© 2009 South-Western, a part of Cengage LearningChapter 1The World of Advertising and Integrated Brand PromotionPPT 1-1

The World of Advertising and Integrated Brand PromotionWe need perspective on advertising and IBP!Technology and consumer control are reshaping the communications environmentThe lines between entertainment and advertising/IBP are blurring—”Madison & Vine”Firms use advertising/IBP to build brandsFirms of all sizes need and use advertisingAdvertising is just one of many tools in IBPAdvertising/IBP do not guarantee success—8 of 10 new products failPeople have all sorts of positive and negative (mis)perceptions about advertising and promotionPPT 1-2

Technology and consumer control are reshaping the communications environment

The lines between entertainment and advertising/IBP are blurring—”Madison & Vine”

Firms use advertising/IBP to build brands

Firms of all sizes need and use advertising

Advertising is just one of many tools in IBP

Advertising/IBP do not guarantee success—8 of 10 new products fail

People have all sorts of positive and negative (mis)perceptions about advertising and promotion

What are Advertising and Integrated Brand Promotion?Three criteria must be met for a communication to be classified as advertising:The communication must be paid forThe communication must be delivered through mass mediaThe communication must be attempting to persuadePPT 1-3

The communication must be paid for

The communication must be delivered through mass media

The communication must be attempting to persuade

What are Advertising and Integrated Brand Promotion?Integrated Brand Promotion (IBP) is the process of using a wide range of promotional tools working together to create widespread brand exposure.IBP is a processIBP uses a wide ranges of tools including:AdvertisingPoint of Purchase (in-store) materialsDirect Marketing (catalogs, infomercials, email)Personal SellingInternet advertisingBlogsPodcastingEvent sponsorshipBrand entertainment (product placement on TV shows, in movies)Outdoor signage/billboardsPublic relationsInfluencer (peer-to-peer) communicationsCorporate advertisingPPT 1-4

IBP is a process

IBP uses a wide ranges of tools including:

Advertising

Point of Purchase (in-store) materials

Direct Marketing (catalogs, infomercials, email)

Personal Selling

Internet advertising

Blogs

Podcasting

Event sponsorship

Brand entertainment (product placement on TV shows, in movies)

Outdoor signage/billboards

Public relations

Influencer (peer-to-peer) communications

Corporate advertising

Distinctions within AdvertisingAdvertising CampaignAn integrated series of ads and promotions that communicate a central theme or ideaAdvertisementsSpecific messages designed to persuade an audiencePPT 1-5

Advertising Campaign

Advertisements

Advertising as a Communications ProcessProduction: The advertiser and social context determine ad content.Reception: The context of ad reception and the audience’s understanding of an ad result in a meaningful interpretation of the ad.Accommodation and negotiation: The ways in which consumers interpret adsPPT 1-6

Production: The advertiser and social context determine ad content.

Reception: The context of ad reception and the audience’s understanding of an ad result in a meaningful interpretation of the ad.

Accommodation and negotiation: The ways in which consumers interpret ads

Audiences for Advertising: Audience CategoriesHousehold ConsumersBusiness OrganizationsThe Trade ChannelProfessionalsGovernmentPPT 1-7

Household Consumers

Business Organizations

The Trade Channel

Professionals

Government

Audiences GeographyGlobal advertisingInternational advertisingNational advertisingRegional advertisingLocal advertisingPPT 1-8

Global advertising

International advertising

National advertising

Regional advertising

Local advertising

Ad in Context ExampleThis ad ran in Italy. Do you think this is a “global” or “international” ad? What’s the difference?PPT 1-9

Advertising as a Business ProcessThe role of advertising in the marketing mixAdvertising in brand managementAdvertising in market segmentation, differentiation, and positioningAdvertising in revenue and profit generationPPT 1-10

The Role of Advertising in the Marketing MixThe Marketing MixPerceived ValueDistributionProductPromotionPricePPT 1-11

The Role of Advertising in Brand ManagementInformation and persuasionIntroduction of new brands and extensionsBuilding and maintaining brand loyalty/brand equityCreating an image/meaningBuilding brand loyalty in the trade channelPPT 1-12

Information and persuasion

Introduction of new brands and extensions

Building and maintaining brand loyalty/brand equity

Creating an image/meaning

Building brand loyalty in the trade channel

Advertising’s Role in Segmentation, Differentiation and PositioningSegmentation(heterogeneous > homogeneous)Differentiation(perceived as different or unique)PositioningDistinct from other brandsOccupies a “value” levelExternal niche vs. internalPPT 1-13

Distinct from other brands

Occupies a “value” level

External niche vs. internal

Advertising’s Role in Revenue and Profit GenerationBrand loyalty leads to inelasticity of demand: less price sensitivity to demandEconomies of scale: higher volume results in lower unit costPPT 1-14

Brand loyalty leads to inelasticity of demand: less price sensitivity to demand

Economies of scale: higher volume results in lower unit cost

Types of AdvertisingPrimary demand stimulationSelective demand stimulationDirect response advertisingDelayed response advertisingCorporate advertisingPPT 1-15

Primary demand stimulation

Selective demand stimulation

Direct response advertising

Delayed response advertising

Corporate advertising

Ad in Context ExampleIs this ad an example of primary or selective demand stimulation? What’s the difference?PPT 1-16

The Economic Effects of AdvertisingGross Domestic ProductBusiness CyclesCompetitionPricesValuePPT 1-17

SpecialEventsTelevisionAdvertisingCouponsFrom IMC to IBPCoordinated promotional activities reinforce one anotherPPT 1-18