Evaluating Results

MPR's contribution to the bottom line is difficult to measure, because it is used along with other promotional tools. If it is used before the other tools come into action, its media by establishing the ad's desired reach, frequency, and impact and then choosing the media that will deliver the desired results in terms of circulation, audience, effective audience, and effective ad-exposed audience; and (e) evaluate the communication and sales effects of advertising.

3. Sales promotion consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade.

4. Sales promotion includes tools for consumer promotion (samples, coupons, cash refund offers, prices off, premiums, prizes, patronage rewards, free trials, warranties, tie-in promotions, cross-promotions, point-of-purchase displays, and demonstrations); trade promotion (prices off, advertising and display allowances, and free goods); and business- and sales force promotion (trade shows and conventions, contests for sales reps, and specialty advertising).

5. In using sales promotion, a company must establish its objectives, select the tools, develop the program, pretest the program, implement and control it, and evaluate the results. Most people agree that sales promotion works to increase sales and market share in the short run, but does not have much effect in the long run. In addition, marketers face a series of challenges in most forms of sales promotion, especially the high costs of supporting them.

6. 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 or its individual products. Many companies today use marketing public relations (MPR) to support their marketing departments in corporate or product promotion and image making. MPR can affect public awareness at a fraction of the cost of advertising, and is often much more credible. The main tools of PR are publications, events, news, speeches, public-service activities, and identity media.

7. In considering when and how to use MPR, management must establish the marketing objectives, choose the PR messages and vehicles, implement the plan carefully, and evaluate the results. Results are usually evaluated in terms of number of exposures and cost savings; awareness, comprehension, or attitude changes; and sales-and-profit contribution.

APPLICATIONS

CONCEPTS

1. Your company knows that bad publicity could have a lasting negative effect on its future, yet it wants all levels of management to feel comfortable meeting the press with both good news and bad news. Individually or with a group, assist the public-relations staff in developing a 10-point media interview checklist. This checklist will be used by all managers who might possibly be questioned by either the print or electronic media.

Two points to get you started:

■ If a reporter calls, determine the reason for the call and the information sought. If you can't talk at the time or if you need additional information, promise to call the reporter back before his or her deadline. Then make sure you do it.

■ Don't expect the news story to be exactly the way you would have reported it or written it. Expect some confusion in the facts, but if the mistakes aren't major, don't ask for a correction.

2. Suppose a brand of aftershave lotion will be marked down $.09 for a limited period. (In other words, the manufacturer will sell the item to retailers or wholesalers for 9 cents less than its normal price.) The item sells regularly for $1.09, of which $.40 represents a contribution to the manufacturers' profits before marketing expenses. The brand manager expects a million bottles to be sold under this deal. The administrative costs of the promotion are estimated at $10,000.

a. Determine the total cost of this promotion.

b. Assume that the company expected to sell 800,000 bottles of the lotion without the promotion. Is the promotion worth undertaking?

3. A dog-food manufacturer is trying to choose between medium A and medium B. Medium A has 10,000,000 readers and charges $20,000 for a full-page ad ($2 per 1,000). Medium B has 15,000,000 readers and charges $25,000 for a full-page ad ($1.67 per 1,000). What other information does the dog-food manufacturer need before deciding which is the better medium?

part five

Managing and Delivering Marketing Programs

NOTES

part five

Managing and Delivering Marketing Programs

1. See Russell H. Colley, Defining Advertising Goals for Measured Advertising Results (New York: Association of National Advertisers, 1961).

2. See William L. Wilkie and Paul W. Farris, "Comparison Advertising: Problem and Potential," Journal of Marketing, October 1975, pp. 7-15.

