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  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- 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
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on p. 384. At the end of this lecture, you should: 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.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on p. 384. At the end of this lecture, you should: 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.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on p. 384. This is the last chapter of three chapters that discuss issues important for Promotion. The Promotion part of the marketing mix involves telling target customers that the right Product is available at the right Place at the right Price.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Mass selling--advertising and sales promotion--play a central role in the promotion blend for many firms, especially in consumer markets. Marketing managers must make specific advertising strategy decisions to guide the work done by the firm and/or its advertising agency. Similarly, sales promotion objectives must be clear. This chapter starts by considering advertising spending and advertising strategy decisions, including how they are affected by laws, and then the focus turns to the challenges of managing different types of sales promotion. Key Issues The marketing manager should be very specific about the target audience the company is trying to reach. Advertising campaigns can appeal to very specific groups of people through careful selection of words, images, and symbols. Marketers must provide advertisers with accurate target market information. This chapter details advertising and sales promotion in four main discussion areas: A review of the amounts spent on advertising Advertising strategy decisions; Advertising and the law; and, Sales promotion decisions.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Courtesy of HUMMER and General Motors Corporation The marketing manager should set the overall direction of the advertising campaign. The ads we see are the outcome of this direction. This commercial was developed as part of a campaign to position the new midsize HUMMER H3 as an alternative to the competition in the midsize segment as well as versus the H1 and H2. The ad communicates the relative size of the vehicle and labels it the "latest big thing from HUMMER." Video Operation: Use the onscreen player controls to operate the video. To view the video at Full Screen, right-click the video and choose Full Screen. To go back to your presentation you can either hit the Escape key, right-click on the video and uncheck Full Screen or type Alt+Enter. You can do this at anytime during the video playback. Under certain circumstances, the video may not fill the video player window. To restore, right click the video player object and select Zoom 200%. The videos will only play in Slide Show View. Macros must be enabled in order to play the videos from within PowerPoint.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on p. 385. Summary Overview The basic strategy planning decisions for advertising and sales promotion are the same throughout the world, but the look and feel of advertising and sales promotion vary considerably from country to country. Key Issues Literacy rates, the availability of commercial television, language barriers, availability of Internet access, and cultural, social or behavioral influences may all affect the specific advertising strategy decisions that marketers make. One important international dimension is that some countries, such as Austria, do not allow comparative advertising—ads in which a firm names its competition. In this international photo, Coke uses hot-air balloons to deliver its message in North Africa and the Middle East. Discussion Question: What impact do the improvements in satellite television and Internet access have on advertising in the international arena? Sales promotion may also differ across countries. There may be: no room for end-of-aisle displays in stores; difficulty in distributing free samples or coupons; prohibitions against sweepstakes. Countries outside the U. S. may present a much different promotional environment.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview The total spending on advertising is big, and growing internationally . As a country’s economy develops, advertising expenditures increase. In the United States, advertising expenditures have passed the $276 billion mark—about half of the total amount spent worldwide. Key Issues Total spending on advertising seems large, but advertising only accounts for a small percentage of what people pay for goods and services. U.S. corporations spend an average of only about 2.5 percent of sales dollars on advertising. Worldwide, the percentage is even smaller. .However, as highlighted in the exhibit, the percentage spent on advertising by producers varies across product categories Discussion Question: What are some of the reasons for the disparity in the amount spent on advertising by different types of producers? This slide relates to material on pp. 386-87.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview This exhibit shows advertising expenditures as a percentage of sales for different types of retailers. Key Issues Some types of retailers spend more on advertising as a percentage of sales than do other types. Discussion Question: What are some of the reasons for the disparity in the amount spent on advertising by different types of retailers? Total advertising expenditures are large, but the industry is not very big in terms of the number of people employed in advertising . In the United States, only about 500,000 people work directly in advertising. Only about half of these people work for advertising agencies. The rest help to create or sell advertising or advertising media. Discussion Question: Many students study marketing with an eye toward working in an advertising agency. What implications does the size of the industry have for these aspiring advertising professionals? This slide relates to material on pp. 386-87.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Advertising objectives should be specific . They should be related to the overall marketing strategy and to the promotion jobs assigned to advertising. The marketing manager sets the overall direction for the advertising campaign, and it may incorporate one or more of the following types of objectives: Key Issues Position brands : Advertising can communicate product benefits to position the brand relative to others in the mind of the consumer. Introduce new products : Advertising can make target markets aware of new products and their benefits. Marketing managers can specify the percentage of the market that should be aware of the product after a certain period of time. Obtain outlets : Advertising tells customers where they can buy the product and may help encourage merchants to carry it. Provide ongoing contact : Advertising can be a “virtual salesperson,” reminding customers about the product and keeping in touch with them. Prepare the way for salespeople : Advertising may serve to “prime the pump” in advance of a sales call. Salespeople can then reference the ad in their presentations. Get immediate action : Advertising can be a good way to announce time-dated deals, discounts, or other availability requiring immediate customer action. Maintain relationships : Advertising can help maintain relationships with satisfied customers and confirm their original purchase decision. Discussion Question: Can you provide examples of ads that fall under each type of objective? This slide relates to material on pp. 387-88.  Indicates place where slide “builds” to include the corresponding point.       
