Chapter 20

Management of Advertising, Sales

Promotion and Public Relations

Sommers  Barnes
Ninth Canadian Edition

Presentation by
Karen A. Blotnicky
Mount Saint Vincent University, Halifax, NS

Copyright © 2001 by McGraw-Hill Ryerson Limited

Chapter Goals

To gain an understanding of:

• The nature of advertising
• The importance of advertising to the
firm and society
• Different types of advertising
• Development of advertising campaigns
• Selection of advertising media
• The use of public relations and publicity

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Advertising
• Includes all activities involved in presenting
a non-personal, sponsor-identified, paid-for
message about a product or organization.
• Can classify it by:
• The target audience: consumers or
businesses
• Product/service vs.
organization/company
• Objective: Primary or selective demand

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The Nature of Advertising
• advertising is distinguished from other forms
of promotion as follows
• it has a verbal and/or visual message
• the sponsor of the message is identified
• delivery is through recognizable media
• there is payment by the advertiser to the
media for carrying the message
• advertisers are increasingly being able to reach
specific audiences with tailor-made messages

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Advertising to
Target Audiences
• advertising can be classified by the
target audience to which it is directed
• consumer advertising generally appears
in mass media and is directed to end
consumers: may be product or
institutional in nature
• business-to-business advertising is
often called trade advertising and is
directed to a business market

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What is Being Advertised?
• product advertising is designed to promote
the sale of a specific product or service:
• may be direct-action,
direct-action quick-response
• may be indirect-action over a longer time
• institutional advertising promotes the firm
or tries to create a positive image:
• may promote customer service
• or send a public service message

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What are the Objectives?
• primary-demand advertising is
intended to stimulate use of a category
of products
• selective-demand advertising is
intended to encourage purchase of a
particular brand or the products and
services of a specific firm

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Comparative Advertising
• Selective-demand advertising
• Involves comparing a product to its
competing brand
• May be:
• Direct, naming competitors outright
• Less direct, alluding to competitors
(e.g., “leading brand”, “Brand X”) but
not naming them

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Co-operative Advertising
• co-operative advertising involves the
sharing of the cost of advertising by two
or more sponsors:
• a manufacturer and retailers
(vertical),
vertical or
• a group of retailers (horizontal)
(horizontal

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Advertising Revenues by
Medium (1997)
Medium Revenues (Millions
$)
Television 2,100
Newspapers (Daily) 1,545
Yellow Pages 894
Magazines (General) 347
Catalogues/Direct Mail 1,168
Outdoor/Transit Ads 220
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Key Advertising Categories in
Canada (1998)
Industry Spending
(Million $)
Retail 953.5
Automotive (Mfr.) 753.8
Business Equip. & Services 521.6
Food 395.6
Financial/Insurance 388.0
Entertainment 314.8
Local Auto Dealerships 266.6
Travel & Transportation 249.3
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An Advertising Campaign
(Steps 1 and 2)
1. Transforming a theme into a coordinated
advertising program to accomplish a
specific goal.
2. Objectives of the campaign determined by
firm’s overall marketing strategy. Typical
objectives are:
• Support personal selling
• Improve dealer relations
• Introduce a new product
• Counteract substitution
• Expand use of a product category
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 The Advertising Campaign
(Steps 3 and 4)
• Creating a message that:
• Gets and holds the attention of the intended
audience.
• Influences the audience in the desired way.
• Selecting media involves:
• The choice of a medium such as television, radio,
newspaper, or magazine.
• The specific category of the selected medium to
be used, such as special interest (Chatelaine) vs.
general interest magazines (Maclean’s).
• The specific media vehicles.
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The Campaign Budget

• A budget must be allocated among

the various activities comprising the
overall promotional program.
• Promotional budgets can be extended
with co-operative advertising.

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Choosing Media
• Objectives of the ad.
• Audience coverage.
• Requirements of the message.
• Time and location of the buying
decision.
• Media cost (CPM)
• Media characteristics.