3. See Randall L. Rose, Paul W. Miniard, Michael J. Barone, Kenneth C. Manning, and Brian D. Till, "When Persuasion Goes Undetected: The Case of Comparative Advertising," Journal of Marketing Research, August 1993, pp. 315-30; Sanjay Putrevu and Kenneth R. Lord, "Comparative and Noncomparative Advertising: Attitudinal Effects under Cognitive and Affective Involvement Conditions," Journal of Advertising, June 1994, pp. 77-91; Dhruv Grewal, Sukumar Kavanoor, and James Barnes, "Comparative Versus Noncom-parative Advertising: A Meta-Analysis," Journal of Marketing, October 1997, pp. 1-15; Dhruv Grewal, Kent B. Monroe, and P. Krishnan, "The Effects of Price-Comparison Advertising on Buyers' Perceptions of Acquisition Value, Transaction Value, and Behavioral Intentions," Journal of Marketing, April 1998, pp. 46-59.

4. For a good discussion, see David A. Aaker and James M. Carman, "Are You Overad-vertising?" Journal of Advertising Research, August-September 1982, pp. 57-70.

5. See Donald E. Schultz, Dennis Martin, and William P. Brown, Strategic Advertising Campaigns (Chicago: Crain Books, 1984), pp. 192-97.

6. M. L. Vidale and H. R. Wolfe, "An Operations-Research Study of Sales Response to Advertising," Operations Research, June 1957, pp. 370-81.

7. John D. C. Little, "A Model of Adaptive Control of Promotional Spending," Operations Research, November 1966, pp. 1075-97.

8. For additional models for setting the advertising budget, see Gary L. Lilien, Philip Kotler, and K. Sridhar Moorthy, Marketing Models (Upper Saddle River, NJ: Prentice Hall, 1992), ch. 6.

9. "The Best Awards: Retail/Fast-Food," Advertising Age, May 18, 1998, p S8; Karen Benezra, "Taco Bell Pooch Walks the Merch Path," Brandweek, June 8, 1998, p. 46; Bob Garfield, "Perspicacious Pooch Scores for Taco Bell," Advertising Age, March 9, 1998, p. 53.

10. Michael Wilke, "Carville, Matalin Talk Up Alka-Seltzer Brand," Advertising Age, November 23, 1998, p. 26.

11. See "Keep Listening to That Wee, Small Voice," in Communications of an Advertising Man (Chicago: Leo Burnett Co., 1961), p. 61.

12. John C. Maloney, "Marketing Decisions and Attitude Research," in Effective Marketing Coordination, ed. George L. Baker Jr. (Chicago: American Marketing Association, 1961), pp. 595-618.

13. Dik Warren Twedt, "How to Plan New Products, Improve Old Ones, and Create Better Advertising," Journal of Marketing, January 1969, pp. 53-57.

14. See William A. Mindak and H. Malcolm Bybee, "Marketing Application to Fund Raising," Journal of Marketing, July 1971, pp. 13-18.

15. Lalita Manrai, "Effect of Labeling Strategy in Advertising: Self-Referencing versus Psychological Reactance" (Ph.D. dissertation, Northwestern University, 1987).

16. James B. Amdorfer, "Absolut Ads Sans Bottle Offer a Short-Story Series," Advertising Age, January 12, 1998, p. 8.

17. Yumiko Ono, "Bulletins from the Battle of Baldness Drug—Sports Figures Tout Rogaine for Pharmacia," Wall Street Journal, December 19, 1997, p. B1.

18. L. Greenland, "Is This the Era of Positioning?" Advertising Age, May 29, 1972.

19. David Ogilvy and Joel Raphaelson, "Research on Advertising Techniques That Work—And Don't Work," Harvard Business Review, July-August 1982, pp. 14-18.

20. Joanne Lip man, "It's It and That's a Shame: Why Are Some Slogans Losers?" Wall Street Journal, July 16, 1993, p. A4; Paul Farhi, "The Wrong One Baby, Uh-Uh: Has Madison Avenue Lost It?" Washington Post, February 28, 1993, p. C5.

21. For further reading, see Dorothy Cohen, Legal Issues in Marketing Decision Making (Cincinnati, OH: South-Western, 1995).

22. Kevin Goldman, "Advertising: From Witches to Anorexics: Critical Eyes Scrutinize Ads for Political Correctness," Wall Street Journal, May 19, 1994, p. B1.

