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For use only withPerreault/Cannon/McCarthy or Perreault/McCarthy texts.© 2008 McGraw-Hill Companies, Inc.McGraw-Hill/Irwin

Advertising and Sales PromotionAdvertising and Sales Promotion

CHAPTER FIFTEEN

When we finish this lecture you should

1. Understand why a marketing manager sets specific objectives to guide the advertising effort.

2. Understand when the various kinds of advertising are needed.

3. Understand how to choose the “best” medium.

4. Understand the main ways that advertising on the Internet differs from advertising in other media.

When we finish this lecture you should

5. Understand how to plan the "best" message—that is, the copy thrust.

6. Understand what advertising agencies do and how they are paid.

7. Understand how to advertise legally.

8. Understand the importance and nature of sales promotion.

9. Know the advantages and limitations of different types of sales promotion.

Marketing Strategy Planning Process

CH 15: Advertising & Sales Promotion

CH 14: Personal CH 14: Personal Selling and Customer Selling and Customer ServiceService

CH 13: Promotion CH 13: Promotion Intro. To Integrated Intro. To Integrated Marketing Marketing CommunicationsCommunications

Advertising Advertising spendingspending

Advertising Advertising strategy strategy decisionsdecisions

Advertising Advertising and the lawand the law

Sales Sales promotion promotion decisionsdecisions

Strategy Planning, Advertising, and Sales Promotion (Exhibit 15-1)

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

The Decision to Position a New Product

International Dimensions are Important

Advertising Spending as Percent of Sales for Illustrative Product Categories (Exhibit 15-2a)

Retail Ad Spending (Exhibit 15-2b)

Obtain OutletsObtain Outlets

Ongoing ContactOngoing Contact

Support Sales ForceSupport Sales Force

Maintain RelationshipsMaintain Relationships

Get Immediate ActionGet Immediate ActionGet Immediate ActionGet Immediate Action

Obtain OutletsObtain Outlets

Introduce New ProductsIntroduce New Products

Position BrandsPosition Brands

Introduce New ProductsIntroduce New Products

Position BrandsPosition Brands

Ongoing ContactOngoing Contact

Support Sales ForceSupport Sales ForceAdvertisingAdvertisingObjectivesObjectivesShould beShould beSpecificSpecific

Setting Ad Objectives Is a Strategy Decision


What’s the Advertising Objective?

Objectives Guide Implementation (Exhibit 15-3)

Institutional Advertising

Institutional AdvertisingInstitutional Advertising

Institutional Advertising

Pioneering Advertising

Pioneering Advertising

Product Advertising

Product Advertising

Competitive Advertising

Competitive Advertising

Reminder Advertising

Reminder Advertising

DirectDirect IndirectIndirect ComparativeComparative

Types ofAdvertisingTypes of

Advertising

Objectives Determine the Kinds of Advertising (Exhibit 15-4)

Competitive Advertising Emphasizes Selective Demand

A Competitive Ad That’s Comparative


Comparative Advertising

U.S. versionU.S. version Japan versionJapan version

Reminder Advertising Reinforces a Favorable Relationship

Sheds Favorable Light




Connects Divisions of a Company




Advocates Causes and Ideas

Advocates Causes and Ideas

Institutional Advertising – Remember Our Name


Interactive Exercise: Types of Advertising

A television ad for Target encourages consumers

to go to their nearest Target store for a big end-of-

season sale coming up in two weeks. This type of

advertising is:

A. pioneering.

B. reminder.

C. indirect competitive.

D. direct competitive.

E. institutional.

Checking your knowledge

Community Bank sends an advertisement via direct mail to

several thousand customers, quoting special low financing

rates on new vehicles for a limited time only. The ad names

some other financial institutions and shows their respective

loan rates. Community Bank promises to beat any rate

offered for a comparable term. This type of advertising is:

A. pioneering.

B. indirect competitive.

C. comparative.

D. reminder.

E. institutional.


Cooperative Advertising


Integrated Communications






Advertising AllowancesAdvertising AllowancesAdvertising AllowancesAdvertising Allowances

KeyIssuesKey

Issues

Vertical Cooperation




Ethical ConcernsEthical Concerns

Coordinating Advertising Efforts with Cooperative Relationships

Promotion ObjectivesPromotion ObjectivesPromotion ObjectivesPromotion Objectives

Target Market CharacteristicsTarget Market CharacteristicsTarget Market CharacteristicsTarget Market Characteristics

Funds AvailableFunds AvailableFunds AvailableFunds Available

Nature of the MediaNature of the Media

Choosing the “Best” Medium – How To Deliver the Message

MediaMedia2004

spend.(billions)

2004 spend.

