1. foundations of Chapter M A R K E T I N G Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications 19

2. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Objectives 1. Identify the categories of advertisements. 2. Identify and discuss the main advertising media. 3. Describe the process of creating an advertisement. 4. Explain public relations and its functions. 5. Discuss sales promotion and its various elements. 6. Classify the three basic types of selling. 7. Outline the seven steps in the sales process. 8. Specify the functions of sales management. Integrated Marketing Communications Applications 19 19-1

3. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. The Top Ten Advertising Sectors in Canada, 2001 19 Integrated Marketing Communications Applications Table 19.1 19-2 RANKSECTOREXPENDITURES($) 1Retail997 261 000 2Automotive: Cars; Mini Vans; Trucks; Vans; Dealer918 069 000 3Food367 684 000 4Entertainment350 814 000 5Financial Services and Insurance Services319 020 000 6Local Automotive Dealer Advertising318 679 000 7Travel and Transportation241 485 000 8Restaurants and Catering Services233 162 000 9Telecommunications212 010 000 10Media202 364 000 Source:Copyright © Nielsen Media Research Limited, 2002. Reprinted by permission.

4. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. The Process of Creating an Advertisement 19 Integrated Marketing Communications Applications Figure 19.1 19-3 Research Inputs Consumer research Product research Market analysis Competitive situation Strategic Decisions Setting objectives Defining target markets Determining budgets Deciding message strategy Tactical Decisions Establishing controls Writing and producing ads Selecting and scheduling media

5. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Categories of Advertisements Informative Product Persuasive Product Reminder-oriented Product Retail Institutional 19 Integrated Marketing Communications Applications 19-4

6. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Product Advertising Nonpersonal selling of a particular good or service. 19 Integrated Marketing Communications Applications 19-5

7. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Informative Product Advertising Advertising that seeks to develop demand through presenting factual information on the attributes of a product or service. 19 Integrated Marketing Communications Applications 19-6

8. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Persuasive Product Advertising Advertising that emphasizes using words or images to try to create an image for a product and to influence attitudes about it. 19 Integrated Marketing Communications Applications 19-7

9. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Reminder-Oriented Product Advertising Advertising whose goal is to reinforce previous promotional activity by keeping the product or service name in front of the public. 19 Integrated Marketing Communications Applications 19-8

10. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Cooperative Advertising The sharing of advertising costs between the retailer and the manufacturer. 19 Integrated Marketing Communications Applications 19-9

11. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Institutional Advertising Promoting a concept, idea, or philosophy, or the goodwill of an industry, company, or organization. 19 Integrated Marketing Communications Applications 19-10

12. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Relationship between Advertising and the Product Life Cycle 19 Integrated Marketing Communications Applications Figure 19.2 19-11 Informative Advertising Sales Introduction Persuasive Advertising Reminder-Oriented Advertising Time Growth MaturityDecline

13. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Comparative Advertising Advertising that makes direct promotional comparisons with competitive brands. 19 Integrated Marketing Communications Applications 19-12

14. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Celebrity Marketing Having celebrities lend their name and influence to the promotion of a product. 19 Integrated Marketing Communications Applications 19-13

15. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Role Model Marketing Marketing technique that associates a product with the positive perception of a type of individual or role. 19 Integrated Marketing Communications Applications 19-14

16. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Buzz Marketing Giving a significant person in a social system a product to use in the hope that others will see and want to buy the product. 19 Integrated Marketing Communications Applications 19-15

17. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Media Selection Television Newspapers Radio Magazines 19 Integrated Marketing Communications Applications Direct Mail Internet Advertising Outdoor Advertising 19-16

18. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Advantages and Disadvantages of Various Advertising Media (1 of 3) 19 Integrated Marketing Communications Applications Table 19.3 19-17a ADVANTAGES Demonstration ability Intrusion value Ability to generate excitement One-on-one reach Ability to use humour Effective with salesforce and trade Ability to achieve impact Audience in appropriate mental frame to process messages Mass audience coverage Flexibility Ability to use detailed copy Timelines DISADVANTAGES Rapidly escalating cost Erosion of viewing audiences Audience fractionalization Zipping and zapping Clutter Not a highly selective medium Higher rates for occasional advertisers Mediocre reproduction quality Complicated buying for national advertiser Changing composition of readers Television Advertising MEDIUM Newspaper Advertising

19. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Advantages and Disadvantages of Various Advertising Media (2 of 3) 19 Integrated Marketing Communications Applications Table 19.3 19-17b ADVANTAGES Ability to reach segmented audiences Advertising Intimacy Economy Short lead times Transfer of imagery from TV Use of local personalities Some magazines reach large audiences Selectivity Long life High reproduction quality Ability to present detailed information Authoritative conveying of information High involvement potential DISADVANTAGES Clutter No visuals Audience fractionalization Buying difficulties Not intrusive Long lead times Clutter Somewhat limited geographic options Variability of circulation patterns by market Radio Advertising MEDIUM Magazine Advertising

20. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Advantages and Disadvantages of Various Advertising Media (3 of 3) 19 Integrated Marketing Communications Applications Table 19.3 19-17c ADVANTAGES Selectivity; Intense coverage Speed Flexibility of format Complete information; personalization Ability to reach segmented audiences Ability to change message quickly High user interest in medium Use of colour and limited motion graphics Ability to bridge to extensive message and to advertiser’s Web site Broad reach and high frequency levels Geographic flexibility Low cost per thousand Prominent brand identification Opportune purchase reminder DISADVANTAGES High cost per person Dependence on quality of mailing list Consumer resistance Limited initial message length Clutter Uncertain effectiveness of new medium Consumer resistance Concern about security of information Nonselectivity Short exposure time Difficult to measure audience size Environmental problems Direct Mail MEDIUM Internet Advertising Outdoor Advertising Source: Adapted from Advertising, Promotion, and Supplemental Aspects of Integrated Marketing Communications 4th ed., by Terrance A. Shimp. Copyright © 1997, pp. 324-325. Reprinted with permission of South-Western, a division of Thomson Learning: www.thomsonrights.com. Fax 800-730-2215.

21. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Net Advertising Revenues by Medium 19 Integrated Marketing Communications Applications Figure 19.3 19-18 Source: Canadian Media Directors’ Council, Media Digest 1998-99, p. 11. Publication can be accessed on-line at http://www.marketingmag.ca Data compiled from Statistics Canada, CRTC, CAN, CCNA,/Les Hebdos du Quebec, Magazines Canada, CARD CAN, TeleDirect, Canada Post, IAB and Industry estimates.

22. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Advertising Agency A marketing specialist firm that assists the advertiser in planning and preparing its advertisements. 19 Integrated Marketing Communications Applications 19-19

23. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Assessing the Effectiveness of an Advertisement Pretesting The assessment of an advertisement’s effectiveness before it is actually used. Post-testing The assessment of advertising copy after it has been used. 19 Integrated Marketing Communications Applications 19-20

24. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Direct Response Marketing An interactive system of marketing that uses one or more advertising media to effect a measurable response directly to the advertiser. 19 Integrated Marketing Communications Applications 19-21

25. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Comparison of Direct Response Marketing and General Advertising DIRECT RESPONSE MARKETING Selling to individuals. Customers are often identifiable by name, address, and purchase behaviour. Products may have added value or service. Distribution is an important product benefit. The medium is the marketplace. Marketer controls product until delivery. Advertising is used to motivate an immediate order or inquiry. Repetition is used in ad. Consumers feel a high perceived risk -- product is bought unseen. Recourse is distant. 19 Integrated Marketing Communications Applications Table 19.5 19-22 GENERAL ADVERTISING Mass selling. Buyers are identified as broad groups sharing common demographic and psychographic characteristics. Product benefits do not always include convenient distribution channels. The retail outlet is the marketplace. Marketer may lose control as product enters distribution channel. Advertising is used for cumulative effect over time to build image, awareness, loyalty, or benefit recall. Purchase action is deferred. Repetition is used over time. Consumers feel less risk -- have direct contact with the product and direct recourse. Source: Reprinted from Bob Stone, Successful Direct Marketing Methods, 5th ed. (Lincolnwood, IL: NTC Publishing Group, 1994). Used with permission of NTC/Contemporary Publishing Group, Inc. Copyright The McGraw-Hill Companies, Inc.

26. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Point-of-Purchase Advertising Displays and demonstrations that seek to promote the product at a time and place closely associated with the actual decision to buy. 19 Integrated Marketing Communications Applications 19-23

27. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Specialty Advertising Sales promotion medium that uses useful articles to carry the advertiser’s name, address, and advertising message. 19 Integrated Marketing Communications Applications 19-24

28. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Loyalty Program A program that gives rewards, such as points or free air miles, with each purchase in order to stimulate repeat business. 19 Integrated Marketing Communications Applications 19-25

29. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Trade Show An organized exhibition of products based on a central theme. 19 Integrated Marketing Communications Applications 19-26

30. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Public Relations The component of marketing communications that focuses on fostering goodwill between a company and its various publics. 19 Integrated Marketing Communications Applications 19-27

31. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Publicity Normally unpaid communication that disseminates positive information about company activities and products. 19 Integrated Marketing Communications Applications 19-28

32. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Factors Affecting the Importance of Personal Selling in the Promotional Mix 19 Integrated Marketing Communications Applications Table 19.6 19-29 PERSONAL SELLING IS LIKELY TO BE MORE IMPORTANT WHEN Geographically concentrated, relatively small in number Expensive, technically complex, custom-made, requires special handling, frequently involves trade-ins Relatively high Relatively short ADVERTISING IS LIKELY TO BE MORE IMPORTANT WHEN Geographically dispersed, relatively large in number Inexpensive, simple to understand, standardized, requires no special handling, requires no trade-ins Relatively low Relatively short Consumer is Product is Price is Channels are

33. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Categories of Personal Selling Order Processing Creative Selling Missionary Selling 19 Integrated Marketing Communications Applications 19-30

34. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Order Processing Selling at the wholesale and retail levels; involves identifying customer needs, pointing out these needs to the customer, and completing the order. 19 Integrated Marketing Communications Applications 19-31

35. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Creative Selling Selling that involves making the buyer see the worth of the item. 19 Integrated Marketing Communications Applications 19-32

36. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Missionary Selling Selling that emphasizes the firm’s goodwill and providing customers with technical or operational assistance. 19 Integrated Marketing Communications Applications 19-33

37. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. The Sales Process 1.Prospecting and Qualifying 2.Approach 3.Presentation 4.Demonstration 5.Handling Objections 6.Closing 7.Follow-up 19 Integrated Marketing Communications Applications 19-34

38. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Prospecting and Qualifying Prospecting –Identifying potential customers. Qualifying –Determining that the prospect is really a potential customer. 19 Integrated Marketing Communications Applications 19-35

39. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Approach The initial contact between the salesperson and the prospective customer. 19 Integrated Marketing Communications Applications 19-36

40. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Presentation The act of giving the sales message to a prospective customer. 19 Integrated Marketing Communications Applications 19-37

41. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Demonstration Actions which supplement, support, and reinforce what the salesperson has told the prospect. 19 Integrated Marketing Communications Applications 19-38

42. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Objection Reveals a customer’s interest in a product and can be used as a cue to provide additional information. 19 Integrated Marketing Communications Applications 19-39

43. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Closing and Follow-Up Closing –The act of asking the prospect for an order. Follow-Up –The post-sales activities that often determine whether a person will become a repeat customer. 19 Integrated Marketing Communications Applications 19-40

44. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Sales Management Securing, maintaining, motivating, supervising, evaluating, and controlling the field sales force. 19 Integrated Marketing Communications Applications 19-41

45. Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Sales Management - Seven Basic Managerial Functions 1.Recruitment and Selection 2.Training 3.Organization 4.Supervision 5.Motivation 6.Compensation 7.Evaluation and Control 19 Integrated Marketing Communications Applications 19-42