ADV3008 EXAM 3 REVIEW**SALES PROMOTION**Sales Promotion- 3 popular types-Trade shows- exhibition of product category vendors’ products; sales leads-EX: boat shows-Specialty items- keeps the company name in front of the customer; premium items, give aways-Samples- Short purchase cycle, lower priced items; trying product increases the likelihood of a purchase.**PUBLIC RELATIONS**Public Relations- management function, action oriented, understanding and goodwill, target specific publics.-Free media=no control of message, time, etc.Differences between Advertising and Public Relations-Goals-Advertising- Inform and persuade target to buy specific brands of products-PR- Develop understanding and goodwill.-Credibility- PR seen as more credible; messages appear in nonpaid media-Cost-Major advertising costs = media time & space-Major PR costs = non-media-Control- Advertising- more control over message; can always control-PR-less control over message; can’t always control.Interest-Advertising- editorial interest not very important; we don’t need to generate interest-PR – critical to success; we don’t need to generate interest-Personnel--Advertising- more likely to have a business background-PR- more likely to have a journalism background.Similarities between Advertising & PR-Stimulate interest in a target group-ADV- target market-PR – target public-Research based situation analysis- starts with research foundation-Specific objectives-Detailed knowledge of mediaReasons to use PR-Relatively inexpensive-compared to advertising-Cuts through advertising noise (clutter)-Highly credible-Develop new sales leads-Difficult to reach some publics w/ traditional forms of advertising.-Lobbying is an example of PRCorporate Image Advertising- an umbrella category of advertising.-Benefits to company image-Not specific to one product.-Corporate image advertising relationships to PR-Share the same objectives as PR-Understanding goodwill-Paid time provides a greater control over message and media-EX: Toyota trying to fix their image after the recall last year, ad fixed on overall image instead of 1 specific model.-Corporate image & product advertising differences-Direction-Overall image-Not specific products-Tangibility-Corporate image is less tangible than product attributes-Upper management involvement-entire company-Corporate image & product similarities-Gain attention-Involve audience-Build credibilityEX: BP showing real people; Bill Ford talking-Get action (get you to do something)-Types of corporate advertising messages-General Image- Most popular, designed to enhance the basic image of the company.-Financial- anything that deals with money; creates a favorable image in the financial community.-EX: Charles Schwaab-Advocacy- taking a side on something; attitude or behavior with the public on a specific issue, often controversial: alcohol ads, don’t drink and drive.-Recruiting- presents the company favorably to prospective employees-EX: Army-Special situation- corporate living-Corporate Advertising Problems-Specific purpose often lacking- lack of clear cut purpose-Limited results measurement-What works and what doesn’t work isn’t always known- little knowledge-Basic lack of research**BUDGET STRATEGIES**Predetermined methods- all financially oriented; allocation is DETERMINED IN ADVANCE of advertising task analysis.• Affordable- simple & most straight forward; non-advertising expenses and the desired profit are deducted from projected revenues, and part of what’s left in budget.Project Revenues – Nonadvertising Expense- Desired Profit-Problems- Least reliable-No situation analysis-Leads to under spending• Percent of sales - no residual-budget is some percent of PAST OR PROJECTED SALES-Problems-No situational analysis-Difficult to use with new products- no sales history to build trends with-May lead to under spending• Competitive Parity - leads to spending wars, competitive in its’ category/division-Company’s share of industry exp on advertising should= its market share- EX: Coke Classic (large) VS. Dr. pepper Cherry (small)• Objective & Task budgeting -Set objectives-Identify strategies-Estimate costs to do strategies-Complications-use of several media, vehicles, media-interaction with other marketing variables-interaction with marketplace variables-time to achieve objectives- is it long or short term campaign?• Budgeting for new products -Larger budgets needed- need to generate sales immediately; you spend on analysis, etc. but have no sales yet-Awareness-Trial- 50% of people-Double budget• Agency compensation -Commission- 15% of media billings-Fee- the role of the full service agency is changing and is more on a fee system-Combination-reduce media system & fee.-Other-Bonus-make a lot more on annual bonuses-Retainer- a fixed expense level, steady stream on income**RETAIL ADVERTISING**Retailing- online or brick & mortar; selling products directly to final consumers, personal use- non bus.Retailing advertising tasks-Create awareness within a store or chain-Create a unique position-store identity-Reduce excess inventory-Key- moving merchandise through the storeDifferences between retail & product advertising-Immediacy- generate sales to reduce inventory -Product vs. Location- retail advertising STRESSES LOCATION-Breadth of product line- balance advertising across thousands of products; store is constant-Geographic coverage- often focuses on a specific geographic areaTypes of retailer advertising-Regular price line advertising- est. for positioning of the store.-focus on product line and regular prices-Positioning advertising-Long term-EX: stapes=low prices-Sale advertising- MOST COMMON-Reduced prices for limited time, short-term response, creates a sense of urgency- before prices go back up, designed to move inventory.-Clearance advertising- MOST EXTREME, INTENSE-Huge markdowns, closeout sales, very immediate, inventory change over, least image oriented.Retail Media SelectionMedia selection issues-local media-Short-term resultsPrint media-Newspaper- geographic coverage & short term results-largest source of retail advertising-Magazines-Weekly/Monthly-Awareness building-Regular price line advertisingBroadcast-TV- high GRPs, short time period-effective for both sale and regular price line-Radio- the more narrow, the more specific-effective with narrow target marketsDirect Mail- minimal waste coverage-current customers (credit card have coupons)-Geographic
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