23. Adapted from Sandra Cordon, "Where High Road Meets Bottom Line: Ethical Mutual Funds Avoid Companies Deemed Socially Irresponsible," The London Free Press, October 9, 1998, p. D3.

24. Schultz et al., Strategic Advertising Campaigns, p. 340.

25. See Herbert E. Krugman, "What Makes Advertising Effective?" Harvard Business Review, March-April 1975, p. 98.

26. See Peggy J. Kreshel, Kent M. Lancaster, and Margaret A. Toomey, "Advertising

Media Planning: How Leading Advertising Agencies Estimate Effective Reach and Frequency" (Urbana: University of Illinois, Department of Advertising, paper no. 20, January 1985). Also see Jack Z. Sissors and Lincoln Bumba, Advertising Media Planning, 3d ed. (Lincolnwood, IL: NTC Business Books, 1988), ch. 9. Roland T. Rust and Richard W. Oliver, "Notes and Comments: The Death of Advertising," Journal of Advertising, December 1994, pp. 71-77. Gene Accas, "Prime Prices Fall with Shares," Broadcasting & Cable, September 28, 1998, p. 36; "Hilfilger Hikes Ads to New Level: First Designer to Go Super Bowl Route," Daily News Record 28, no. 7 (January 16, 1998): 2. See Roland T. Rust, Advertising Media Models: A Practical Guide (Lexington, MA: Lexington Books, 1986). See Jay W. Forrester, "Advertising: A Problem in Industrial Dynamics," Harvard Business Review, March-April 1959, pp. 100-10.

See Amber G. Rao and Peter B. Miller, "Advertising/Sales Response Functions," Journal of Advertising Research, April 1975, pp. 7-15.

See Alfred A. Kuehn, "How Advertising Performance Depends on Other Marketing Factors," Journal of Advertising Research, March 1962, pp. 2-10. See also Hani I. Mesak, "An Aggregate Advertising Pulsing Model with Wearout Effects," Marketing Science, Summer 1992, pp. 310-26; and Fred M. Feinberg, "Pulsing Policies for Aggregate Advertising Models," Marketing Science, Summer 1992, pp. 221-34. Forrester, "Advertising," p. 102. Russell I. Haley, James Staffaroni, and Arthur Fox, "The Missing Measures of Copy Testing," Journal of Advertising Research, May-June 1994, pp. 46-56. (Also see this May-June 1994 issue of the Journal of Advertising Research for more articles on copy testing.) See J. O. Peckham, The Wheel of Marketing (Scarsdale, NY: privately printed, 1975), pp. 73-77.

Kristian S. Palda, The Measurement of Cumulative Advertising Effect (Upper Saddle River, NJ: Prentice Hall, 1964), p. 87. David B. Montgomery and Alvin J. Silk, "Estimating Dynamic Effects of Market Communications Expenditures," Management Science, June 1972, pp. 485-501. See Robert D. Buzzell, "E. I. Du Pont de Nemours & Co.: Measurement of Effects of Advertising," in his Mathematical Models and Marketing Management (Boston: Division of Research, Graduate School of

Business Administration, Harvard University, 1964), pp. 157-79.

40. See Glen L. Urban, "Allocating Ad Budgets Geographically," Journal of Advertising Research, December 1975, pp. 7-16.

41. See Nigel Hollis, "The Link Between TV Ad Awareness and Sales: New Evidence from Sales Response Modelling," Journal of the Market Research Society, January 1994, pp. 41-55.

