4200 Principles Exam 1 Notes 08 22 2012 What are Advertising and Integrated Brand Promotion To be classified as advertising o The communication must be paid for Public service announcements aren t considered advertisements because they re not paid for Promotion activities aren t considered advertisements either o The communication must be delivered though mass media TV newspapers radio internet o The communication must attempt to persuade Distinctions within Advertising Advertisements o Specific messages designed to persuade an audience Advertising Campaign o An integrated coordinated series of ads and promotions that communicate a central theme or idea 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 o IBP is a process o IBP uses a wide ranges of tools including Advertising sales promotion coupons and free trials 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 and in movies outdoor signage billboards public relations influencer peer to peer communications corporate advertising Advertising as a Communications Process Production Reception o The advertiser and social context determine ad content o The context of ad reception and the audiences understanding of an ad result in a meaningful interpretation of the ad Accommodation and negotiation o The ways in which consumers interpret ads Ch 1 08 22 2012 Audiences for Advertising Target Audience Who is most likely to use our brand they become our target audience single them out be aiming advertisements at them Audiences for Advertising Audience Categories o Most advertising is aimed at this audience Household Consumers Business Organizations The Trade Channel o Retailers wholesalers distributors Professionals Government o Often reached with ads in trade journals Audiences Geography Global advertising o Uses common theme and presentation in all markets o Not seen a lot because there are cultural differences between countries International Advertising National Advertising o Advertising is different from country to country o Same advertising runs throughout the country Apple McDonalds etc Regional Advertising o Advertising that runs in only parts of the country Local Advertising o Advertising runs in a small designated market o Includes cooperative advertising or co op advertising Ch 1 08 22 2012 Advertising has a role In the marketing mix In brand management In market segmentation differentiation and positioning In revenue and profit generation The role of advertising in the marketing mix The Marketing Mix o Product o Price o Promotion o Place distribution The role of the marketer is to come up with the perceived value based off of the marketing mix The role of advertising in brand management Information and persuasion Introduction of new brands and extensions Building and maintaining brand loyalty brand equity It s not only about the tangible things Crest gets my teeth clean there s also intangible things Create an image meaning Building brand loyalty in the trade channel The role of advertising in market segmentation differentiation and positioning Market segmentation o Breaking down a large varied market into smaller more similar submarkets Advertising s role in market segmentation o To come up with meaningful messages aimed at segmented audience Differentiation o Creating a perceived difference between brands in the mind of the consumer Advertising s role in differentiation o To shape the perception of the differences between our brand and the competitor s brand Positioning o Getting a brand to occupy a distinct and valued place in the consumers mind Advertising s role in differentiation o Communicating about the brand in a way that consumers believe the brand s distinctiveness External positioning how you position your brand our your product in comparison with your competitors VS internal positioning The role of advertising in revenue and profit generation Economies of scale o Higher volume results in lower unit cost Brand loyalty leads in inelasticity of demand o Less price sensitivity to demand Types of Advertising Primary demand stimulation entire product category Selective demand stimulation Direct Response advertising o Advertising when you re trying to stimulate demand in one o Wanting people to buy something right then Delayed response advertising o Getting people to prefer brands over time o This is the majority of advertising Corporate advertising o Focusing on promoting the company as a whole Brand advertising 08 22 2012 Technology has changed and that has changed how the advertising industry does business Trends affecting the advertising and promotion industry Trend 1 Consumer Control o Social Media Facebook 900 million users sharing 3 2 bullion likes and comments a day Up from 350 million users a year ago Up from 3 5 likes and comments a week Twitter 500 million users posting 400 million tweets a day o Blogs o DVR s Only 50 million users last year 133 million active blogs 346 million people globally visit blog sites Consumers can praise or trash brand Could reduce ad viewership by 30 Translation 20 billion out of ad industry Trend 2 Evolving Media Organizations o They re either adding merging or consolidating o Changing with the changing media landscape Trend 3 Media clutter fragmentation o Solution More efficient and effective targeting o This mean less advertising in mass media o IBP will have to grow and increase Trend 4 Crowdsourcing Trend 5 Mobile Marketing Mobile Media o Expected to grow to 1 2 billion by 2014 E readers tablets and smart phones 08 22 2012 Scope of the Advertising Industry Worldwide advertising spending o More than 600 billion U S advertising spending o More than 300 billion Structure of the Advertising Industry Advertising Advertisers spend money to do it Types Have a message to get out to consumers and they re willing to o Manufacturers and Service Firms Apple Coca Cola McDonalds Target business or local people Spend a lot of money on advertising o Trade Resellers Sears American Lock and Supply Middle man between the manufacturer who makes the product and the consumer who buys the product Wholesalers American Lock and Supply and distributors fall into this category They don t use mass media much