17 - Maret 2020 Chapter-18 - Mass Comm, Adv, PR Etc

Marketing Management:
An Asian Perspective,
6th Edition
Instructor Supplements
Created by Geoffrey da Silva
Managing Mass Communications: Advertising, Sales
Promotions, Events, and Public Relations
3 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Learning Issues for Chapter Eighteen
1. What steps are required in developing an advertising

program?
2. How should sales promotion decisions be made?
3. What are the guidelines for effective brand-building events

and experiences?
4. How can companies exploit the potential of public relations

and publicity?
Chapter Outline
• Although there has been an enormous increase in the use of

personal communications by marketers in recent years, due
to the rapid penetration of the Internet and other factors, the
fact remains that mass media, if used correctly, is still an
important component of a modern marketing communications
program.
Chapter Outline
• The old days of ―if you build a great ad, they will come,‖
however, are long gone.
• To generate consumer interest and sales, mass media must

often be supplemented and carefully integrated with other
communication; other marketers are trying to come to grips
with how to best use mass media in the new—and still
changing—communication environment.
Developing and Managing an Advertising Program
• Advertising can be a cost-effective way to disseminate

messages, whether to build a brand preference or to educate
people.
• In developing an advertising program, marketing managers

must always start by identifying the target market and buyer
motives.
• They can then make the five major decisions known as ―the
Five Ms.‖
Advertising Decisions : the Five Ms
1. Mission: What are the advertising objectives?
2. Money: How much to spend?
3. Message: What message should be sent?
4. Media: What media should be used?
5. Measurement: How should the results be evaluated?
Figure 18.1: The Five Ms of Advertising
Setting the Objectives
• The advertising objectives must flow from prior decisions on

target market, brand positioning, and the marketing
program.
• An advertising objective (or goal) is a specific communication

task and achievement level to be accomplished with a specific
audience in a specific period of time. Example:
To increase among 30 million Indonesian car owners the

number who identify the Toyota Corona as an efficient car
and who are persuaded that it is reliable from 10 percent to
40 percent in one year.
Types of Advertising Objectives
• Advertising objectives can be classified according to whether

their aim is to:
1. Inform
2. Persuade
3. Remind
4. Reinforce
• Each aim at different stages in the hierarchy of effects

discussed in Chapter 17.
Types of Advertising Objectives
1. Informative advertising aims to create brand awareness and

knowledge of new products or new features of existing
products.
2. Persuasive advertising aims to create liking, preference,

conviction, and purchase of a product or service.
3. Reminder advertising aims to stimulate repeat purchase of

products and services.
4. Reinforcement advertising aims to convince purchasers that

they made the right choice.
Reminder Advertising
In the latest ‗Treasure the Breast Things in Life‘ campaign, the Singapore Cancer Society, along with
their healthcare partners, remind women to be ‗breast‘ aware for earlier screening and detection of
breast cancer.
Deciding On the Advertising Budget
• How does a company know if it is spending the right amount?
• Although advertising is treated as a current expense, part of

it really is an investment in building brand equity.
• Is money spent on advertising an expense or an investment?
When $5 million is spent on capital equipment, the equipment may be

treated as a five-year depreciable asset and only one-fifth of the cost is
written off in the first year. When $5 million is spent on advertising to
launch a new product, the entire cost must be written off in the first year,
reducing the company‘s reported profit, even if the effects persist for many
years to come.
Five Specific Factors to Consider when Setting the
Advertising Budget
1. Stage in the product life cycle—New products typically
receive large advertising budgets to build awareness and to
gain consumer trial. Established brands are usually
supported with lower advertising budgets as a ratio to sales.
2. Market share and consumer base—High-market-share

brands usually require less advertising expenditure as a
percentage of sales to maintain share. To build share by
increasing market size requires larger expenditures.
Five Specific Factors to Consider when Setting the
Advertising Budget
3. Competition and clutter—In a market with many competitors
and high advertising spending, a brand must advertise more
heavily to be known. Even simple clutter from ads not directly
competing with the brand creates a need for heavier advertising.
4. Advertising frequency—The number of repetitions needed to put

across the brand‘s message to consumers has an important impact
on the advertising budget.
5. Product substitutability—Brands in less well-differentiated or

commodity-like product classes (beer, soft drinks, banks, and
airlines) require heavy advertising to establish a differential image.
Advertising Elasticity
• The predominant response function for advertising is often

concave but can be S-shaped.
• When consumer response is S-shaped, some positive amount

of advertising is necessary to generate any sales impact, but
sales increases eventually flatten out.
Developing an Advertising Campaign
• In designing and evaluating an ad campaign, marketers

employ both art and science to develop the message strategy
or positioning of an ad—what the ad attempts to convey
about the brand, its creative strategy and how the ad
expresses the brand claim.
• To develop a message strategy, advertisers go through three

steps: message generation and evaluation, creative
development and execution, and social responsibility review.
Developing an Advertising Campaign
McDonald‘s in China informed people of its ethical treatment of chickens by using a play on the
Chinese term for Wikileaks to create ―Chickileaks.‖
Message Generation and Evaluation
• Advertisers are always seeking ―the big idea‖ that connects

with consumers rationally and emotionally, sharply
distinguishes the brand from competitors, and is broad and
flexible enough to translate to different media, markets, and
time periods.
• Fresh insights are important for avoiding using the same

appeals and position as others.
• A good ad normally focuses on one or two core selling

propositions.
Message Generation and Evaluation
• As part of refining the brand positioning, the advertiser

should conduct market research to determine which appeal
works best with its target audience.
• Once they find an effective appeal, advertisers should

prepare a creative brief, typically covering one or two
pages.
• This is an elaboration of the positioning statement and

includes: key message, target audience, communication
objectives (to do, to know, to believe), key brand benefits,
support for the brand promise, and media.
Number of Alternative Ad Themes
• How many alternative ad themes should the advertiser create before

making a choice?
• The more ads created, the higher the probability of finding an excellent
one.
• Fortunately, the expense of creating rough ads is rapidly falling due to

