1. www.mhhe.com/fourps For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Advertising and Sales Promotion Advertising and Sales Promotion CHAPTER FIFTEEN

2. When we finish this lecture you should 1. 1. Understand why a marketing manager sets specific objectives to guide the advertising effort. 2. 2. Understand when the various kinds of advertising are needed. 3. 3. Understand how to choose the “best” medium. 4. 4. Understand the main ways that advertising on the Internet differs from advertising in other media.

3. When we finish this lecture you should 5. 5. Understand how to plan the "best" message— that is, the copy thrust. 6. 6. Understand what advertising agencies do and how they are paid. 7. 7. Understand how to advertise legally. 8. 8. Understand the importance and nature of sales promotion. 9. 9. Know the advantages and limitations of different types of sales promotion.

4. Marketing Strategy Planning Process

5. 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 Strategy Planning, Advertising, and Sales Promotion (Exhibit 15-1)

6. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Decision to Position a New Product

7. International Dimensions are Important

8. Advertising Spending as Percent of Sales for Illustrative Product Categories (Exhibit 15-2a)

9. Retail Ad Spending (Exhibit 15-2b)

10. Obtain Outlets Ongoing Contact Support Sales Force Maintain Relationships Get Immediate Action Obtain Outlets Introduce New Products Position Brands Introduce New Products Position Brands Ongoing Contact Support Sales Force AdvertisingObjectives Should be Specific Setting Ad Objectives Is a Strategy Decision

11. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin What’s the Advertising Objective?

12. Objectives Guide Implementation (Exhibit 15-3)

13. Institutional Advertising Pioneering Advertising Product Advertising Competitive Advertising Reminder Advertising Direct Indirect Comparative Types of Advertising Types of Advertising Objectives Determine the Kinds of Advertising (Exhibit 15-4)

14. Competitive Advertising Emphasizes Selective Demand

15. A Competitive Ad That’s Comparative

16. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Comparative Advertising U.S. version Japan version

17. Reminder Advertising Reinforces a Favorable Relationship

18. Sheds Favorable Light Connects Divisions of a Company Advocates Causes and Ideas Institutional Advertising – Remember Our Name

19. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Interactive Exercise: Types of Advertising

20. A television ad for Target encourages consumers to go to their nearest Target store for a big end-of- season sale coming up in two weeks. This type of advertising is: A.pioneering. B.reminder. C.indirect competitive. D.direct competitive. E.institutional. Checking your knowledge

21. Community Bank sends an advertisement via direct mail to several thousand customers, quoting special low financing rates on new vehicles for a limited time only. The ad names some other financial institutions and shows their respective loan rates. Community Bank promises to beat any rate offered for a comparable term. This type of advertising is : A.pioneering. B.indirect competitive. C.comparative. D.reminder. E.institutional. Checking your knowledge

22. Cooperative Advertising Cooperative Advertising Integrated Communications Integrated Communications Integrated Communications Integrated Communications Cooperative Advertising Cooperative Advertising Allowances Advertising Allowances Advertising Allowances Advertising Allowances Key Issues Key Issues Vertical Cooperation Vertical Cooperation Vertical Cooperation Vertical Cooperation Ethical Concerns Coordinating Advertising Efforts with Cooperative Relationships

23. Promotion Objectives Target Market Characteristics Funds Available Nature of the Media Choosing the “Best” Medium – How To Deliver the Message

24. Media 2004 spend. (billions) 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 Wide reach, low cost segmented audience Weak attention, many different rates, short exposure Comparing Advertising Media (Exhibit 15-5)

25. Media 2004 spend. (billions) 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 Comparing Advertising Media (Exhibit 15-5)

26. Specialized Media Are Gaining Specialized Media Are Gaining Specialized Media Are Gaining Specialized Media Are Gaining Traditional Media Are More Focused Traditional Media Are More Focused Traditional Media Are More Focused Traditional Media Are More Focused Direct Mail Has Grown Direct Mail Has Grown Key Issues Key Issues Direct Mail Has Grown Direct Mail Has Grown “Must Buys” May Use Up Funds “Must Buys” May Use Up Funds An Emphasis on Targeting

27. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Interactive Exercise: Promotion Planning

28. Need to Maintain Interest Need to Maintain Interest Pay for Performance Pay for Performance Pay for Performance Pay for Performance Search Ads Match Consumer Keywords Search Ads Match Consumer Keywords Search Ads Match Consumer Keywords Search Ads Match Consumer Keywords Some Sites Offer Better Targeting Some Sites Offer Better Targeting Some Sites Offer Better Targeting Some Sites Offer Better Targeting Behavioral Targeting Behavioral Targeting Behavioral Targeting Behavioral Targeting Direct Response Desired Direct Response Desired Direct Response Desired Direct Response Desired Taking Hold with Advertisers Taking Hold with Advertisers Taking Hold with Advertisers Taking Hold with Advertisers Key Issues Key Issues Advertising on the Internet

29. Planning the Best Message—Getting Attention

30. Obtain Action Arouse Desire Hold Interest Get Attention Can Global Messages Work? AIDA – Attention, Interest, Desire and Action

31. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A Unique Selling Proposition

32. A famous athlete is featured in a commercial for a pain- relieving rub that can help soothe muscle aches and pains. He says, “If it works for me, it’ll surely work for you.” This testimonial is mainly aimed at the _________ stage of the AIDA model. A.attention B.interest C.desire D.action E.confirmation Checking your knowledge

33. Organi- zation Organi- zation Largest agencies HQ location 2005 revenue billions 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 Advertising Agencies Often Do the Work

34. Organi- zation Organi- zation Largest agencies HQ location 2005 revenue billions 2005 revenue billions Select clients 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 * 2004 revenues Advertising Agencies Often Do the Work

35. Research and Testing May Improve Odds Consider the Total Mix Research and Testing May Improve Odds Hindsight May Lead to Foresight Measuring Advertising Effectiveness is Not Easy

36. Standards Are Changing Standards Are Changing Standards Are Changing Standards Are Changing FTC Controls Unfair Practices FTC Controls Unfair Practices FTC Controls Unfair Practices FTC Controls Unfair Practices Government May Say What’s Fair Government May Say What’s Fair Government May Say What’s Fair Support for Claims Is Fuzzy Support for Claims Is Fuzzy How to Avoid Unfair Advertising

37. Sales Promotion: Do Something Different to Stimulate Change (Exhibit 15-6)

38. Hard to Manage Need For Alternatives Erodes Brand Loyalty Not For Amateurs Key Problems Problems in Managing Sales Promotion

39. Different Types of Sales Promotion for Different Targets

40. You now 1. 1. Understand why a marketing manager sets specific objectives to guide the advertising effort. 2. 2. Understand when the various kinds of advertising are needed. 3. 3. Understand how to choose the “best” medium. 4. 4. Understand the main ways that advertising on the Internet differs from advertising in other media.

41. You now 5. 5. Understand how to plan the "best" message— that is, the copy thrust. 6. 6. Understand what advertising agencies do and how they are paid. 7. 7. Understand how to advertise legally. 8. 8. Understand the importance and nature of sales promotion. 9. 9. Know the advantages and limitations of different types of sales promotion.

42. Product advertising Institutional advertising Pioneering advertising Competitive advertising Direct type advertising Indirect type advertising Comparative advertising Reminder advertising Advertising allowances Cooperative advertising Copy thrust Advertising agencies Corrective advertising Key Terms