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Courtesy of Perdue A commercial is most effective when its objective is specific. After viewing the following ad from Perdue, discuss whether you think the primary strategic objective is to: 1. Obtain outlets, 2. Provide ongoing contact, 3. Prepare the way for salespeople, 4. Get immediate action, or 5. Maintain relationships. Do you think any of the above could be secondary objectives? Video Operation: Use the onscreen player controls to operate the video. To view the video at Full Screen, right-click the video and choose Full Screen. To go back to your presentation you can either hit the Escape key, right-click on the video and uncheck Full Screen or type Alt+Enter. You can do this at anytime during the video playback. Under certain circumstances, the video may not fill the video player window. To restore, right click the video player object and select Zoom 200%. The videos will only play in Slide Show View. Macros must be enabled in order to play the videos from within PowerPoint.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview The more specific the advertising objective is, the more guidance it provides in getting specific results in the marketplace. In other words, if you want half the market, say so —and be specific about it. Key Issues Objectives also guide implementation of an advertising plan. As shown in this exhibit, the type of advertising that works for one stage of the adoption process may not work as well for other stages. To generate awareness , pioneering ads and advertising jingles or slogans are among the popular methods used. Discussion Question: Can you remember any ad slogans or jingles that left a lasting impression on you? What effect did they have on you? Creating interest may result from the use of image-based ads, celebrity endorsements, or product demonstrations, among other methods. Competitive ads featuring persuasive content, or comparative ads, are among the methods used to stimulate evaluation and trial among consumers. In order to motivate consumers to make a purchase decision , direct-response ads, point-of-purchase ads, and advertising containing price deals are all helpful. Finally, after a consumer makes a decision to purchase a product or service, reminder ads and informative ads help consumers to confirm and justify their purchases and reduce post-purchase dissonance. This slide relates to material on p. 388.  Indicates place where slide “builds” to include the corresponding point.     
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Advertising objectives largely determine which of two basic types of advertising to use -- product or institutional. Key Issues Institutional advertising : tries to promote the organization’s image, reputation, or ideas. It supports the overall objective of developing goodwill or improving an organization’s relations with various important groups. Product advertising tries to sell a product and can be targeted to channel members or final consumers. Product ads are designed to get consumers to know, like and remember an organization’s products or services. Key types of product advertising include: pioneering, competitive, and reminder advertising. Each of these will be discussed in turn. Pioneering advertising : tries to develop primary demand for a product category rather than demand for a specific product. It is appropriate for the early stages in a product’s life cycle when consumers still need to understand what the product category is all about. Discussion Question: When cellular phones were first introduced to the general public, many people had trouble understanding why they would need to have a portable or mobile phone. Are there other products currently in the market that are so new that consumers require pioneering ads to understand why they need the products? This slide relates to material on pp. 388-89.  Indicates place where slide “builds” to include the corresponding point.   
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on p. 389. Summary Overview Competitive advertising tries to develop selective demand for a specific product or brand. Competitive ads become more important as competition increases and as a product moves into maturity. Key Issues Direct type : competitive advertising that aims for immediate buying action. Indirect type : points out product advantages to consider in future buying decisions. In the U.S., marketing managers at Nestlé are constantly trying to stimulate selective demand in a very competitive market. In developing nations where candy is less popular, Nestlé faces the challenge of stimulating primary demand Discussion Question: Is this ad a direct competitive ad or an indirect competitive ad? Why?
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on p. 389. Summary Overview Comparative advertising goes head-to-head with competitive products by making specific brand comparisons. Even though comparative ads are common in the U.S., they are still banned in some other countries. Key Issues In the ad above, Clorox Disinfecting Wipes states that a competing wipe made by Windex doesn’t disinfect as well as its product. Some consumers might view all wipe products as having the same cleaning capabilities. Discussion Question: What ads for other products draw direct comparisons with other competing products? A key thing to remember in planning comparative ads is that the claims made about products should be supported by research. There may also be drawbacks to comparative ads if they are confusing to consumers, or if they focus on small, insignificant differences between products.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Courtesy of Apple Comparative advertising goes head-to-head with competitive products by making specific brand comparisons. Even through comparative ads are common in the United States, they are less accepted in many other countries. When Apple brought this advertising campaign to Japan, it had to make several changes. In Japan it is considered impolite to brag about one’s strengths. So Japanese versions of these ads utilized two local comedians and made subtle changes to the ads to suggest that Macs and PCs were actually not that different. Instead of showing Mac as “cool” and PC as “nerdy”, the ads show PC wearing work clothes and Mac wearing casual weekend attire. According to Oliver Reichenstein, a Tokyo based interactive brand consultant, “The western version of the Mac ads would backfire in Japan, because the Mac would appear to lack class.” [Reference and for more information, see “Mac and PC’s Overseas Adventures,” Wall Street Journal , March 1, 2007.] Video Operation: Use the onscreen player controls to operate the video. To view the video at Full Screen, right-click the video and choose Full Screen. To go back to your presentation you can either hit the Escape key, right-click on the video and uncheck Full Screen or type Alt+Enter. You can do this at anytime during the video playback. Under certain circumstances, the video may not fill the video player window. To restore, right click the video player object and select Zoom 200%. The videos will only play in Slide Show View. Macros must be enabled in order to play the videos from within PowerPoint.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on p. 389. Summary Overview Reminder advertising tries to keep the product’s name before the public. It is useful for supporting successful products well into the market maturity and sales decline stages of the product life cycle. Key Issues Buster Brown, displayed in the ad, is a well-known brand with a 100-year history. The ad above was run at back-to-school, shoe-buying time to remind parents of their positive feelings about Buster Brown shoes. The ads featured a toll-free number to call or website address so consumers could learn the location of the closest retailer.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Aside from all the types of product advertising described so far, the other major kind of advertising is institutional advertising. It usually focuses on the name and prestige of an organization or industry. It may seek to inform, persuade, or remind. Key Issues Companies sometimes use institutional advertising to: connect the various divisions of a large company in the consumer’s mind; present the company in a favorable light ; or advocate causes and ideas . Discussion Question: On many “news magazine” television programs in the United States, companies marketing business-to-business products run institutional ads. Why would they expose final consumers to these ads if they do not market products or services that are targeted at final consumers? This slide relates to material on p. 390.  Indicates place where slide “builds” to include the corresponding point.   
