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Louise Ripley

 
Introductory Marketing
Communication
Chapters 12 and 13: Armstrong/ Kotler Marketing: An Introduction



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Chapter 12: Communicating Customer Value: Advertising and Public Relations

In 1885, Thomas Smith wrote about how advertising affects a potential customer:

The first time a man looks at an advertisement, he does not see it. 
The second time he does not notice it. 
The third time he is conscious of its existence. 
The fourth time he faintly remembers having seen it before. 
The fifth time he reads it. 
The sixth time he turns up his nose at it. 
The seventh time he reads it through and says, "Oh brother." 
The eighth time he says, "Here's that confounded thing again." 
The ninth time he wonders if it amounts to anything. 
The tenth time he thinks he will ask his neighbour if he has tried it. 
The eleventh time he wonders how the advertiser makes it pay. 
The twelfth time he thinks perhaps it may be worth something. 
The thirteenth time he thinks it must be a good thing. 
The fourteenth time he remembers he has wanted it for a long time. 
The fifteenth time he is tantalized because he cannot afford to buy it. 
The sixteenth time he thinks he will buy it some day. 
The seventeenth time he makes a memorandum of it. 
The eighteenth time he swears at his poverty. 
The 19th time he counts his money carefully. 
The twentieth time he sees it he buys it, or instructs his wife to do so.
Successful Advertising by Thomas Smith 1885

I. The Promotion Mix

Exercise  
Communications Mix
In what way does Public Relations particularly stand out as different from the other four methods of communication? 
Post your answer in the Moodle Discussion Group.

II. Integrated Marketing Communications  

We are moving from an age of mass communication (think Coca-Cola before the 1990s) to an age that takes advantage of all the media coming to use for advertisers - more digitally oriented customers, focused marketing programmes, new technology...
 

The Need for Integrated Marketing Communications (IMC)

 


III. Shaping the Overall Promotion Mix

Just as your Marketing Plan must be developed with every element in relation to all the others, so a Promotion Mix must be developed.

Promotion Mix Strategies: Push vs. Pull

Does your company advertise mostly to retailers to encourage them to PUSH your product through the channel to the final consumer?
 

or are you going to focus on advertising to reach consumers who will then PULL your product through the channel?

The small print says that retailers can expect coffee sales to rise 567% with in-store displays
Exercise - Plan
Push or Pull
Will you use mainly Push or Pull for your Marketing Plan product? Describe what you will do and why.
Post your answer in the Moodle Discussion Group. 

The IMC Process

The combination of the elements of communication must be consistent with what you are trying to accomplish. Which market are you going after? What are your buyers like? What magazines do they read? What are their demographics? Advertising may be more important in consumer marketing, while personal sales is usually more important in industrial marketing. 

The Communication Mix must reflect your overall marketing strategy. You wouldn't advertise a $20,000 Rolex watch in Magazine.

See the earlier challenge to this here
Exercise
Mad Magazine

LAB?

Seriously, under what circumstances MIGHT you reasonably advertise a Rolex watch in Mad Magazine? Think outside the box; you can't just say, "You can't do it"!
Post your answer in the Moodle Discussion Group.

If you don't know what Mad Magazine is, make this a Marketing Lab exercise and go buy a copy and find out. It was your professor's favourite magazine when she was a teenager. Do check this out and think it through; I almost always ask it on the in-class test! Or, these days you can check it out online.

 


IV. Advertising

Small and Medium Sized Companies usually use an In-House Marketing Department; Large Companies use Outside Agencies, sometimes with an In-House Department as well, or they may have their own In-House Agency.
Agencies vary in size from tiny boutiques to huge conglomerates like J. Walter Thompson.

The Top 24 Most words in English

win
you
yes
now
new
free
sale
love
save
easy
today
safety
health
results
proven
money
limited
benefits
how (to)
deadline
discovery
guarantee
introducing
announcing  
              

Setting Advertising Objectives

 

Possible Objectives For Advertising
Inform
e.g.: describing available services
Persuade
e.g.: changing buyer perceptions of product attributes
 
If this is how you think sharks look at people, you need to take a good look at our exhibit...
(the shark is saying, "Hey you, little fat kid! Yeah you, come up closer to the glass")
Compare
In addition to the three major objectives mentioned in your text, advertising also can be used to compare one product to another, as in this ad by Tripod, an internet advertising company
Remind
e.g.: maintaining top of mind product awareness
 

 

Exercise
Advertising Objectives
Describe a favourite TV ad of your own that accomplishes one of these objectives. In your opinion, what makes the ad effective?
Post your answer in the Moodle Discussion Group.

