactive
Con: low impact, audience controlled exposure
newspapers pro: flexible, timely, good local coverage,
believeability
con: short life, small audience
direct mail pro: highly selective, flexible, no competition,
personal

con: high cost, throwaway

magazines pro: selective, credible, high-quality, long life, pass
along
con: long purchase lead time, no position
guarantee
radio pro: local acceptance, cheap
con: audio only, fleeting exposure, low attention
outdoor pro: flexible, high repeat exposure, low cost, pick
location
con: not selective, limited creatively
Digitial Media Types: mobile phones, etc
Alternative Media: bus ads, shopping cart ads, milk carton ads,
taxi sides
Narrowcasting rifling in on specific market segments rather
than all the networks. Ex. Broadcasting Spanish TV ads only in
Spanish neighborhoods
Selecting Specific Media Vehicles:
1. Media planners must decide on the best media vehicles
specific media within each general media type
a. Television Vehicles 30 Rock, ABC World News Tonight
b. Magazines Vehicles Newsweek, ESPN the Magazine
c. Online/Mobile Vehicles Facebook, YouTube
2. Media planners must compute cost per 1,000 people reached
by vehicle, but also may be more cost-effective to pay more
to reach target audience
3. A firm can vary its advertising to follow a seasonal pattern or
be the same all year
a. Continuity schedule ads evenly within a period
b. Pulsing scheduling ads unevenly over a given time
period
5. Evaluating Advertising Effectiveness and the Return on
Advertising Investment
Return on Advertising Investment The net return on advertising
investment divided by the costs of the advertising investment. Are we
spending the right amount on advertising? Evaluated by two types of
results:

1. Communication Effects are the ads communicating the

intended message well? Can test it on consumers before, after, or
both
2. Sales and Profit Effects what profit is produced by an ad? Can
compare past to past advertisements and past results. Technically
an inexact science.

6. Other Advertising Considerations:

Organizing for Advertising:
Advertising Agency used by most large companies - marketing service
firm that assists companies in planning, preparing, implementing, and
evaluating all or portions of their advertising programs.
Advantages: expertise, outside perspective, experience with other
companies
Public Relations Building good relations with the companys various
publics by obtaining favorable publicity, building a good image, handling bad
rumors and events. PR Departments may be responsible for:
Press Relations- creating and placing newsworthy information in the
media to attract attention to the product
Product Publicity- publicizing specific products
Public Affairs- building and maintaining a community relationship
Lobbying- building relationships with government to influence law
Investor Relations- maintaining stockholder relations
Development working with donors or nonprofits to gain volunteer
support
PR Tools:
NewsSpecial Events- news conference, speech, press tour
Written Material reports, brochures, magazines

Audiovisual Material- DVDs, online video

Corporate Identity Material business card, building,
uniforms

CHAPTER 16 Personal Selling and Sales

Promotion

Personal Selling Personal presentations by the firms sales force for the
purpose of making sales and building customer relationships
a. Salesperson an individual who represents a company to
customers and customers to company by performing one or more of
the following jobs: prospecting, communicating, selling, servicing, I
nformation gather, and relationshop building
a. Order Taker ex. Person behind counter at store
b. Order Getter ex. Selling and relationship building
c. Salesperson Owned Loyalty
Managing the Sales Force
1. Sales Force Management analyzing, planning, implementing, and
controlling sales force activities. Designing strategy and structure,
recruiting, selecting, training, compensating, supervising, and
evaluating the firms sales people.
2. Sales Force Structure
a. Territorial Structure sales force org. that assigns each
salesperson a geographic territory om which that salesperson
sells the companys full line. Small travel expenses, increased
relationships
b. Product Structure salespeople specialize in selling only a
portion of companys products or lines. Good for numerous
complex products
c. Customer (Market) Structure salespeople are assigned to
only certain customers or industries
d. Complex Sales Structure can be organized by a mixture of
any of the above

3. Sales Force and Structure Issues

a. Outside Force salespeople who travel to call on customers in
the field
b. Inside Force sales people who conduct business from their
offices via telephone, internet, or visits from buyers.
c. Team Selling using teams of people from sales. Marketing,
engineering, finance, technical support, and upper management
to service large accounts
Recruiting Salespeople On average, the top 30% of the salespeople bring in 60% of the sales.
Four Key Attributes: Intrinsic motivation, discipline work style, ability
to close, and the ability to build relationships
Training Salespeople
Goals:
1. Show how to build customer relationships
2. Teach about different types of customers, their needs,
buying motives, and buying habits
3. Show how to sell effectively and train them in basics of
selling process
4. Know products, company, and competitors
5. Company objectives, organization, products, and strategies
of competitors.
Compensating Salespeople
Four Elements: Fixed amount (salary), Variable amount
(commissions/bonuses)
1.
2.
3.
4.

Straight Salary (18%)

Straight Commission (19%)
Salary plus bonus (63%)
Salary plus Commission^^
AVERAGE SALES PERSON IS 67% SALARY AND 33%
INCENTIVES

Sales Force Automation Systems computerized, digitized sales force

operations that let salespeople work more effectively anytime, anywhere.
Tablets, laptops with relationship management software for better time
management.

