LO1  Explain the differences between product advertising and institutional advertising and the variations within each type.

Product advertisements focus on selling a good or service and take three forms: Pioneering advertisements tell people what a product is, what it can do, and where it can be found; competitive advertisements persuade the target market to select the firm's brand rather than a competitor's; and reminder advertisements reinforce previous knowledge of a product. Institutional advertisements are used to build goodwill or an image for an organization. They include advocacy advertisements, which state the position of a company on an issue, and pioneering, competitive, and reminder advertisements, which are similar to the product ads but focused on the institution.

LO2  Describe the steps used to develop, execute, and evaluate an advertising program.

The promotion decision process can be applied to each of the promotional elements. The steps to develop an advertising program include identify the target audience, specify the advertising objectives, set the advertising budget, design the advertisement, create the message, select the media, and schedule the advertising. Executing the program requires pretesting, and evaluating the program requires posttesting.

LO3  Explain the advantages and disadvantages of alternative advertising media.

Television advertising reaches large audiences and uses picture, print, sound, and motion; its disadvantages, however, are that it is expensive and perishable. Radio advertising is inexpensive and can be placed quickly, but it has no visual element and is perishable. Magazine advertising can target specific audiences and can convey complex information, but it takes a long time to place the ad and is relatively expensive. Newspapers provide excellent coverage of local markets and can be changed quickly, but they have a short life span and poor color. Yellow pages advertising has a long use period and is available 24 hours per day; its disadvantages, however, are that there is a proliferation of directories and they cannot be updated frequently. Internet advertising can be interactive, but its effectiveness is difficult to measure. Outdoor advertising provides repeat exposures, but its message must be very short and simple. Direct mail can be targeted at very selective audiences, but its cost per contact is high.

LO4  Discuss the strengths and weaknesses of consumer oriented and trade-oriented sales promotions.

Coupons encourage retailer support but may delay consumer purchases. Deals reduce consumer risk but reduce perceived value. Premiums offer consumers additional merchandise they want, but they may be purchasing only for the premium. Contests create involvement but require creative thinking. Sweepstakes encourage repeat purchases, but sales drop after the sweepstakes. Samples encourage product trial but are expensive. Loyalty programs help create loyalty but are expensive to run. Displays provide visibility but are difficult to place in retail space. Rebates stimulate demand but are easily copied. Product placement provides a positive message in a noncommercial setting but is difficult to control. Trade-oriented sales promotions include (a) allowances and discounts, which increase purchases but may change retailer ordering patterns, (b) cooperative advertising, which encourages local advertising, and (c) salesforce training, which helps increase sales by providing the salespeople with product information and selling skills.

LO5  Recognize public relations as an important form of communication.

Public relations activities usually focus on communicating positive aspects of the business. A frequently used public relations tool is publicity. Publicity tools include new releases and news conferences. Nonprofit organization often use public service announcements.