The key challenges in measuring PR effectiveness are: - PR outcomes are often indirect and long-term, influencing perceptions over time rather than directly driving immediate sales. - Many external factors also influence perceptions and purchasing decisions, making it hard to isolate the impact of PR alone. - PR messages are often subtle and diffuse, reaching audiences through many different channels, making it difficult to track specific exposures or attribute changes to PR. The most common measures used are relatively crude proxies rather than direct measures of PR's impact on overall objectives like sales, market share, or brand equity.

1. Communicating Customer Value:
Advertising, Sales Promotion & PR
My Chinh, Vu

2. Learning Goals
1. Explore the roles & understand the objectives
of advertising, sales promotion, & public
relations
2. Facilitate understanding of those three tools
3. Explain how advertising, sales promotion, &
public relations work & understand the factors
that influence the use of those tools
4. Know how to best use advertising, sales
promotion & public relations in an organization

3. Advertising

4. Contents
What?
When?
Where?
How?
Why?

5. Advertising
Any paid form of
non-personal communication
about an organization, good, service,
or idea by an identified sponsor.

6. Characteristics of Advertising
• Can reach masses of geographically
dispersed buyers at a low cost per exposure
• Can repeat a message many times
• Consumers view advertised products as more
legitimate
• Is impersonal, one-way communication
• Can be very costly for some media types

7. Who uses Advertising?
• Business firms
• Not-for-profit organizations
• Professionals
• Social agencies
• Government

8. US ad expenditures (1998-2003)

9. 10 Leading Advertisers in 2005 in the US

10. Key advertising decisions
• Setting objectives
• Setting the budget
• Developing the advertising strategy
• Evaluating advertising campaigns

11. Key advertising decisions (2)
Advertising objectives can be
• Setting objectives classified by primary purpose:
• Setting the budget • Inform
• Developing the – Introducing new products
 Help stimulate & build initial
advertising strategy demand
• Evaluating advertising • Persuade
campaigns – Becoming more important as competition
increases  Help improve the competitive
status of a product
• Remind
– Most important for mature products
 Help maintain awareness of the
importance & usefulness of a product.

17. Key advertising decisions (3)
• Setting objectives • 5 popular budget setting
• Setting the budget methods
• Developing the • Several factors should be
advertising strategy considered when setting the ad
• Evaluating advertising budget:
– Stage in the PLC
campaigns
– Market share
– Level of competition
– Ad clutter
– Degree of brand differentiation

18. 5 popular budget setting methods
• Historical method
• Task-objective method:
Bottom-Up
• Percentage-of-sales method
• Competitive methods
• All-you-can-afford method

19. 5 popular budget setting methods (2)
• Common budgeting method.
• May be based on last year’s with a
Historical Method percentage increase.
• Nothing to do with advertising
objectives.
• Most common method.
Task-Objective Method:
• Looks at objectives set for each activity, &
Bottom-Up determines the cost of accomplishing each
objective.
Percentage-of-Sales Compares total sales with the total advertising
budget during a previous time period to
Method compute a percentage.

20. 5 popular budget setting methods (3)
Competitive Methods • Relates the amount invested in
advertising to the product’s
share of market.
• Must understand share-of-mind.
All You Can Afford
• Allocates whatever is left over to
Method advertising.
• Companies who use this don’t value
advertising very much.

21. Advertising expenditures as a
percentage of sales
Wal-Mart Corporation 0.34%
Sears, Roebuck & Co. 3.78%
Kmart Corp. 1.25%
Dayton Hudson Corp. 2.15%
J.C. Penney Co. 3.42%
Federated Dept. Stores 3.75%
May Dept. Stores Co. 3.43%
Woolworth Corporation 1.30%
Source: Retailing, 3rd Edition, Dunne & Lusch, 1999

22. Key advertising decisions (4)
• Setting objectives • Creative challenges: Advertising
• Setting the budget clutter
• Creating ad messages
• Developing the
– Message strategy
advertising strategy
• Creative concept/ Big Idea
• Evaluating advertising • Advertising appeal (Meaningful,
campaigns Believable, Distinctive)
– Message execution
• Many execution styles
• Tone ; Use memorable, attention-
getting words); Format (illustration,
headline, sound & colour)

25. Advertising Execution Styles
• Creative execution refers to the manner in which
an advertising appeal is carried out or
presented.
• A particular advertising appeal can be executed
in a variety of ways.
• The impact of the message depends not only
on what is said but also on how it is
said.
• Any message can be presented in different

26. Advertising Execution Styles (1)
1. Straight - sell or factual message
2. Scientific or technical evidence
3. Demonstration
4. Comparison
5. Testimonials
6. Slice of life

27. Advertising Execution Styles (2)
1. Animation
2. Personality symbols
3. Fantasy
4. Dramatization
5. Humour
6. Lifestyle

28. Advertising Execution Styles (3)
1. Mood or Image
2. Musical
3. Culture or Tradition
4. Surrogate
5. Social
6. Combinations

29. Key advertising decisions (5)
• Setting objectives • Select advertising media
• Setting the budget – Decide on level of reach,
• Developing the frequency & impact
advertising strategy – Choose among the major media
(cont.) types by considering:
• Evaluating advertising • Consumer media habits, nature of
the product, types of messages,
campaigns
and costs
– Select specific media vehicles
– Decide on media timing

30. Setting media objectives
• Reach: Percentage of people exposed to ad
• Frequency: Number of times a person is
exposed to ad
• Media Impact: The qualitative value of a
message exposure through a given medium.