Motivating Sales People

Sales Quota standard that states the amount a salesperson should
sell and how sals should be divided among the companys products
Organizational Climate- feeling that salespeople have about their
opportunity, value,
and rewards for a good performance.
Evaluating Sales People and Sales Force Performance
Sales Reports weekly or monthly work plans and longer-term
territory marketing plans
Company seeks to measure return on investment

The Personal Selling Process:

Selling Process steps that salespeople follow when selling, which
include prospecting and qualifying, preapproach, approach,
presentation and demonstration, handling objections, closing, and
follow-up. 7 Steps:
1. Prospecting identifying qualified potential customers
2. Preapproach salesperson learns as much as possible about a
prospective customer before making the call. Sets call objectives,
determine approach, timing, and overall strategy
3. Approach a salesperson meets the customer for the first time
4. Presentation and Demonstration salesperson tells the value
story to the buyer and shows how the product solves a problem
5. Handling Objections salesperson seeks out, clarifies, and
overcomes any customer objections to buying
6. Closing salesperson asks customer for an order
7. Follow Up follows up after the sale to ensure satisfaction and
repeat business

Sales Promotion Objectives:

Sales Promotion short-term incentives to encourage purchase of a
product. Advertising is a reason to buy, promotion is reason to buy now.
Factors causing increasing sales promotion:
1. Internal pressure to increase sales
2. External pressure from increasing, less differentiated brands
3. Declining advertising efficiency (costs, clutter, legal restraints)
Consumer Promotions: used to boost short term buying and involvement
or enhance long-term consumer relationships
Rebates customer mails in proof of purchase and gets some refunded
Price Packs savings off regular price. 2 for 1 shampoo
Premiums either free or low cost with an item. Happy Meal
Advertising Specialties/Promotion Product item with company logo for
free
Point of Purchase demonstrations at point of sale
Contests consumer has chance to win something
Event Marketing sponsoring a festival or event
Trade Promotions: used to persuade resellers to carry a brand, give it shelf
space, promote it, and push it to consumers
Business Promotions: generate business leads, stimulate purchases,
reward customers, and motivate salespeople. Ex. Trade shows

CHAPTER 12: MARKETING CHANNELS

Supply Chains and the Value Network:
Supply Chain upstream and downsteam partners. Upstream from the
company is the set of firms that supply the raw materials, components,

parts, info needed to create the product. Downstream is the marketing

channels that look toward the customer (wholesalers, retailers)
Marketing (Distribution) Channel set of interdependent organizations
that help make a product or service available for use or consumption by the
consumer or business user
Demand Chain (Better Term) suggests and sense and respond view of
the market
Value Deliver Network a network composed of the company, suppliers,
distributers, and customers who partner with each other to improve the
performance of the entire system in delivering customer value

VIDEOS:

DOW: Carly Howler

Fortune 100 company, founded over 100 years ago, over 6000 products
Revenue over 6 billion
Chemical company specializing in manufacturing chemicals
Lived in Medina as a child, father worked for Ford
Job is in plastic additives. Prospects and finds new business, cold calling,
prospecting business to business. Also manages distribution for smaller
customers or specific ordering

Out of college, 6 month training program learning how to sell and about the
company and its functions. 3 in classroom, 3 working on a project

P&G: Katie Box

Biographical Info:

Brand Manager at P&G, OSU fisher. Was TA as undergrad

From Cincinnati, St. Ursula
Jumped from entry position to 3rd level, skipping second

Marketing Environment Changes:

3 billion people have used P&G products

Hispanic consumer group growing fastest in market. 3rd largest for
P&G. Created specialized marketing for them
Typical customer: Walmart, target, but emergence of E-Commerce
Creating more value packs, Twin packs of deodorant
Pantry loading giving more to the consumer to keep them from
buying from your competitor
Tiers: base tier normal old spice, upper tier- swagger, Fiji (costs more)
Original Old Spice was cologne and aftershave. These two are dying
out as older generation dies

Consumer Behavior insights:

Old Spice male customers are not as well-versed as expected. The

simpler the better. Guys are judgmental about what deodorant other
guys wear
An old spice guy is Older brother type who doesnt take himself too
seriously

Building Relationships with Big Retail Customers:

Amazon Effects:

Shifting from just books, movies, miscellaneous products, to trying to

push everyday items through subscription.

Product Issues:

Identifying whats missing in deodorant market

Consumers dont understand what the deodorant names indicate

Place Issues:

They sometimes dont have enough so they have to allocate products

evenly
Trying to improve speed of delivery
Anticipating and forecasting demand

Leading Team of Functional Specialists:

The Hand Model:

Thump distinctive, standout

Inspire
Middle finger recognizable glue. People see the commercial and know
its Old Spice before seeing the logo
4th
Pinky finger simple

Media Shifts:

Find out where younger guys spend time. For Old Spice, its digital.
Younger guys spend more times on their phone. Shift from computers.
30-40% digital. Specific about who they target through TV (ESPN,
Family Guy)

Publicity and PR:

Use the Old Spice guy for publicity.

Sales Promotion:

Bread and butter: Coupons, 2 for 1, displays