(billions)

2-year %

growth

2-year %

growthAdvantagesAdvantages DisadvantagesDisadvantages

Television & cableTelevision & cable

$67.8$67.8 25.3%25.3%Demonstrates well, good attention, wide reach

Demonstrates well, good attention, wide reach

Expensive in total, “clutter,” and less selective audience

Expensive in total, “clutter,” and less selective audience

Direct mailDirect mail

$52.2$52.2 16.816.8Selected audience, flexible, can personalize

Selected audience, flexible, can personalize

Relatively costly per contact, “junk mail,” hard to retain attention

Relatively costly per contact, “junk mail,” hard to retain attention

News-paperNews-paper

$46.6$46.6 5.95.9Flexible, timely, local marketFlexible, timely, local market

May be expensive, short life, no “pass along”

May be expensive, short life, no “pass along”

RadioRadio $19.6$19.6 9.59.5Wide reach, low costsegmented audienceWide reach, low costsegmented audience

Weak attention, many different rates, short exposure

Weak attention, many different rates, short exposure

Comparing Advertising Media (Exhibit 15-5)

MediaMedia2004

spend.(billions)

2004 spend.

(billions)

2-year %

growth

2-year %

growthAdvantagesAdvantages DisadvantagesDisadvantages

Yellow pagesYellow pages

$14.0$14.0 1.4%1.4%Reaches local customers seeking purchase info.

Reaches local customers seeking purchase info.

Many competitors listed in same place, hard to differentiate

Many competitors listed in same place, hard to differentiate

MagazineMagazine $12.3$12.3 11.811.8Very targeted, good detail, good “pass along”

Very targeted, good detail, good “pass along”

Inflexible, long lead timesInflexible, long lead times

InternetInternet $6.9$6.9 40.840.8

Ads link to more detailed site, some “pay for results,” easy to track results

Ads link to more detailed site, some “pay for results,” easy to track results

Hard to compare costs with other mediaHard to compare costs with other media

OutdoorOutdoor $5.8$5.8 11.511.5Flexible, repeat exposure, inexpensive

Flexible, repeat exposure, inexpensive

“Mass market,” very short exposure“Mass market,” very short exposure

Comparing Advertising Media (Exhibit 15-5)

Specialized Media Are

Gaining


Gaining


Gaining


Gaining

Traditional Media Are More

Focused


Focused


Focused


FocusedDirect Mail Has

GrownDirect Mail Has

Grown

KeyIssuesKey

Issues

Direct Mail Has Grown

Direct Mail Has Grown

“Must Buys” May Use Up

Funds

“Must Buys” May Use Up

Funds

An Emphasis on Targeting


Interactive Exercise: Promotion Planning

Need to Maintain Interest

Need to Maintain Interest

Pay for Performance

Pay for Performance

Pay for Performance

Pay for Performance

Search Ads Match

Consumer Keywords

Search Ads Match

Consumer Keywords

Search Ads Match

Consumer Keywords

Search Ads Match

Consumer Keywords

Some Sites Offer Better Targeting




Behavioral Targeting

Behavioral TargetingBehavioral Targeting

Behavioral Targeting

Direct Response Desired

Direct Response Desired

Direct ResponseDesired

Direct ResponseDesired

Taking Hold with

Advertisers

Taking Hold with

Advertisers

Taking Hold with

Advertisers

Taking Hold with

Advertisers

KeyIssuesKey

Issues

Advertising on the Internet

Planning the Best Message—Getting Attention

Obtain ActionObtain ActionObtain ActionObtain Action

Arouse DesireArouse DesireArouse DesireArouse Desire

Hold InterestHold InterestHold InterestHold Interest

Get AttentionGet AttentionGet AttentionGet Attention

Can Global Messages Work?Can Global Messages Work?

AIDA – Attention, Interest, Desire and Action


A Unique Selling Proposition

A famous athlete is featured in a commercial for a pain-

relieving rub that can help soothe muscle aches and pains.

He says, “If it works for me, it’ll surely work for you.” This

testimonial is mainly aimed at the _________ stage of the

AIDA model.

