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Belch & Belch - Advertising and promotion- integrated marketing communication


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  • 1. Belch: Advertising andPromotion, Sixth EditionFront Matter Preface © The McGraw−HillCompanies, 2003The Changing Worldof Advertising and PromotionNearly everyone in the modern world is influenced tosome degree by advertising and other forms of promo-tion. Organizations in both the private and public sectorshave learned that the ability to communicate effectivelyand efficiently with their target audiences is critical totheir success. Advertising and other types of promotionalmessages are used to sell products and services as wellas to promote causes, market political candidates, anddeal with societal problems such as alcohol and drugabuse. Consumers are finding it increasingly difficult toavoid the efforts of marketers, who are constantlysearching for new ways to communicate with them.Most of the people involved in advertising and promo-tion will tell you that there is no more dynamic and fasci-nating a field to either practice or study. However, theywill also tell you that the field is undergoing dramaticchanges that are changing advertising and promotion for-ever. The changes are coming from all sides—clientsdemanding better results from their advertising and pro-motional dollars; lean but highly creative smaller adagencies; sales promotion and direct-marketing firms, aswell as interactive agencies, which want a larger share ofthe billions of dollars companies spend each year pro-moting their products and services; consumers who nolonger respond to traditional forms of advertising; andnew technologies that may reinvent the very process ofadvertising. As the new millennium begins, we are expe-riencing perhaps the most dynamic and revolutionarychanges of any era in the history of marketing, as well asadvertising and promotion. These changes are beingdriven by advances in technology and developments thathave led to the rapid growth of communications throughinteractive media, particularly the Internet.For decades the advertising business was dominatedby large, full-service Madison Avenue–type agencies.The advertising strategy for a national brand involvedcreating one or two commercials that could be run onnetwork television, a few print ads that would run ingeneral interest magazines, and some sales promotionsupport such as coupons or premium offers. However, intoday’s world there are a myriad of media outlets—print,radio, cable and satellite TV, and the Internet—compet-ing for consumers’ attention. Marketers are lookingbeyond the traditional media to find new and better waysto communicate with their customers. They no longeraccept on faith the value of conventional advertisingplaced in traditional media. The large agencies are rec-ognizing that they must change if they hope to survive inthe 21st century. Keith Reinhard, chairman and CEO ofDDB Worldwide, notes that the large agencies “havefinally begun to acknowledge that this isn’t a recessionwe’re in, and that we’re not going back to the good olddays.”In addition to redefining the role and nature of theiradvertising agencies, marketers are changing the waythey communicate with consumers. They know they areoperating in an environment where advertising messagesare everywhere, consumers channel-surf past most com-mercials, and brands promoted in traditional ways oftenfail. New-age advertisers are redefining the notion ofwhat an ad is and where it runs. Stealth messages arebeing woven into the culture and embedded into moviesand TV shows or made into their own form of entertain-ment. Many experts argue that “branded content” is thewave of the future, and there is a growing movement toreinvent advertising and other forms of marketing com-munication to be more akin to entertainment. Companiessuch as BMW, Levi Straus & Co., Nike, and Skyy Spiritsare among the marketers using “advertainment” as a wayof reaching consumers: They create short films or com-mercials that are shown on their websites.Marketers are also changing the ways they allocatetheir promotional dollars. Spending on sales promotionactivities targeted at both consumers and the trade hassurpassed advertising media expenditures for years andcontinues to rise. In his book The End of Marketing asWe Know It, Sergio Zyman, the former head of market-ing for Coca-Cola, declares traditional marketing is “notdying, but dead.” He argues that advertising in general isoverrated as part of the marketing mix and notes that allelements of the marketing mix communicate, such asbrand names, packaging, pricing, and the way a productis distributed. The information revolution is exposingconsumers to all types of communications, and mar-keters need to better understand this process.A number of factors are impacting the way marketerscommunicate with consumers. The audiences that mar-keters seek, along with the media and methods forreaching them, have become increasingly fragmented.Advertising and promotional efforts have become moreregionalized and targeted to specific audiences. Retail-ers have become larger and more powerful, forcingmarketers to shift money from advertising budgets tosales promotion. Marketers expect their promotionaldollars to generate immediate sales and are demandingmore accountability from their agencies. The Internetrevolution is well under way and the online audience isgrowing rapidly, not only in the United States and West-ern Europe but in many other countries as well. Manycompanies are coordinating all their communicationsefforts so that they can send cohesive messages to theircustomers. Some companies are building brands withlittle or no use of traditional media advertising. ManyviPreface
