For use only with Perreault/Cannon/ McCarthy texts, © 2009 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Chapter 16 Advertising and Sales Promotion

1. 1.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. At the end of this presentation, you should be able to:

5. 5.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. At the end of this presentation, you should be able to:

Marketing Strategy Planning Process

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

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)

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

What’s the Advertising Objective? © 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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

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

Competitive Advertising Emphasizes Selective Demand

A Competitive Ad That’s Comparative

Reminder Advertising Reinforces a Favorable Relationship

Sheds Favorable Light Connects Divisions of a Company 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. A. pioneering. B. B. reminder. C. C. indirect competitive. D. D. direct competitive. E. 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. A. pioneering. B. B. indirect competitive. C. C. comparative. D. D. reminder. E. E. institutional. Checking Your Knowledge

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

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

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

Media 2008 spend. (billions) 2008 spend. (billions) % growth 2007 to 2008 Advantages Disadvantages Yellow pages $ % Reaches local customers seeking purchase info. Many competitors listed in same place, hard to differentiate Magazine $ Very targeted, good detail, good “pass along” Inflexible, long lead times Internet $ Ads link to more detailed site, some “pay for results,” easy to track results Hard to compare costs with other media Outdoor $ Flexible, repeat exposure, inexpensive “Mass market,” very short exposure Comparing Advertising Media (Exhibit 16-5)

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

Interactive Exercise: Promotion Planning

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

Planning the Best Message—Getting Attention

Planning the Best Message Example © 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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

A Unique Selling Proposition © 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

A Unique Selling Proposition © 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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. A. attention B. B. interest C. C. desire D. D. action E. E. confirmation Checking Your Knowledge

Organi- zation Organi- zation Largest agencies HQ location 2007 revenue billions 2007 revenue billions Select clients 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 London $12.38 Altria, American Express, Ford, GlaxcoSmithKline, IBM, P&G Inter- public DraftFCB, Lowe Worldwide, McCann Erickson Worldwide New York $6.55 GM, Johnson & Johnson, Microsoft, Unilever, UPS, Verizon Advertising Agencies Often Do the Work (Exhibit 16-7)

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

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

Standards Are Changing Standards Are Changing Government May Say What’s Fair Support for Claims Is Fuzzy Support for Claims Is Fuzzy How to Avoid Unfair Advertising FTC Controls Unfair Practices FTC Controls Unfair Practices

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

Hard to Manage Need For Alternatives Erodes Brand Loyalty Not For Amateurs Key Problems Problems in Managing Sales Promotion

Different Types of Sales Promotion for Different Targets

1. 1.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. You should now be able to:

5. 5.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. You should now be able to:

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