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- For complete information and suggestions on using this Interactive Exercise, please refer to the “Notes on the Interactive Exercise” section for this chapter in the Multimedia Lecture Support Package to Accompany Essentials of Marketing.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Answer: D Checking your knowledge (answer explanation): Competitive advertising tries to develop selective demand for a specific brand. By encouraging consumers to go to their nearest Target store for a large sale in two weeks, the ad is stressing an immediate buying action (direct type of competitive advertising). One could argue that the ad described in the question is an institutional ad because it is for the whole Target chain. However, because it attempts to develop selective demand for Target and encourages an immediate (within two weeks) purchase, the best answer selection is ‘D’. . This slide relates to material on p. 389.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Answer: C Checking your knowledge answer explanation: The Community Bank ad makes specific comparisons with other banks. This type of advertising is best described as comparative advertising. The best answer selection is ‘C’. This slide relates to material on p. 389.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Producers sometimes want advertising efforts to be handled further down the channel. Retailers may depend upon producers to provide support for their local advertising efforts. Vertical cooperative relationships can help advertisers at all levels of the channel to make the most efficient use of their advertising dollars. Key Issues Advertising allowances : price reductions to firms in the channel that encourage channel members to promote the product. Cooperative advertising : involves producers and middlemen sharing in ad costs. This practice helps the producer to get more promotion for the advertising dollar, and it helps the middlemen to compete locally. Integrated communications also come from cooperative relationships . If producers and middlemen coordinate their advertising efforts, they are likely to be more successful than if they worked separately. Sometimes, producers offer a master copy of an ad that can be “tagged” at the end with the contact information for local dealers. Ethical concerns may arise in these cooperative relationships. Retailers may abuse advertising allowances or cooperative advertising. Discussion Question: If a retailer uses cooperative ads to lure consumers into the store, only to sell them another brand of product, is this practice unethical ? How about if a middleman accepts advertising allowances, but runs no ads? Producers often follow up to ensure that promotional allowances and other assistance result in middlemen running ads and supporting the producer’s brand. This slide relates to material on pp. 390-91.  Indicates place where slide “builds” to include the corresponding point.     
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview There is no simple answer to the question, “Which is the “best” advertising medium?” Key Issues Choosing an advertising medium depends on : The organization’s promotion objectives. The characteristics of the target market. The funds available for advertising. The nature of the media—who is reached, with what frequency, with what impact, and at what cost. Before choosing the medium, the marketer must have specific promotion objectives . Some media are better than others at delivering a specific objective. The marketer must match the market with the media : specify the characteristics of the target market in order to select media that they hear, read, or see. Most major media do research to develop audience profiles. Profiles should include segmenting dimensions besides demographics. Discussion Question: Thinking back to Chapter 3 on market segmentation, what other segmenting dimensions are there besides demographics? Marketers should do their best to select media that attract a high percentage of the desired target market. Ad exposure to non-targeted consumers is wasteful. Some media help zero in on specific target markets . This slide relates to material on pp. 391-93.  Indicates place where slide “builds” to include the corresponding point.    
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview This exhibit compares the characteristics of several types of media. Note how their advantages and disadvantages vary. Key Issues Television provides a way to demonstrate products and is a good medium for getting attention. Television also offers wide reach. Disadvantages include expense, competition among lots of ads--“clutter”--and less-selective audiences Direct mail is very flexible, can be personalized, and is very selective. Disadvantages include expense per contact, “junk mail” image, and difficulty retaining attention. Newspapers offer flexibility, timely placement, and good local market coverage. Some disadvantages are expense (for some markets), short life, and no “pass along” readership. Radio offers wide reach, low cost, and it appeals to highly segmented audiences. Disadvantages include weak attention, short exposure, and varying rates.    This slide relates to material on p. 392.  Indicates place where slide “builds” to include the corresponding point.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview This exhibit compares the characteristics of several types of media. Note how their advantages and disadvantages vary. Key Issues Yellow Pages reach local customers who are seeking purchase information. However, competitors are also listed there and differentiation is difficult. Magazines are very targeted, provide good detail and excellent graphics, have high “pass-along” rates, and long shelf life. Disadvantages include inflexibility and long lead times. Internet . Internet ads link to more detailed website information, some with “pay for results” offers to the advertiser, but it’s difficult to compare total costs with other types of media. Outdoor advertising is flexible, inexpensive, and offers repeat exposures. However, exposure is very short and there is a lack of market segmentation. This slide relates to material on p. 392.  Indicates place where slide “builds” to include the corresponding point.   