  • 2. Belch: Advertising andPromotion, Sixth EditionFront Matter Preface © The McGraw−HillCompanies, 2003viiadvertising agencies have acquired, started, or becomeaffiliated with sales promotion, direct-marketing, inter-active agencies, and public relations companies to betterserve their clients’ marketing communications needs.Their clients have become “media-neutral” and are ask-ing that they consider whatever form of marketing com-munication works best to target market segments andbuild long-term reputations and short-term sales.This text will introduce students to this fast-changingfield of advertising and promotion. While advertising isits primary focus, it is more than just an introductoryadvertising text because there is more to most organiza-tions’ promotional programs than just advertising. Thechanges discussed above are leading marketers and theiragencies to approach advertising and promotion from anintegrated marketing communications (IMC) perspec-tive, which calls for a “big picture” approach to planningmarketing and promotion programs and coordinating thevarious communication functions. To understand therole of advertising and promotion in today’s businessworld, one must recognize how a firm can use all thepromotional tools to communicate with its customers.To the Student: PreparingYou for the New World ofAdvertising and PromotionSome of you are taking this course to learn more aboutthis fascinating field; many of you hope to work in adver-tising or some other promotional area. The changes in theindustry have profound implications for the way today’sstudent is trained and educated. You will not be workingfor the same kind of communication agencies that existed5 or 10 years ago. If you work on the client side of thebusiness, you will find that the way they approach adver-tising and promotion is changing dramatically.Today’s student is expected to understand all themajor marketing communication functions: advertising,direct marketing, the Internet, interactive media, salespromotion, public relations, and personal selling. Youwill also be expected to know how to research and evalu-ate a company’s marketing and promotional situationand how to use these various functions in developingeffective communication strategies and programs. Thisbook will help prepare you for these challenges.As professors we were, of course, once students our-selves. In many ways we are perpetual students in thatwe are constantly striving to learn about and explain howadvertising and promotion work. We share many of yourinterests and concerns and are often excited (and bored)by the same things. Having taught in the advertising andpromotion area for a combined 50-plus years, we havedeveloped an understanding of what makes a book inthis field interesting to students. In writing this book, wehave tried to remember how we felt about the varioustexts we used throughout the years and to incorporate thegood things and minimize those we felt were of littleuse. We have tried not to overburden you with defini-tions, although we do call out those that are especiallyimportant to your understanding of the material.We also remember that as students we were not reallyexcited about theory. But to fully understand how inte-grated marketing communications works, it is necessaryto establish some theoretical basis. The more you under-stand about how things are supposed to work, the easierit will be for you to understand why they do or do notturn out as planned.Perhaps the question students ask most often is, “Howdo I use this in the real world?” In response, we providenumerous examples of how the various theories and con-cepts in the text can be used in practice. A particularstrength of this text is the integration of theory with prac-tical application. Nearly every day an example of adver-tising and promotion in practice is reported in the media.We have used many sources, such as Advertising Age,Adweek, Brandweek, The Wall Street Journal, Business-Week, Fortune, Forbes, Sales & Marketing Manage-ment, Business 2.0, eMarketer, The Internet AdvertisingReport, Promo, and many others, to find practical exam-ples that are integrated throughout the text. We have spo-ken with hundreds of people about the strategies andrationale behind the ads and other types of promotionswe use as examples. Each chapter begins with a vignettethat