computers.
• An ad agency‘s creative department can compose many alternative ads in a

short time by drawing from computer files.
• Marketers can also dramatically cut the cost of creatives by using

consumers as their creative team, a strategy called ―open source,‖ or
crowdsourcing.
Understanding the Local Culture
• An intimate knowledge of the local culture is important to

develop a suitable theme.
• Some ad agencies in Asia have implemented ―disaster

checks‖ before their campaigns go live to make sure that
they are not blind to a political sore spot.
• Marketing Insight: ―Advertising Guidelines for Modern Asia‖

outlines some considerations when advertising in Asia.
Marketing Insight: Advertising Guidelines for
Modern Asia
24
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
Creative Development and Execution
• The ad‘s impact depends not only on what is said, but often
more importantly, on how it says it.
• Execution can be decisive.
• Every advertising medium has specific advantages and

disadvantages.
• We review each medium.
Television Advertising
Television is generally acknowledged as the most powerful

advertising medium and reaches a broad spectrum of
consumers. Its advantages include the following:
a. The wide reach translates to low cost per exposure.

b. From a brand-building perspective, TV advertising has two
particularly important strengths:
c. It can be an effective means of vividly demonstrating product
attributes and persuasively explaining their corresponding
consumer benefits.
d. TV advertising can be a compelling means for dramatically
portraying user and usage imagery, brand personality, and
other brand tangibles.
TV advertising can be used to dramatically portray
user and usage imagery, brand personality, and
other brand intangibles.
Smooth-E in Thailand is creative in telling an entertaining story about its facial products that appeal
to its target audience of young girls and trendy men.
Television Advertising
• Television advertising also has its drawbacks.
a. Because of the fleeting nature of the message and the

potentially distracting creative elements, product-related
messages and the brand itself can be overlooked.
b. The large number of ads and non-programming material creates
clutter that makes it easy for consumers to ignore or forget ads.
c. TV advertising has high costs in production and placement.
• Properly designed and executed TV ads can improve brand

equity and affect sales and profits. A well-done TV
commercial can still be a powerful marketing tool.
Print Ads
• Print media offers a stark contrast to broadcast media.
• Print media can provide much detailed product information

and can also effectively communicate user and usage
imagery.
• However, the static nature of the visual images makes it

difficult to provide dynamic presentations or demonstrations.
• It can also be a fairly passive medium.
Print Ads
• The two main print media—newspapers and magazines—have

many of the same advantages and disadvantages.
– Newspapers are timely and pervasive.
– Magazines are more effective at building user and usage imagery.
• Format elements such as ad size, color, and illustration affect

a print ad‘s impact.
Research on Print Advertising
• Researchers studying print advertisements report that the

picture, headline, and copy are important, in that order.
• The picture must be strong enough to draw attention. Then

the headline must reinforce the picture and lead the person to
read the copy.
• The copy itself must be engaging and the advertised brand‘s

name must be sufficiently prominent.
Research on Print Advertising
• Even then, a really outstanding ad will be noted by less than

50 percent of the exposed audience.
• About 30 percent might recall the headline‘s main point;

about 25 percent might remember the advertiser‘s name;
and less than 10 percent will read most of the body copy.
• Ordinary ads do not achieve even these results.
Marketing Memo: Print Ad Evaluation Criteria
Marketing Memo: Print Ad Evaluation Criteria
This marketing memo lists the seven questions marketers should

consider when evaluating whether or not their printed ad was
executed for effectiveness:
1.Is the message clear at a glance? Can you quickly tell what the
advertisement is all about?
2.Is the benefit stated in the headline?
3.Does the illustration support the headline?
4.Does the first line of the copy support or explain the headline and
illustration?
5.Is the ad easy to read and follow?
6.Is the product easily identified?
7.Is the brand or sponsor clearly identified?
Radio Ads
• Radio is a pervasive medium.

– Radio‘s main advantage is flexibility:
– Stations are very targeted.
– Ads are relatively inexpensive to produce and place.
– Short closing allow for quick response.
• Radio is particularly effective in the morning.
• It allows a company to achieve a balance between broad and

localized market coverage.
Radio Ads
• The obvious disadvantages of radio are the lack of visual

images and the relatively passive nature of the consumer
processing that results.
• Nevertheless, radio ads can be extremely creative.
• Some see the lack of visual images as a plus because they

feel the clever use of music, sound, and other creative
devices can tap into the listener‘s imagination to create
powerfully relevant and well-liked images.
Legal and Ethical Issues
• To break through clutter, some advertisers believe they have

to be edgy and push the boundaries of what consumers are
used to seeing in advertising.
• Advertisers and their agencies must be sure advertising does

not overstep social and legal norms.
• Public policy makers have developed a substantial body of

laws and regulations to govern advertising.
Legal and Ethical Issues
• For example, ads using the words ―most,‖ ―best,‖ and ―number one‖
are not allowed in China. However, such regulations vary by
location.
• Advertisers should not make false claims, such as stating that a

product cures something when it does not. They must avoid false
demonstrations. The problem is how to tell the difference between
deception and ―puffery‖—simple exaggerations not intended to be
believed that are permitted by law.
• Some marketers use bait-and-switch advertising to attract buyers

under false pretenses.
Social Responsibility in Advertising—Asian Context
• To be socially responsible, advertisers must be careful not to

offend the general public as well as any ethnic groups, racial
minorities, or special-interest groups.
• A print ad for Clinique‘s perfume, Elixir, showing a snake

crawling over the head of an image of Buddha was taken off
because it was insulting to Thais. Most Thais are Buddhists,
and the head is considered the most revered part of the
body.
• In China, a Toyota ad showing two stone lions saluting a