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Most major media are now becoming more targeted to reach smaller, more defined target markets. Key Issues Direct mail has grown significantly because marketers can promote directly to consumers who are in a database. Computerized printing processes link the database to the piece being printed. Television has also become more targeted because of the growth in the number of cable channels and the use of infomercials—half hour television advertisements that often feature product demonstrations before live audiences. Discussion Question: For what products have you seen infomercials? Why do you think they are effective? Like television, radio formats and magazines have become more targeted. National magazines, such as Time, offer regional editions and special issues. In the business-to-business market, trade magazines are very focused on particular industries. Specialized media are small, but gaining . Examples include advertising on shopping carts, gasoline pumps, bike racks, and automatic teller machines. The more targeted the medium is, the more precisely a marketer can zero in on a particular target market. “ Must buys”may use up the available funds for advertising. A “must buy” is a medium that may be the only way to reach a particular audience, or it may be such an important medium that an advertiser can’t bypass it. This slide relates to material on pp. 393-94.  Indicates place where slide “builds” to include the corresponding point.    
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- The objective of this exercise is to show an example of the tradeoffs between different types of advertising. A marketing or advertising manager needs to be able to assess the pros and cons of different advertising methods in light of the characteristics of the target audience, the advertising and promotion objectives, and the available budget. Managers try to get the greatest return they can from their promotional dollars. This example shows how television advertising and direct mail promotion might be compared. Working through the exercise, the students will learn: How to compute “cost per thousand” (CPM); The meaning of television ratings data; The cost of running a commercial on a popular prime-time television show; How the cost of the commercial compares with the cost of a direct mail campaign; The advantages and disadvantages of TV advertising vs. direct mail. For more detailed instructions on how to use the Interactive Exercise, see the included Word document located in the assets folder for this chapter.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Internet advertising is taking hold as mainstream advertisers look for more efficient ways to reach target customers. Key Issues Internet ads seek a direct response . Internet ads take many forms, such as buttons, banner ads, animations, and pop-ups. By clicking on choices, the viewer directs the search for more information. Some consumers don’t want to respond, and many view Internet ads as annoying. And use software to eliminate them. Web surfers select sites that match their interests and specific needs, so some websites are better for reaching specific target customers than are others. Broader target markets can be reached on Web general interest portals like Yahoo or MSN. Search ads know what customers are looking for . Firms can pay search engines to display an ad that matches the content the customer is searching. Behavioral targeting delivers ads to consumers based on previous websites the consumer has visited or the content of a page being viewed. Many web sites now display an ad for free, and at some websites, ads are free if they don’t get results . So, the Internet can be a cost-effective medium. Pay-per-click advertising is common on sites such as Google. Advertisers only pay when a customer clicks on the ad and links to the advertiser’s website. Websites need to maintain interest and create desire. Once customers get to a company’s website, the site can provide much more interactivity than traditional advertising. Discussion Question: As it is now, what do you like and dislike about Internet ads? This slide relates to material on pp. 394-96.  Indicates place where slide “builds” to include the corresponding point.       
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on p. 397. Summary Overview In planning the message, the key decision is specifying the copy thrust : what the words and illustrations should communicate. The copy thrust should be designed to achieve the promotion objectives. Key Issues Marketers are well advised to let the AIDA model help guide message planning. Getting attention is an ad’s first job. Marketers must determine what, specifically, will get the customer’s attention and how. Attention-getting devices include large headlines, shocking statements, attractive models, babies, and special effects. Billboards are also good for getting attention with a simple copy thrust. This outdoor ad for Colorado Wildlands uses a clever display to maximize its attention-getting impact. Discussion Question: What other billboard advertising can you think of that used a clever display or slogan for attention?
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Getting attention is important, but it is only the first stage of the AIDA model. The other three aspects of this model play important roles in message planning. Key Issues Holding interest is more difficult than getting attention. Holding interest typically involves linking the ad message to something important to the customer -- a reference group, core values of the target market, or a person’s self-interest. Arousing desire , or moving the customer to really want the product, is one of an ad’s most difficult jobs. This requires knowing how the customer thinks and makes decisions. Sometimes it is helpful to focus on one unique selling proposition -- something distinctive about the product that sets it apart from other offers. Ads are designed to obtain action on the part of consumers in some form. Some ads encourage consumers to do something that is less risky or demanding than actually making a purchase. Discussion Question: What features might an ad contain that cause consumers to take some action—even if that action is not immediate purchase? Can global messages work ? Possibly, in cases where there are major similarities among consumers for the product all over the world. Usually, more targeted ad messages work better than a mass marketing approach. This slide relates to material on pp. 398-99.  Indicates place where slide “builds” to include the corresponding point.     
