CHAPTER FIFTEEN
Advertising and
Sales Promotion
For use only with
Perreault/Cannon/McCarthy
or Perreault/McCarthy texts.
© 2008 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
Strategy Planning, Advertising, and Sales
Promotion (Exhibit 15-1)
CH 13: Promotion
Intro. To Integrated
Marketing
Communications
Advertising
spending
CH 14: Personal
Selling and Customer
Service
Advertising
strategy
decisions
Advertising
and the law
CH 15: Advertising
& Sales Promotion
Sales
promotion
decisions
Advertising Spending as Percent of Sales for
Illustrative Product Categories (Exhibit 15-2a)
Retail Ad Spending (Exhibit 15-2b)
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
Objectives Guide Implementation (Exhibit 15-3)
Objectives Determine the Kinds of Advertising
(Exhibit 15-4)
Types of
Advertising
Product
Advertising
Institutional
Advertising
Pioneering
Advertising
Competitive
Advertising
Reminder
Advertising
Direct
Indirect
Comparative
Coordinating Advertising Efforts with Cooperative
Relationships
Vertical
Cooperation
Advertising
Allowances
Key
Issues
Ethical Concerns
Integrated
Communications
Cooperative
Advertising
Comparing Advertising Media (Exhibit 15-5)
Media
Television
& cable
Direct
mail
Newspaper
Radio
2004
spend.
(billions)
$67.8
$52.2
$46.6
$19.6
2-year
%
growth
Advantages
25.3%
Demonstrates well,
good attention, wide
reach
Expensive in total,
“clutter,” and less
selective audience
16.8
Selected audience,
flexible, can
personalize
Relatively costly per
contact, “junk mail,”
hard to retain attention
5.9
Flexible, timely, local
market
May be expensive,
short life, no “pass
along”
9.5
Wide reach, low cost
segmented audience
Weak attention, many
different rates, short
exposure
Disadvantages
Comparing Advertising Media (Exhibit 15-5)
Media
Yellow
pages
Magazine
Internet
Outdoor
2004
spend.
(billions)
$14.0
$12.3
$6.9
$5.8
2-year
%
growth
Advantages
Disadvantages
1.4%
Reaches local
customers seeking
purchase info.
Many competitors
listed in same place,
hard to differentiate
11.8
Very targeted, good
detail, good “pass
along”
Inflexible, long lead
times
40.8
Ads link to more
detailed site, some
“pay for results,”
easy to track results
Hard to compare
costs with other media
11.5
Flexible, repeat
exposure,
inexpensive
“Mass market,” very
short exposure
AIDA – Attention, Interest, Desire and Action
Get Attention
Hold Interest
Arouse Desire
Obtain Action
Can Global Messages Work?
Advertising Agencies Often Do the Work
Organization
Largest
agencies
Omnicon
Group
BBDO Worldwide,
DDB Worldwide,
TBWA Worldwide
WPP
Group
J. W. Thompson,
Oglivy & Mather,
Grey Worldwide
Interpublic
Group
McCann Erickson
Worldwide, Foote
Cone & Belding
Worldwide, Lowe
Worldwide
HQ
location
New York
London
New York
2005
revenue
billions
Select clients
$10.48
DaimlerChrysler, IKEA,
Exxon Mobil, Bud Light,
McDonalds, Apple
$9.24
Bayer, Ford, HSBC,
Mattel, Diamond Trading
Company, 3M
$6.27
John Deere, Cadbury
Schweppes, Quiznos,
AOL, Black & Decker,
General Motors Europe
Advertising Agencies Often Do the Work
Organization
Largest
agencies
HQ
location
Publicis
Group
Publicis
Worldwide, Leo
Burnett
Worldwide,
Saatchi & Saatchi
Dentsu
Dentsu, Colby &
Partners, DCA
Advertising
Tokyo
Havas
Euro RSCG
Worldwide, MPG,
Arnold Worldwide
Suresnes
France
* 2004 revenues
Paris
2005
revenue
billions
Select clients
$4.95
Coca-Cola, British
Airways, HewlettPackard, Kellogg’s, Visa,
Hallmark
$2.97*
Kao, Toshiba, Canon,
Matsushita, Hitachi,
Shiseido
$1.75
Sony, Hershey’s, Verizon,
Peugeot, Lee Jeans,
eBay in China
Sales Promotion: Do Something Different to
Stimulate Change (Exhibit 15-6)