McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 18 Advertising and Sales Promotions

18-2 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Altoids and Ice Breakers Is it Liquid? Or is it Ice?

18-3 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising To be considered advertising: 1.Someone has paid to get the message shown. 2.Must be carried by some medium. 3.Legally the source of the message must be known or knowable. 4.A persuasive form of communication.

18-4 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Steps in Planning an Ad Campaign

18-5 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Identify Target Audience Tone of Message Media Selection Target Market

18-6 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Set Advertising Objectives Pull strategy Push strategy Advertising plan

18-7 Test Your Knowledge Which of the following attempts to motivate the retailers to purchase one firm’s product, rather than the products of competitors? A)advertising plan B)informative advertising C)push strategy D)pull strategy

18-8 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising Objectives Inform Persuade Remind

18-9 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Museum of Modern Art, NY Discussion question How does this ad inform, persuade, and remind?

18-10 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Informative Advertising Early in the PLC firms use informative advertising to educate consumers about the product/service.

18-11 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Persuasive Advertising Generally occurs in the growth and early maturity stages of the PLC when competition is most intense In the later stage of the PLC may be used to reposition an established brand

18-12 Reminder Advertising © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin After the products have gained market acceptance Top-of-the-mind- awareness Top-of-the-mind- awareness

18-13 Test Your Knowledge Quiznos comparing themselves against Subway and showing that their sandwiches have more meat is an example of _______________. A)reminder advertising B)informative advertising C)top-of-the-mind awareness D)persuasive advertising

18-14 Focus of Advertisements © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Product-focused advertisements Institutional advertisements

18-15 Primary versus Selective Demand © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

18-16 Social Marketing © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Public Service Advertising (PSA) Public Service Advertising (PSA) Under Federal Communication Commission rules broadcasters must devote a specific amount of free airtime to PSA’s

18-17 The AdCouncil © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

18-18 Ethical Dilemma 18.1: The TRUTH Takes Hold © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin How to get young consumers to quit smoking? Part of the tobacco settlement “raising generation that would be smoke free” TRUTH uses a hard-hitting media campaign In your face ads

18-19 Determining Advertising Budget Considerations: 1.Role that advertising plays in their attempt to meet their overall promotional objectives. 2.Expenditures vary over the course of the PLC. 3.Nature of the market and the product influence the size of the budget.

18-20 Convey the Message Unique selling proposition Boost Mobile….Where you at? Nokia….. Connecting People

18-21 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Appeal Emotional appeal Informational appeal

18-22 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Right Appeal to Change an Image How can a firm change its image using advertising?

18-23 Case in Point: Wal-Mart Challenge Answer Results To stop the trend of decreasing same store sales. Refocus advertising away from featuring the stores merchandise to appeal to more affluent consumer, and instead focus more on “political style” ads targeted at working families. Informs family of the amount ($2,300) Wal-Mart saves them per year. Ads are in test marketing, but will be launched using a national media buy.

18-24 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Evaluate and Select Media Media planning Media mix Media buy

18-25 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Mass and Niche Media Mass media reach large anonymous audience Niche media reach a smaller more targeted audience

18-26 Test Your Knowledge What type of media typically accounts for the largest portion of the media buy? A)Internet B)Television C)Direct mail D)Newspapers

18-27 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Choosing the Right Medium

18-28 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Choosing the Right Medium (continued)

18-29 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Determine the Advertising Schedule Continuous Pulsing Flighting

18-30 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Create Advertisements Create advertisements The type of medium determines the execution style Creativity plays a major role in the execution stage Creativity should not overshadow the message The execution style must match the medium and objectives

18-31 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Creative Elements What appeal is being used in this advertisement? Is this ad effective in delivering the selling message? Discussion question

18-32 Test Your Knowledge When employing a combination of media, why must advertisers maintain consistency across the execution styles? A)To deliver a consistent and compelling message B)To reduce costs on the advertising budget C)To impact the largest part of their target audience D)To increase exposure time

18-33 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Managing Creative Elements What to do when creative ads don’t deliver the selling message?