Prado SUV angered many Chinese as the lions, a traditional
symbol of Chinese power, resembled those flanking the Marco
Polo Bridge, the site near Beijing where the opening battle in
Japan‘s 1937 invasion of China took place.
• As Chinese words often hold multiple meanings, Prado

translates into Chinese as badao (霸道), which also means
―rule by force‖ or ―overbearing.‖ Toyota had to pull the ad
and apologize.
• In Malaysia, Unilever‘s ad for Pond‘s skin lightening

moisturizer showed a Malay college student using the product
for a fairer complexion to get a boy‘s attention. The ad was
deemed offensive to the darker-complexioned ethnic group.
Social Responsibility in Advertising- Asian Context
Sex appeal has also come under increased scrutiny. When clothing retailer, Abercrombie & Fitch,
placed a huge billboard in front of its to-be-opened retail store in Singapore, it raised a furore among
some Singaporeans who thought it promoted promiscuous behavior. Here is an ad using sex appeal
that failed.
Deciding on Media and Measuring Effectiveness
• After choosing the message, the advertiser‘s next task is to

choose media to carry it.
• The steps here are deciding on desired reach, frequency, and

impact; choosing among major media types; selecting
specific media vehicles; deciding on media timing; and
deciding on geographical media allocation.
• Then the marketer evaluates the results of these decisions.
Deciding On Reach, Frequency, and Impact
• Media selection is finding the most cost-effective media to

deliver the desired number and type of exposures to the
target audience.
• What do we mean by the desired number of exposures?
• The advertiser is seeking a specified advertising objective and

response from the target audience.
Figure 18.2: Relationship between Trial, Awareness,
and the Exposure Function
• The rate of product trial will
depend, among other things,
on the level of brand
awareness.
• Suppose the rate of product

trial increases at a
diminishing rate with the
level of audience awareness,
as shown in Figure 18.2(a).
• If the advertiser seeks a
product trial rate of (say) T*, it
will be necessary to achieve a
brand awareness level of A*.
• The next task is to find out how many exposures, E*, will
produce an audience awareness of A*.
• The effect of exposures on audience awareness depends on

the exposures‘ reach, frequency, and impact:
a.Reach (R)—The number of different persons or households

exposed to a particular media schedule at least once during a
specified time period.
b. Frequency (F)—The number of times within the specified time

period that an average person or household is exposed to the
message.
c. Impact (I)—The qualitative value of an exposure through a

given medium (thus a cosmetic ad in Cleo would have a higher
impact than in Fortune magazine).
• Figure 18.2(b) shows the
relationship between audience
awareness and reach.
• Audience awareness will be

greater the higher the
exposures‘ reach, frequency,
and impact.
• There are important trade-offs

among reach, frequency, and
impact.
• The relationship between reach, frequency, and impact is captured in the

following concepts:
– Total number of exposures (E)—This is the reach times the average

frequency; that is, E = R × F. This measure is referred to as the gross
rating points (GRP). If a given media schedule reaches 80 percent of the
homes with an average exposure frequency of three, the media schedule
is said to have a GRP of 240 (80 × 3). If another media schedule has a
GRP of 300, it is said to have more weight, but we cannot tell how this
weight breaks down into reach and frequency.
– Weighted number of exposures (WE)—This is the reach times

average frequency times average impact, that is WE = R × F × I.
Reach versus Frequency
• Reach is most important when:

a. Launching new products
b. Flanker brands
c. Extensions of well-known brands
d. Infrequently purchased goods
e. Going after an undefined target market
• Frequency is most important where:

a. There are strong competitors
b. A complex story to tell
c. High consumer resistance
d. A frequent-purchase cycle
Repetition
• A key reason for repetition is forgetting.
• The higher the forgetting rate associated with a brand, the

higher the warranted level of repetition.
• Ads wear out and viewers tune them out so repetition is not
enough.
• Advertisers should insist on fresh ads.
Choosing Among Major Media Types
• The media planner has to know the capacity of the major

advertising media types to deliver reach, frequency, and
impact.
• The major advertising media along with their costs,

advantages, and limitations are profiled in Table 18.1.
• Media planners make their choices by considering factors

such as target audience media habits, product characteristics,
message requirements, and cost.
Table 18.1: Profiles of Major Media Types
Choosing Among Major Media Types
• Given the abundance of media, the planner must first decide how to
allocate the budget to the major media types.
• The distribution must be planned with the awareness that people

are increasingly time-starved.
• Attention is becoming a scarce currency, and advertisers need

strong devices to capture people‘s attention.
• Marketers must also recognize that consumer response can be S-

shaped: An ad threshold effect exists where some positive amount
of advertising is necessary before any sales impact can be detected,
but sales increases eventually flatten out.
Alternative Advertising Options
• In recent years, reduced effectiveness of traditional mass

media has led advertisers to increase their emphasis on
alternate advertising media.
• This involves place advertising.
Place Advertising
• Place advertising, or out-of-home advertising, is a broadly

defined category that captures many different alternative
advertising forms.
• Marketers are using creative and unexpected ad placement to

grab consumer‘s attention.
• The rationale is that marketers are better off reaching people

in other environments, such as where they:
a. Work
b. Play
Popular options available include billboards, public
c. Shop places, product placement, and point-of-purchase.
Billboards
• Billboards have been transformed over the years and now use
colorful, digitally produced graphics, backlighting, sounds,
movement, and unusual—even 3-D—images.
• Billboards do not even necessarily have to stay in one place.
• Marketers can buy ad space on billboard-laden trucks that are

driven continuously all day in selected areas.
Outdoor Advertising
• This creative adidas‘s outdoor

advertisement grabbed the
headlines in Japan and
worldwide.
Outdoor Advertising in Asia
• Outdoor advertising is popular in Asia for the following reasons.
• The traffic jams in cities such as Bangkok, Kuala Lumpur, Shanghai,

and Tokyo suggest that there is a massive captive audience.
• In rural areas where television and newspaper advertising is less

available, billboards are used to reach the mass audience.
• Moreover, TV advertising rates have increased dramatically while

outdoor advertising has become more cost-effective.
Public Spaces
• Advertisers are placing traditional TV and print ads in

unconventional places such as movies, airlines, lounges,
classrooms, sports arenas, office and hotel elevators,
escalator handrails, restrooms, and other public places.
• Billboard-type poster ads are showing up everywhere.
• Transit ads on buses, subways, and commuter trains have

been used for a long time.
Outdoor Advertising
Pillars below train tracks are used as advertising space, as seen in this one in Kuala Lumpur,
Malaysia.
Unconventional Locations
• Advertisers can even buy space in toilet stalls and above

urinals which, according to research studies, office workers
visit an average of three to four times a day for roughly four
minutes per visit.
• Restroom advertising is fast becoming popular in Bangkok,