presents an example of an advertising or promo-tional campaign or other interesting insights. Everychapter also contains several IMC Perspectives thatpresent in-depth discussions of particular issues relatedto the chapter material and show how companies areusing integrated marketing communications. GlobalPerspectives are presented throughout the text in recog-nition of the increasing importance of international mar-keting and the challenges of advertising and promotionand the role they play in the marketing programs ofmultinational marketers. Ethical Perspectives focusattention on important social issues and show howadvertisers must take ethical considerations into accountwhen planning and implementing advertising and pro-motional programs. Diversity Perspectives discuss theopportunities, as well as the challenges, associated withmarketers’ efforts to reach culturally and ethnicallydiverse target markets. There are also a number ofCareer Profiles, which highlight successful individualsworking in various areas of the field of advertising andpromotion.Each chapter features beautiful four-color illustrationsshowing examples from many of the most current andbest-integrated marketing communication campaignsbeing used around the world. We have included morethan 350 advertisements and examples of numerous othertypes of promotion, all of which were carefully chosen toillustrate a particular idea, theory, or practical applica-tion. Please take time to read the opening vignettes toeach chapter, the IMC, Global, Ethical, and DiversityPerspectives, and the Career Profiles and study thediverse ads and illustrations. We think they will stimulate
  • 3. Belch: Advertising andPromotion, Sixth EditionFront Matter Preface © The McGraw−HillCompanies, 2003your interest and relate to your daily life as a consumerand a target of advertising and promotion.To the Instructor: A Text ThatReflects the Changes in the Worldof Advertising and PromotionOur major goal in writing the sixth edition of Advertisingand Promotion was to continue to provide you with themost comprehensive and current text on the market forteaching advertising and promotion from an IMC per-spective. This sixth edition focuses on the many changesthat are occurring in areas of marketing communicationsand how they influence advertising and promotionalstrategies and tactics. We have done this by continuingwith the integrated marketing communications perspec-tive we introduced in the second edition. More and morecompanies are approaching advertising and promotionfrom an IMC perspective, coordinating the various pro-motional mix elements with other marketing activitiesthat communicate with a firm’s customers. Many adver-tising agencies are also developing expertise in directmarketing, sales promotion, event sponsorship, theInternet, and other areas so that they can meet all theirclients’ integrated marketing communication needs—and, of course, survive.The text is built around an integrated marketing com-munications planning model and recognizes the impor-tance of coordinating all of the promotional mixelements to develop an effective communications pro-gram. Although media advertising is often the most visi-ble part of a firm’s promotional program, attention mustalso be given to direct marketing, sales promotion, pub-lic relations, interactive media, and personal selling.This text integrates theory with planning, manage-ment, and strategy. To effectively plan, implement, andevaluate IMC programs, one must understand the overallmarketing process, consumer behavior, and communica-tions theory. We draw from the extensive research inadvertising, consumer behavior, communications, mar-keting, sales promotion, and other fields to give studentsa basis for understanding the marketing communicationsprocess, how it influences consumer decision making,and how to develop promotional strategies.While this is an introductory text, we do treat eachtopic in some depth. We believe the marketing andadvertising student of today needs a text that providesmore than just an introduction to terms and topics. Thebook is positioned primarily for the introductory adver-tising, marketing communications, or promotions courseas taught in the business/marketing curriculum. It canalso be used in journalism/communications courses thattake an integrated marketing communications perspec-tive. Many schools also use the text at the graduate level.In addition to its thorough coverage of advertising, thistext has chapters on sales promotion, direct marketingand marketing on the Internet, personal selling, and pub-licity/public relations. These chapters stress the integra-tion of advertising with other promotional mix elementsand the need to understand their role in the overall mar-keting program.Organization of This TextThis book is divided into seven major parts. In Part Onewe examine the role of advertising and promotion inmarketing and introduce the concept of integrated mar-keting communications. Chapter 1 provides an overviewof advertising and promotion and its role in modern