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Marketing: An Introduction

Armstrong, Kotler, Trifts, Buchwitz, Gaudet

Updated 6th Canadian Edition with Integrated B2B Case

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Part 3: Designing a Customer-Driven Marketing Strategy and Marketing Mix

CHAPTER 13

Communicating Customer Value: Advertising and Public Relations

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Chapter 13: Learning Objectives

Define the five promotion mix tools for communicating customer value.

Discuss the changing communication landscape and the need for integrated marketing communications.

Describe how advertising objectives are set and how advertising strategy is developed.

Explain how advertising effectiveness is evaluated and the role of the advertising agency.

Explain how companies use public relations to communicate with their publics.

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Outlines learning objectives from this chapter.

The Promotion Mix

Tools used to persuasively communicate customer value and build customer relationships

Advertising

Sales Promotion

Public Relations

Personal Selling

Direct Marketing

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LO 1: Define the five promotion mix tools for communicating customer value.

Promotion mix is part of marketing mix.

Sometimes people put a number six promotion mix: internet & online sale.

Integrated Marketing Communications

Communication with/to customers is changing:

Consumers see “single” messages from companies

Communication technology is richer, faster

Marketing strategies must be integrated 互相协调的

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LO 2: Discuss the changing communications landscape and the need for integrated marketing communications.

These factors are shifting the marketing communications model towards more narrowcasting and less broadcasting

Rovio Entertainment introduced the Angry Birds Space version of its popular game using only an online video campaign. The campaign reaped an astonishing 134 million views and 168 570 social shares

Integrated Marketing Communications

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Chapter 13

Communicating Customer Value: Advertising and Public Relations

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LO 2: Discuss the changing communications landscape and the need for integrated marketing communications.

- These factors are shifting the marketing communications model towards more narrowcasting and less broadcasting

Integrated Marketing Communications

Integration of communication channels to deliver a clear, consistent, and compelling message about the company and its products.

IMC

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LO 2: Discuss the changing communications landscape and the need for integrated marketing communications.

- All touchpoints must be recognized and ensure the brand contact delivers a consistent and positive message

Integrated Marketing Communications

Reaches masses at low cost per exposure

Repeats message many times

Creates consumer trust (view of advertised products as more legitimate)

Promotes impersonally, one-way

Costs are high for some media types

Cons

Advertising

Pros

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LO 2: Discuss the changing communications landscape and the need for integrated marketing communications.

Advertising can reach masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times.

Integrated Marketing Communications

Communicates personally two-ways

Builds preferences, convictions, and actions

Allows relationship building

Cons

Personal Selling

Pros

Requires long-term commitment to sales force

Most expensive promotion tool

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LO 2: Discuss the changing communications landscape and the need for integrated marketing communications.

Personal selling is the most effective tool at certain stages of the buying process, particularly in building up buyers’ preferences, convictions, and actions. It involves personal interaction between two or more people, so each person can observe the other’s needs and characteristics and make quick adjustments.

Integrated Marketing Communications

Includes a wide assortment of tools

Attracts consumer attention

Offers strong incentives to purchase

Dramatizes product offers

Invites quick consumer response

Effects are short-lived

Cons

Sales Promotion

Pros

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LO 2: Discuss the changing communications landscape and the need for integrated marketing communications.

Sales promotion includes a wide assortment of tools—coupons, contests, discounts, premiums, and others—all of which have many unique qualities. They attract consumer attention, offer strong incentives to purchase, and can be used to dramatize product offers and boost sagging sales. Sales promotions invite and reward quick response. Whereas advertising says “Buy our product,” sales promotion says “Buy it now.”

Example of sales promotion: buy one get one 50% off.

Integrated Marketing Communications

Cons

Public Relations

Pros

Legitimizes credibility, very believable

Reaches people who resist advertising

Dramatizes a company or product

Saves money when used proactively

Tends to be used as an afterthought

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Chapter 13

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LO 2: Discuss the changing communications landscape and the need for integrated marketing communications.

Marketers tend to underuse public relations or use it as an afterthought. Yet a well-thought-out public relations campaign used with other promotion mix elements can be very effective and economical.

Integrated Marketing Communications

Cons

Direct Marketing

Pros

Communicates more directly with targeted customers

Reaches customers with tailored message

Creates interactivity互动的

Builds one-to-one relationships

Often perceived as junk-mail/spam

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LO 2: Discuss the changing communications landscape and the need for integrated marketing communications.

