ADVERTISING AND PUBLIC RELATIONS

OBJECTIVES
- What is advertising and its role in marketing mix?
- How to develop an advertising program?
- What is PR and its role in marketing mix?
- Advertising or PR?

CHAPTER 15:
ADVERTISING AND PUBLIC RELATIONS

I. ADVERTISING
Objective 15-1 Define the role of advertising in the promotion mix

- Advertising: Any paid form of nonpersonal presentation and promotion of ideas,

goods, or services by an identified sponsor.
- Advertising is a good way to engage, inform, and persuade, whatever the purpose is.
- Marketing management must make 4 important decisions when developing an
advertising program:
II. MAJOR ADVERTISING DECISIONS
Objective 15-2 Describe the major advertising decisions involved in developing an
advertising plan

1. Setting Advertising Objectives

- Setting advertising objective should be based on decisions about the target market,
positioning, and the marketing mix, which define the job that advertising must do in
the context of the overall marketing strategy
- Advertising objective: A specific communication task to be accomplished with a
specific target audience during a specific period of time
+ Can be classified by their primary purpose - to inform, persuade, or remind
○ Informative advertising: used heavily when introducing a new product
category
Example: Early producers of all-electric vehicles (EVs) have to inform
consumers of the economic and performance benefits of EVs
○ Persuasive advertising: becomes more important as competition increases
Example: As EVs catch on, GM is now trying to persuade consumers that its
Chevy Bolt offers more value for the price than the Tesla Model 3 or Nissan
Leaf. Such advertising aims to engage customers and create brand preference.
The Chevy Bolt offers “Technology: Limitless. Seamless.” and “Affordable
electric for everyone.” Nissan’s Leaf promises “Electric power, instant thrill.”
→ Some persuasive advertising can become comparative advertising (attack
advertising): a company directly or indirectly compares its brand with
competitors. Comparative advertising now occurs in almost every product
category.
Example: Microsoft and Apple
○ Reminder advertising: helps mature products maintain customer relationships
and keep consumers thinking about them
Example:
Silk soy milk tells consumers to “Fall back in love with Soymilk”
Coca-Cola television ads help build and maintain the brand relationship rather
than inform consumers or persuade them to buy it in the short run.
→ Advertising helps move consumer through the buying process
 + Some advertising aims to move people to immediate action
Example: A direct-response television ad by Weight Watchers urges
consumers to go online and sign up right away
+ Many ads focus on building or strengthening long-term customer
relationships
Example: Nike video clip - everyday athletes work through extreme challenges
in their Nike gear

2. Setting the Advertising Budget

- Advertising budget: The dollars and other resources allocated to a product or a
company advertising program
+ 4 commonly used methods for setting promotion budgets - Chapter 14
+ Here we discuss some specific factors that should be considered when setting
the advertising budget
- Factors: often depends on brand’s stage in the product life cycle
+ New products: need large budgets to build awareness and to gain trial
+ Mature brands: require relatively low budgets
+ Brands in markets with many competitors and high advertising clutter: must
be advertised more heavily
+ Undifferentiated brands: require heavy advertising to set them apart
+ Brands which are well differentiated from competitors: ads can highlight
those differences to consumers
- Setting the advertising budget is no easy task:
+ How does a company know if it is spending the right amount, or spending it
on the right content and media?
+ Within the overall budget, specific media buys can be difficult to assess
+ Example: FIFA World Cup ads
- The advertising budget is one of the first to be cut in tough economic times
+ Short-run: little harm in sales
+ Long-run: damage brand’s image and market share
+ Companies that maintain/ increase their advertising spending while
competitors are decreasing theirs can gain a competitive advantage
+ Example: During Great Recession, Audi
3. Developing Advertising Strategy
- Advertising strategy: The strategy by which the company accomplishes its
advertising objectives. It consist of 2 key elements:
+ Creating advertising messages
+ Selecting advertising media
a. Creating the Advertising message and brand content: Advertising can succeed only
if it engages consumers and communicates well, especially in today’s costly and
cluttered advertising environment
- Breaking through the clutter
+ Today’s viewers are no longer captive audiences. They can easily skip, mute,
block, or avoid TV and digital content they don’t want to watch
+ Unless ads provide content that is engaging, useful, or entertaining, many
consumers will simply ignore or skip them
- Merging advertising and entertainment: To break through the clutter, marketers are
now merging advertising and entertainment to reach consumers with more engaging
content
+ This merging takes ½ forms: advertainment/ brand integrations
+ Advertainment’s goal:
. Make ads and brand content so entertaining or so useful that people want to
watch them (Example: Super Bowl)
. Create content forms that look less like ads and more like short films or
shows (Example: Google video documentary “Forward Rythm”)
+ Brand integrations (Branded entertainment): involve making the brand an
inseparable part of some other form of entertainment or content
. The most common form: product placements - embedding brands as props
within other programming
. A related form of brand integration is native advertising (sponsor content):
Advertising or other brand-produced online content that looks in form and
function like the other natural content surrounding it on a web or social media
platform
Example: article on The New York Times, brand-prepared videos, pictures,…
on Facebook, Youtube,...
 → Today’s marketers aim to make brand messages a part of the broader flow of

