T233 ADV Adsch01Revised

The World of Advertising and Integrated Brand Promotion : 

Copyright © 2006 Thomson Business and Economics. All rights reserved. Chapter 1 The World of Advertising and Integrated Brand Promotion

The World of Advertising : 

1–2 Copyright © 2006 Thomson Business and Economics. All rights reserved. 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.

What is Advertising? : 

1–3 Copyright © 2006 Thomson Business and Economics. All rights reserved. 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.

Distinctions within Advertising : 

1–4 Copyright © 2006 Thomson Business and Economics. All rights reserved. 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

Slide 5: 

1–5 Copyright © 2006 Thomson Business and Economics. All rights reserved. Is this political message an advertisement or a public service announcement?

Advertising as a Communications Process : 

1–6 Copyright © 2006 Thomson Business and Economics. All rights reserved. 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.

Audiences for Advertising : 

1–7 Copyright © 2006 Thomson Business and Economics. All rights reserved. Audiences for Advertising Household Consumers Business Organizations The Trade Channel Professionals Government

Audience Geography : 

1–8 Copyright © 2006 Thomson Business and Economics. All rights reserved. Audience Geography Global International National Regional Local

Slide 9: 

1–9 Copyright © 2006 Thomson Business and Economics. All rights reserved. This ad ran in Italy. Do you think this was a “global” ad or and “international” ad? What’s the difference?

Advertising as a Business Process: Role of Advertising in Marketing and Brand Promotion : 

1–10 Copyright © 2006 Thomson Business and Economics. All rights reserved. Advertising as a Business Process: Role of Advertising in Marketing and Brand Promotion Advertising and the marketing mix Advertising in brand development and management Advertising in market segmentation, differentiation, and positioning Advertising in revenue and profit generation

The Marketing Mix : 

1–11 Copyright © 2006 Thomson Business and Economics. All rights reserved. The Marketing Mix Perceived Value Product Promotion Price Distribution

Advertising in Brand Development and Management : 

1–12 Copyright © 2006 Thomson Business and Economics. All rights reserved. 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

Advertising’s Role in SDP Marketing : 

1–13 Copyright © 2006 Thomson Business and Economics. All rights reserved. Advertising’s Role in SDP Marketing Segmentation (heterogeneous > homogeneous) Differentiation (perceived as different or unique) Positioning Distinct from other brands Occupies a “value” level External niche vs. internal

Revenue and Profit Generation : 

1–14 Copyright © 2006 Thomson Business and Economics. All rights reserved. Revenue and Profit Generation Economies of scale: higher volume results in lower unit cost Brand loyalty leads to inelasticity of demand: less price sensitivity to demand

Types of Advertising : 

1–15 Copyright © 2006 Thomson Business and Economics. All rights reserved. Types of Advertising Primary demand stimulation Selective demand stimulation Direct response advertising Delayed response advertising Corporate advertising

Is this ad an example of primary or selective demand stimulation? What’s the difference? : 

1–16 Copyright © 2006 Thomson Business and Economics. All rights reserved. Is this ad an example of primary or selective demand stimulation? What’s the difference?

The Economic Effects of Advertising : 

1–17 Copyright © 2006 Thomson Business and Economics. All rights reserved. The Economic Effects of Advertising Gross Domestic Product Business Cycles Competition Prices Value

Integrated Brand Promotion (IBP) : 

1–18 Copyright © 2006 Thomson Business and Economics. All rights reserved. Integrated Brand Promotion (IBP) Coordinated promotional activities reinforce one another.