Setting the Advertising Budget

 

Method Question to Ask Drawbacks
Affordable How much can we afford to spend?  ignores effect of promotion on sales
Percentage of Sales What did we make last year?  sees sales as a cause of promotion rather than a result
Competitive-Parity What's our competition doing? assumes your competitor knows more than you do
Objective/Task 
probably best
What do we want to accomplish? difficult to directly tie objectives  to specific promotion tasks

 

Developing Advertising Strategy

You need a good message that can break through advertising clutter and catch peoples' attention, positioning the product to meet the consumer's needs with a creative concept or "Big Idea" that will capture the essence of what you're trying to communicate. 

Message Strategy and Execution

This involves deciding on what kind of argument you will make in your promotion. This is the area where I do most of my academic research. Advertisements can argue for the product in many different ways

Rational
Logic is our favourite way of making an argument in North America and most promotional messages will be based to at least some degree in a consistent sensible logical argument
Emotional
We've seen a real shift in the last years from almost complete avoidance of fear appeals to much more active use of them
Exercise
Emotional Advertising
Why do you think we're seeing so much more emotional advertising now?  
Post your answer in the Moodle Discussion Group.
Moral
Who decides whether it's right to air a particular ad or run a particular promotion campaign? Censorship should not be needed; companies and associations of companies try to police themselves 
Advanced: Add to this list of types of arguments made by the communications process: Visceral and Kisceral

Selecting Advertising Media

You next need to choose the place and voice in which to present your message. It's not always a matter of how much money you spend, but more often of where your money will be most effective. If you are advertising an expensive tennis racket, a $15,000 ad in Tennis Life may effectively reach far more of your target market than a $100,000 ad in Maclean's

Exercise - Plan
Type of Media
Where will it be most effective to put your promotion for your marketing plan product? Why?
Post your answer in the Moodle Discussion Group.

Evaluating Advertising Effectiveness and Return on Advertising Investment

Aim for Effect Not Just Exposure - Recall versus Recognition
Imagine I am doing a Marketing Research study for the new Porsche Boxster. Imagine I have properly introduced myself and ascertained that you watched TV last night. Then I ask you

"What ads do you remember seeing last night?" 
I'm hoping you'll say "the Porsche Boxster" This is unaided recall, and it's the best answer I can hope for; it means you remembered the company's ad without any help, that it's right there in the top of your mind (top of the mind awareness). If you don't remember, I will ask

"Do you remember seeing an ad about X (or with X, Y, and Z in it)?"
I'm still hoping you'll say yes, and maybe that it will trigger you to say, "yes, it was for that new Porsche!" This is aided recall and it's not as good as unaided recall but it's better than the next one
"Do you recognize this ad?"

This is recognition. I'm hoping you'll say, "yes, I saw it last night" but it's the least impressive result I can bring to Porsche to tell them how effective their ads are

And of course ultimately the company does not really care who saw their ad no matter how they remembered it; the company wants to know how many people went out and bought the product -- measure effect not exposure

Exercise  
Recall
Unaided Recall is difficult. Try it right here while you're at the computer. Think back, can you tell us what ads you saw last night? (either on TV or on your way home from somewhere).
Post your answer in the Moodle Discussion Group.

Other Advertising Considerations
  
Organzing for Advertising

This is the area of Advertising that overlaps what I did in my doctoral dissertation with respect to channels of distribution. To put it in a few spare words, a company has to decide whether to hire someone from outside or do the functions themselves. 

   International Advertising Decisions

One of the exciting things about teaching at York is having students who come from all over the world. This section of your text deals with the problems of international advertising. 

Exercise  
International Advertising
Does anyone who has lived in a country other than Canada have any stories to share about advertising in other countries?
Post your answer in the Moodle Discussion Group.

IV. Public Relations

The Role and Impact of Public Relations

Building good relations with the company's various publics by obtaining favourable publicity, building up a good "corporate image" and handling or heading off unfavourable rumours, stories, and events, through the use of news stories, features, press conferences, annual reports, corporate website, product publicity, lobbying, and public service. It is often seen as more believable than advertising. 

Press Relations or Agency - creating and placing newsworthy information in the media
Product Publicity - publicizing specific products
Public Affairs - building and maintaining national or local community relations (sponsoring a Little League baseball team)
Lobbying - building and maintaining relations with legislators and government officials
Investor Relations - maintaining relationships with shareholders and others in the financial community
Development - maintaining relationships with donors or members of not-for-profit organizations
Crisis Management - helping a company in the media spotlight because of a problem with product, employees, or business

Major Public Relations Tools


Chapter 13: Personal Selling and Sales Promotion

I. Personal Selling

Most sales people are well-educated, highly trained professionals whose main job it is to build and maintain long-term relationships with customers through two-way personal communication. The sales force can be manufacturer's representatives or people hired directly by the firm, and they range from Order-Takers (department store salesperson) to Order Getters (someone selling a Lear jet). One of the things that makes them good at their jobs is their ability to really know their customers and find out what they want and need. 

