Grade: Senior
Subject: other

#2446. Promotion

other, level: Senior
Posted Wed Nov 28 19:15:49 PST 2001 by Seeralan (

Marketing and e-Business, Seneca, Toronto, Ontario

Ch. 16: Promotion - Advertising & Sales Promotion

Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor.
Product advertising -- Tries to sell a product. It may be aimed at final users or at channel members.
Institutional advertising -- Tries to promote an organization's image, reputation, or ideas, rather than a specific product. Its basic objective is to develop goodwill or improve an organization's relations with various groups -- customers but also current and prospective channel members, suppliers, shareholders, employees, and the general public.

Pioneering Advertising: tries to develop primary demand for a product category rather than demand for a specific brand. Pioneering advertising is usually done in the early sate of the product life cycle (introduction and market growth).
Inform potential customers about the new product and helps turn them into adopters.

Comparative advertising: tries to develop selective demand for a specific brand. As the product life cycle moves along, a firm is forced into competitive advertising to hold its own against competition.

Involves making specific brand comparisons using actual product names.

Competitive advertising may be direct or indirect.

Direct type: aims for immediate buying action
Indirect type: points out product advertising to affect future buying decisions.

Comparative Advertising: involves making specific brand comparisons using actual product names.

Reminder advertising: is likely to be most useful when the firm has achieved brand preference or brand insistence for its product.


Advertising Allowances: are price reductions to firms farther along in the channel to encourage them to advertise or otherwise promote the firm's products locally. Some of the ethical issues associated with advertising allowances are that a retailer, for example, may accept the allowance, run the ad to draw customers to the store and then sell the customer another brand, or the retailer may accept the allowance but not run the ads at all.

Cooperative advertising: involves intermediaries and producers sharing in the cost of ads.

Horizontal cooperation: two or more firms join together in common advertising effort

Advertising Agencies: are specialists in planning and handling mass-selling details for advertisers.

Strategic planning decisions for advertising include;
Target audience
Kind of advertising
Media types
Copy thrust
Who will do the work?

Type of advertising depends on adoption process stage;
Awareness - teaser, jingle, announcement
Interest - informative/descriptive, image/celebrity
Evaluation & Trial - comparative, testimonial
Decision - point-of purchase, price deal
Confirmation - reminder


Copy thrust: what the words and illustrations should communicate.

Let AIDA help guide message planning

Use AIDA concept as guide;
Get Attention - headline, photo, statement
Hold Interest - relate to emotions
Arouse Desire - meet customer needs
Obtain Action - relate to strongly felt, unsatisfied needs
Each step gets progressively more difficult
Very difficult to use a global message

Advertising agencies
Specialists in planning and handling mass selling details for advertisers
Full service - include all advertising activities as well as strategic planning, market research, product development and sales promotion or
Just media buying services

Size matters
Lots of little agencies but the largest control most of the billings
Smaller firms offer specialized and/or more persona services

Method of payment
Usually commission/percentage on media and production costs
This is OK for firms that need lots of service but spend little on media versus firms that have many advertising campaigns with large media expenditures
Could use fee for service
Some firms now include bonus based on results

Ethical issues
Access to confidential information about clients, therefore usually can't work for competing firms
More specialized advertising is becoming more popular

Economic impact
Billions of dollars spent
Growth of TV, but use of other media is also expanding
Concentrated mostly in certain consumer product categories


Role of government agencies
In most countries, government determines what is allowable, fair or appropriate
Rules vary from country to country
Provincial governments are also getting involved
Self regulation is also used - Advertising Standards Council

Activities other than mass and personal selling
Stimulates interest, trial or purchase by others in the channel
Usually complements other promotion methods
Short term effect

Spending is growing
Mainly from frequently purchased products (staples) - food, health & beauty and household cleaning products which are competing in mature markets which large retail chains
Consumers more price sensitive
New technologies make promotions more efficient
More specialists

Problems managing sales promotions
May erode brand loyalty
Doesn't develop close customer relationship
Increases prices due to costs
New approaches focus on building better channel relations
Lack of experience and difficult to develop promotion skills
Lack of sales promotion manager

Different sales promotion for different targets
Final customers - focus on increasing demand with store point of purchase materials, samples, displays, trial size etc.
Middlemen - trade promotion stresses price with allowances and contests
Sales force - encourage new customers with bonuses, sales meetings, sales materials, employee of the month