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Courtesy of Iomega The importance of a unique selling proposition is demonstrated in this humorous ad for Iomega. Video Operation: Use the onscreen player controls to operate the video. To view the video at Full Screen, right-click the video and choose Full Screen. To go back to your presentation you can either hit the Escape key, right-click on the video and uncheck Full Screen or type Alt+Enter. You can do this at anytime during the video playback. Under certain circumstances, the video may not fill the video player window. To restore, right click the video player object and select Zoom 200%. The videos will only play in Slide Show View. Macros must be enabled in order to play the videos from within PowerPoint.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Answer: C or B Checking your knowledge (answer explanation): This testimonial attempts to persuade a consumer that the famous athlete with sore muscles likes the product so it will work for your sore muscles too. This is an attempt to arouse desire. Depending on the consumer, you could also argue that this commercial is aimed at the interest stage of the AIDA. For that reason, either C or B could be acceptable answers for this question. This slide relates to material on pp. 397-99.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Some companies have their own advertising departments that plan and execute ad campaigns. Other firms use outside advertising agencies : specialists in planning and handling mass-media details of advertisers. Key Issues Agencies provide an outside viewpoint and vast client experience. Sometimes, they can do the job more efficiently and effectively, at lower cost, than a firm’s in-house advertising department. The advertiser can terminate a relationship if it doesn’t work well. Agencies range from small specialists to large, full-service companies. The biggest agencies handle much of the advertising , as shown in this exhibit. Many mergers and acquisitions have created these mega-agencies. Smaller firms continue to have an important role, because not every advertiser has the need or the resources to deal with a huge ad agency. Ad agencies have typically been paid via a percentage commission on media and production costs. This straight commission has raised the question, “ Are they paid too much ?” Now, some firms pay the agency based on the results achieved . Discussion Question: How can specific ad objectives play a role in determining whether or not an ad agency has achieved the desired results ? Ethical conflicts may arise if agencies divulge their clients’ information to competitors. This slide relates to material on pp. 399-401. Note: this exhibit continues on the next slide.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Some companies have their own advertising departments that plan and execute ad campaigns. Other firms use outside advertising agencies : specialists in planning and handling mass-media details of advertisers. Key Issues Agencies provide an outside viewpoint and vast client experience. Sometimes, they can do the job more efficiently and effectively, at lower cost, than a firm’s in-house advertising department. The advertiser can terminate a relationship if it doesn’t work well. Agencies range from small specialists to large, full-service companies. The biggest agencies handle much of the advertising , as shown in this exhibit. Many mergers and acquisitions have created these mega-agencies. Smaller firms continue to have an important role, because not every advertiser has the need or the resources to deal with a huge ad agency. Ad agencies have typically been paid via a percentage commission on media and production costs. This straight commission has raised the question, “ Are they paid too much ?” Now, some firms pay the agency based on the results achieved . Discussion Question: How can specific ad objectives play a role in determining whether or not an ad agency has achieved the desired results ? Ethical conflicts may arise if agencies divulge their clients’ information to competitors. This slide relates to material on pp. 399-401. Note: this is a continuation of the exhibit on the previous slide.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview Measuring advertising effectiveness is often difficult. It is important to remember that the different types of advertising do not always work toward the same goal. Also, advertising effectiveness needs to be considered in relation to its specific objective. For example, an ad campaign that is designed to increase awareness should not be judged a failure because it does not increase desire for the product. A key element to effective measurement is to quantify and specify the objective of the ad. Key Issues Success depends on the total marketing mix , not just advertising. The effectiveness of advertising is hard to separate from the effects of the other elements of the mix. For example, a great advertisement cannot be faulted for failing to sell a poor product. Research and testing can improve the odds . Marketing managers should try variations on their overall advertising message to see which combination of message variables is the most effective. Discussion Question: How might a focus group discussion help in pretesting an ad? Hindsight may lead to foresight . What consumers tell marketers about ads, and what they remember—both good and bad--should be used as input into the refinement of subsequent advertisements. This slide relates to material on pp. 401-402.  Indicates place where slide “builds” to include the corresponding point.   
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview In most countries, government agencies may say what is fair , allowable, or appropriate advertising. However, these regulations vary greatly from country to country. Key Issues In the U. S., the Federal Trade Commission (FTC) controls unfair practices . Both advertisers and ad agencies share equal responsibility for false, misleading, or unfair ads. Companies that violate FTC regulations may be required to promulgate “affirmative disclosures,” such as the health warnings on cigarettes. Corrective advertising : ads that correct deceptive advertising. Listerine’s manufacturer had to run corrective ads to counter its earlier claims that gargling with Listerine would prevent a cold. The notion of what is unfair or deceptive is changing . Old-fashioned “puffery”—making exaggerated claims about products as being the “best” or the “finest”—used to be accepted practice but is now under increased scrutiny. Supporting ad claims is a fuzzy area , subject to much interpretation. Pretesting of ads among consumers may uncover possible problems with dubious claims. Discussion Question: In light of the FTC’s watchdog role, why is there still a lot of deceptive advertising that reaches consumers? This slide relates to material on pp. 402-403.  Indicates place where slide “builds” to include the corresponding point.    
