1The World ofAdvertising andIntegrated BrandPromotionChapter 1© 2006 Thomson/South-WesternThe World ofAdvertisingWe Need to have Perspective!• Firms use advertising to build brands• Firms of all sizes need and use advertising• Advertising is just one tool in IntegratedBrand Promotion (IBP)• Advertising and promotion do not guaranteesuccess• People have all sorts of positive and negative(mis-)perceptions about advertising andpromotionCh 1: The process 2© 2006 Thomson/South-WesternCh 1: The process 3What is advertising?Three criteria must bemet for acommunication to beclassified asadvertising:• The communication mustbe paid for• The communication mustbe delivered throughmass media• The communication mustbe attempting topersuade© 2006 Thomson/South-Western2Distinctions withinAdvertising• Advertisements– Specific messagesdesigned to persuade anaudience• Advertising Campaign– An integrated series of adsand promotions thatcommunicate a centraltheme or idea• Integrated BrandPromotion (IBP)– Coordinating promotionaltools with advertising tobuild and maintain brandawareness, identity, andpreferenceCh 1: The process 4© 2006 Thomson/South-WesternAdvertising as aCommunications Process• Production: The advertiser and social contextdetermine ad content.• Accommodation and negotiation: The ways inwhich consumers interpret ads.• Reception: The context of ad reception and theaudience’s understanding of an ad result in ameaningful interpretation of the ad.Ch 1: The process 5© 2006 Thomson/South-WesternAudiences for Advertising• Household Consumers• Business Organizations• The Trade Channel• Professionals• GovernmentCh 1: The process 6© 2006 Thomson/South-Western3Audience GeographyGlobalInternational NationalRegionalLocalCh 1: The process 7© 2006 Thomson/South-WesternAdvertising as a BusinessProcess: Role of Advertising inMarketing and Brand Promotion1. Advertising and the marketing mix2. Advertising in brand development andmanagement:3. Advertising in market segmentation,differentiation, and positioning4. Advertising in revenue and profit generation:Ch 1: The process 10© 2006 Thomson/South-WesternWhich branddevelopment andmanagement featuresare shown in this ad?© 2006 Thomson/South-Western4The Marketing MixProductPromotion PriceDistributionCh 1: The process 10© 2006 Thomson/South-WesternAdvertising in BrandDevelopment andManagement1. Information and persuasion2. Introduction of new brands--extensions3. Building brand loyalty/brand equity4. Creating an image/meaning5. Building brand loyalty in the tradechannelCh 1: The process 11© 2006 Thomson/South-WesternAdvertising’s role in SDPmarketingSegmentation(heterogeneous > homogeneous)Differentiation(perceived as different or unique)Positioning•Distinct fromother brands•Occupies a“value” level•Externalniche vs.internalCh 1: The process 12© 2006 Thomson/South-Western5Revenue and ProfitGeneration1. Economies of scale: highervolume results in lower unit cost2. Brand loyalty leads to inelasticityof demand: less price sensitivityto demandCh 1: The process 13© 2006 Thomson/South-WesternTypes of Advertising1. Primary demand stimulation2. Selective demand stimulation3. Direct response advertising4. Delayed responseadvertising5. Corporate advertisingCh 1: The process 14© 2006 Thomson/South-WesternThe Economic Effects ofAdvertisingGross Domestic ProductBusiness CyclesCompetitionPricesValueCh 1: The process 15© 2006 Thomson/South-Western6Integrated Brand Promotion(IBP)SpecialSpecialEventsEventsTelevisionTelevisionAdvertisingAdvertisingCCoouuppoonnssCoordinatedpromotionalactivitiesreinforce oneanotherCh 1: The process 16© 2006
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