consumer content and conversation rather than an intrusion or interruption of it

- Message and content strategy: The 1st step in creating effective advertising content is
to plan a message strategy - the general message that will be communicated to
consumers
+ Message strategy tend to be plain
+ The advertiser must next develop a creative concept - the compelling “big
idea” that will bring an advertising message strategy to life in a distinctive and
memorable way
+ The creative concept will guide the choice of specific appeals to be used in the
campaign
+ Advertising appeals should have 3 characteristics: meaningful, believable,
distinctive
- Message execution: The advertiser must now turn the big idea into actual content
executions that will capture the target market’s attention and interest. The team can
choose from various execution styles - the approach, style, tone, words, and format
used for executing an advertising message
+ The advertiser also must choose a tone for the ad
. P&G: positive tone
. Doritos, Burger King: edgy humor
+ The advertiser must also use memorable and attention-getting words in the ad
. BMW: a BMW is a well-engineered automobile → “The ultimate driving

machine”
 + Format elements make a difference in an ad’s impact as well as in its cost
- Consumer-generated content: Taking advantage of today’s digital and social media,
companies are now tapping consumers for marketing content, message ideas, or even
actual ads and videos
+ If done well, user-generated content can
. incorporate the voice of the customer into brand messages
. generate greater customer engagement
+ Example: Tesla held a fan-made ad contest, with 3 winning “charmingly low-
budget commercial selected from 10 finalists by public voting (via Twitter
likes)
b. Selecting Advertising Media
- Advertising media: The vehicles through which advertising messages are delivered
to their intended audiences
- Steps in advertising media selection:
+ Determine reach, frequency, impact, and engagement
+ Choose among major media types
+ Select specific media vehicles
+ Choose media timing
- Determine react, frequency, impact, and engagement
+ Reach: the percentage of people in the target market who are exposed to an ad
campaign in a given period of time
Example: the advertiser might try to reach 70% of the target market during the
first 3 months of a campaign
+ Frequency: a measure of how many times the average person in the target
market is exposed to a message
Example: the advertiser might want an average exposure frequency of 3
+ Media impact: qualitative value of message exposure through a given medium
Example: the same message in 1 magazine may be more believable than in
another
for products that need to be demonstrated, television ads/ online
video content may have more impact (because of sound, motion,
and sight)
+ An advertiser must choose media that will engage consumers rather than
simply reach them
 Example: Adidas - wanted to connect personally with avid runners and
influencers - launched a “Here to Create Legend” campaign that created
personalized highlight videos for each of 30,000 marathon participants
- Choose among major media-types
+ Today’s marketers now employ a full mix of paid, owned, earned, and shared
media that create and deliver engaging brand content to target consumers
+ Trend:
. Collection of alternative media
. Rapid growth in the number of media multitaskers (Example: using
smartphone while watching TV)
- Select specific media vehicles
+ Media vehicles - specific media within each general media type
Example: TV vehicle - VTV, magazine vehicle, online and mobile vehicle -
Facebook, Instagram,...
+ Media planners:
. Must compute the cost per 1,000 persons reached by a vehicle. The media
planner may favor the vehicle that cost lower per 1,00 if their readers are
similar
. Must consider the costs of producing ads for different media
. Must balance media costs against several media effectiveness factors (1st:
evaluate the media vehicle’s audience quality - 2nd: consider audience
engagement - 3rd: assess the vehicle’s credibility)
 - Decide on media timing
+ Most firms do some seasonal advertising (Example: Tet Holiday)
+ Today’s online and social media let advertisers create content that
responds to events in real time
Example: Oreos

