15-1 copyright 2007 mcgraw-hill australia pty ltd ppts t/a marketing: creating and delivering value...

15-1Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthyBy Carolin Plewa

Promotion: Advertising


Advertising

• Advertising= Involves non-personal communication with a determined message– The most visible and contentious aspect of marketing

• Marketing managers must decide– who is their target audience– what kind of advertising to use– how to reach customers (via which types of media)– what to say to them (the copy strategy)– who will do the work (the company’s own advertising department or

an outside agency?)


Figure 15.1 Strategy planning for advertising


The importance of advertising

• Advertising expenditure = Involves a huge amount of money– Expenditure has grown across the world – US accounts for about 50% of worldwide advertising budgets– Companies spend only a small percentage of sales on advertising– Major expense is for media time/space

• Work is done by relatively few people


Setting advertising objectives

• Help introduce new products to target markets• Help position the firm's brand or marketing mix by informing

and persuading target customers or intermediaries about its benefits

• Help obtain desirable outlets (distribution)• Provide ongoing contact with target customers • Pave the way for personal selling effort• Get immediate buying action• Help buyers confirm purchasing decisions


Figure 15.2 Examples of different types of advertising over adoption process stages


Types of advertising

• Product advertising= Tries to sell a specific product to final users or channel members– Pioneering advertising builds primary demand– Competitive advertising builds selective demand

• Corporate/institutional advertising= Tries to promote an organisation's image, reputation or ideas—rather

than a specific product


Exhibit 15.1c Product advertising aims to promote a product


Exhibit 15.2aCorporate advertising aims at creating a strong identify for the organisation -

http://www.qantas.com.au/travel/airlines/i-still-call-australia-home/global/en


Coordinating advertising efforts

• Vertical cooperation= Involves the cooperation of members from different levels of a

distribution channel– Is common in relation to advertising decisions

• Advertising allowances= Price reductions given to organisations in the channel to encourage

them to advertise or otherwise promote the supplier’s products locally

• Horizontal cooperation= Involves cooperation between several members at the same level of a

distribution channel– Often occurs in relation to advertising

Major advertising media

Traditional

• Magazines• Television• Newspapers• Radio• Outdoors• Cinema

http://www.abc.net.au/tv/gruentransfer/gruensessions.htm

New Digital Media

• Internet• Mobile• Social Media & New

Media

DVD on New Digital Media



Choosing the ‘best’ advertising medium

• Promotional objectives• Target market you need to reach• Funds available• Nature of the media

– Who it reaches– With what frequency– At what impact– At what cost

• Overall fit with the rest of the marketing mix


Radio & television – daytime/evening

41%

85%89%

38%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Daytime Evening

Television

Radio

Source: Adapted from “Radio’s Advantage: Advertising Effectiveness Study”, Commercial Radio Australia Ltd 2006


Table 15.2 Advantages and disadvantages of several types of media


Table 15.2 Advantages and disadvantages of several types of media (cont.)


Exhibit 15.3aTo attract attention, advertisers can use bold graphics, visual tricks and attractive celebrities

Good Ads vs Bad

• CLASS ACTIVITY

• Gruen Transfer Unilever Ad – Evolution• Gruen Transfer Screaming Ad

• What other ads can you remember as fitting into the good & bad categories and why?



Measuring advertising effectiveness

• Sales• Direct-response advertising• Pre-testing advertising• Attitude research• Laboratory-type devices• Split runs of advertisements• Customer recall


International aspects of advertising

• Legal aspects of advertising

In most countries, the government takes an active role in deciding what kinds of advertising are permitted, what is considered fair and what is inappropriate

• Global agencies for global advertising– Many agencies are small (10 or fewer employees)– Some large agencies have merged, creating mega-agencies


Table 15.3Top nine advertising agency supergroups and examples of products they advertise


Direct-response promotion

= Direct communication between a seller and the individual customer using a promotion method other than face-to-face personal selling

• Distinctive feature – It attempts to evoke a direct, measurable response from the customer

• Closely tied to the use of a database to target customers• Started with mail advertising, but has evolved to include

other media


Direct-response online

• Website – It is often part of a promotional mix– It can provide detailed information and links to outside sources of

information– A viewer can respond directly by clicking to obtain more detailed

information

• Portals – A small subset of the total number of websites account for a large

percentage of the potential audience– Portals are websites that act as a gateway to the Internet

• Targeting can be more precise– Context marketing– Pointcasting


Sales promotion

= Promotion activities (other than advertising, publicity and personal selling) that stimulate interest, trial or purchase

• May be focused at – channel members– final customers or users– employees

• Skill may be difficult to develop inside the company– A promotion activity is often designed and used only once

• Sales promotion spending is increasing and exceeds advertising spending


Table 15.4 Examples of sales promotion activities


Figure 15.3 Some possible effects of a sales promotion on sales


Sponsorship

= An investment in cash or kind (in an event, sport, art, person or idea) in exchange for access to the commercial potential of that event, sport, art, person or idea

• Not a new concept – traced back to ancient Rome and gladiatorial games

• Sport sponsorship is by far the most intensive form

• Sponsors– A wide range of possible objectives– A general lack of rigorous evaluation


Public relations and publicity

• Public relations (PR) – involves communicating with several interest groups—employees,

shareholders, governments and political parties, as well as customers and the general public

– is aimed at fostering positive publicity and may be used to counter negative publicity

• Publicity– comprises all word-of-mouth (negative or positive) and media

coverage– There is such a thing as negative publicity (including rumours and

myths)



• Brands that have been negatively impacted & how PR was used in the crisis management of the brand:– Nike: sponsorship of Tiger Woods, Lance Armstrong & Oscar Pitorius

http://www.thedrum.com/news/2013/02/20/oscar-pistorius-dropped-sponsors-nike-and-oakley– Gasp:

http://houseofturtle.net/2011/09/29/gasp-goes-viral-or-should-i-say-gaspfail/

– Qantas: grounding of aircraft fleet

– Top 10 Social Media Disasters 2011

https://www.youtube.com/watch?v=hsYMFSR9CUQ



CLASS ACTIVITY

• Read the PR Case Study and answer the questions• Research the recent horse meat PR disaster in the UK• How has McDonalds responded to this?• Why were they in a positive to use negative Pr to their

advantage?


Creating synergies

• Many tools– There is a wide array of tools in the promotional mix– There is an unlimited number of possible combinations

• The aim of marketers – to create synergy – to ensure that every promotional activity reinforces the desired image– For example, a sponsorship program that is not advertised is unlikely

to have the same impact as one which is advertised and used for PR and sales promotions purposes