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Chapter 16

Chapter 16. Advertising and Sales Promotion. www.mhhe.com/fourps. At the end of this presentation, you should be able to:. Understand why a marketing manager sets specific objectives to guide the advertising effort. Understand when the various kinds of advertising are needed.

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Chapter 16

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  1. Chapter 16 Advertising and Sales Promotion www.mhhe.com/fourps

  2. At the end of this presentation, you should be able to: • Understand why a marketing manager sets specific objectives to guide the advertising effort. • Understand when the various kinds of advertising are needed. • Understand how to choose the “best” medium. • Understand the main ways that advertising on the Internet differs from advertising in other media.

  3. At the end of this presentation, you should be able to: • Understand how to plan the "best" message—that is, the copy thrust. • Understand what advertising agencies do and how they are paid. • Understand how to advertise legally. • Understand the importance and nature of sales promotion. • Know the advantages and limitations of different types of sales promotion.

  4. Marketing Strategy Planning Process

  5. Strategy Planning, Advertising, and Sales Promotion(Exhibit 16-1) CH 15: Personal Selling and Customer Service CH 14: Promotion Intro. To Integrated Marketing Communications CH 16: Advertising & Sales Promotion Advertising spending Advertising strategy decisions Advertising and the law Sales promotion decisions

  6. International Dimensions Are Important

  7. Advertising Spending as Percent of Sales for Illustrative Product Categories(Exhibit 16-2a)

  8. Retail Ad Spending(Exhibit 16-2b)

  9. Setting Ad Objectives Is a Strategy Decision Position Brands Introduce New Products Obtain Outlets Ongoing Contact Advertising Objectives Should be Specific Support Sales Force Get Immediate Action Maintain Relationships

  10. Objectives Guide Implementation (Exhibit 16-3) Awareness Interest Evaluation and Trial • Teaser campaigns • Pioneering ads • Jingles/slogans • Viral advertising • Announcements • Informative or descriptive ads • Image/celebrity ads • Search ads • E-mail ads • Demonstration • Competitive ads • Persuasive copy • Comparative ads • Testimonials Decision Confirmation • Direct-action retail ads • Point-of-purchase ads • Price deal offers • Reminder ads • Informative “why” ads

  11. Objectives Determine the Kinds of Advertising(Exhibit 16-4) Types of Advertising Institutional Advertising Product Advertising Pioneering Advertising Competitive Advertising Reminder Advertising Direct Indirect Comparative

  12. Competitive Advertising Emphasizes Selective Demand

  13. A Competitive Ad That’s Comparative

  14. Reminder Advertising Reinforces a Favorable Relationship

  15. Institutional Advertising – Remember Our Name Connects Divisions of a Company Sheds Favorable Light Advocates Causes and Ideas

  16. Checking Your Knowledge • 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: • pioneering. • reminder. • indirect competitive. • direct competitive. • institutional.

  17. 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: • pioneering. • indirect competitive. • comparative. • reminder. • institutional.

  18. Coordinating Advertising Efforts with Cooperative Relationships Vertical Cooperation Advertising Allowances Key Issues Ethical Concerns Cooperative Advertising Integrated Communications

  19. Choosing the “Best” Medium – How To Deliver the Message Promotion Objectives Target Market Characteristics Funds Available Nature of the Media

  20. Television & cable $70.0 5.7% Demonstrations, good attention, wide reach, cable targets Expensive in total, “clutter” Direct mail $63.7 4.5 Selected audience, flexible, can personalize Relatively costly per contact, “junk mail,” hard to retain attention News-paper $42.1 - 1.8 Flexible, timely, local market May be expensive, short life, no “pass along” Radio $18.6 0.2 Wide reach, low cost segmented audience Weak attention, many different rates, short exposure Comparing Advertising Media (Exhibit 16-5) Media 2008 spend. (billions) % growth 2007 to 2008 Advantages Disadvantages

  21. Yellow pages $14.7 1.1% Reaches local customers seeking purchase info. Many competitors listed in same place, hard to differentiate Magazine $14.1 3.0 Very targeted, good detail, good “pass along” Inflexible, long lead times Internet $12.7 16.5 Ads link to more detailed site, some “pay for results,” easy to track results Hard to compare costs with other media Outdoor $6.6 6.1 Flexible, repeat exposure, inexpensive “Mass market,” very short exposure Comparing Advertising Media (Exhibit 16-5) Media 2008spend. (billions) % growth2007 to2008 Advantages Disadvantages

  22. An Emphasis on Targeting Direct Mail Has Grown Traditional Media Are More Focused Key Issues “Must Buys” May Use Up Funds Specialized Media Are Gaining

  23. Advertising on the Internet Direct Response Desired Influences Many Purchases Some Sites Offer Better Targeting Key Issues Need to Maintain Interest Search Ads Match Consumer Keywords Pay for Performance Behavioral Targeting

  24. Planning the Best Message—Getting Attention

  25. AIDA – Attention, Interest, Desire and Action Get Attention Hold Interest Arouse Desire Obtain Action Can Global Messages Work?

  26. Checking Your Knowledge • 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. • attention • interest • desire • action • confirmation

  27. WPP Group Inter-public Omnicon Group DraftFCB, Lowe Worldwide, McCann Erickson Worldwide BBDO Worldwide, DDB Worldwide, TBWA Worldwide Grey Worldwide, J WT, Oglivy & Mather Worldwide,Y & R New York New York London $12.38 $12.69 $6.55 Apple, Bud, ExxonMobil, FedEx, GE, Pepsi GM, Johnson & Johnson, Microsoft, Unilever, UPS, Verizon Altria, American Express, Ford, GlaxcoSmithKline, IBM, P&G Advertising Agencies Often Do the Work (Exhibit 16-7) Organi- zation Largest agencies HQ location 2007 revenue billions Select clients

  28. Publicis Groupe Aegis Group Dentsu Aegis Media, Isobar, Synovate Colby & Partners, Dentsu Leo Burnett Worldwide, Publicis Worldwide, Saatchi & Saatchi London Tokyo Paris $6.38 $2.93 $2.21 Canon, Hitachi, International Olympic Committee, Kao, Matsushita, Toshiba AT&T, Cablevision, Columbia House, Comcast, Green Mountain Energy, Qwest British Airways, Coca-Cola, Disney, Kellogg’s, L’Oreal, McDonald’s Advertising Agencies Often Do the Work(Exhibit 16-7) Organi- zation Largest agencies HQ location 2007 revenue billions Select clients

  29. Measuring Advertising Effectiveness is Not Easy Consider the Total Mix Research and Testing May Improve Odds Hindsight May Lead to Foresight

  30. How to Avoid Unfair Advertising Government May SayWhat’s Fair FTC Controls Unfair Practices Support for Claims Is Fuzzy StandardsAre Changing

  31. Sales Promotion: Do Something Different to Stimulate Change (Exhibit 16-8)

  32. Erodes Brand Loyalty Need For Alternatives NotForAmateurs Hard toManage Problems in Managing Sales Promotion KeyProblems

  33. Different Types of Sales Promotion for Different Targets

  34. You should now be able to: • Understand why a marketing manager sets specific objectives to guide the advertising effort. • Understand when the various kinds of advertising are needed. • Understand how to choose the “best” medium. • Understand the main ways that advertising on the Internet differs from advertising in other media.

  35. You should now be able to: • Understand how to plan the "best" message—that is, the copy thrust. • Understand what advertising agencies do and how they are paid. • Understand how to advertise legally. • Understand the importance and nature of sales promotion. • Know the advantages and limitations of different types of sales promotion.

  36. Key Terms • 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

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