4. Evaluating Advertising Effectiveness and the Return on Advertising

Investment
- Return on advertising investment: The net return on advertising investment/ The
costs of the advertising investment
- Advertisers should evaluate 2 types of outcomes:
+ The communication effects: indicates whether the ads and media are
communicating the intended message well
+ The sale and profit effects: often more difficult to measure because
sales and profit are affected by many factors other than advertising.
Ways to measure the sales and profit effects:
. To statistically model how sales and profits move with advertising
spending over time
. Through experiments
Example: Coca-Cola
 5. Other advertising considerations
- In developing advertising strategies and programs, the company must address 3
additional questions
+ How will the company organize its advertising and marketing content
function? - Who will perform which advertising tasks?
+ How will the company adapt its advertising strategies and programs to
the complexities of international markets?
+ Is the company properly addressing issues of diversity, equity, and
inclusion in its ads and advertising strategy?
a. Organizing for Advertising
- Company vary a lot in how they manage the advertising function
+ Small companies: advertising might be handled by someone in the
sales department
+ Large companies: have advertising departments or use outside
advertising agencies
- Advertising agency: A marketing services firm that assists companies in planning,
preparing, implementing, and evaluating all or portions of their advertising programs
b. International Advertising Decisions
- International advertisers face complexities not encountered by domestic advertisers.
The most basic issue concerns the degree to which global advertising should be
adapted to various country markets.
- Some advertisers have attempted to support their global brands with highly
standardized worldwide advertising
Example: Coca Cola “Real Magic” theme, Oreo’s “Open up with Oreos”
c. Diversity, Equity, and Inclusion (DEI) in Advertising
- Example: Coca-Cola
- Diversity, equity, and inclusion (DEI) in advertising: Applying DEI values with
and within advertising to ensure full, accurate, and inclusive representations across
different gender, religious, racial, ethnic, nationality, ability, age, sexuality, and
socioeconomic groups.
+ Diversity: the presence of differences in an entity - races, gender, religion,
nationality, age, ability,...
 + Equity: ensure that everyone has access to the same resources and
opportunities
+ Inclusion: people from different groups feeling and being valued and
welcomed

III. PUBLIC RELATIONS

Objective 15-3 Define the role of public relations in the promotion mix

- Another major promotion tool, public relations (PR), consists of activities designed
to engage the company’s various publics and build good relations with them
- PR’s functions:

- PR is used to:
+ Promote products, people, place, ideas, activities, organizations, and nations
+ Build good relations with consumers, investors, the media, and their
communities
+ Help build support for newsworthy company events and actions
- The role and impact of PR
+ PR can engage consumers and make a brand part of their lives and
conversations at a much lower cost than advertising can
Example: PR campaign by large Wall Street investment firm State Street
Global Advisors
+ Responsible for creating relevant marketing content that draws consumers to a
brand rather than pushing messages out
→ PR should work hand in hand with advertising within an integrated marketing

communications program to help build customer engagement and relationships.

