Chapter 16 Advertising and Sales Promotion

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Chapter 16 - Advertising and Sales Promotion

• The marketing manager has to look at the firms
  overall marketing strategy
• set advertising objectives that fit.
• These objectives are used to help guide the
  implementation and purpose of the advertising
• also guide what medium is best suited to getting
  the message across to target market

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• Product advertising - attempts to sell a product.
  Often aimed at final user or channel members.
  (like who?)
• Three key types of product advertising
• Pioneering Advertising used to develop primary
  demand for a product category rather than for a
  specific brand. Early stages of product life cycle

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• Competitive advertising tries to develop
  selective demand for a specific brand, occurring
  as the product life cycle progresses
• Reminder advertising - tries to keep the
  products name before the public. Useful in the
  market maturity or sales decline stage
• Institutional advertising promotes an
  organizations image, reputation, or ideas
  INSTEAD of a specific product. Objective is to
  develop good will, relationships

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How do you know which medium is best?

• To choose the best medium, the marketing manager
  must consider
• 1. promotion objectives
• 2. who the target market is
• 3. the funds available for advertising
• 4. the nature of the medium including REACH,
  FREQUENCY, IMPACT, COST.
• Medium should match advert. objectives already
  set out by the company.

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The Copy Thrust - the best message

• The AIDA concept (getting attention, holding
  interest, arousing desire, obtaining action) is
  useful framework for planning copy thrust
• If you dont get their attention, whats the
  point of going on?
• The method of getting attention shouldnt detract
  from ad, but LEAD to interest

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• To HOLD their interest, the tone of the ad must
  fit with experiences and attitudes of the viewer.
  The tone must fit the experiences/attitudes of
  target market
• must provide evidence that convinces the customer
  of the validity of the claim
• THEN, youll arouse their desire to get the
  product to meet their needs as well
• The ad must be a call for action.

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What do Advertising Agencies really do?

• specialists in planning and handling mass-selling
  details for advertisers
• work independently of the advertiser and can
  therefore offer an outsiders view
• most ad agencies are paid by commission - about
  15 percent on media production costs on a
  national basis

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• most local companies dont use an ad agency, but
  those that do often receive discounted rates
• other forms of payment may include a fee for
  service or payment based on results
• full-service agencies handle ANY activities
  related to advertising - creating, writing,
  shooting, producingeven overall strategic market
  planning, research, sales promotion

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• A mega-agency can offer services wherever needed
  in the worldthats important for marketing
  managers of a firm like Toyota, Coca-Cola etc.
• How do you advertise legally?
• the government takes a role in deciding what
  kinds of advertising it will allow, what is fair
  and what is appropriate

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The Competition Act

• Different countries have different limitations.
  France, Japan limit the use of cartoon characters
  in advertising to children. In Switzerland,
  advertisers cant use actors to represent a
  consumer.
• Provisions in the Competition Act are designed to
  prevent misleading advertising in Canada

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• New legislation and stricter enforcement have
  developed as a result of Canadian consumer
  activists and
• Consumer and Corporate Affairs, which is now
  amalgamated with Industry Canada
• The CRTC - Canadian Radio-television and
  Telecommunications Commission regulates content
  of radio and TV ads
• also Advertising Standards Canada admins a Code
  of Advert. Standards.

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How can you measure effectiveness?

• many advertisers demand laboratory or market
  tests to evaluate an ads effectiveness. American
  Express used interviews to get reactions
• scanner sales data from retailers in certain
  cable TV areas provide estimates
• Three major services in Canada Bureau of
  Broadcast Measurement BBM, Nielsen for TV, and
  the Print Measurement Bureau PMB for newspapers
• COMB - Can. Outdoor Measurement Bureau for total
  traffic passing billboards etc...

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Sales Promotion - the nature of

• it can be implemented quickly
• generates quicker results than advertising
• focus is usually on short-term results by
  overcoming consumer price resistance with coupons
• spending on promotion is increasing
• accounts for MORE spending than does advertising

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• In mature markets, there is a particularly heavy
  use of sales promotion
• this causes price-sensitive customers to switch
  back and forth between brands
• its argued that sales promotion just contributes
  to lower profits and is often done just to
  counter the promotion efforts of your competitor

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Advantages/ Disadvantages of Promotions

• Sales promotion can be difficult to manage
• It is easy to make large, costly mistakes
• If the increase in sales wont at least cover the
  cost of promotion, it probably doesnt make sense
  to do it.

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• There are many forms of sales promotion
• free trials encourage customers to switch brands
• can lead to permanent growth in sales
• price-off coupons will probably return to
  original level or decline if customers have used
  up the coupons to stock up
• Trade promotion - stresses price-related matters,
  sales contests, savings down line

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• Sales promotions for employees
• encourage getting new customers
• selling a new product
• selling a companys entire line
• Incentives for salespeople can include contests,
  bonuses on sales, holding sales meetings at a
  fancy resort

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Internet - for advertising/sales promotion

• a new medium for advertising/promotion
• provides a new capability to interact with and
  engage the audiences in a two-way flow of
  information.
• look back at Chapter 14 for discussion on the
  Internet
• Do YOU think its effective as an
  advertising/promotion vehicle? Wheres the proof?
  (-30-)