Hong Kong, Korea, and Singapore. Ads are placed directly in
front of the audience where they cannot be missed.
Unconventional Locations
This hair salon in Malaysia used the public ladies‘ restroom to advertise, a captive market for ladies
waiting in line.
64
Product Placements
• Marketers pay fees of $50,000–$100,000 and even higher so

that their products make cameo appearances in movies and
on television.
• Some firms get product placement at no cost by supplying

their products to the movie company (Nike does not pay to
be in movies but often supplies shoes, jackets, bags, etc.).
• Increasingly, products and brands are being woven directly

into the story.
Unilever’s Product Placement Strategy in China
Point-of-Purchase
• There are many ways to communicate with consumers at the point of

purchase (P-O-P).
• In-store advertising includes ads on shopping carts, cart straps, aisles, and
shelves, as well as promotion options such as in-store demonstrations, live
sampling, and instant coupon machines.
• Some supermarkets are selling floor space for company logos and
experimenting with talking shelves. P-O-P radio provides FM-style
programming and commercial messages to thousands of food stores and
drugstores nationwide.
• Programming includes a store-selected music format, consumer tips, and

commercials.
Evaluating Alternative Media
• Ads can now appear virtually anywhere consumers have a few

minutes or even seconds to notice them.
• The main advantage of non-traditional media is a very precise and

captive audience in a cost-effective manner.
• Unique ad placements designed to break through clutter may also

be perceived as invasive and obtrusive, however.
• Consumer backlash often results when people see ads in

traditionally ad-free spaces, such as in schools, on police cruisers,
and in doctors‘ waiting rooms.
Evaluating Alternative Media
• The challenge with non-traditional media is demonstrating its reach

and effectiveness through credible, independent research.
• These new marketing strategies must be judged on how they

contribute, directly or indirectly, to brand equity.
• Perhaps because of the sheer pervasiveness of advertising,

consumers seem to be less bothered by non-traditional media now
than in the past.
• Consumers must be favorably affected in some way to justify the

marketing expenditures for non-traditional media.
Marketing Insight: Playing Games with Brands
• Many advertisers have adopted an ―if you can‘t beat them, join
them‖ attitude and are advertising in online games.
• Marketers are also playing starring roles in popular video games by

having their product featured in the games.
• The growing popularity of Second Life and other virtual

communities is creating new placement opportunities for marketers.
Selecting Specific Vehicles
• The media planner must search for the most cost-effective

vehicles within each chosen media type.
• These choices are critical given the high cost of producing

and airing television commercials.
• In making choices, the planner has to rely on measurement

services that provide estimates of audience size, composition,
and media cost.
• Media planner calculates the cost per thousand persons

reached by a vehicle.
Selecting Specific Vehicles
• Several adjustments have to be applied to the cost-per-

thousand measure:
1. The measure should be adjusted for audience quality.

2. The exposure value should be adjusted for the audience-
attention probability.
3. The exposure value should be adjusted for the magazine‘s
editorial quality (prestige and believability).
4. The exposure value should be adjusted for the magazine‘s ad
placement policies and extra services.
Media Planning
• Media planners are using more sophisticated measures of

effectiveness and employing them in mathematical models to
arrive at the best media mix.
• Many advertising agencies use a computer program to select

the initial media and then make further improvements based
on subjective factors.
Deciding On Media Timing and Allocation
• In choosing media, the advertiser faces both a macro

scheduling and a micro-scheduling problem.
a. The macro-scheduling problem involves scheduling the

advertising in relation to seasons and the business cycle.
b. The micro-scheduling problem calls for allocating advertising

expenditures within a short period to obtain maximum impact.
Micro-scheduling
• Figure 18.3 shows several possible patterns.
• The left side shows that advertising messages for the month
can be concentrated (―burst‖ advertising), dispersed
continuously throughout the month, or dispersed
intermittently.
• The top side shows that the advertising messages can be

beamed with a level, rising, falling, or alternating frequency.
Figure 18.3: Classification of Advertising Timing
Patterns
• The chosen pattern should meet the communication

objectives set in relationship to the nature of the product,
target customers, distribution channels, and other marketing
factors.
• The timing pattern should consider three factors.
a. Buyer turnover expresses the rate at which new buyers enter

the market; the higher this rate, the more continuous the
advertising should be.
b. Purchase frequency is the number of times during the period
that the average buyer buys the product; the higher the
purchase frequency, the more continuous the advertising should
be.
c. The forgetting rate is the rate at which the buyer forgets the
brand; the higher the forgetting rate, the more continuous the
advertising should be.
In launching a new product, the advertiser has to choose
between continuity, concentration, flighting, and pulsing.
• Continuity is achieved by scheduling exposures evenly

throughout a given period. Generally, advertisers use
continuous advertising in expanding market situations, with
frequently purchased items, and in tightly defined buyer
categories.
• Concentration calls for spending all the advertising dollars in

a single period. This makes sense for products with one
selling season or holiday.
In launching a new product, the advertiser has to choose
between continuity, concentration, flighting, and pulsing.
• Flighting calls for advertising for a period, followed by a

period with no advertising, followed by a second period of
advertising activity. It is used when funding is limited, the
purchase cycle is relatively infrequent, and with seasonal
items.
• Pulsing is continuous advertising at low-weight levels