IV. MAJOR PUBLIC RELATIONS TOOLS
Objective 15-4 Explain how companies use PR to communicate with relevant publics

- News
- Special events
- Written materials to reach and influence their target market - annual reports, articles,
magazines
- Videos
- Corporate identity materials - logos, signs, business cards, buildings,...
- Public service activities

- The web and social media are also important PR channels

→ The firm’s PR should be blended smoothly with other promotion activities within the

company’s overall integrated marketing communications effort

CHAPTER 16:
PERSONAL SELLING AND SALES PROMOTION

I. PERSONAL SELLING
Objective 16-1 Discuss the role of a company’s salespeople in engaging customers,
creating customer value, and building customer relationships

1. The Nature of Personal Selling

- Personal selling: Personal presentations by the firm’s sales force for the purpose of
engaging customers, making sales, and building customer relationships
→ 1 of the oldest professions in the world
- Most salespeople are well-educated and well-trained professionals. They
+ Listen to customers
+ Assess customers needs
 + Organize the company’s efforts to solve customer problems
→ The best salespeople are the ones who work closely with customers for mutual

gain
- Example: P&G - “Customer Business Development”
- Salesperson: An individual who represents a company to customers by performing 1
or more of the following activities - prospecting, communicating, selling, servicing,
information gathering, and relationship building

2. The Role of the Sales Force

- Personal selling
+ Is the interpersonal arm of the promotion mix
+ Involve interpersonal interactions and engagement between salespeople and
individual customers
+ Can be very effective in complex selling situations
- The role of personal selling varies from company to company
+ No salespeople:
. Companies that sell only online
. Companies that sell through manufacturers’ reps, sales agents, or brokers

+ Sales force plays a major role

. Business that sales products and services (Example: Intel, Dupont) →

Salespeople work directly with the customers

. Consumer product companies (Example: Nike, P&G) → The sale force

plays an important BTS role, work with wholesalers and retailers

a. Linking the Company with Its Customers

- In many cases, salespeople serve 2 masters - the seller and the buyer
- They represent the company to customers
+ Find and develop new customers and communicate information about the
company’s products and services
 + Sell products by engaging customers and learning about their needs -
presenting solutions - answering objections - negotiating prices and terms -
closing sales - servicing accounts - maintaining account relationships
- → In fact, to many customers, the salesperson is the company
- They represent customers to the company
+ Relay customer concerns about the company products and actions back inside
to those who can handle them
+ Learn about customer needs and work with other marketing and nonmarketing
people in the company to develop greater customer value
b. Coordinating Marketing and Sales
- Ideally, the sales force and other marketing functions should work together closely to
jointly create value for customers. However, some companies still treat sales and
marketing as separated functions
→ 2 groups may not get along well → Damage customer relationships and

company performance
- Actions to bring marketing and sales functions closer
+ Increase communications by arranging joint meeting and spelling out
communication channels
+ Create opportunities for salespeople and marketers to work together
+ Create joint objectives and reward systems
+ Appoint a high-level marketing executive to oversee both

II. MANAGING THE SALES FORCE

Objective 16-2 Identify and explain the 6 major sales force management steps

- Sales force management: Analyzing, planning, implementing, and controlling sales

force activities
1. Designing the Sales Force Strategy and Structure
a. The Sales Force Structure A company can divide sales responsibilities along any of
several lines
- If the company sells only 1 product line to 1 industry with customers in many

locations → Territorial sales force structure

+ Territorial sales force structure: A sales force organization that assigns each
salesperson to an exclusive geographic territory in which that salesperson sells
the company’s full line
+ This organization
. Clearly defines each salesperson’s job and fixes accountability
. Increase the salesperson’s desire to build local customer relationship →

