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CHAPTER FIFTEEN For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc...
When we finish this lecture you should <ul><li>Understand why a marketing manager sets specific objectives to guide the ad...
When we finish this lecture you should <ul><li>Understand how to plan the &quot;best&quot; message—that is, the copy thrus...
Marketing Strategy Planning Process
Strategy Planning, Advertising, and Sales Promotion  (Exhibit 15-1) CH 15:  Advertising & Sales Promotion   CH 14:  Person...
The Decision to Position a New Product ©  2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
International Dimensions are Important
Advertising Spending as Percent of Sales for Illustrative Product Categories  (Exhibit 15-2a)
Retail Ad Spending  (Exhibit 15-2b)
Setting Ad Objectives Is a Strategy Decision Get Immediate Action Obtain Outlets Introduce New Products Position Brands On...
What’s the Advertising Objective? ©  2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Objectives Guide Implementation  (Exhibit 15-3)
Objectives Determine the Kinds of Advertising  (Exhibit 15-4) Institutional Advertising Types of Advertising Institutional...
Competitive Advertising Emphasizes Selective Demand
A Competitive Ad That’s Comparative
Comparative Advertising U.S. version Japan version ©  2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Reminder Advertising Reinforces a Favorable Relationship
Institutional Advertising – Remember Our Name Sheds Favorable Light Connects Divisions of a Company Sheds Favorable Light ...
Interactive Exercise: Types of Advertising ©  2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
<ul><li>A television ad for Target encourages consumers  </li></ul><ul><li>to go to their nearest Target store for a big e...
<ul><li>Community Bank sends an advertisement via direct mail to  </li></ul><ul><li>several thousand customers, quoting sp...
Coordinating Advertising Efforts with Cooperative Relationships Integrated Communications Cooperative Advertising Advertis...
Choosing the “Best” Medium – How To Deliver the Message Promotion Objectives Target Market Characteristics Funds Available...
Comparing Advertising Media  (Exhibit 15-5) Media 2004 spend. (billions) 2-year % growth Advantages Disadvantages Televisi...
Comparing Advertising Media  (Exhibit 15-5) Media 2004 spend. (billions) 2-year % growth Advantages Disadvantages Yellow p...
An Emphasis on Targeting Specialized Media Are Gaining Traditional Media Are More Focused Direct Mail Has Grown Specialize...
Interactive Exercise: Promotion Planning ©  2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Advertising on the Internet Pay for Performance Search Ads Match Consumer Keywords Some Sites Offer Better Targeting Behav...
Planning the Best Message—Getting Attention
AIDA – Attention, Interest, Desire and Action Obtain Action Arouse Desire Hold Interest Get Attention Get Attention Can Gl...
A Unique Selling Proposition ©  2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
<ul><li>A famous athlete is featured in a commercial for a pain- </li></ul><ul><li>relieving rub that can help soothe musc...
Advertising Agencies Often Do the Work Organi- zation Largest agencies HQ location 2005 revenue billions Select clients Om...
Advertising Agencies Often Do the Work Organi- zation Largest agencies HQ location 2005 revenue billions Select clients * ...
Measuring Advertising Effectiveness is Not Easy Consider the  Total Mix Research and Testing May Improve Odds Research and...
How to Avoid Unfair Advertising Standards Are Changing FTC Controls Unfair Practices Government May Say What’s Fair Standa...
Sales Promotion: Do Something Different to Stimulate Change  (Exhibit 15-6)
Problems in Managing Sales Promotion Key Problems Hard to Manage Hard to Manage Need  For Alternatives Need  For Alternati...
Different Types of Sales Promotion for Different Targets
You now <ul><li>Understand why a marketing manager sets specific objectives to guide the advertising effort. </li></ul><ul...
You now <ul><li>Understand how to plan the &quot;best&quot; message—that is, the copy thrust. </li></ul><ul><li>Understand...
Key Terms <ul><li>Product advertising </li></ul><ul><li>Institutional advertising </li></ul><ul><li>Pioneering 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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