reinforced periodically by waves of heavier activity. Pulsing
draws on the strength of continuous advertising and flights to
create a compromise scheduling strategy. Those who favor
pulsing feel that the audience will learn the message more
thoroughly, and money can be saved.
Allocating the Advertising Budget
• A company has to decide how to allocate its advertising

budget over space as well as over time.
• The company makes ―national buys‖ when it places ads on
national TV networks or in nationally circulated magazines.
• It makes ―spot buys‖ when it buys TV time in just a few
markets or in regional editions of magazines.
• These markets are called areas of dominant influence (ADIs)
or designated marketing areas (DMAs).
• Ads reach a market 80–140 kilometers from a city center.
• The company makes ―local buys‖ when it advertises in local
newspapers, radio, or outdoor sites.
Evaluating Advertising Effectiveness
• Most advertisers try to measure the communication effect of

an ad—that is, the potential effect on awareness, knowledge,
or preference.
• They would also like to measure the ad‘s sales effect.
Communication-effect Research
• Communication-effect research seeks to determine whether

an ad is communicating effectively.
• Called copy testing, it can be done before an ad is put into

media and after it is printed or broadcast.
• Table 18.2 describes some specific advertising research

techniques.
Table 18.2: Advertising Research Techniques
Communication-effect Research
• There are three major methods of pre-testing:
a. The consumer feedback method asks consumers for their

reactions to a proposed ad.
b. Portfolio tests ask consumers to view or listen to a portfolio of
advertisements, then consumers are asked to recall all the ads
and their contents.
c. Laboratory tests use equipment to measure physiological
reactions to an ad.
• Many advertisers use post-tests to assess the overall impact

of a completed campaign.
Sales-effect Research
• The fewer or more controllable other factors such as features and

price are, the easier it is to measure advertising‘s effect on sales.
• Sales are influenced by many factors, such as features, price, and

availability, as well as competitors‘ actions.
• The fewer or more controllable these other factors are, the easier it
is to measure effect on sales.
• The sales impact is easiest to measure in direct marketing

situations and hardest in brand or corporate image-building
advertising.
• Companies are generally interested in finding out whether

they are overspending or underspending on advertising.
• One approach to answering this question is to work with the

formulation shown in Figure 18.4.
Figure 18.4
Formula for Measuring Sales Impact of Advertising
• A company‘s share of advertising expenditures produces:
– a share of voice (i.e., proportion of company advertising of that

product to all advertising of that product) that earns a
– share of consumers’ minds and hearts and ultimately,
– a share of market.
• Researchers try to measure the sales impact through

analyzing historical or experimental data.
• The historical approach involves correlating past sales to past

advertising expenditures.
• Other researchers use an experimental design to measure

advertising‘s sales impact.
Sales Promotions
• Sales promotion, a key ingredient in marketing campaigns,

consists of a collection of incentive tools, mostly short-term,
designed to stimulate quicker or greater purchase of
particular products or services by consumers or the trade.
• Where advertising offers a reason to buy, sales promotion

offers an incentive to buy.
Tools of Sales Promotions
• Sales promotion includes tools for consumer promotion

(samples, coupons, cash refund offers, price-offs, premiums,
prizes, patronage rewards, free trials, warranties, tie-in
promotions, cross-promotions, point-of-purchase displays,
and demonstrations);
• trade promotion (price-offs, advertising and display

allowances, and free goods);
• and business and sales-force promotion (trade shows and

conventions, contests for sales reps, and specialty
advertising).
Objectives
• Sales promotions tools vary in their specific objectives.
• Sellers use incentive-type promotions to:
a. Attract new users.
b. Reward loyal customers.
c. Increase the repurchase rates of occasional users.
Objectives
• Sales promotions often attract brand switchers, who are

primarily looking for low price, good value, or premiums.
• If some of them would not have otherwise tried the brand,

promotion can yield long-term increases in market share.
Objectives
• Sales promotions in markets of high brand similarity can

produce a high sales response in the short run but little
permanent gain in brand preference over the longer term.
• In markets of high brand dissimilarity, they may be able to

alter market shares permanently.
• In addition to brand switching, consumers may engage in

stockpiling—purchasing earlier than usual (purchase
acceleration) or purchasing extra quantities.
• But sales may then hit a post-promotion dip.
Advertising versus Promotion: Factors Leading to a
Growth in the Use of Sales Promotions
i. Promotions became more accepted by top management as an
effective sales tool
ii. The number of brands increased; competitors used promotions

more frequently
iii. Many brands were seen as similar
iv. Consumers became more price-oriented
v. The trade demanded more deals from manufacturers
vi. Advertising efficiency declined
Downside of Sales Promotions
• However, there is a danger in letting advertising take too

much of a back seat to promotions, because advertising
typically builds brand loyalty.
• The question of whether or not sales promotion weakens

brand loyalty is subject to interpretation.
• Sales promotion, with its incessant price-offs, coupons, deals,

and premiums, may devalue the product offering in buyers‘
minds.
Price Promotions versus Added Value Promotions
• There is a need to distinguish between price promotions and

added-value promotions.
• Certain types of sales promotion can actually enhance brand

image.
• The rapid growth of sales-promotion media has created

clutter similar to advertising clutter.
Price Promotions versus Added Value Promotions
• Manufacturers have to find ways to rise above the clutter—for

instance, by offering larger coupon-redemption values or
using more dramatic point-of-purchase displays or
demonstrations.
• Usually, when a brand is price promoted too often, the

consumer begins to devalue it and buys it mainly when it
goes on sale.
Impact of sales promotions
• Loyal brand buyers tend not to change their buying patterns

as a result of competitive promotion.
• Advertising appears to be more effective at deepening brand

loyalty.
• Price promotions may not build permanent total-category

volume.
Impact of sales promotions
• Small-share competitors find it advantageous to use sales

promotion because they cannot afford to match the market leaders‘
large advertising budgets, nor can they obtain shelf space without
offering trade allowances or stimulate consumer trial without
offering incentives.
• The upshot is that many consumer-packaged-goods companies feel

they are forced to use more sales promotion than they wish.
• They blame the heavy use of sales promotion for decreasing brand
loyalty, increasing consumer price-sensitivity, brand-quality-image
dilution, and a focus on short-run marketing planning.
Major Decisions
• In using sales promotions, a company must:
a. establish its objectives,
b. select the tools,
c. develop the program,
d. Pre-test the program,
e. implement and control it, and
f. evaluate the results.
Establishing Objectives
• Sales promotion objectives are derived from broader

promotion objectives that are derived from more basic
marketing objectives developed for the product.
• For consumers, objectives may include:

1. Encouraging purchase of larger-sized units
2. Building trial among non-users
3. Attracting switchers away from competitors‘ brands
• Ideally, promotions with consumers would have short-run

sales impact as well as long-run brand equity effects.
• For retailers, objectives include persuading retailers to:
1. Carry new items

2. Higher levels of inventory
3. Encourage off-season buying
4. Encourage stocking of related items
5. Offset competitive promotions
6. Build brand loyalty
7. Gain entry into new retail outlets
• For the sales force, objectives include:
1. Encourage support of a new product or model
2. Encourage more prospecting
3. Stimulate off-season sales
Selecting Consumer-Promotion Tools
• The promotion planner should take into account the type of

market, sales promotion objectives, competitive conditions,
and each tool‘s cost-effectiveness.
• The main consumer-promotion tools are summarized in Table

18.3.
• Manufacturer promotions include rebates, gifts to motivate

purchases, and high-value trade-in credit.
• Retailer promotions include price cuts, feature advertising,

retailer coupons, and retailer contests or premiums.
Table 18.3: Major Consumer Promotion Tools
Table 18.3: Major Consumer Promotion Tools
Selecting Consumer-promotion Tools
• We can also distinguish between sales-promotion tools that

are consumer-franchise building and reinforce the consumer‘s
brand preference and those that do not.
• Consumer franchise-building promotions offer the best of

both worlds—they build brand equity while moving product.
• Sales promotion seems most effective when used together

with advertising.
• Digital coupons eliminate printing costs, reduce paper waste,

are easily updatable, and have higher redemption rates.
Possible Abuse of Digital Coupons
KFC‘s move to reject online coupons because of fake coupons angered Chinese consumers.
Selecting Trade-promotion Tools
• Manufacturers use several trade promotion tools (Table

18.4).
• Manufacturers award money to the trade
1. to persuade the retailer or wholesaler to carry the brand;

2. to persuade the retailer or wholesaler to carry more units than
the normal amount;
3. to induce retailers to promote the brand by featuring, display,
and price reductions; and
4. to stimulate retailers and their sales clerks to push the product.
Table 18.4: Major Trade Promotion Tools
Trade Promotions
• The growing power of large retailers has increased their

ability to demand trade promotions at the expense of
consumer promotion and advertising.
• Manufacturers face several challenges in managing trade

promotions:
– They often find it difficult to police retailers.
– Manufacturers are increasingly insisting on proof of performance

before paying allowance.
Trade Promotions
• More retailers are doing forward buying—buying a greater

quantity during the deal period than they can sell during the
deal period.
• Retailers are doing more diverting:
– Manufacturers are trying to handle forward buying and diverting

by limiting the amount that they will sell at a discount.
• Ultimately, manufacturers feel that trade promotion has

become a nightmare. It contains layers of deals, is complex
to administer, and often leads to lost revenues.
Selecting Business- and Sales-Force-Promotion
Tools
• Companies spend heavily on business and sales force
promotion tools (Table 18.5) to gather business leads,
impress and reward customers, and motivate the sales force
to greater effort.
• Companies typically develop budgets for each business

promotion tool that remain fairly constant from year to year.
Table 18.5: Major Business and Sales Force Promotion
Tools
Developing the Program
• In deciding to use a particular incentive, marketers have several

factors to consider.
• First, they must determine the size of the incentive. A certain

minimum is necessary if the promotion is to succeed.
• Second, the marketing manager must establish conditions for

participation. Incentives might be offered to everyone or to select
groups.
• Third, the marketer has to decide on the duration of the

promotion.
Developing the Program
• Fourth, the marketer must choose a distribution vehicle. A 15-

cents-off coupon can be distributed in the package, in stores, by
mail, or in advertisements.
• Fifth, the marketing manager must establish the timing of the

promotion.
• Finally, the marketer must determine the total sales promotion

budget. The cost of a particular promotion consists of the
administrative cost (printing, mailing, and promoting the deal) and
the incentive cost (cost of premium or cents-off, including
redemption costs), multiplied by the expected number of units that
will be sold on the deal.
Implementing and Evaluating the Program
• Marketing managers must prepare implementation and control

plans for each individual promotion that cover lead time and sell-in
time.
• Lead time is the time necessary to prepare the program prior to

launching it.
• Sell-in time begins with the promotional launch and ends when
approximately 95 percent of the deal merchandise is in the hands of
consumers.
Implementing and Evaluating the Program
• Sales promotions work best when they attract competitors‘

customers who then switch.
• If the company‘s product is not superior, the brand‘s share is likely

to return to its pre-promotion level.
• Consumer surveys can be conducted to learn how many recall the

promotion, what they thought of it, how many took advantage of it,
and how the promotion affected subsequent brand-choice behavior.
• Sales promotions can also be evaluated through experiments that

vary such attributes as incentive value, duration, and distribution
media.
Additional Costs of Running Sales Promotions
• Additional costs beyond the cost of specific promotions

include the risk that promotions might decrease long-run
brand loyalty.
• Second, promotions can be more expensive than they

appear.
• Third, there are the costs of special production runs, extra

sales force effort, and handling requirements.
• Finally, certain promotions irritate retailers, who may demand

extra trade allowances or refuse to cooperate.
Events and Experiences
• Companies also sponsor events including sports, entertainment tours and

attractions, festivals, fairs, the arts, as well as cause marketing.
• By becoming part of a special and more personally relevant moment in