Improve selling effectiveness

. Each salesperson travels within a limited geographic area → Travel

expenses are small

+ TSFS often supported by many levels of sales management positions
Example: individual territory sales reps → Area managers → Regional

managers → Director of sales

- If the the company sells numerous and complex products → Product sales force

structure
+ Product sales force structure: A sales force organization in which
salespeople specialize in selling only a portion of the company’s products or
lines
- Using a customer (or market) sales force structure, a company organizes its sales
force along customer or industry lines.
+ Customer (or market) sales force structure: A sales force organization in
which salespeople specialize in selling only to certain customers or industries
+ Example: P&G sale reps → Customer Development (CBD) teams
Each CBD team is assigned to a major P&G customer (Walmart,
Safeway,...)

- When a company sells a wide variety of products to many types of customers over a
broad geographic area, it often employs a complex sales force structure, which
combines several types of organization.
+ Salespeople can be specialized by
. Customer and territory
. Product and territory
. Product and customer
. Territory, product, and customer.
+ Example: P&G - customer and territory

b. Sale Force Size

- May range in size from a few → tens of thousand
- A company might use some form of workload approach to set sales force size
+ Group account into different classes according to size, account status, or other
factors related to the amount of effort required to maintain the account

c. Other Sales Force Strategy and Structure Issues Sales management must also
determine who will be involved in the selling effort and how various sales and sales-
support people will work together

Outside and Inside Sales Forces

- Outside sales force (field sales force): Salespeople who travel to call on customers in
the field
- Inside sales force: Salespeople who conduct business from their offices via
telephone, online and social media interactions, or visits from prospective buyers
 → The use of inside sales has grown in recent years

→ Provide support to outside sales force and more

- COVID-19 → Trends: forcing salespeople to use remote phone, video,

technologies → The lines between outside and inside sales force have blurred
Team Selling
- Team selling: Using teams of people from sales, marketing, engineering, finance,
technical support, and even upper management to service large, complex accounts
+ Products become more complex and as customers grow larger and more

demanding → Most companies now use team selling

+ Example: the 200-person P&G Walmart Customer Business Development
team is a complete, multifunctional customer service unit

2. Recruiting and Selecting Salespeople

- Careful salesperson selection → increase overall sales force performance

- Poor selection → costly turnover

- The best salespeople possess four key talents
+ Intrinsic motivation - Money, recognition, satisfaction of competing and
winning, desire to provide service and build relationships
+ Disciplined work style - lay out detailed, organized plans and follow through
in a timely way
+ The ability to close a sale
+ The ability to build relationships with customers

3. Training Salespeople
- Training programs’ goals: Salespeople need to know about:
+ Customers and how to build relationships with them
+ Different types of customers and their needs, buying motives, buying habits
+ How to sell effectively and train them in the basics of the selling process
+ Company’s objectives, organization, products. and strategies of major
competitors
- Today, much training is through online
→ Cut down travel and other training costs
 → On-demand training available

4. Compensating Salespeople
- To attract good salespeople, a company must have an appealing compensation plan
- 4 elements of compensation
+ A fixed amount - salary
+ A variable amount - commissions/ bonuses
+ Expenses
+ Fringe benefits
- A good compensation plan both motivates salespeople and directs their activities
- Strategy: Acquire new business, grow rapidly, gain market share → Plan: Include a

larger commission component + A new account bonus to encourage high sales

performance and new account development

- Strategy: Maximize current account profitability → Plan: Contain a larger base-

salary component with additional incentives for current account sales or customer

satisfaction

→ More and more companies are moving away from high-commission plans.