mar-keting. The concept of IMC and the factors that have ledto its growth are discussed. Each of the promotional mixelements is defined, and an IMC planning model showsthe various steps in the promotional planning process.This model provides a framework for developing theintegrated marketing communications program and isfollowed throughout the text. Chapter 2 examines therole of advertising and promotion in the overall market-ing program, with attention to the various elements ofthe marketing mix and how they interact with advertis-ing and promotional strategy. We have also includedcoverage of market segmentation and positioning in thischapter so that students can understand how these con-cepts fit into the overall marketing programs as well astheir role in the development of an advertising and pro-motional program.In Part Two we cover the promotional program situa-tion analysis. Chapter 3 describes how firms organize foradvertising and promotion and examines the role of adagencies and other firms that provide marketing and pro-motional services. We discuss how ad agencies areselected, evaluated, and compensated as well as thechanges occurring in the agency business. Attention isalso given to other types of marketing communicationorganizations such as direct marketing, sales promotion,and interactive agencies as well as public relations firms.We also consider whether responsibility for integratingthe various communication functions lies with the clientor the agency. Chapter 4 covers the stages of the con-sumer decision-making process and both the internalpsychological factors and the external factors that influ-ence consumer behavior. The focus of this chapter is onhow advertisers can use an understanding of buyerbehavior to develop effective advertising and otherforms of promotion.Part Three analyzes the communications process.Chapter 5 examines various communication theories andmodels of how consumers respond to advertising mes-sages and other forms of marketing communications.Chapter 6 provides a detailed discussion of source, mes-sage, and channel factors.In Part Four we consider how firms develop goals andobjectives for their integrated marketing communicationsprograms and determine how much money to spend try-ing to achieve them. Chapter 7 stresses the importance ofknowing what to expect from advertising and promotion,viii
  • 4. Belch: Advertising andPromotion, Sixth EditionFront Matter Preface © The McGraw−HillCompanies, 2003the differences between advertising and communicationobjectives, characteristics of good objectives, and prob-lems in setting objectives. We have also integrated thediscussion of various methods for determining and allo-cating the promotional budget into this chapter. Thesefirst four sections of the text provide students with a solidbackground in the areas of marketing, consumer behav-ior, communications, planning, objective setting, andbudgeting. This background lays the foundation for thenext section, where we discuss the development of theintegrated marketing communications program.Part Five examines the various promotional mix ele-ments that form the basis of the integrated marketingcommunications program. Chapter 8 discusses the plan-ning and development of the creative strategy and adver-tising campaign and examines the creative process. InChapter 9 we turn our attention to ways to execute thecreative strategy and some criteria for evaluating cre-ative work. Chapters 10 through 13 cover media strategyand planning and the various advertising media. Chapter10 introduces the key principles of media planning andstrategy and examines how a media plan is developed.Chapter 11 discusses the advantages and disadvantagesof the broadcast media (TV and radio) as well as issuesregarding the purchase of radio and TV time and audi-ence measurement. Chapter 12 considers the same issuesfor the print media (magazines and newspapers). Chap-ter 13 examines the role of support media such as out-door and transit advertising and some of the many newmedia alternatives.In Chapters 14 through 17 we continue the IMCemphasis by examining other promotional tools that areused in the integrated marketing communications process.Chapter 14 looks at the rapidly growing areas of directmarketing. This chapter examines database marketing andthe way by which companies communicate directly withtarget customers through various media. Chapter 15 pro-vides a detailed discussion of interactive media and mar-keting on the Internet and how companies are using theWorld Wide Web as a medium for communicating withcustomers. We discuss how this medium is being used fora variety of marketing activities including advertising,sales promotion and even the selling of products and ser-vices. Chapter 16 examines the area of sales promotionincluding both consumer-oriented promotions and pro-grams targeted to the trade (retailers, wholesalers andother middlemen). Chapter 17 covers the role of publicityand public relations in IMC as well as corporate advertis-ing. Basic issues regarding personal selling and its role