42. In addition to the sources cited below, see David Walker and Tony M. Dubit-sky, "Why Liking Matters," Journal of Advertising Research, May-June 1994, pp. 9-18; Abhilasha Mehta, "How Advertising Response Modeling (ARM) Can Increase Ad Effectiveness," Journal of Advertising Research, May-June 1994, pp. 62-74; Karin Holstius, "Sales Response to Advertising," International Journal of Advertising 9, no. 1, (1990): 38-56; John Deighton, Caroline Henderson, and Scott Neslin, "The Effects of Advertising on Brand Switching and Repeat Purchasing," Journal of Marketing Research, February 1994, pp. 28-43; Anil Kaul and Dick R. Wittink, "Empirical Generalizations About the Impact of Advertising on Price Sensitivity and Price," Marketing Science 14, no. 3, pt. 1, (1995): G151-60; and Ajay Kalra and Ronald C. Goodstein, "The Impact of Advertising Positioning Strategies on Consumer Price Sensitivity," Journal of Marketing Research, May 1998, pp. 210-24.

43. Gerald J. Tellis, "Advertising Exposure, Loyalty, and Brand Purchase: A Two-Stage Model of Choice," Journal of Marketing Research, May 1988, pp. 134-44. Also see "It's Official: Some Ads Work," The Economist, April 1, 1995, p. 52; Dwight R. Riskey, "How TV Advertising Works: An Industry Response," Journal of Marketing Research, May 1997, pp. 292-93.

44. See Michael A. Kamins, Lawrence J. Marks, and Deborah Skinner, "Television Commercial Evaluation in the Context of Program Induced Mood: Congruency versus Consistency Effects," Journal of Advertising, June 1991, pp. 1-14.

45. See Kenneth R. Lord and Robert E. Burnkrant, "Attention versus Distraction: The Interactive Effect of Program Involvement and Attentional Devices on Commercial Processing," Journal of Advertising, March 1993, pp. 47-60; Kenneth R. Lord, Myung-Soo Lee, and Paul L. Sauer, "Program Context Antecedents of Attitude Toward Radio Commercials," Journal of the Academy of Marketing Science, Winter 1994, pp. 3-15.

46. See Yoav Ganzach and Nili Karashi, "Message Framing and Buying Behavior: A Field Experiment," Journal of Business Research, January 199S, pp. 11-17.

47. From Robert C. Blattberg and Scott A. Neslin, Sales Promotion: Concepts, Methods, and Strategies (Upper Saddle River, NJ: Prentice Hall, 1990). This text provides the most comprehensive and analytical treatment of sales promotion to date.

48. Roger A. Strang, "Sales Promotion—Fast Growth, Faulty Management," Harvard Business Review, July-August 1976 pp. 116-19.

49. For a good summary of the research on whether promotion erodes the consumer franchise of leading brands, see Blattberg and Neslin, Sales Promotion.

50. Robert George Brown, "Sales Response to Promotions and Advertising," Journal of Advertising Research, August 1974, pp. 36-37. Also see Carl F .Mela, Sunil Gupta, and Donald R. Lehmann, "The Long-Term Impact of Promotion and Advertising on Consumer Brand Choice," Journal of Marketing Research, May 1997, pp. 248-61; Purushottam Papatla and Laksh-man Krishmamurti, "Measuring the Dynamic Effects of Promotions on Brand Choice," Journal of Marketing Research, February 1996, pp. 20-3S.

51. F. Kent Mitchel, "Advertising/Promotion Budgets: How Did We Get Here, and What Do We Do Now?" Journal of Consumer Marketing, Fall 198S, pp. 40S-47.

52. See Paul W. Farris and John A. Quelch, "In Defense of Price Promotion," Sloan Management Review, Fall 1987, pp. 63-69.

53. For a model for setting sales promotions objectives, see David B. Jones, "Setting Promotional Goals: A Communications Relationship Model," Journal of Consumer Marketing 11, no. 1 (1994): 38-49.

54. See John C. Totten and Martin P. Block, Analyzing Sales Promotion: Text and Cases, 2d ed. (Chicago: Dartnell, 1994), pp. 69-70.

55. See Paul W. Farris and Kusum L. Ailawadi, "Retail Power: Monster or Mouse?" Journal of Retailing, Winter 1992, pp. 3S1-69.

