Chapter 1 The World of Advertising and Integrated Brand Promotion 2006 Thomson South Western The World of Advertising We Need to have Perspective Firms use advertising to build brands Firms of all sizes need and use advertising Advertising is just one tool in Integrated Brand Promotion IBP Advertising and promotion do not guarantee success People have all sorts of positive and negative mis perceptions about advertising and promotion 2006 Thomson South Western Ch 1 The process 2 What is advertising 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 2006 Thomson South Western Ch 1 The process 3 1 Distinctions within Advertising Advertisements Specific messages designed to persuade an audience Advertising Campaign An integrated series of ads and promotions that communicate a central theme or idea Integrated Brand Promotion IBP Coordinating promotional tools with advertising to build and maintain brand awareness identity and preference 2006 Thomson South Western Ch 1 The process 4 Advertising as a Communications Process Production The advertiser and social context determine ad content Accommodation and negotiation The ways in which consumers interpret ads Reception The context of ad reception and the audience s understanding of an ad result in a meaningful interpretation of the ad 2006 Thomson South Western Ch 1 The process 5 Audiences for Advertising Household Consumers Business Organizations The Trade Channel Professionals Government 2006 Thomson South Western Ch 1 The process 6 2 Audience Geography Global International National Regional Local 2006 Thomson South Western Ch 1 The process 7 Advertising as a Business Process Role of Advertising in Marketing and Brand Promotion 1 Advertising and the marketing mix 2 Advertising in brand development and management 3 Advertising in market segmentation differentiation and positioning 4 Advertising in revenue and profit generation 2006 Thomson South Western Ch 1 The process 10 Which brand development and management features are shown in this ad 2006 Thomson South Western 3 The Marketing Mix Product Distribution Promotion Price Ch 1 The process 10 2006 Thomson South Western 1 2 3 4 5 Advertising in Brand Development and Management Information and persuasion Introduction of new brands extensions Building brand loyalty brand equity Creating an image meaning Building brand loyalty in the trade channel Ch 1 The process 11 2006 Thomson South Western Segmentation heterogeneous homogeneous Differentiation perceived as different or unique 2006 Thomson South Western Positioning Advertising s role in SDP marketing Distinct from other brands Occupies a value level External niche vs internal Ch 1 The process 12 4 Revenue and Profit Generation 1 Economies of scale higher volume results in lower unit cost 2 Brand loyalty leads to inelasticity of demand less price sensitivity to demand 2006 Thomson South Western Ch 1 The process 13 Types of Advertising 1 2 3 4 Primary demand stimulation Selective demand stimulation Direct response advertising Delayed response advertising 5 Corporate advertising 2006 Thomson South Western Ch 1 The process 14 The Economic Effects of Advertising Gross Domestic Product Business Cycles Competition Prices Value 2006 Thomson South Western Ch 1 The process 15 5 Integrated Brand Promotion IBP S Evpec en ial ts on isi ing levertis e T dv A C o u p o n s 2006 Thomson South Western Coordinated promotional activities reinforce one another Ch 1 The process 16 6
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