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on pp. 403-404. Summary Overview Sales promotion includes those activities other than advertising, publicity, and personal selling that are designed to stimulate interest, trial, or purchase by final customers or others in the channel. Sales promotion typically seeks an immediate response. Key Issues Sales promotions can be launched quickly and lead to immediate results. However, the sales promotion objectives and the particular situation should influence the decision about which type of promotion to use. This exhibit shows three ways that a short-term sales promotion might affect sales. First sales pattern : a firm issues coupons to help clear excess inventory. Some consumers might buy in advance “stockpile” to take advantage of the coupon, but unless they use more of the product, their next purchase will be delayed. Second pattern : consumption increases during a limited-time promotion, but when the promotion ends, sales go back to normal. Third pattern : free samples of a product pull in new customers who like the product and keep coming back. This pattern is the kind of long-term result that is the aim of effective sales promotion. More companies are using a greater percentage of their promotion dollars on sales promotion. Sales promotion spending has grown in mature markets, where tough competition requires extra incentives to sell. Discussion Question: Think about a freestanding coupon insert in a newspaper, or a direct-mail packet containing coupons. In what stage of the product life cycle (introduction, growth, maturity, or decline) are most of these products?  
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- Summary Overview In spite of the positive impact that sales promotions may have, there are potential problems in managing sales promotion. Key Issues “ Does sales promotion erode brand loyalty ?” In mature markets, customers and middlemen may “cherry pick” between competing brands to catch the best sales promotion discount at a particular time. Brands in this competitive situation may have little other choice. There are alternatives . Proctor and Gamble has decreased its reliance on sales promotions to middlemen and moved toward an “everyday low price.” Sales promotion is hard to manage . It may be hard to transfer lessons learned from promotion to the next. Sales promotion activities can stimulate demand among non-targets. Sales promotion is not a sideline for amateurs . Sales promotion specialists have developed to handle the various tasks, but their efforts need to be coordinated with the overall promotion strategy. Discussion Question: McDonald’s “Monopoly” game and other sales promotions have gone wrong in recent years. Who bears the responsibility for making sure that sales promotions are conducted legally and fairly—the sales promotion specialist, or the company sponsoring the promotion? This slide relates to material on pp. 404-405.  Indicates place where slide “builds” to include the corresponding point.     
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on pp. 405-407. Summary Overview Sales promotion is very flexible and can be aimed at final consumers, middlemen, or a company’s own employees. Key Issues Sales promotion for final consumers or users tries to increase demand or speed up purchase. Point-of-purchase materials, banners, sample packages, calendars, or coupons might be used to entice purchase. Discussion Question: How does a point-of-purchase display affect the various stages of the consumer problem-solving process? Refer to Chapter 5. Sales promotion for middlemen often emphasizes price. The objective may be to encourage middlemen to stock new items, buy larger quantities, buy early, or emphasize products in local promotion. Techniques include discounts, allowances, and possible sales contests. Owens Corning, in the ad above, uses a variety of promotion methods, including advertising, sweepstakes, and other sales promotions to help stimulate demand for its high quality products. The trade ad above provides a website address and a toll-free number so it will be easy for distributors to respond to the ad and get more specific information Sales promotion aimed at a company’s own employees , such as its sales force, often stimulates better service, customer acquisition, support for new products, or attention to the whole product line. Contests, bonuses, awards, and motivational sales meetings are used.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on p. 384. You now should: 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.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide relates to material on p. 384. You now should: 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.
  • Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 15- This slide refers to boldfaced terms appearing in Chapter 15. Summary Overview These are key terms you should be familiar with based upon the material in this presentation. Key Issues Product advertising : advertising that tries to sell a specific product. Institutional advertising : advertising that tries to promote an organization's image, reputation, or ideas--rather than a specific product. Pioneering advertising : advertising that tries to develop primary demand for a product category rather than demand for a specific brand. Competitive advertising : advertising that tries to develop selective demand for a specific brand rather than a product category. Direct type advertising : competitive advertising that aims for immediate buying action. Indirect type advertising : competitive advertising that points out product advantages‑‑to affect future buying decisions. Comparative advertising : advertising that makes specific brand comparisons using actual product names. Reminder advertising : advertising to keep the product's name before the public. Advertising allowances : price reductions to firms in the channel to encourage them to advertise or otherwise promote the firm's products locally. Cooperative advertising : middlemen and producers sharing in the cost of ads. Copy thrust : what the words and illustrations of an ad should communicate. Advertising agencies : specialists in planning and handling mass-selling details for advertisers. Corrective advertising : ads to correct deceptive advertising.