inpromotional strategy are presented in Chapter 18.Part Six of the text consists of Chapter 19, where wediscuss ways to measure the effectiveness of various ele-ments of the integrated marketing communications pro-gram, including methods for pretesting and posttestingadvertising messages and campaigns. In Part Seven weturn our attention to special markets, topics, and per-spectives that are becoming increasingly important incontemporary marketing. In Chapter 20 we examine theglobal marketplace and the role of advertising and otherpromotional mix variables such as sales promotion, pub-lic relations, and the Internet in international marketing.The text concludes with a discussion of the regula-tory, social, and economic environments in which adver-tising and promotion operate. Chapter 21 examinesindustry self-regulation and regulation of advertising bygovernmental agencies such as the Federal Trade Com-mission, as well as rules and regulations governing salespromotion, direct marketing, and marketing on the Inter-net. Because advertising’s role in society is constantlychanging, our discussion would not be complete withouta look at the criticisms frequently levied, so in Chapter22 we consider the social, ethical, and economic aspectsof advertising and promotion.Chapter FeaturesThe following features in each chapter enhance students’understanding of the material as well as their readingenjoyment.Chapter ObjectivesObjectives are provided at the beginning of each chapterto identify the major areas and points covered in thechapter and guide the learning effort.Chapter Opening VignettesEach chapter begins with a vignette that shows the effec-tive use of integrated marketing communications by acompany or ad agency or discusses an interesting issuethat is relevant to the chapter. These opening vignettes aredesigned to draw the students into the chapter by present-ing an interesting example, development, or issue thatrelates to the material covered in the chapter. Some of thecompanies, brands, and organizations profiled in the open-ing vignettes include the U.S. Army, BMW, Samsung,TiVo, Red Bull, Nike, Skyy Spirits, and Rolling Stonemagazine. In addition, some of the chapter openers dis-cuss current topics and issues such as branding, conver-gence, the role of advertising versus public relations, andthe controversy over the advertising of hard liquor on net-work television.IMC PerspectivesThese boxed items feature in-depth discussions of inter-esting issues related to the chapter material and thepractical application of integrated marketing communi-cations. Each chapter contains several of these insightsinto the world of integrated marketing communications.Some of the companies/brands whose IMC programs arediscussed in these perspectives include Jet Blue, DellComputer, Jupiter Media Matrix, BMW Mini-Cooper,Intel, USA Today, PT-Cruiser, and Dunkin’ Donuts.Issues such as the use of music to enhance the effective-ness of commercials, the value of stadium naming rights,ix
  • 5. Belch: Advertising andPromotion, Sixth EditionFront Matter Preface © The McGraw−HillCompanies, 2003public relations blunders, and problems that companieshave encountered when using contests and sweepstakesare also discussed in the IMC Perspectives.Global PerspectivesThese boxed sidebars provide information similar to thatin the IMC Perspectives, with a focus on internationalaspects of advertising and promotion. Some of the com-panies/brands whose international advertising programsare covered in the Global Perspectives include MTV,Microsoft, Sony, McDonald’s, and Nike. Topics such asthe Cannes international advertising awards, celebritieswho appear in commercials in Japan while protectingtheir image in the United States, advertising in China,and the challenges of communicating with consumers inThird World countries are also discussed.Ethical PerspectivesThese boxed items discuss the moral and/or ethicalissues regarding practices engaged in by marketers andare also tied to the material presented in the particularchapter. Issues covered in the Ethical Perspectivesinclude subliminal advertising, the battle between televi-sion networks and advertisers over tasteful advertising,and controversies arising from the increase in direct-to-consumer advertising of prescription drugs and the com-mercialization of schools.Diversity PerspectivesThese boxed items discuss topics related to the opportu-nities and challenges facing companies as they developintegrated marketing communications programs for mar-kets that are becoming more ethnically diverse. TheDiversity Perspectives include the rapid growth of theHispanic market and issues involved in communicatingwith this important segment, the emergence of Spanish-language television stations in the United States, and theuse of sales promotion to target the African-Americanmarket.Career ProfilesAlso included are Career Profiles of successful individu-als working in the communications industry. The indi-viduals featured in Career Profiles include an accountexecutive for the Leo Burnett advertising