The many forms of direct and digital marketing—from direct mail, catalogues, and telephone marketing to online, mobile, and social media—all share some distinctive characteristics. Direct marketing is more targeted: It’s usually directed to a specific customer or customer community. It’s also immediate and personalized: Messages can be prepared quickly—even in real time—and tailored to appeal to specific consumers or brand groups. Finally, direct marketing is interactive: It allows a dialogue between the marketing team and the consumer, and messages can be altered depending on the consumer’s response.

Not mass marketing, reach to one customer at a time directly, example: phone sale.

Check Your Understanding

Tim Hortons “Roll Up the Rim to Win” is an icon of sales promotions to the same extent the brand is iconic of Canadian quick service restaurants – familiar, predictable, and enormously popular. It does everything (and more) that a sales promotion is supposed to do – namely, incentivize consumers for quick sales.

The popularity of “Roll Up the Rim” is not a result of the contest alone, however. The communication comes across all platforms of IMC tools and is, in fact, supported by other sales promotional tactics. Review the five main forms of promotional tools used by marketers and identify examples of each used by Tim Hortons in its integrated message to support “Roll Up the Rim.”

Integrating the Rim to Win

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Promotion Mix Strategies

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Chapter 13

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LO 2: Discuss the changing communications landscape and the need for integrated marketing communications.

- Push strategy: Uses the sales force and trade promotion to push the product through channels.

- Pull strategy: Marketing activities are directed toward final consumers to induce them to buy.

Advertising Decisions

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Chapter 13

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

Marketing management must make four important decisions when developing an advertising program (Figure 13.3): setting advertising objectives, setting the advertising budget, developing advertising strategy (message decisions and media decisions), and evaluating advertising campaigns.

Advertising

Advertising Objective:

Specific communication task to be accomplished with a specific target audience during a specific period of time

Build

relationships by communicating value

Features of advertising objective:

SMART

Special, measurable, actionable, realistic, time-specific.

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

An <KT>advertising objective</KT> is a specific communication task to be accomplished with a specific target audience during a specific period of time. Advertising objectives can be classified by their primary purpose—to inform, persuade, or remind. Table 13.1 lists examples of each of these specific objectives.

Advertising

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

Comparative Advertising Example

Microsoft’s “Bing It On” campaign urged consumers to make side-by-side comparisons of the search results from its Bing search engine and Google’s. It claimed that people making the comparison chose Bing by nearly 2 to 1.

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

Advertisers should use comparative advertising with caution. All too often, such ads invite competitor responses, resulting in an advertising war that neither competitor can win. Upset competitors might also take more drastic action, such as filing complaints with the self-regulatory National Advertising Division of the Council of Better Business Bureaus or even filing false-advertising lawsuits. For example, Sara Lee’s Ball Park brand hot dogs and Kraft’s Oscar Mayer brand waged a nearly two-year “weiner war.” It started when Sara Lee sued Kraft, challenging advertising claims that Oscar Mayer franks had won a national taste test over Ball Park and other brands and that they were “100% beef.” Kraft, in turn, filed a countersuit, accusing Sara Lee of making similar advertising misstatements about its own “all-beef” Ball Park hot dogs, along with claims touting Ball Park as “America’s best.” By the time the lawsuits were settled, about all that the competitors had accomplished was to publicly call into question the taste and contents of both hot dog brands.

Advertising

Advertising budget methods:

Affordable method

Percentage-of-sales method

Competitive-parity method

Objective-and-task method

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

Promotion spending is one of the easiest items to cut in tough economic times. But Audi gained competitive advantage by keeping its foot on the promotion pedal as competitors retrenched.

Developing Advertising Strategy

1. Creating Advertising Messages

Must break through the clutter

Branded entertainment

Madison & Vine (“Advertainment”): merging ads with entertainment

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

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.

This merging of advertising and entertainment takes one of two forms: advertainment or branded entertainment. The aim of advertainment is to make ads themselves so entertaining, or so useful, that people want to watch them. There’s no chance that you’d watch ads on purpose, you say? Think again. For example, the Super Bowl has become an annual advertainment showcase. Tens of millions of people tune in to the Super Bowl each year, as much to watch the entertaining ads as to see the game.