Five Stages in the History of the Salesperson

  Time  Mythology Popular Culture

The Music Man

Pre World War I Personality of the salesman is what counts

The Music Man

The Iceman Cometh 


The Animated Catalogue
Post World War I Add Product Knowledge to Personality and you can't lose Tin Men

The Magic Formula
Late 1930's, early 1940's The good salesman controls the sale


See Below

101 Successful Closes

The Problem Solver
1950's  The salesman as consultant - What's your problem? I've got the solution

????
Today Machines will never replace us
Will computerized selling be the "Death of a Salesman" ?

"The 5 Stages of the Salesperson" is adapted from a lecture Professor Larry Ring used to do when I was a doctoral student at the University of Toronto. Professor Ring has no idea, because I never got around to telling him before he moved to William and Mary College, that he was one of the best professors I've known and one of my favourites in my doctoral programme, and I hope that he takes my use of his material as a tribute to his excellent teaching skills. This story of the AIDA model is also his. 

The AIDA Model

The AIDA model is popular in Advertising, and it also gives us a clue to what makes a successful salesperson. 

Awareness
(said loudly as you enter the customer's office)
"Mr. Sheppard, your wastebasket's on fire!!!!!"
Interest
(said in a continual stream, not leaving time for the customer to interrupt)
"How's the wife and kids? Taking a vacation this year, I know you've always taken the family to the cottage, lovely up there this time of year I'd bet. Hey! Last time we talked, I remember you were looking for a new floor cleaner for the plant?"
Desire
"How would you like to try something that's going to knock your socks off? It's not officially out on the product line yet, I'm only giving it to a very few select customers."
Action
"You'll take it! I knew you would! I know you know a good deal when you seen one, just sign here!" 
Also known as "THE CLOSE" and the worst possible thing you can say about a salesman, the true test of his manhood, particularly a salesman when his entire success was (surely we've moved beyond that?!) measured by how his work day went, the worst thing you could say about him was 

 

 

Exercise  
Sales People-Good or Bad
Everyone has a "favourite good salesperson" story - what's yours? From whom did you buy something and felt wonderful about the purchase mainly because of the salesperson?

Or alternatively, what is your "worst salesperson" story?

Post your answer in the Moodle Discussion Group.

The Role of the Sales Force

A company needs to decide whether its sales force will be product oriented or customer oriented, outside or inside, or a combination of these.

The Personal Selling Process

Prospecting & Qualifying
Preapproach
Approach
Presentation & Demonstration
Handling Objections
Closing
Follow-Up

From prospecting and qualifying through to the following-up, the personal selling process is all about getting new customers, and we know from research that it costs a company roughly 4 times as much to get a new customer as it does to keep an old one.

II. Sales Promotion

Offers short-term incentives to encourage purchase or sales of a product or service
Offers reasons to buy NOW. In general, Sales Promotion techniques focus on customer relationship building. 

Sales Promotion Objectives and Tools

Consumer Promotion Tools
samples, coupons, cash refunds, price packs, premiums, advertising specialties, patronage rewards, point-of-purchase, contests, sweepstakes, games
Objective: increase short-term sales or help build long-term market share

 

Trade Promotion Tools
discounts, buying allowances, merchandise allowances, free goods, push money, specialty ad items, cooperative advertising, dealer sales contests
Objective: persuade channel members to carry a brand, give it shelf space, promote a brand in their advertising, or to push a brand to consumers
Business Promotion Tools
conventions, trade shows, sales contests, bonuses 
Objective: generate business leads, stimulate purchase, reward customers, motivate sales people
Exercise - Plan
Sales Promotion
Which of these three will be most useful to you in your Marketing Plan?
Post your answer in the Moodle Discussion Group.

Sales Promotion Decisions

Size of incentive
How to Promote and Distribute the Promotion
Timing and Length of Promotion
Evaluation
Rules and Regulations Governing Sales Promotions

Relationship Marketing

This is what it's all about in Marketing, what it's always been all about since the clerk in the country store told Mrs. Jones that he was expecting a new shipment of calico cloth in on Tuesday that he knew her daughters would like for new dresses that fall. It's nothing new. It is simply about meeting the needs of your consumer, knowing them well enough to know what is of value to them, and putting their needs before yours, which will, almost always, ensure you a profit. 