31. Choosing the major media types
• Each media type has specific advantages &
disadvantages.
• The following points should take into consideration.
–Consumer media habits,
–Nature of the product,
–Types of messages,
–Costs,
–Media vehicles (E.g.: Newsweek)
 Factors need considering: Cost, Audience quality,
Audience engagement, Editorial quality

32. Major media types
• Newspapers (local, national, free, trade)
• Television (local, national, terrestrial, satellite)
• Direct Mail
• Radio
• Magazines
• Outdoor (e.g.: posters, bus sides)
• Internet

33. Media Alternatives
• Yellow Pages
• Transit advertising
• Electronic information terminals
• Shopping guides
• etc.

34. Advertising Scheduling
 On or just before big
buying days
 Concentrated on pay dates
 Periods of highest demand
 Period of highest CPM
 Habit (same day each
week)

35. Ad Spending Growth
Expenditures of 100 leading national advertisers
Outdoor 9.8%
Cable TV Network 11.0%
Internet 13.3%
Sunday Magazine 13.7%
Local Magazine 25.2%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Source: Advertising Age, 2005

36. Key Advertising Decisions
• Measuring communications effect
Copy testing
• Setting objectives – Viewer playback of what ad is saying
• Setting the budget – Cognitive response (thoughts while
• Developing the advertising watching)
strategy (cont.) – Motivation research (hidden meanings)
– Objective measures
• Evaluating advertising
– Theater testing
campaigns
– Day after recall (DAR)
• Measuring sales effect
– Compare past sales with past advertising
expenditures
– Experimental designs; scanner data, direct
response/ mail

37. 10 errors causing ineffective advertising (1)
• Bombarding the customer with so many
messages & sales that any single message or
sale tends to be discounted.
• The advertising was not creative or appealing.
• The advertising didn’t give all the needed
information.
• Advertising dollars were spread too thinly over
too many departments or merchandise lines.

38. 10 errors causing ineffective advertising (2)
• Poor internal communication among sales staff,
cashiers, stock staff, and management.
• Advertisement not directed at the proper target market.
• Not all media options are considered.
• Too many last-minute changes in the advertising copy.
• Retailer took co-op dollars just because they were “free”
& therefore presumably a good deal.
• Used a medium that reached too many people not in the
target market.

39. Sales Promotion

40. Contents
What?
When?
Where?
How?
Why?

41. Sales promotion
Sales promotion are short-term
incentives to encourage the purchase or
sale of a product or service.
GOOD ON YOUR NEXT SHOPPING ORDER
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42. Characteristics of Sales promotion
• Wide assortment of tools.
• Attracts consumer attention.
• Offers strong incentives to buy.
• Invites & rewards quick consumer response.
• Effects are short-lived.
• Should build long-term customer
relationships.

43. Reasons for
rapid growth of Sales promotion
• Greater focus on increasing sales
in the
short-term
• Greater competition
• Decline in advertising efficiency
• Consumers are more “deal-oriented”

44. Who does sales promotion target at?
• Final buyers
E.g.: Coupons/ Frequent shoppers
• Retailers/ Wholesalers
E.g.: Gifts, price breaks
• Business customers
• Members of the sales force
E.g.: Bonuses, training

45. Forms of Sales promotion
1. Consumer promotion
2. Trade promotion
3. Business promotion
4. Sales force promotions.

46. 1. Consumer promotion
Consumer promotion
is directed toward
ultimate users of the
good or service

47. Consumer promotion objectives
• Increase short-term sales
• Generate product trial
• Encourage consumers to
prefer a particular brand to
competitive
offerings
• Help build long-term
customer relationships

48. Consumer promotion tools
• Coupons • Patronage Rewards
• Cash Refunds/ Rebates • POP Displays
• Price Packs/ • Demonstrations
Money-off deals • Contests
• Samples • Sweepstakes
• Premiums • Games
• Advertising Specialties

55. Consumer promotion pitfalls
• Displaced sales (those who would buy anyway)
• Stocking up effect
• Reduction in profits
• Risk of reducing brand equity
• Cause consumers to expect price cuts

56. 2. Trade promotion
• Trade promotion are activities designed to
gain manufacturers', wholesalers', &
retailers' support for a product.
• More money is actually spent on promoting
to businesses than to consumers.