Developing Advertising Strategy

2. Selecting Advertising Media

Set reach, frequency, and impact goals

Choose among major media types

Select specific media vehicles

Decide on media timing

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Chapter 13

Communicating Customer Value: Advertising and Public Relations

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

Advertising

Message Strategy:

Identify benefits to be used as appeals

Develop a compelling creative concept

Choose an advertising appeal that is:

Meaningful

Believable

Distinctive

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

Creative concept also known as “the big idea”

The creative concept will guide the choice of specific appeals to be used in an advertising campaign. Advertising appeals should have three characteristics. First, they should be meaningful, pointing out benefits that make the product more desirable or interesting to consumers. Second, appeals must be believable. Consumers must believe that the product or service will deliver the promised benefits.

Advertising: Message Executive Styles

Slice of Life

Scientific

Evidence

Technical

Expertise

Personality

Musical

Mood

Image

Fantasy

Lifestyle

Testimonial

-Slice of life: how product is used in daily life.

-Testimonial: Show white teeth during advertising a teeth whitening product.

-Mood or image: flower at restaurant.

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

Check Your Understanding…

It became not only an evolution of advertising tactics, but a necessary defense against unprecedented ad tune-out and response to user-generated entertainment (see YouTube). Consumer-generated messages can tap the minds and creative instincts of everyday people not only to collect new ideas, but also to engage consumers with brands. Page 487 of your textbook documents the success of Doritos’ Superbowl ad. The knock against this otherwise shrewd means of involving customers is that it involves existing loyal customers – not necessarily new ones. What is your

opinion – can content co-creation grow market?

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Chapter 13

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

Many brands hold contests that invite consumers to submit ad message ideas and videos. For example, as we mentioned earlier in the chapter, PepsiCo’s Doritos brand runs an annual “Crash the Super Bowl Challenge” contest that invites consumers to create their own 30-second video ads about the tasty triangular corn chips. A Doritos brand team whittles down the thousands of entries and posts the finalists on Facebook, where consumers vote for their favourites. The winners receive large cash awards and have their ads run during the Super Bowl.

Selecting Advertising Media

Steps in Media Selection:

Deciding on reach, frequency, impact

Choosing media types

Selecting media vehicles (which media company to use)

Deciding on media timing

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Communicating Customer Value: Advertising and Public Relations

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

Advertising

Reach, Frequency, Impact:

Reach: Percentage of people exposed to an ad campaign in a given time period

Frequency: Number of times a person is exposed to an advertisement

Media Impact: Qualitative value of a message exposure through a given medium

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

More generally, the advertiser wants to choose media that will engage consumers rather than simply reach them. In any medium, the relevance of ad content for its audience is often much more important than how many people it reaches.

Profiles of Major Media Types

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Chapter 13

Communicating Customer Value: Advertising and Public Relations

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

- Each media type has specific advantages and disadvantages

- Choosing among media types requires consideration of the:

- Medium’s impact

- Message effectiveness

- Cost

- The media mix should be regularly re-examined

Advertising

Media Vehicles:

Each media type includes specific vehicles (e.g., Maclean’s as a specific magazine, etc.)

Considerations when choosing vehicles:

Cost

Audience quality / engagement

Editorial quality

Media Timing Schedules:

Follow seasonal pattern

Oppose seasonal pattern

Same coverage all year

Choose the pattern of the ads:

Continuity

Pulsing

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Chapter 13

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LO 3: Describe how advertising objectives are set, and how advertising strategy is developed.

The mix of media must be re-examined regularly. For a long time, television and magazines dominated the media mixes of national advertisers, with other media often neglected. However, as mass-media costs rise, audiences shrink, and exciting new digital and social media emerge, many advertisers are finding new ways to reach consumers. They are supplementing the traditional mass media with more-specialized and highly targeted digital media that cost less, target more effectively, and engage consumers more fully.

In selecting specific media vehicles, media planners must balance media costs against several media effectiveness factors.

The advertiser must choose the pattern of the ads. Continuity means scheduling ads evenly within a given period. Pulsing means scheduling ads unevenly over a given time period.

Evaluating Advertising Effectiveness and the Return on Advertising Investment

Evaluating advertising involves measuring:

Communication effects of an ad or campaign

Sales and profit effects of the ad campaign

Return on Advertising Investment:

The net return on advertising investment divided by the costs of the advertising investment

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Chapter 13

Communicating Customer Value: Advertising and Public Relations

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LO 4: Explain how advertising effectiveness is evaluated, and the role of the advertising agency.