Exercise  
Relationship Marketing
Remember our early discussion about Relationship Marketing, back in Unit 1? (my story about earbags). What do you now know that you didn't back then that would help you better understand what makes relationship marketing work?
Post your answer in the Moodle Discussion Group.

III. Wrapping It Up, Tying It Together

The promotional tools are all related. A company may use advertising to promote its image to the public through corporate or institutional advertising, which, unlike specific product advertising, promotes the organization as a whole, while ensuring that Public Relations experts get stories of their events to the newspapers. 

Exercise
Benetton

Advanced

While this ad appears to deal with social issues, why is it NOT Social Marketing?  
Post your answer in the Moodle Discussion Group.

If you don't have the faintest idea and are interested, check the course on Social Marketing


Socially Responsible Marketing Communication
What's Bad About Ads? The only even quasi-political statement I make when teaching Introductory marketing is a section I do in this chapter from my own research into sexism and racism in advertising. I have not yet been able to convert it to the Internet due to copyright problems with the large number of ads I use, but you can see it for yourself. Open your eyes and your mind and go look at ads, in magazines, on TV. 


IV. Advertising and the "Real World": Use of Advertising in Different Stages of the Product Life Cycle

Introduction

Goal - Create awareness and encourage early trial
Promotional Activities
Advertising & Personal Selling - create awareness, liking, preference
Sales Promotion to encourage early trial
Personal Selling to encourage retailers to carry the product
Advertising
Informative Advertising in this stage is largely informative
Pioneer Advertising creates primary demand for a new product 
When veggie burgers were still reasonably new, Wholesome and Hearty Foods, Inc. had the job of raising awareness not only of its own product but of the concept of vegetable-based burgers as well 

A firm may also promote a new way of using an existing product

What wiggles more than an Easter Bunny's Nose?

You can send away for special molds to make Easter eggs out of Jello - a new use for a very old product

Or a company may promote a product that is new to the company 

Godiva, maker of gorgeous chocolates, introduces a Godiva cookie (also luscious I know from personal experience)

Growth

Goal - Maximize market share
Promotional Activities
Advertising & Public Relations - build awareness in mass market
Sales Promotion - reduced to take advantage of heavy demand
Advertising
Persuasive Advertising in the remainder of the stages is largely persuasive
Competitive Advertising creates secondary or competitive demand for the company's particular brand of a product
Competitive advertising can be Non-Comparative or Comparative
Competitive advertising asks for Direct Action or Indirect Action
Non-Comparative Competitive Advertising
Seeking Direct Action Seeking Indirect Action

If you're spending more on your kid's shoes than her bicycle helmet, Bell wants you to go right out NOW and buy a good helmet

Malaysia Airlines doesn't expect you to go right out to the airport and fly to Malaysia, but hopes that when you do, you'll use them

Comparative Competitive Advertising
Indirect Comparison

Tripod Ad Sales ad says, "70 Million + Pageviews each month, 600,000+ Registered Members, Unique, High-Impact Sponsorship Programs," not mentioning any particular competitor
Direct Comparison

Sweet and Low Ad (to the retailer) says, "Yet another sales increase from out of the blue... For millions of people, there's just no equal;" the tiny numbers above each pile are the number of packet sales in the previous year - 4.1MM for S&L, only 2.8 for Equal

Exercise
Comparison
Which kind of ad do you think is more effective? Why?
Post your answer in the Moodle Discussion Group.

Maturity

Goal - Maximize profit and defend market share
Promotional Activities
Advertising - stress brand differences and benefits
Sales Promotion - increased to encourage brand switching
Advertising
Reminder Advertising reminds loyal customers that you still serve them and reminds others that you're there
Converse reminds us of its AllStar running shoe
This ad was made for the Thai market as well as U.S., possessing no language barrier

Decline

Goal - Reduce expenses and milk the brand
Promotional Activities
Advertising is reduced to keep only the die-hard loyal customers OR 
   New Advertising to stimulate growth
Sales Promotion is reduced to a minimal level
Advertising
New Advertising to Stimulate Growth
When milk consumption hit a low, the Milk Board instituted a series of ads which revitalized sales. They continue that effort in the recent series of ads with the milk moustache

Other Units

Introduction Strategy Society Environments Research Buyers
Segmentation Product Price Place Promotion The Marketing Plan

Return to Course Syllabus

AP/ADMS 2200 3.0 Introductory Marketing
York University, Toronto
M Louise Ripley, M.B.A., Ph.D.