agency, adirector of corporate communications for JetBlue air-lines, the vice president of the iDeutsch interactiveagency, the manager of Corporate Communications andCreative Services for Savin Corporation, a media sales-person for Rolling Stone magazine, the vice president ofmarketing and communication for Cox Target Media, amarketing and sales promotion analyst for Chicken ofthe Sea International, the president of eMarketer, and thepresident of the Ipsos-ASI, Inc., global marketing andadvertising research firm.Key TermsImportant terms are highlighted in boldface throughoutthe text and listed at the end of each chapter with a pagereference. These terms help call students’ attention toimportant ideas, concepts, and definitions and help themreview their learning progress.Chapter SummariesThese synopses serve as a quick review of important top-ics covered and a very helpful study guide.Discussion QuestionsQuestions at the end of each chapter give students anopportunity to test their understanding of the materialand to apply it. These questions can also serve as a basisfor class discussion or assignments.Four-Color VisualsPrint ads, photoboards, and other examples appearthroughout the book. More than 400 ads, charts, graphs,and other types of illustrations are included in the text.Changes in the Sixth EditionWe have made a number of changes in the sixth editionto make it as relevant and current as possible, as well asmore interesting to students:• Updated Coverage of the Emerging Field ofIntegrated Marketing Communications Thesixth edition continues to place a strong emphasison studying advertising and promotion from anintegrated marketing communications perspective.We examine developments that are impacting theway marketers communicate with their customers,such as the movement toward “branded content,”whereby marketers and agencies are becoming moreinvolved in creating an entertainment product andintegrating their messages into it. New technologiessuch as personal video recorders and the conver-gence of television, computers, and the Internet arechanging the way companies are using advertisingalong with other marketing tools to communicatewith their customers. In this new edition we examinehow these cutting-edge developments are impactingthe IMC program of marketers.• Updated Chapter on the Internet andInteractive Media The sixth edition includes up-to-date information on the Internet and other formsof interactive media and how they are being usedby marketers. We also discuss developments suchas wireless communications as well as regulationsaffecting the use of the Internet and importantissues such as privacy. This chapter also discussesthe latest developments in areas such as audiencex
  • 6. Belch: Advertising andPromotion, Sixth EditionFront Matter Preface © The McGraw−HillCompanies, 2003measurement and methods for determining theeffectiveness of Internet advertising. Discussion ofthe emerging role of the Internet as an importantintegrated marketing communications tool and ofthe ways it is being used by marketers is integratedthroughout the sixth edition.• Diversity Perspectives—New to This EditionIn this edition we introduce a new feature calledDiversity Perspectives. These boxed items aredesigned to focus attention on the increase in thediversity of the consumer market in the UnitedStates. The 2000 census showed that the Hispanicmarket grew by 58 percent over the past decade,and another 35 percent increase is forecast over thenext 10 years. Marketers are recognizing the impor-tance of being able to communicate with a diversemarket that includes Hispanics, African-Americans,Asian-Americans, and other ethnic groups. Thisnew feature focuses on the opportunities and chal-lenges facing companies as they develop integratedmarketing communications programs for marketsthat are becoming more ethnically diverse.• Online Cases Six short cases written tocorrespond to various sections of the text are avail-able online and can be downloaded for classroomuse and assignments. These cases are designed tobuild on the material presented in the text and pro-vide students with the opportunity to apply variousIMC tools and concepts. The cases include compa-nies and organizations such as Gateway, the U.S.Armed Forces, Chicken of the Sea International,the Partnership for a Drug Free America, and theU.S. Office of National Drug Control Policy. Theonline cases include information beyond thatprovided in the text and require that students evalu-ate an advertising and promotional issue and makea decision and recommendation.• New Chapter Opening Vignettes All of the chap-ter opening vignettes in the sixth edition are newand were chosen for their currency and relevance tostudents. They demonstrate how various companiesand advertising agencies use advertising and otherIMC tools. They also provide interesting insightsinto some of the current trends and developmentsthat are taking place in the advertising world.• New and Updated IMC Perspectives All of theboxed items focusing on specific examples of howcompanies and th