Chapter 1 The World of Advertising and Integrated Brand Promotion 2009 South-Western, a part of Cengage Learning PPT 1-1

The World of Advertising and Integrated Brand Promotion We need perspective on advertising and IBP! Technology and consumer control are reshaping the communications environment The lines between entertainment and advertising/IBP are blurringMadison & 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 success8 of 10 new products fail People have all sorts of positive and negative (mis)perceptions about advertising and promotion PPT 1-2

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 for The communication must be delivered through mass media The communication must be attempting to persuade PPT 1-3

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 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-topeer) communications Corporate advertising PPT 1-4

Distinctions within Advertising Advertising Campaign An integrated series of ads and promotions that communicate a central theme or idea Advertisements Specific messages designed to persuade an audience PPT 1-5

Advertising as a Communications Process Production: The advertiser and social context determine ad content. Reception: The context of ad reception and the audiences understanding of an ad result in a meaningful interpretation of the ad. Accommodation and negotiation: The ways in which consumers interpret ads PPT 1-6

Audiences for Advertising: Audience Categories Household Consumers Business Organizations The Trade Channel Professionals Government PPT 1-7

Audiences Geography Global advertising International advertising National advertising Regional advertising Local advertising PPT 1-8

Ad in Context Example This ad ran in Italy. Do you think this is a global or international ad? Whats the difference? PPT 1-9

Advertising as a Business Process 1. The role of advertising in the marketing mix 2. Advertising in brand management 3. Advertising in market segmentation, differentiation, and positioning 4. Advertising in revenue and profit generation PPT 1-10

The Role of Advertising in the Marketing Mix The Marketing Mix Product Distribution Perceived Value Promotion Price PPT 1-11

The Role of Advertising in Brand Management 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 PPT 112

Advertisings Role in Segmentation, Differentiation and Positioning Segmentation Distinct from (heterogeneous > Positioning other brands homogeneous) Occupies a value level Differentiation External niche (perceived as different or vs. internal unique) PPT 113

Advertisings Role in Revenue and Profit Generation Brand loyalty leads to inelasticity of demand: less price sensitivity to demand Economies of scale: higher volume results in lower unit cost PPT 1-14

Types of Advertising Primary demand stimulation Selective demand stimulation Direct response advertising Delayed response advertising Corporate advertising PPT 1-15

Ad in Context Example Is this ad an example of primary or selective demand stimulation? Whats the difference? PPT 1-16

The Economic Effects of Advertising Gross Domestic Product Business Cycles Competition Prices Value PPT 1-17

From IMC to IBP Sp ionng Coordinated Ev eci vistisi promotional en al ts elever