A. attention

B. interest

C. desire

D. action

E. confirmation


Organi-zation

Organi-zation

Largest agenciesLargest

agenciesHQ

locationHQ

location

2005 revenuebillions


Select clientsSelect clients

Omnicon GroupOmnicon Group

BBDO Worldwide, DDB Worldwide, TBWA Worldwide

BBDO Worldwide, DDB Worldwide, TBWA Worldwide

New YorkNew York $10.48$10.48DaimlerChrysler, IKEA, Exxon Mobil, Bud Light, McDonalds, Apple

DaimlerChrysler, IKEA, Exxon Mobil, Bud Light, McDonalds, Apple

WPP GroupWPP Group

J. W. Thompson, Oglivy & Mather, Grey Worldwide

J. W. Thompson, Oglivy & Mather, Grey Worldwide

LondonLondon $9.24$9.24Bayer, Ford, HSBC, Mattel, Diamond Trading Company, 3M

Bayer, Ford, HSBC, Mattel, Diamond Trading Company, 3M

Inter-public Group

Inter-public Group

McCann Erickson Worldwide, Foote Cone & Belding Worldwide, Lowe Worldwide

McCann Erickson Worldwide, Foote Cone & Belding Worldwide, Lowe Worldwide

New YorkNew York $6.27$6.27

John Deere, Cadbury Schweppes, Quiznos, AOL, Black & Decker, General Motors Europe

John Deere, Cadbury Schweppes, Quiznos, AOL, Black & Decker, General Motors Europe

Advertising Agencies Often Do the Work

Organi-zation

Organi-zation

Largest agenciesLargest

agenciesHQ

locationHQ

location



Select clientsSelect clients

DentsuDentsuDentsu, Colby & Partners, DCA Advertising

Dentsu, Colby & Partners, DCA Advertising

TokyoTokyo $2.97*$2.97*Kao, Toshiba, Canon, Matsushita, Hitachi, Shiseido

Kao, Toshiba, Canon, Matsushita, Hitachi, Shiseido

Publicis GroupPublicis Group

Publicis Worldwide, Leo Burnett Worldwide, Saatchi & Saatchi

Publicis Worldwide, Leo Burnett Worldwide, Saatchi & Saatchi

ParisParis $4.95$4.95

Coca-Cola, British Airways, Hewlett-Packard, Kellogg’s, Visa, Hallmark

Coca-Cola, British Airways, Hewlett-Packard, Kellogg’s, Visa, Hallmark

HavasHavasEuro RSCG Worldwide, MPG, Arnold Worldwide

Euro RSCG Worldwide, MPG, Arnold Worldwide

Suresnes France

Suresnes France

$1.75$1.75Sony, Hershey’s, Verizon, Peugeot, Lee Jeans, eBay in China

Sony, Hershey’s, Verizon, Peugeot, Lee Jeans, eBay in China

* 2004 revenues

Advertising Agencies Often Do the Work

Research and Testing May Improve Odds


Consider the Total Mix






Hindsight May Lead to Foresight

Hindsight May Lead to Foresight

Measuring Advertising Effectiveness is Not Easy

StandardsAre Changing




FTC Controls Unfair PracticesFTC Controls

Unfair PracticesFTC Controls

Unfair PracticesFTC Controls

Unfair Practices

Government May Say

What’s Fair

Government May Say

What’s Fair

Government May Say

What’s Fair

Support for Claims Is Fuzzy

Support for Claims Is Fuzzy

How to Avoid Unfair Advertising

Sales Promotion: Do Something Different to Stimulate Change (Exhibit 15-6)

Hard toManageHard toManage

Need For

Alternatives

Need For

Alternatives

Erodes Brand Loyalty

Erodes Brand Loyalty

NotFor

Amateurs

KeyProblems

Problems in Managing Sales Promotion

Different Types of Sales Promotion for Different Targets

You now

1. Understand why a marketing manager sets specific objectives to guide the advertising effort.

2. Understand when the various kinds of advertising are needed.

3. Understand how to choose the “best” medium.

4. Understand the main ways that advertising on the Internet differs from advertising in other media.

You now

5. Understand how to plan the "best" message—that is, the copy thrust.

6. Understand what advertising agencies do and how they are paid.

7. Understand how to advertise legally.

8. Understand the importance and nature of sales promotion.

9. Know the advantages and limitations of different types of sales promotion.

• Product advertising

• Institutional advertising

• Pioneering advertising

• Competitive advertising

• Direct type advertising

• Indirect type advertising

• Comparative advertising

• Reminder advertising

• Advertising allowances

• Cooperative advertising

• Copy thrust

• Advertising agencies

• Corrective advertising

Key Terms

mkt 16

Documents

gaining traditional

focused direct

comparing

work organi

indirect competitive

media 2004

sites offer

copy thrust