Instead, companies are designing compensation plans that reward salespeople for

building customer relationships and growing the long-run value of each customer

5. Supervising and Motivating Salespeople

a. Supervising Salespeople The goal of supervision is to help salespeople “work smart”
by doing the right things in the right way
b. Motivating Salespeople The goal of motivation is to encourage salespeople to ‘work
hard’ and energetically toward sales force goals
- Sales quota A standard that states the amount a salesperson should sell and how sales
should be divided among the company’s products
→ If salespeople work smart and work hard, they will realize their full potential—

to their own and the company’s benefit

6. Evaluating Salespeople and Sales Force Performance
 - This process requires good feedback, which means getting regular information about
salespeople to evaluate their performance
- The most important source for managers to get information about its salespeople is
sales reports
- Sales management evaluates members of the sales force on their ability to “plan their
work and work their plan”
- How salesperson performance should be measured:
+ Customers satisfaction and customer retention
+ How well the salesperson met team sales quotas and individual sales quotas

7. Social Selling: Using Digital Sales Platforms and Tools

- Social selling: Using digital platforms and sales tools to engage customers, build
stronger customer relationships, and augment sales performance
- Social selling hasn’t really changed the fundamental of selling
- In today’s digital world, many customers no longer rely as much as they once did on
information and assistance provided by salespeople.
→ Social selling technologies are helping to make sales forces more efficient, cost-

effective, and productive. The technologies help salespeople do what good

salespeople have always done—build customer relationships by solving customer

problems—but do it better, faster, and cheaper

- Drawbacks:
+ For starters, it's not cheap
+ There are some things that you just can’t present or teach via internet

III. SALES PROMOTION

Objective 16-4 Explain how sales promotion campaigns and developed and implemented

- Personal selling (the interpersonal part of the promotion mix) and advertising often
work closely with another promotion tools: sales promotion
- Sale promotion: Short-term incentives to encourage the purchase or sale of a product
or a service
Example: Black Friday deals
1. Major Sales Promotion Tools
a. Consumer Promotions
- Consumer promotions:
+ Use to boost short term customer buying and engagement or enhance long-
term customer relationships
+ Include a wide range of tools - from samples, coupons, refunds, premiums,
and poin-of-purchase displays to contests, sweepstake, and event relationships
- Samples: offers of a trial amount of a product
+ The most effective and exspensive
+ When the COVID-19 pandemic restricted the use of in-person and in-store
sampling, many brands were forced to find innovative new sampling
approaches. Many increased their use of sampling by mail.
+ Example: Ben & Jerry’s Free Cone Day
- Coupons: certificates that save buyers money when they purchase specified products
+ Coupons can promote early trial of a new brand or stimulate sales of a mature
brand
+ Still popular, but has seen a steady decline in recent years
- Rebates (Cash refund): like coupons except that the price reduction occurs after the
purchase rather than at the retail outlet
- Price packs (cents-off deals): offer consumers savings off the regular price of a
product. The producer marks the reduced prices directly on the label or package
- Premiums: goods offered either free or at low cost as an incentive to buy a product
Example: McDonald: toys in Happy Meals
- Advertising specialities (Promotional products): useful articles imprinted with an
advertiser’s name, logo, or message that are given as gifts to consumer
Example: T-shirt, tote bags, caps,...
- Point-of-purchase (POP) promotion: include displays and demonstrations that take
place at the point of sale
- Contests, sweepstakes, games: give consumers the chance to win something
- Event marketing (event sponsorships): Creating a brand-marketing event or serving
as a sole or participating sponsor of events created by others
Example: Vans - The pop-up events feature custom skateboard, live music
performance,...

b. Trade Promotions
- Trade promotions: Sales promotion tools used to persuade resellers to carry a brand
- Trade promotion can pursue resellers to carry a brand, give it shelf space, promote it
in advertising, and push it to consumers
- Tools
+ Contests, premiums, displays
+ Straight discount
c. Business Promotions
- Business promotions are used to generate business leads, stimulate purchases,
reward customers, and motivate salespeople. Business promotions include many of
the same tools used for consumer or trade promotions.
- Here, we focus on two additional major business promotion tools: conventions and
trade shows and sales contests.
+ Conventions and trade shows: Firms selling to the industry show their
products at the trade show
+ A sales contest is a contest for salespeople or dealers to motivate them to
increase their sales performance over a given period