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Chapter 2 Roles of Advertising. Objectives_1. Understand Primary goals and objectives of advertising Changing roles of advertising within the marketing communication mix Value of advertising and measuring return-on-investment (ROI). Objectives_2. Understand

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objectives 1
Objectives_1

Understand

  • Primary goals and objectives of advertising
  • Changing roles of advertising within the marketing communication mix
  • Value of advertising and measuring return-on-investment (ROI)
objectives 2
Objectives_2

Understand

  • Various categories of advertising
  • Advertising and building brand equity
  • Advertising of ideas
convergence and the advertising environment
Convergence and the Advertising Environment

Technological convergence

Business convergence

Content convergence

the shift in media spending
The Shift in Media Spending

Exhibit 2.1 shows

a 3-year forecast for

media spending.

components of a marketing plan
Components of a Marketing Plan
  • Overall goal(s) of the plan
  • Marketing objectives
  • Marketing strategy
  • Situational analysis
  • Problems and opportunities
  • Financial plan
  • Research
advertising tasks related to marketing plan
Advertising Tasks Related to Marketing Plan
  • Prospect identification
  • Consumer motivations
  • Advertising execution
  • Advertising budget and allocation
return on investment roi
Return-on-Investment (ROI)

Return-on-investment is a measure of the efficiency of a company based on the rate of return (profits) achieved by a certain level of investment on various business functions including advertising

integrated marketing
Integrated Marketing

Product

Personal selling

Price

Sales promotion

Distribution

Public relations

Communication

Advertising

advertising and imc defined
Advertising and IMC Defined
  • Advertising consists of paid notices from identified sponsors normally offered through communication media.
  • Integrated marketing communication (IMC) is the joint planning, execution, and coordination of all areas of marketing communication.
advertising s roles
Advertising’s Roles

Economic

Social/

cultural

advertising to diverse publics
Advertising to Diverse Publics

Distribution channel

Employees

Customers

Stockholders

Community at large

brand name
Brand Name
  • A brand name is the written or spoken part of a trademark, in contrast to the pictorial mark.
  • A brand extension is a new product introduction under an existing brand in order to leverage that brand’s equity.
brand extension strategies
Advantages

Saving money by not needing to build awareness for a new, unknown brand name

Adding equity to an existing brand name

Disadvantages

Damaging a core brand in the minds of loyal consumers with a failed introduction

Losing marketing focus/diluting efforts

Brand Extension Strategies
to promote a good product
To Promote a Good Product
  • Solve a problem
  • Consider social and psychological tendencies
  • Minimize fragmentation of products and audiences
  • Be aware of changing preferences in the marketplace
  • Build trust with consumers
  • Rely on research
approaches to achieving long term profitability
Approaches to Achieving Long-Term Profitability
  • Developing and expanding new-product niches to reach current customers
  • Emphasizing profits over sales volume
  • Emphasizing short-term market share rather than profitability
  • Tracking customers
the product life cycle
The Product Life Cycle
  • The process of a brand moving from introductions to maturity and, eventually, to either adaptation or demise.
    • Introduction
    • Growth
    • Maturity
    • Adaptation or Demise
the value gap
The Value Gap
  • The perceived difference between the price of a product and the value ascribed to it by consumers
  • Primary function of advertising is to create a positive gap between price and perceived value
advertising expenditures as a of revenue
Advertising Expenditures as a % of Revenue
  • Ranked 30 among
  • the leading national
  • advertisers in terms
  • of ad spend
  • Advertising was 28.6%
  • of revenues
  • Ranked 40 among
  • the leading national
  • Advertisers in terms
  • of ad spend
  • Advertising was .5%
  • of revenues
factors affecting advertising s role
Factors Affecting Advertising’s Role
  • Corporate preference for various segments of marketing communication channels
  • High sales volume tends to lower advertising to sales ratios
  • Industries with a number of competing firms and/or extensive competition
  • Product categories with widespread competition and little perceived product differentiation
  • Reversing sales or market share declines
advertising s role in marketing process
Advertising’s Role in Marketing Process

Intended time frame to see effect

Short-term Long-term

Direct-action,

short-term

Direct-action,

long-term

Direct

Indirect

Intended communication effect

Indirect-action,

short-term

Indirect-action,

long-term

advertising to the consumer
Advertising to the Consumer
  • National advertising
  • Retail (local) advertising
  • End-product advertising
  • Direct-response advertising
advertising to business
Advertising to Business
  • Trade advertising
  • Industrial advertising
  • Professional advertising
  • Corporate (institutional) advertising
b2b purchases decisions
B2B Purchases Decisions
  • Many decision makers
  • Precise, technical specifications
  • Planned purchases
  • Substantial dollar volumes
principles of service advertising
Principles of Service Advertising
  • Feature tangibles
  • Feature employees
  • Stress quality
for discussion
For Discussion
  • How has the emphasis on return-on-investment changed the relationship between advertising and the media?
  • How does advertising complement the other elements of marketing communications?
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