consumers‘ lives, companies‘ involvement with events can broaden and
deepen the relationship with their target market.
• Such below-the-line activities are gaining popularity in Asia as companies

try to find better use for their money to achieve a higher return on
investments.
• An event, relative to an ad, may cost less and yet allows the advertiser to
interact with a captive target market.
Events and Experiences
• Daily encounters with brands may also affect consumers‘

brand attitudes and beliefs.
• Atmospheres are ―packaged environments‖ that create or

reinforce leanings toward product purchase.
• A five-star hotel will use elegant chandeliers, marble

columns, and other tangible signs of luxury.
• Many firms are creating on-site and off-site product and

brand experiences.
Event Objectives
• Marketers report a number of reasons why they sponsor

events:
i. To identify with a particular target market or lifestyle
ii. To increase awareness of company or product name
iii. To create or reinforce consumer perceptions of key brand image
associations
iv. To enhance corporate image dimensions
v. To create experiences and evoke feelings
vi. To express commitment to the community or to social issues
vii. To entertain key clients or reward key employees
viii. To permit merchandising or promotional opportunities
Sponsorships
Although Nike was not an official sponsor of the World Cup, it set up this attraction in downtown
Kuala Lumpur to capitalize on the then soccer fever.
Potential Disadvantages of Sponsorships
• Despite these potential advantages, there are a number of

potential disadvantages to sponsorship.
• The success of an event can be unpredictable and beyond the

control of the sponsor.
• Although many consumers will credit sponsors for providing

the financial assistance to make an event possible, some
consumers may still resent the commercialization of events.
Major Sponsorship Decisions
Making sponsorships successful requires:
a. choosing the appropriate events,
b. designing the optimal sponsorship program for the event, and
c. measuring the effects of sponsorship.
Choosing Events
Because of the huge amount of money involved and the number of

events, many marketers are becoming more selective about choosing
sponsorship events.
a. The event must meet the marketing objectives and

communication strategy defined for the brand.
b. The audience delivered by the event must match the target
market.
c. The event must have sufficient awareness.
d. Possess the desired image.
e. Be capable of creating the desired effect with that target
market.
f. Consumers must make favorable attributions to the sponsor for
its event involved.
Choosing Events
• An ideal event is also unique but not encumbered with many

sponsors, lends itself to ancillary marketing activities, and
reflects or enhances the sponsor‘s brand or corporate image.
• Example of the Beijing Olympics.
Choosing Events
Government organizations tend to favor domestic suppliers over foreign suppliers. Lenovo was a
partner sponsor of the 2008 Beijing Olympics.
Designing Sponsorship Programs
• Many marketers believe that it is the marketing program

accompanying an event sponsorship that ultimately determines its
success.
• At least 2 to 3 times the amount of the sponsorship expenditure

should be spent on related marketing activities.
• Event creation is a particularly important skill in publicizing

fundraising drives for non-profit organizations.
• Fund-raisers have developed a large repertoire of special events,

including anniversary celebrations, art exhibits, auctions, benefit
evenings and others.
More firms are using their names to sponsor arenas,
stadiums, and other venues that hold event.
Companies find that using their names to sponsor venues such as arts centers can raise their profile.
Measuring Sponsorship Activities
• It is a challenge to measure the success of events.
• The supply-side method focuses on potential exposure to the

brand by assessing the extent of media coverage.
• Demand-side method focuses on reported exposure from

consumers.
• See Marketing Memo.
Marketing Memo: Measuring High Performance
Sponsorship Programs
134
© Pearson Education South Asia Pte Ltd 2013. All rights reserved
Measuring Sponsorship Activities
• Supply-side methods attempt to approximate the amount of

time or space devoted to media coverage of an event.
• This measure of potential ―impressions‖ is then translated

into an equivalent ―value‖ in advertising dollars according to
the fees associated with actual advertising in the particular
media vehicle.
• The demand-side method attempts to identify the effects

sponsorship has on consumers‘ brand knowledge.
Creating Experiences
• A large part of local, grassroots marketing is experiential

marketing, which not only communicates features and
benefits but also connects a product or service with unique
and interesting experiences.
• ―The idea is not to sell something, but to demonstrate how a

brand can enrich a customer‘s life.
Creating Experiences
• One survey showed four of five respondents found participating in a

live event was more engaging than all other forms of
communication.
• The vast majority also felt experiential marketing gave them

more information than other forms of communication and would
make them more likely to tell others about participating in the
event and be receptive to other marketing for the brand.
• Companies can even create a strong image by inviting prospects

and customers to visit their headquarters and factories.
Company Tours to Enhance Customer Experiences
Company tours to companies such as Hershey‘s tell consumers, in an engaging manner, the
corporate history and products.
Public Relations
• Not only must the company relate constructively to customers,

suppliers, and dealers, it must also relate to a large number of
interested publics.
• A public is any group that has an actual or potential interest in or

impact on a company‘s ability to achieve its objectives.
• Public relations (PR) involves a variety of programs designed to

promote or protect a company‘s image to its individual products.
• The wise company takes concrete steps to manage successful

relations with its key publics.
Public Relations
• Most companies have a public relations department that

monitors the attitudes of the organization‘s publics and
distributes information and communication materials to build
goodwill.
• The best PR departments spend time counseling top

management to adopt positive programs and to eliminate
questionable practices so that negative publicity does not
arise in the first place.
• They perform the following five functions.
Functions of a PR Department
1. Press relations—Presenting news and information about the

organization in the most positive light.
2. Product publicity—Sponsoring efforts to publicize specific products.
3. Corporate communication—Promoting the understanding of the

organization through internal and external communications.
4. Lobbying—Dealing with legislators and government officials to

promote or defeat legislation and regulation.
5. Counseling—Advising management about public issues, company

positions, and image during good and bad times.
Marketing Public Relations
• Many companies are turning to marketing public relations

