Canadian Advertising in Action Chapter 1 Advertising in a Marketing Communications Environment © 2006 Pearson Education Canada Inc.

Learning Objectives Assess role of advertising Identify distinctions among forms of advertising Define seven components of integrated marketing communications Explain how advertising can be effective Identify social and business issues Describe laws and regulations © 2006 Pearson Education Canada Inc.

Advertising Has One Key Role To influence behaviour so that a receiver of the message views something positively and then takes the appropriate action. When all is said and done the real task of advertising is to influence behaviour in a positive way (e.g., buy this product, vote for this candidate, give to this cause, etc.). If the advertising is strong enough, it will encourage the desired action. © 2006 Pearson Education Canada Inc.

Advertising’s Position © 2006 Pearson Education Canada Inc.

Integrated Marketing Communications Coordinating the various components of communications so that all of the components work together to achieve common objectives. Integrated marketing communications is the latest trend in communications. The goal is to ensure that all elements of the communications mix work together to achieve common goals. Clients now expect their agencies to provide expertise in areas beyond advertising. On one hand this has caused problems between clients and agencies (e.g., relationships have suffered). On the other hand it has forced agencies to review their operations and diversify where necessary. © 2006 Pearson Education Canada Inc.

Integrated Marketing Communications Mix Advertising Sales Promotion Personal Selling Public Relations Events and Sponsorship Direct Response Interactive IMC These are the five major components of the integrated marketing communications mix. My preference is to keep event marketing and sponsorship separate from sales promotion. Others may view this situation differently. Nonetheless, event marketing is becoming much more important in the communications mix today. Its rate of growth and status in the mix merit a separate category. © 2006 Pearson Education Canada Inc.

Factors Encouraging IMC Efficiency and Accountability Changing Business Environment Database Marketing Marketers are under the gun to produce results. Therefore, the goal is efficiency in spending. Technology is fuelling change in communications (e.g., the shift toward direct response advertising and Internet advertising and away from traditional media). Database marketing provides a means of communicating more directly with customers, building stronger relationships in the process. © 2006 Pearson Education Canada Inc.

Consumer Advertising Advertising directed at consumers: National Retail End-Product Direct Response Advocacy National advertising refers to the advertising of branded products (e.g., Coca-Cola, Labatt Blue, Tide detergent, etc. Retail advertising refers to advertising done by retailers to build their image or attract business (e.g., announce sales or other events). End-product advertising involves advertising part of a finished product (e.g., Intel inside. Direct response advertising directly to consumers © 2006 Pearson Education Canada Inc.

Business Advertising Advertising directed by business to business: Trade Industrial Service Industry Corporate Business-to-business advertising refers to advertising directed by business and industry at business and industry. Trade advertising is directed at channel members. Industrial advertising is directed at business and industry end users. Professional advertising refers to messages directed at professionals (lawyers, accountants, etc.) © 2006 Pearson Education Canada Inc.

action item Read the ‘action’ item on page 11 of the text. Visit budlightinstitute.ca - use the Excuse Centre and discuss its effectiveness. © 2006 Pearson Education Canada Inc.

Product and Promotional Advertising Informs customers about a brand’s benefits. Promotional Incentive oriented to create immediate action. © 2006 Pearson Education Canada Inc.

Conditions for Using Advertising Effectively 1. Market and Product Demand 2. Product Life Cycle 3. Competitive Advantage 4. Competitive Environment 1. It is better to advertise in markets where demand is positive. When other situations prevail advertisers must spend more wisely or differently. 2. Advertising is critical in the introduction (creating demand and awareness) and growth stages (awareness and preference plus the threat of competition) of the product life cycle. 3. Products need a unique selling point that will make them stand out from competitors. Typically, they portray superiority, capitalize on innovation or draw upon a hidden quality to do so. 4. Position in the market often dictates a brand’s ability to keep pace with leading advertisers. Share of mind is often related to the amount invested in advertising. Alternate strategies may be more beneficial than advertising. Cont’d… © 2006 Pearson Education Canada Inc.

Conditions for Using Advertising Effectively 5. Product Quality 6. Management Commitment 7. Marketing Mix 5. Advertising encourages the first purchase. The product must live up to the promise of advertising and encourage additional purchases. Good advertising is no substitute for an inferior product. 6. Management must be committed to seeing and advertising strategy (plan) through to completion. Managers with short-term outlooks often pull the plug on campaigns and do more damage to the brand. The more longer-term the orientation the stronger the likelihood of success through advertising investment. 7. Advertising must be carefully integrated into the marketing communications mix and the marketing mix. A chain is only as strong as its weakest link. © 2006 Pearson Education Canada Inc.

Influence of Demand on Advertising Flat Positive Negative Vol. It is better to advertise in markets where demand is positive. Given the scarcity of resources and the demands for greater accountability for advertising spending it is hard to justify heavy investments when demand is flat or declining. There are many other views on this matter (e.g., spending when demand is flat or negative could prepare for consumers for the day when demand rebounds). In other words, the state of the economy often dictates demand in markets. If times change and your brand is top of mind, you may benefit the most. Time © 2006 Pearson Education Canada Inc.

Issues of Contemporary Advertising Use of Sex and Sex-Role Stereotyping Misleading Advertising Technology and IMC Changing Business Environment Media Convergence © 2006 Pearson Education Canada Inc.

Laws and Regulations Regulation and control come from two primary sources: CRTC Governs all broadcasting laws Advertising Standards Canada Canadian Code of Advertising Standards Gender Portrayal Guidelines © 2006 Pearson Education Canada Inc.