Chapter 15 Notes

Advertising: any paid form of nonpersonal communication about an organization, product,

service, or idea by an identified sponsor
2 types of advertisement: product and institutional
product advertisement
-focuses on selling good or service
- takes 3 forms: pioneering, competitive (persuasive) and reminder
- pioneering: used in the introductory stage of the product life cycle; tells people
what a product is, what it can do, and where it can be found; key objective is to
inform the target market
- Competitive: advertising that promotes a specific brand feature and benefits;
objective is to persuade the target market to select the firms brand rather than that of a
competitor
* form of competitive advertising is comparative advertising which shows one
brands strengths relative to those of competitors
- reminder advertising: used to reinforce previous knowledge of a product; good
for products that have achieved a well-recognized position and are in the mature
phase of their product life cycle
* another form of reminder advertising is reinforcement which is used to assure
current users they made the right choice
Institutional advertisement
Objective: to build goodwill or an image for an organization rather than promote a
specific good or service
-this form is used to support the public relations plan or counter adverse publicity
-4 forms of institutional advertisement: advocacy, pioneering institutional,
competitive, reminder
- Advocacy advertisement: state the position of a company on an issue
- pioneering institutional advertisement: used for announcements about what a
company is, what it can do, or where it is located
- Competitive institutional advertisement: promote the advantages of one product
class over another and are used in markets where different product classes compete
for the same buyers
- Reminder institutional advertisement: bring the companys name to the attention
of the target market again
How to manage advertising: develop, execute, and evaluate
Develop
- To develop an effective advertising program, advertisers must identify the target audience
-must understand the lifestyles, attitudes, and demographic of the target market

Execute
- involves pretesting the advertising copy and actually carrying out the advertising program
Advertising message usually focuses on the key benefits of the product that are important to a
prospective buyer in making trial and adoption decisions
-made up of informational and persuasional elements
*information and persuasive content can be combined in the form of an appeal to
provide a basic reason for the consumer to act
- Fear appeals: suggest to the consumer that he/ she can avoid some
negative experience through the purchase and use of a product or service, change in
behavior, or a reduction in the use of a product
Example: automobile safety ads that depict an accident or injury; social
cause ads warning of the serious consequences of drug and alcohol use
- Sex appeals: suggest to the audience that the product will increase the
attractiveness of the user
- Humorous appeals: imply either directly or subtly that the product is
more fun or exciting than competitors offerings
Example: Geico commercials, rod sterling look-alike actor
Advertising media: means by which the message is communicated to the target audience
Ex: newspapers, magazines, radio, TV
Reach: number of different people or households exposed to an advertisement
Ratings: percentage of households in a market that are tuned into a particular TV show or
radio station
Frequency: average number of times a person in the target audience is exposed to a
message or advertisement
Gross rating points (GRPS): reach x frequency = GRPs
Cost per thousand: cost of reaching 1,000 individuals or households with the advertising
message in a given medium
Media Alternatives
Medium
Television

Radio

Magazines

Newspapers

Advantage
Reaches extremely large
audience, uses picture, print,
sound; can target specific
audiences
Low cost; target specific local
audiences; ads can be places
quickly; can use sound, humor
Can target audience; high
quality color; long life ad; ads
can be clipped and saved
Excellent coverage of local

Disadvantage
High cost to prepare and run
ads; short exposure time;
difficult to convey complex
information
No visual element; short
exposure time
Long time needed to place ad;
relatively high cost; competes
for attention with other
magazine features
Ads compete for attention

Internet

Outdoor

Direct Mail

markets; ads can be placed

and changed quickly; can be
saved; low cost
Video and audio capabilities;
animation can capture
attention
Low cost; local market focus;
high visibility; opportunity for
repeat exposures
High selectively audience;
high quality graphics

with other newspaper features;

lack color
Animation and interactivity
require large files and more
time to load
Message must be short; low
selectively of audience;
criticized as a traffic hazard
High cost per contact; poor
image

Infomercials: program length advertisements that take an educational approach to communicate

with potential customers
Ex: Magic Bullet, OxiClean
Scheduling the Advertising
3 factors must be considered: buyer turnover, purchase frequency, forgetting rate
3 basic approaches to this:
- Continuous schedule: when seasonal factors are unimportant advertising is run
at a continuous or steady schedule throughout the year
Example: breakfast cereal commercials
- Flighting schedule: periods of advertising are scheduled between periods of no
advertising to reflect seasonal demand
Example: products for snow skis and suntan lotion
- Pulse Schedule: flighting schedule is combined with a continuous schedule
because of increases in demand, heavy periods of promotion, or introduction of a
new product
Example: toys or automobiles
Evaluating: must determine whether the advertisement is achieving their intended objectives
-Must go through posttest (tests conducted after an advertisement has been shown to the
target audience to determine whether it has accomplished its intended purpose)
- 5 approaches to this
- Aided Recall: used to determine the percentage of those who remember seeing a
specific ad, who saw/ read any part of the ad to identify the product or brand, who read any part
of the ads copy, who read at least half of the ad
- Unaided Recall: determine whether they saw or heard the advertising message
- Attitude Tests: respondents are asked questions to measure changes in their
attitudes after an advertising campaign
Consumer- oriented sales promotion: sales tools used to support a companys advertising and
personal selling
*include coupons, deals, premiums, contest, sweepstakes, samples, loyalty programs, point of
purchase displays, rebates, product placements

Coupons: sales promotion that offer a discounted price to the consumer which encourages
trial
Deals: short term price reductions, commonly used to increase trial among potential
customers or to retaliate against a competitor actions
Premiums: consists of merchandise offered free or at a significant savings over its retail
price
Contest: consumers apply their skill or analytical or creative thinking to try to win a prize
Sweepstakes: require participants to submit some kind of entry but are purely games of
chance requiring no analytical or creative effort by the consumer
Sampling: offering the product free or at a greatly reduced price
Loyatly programs: used to encourage and reward repeat purchased by acknowledging
each purchase made by a consumer and offering a premium as purchases accumulate
Rebates: cash rebate, offers the return of money based on proof of purchased
Public Relations uses a publicity tool
Publicity tool: available to the public relations director; methods of obtaining nonpersonal
presentation of an organization, product, or service without direct costs
Types of publicity tool
News release
News conferences
PSA