Chapter 16
Advertising and Sales
Promotion
For use only with
Perreault/Cannon/
McCarthy texts, © 2009
McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
At the end of this presentation, you should be
able to:
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.
At the end of this presentation, you should be
able to:
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
Strategy Planning, Advertising, and Sales
Promotion (Exhibit 16-1)
CH 14: Promotion
Intro. To Integrated
Marketing
Communications
Advertising
spending
CH 15: Personal
Selling and Customer
Service
Advertising
strategy
decisions
Advertising
and the law
CH 16: Advertising
& Sales Promotion
Sales
promotion
decisions
The Decision to Position a New Product
© 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
International
Dimensions
Are Important
Advertising Spending as Percent of Sales for
Illustrative Product Categories (Exhibit 16-2a)
Retail Ad Spending (Exhibit 16-2b)
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
What’s the Advertising Objective?
© 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Objectives Guide Implementation (Exhibit 16-3)
•
•
•
•
•
Awareness
Interest
Teaser campaigns
Pioneering ads
Jingles/slogans
Viral advertising
Announcements
• Informative or
descriptive ads
• Image/celebrity ads
• Search ads
• E-mail ads
• Demonstration
Decision
• Direct-action retail
ads
• Point-of-purchase
ads
• Price deal offers
•
•
•
•
Evaluation and
Trial
Competitive ads
Persuasive copy
Comparative ads
Testimonials
Confirmation
• Reminder ads
• Informative “why”
ads
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
Competitive
Advertising
Emphasizes
Selective
Demand
A Competitive
Ad That’s
Comparative
Reminder
Advertising
Reinforces a
Favorable
Relationship
Institutional Advertising – Remember Our
Name
Connects Divisions of
a Company
Sheds Favorable
Light
Advocates Causes
and Ideas
Interactive Exercise: Types of Advertising
Checking Your Knowledge
A television ad for Target encourages consumers
to go to their nearest Target store for a big end-ofseason 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.
B.
C.
D.
E.
pioneering.
indirect competitive.
comparative.
reminder.
institutional.
Coordinating Advertising Efforts with
Cooperative Relationships
Vertical
Cooperation
Advertising
Allowances
Key
Issues
Ethical Concerns
Integrated
Communications
Cooperative
Advertising
Choosing the “Best” Medium – How To Deliver
the Message
Promotion Objectives
Target Market
Characteristics
Funds Available
Nature of the Media
Comparing Advertising Media (Exhibit 16-5)
Media
Television
& cable
Direct
mail
Newspaper
Radio
2008
spend.
(billions)
$70.0
$63.7
$42.1
$18.6
%
growth
2007 to
2008
Advantages
5.7%
Demonstrations,
good attention, wide
reach, cable targets
Expensive in total,
“clutter”
4.5
Selected audience,
flexible, can
personalize
Relatively costly per
contact, “junk mail,”
hard to retain attention
- 1.8
Flexible, timely, local
market
May be expensive,
short life, no “pass
along”
0.2
Wide reach, low cost
segmented audience
Weak attention, many
different rates, short
exposure
Disadvantages
Comparing Advertising Media (Exhibit 16-5)
Media
Yellow
pages
Magazine
Internet
Outdoor
2008
spend.
(billions)
$14.7
$14.1
$12.7
$6.6
%
growth
2007 to
2008
Advantages
Disadvantages
1.1%
Reaches local
customers seeking
purchase info.
Many competitors
listed in same place,
hard to differentiate
3.0
Very targeted, good
detail, good “pass
along”
Inflexible, long lead
times
16.5
Ads link to more
detailed site, some
“pay for results,”
easy to track results
Hard to compare
costs with other media
6.1
Flexible, repeat
exposure,
inexpensive
“Mass market,” very
short exposure
An Emphasis on Targeting
Traditional
Media Are More
Focused
Direct Mail Has
Grown
Key
Issues
“Must Buys”
May Use Up
Funds
Specialized
Media Are
Gaining
Interactive Exercise: Promotion Planning
Advertising on the Internet
Influences
Many
Purchases
Direct
Response
Desired
Some Sites
Offer Better
Targeting
Key
Issues
Need to
Maintain
Interest
Pay for
Performance
Search Ads
Match
Consumer
Keywords
Behavioral
Targeting
Planning the Best Message—Getting Attention
Planning the Best Message Example
© 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
AIDA – Attention, Interest, Desire and Action
Get Attention
Hold Interest
Arouse Desire
Obtain Action
Can Global Messages Work?
A Unique Selling Proposition
© 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
A Unique Selling Proposition
© 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Checking Your Knowledge
A famous athlete is featured in a commercial for a painrelieving 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
Advertising Agencies Often Do the Work
(Exhibit 16-7)
Organization
Largest
agencies
HQ
location
2007
revenue
billions
Omnicon
Group
BBDO Worldwide,
DDB Worldwide,
TBWA Worldwide
New York
$12.69
Apple, Bud, ExxonMobil,
FedEx, GE, Pepsi
WPP
Group
Grey Worldwide,
J WT, Oglivy &
Mather Worldwide,
Y&R
$12.38
Altria, American Express,
Ford, GlaxcoSmithKline,
IBM, P&G
Interpublic
DraftFCB, Lowe
Worldwide,
McCann Erickson
Worldwide
$6.55
GM, Johnson & Johnson,
Microsoft, Unilever, UPS,
Verizon
London
New York
Select clients
Advertising Agencies Often Do the Work
(Exhibit 16-7)
Organization
Publicis
Groupe
Dentsu
Aegis
Group
Largest
agencies
Leo Burnett
Worldwide,
Publicis
Worldwide,
Saatchi & Saatchi
Colby & Partners,
Dentsu
Aegis Media,
Isobar, Synovate
HQ
location
Paris
Tokyo
London
2007
revenue
billions
Select clients
$6.38
British Airways, CocaCola, Disney, Kellogg’s,
L’Oreal, McDonald’s
$2.93
Canon, Hitachi,
International Olympic
Committee, Kao,
Matsushita, Toshiba
$2.21
AT&T, Cablevision,
Columbia House,
Comcast, Green
Mountain Energy, Qwest
Measuring Advertising Effectiveness is Not
Easy
Consider the
Total Mix
Research and Testing
May Improve Odds
Hindsight May Lead
to Foresight
How to Avoid Unfair Advertising
Government
May Say
What’s Fair
FTC Controls
Unfair Practices
Support for
Claims Is Fuzzy
Standards
Are Changing
Sales Promotion: Do Something Different to
Stimulate Change (Exhibit 16-8)
Problems in Managing Sales Promotion
Erodes
Brand
Loyalty
Need
For
Alternatives
Key
Problems
Not
For
Amateurs
Hard to
Manage
Different Types
of Sales
Promotion for
Different
Targets
You should now be able to:
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 should now be able to:
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.
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