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Characteristics of
Key Media
• Newspapers: flexible, local
• Television: versatile, powerful but costly,
fragmented
• Direct Mail: personal, selective, effective, but
tough
• Radio: strong locally, cheap but single
medium
• Magazines: top quality, little flexibility

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More
Key Media
• out-of-home advertising
• specialty advertising
• emerging media:
• World Wide Web
• infomercials
• place-based media
• videos and CD-ROMs
• yellow pages

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Evaluating the Major Media
• newspapers are flexible and timely, have
a local orientation and wide coverage,
low cost
• television is versatile, but audience is
now fragmented, reaches mass
audiences
• direct mail is efficient, targets certain
audience

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More Media
Evaluations
• radio stations target specific segments,
low cost, local orientation, short
message life
• magazines deliver quality advertising
to specific segments, message stays
around

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The Changing Nature
of Media
• media are becoming less mass, more targeted
• cable TV offers many specialty channels
• direct-to-home TV adds to fragmentation
• lots of new out-of-home media
• Yellow Pages and other directories on CD-ROM
• place-based media where they shop and live
• advertising on the Web works as Yellow Pages
does -- the customer seeks out the advertiser

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Evaluating Advertising
• It is difficult to measure the sales
effectiveness of advertising because:
• Ads have different objectives.
• Ads can have an effect over time period.
• Measurement problems.

• Effectiveness can be tested:

• Before an ad is presented.
• While it is being presented.
• After it has completed its run.

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Organizing for Advertising
• Develop an internal advertising
department.
• Many large retailers do this.
• Use an outside advertising agency.
• Specialized, skilled professionals.
• Experienced, many services offered
• Do both.

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Sales Promotion
• Demand-stimulating devices designed to
supplement advertising and facilitate
personal selling.
• Sales promotions include such things as
coupons, in-store displays, premiums, trade
shows, in-store demonstrations, and
contests.
• The target for these activities may be
middlemen, end users, or the producer’s
own salesforce.

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Types of Sales Promotion

• Trade promotions, directed to

members of the distribution channel.
• Consumer promotions, aimed at
consumers.
• Consumers got 3.3 billion coupons for
packaged goods alone in 1996.

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Advantages of
Sales Promotion
• It can produce short-term results.
• Competitors are using sales
promotions.
• Sales promotions are attractive to
price-conscious consumers.
• Can enhance/facilitate retail
salesmanship which is often of low
quality.

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Key Reasons for
Sales Promotion
• Stimulating end-user demand.
• Sampling program for new/improved
product
• Improving the marketing performance
of middlemen and salespeople.
• Sell more, win a holiday trip.
• Supplementing advertising and
facilitating personal selling.
• Displays, promotional giveaways

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Managing Sales Promotion
• Select from wide range of techniques, depending
on your objectives
• Select promotional devices based on:
• Nature of target audience
• Your promotional objectives: Push vs. Pull.
• Cost of device-- sampling can get costly.
• Current economic conditions-- coupons, rebates
work best in recessionary period.
• Evaluating Sales Promotion:
• Much easier than with advertising.
• Usually clear start, finish, goal.
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Public Relations
• A tool designed to influence favourably attitudes
towards an organization, its products and
policies.
• Public relations is often overlooked by
management because of:
• Organization structure; not in marketing.
• Inadequate definitions; loosely defined.
• Unrecognized benefits; many non-believers.

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Publicity

Publicity is a form of public

relations that includes any
communication about an
organization or its products that
is presented by the media but is
not paid for by the organization.

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Strengths of Publicity
• Can announce new products, recognize employees,
report good results, breakthroughs.
• Key Benefits:
• Lower cost than advertising or personal selling.
• Increased readership; advertising ignored often.
• More information.
• Timeliness.

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Weaknesses of Publicity
• Some loss of control over message.
• Limited exposure; only happens
once.
• Not free; preparation costs.

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