Advertisers should regularly evaluate two types of advertising results: the communication effects and the sales and profit effects. Measuring the communication effects of an ad or ad campaign tells whether the ads and media are communicating the ad message well. Individual ads can be tested before or after they are run. Before an ad is placed, the advertiser can show it to consumers, ask how they like it, and measure message recall or attitude changes resulting from it. After an ad is run, the advertiser can measure how the ad affected consumer recall or product awareness, knowledge, and preference. Pre- and post-evaluations of communication effects can be made for entire advertising campaigns as well.

One way to measure the sales and profit effects of advertising is to compare past sales and profits with past advertising expenditures. Another way is through experiments.

Organizing for Advertising

Advertising agency - A marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs.

Small companies - Advertising done by someone in the sales department.

Large companies - have advertising departments

Most large companies use outside advertising agencies because they offer several advantages.

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LO 4: Explain how advertising effectiveness is evaluated, and the role of the advertising agency.

Advertising agencies originated in the mid- to late 1800s from salespeople and brokers who worked for the media and received a commission for selling advertising space to companies. As time passed, the salespeople began to help customers prepare their ads. Eventually, they formed agencies and grew closer to the advertisers than to the media.

Public Relations

Public relations is used to promote products, people, places, ideas, activities, organizations, and even nations.

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LO 5: Explain how companies use public relations to communicate with their publics.

Trade associations have used PR to rebuild interest in commodities, such as eggs, apples, potatoes, milk—and even chocolate milk. For example, the U.S. Milk Processor Education Program (MilkPEP), known for its successful “Got Milk?” campaign, and the Dairy Farmers of Canada have both created strong PR campaigns to promote the health benefits of chocolate milk and boost its consumption.

Public Relations

Public Relations is about building strong relations with the company’s various stakeholders by:

Obtaining favourable publicity

Communicating a trustworthy corporate image

Managing unexpected occurrences, both positive and negative

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LO 5: Explain how companies use public relations to communicate with their publics.

The Role and Impact of Public Relations

Public relations can have a strong impact on public awareness at a much lower cost than advertising can.

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Communicating Customer Value: Advertising and Public Relations

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LO 5: Explain how companies use public relations to communicate with their publics.

Consider Coca-Cola’s “Hug Me” campaign, in which the company installed a “happiness” vending machine overnight at a university in Singapore. The machine had a solid red front and trademark wavy white stripe, but it contained no Coca-Cola logo, no coin slot, and no soda selection buttons. Only the words “Hug Me” were visible in large white letters printed in Coca-Cola’s famous script. With hidden cameras rolling, Coca-Cola captured the quizzical reactions of passersby as they first scratched their heads, then slowly approached the machine, and, finally, with smiles on their faces, gave it a big hug. Responding to that simple act of happiness, the machine magically dispensed a cold can of Coca-Cola, free of charge.

Public Relations Functions

Function	Description
Press Relations	Creating and placing newsworthy information in the news media to attract attention
Product Publicity	Publicizing specific products
Public Affairs	Building and maintaining national or local community relations
Lobbying	Building and maintaining relations with legislators and government officials to influence legislation and regulation
Investor Relations	Maintaining relationships with shareholders and others in the financial community
Development	Working with donors or members of not-for-profit organizations to gain financial or volunteer support

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Chapter 13

Communicating Customer Value: Advertising and Public Relations

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LO 5: Explain how companies use public relations to communicate with their publics.

Public Relations

Major Public Relations Tools

News

Speeches

Special events

Written materials

Audiovisual materials

Corporate identity materials

Public service activities

Buzz marketing

Company website

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Chapter 13

Communicating Customer Value: Advertising and Public Relations

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LO 5: Explain how companies use public relations to communicate with their publics.

- Public Relations:

- May strongly impact public awareness at a lower cost than advertising

- Can yield spectacular results

- Is beginning to play an increasingly important brand-building role

Reviewing the Concepts

Define the five promotion mix tools for communicating customer value.

Discuss the changing communications landscape and the need for integrated marketing communications.

Describe how advertising objectives are set, and how advertising strategy is developed.

Explain how advertising effectiveness is evaluated, and the role of the advertising agency.

Explain how companies use public relations to communicate with their publics.

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Chapter 13

Communicating Customer Value: Advertising and Public Relations

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