#2446. Promotion

other, level: Senior
Posted Wed Nov 28 19:15:49 PST 2001 by Seeralan (southcinema@hotmail.com).

Marketing and e-Business, Seneca, Toronto, Ontario

Ch. 16: Promotion - Advertising & Sales Promotion
ADVERTISING

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.
TYPES OF ADVERTISING

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 REQUIRES COORDINATION

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

PLANNING THE BEST MESSAGE - WHAT TO COMMUNICATE

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

ROLE OF ADVERTISING AGENCIES
· 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

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

REGULATING ADVERTISING

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

SALES PROMOTION - DO SOMETHING DIFFERENT
· Definition
· 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