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The World of Advertising

and Integrated Brand


We need perspective on
advertising and IBP!

• Technology and consumer


control are reshaping the
communications environment
• The lines between
entertainment and
advertising/IBP are blurring
—”Madison & Vine”
• Firms use advertising/IBP to
build brands
We need perspective on
advertising and IBP!

• Firms of all sizes need and use


advertising
• Advertising is just one of many
tools in IBP
• Advertising/IBP do not guarantee
success—8 of 10 new products
fail
• People have all sorts of positive
We need perspective on
advertising and IBP!

Four criteria must be met for a
communication to be classified as
advertising:
• The communication must be paid
for
• The advertiser must be identified
• The communication must be
delivered through mass media
We need perspective on
advertising and IBP!


Integrated Brand Promotion
(IBP)

is the process of using a wide

range of promotional tools

working together to create

widespread brand exposure.
We need perspective on
advertising and IBP!
IBP is a process
IBP uses a wide r anges of tools
including:
•Adver tising • Event sponsorship
•Point of • Brand
Pur chase entertainment
(in-stor e) materials (product
•Dir ect Mar keting placement on TV
shows, in
(catalogs, infomer cials, movies)
email) • Outdoor
•Per sonal Selling signage/billboard
•Inter net s
• Public relations
Distinctions within
Advertising
• Advertising Campaign
• An integrated series of ads and
promotions that communicate a

central theme or idea




• Advertisements
Model of the
Communications
Process
Fields of Experience

Channel
Source / Receiver /
Sender Encoding Decoding Audience
MESSAGE

Response Feedback Loop


Advertising as a
Communications Process:
Mass Mediated
Advertising as a
Communications Process

• Production: The advertiser and social


context determine ad content.

• Reception: The context of ad reception
and the audience’s understanding of an
ad result in a meaningful interpretation
of the ad.

• Accommodation and negotiation: The ways
in which consumers interpret ads
Audiences for Advertising:
Audience Categories

• Household Consumers
• Business
Organizations
• The Trade Channel
• Professionals
• Government
Audiences for Advertising:
Audience Geography

•Global advertising
•International advertising
•National advertising
•Regional advertising
•Local advertising
Ad in Context Example

This
This ad
ad ran
ran inin
Italy.
Italy. Do
Do you
you
think
think this
this is
is aa
“global”
“global” oror
“international”
“international”
ad?
ad? What’s
What’s
the
the difference?
difference?
Advertising as a
Business Process

• The role of advertising in the


marketing mix
• Advertising in brand management
• Advertising in market segmentation,
differentiation, and positioning
• Advertising in revenue and profit
generation
Advertising as a
Business Process

• Definition of Marketing:
• The process of planning and
executing the conception,
pricing, promotion and
distribution of ideas, goods and
services to create exchanges
that satisfy individual and
organizational objectives.

The Role of Advertising
in the Marketing Mix


The Marketing Mix
• Distribution
Product

Perceived
Value
Promotion Price
The Role of Advertising
in Brand Management

§ Information and persuasion


§ Introduction of new brands and
extensions
§ Building and maintaining brand
loyalty/brand equity
§ Creating an image/meaning
§ Building brand loyalty in the trade
channel
Advertising’s Role in
Segmentation,
Differentiation and Positioning

• Segmentation
• (heterogeneous > •Distinct from
homogeneous) other brands

• •Occupies a
• “value” level

• •External
niche vs.
• Differentiation internal
soP
• (perceived as
• different
Advertising’s Role in
Revenue and Profit
Generation
§ Brand loyalty leads to
inelasticity of demand: less
price sensitivity to demand
§ Economies of scale: higher
volume results in lower unit
cost

Types of Advertising

§ Primary demand stimulation


§ Selective demand stimulation
§ Direct response advertising
§ Delayed response advertising
§ Corporate advertising
Ad in Context Example

Is
Is this
this ad
ad an
an example
example
of
of primary
primary oror selective
selective
demand
demand stimulation?
stimulation?
What’s
What’s thethe difference?
difference?
Gross Domestic
Product
Business Cycles
Competition
Prices
Value
of Advertising
The Economic Effects
From IMC to IBP

Sp n
Ev ec s io i n
en ial i
v rti s
ts l e
Te dve
A
g
Coordinated
C
promotional activities reinfo
o
u
p
o
n
s