56. See "Retailers Buy Far in Advance to Exploit Trade Promotions," Wall Street Journal, October 9, 1986, p. 3S; Rajiv Lal, J. Little, and J. M. Vilas-Boas, "A Theory of Forward Buying, Merchandising, and Trade Deals," Marketing Science 1S, no. 1 (1996), 21-37.

57. "Trade Promotion: Much Ado About part five Something," PROMO, October 1991, pp. Managing and 1S, 37, 40.

Delivering Marketing S8. Quoted from Kerry E. Smith, "Media Fu-

Programs sion," PROMO, May 1992, p. 29.

59. Arthur Stern, "Measuring the Effectiveness of Package Goods Promotion Strategies" (paper presented to the Association of National Advertisers, Glen Cove, NY, February 1978).

60. Strang, "Sales Promotion," p. 120.

61. Kurt H. Schaffir and H. George Trenten, Marketing Information Systems (New York: Amacom, 1973), p. 81.

62. See Magid M. Abraham and Leonard M. Lodish, "Getting the Most Out of Advertising and Promotion," Harvard Business Review, May-June 1990, pp. 50-60.

63. See Joe A. Dodson, Alice M. Tybout, and Brian Sternthal, "Impact of Deals and Deal Retraction on Brand Switching," Journal of Marketing Research, February 1978, pp. 72-81.

64. Books on sales promotion include Totten and Block, Analyzing Sales Promotion: Text and Cases; Don E. Schultz, William A. Robinson, and Lisa A. Petrison, Sales Promotion Essentials, 2d ed. (Lincolnwood, IL: NTC Business Books, 1994); John Wilmshurst, Below-the-Line Promotion (Oxford, England: Butterworth/Heinemann, 1993); and Robert C. Blattberg and Scott A. Neslin, Sales Promotion: Concepts, Methods, and Strategies (Upper Saddle River, NJ: Prentice Hall, 1990). For an expert systems approach to sales promotion, see John W. Keon and Judy Bayer, "An Expert Approach to Sales Promotion Management," Journal of Advertising Research, June-July 1986, pp. 19-26.

65. Adapted from Scott M. Cutlip, Allen H. Center, and Glen M. Broom, Effective Public Relations, 8th ed. (Upper Saddle River, NJ: Prentice Hall, 1997).

66. For an excellent account, see Thomas L. Harris, The Marketer's Guide to Public Relations (New York: John Wiley, 1991). Also see Value-Added Public Relations (Chicago: NTC Business Books, 1998)

67. Tom Duncan, A Study of How Manufacturers and Service Companies Perceive and Use Marketing Public Relations (Muncie, IN: Ball State University, December 1985). For more on how to contrast the effectiveness of advertising with the effectiveness of PR, see Kenneth R. Lord and Sanjay Putrevu, "Advertising and Publicity: An Information Processing Perspective," Journal of Economic Psychology, March 1993, pp. 57-84.

68. Kate Bertrand, "Intel Starts to Rebuild," Business Marketing, February 1995, pp. 1, 32; John Marko ff, "In About-face, Intel Will Swap Its Flawed Chip," New York Times, December 21, 1994, p. A1; T. R. Reid, "It's a Dangerous Precedent to Make the Pentium Promise," The Washington Post, December 26, 1994, p. WBIZ14^M

69. For further reading on cause-related marketing, see P. Rajan Varadarajan and Anil Menon, "Cause-Related Marketing: A Co-Alignment of Marketing Strategy and Corporate Philanthropy," Journal of Marketing, July 1988, pp. S8-74.

7D. Material adapted from Thomas L. Harris, "PR Gets Personal," Direct Marketing, April 1994, pp. 29-S2.

71. See Dwight W. Catherwood and Richard L. Van Kirk, The Complete Guide to Special Event Management (New York: John Wiley, 1992).

72. Arthur M. Merims, "Marketing's Stepchild: Product Publicity," Harvard Business Review, November-December 1972, pp. 111-12. Also see Katerine D. Paine, "There Is a Method for Measuring PR," Marketing News, November 6, 1987, p. 5.

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