18-34 Case in Point: Volkswagen Challenge Answer Results To redefine ad strategy when sales are still lagging. Analysis of the current ad campaign revealed that though consumers loved the creative approach it was not translating into sales. Too many disparate ads. Return to a more coherent ad strategy centered around a consistent theme.

18-35 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Assess Impact Pretesting Tracking Posttesting

18-36 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Regulatory and Ethical Issues in Advertising

18-37 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Puffery

18-38 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Promotions Can be targeted at either the end user consumers or channel members Can be used in either push or pull strategies

18-39 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Types of Sales Promotion

18-40 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Promotion Discussion question What form of sales promotion is represented in this ad? Do you feel it is an effective promotion?

18-41 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Types of Sales Promotion (Continued)

18-42 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Using Sales Promotion Tools Cross-promoting Pop-up stores

18-43 Test Your Knowledge To achieve a successful cross-promotion, the two products must _______________. A)be in the same price range B)appeal to the same target market C)cause an emotional customer response D)not contain puffery

18-44 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Adding Value 18.1: The Cat’s Meow Meow Mix Company, has the leading dry cat food brand To launch its new wet food they wanted a unique promotion The used a pop-up store on 5 th Avenue in New York, for cats and their owners The store was so popular that people called wanting to open franchises

18-45 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Meow Mix Cafe

18-46 Chapter 18 Glossary © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising plan: A section of the firm’s overall marketing plan that explicitly outlines the objectives of the advertising campaign, how the campaign might accomplish those objectives, and how the firm can determine whether the campaign was successful. Continuous advertising schedule: Runs steadily throughout the year and therefore is suited to products and services that are consumed continually at relatively steady rates and that require a steady level of persuasive or reminder advertising. Cross-promoting: Efforts of two or more firms joining together to reach a specific target market. Flighting advertising schedule: An advertising schedule implemented in spurts, with periods of heavy advertising followed by periods of no advertising. Institutional advertisements: Used to inform, persuade, and remind consumers about issues related to places, politics, an industry, or a particular corporation. Media buy: The actual purchase of airtime or print pages. Media mix: The combination of the media used and the frequency of advertising in each medium. Media planning: The process of evaluating and selecting the media mix that will deliver a clear, consistent, compelling message to the intended audience. Pop-up stores: Temporary storefronts that exist for only a limited time and generally focus on a new product or a limited group of products offered by a retailer, manufacturer, or service provider; give consumers a chance to interact with the brand and build brand awareness, but are not designed primarily to sell the product. Posttesting: The evaluation of an IMC campaign’s impact after it is has been implemented. Pretesting: Assessments performed before an ad campaign; is implemented to ensure that the various elements are working in an integrated fashion and doing what they are intended to do.

18-47 Chapter 18 Glossary (continued) © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Product-focused advertisements: Used to inform, persuade, or remind consumers about a specific product or service. Public service advertising (PSA): Advertising that focuses on public welfare and generally is sponsored by nonprofit institutions, civic groups, religious organizations, trade associations, or political groups; a form of social marketing. Puffery: The legal exaggeration of praise, stopping just short of deception, lavished on a product. Pulsing advertising schedule: Combines the continuous and flighting schedules by maintaining a base level of advertising but increasing advertising intensity during certain periods. Sales promotions: Special incentives or excitement-building programs that encourage the purchase of a product or service, such as coupons, rebates, contests, free samples, and point-of-purchase displays. Social marketing: The application of marketing principles to a social issue to bring about attitudinal and behavioral change among the general public or a specific population segment. Tracking: Includes monitoring key indicators, such as daily or weekly sales volume, while the advertisement is running to shed light on any problems with the message or the medium. Top-of-the-mind awareness: A prominent place in people’s memories that triggers a response without them having to put any thought into it. Unique selling proposition: A strategy of differentiating a product by communicating its unique attributes; often becomes the common theme or slogan in the entire advertising campaign.