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    1. 1. CHAPTER FIFTEEN For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Advertising and Sales Promotion www.mhhe.com/fourps
    2. 2. When we finish this lecture you should <ul><li>Understand why a marketing manager sets specific objectives to guide the advertising effort. </li></ul><ul><li>Understand when the various kinds of advertising are needed. </li></ul><ul><li>Understand how to choose the “best” medium. </li></ul><ul><li>Understand the main ways that advertising on the Internet differs from advertising in other media. </li></ul>
    3. 3. When we finish this lecture you should <ul><li>Understand how to plan the &quot;best&quot; message—that is, the copy thrust. </li></ul><ul><li>Understand what advertising agencies do and how they are paid. </li></ul><ul><li>Understand how to advertise legally. </li></ul><ul><li>Understand the importance and nature of sales promotion. </li></ul><ul><li>Know the advantages and limitations of different types of sales promotion. </li></ul>
    4. 4. Marketing Strategy Planning Process
    5. 5. Strategy Planning, Advertising, and Sales Promotion (Exhibit 15-1) CH 15: Advertising & Sales Promotion CH 14: Personal Selling and Customer Service CH 13: Promotion Intro. To Integrated Marketing Communications Advertising spending Advertising strategy decisions Advertising and the law Sales promotion decisions
    6. 6. The Decision to Position a New Product © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
    7. 7. International Dimensions are Important
    8. 8. Advertising Spending as Percent of Sales for Illustrative Product Categories (Exhibit 15-2a)
    9. 9. Retail Ad Spending (Exhibit 15-2b)
    10. 10. Setting Ad Objectives Is a Strategy Decision Get Immediate Action Obtain Outlets Introduce New Products Position Brands Ongoing Contact Support Sales Force Advertising Objectives Should be Specific Obtain Outlets Ongoing Contact Support Sales Force Maintain Relationships Get Immediate Action Introduce New Products Position Brands
    11. 11. What’s the Advertising Objective? © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
    12. 12. Objectives Guide Implementation (Exhibit 15-3)
    13. 13. Objectives Determine the Kinds of Advertising (Exhibit 15-4) Institutional Advertising Types of Advertising Institutional Advertising Pioneering Advertising Product Advertising Competitive Advertising Reminder Advertising Direct Indirect Comparative
    14. 14. Competitive Advertising Emphasizes Selective Demand
    15. 15. A Competitive Ad That’s Comparative
    16. 16. Comparative Advertising U.S. version Japan version © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
    17. 17. Reminder Advertising Reinforces a Favorable Relationship
    18. 18. Institutional Advertising – Remember Our Name Sheds Favorable Light Connects Divisions of a Company Sheds Favorable Light Connects Divisions of a Company Advocates Causes and Ideas
    19. 19. Interactive Exercise: Types of Advertising © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
    20. 20. <ul><li>A television ad for Target encourages consumers </li></ul><ul><li>to go to their nearest Target store for a big end-of- </li></ul><ul><li>season sale coming up in two weeks. This type of </li></ul><ul><li>advertising is: </li></ul><ul><li>pioneering. </li></ul><ul><li>reminder. </li></ul><ul><li>indirect competitive. </li></ul><ul><li>direct competitive. </li></ul><ul><li>institutional. </li></ul>Checking your knowledge
    21. 21. <ul><li>Community Bank sends an advertisement via direct mail to </li></ul><ul><li>several thousand customers, quoting special low financing </li></ul><ul><li>rates on new vehicles for a limited time only. The ad names </li></ul><ul><li>some other financial institutions and shows their respective </li></ul><ul><li>loan rates. Community Bank promises to beat any rate </li></ul><ul><li>offered for a comparable term. This type of advertising is : </li></ul><ul><li>pioneering. </li></ul><ul><li>indirect competitive. </li></ul><ul><li>comparative. </li></ul><ul><li>reminder. </li></ul><ul><li>institutional. </li></ul>Checking your knowledge
    22. 22. Coordinating Advertising Efforts with Cooperative Relationships Integrated Communications Cooperative Advertising Advertising Allowances Vertical Cooperation Cooperative Advertising Integrated Communications Advertising Allowances Key Issues Vertical Cooperation Ethical Concerns
    23. 23. Choosing the “Best” Medium – How To Deliver the Message Promotion Objectives Target Market Characteristics Funds Available Promotion Objectives Target Market Characteristics Funds Available Nature of the Media
    24. 24. Comparing Advertising Media (Exhibit 15-5) Media 2004 spend. (billions) 2-year % growth Advantages Disadvantages Television & cable $67.8 25.3% Demonstrates well, good attention, wide reach Expensive in total, “clutter,” and less selective audience Direct mail $52.2 16.8 Selected audience, flexible, can personalize Relatively costly per contact, “junk mail,” hard to retain attention News-paper $46.6 5.9 Flexible, timely, local market May be expensive, short life, no “pass along” Radio $19.6 9.5 Wide reach, low cost segmented audience Weak attention, many different rates, short exposure