57. Trade promotion objectives
• Persuade retailers/ wholesalers to carry a brand
 Create initial distribution.
• Give a brand shelf space
(E.g. eye-level/ superior location).
• Push brand to customers.
• Promote a brand in advertising
• Maintain support for established brands
 Share of shelf (SOS) = Share of market
(SOM)

58. Trade promotion tools
• Price-offs • Premiums
• Allowances • Discounts
• Free goods • Push money
• Contests • Specialty advertising
• Buy-back guarantees (E.g. A give-away)

59. Concerns about trade promotion
• High cost; added to cost so higher price of
consumers
• Over-reliance on trade promotions to push
merchandise
• Often used for short-term sales goals
• Potential erosion of brand image
• Impact on small manufacturers

60. 3. Business promotion
Business promotions are directed at members
of the trade – wholesalers, distributors, &
retailers in order to
• stimulate demand in the short run
• help push the product through the
distribution channel more immediately.

61. Business promotion objectives
• Generate business leads
• Stimulate purchases
• Reward customers
• Motivate salespeople

62. Business promotion tools
• Conventions
• Trade shows
• Sales contests
• & many of the same tools used for
consumer or trade promotions.

63. Marketing in Action
The International Consumer Electronics trade show attracts over
20,000 exhibitors and over 130,000 visitors.

64. 4. Sales force promotion
Sales force promotion are schemes directed towards
the sales people to motivate them to put in more efforts
• to increase sales,
• to increase distribution,
• to promote new or seasonal products
• to sell more deals to resellers
• to develop prospects lists
• to build up morale & enthusiasm.

65. Sales force promotion objectives
• Encouraging more sales force support
for new or current products
• Signing up new accounts
• Getting market information

66. Major sales force promotion tools
• Sales contests
• Incentives
• Awards and prizes
• Premiums (gifts)
• Sales meetings
• Training
• Sales manuals

67. Key decisions when developing the
Sales promotion program
• Size of the incentive
• Conditions for participation
• Promotion & distribution of the actual
sales promotion program
• Length of the promotional program
• Evaluation

68. Evaluating Sales Promotions:
What Sales Promotions Can Achieve
• Get consumers to try a new product
• Stimulate the sales of products
• Neutralize competitive advertising &
sales promotions
• Encourage repeat usage by current users
• Reinforce advertising

69. Evaluating Sales Promotions:
What Sales Promotions Cannot Achieve
• Change the basic non-acceptance of an undesired
product
• Compensate for a poorly trained sales force
• Give consumers a compelling reason to continue
purchasing a product over the long run
• Permanently stop an established product’s
declining sales trend

70. Public Relations

71. Contents
What?
When?
Where?
How?
Why?

72. Public Relations
“PR practice is the planned &
sustained effort to establish &
maintain goodwill & mutual understanding
between an organization & its publics.”

73. PR objectives
Awareness
Motivational

74. Types of PR
Product PR
… focuses on raising awareness of a
particular product or service
WHILE
Corporate PR
… tries to positively portray a whole
company or brand

75. PR functions
Press
Relations
Product
Counseling
Publicity
Corporate
Lobbying Communications

76. Characteristics of PR
• Very believable
• Reaches people who avoid salespeople & ads
• Can dramatize a company or product
• Tends to be used as an afterthought
• Planned use can be effective & economical

77. PR – Pros & Cons
PROS CONS
• Credibility • Out-of-control
• Cost message after having
been released
• Avoidance of clutter
• Not completing the
• Lead generation communications
• Ability to reach specific process
groups • Not easy to measure
• Image building its effectiveness

78. How PR can help…
In general,
PR tactically manages
appropriate communication
between the organization & its stakeholders.
Notes:
Communication can influence behavior

79. In more detailed, PR can help ...
• Assist in the launch of new products
• Assist in repositioning a mature product
• Build interest in a product category
• Influence specific target groups
• Defend products that have encountered
public problems
• Build the corporate image in a way that
reflects favourably on its products

80. Major PR tools
• Publicity
(news release, feature article, captioned
photograph, press conference)
• Event sponsorship
(concert, sports competition, festival, play).
• Written materials
(brochures, newsletters, company magazines,
annual reports, news releases)
• Corporate identity material
(logos, business cards, signs, stationery)

81. From pizza to doctors, many magazines
and websites publish “Best of” lists.

82. Some examples of publicity through
the issuing of press releases

83. Some examples of event sponsorship

85. Criteria for the best choice of PR tool
• Composition of the target audience
• Response of media personnel
• Significance of the news item

86. PR Strategies
• Push strategy
• Pull strategy

87. Basic questions for any PR
executive
• What do I want to achieve? (objectives)
• Who do I want to talk to? (publics)
• What do I want to say? (messages)

88. Measuring PR effectiveness (1)
• PR’s contribution to the bottom line is
difficult to measure. Why?
• The 3 most commonly used measures of
PR effectiveness:
– Number of exposures -- the easiest way,
– Awareness/ attitude change, &
– Contribution to sales & profits.

89. Measuring PR effectiveness (2)
• To measure effectively, the PR objectives
needs to be defined clearly. Say,…
– The nature of the intended change
– The target public
– The outcome to be achieved
– The amount of change desired
– A target date for achieving the outcome.

90. Top 10 PR Mistakes
• Poor timing
• Poor choice of language
• Poorly written press releases
• Poor follow-up
• Too much hype
• Press releases without purpose
• No newspaper knowledge
• Lack of plan
• No help
• Staying inside the box

91. Quick review