(MPR) to support corporate or product promotion and image
making.
• The old name for MPR was publicity that was seen as the task
of securing editorial space to promote or ―hype‖ a product,
service, idea, etc.
• MPR goes beyond simple publicity and plays an important role

in many key marketing tasks.
MPR plays an important role in the following tasks:
1. Launching new products
2. Repositioning a mature product
3. Building interest in a product category
4. Influencing specific target groups
5. Defending products that have encountered public problems
6. Building the corporate image in a way that reflects favorably

on its products
Using MPR to Win Back Public Confidence
In India, Coca-Cola and Pepsi struggled to win back consumer confidence after allegations of
pesticide contamination surfaced.
Impact of Public Relations
• As the power of mass advertising weakens, marketing

managers are turning to MPR to build awareness and brand
knowledge for both new and established products.
• MPR is also effective in blanketing local communities and

reaching specific groups. In several cases, MPR proved more
cost-effective than advertising.
Impact of Public Relations
• MPR must be planned jointly with advertising.
• Creative public relations can affect public awareness at a

fraction of the cost of advertising.
• Some experts say that consumers are five times more likely
to be influenced by editorial copy than by advertising
Major Decisions in Marketing PR
• In considering when and how to use MPR, management must

establish:
i. the marketing objectives,
ii. choose the PR messages and vehicles,
iii. implement the plan carefully, and
iv. evaluate the results.
• The main tools of MPR are described in Table 18.6.
Table 18.6: Major Tools in Marketing PR
• MPR can build awareness by placing stories in the media to bring

attention to a product, service, person, organization, or idea. It can
build credibility by communicating the message in an editorial
context.
• It can help boost sales force and dealer enthusiasm with stories
about a new product before it is launched. It can hold down
promotion cost because MPR costs less than direct-mail and media
advertising.
• Whereas PR practitioners reach their target public through the mass

media, MPR is increasingly borrowing the techniques and technology
of direct-response marketing to reach target audience members one
on one.
Choosing Messages and Vehicles
• The MPR manager must identify or develop interesting stories

about the product.
• Each event is an opportunity to develop a multitude of stories

directed at different audiences.
• The best MPR practitioners are able to find or create stories

even for mundane or out-of-fashion product.
Implementing the Plan and Evaluating Results
• MPR‘s contribution to the bottom line is difficult to measure,

because it is used along with other promotional tools.
• The three most commonly used measures of MPR

effectiveness are:
a. Number of exposures
b. Awareness, comprehension, or attitude change
c. Contribution to sales and profits
• The easiest measure of MPR effectiveness is the number of

exposures carried by the media.
• Limitations of measuring the number of exposures:
– This measure is not very satisfying because it contains no

indication of how many people actually read, heard, or recalled
the message and what they thought afterward; nor does it contain
information on the net audience reached, because publications
overlap in readership.
– Because publicity‘s goal is reach, and not frequency, it would be

more useful to know the number of unduplicated exposures.
• A better measure is the change in product awareness,

comprehension, or attitude resulting from the MPR campaign
(after allowing for the effect of other promotional tools).
– For example, how many people recall hearing the news item?
– How many told others about it (a measure of word of mouth)?
– How many changed their minds after hearing it?
Schema for Chapter Eighteen
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Marketing Management:

1. What steps are required in developing an advertising

2. How should sales promotion decisions be made?

3. What are the guidelines for effective brand-building events

4. How can companies exploit the potential of public relations

• Although there has been an enormous increase in the use of

• To generate consumer interest and sales, mass media must

• Advertising can be a cost-effective way to disseminate

• In developing an advertising program, marketing managers

1. Mission: What are the advertising objectives?

2. Money: How much to spend?

3. Message: What message should be sent?

4. Media: What media should be used?

5. Measurement: How should the results be evaluated?

• The advertising objectives must flow from prior decisions on

• An advertising objective (or goal) is a specific communication

To increase among 30 million Indonesian car owners the

• Advertising objectives can be classified according to whether

• Each aim at different stages in the hierarchy of effects

1. Informative advertising aims to create brand awareness and

2. Persuasive advertising aims to create liking, preference,

3. Reminder advertising aims to stimulate repeat purchase of

4. Reinforcement advertising aims to convince purchasers that

• How does a company know if it is spending the right amount?

• Although advertising is treated as a current expense, part of

• Is money spent on advertising an expense or an investment?

When $5 million is spent on capital equipment, the equipment may be

2. Market share and consumer base—High-market-share

4. Advertising frequency—The number of repetitions needed to put

5. Product substitutability—Brands in less well-differentiated or

• The predominant response function for advertising is often

• When consumer response is S-shaped, some positive amount

• In designing and evaluating an ad campaign, marketers

• To develop a message strategy, advertisers go through three

• Advertisers are always seeking ―the big idea‖ that connects

• Fresh insights are important for avoiding using the same

• A good ad normally focuses on one or two core selling

• As part of refining the brand positioning, the advertiser

• Once they find an effective appeal, advertisers should

• This is an elaboration of the positioning statement and

• How many alternative ad themes should the advertiser create before

• Fortunately, the expense of creating rough ads is rapidly falling due to

• An ad agency‘s creative department can compose many alternative ads in a

• Marketers can also dramatically cut the cost of creatives by using

• An intimate knowledge of the local culture is important to

• Some ad agencies in Asia have implemented ―disaster

• Marketing Insight: ―Advertising Guidelines for Modern Asia‖

• Execution can be decisive.

• Every advertising medium has specific advantages and

• We review each medium.

Television is generally acknowledged as the most powerful

a. The wide reach translates to low cost per exposure.

• Television advertising also has its drawbacks.

a. Because of the fleeting nature of the message and the

• Properly designed and executed TV ads can improve brand

• Print media offers a stark contrast to broadcast media.

• Print media can provide much detailed product information

• However, the static nature of the visual images makes it

• It can also be a fairly passive medium.

• The two main print media—newspapers and magazines—have

– Newspapers are timely and pervasive.

– Magazines are more effective at building user and usage imagery.

• Format elements such as ad size, color, and illustration affect