    25. 25. Comparing Advertising Media (Exhibit 15-5) Media 2004 spend. (billions) 2-year % growth Advantages Disadvantages Yellow pages $14.0 1.4% Reaches local customers seeking purchase info. Many competitors listed in same place, hard to differentiate Magazine $12.3 11.8 Very targeted, good detail, good “pass along” Inflexible, long lead times Internet $6.9 40.8 Ads link to more detailed site, some “pay for results,” easy to track results Hard to compare costs with other media Outdoor $5.8 11.5 Flexible, repeat exposure, inexpensive “ Mass market,” very short exposure
    26. 26. An Emphasis on Targeting Specialized Media Are Gaining Traditional Media Are More Focused Direct Mail Has Grown Specialized Media Are Gaining Traditional Media Are More Focused Direct Mail Has Grown Key Issues “ Must Buys” May Use Up Funds
    27. 27. Interactive Exercise: Promotion Planning © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
    28. 28. Advertising on the Internet Pay for Performance Search Ads Match Consumer Keywords Some Sites Offer Better Targeting Behavioral Targeting Direct Response Desired Taking Hold with Advertisers Key Issues Need to Maintain Interest Pay for Performance Search Ads Match Consumer Keywords Some Sites Offer Better Targeting Behavioral Targeting Direct Response Desired Taking Hold with Advertisers
    29. 29. Planning the Best Message—Getting Attention
    30. 30. AIDA – Attention, Interest, Desire and Action Obtain Action Arouse Desire Hold Interest Get Attention Get Attention Can Global Messages Work? Obtain Action Arouse Desire Hold Interest
    31. 31. A Unique Selling Proposition © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
    32. 32. <ul><li>A famous athlete is featured in a commercial for a pain- </li></ul><ul><li>relieving rub that can help soothe muscle aches and pains. </li></ul><ul><li>He says, “If it works for me, it’ll surely work for you.” This </li></ul><ul><li>testimonial is mainly aimed at the _________ stage of the </li></ul><ul><li>AIDA model . </li></ul><ul><li>attention </li></ul><ul><li>interest </li></ul><ul><li>desire </li></ul><ul><li>action </li></ul><ul><li>confirmation </li></ul>Checking your knowledge
    33. 33. Advertising Agencies Often Do the Work Organi- zation Largest agencies HQ location 2005 revenue billions Select clients Omnicon Group BBDO Worldwide, DDB Worldwide, TBWA Worldwide New York $10.48 DaimlerChrysler, IKEA, Exxon Mobil, Bud Light, McDonalds, Apple WPP Group J. W. Thompson, Oglivy & Mather, Grey Worldwide London $9.24 Bayer, Ford, HSBC, Mattel, Diamond Trading Company, 3M Inter-public Group McCann Erickson Worldwide, Foote Cone & Belding Worldwide, Lowe Worldwide New York $6.27 John Deere, Cadbury Schweppes, Quiznos, AOL, Black & Decker, General Motors Europe
    34. 34. Advertising Agencies Often Do the Work Organi- zation Largest agencies HQ location 2005 revenue billions Select clients * 2004 revenues Dentsu Dentsu, Colby & Partners, DCA Advertising Tokyo $2.97* Kao, Toshiba, Canon, Matsushita, Hitachi, Shiseido Publicis Group Publicis Worldwide, Leo Burnett Worldwide, Saatchi & Saatchi Paris $4.95 Coca-Cola, British Airways, Hewlett-Packard, Kellogg’s, Visa, Hallmark Havas Euro RSCG Worldwide, MPG, Arnold Worldwide Suresnes France $1.75 Sony, Hershey’s, Verizon, Peugeot, Lee Jeans, eBay in China
    35. 35. Measuring Advertising Effectiveness is Not Easy Consider the Total Mix Research and Testing May Improve Odds Research and Testing May Improve Odds Consider the Total Mix Hindsight May Lead to Foresight
    36. 36. How to Avoid Unfair Advertising Standards Are Changing FTC Controls Unfair Practices Government May Say What’s Fair Standards Are Changing FTC Controls Unfair Practices Government May Say What’s Fair Support for Claims Is Fuzzy
    37. 37. Sales Promotion: Do Something Different to Stimulate Change (Exhibit 15-6)
    38. 38. Problems in Managing Sales Promotion Key Problems Hard to Manage Hard to Manage Need For Alternatives Need For Alternatives Erodes Brand Loyalty Erodes Brand Loyalty Not For Amateurs
    39. 39. Different Types of Sales Promotion for Different Targets
    40. 40. You now <ul><li>Understand why a marketing manager sets specific objectives to guide the advertising effort. </li></ul><ul><li>Understand when the various kinds of advertising are needed. </li></ul><ul><li>Understand how to choose the “best” medium. </li></ul><ul><li>Understand the main ways that advertising on the Internet differs from advertising in other media. </li></ul>
    41. 41. You now <ul><li>Understand how to plan the &quot;best&quot; message—that is, the copy thrust. </li></ul><ul><li>Understand what advertising agencies do and how they are paid. </li></ul><ul><li>Understand how to advertise legally. </li></ul><ul><li>Understand the importance and nature of sales promotion. </li></ul><ul><li>Know the advantages and limitations of different types of sales promotion. </li></ul>
    42. 42. Key Terms <ul><li>Product advertising </li></ul><ul><li>Institutional advertising </li></ul><ul><li>Pioneering advertising </li></ul><ul><li>Competitive advertising </li></ul><ul><li>Direct type advertising </li></ul><ul><li>Indirect type advertising </li></ul><ul><li>Comparative advertising </li></ul><ul><li>Reminder advertising </li></ul><ul><li>Advertising allowances </li></ul><ul><li>Cooperative advertising </li></ul><ul><li>Copy thrust </li></ul><ul><li>Advertising agencies </li></ul><ul><li>Corrective advertising </li></ul>

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