Chapter 1 The World of Advertising and Integrated Brand Promotion

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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.
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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.

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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
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Is this political message an advertisement or a public service announcement?

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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 audiences understanding of an ad result in a meaningful interpretation of the ad.
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Audiences for Advertising

Household Consumers Business Organizations The Trade Channel Professionals Government

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Audience Geography
Global International National Regional Local

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This ad ran in Italy. Do you think this was a global ad or and international ad? Whats the difference?

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

1. Advertising in 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
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The Marketing Mix

Product

Distribution

Promotion

Price

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Advertising in Brand Development and Management

1. 2. 3. 4. 5. Information and persuasion Introduction of new brandsextensions Building brand loyalty/brand equity Creating an image/meaning Building brand loyalty in the trade channel

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Advertisings Role in SDP Marketing

Segmentation
(heterogeneous > homogeneous)

Positioning

Distinct from other brands Occupies a value level External niche vs. internal

Differentiation
(perceived as different or unique)

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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

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Types of Advertising
1. 2. 3. 4. 5. 6. Primary demand stimulation Selective demand stimulation Direct response advertising Delayed response advertising Corporate advertising Brand advertising

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Is this ad an example of primary or selective demand stimulation? Whats the difference?

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The Economic Effects of Advertising

Gross Domestic Product Business Cycles Competition Prices Value

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Integrated Brand Promotion (IBP)

Coordinated promotional activities reinforce one another.
C o u p o n s
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