ADVERTISING AND SALES PROMOTION

Evolution of advertising
‡ The first documented advertising agency in the US was the N. W. Ayer Agency, established in 1877 (Gilson, 1980). ‡ Prior to this time, advertising agents were space brokers³agents who solicited ads from businesses and then sold them to newspapers that had difficulty getting out-of-town advertising.

1870-Early 1900
‡ 1914 ² The Federal Trade Commision Act designed to make unfair trade practices unlawful. ‡ 1922 ² FTC vs. Winstead Hosiery Co. case emphasised the need for ethical practices in advertising.

drug.1920·s ² Early 1950·s ‡ 1934 Wheeler Lea amendment to FTC Act passed to protect consumers from deceptive advertising in the food. . therapeutic device and cosmetic industries. ‡ 1936 The Robinson-Patman Act prevented manufacturers from providing promotional incentives unless competition also did the same.

‡ More ad agencies created. ‡ Consolidation of ad agencies. coupons. ‡ ´COPYWRITERµ ruled this era. ‡ 1960-1970 product parity forced creative advertising. ‡ 1980·s-1990·s moved from traditional radio and TV advertising to sales promotion techniques (such as rebates. ‡ Research data from customers were collected. . ‡ Launch of youth targeted ads. sweepstakes).1950·s ² 1990·s ‡ Proliferation of TV sets in 1950·s gave ad agencies a new platform. ‡ 2 minute ads were replaced with 30 sec slots due to cost constraints.

‡ Globalisation ² Create ads for products in global markets. ‡ COPA ² Children·s Online Protection Act. ‡ Internet emerged as a powerful tool. 1998. ‡ Widespread use of cable TV and satellite transmission fragmented TV to niche markets. .1991 to present ‡ Newspaper and Radio still important.

it is now common to offer incentives such as box seats at sporting events and music concerts. Ad councils acts as an ad agency that addresses social evils such as drunken driving. . ‡ While 15% commision on gross sales continues. racial intolerance and domestic violence.Now« ‡ As of 2000.

‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ 2010 Ad spends in main media-TV. Media spends on social issues increased. ‡ Outdoor. newspaper and magazine up by 32%. Stock market related businesses. cinema ² 28% Highest ad spends sectors were telecom and insurance. internet and radioRs. Highest growth in Asia pacific region.Rs.Ad Spends ‡ 2009 ‡ Total ad spend-Rs.16000 Crore up by 6-8%. Newspaper ² 30% TV ² 26% Magazine Ads ² 7% Radio. ‡ Low Sectors-Real estate. outdoor. . textiles and cement. even the social communication of corporates were included. FMCG & Financial Services. Capital goods. Other than government campaign.4000 Crore down by 15-20% ‡ Up Sectors-Auto.20000 Crore ‡ Print & TV Ads. Telecom.

.Global ad spend in Q1 2011 has increased 8.8% resulting in $118 billion advertisement spend.

Careers in advertising ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Account managers Art Directors Creative Directors Copywriters Designers Artists Public relations consultants Researchers Media analysts Product testers Account Director Account planner Media planner ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Event management Image management Internet marketing Brand managers Product managers Client service Key account managers Photographers Visualisers Media buyer Scriptwriters Content analysts Freelancers. .

Ad agencies and Society .MODULE 1 . Consumer.CONTENTS ‡ Marketing Communications ‡ Integrated marketing communications » » » » » Introduction Components Need and importance Legal and regulatory aspects Advantages and Disadvantages to Producer.

packaging. place. direct marketing. Marketing communications is a subset of the overall subject area known as marketing. promotion. sales promotion. Marketing communication is a collective term for all the various types of planned messages used to build a brand-advertising. personal selling. product (know as the four P's) that includes people. public relations. processes and physical evidence.Introduction Marketing has a marketing mix that is made of price. . when marketing services (known as the seven P's). events and sponsorships and customer service.

.Key functional areas of Marcom ‡ ‡ ‡ ‡ ‡ ‡ ‡ Advertising Direct Marketing Public Relations (and publicity) Sales Promotion Personal Selling Packaging Events and sponsorships-Trade Fairs and Exhibitions ‡ Customer service.

the vehicles through which marketing communication messages are carried to (and from) target audiences. .Marketing communications have little value without media. The media that is used frequently include TV Newspaper Outdoor boards Mail Radio Magazines Internet Telephone Building brands is the overall objective of all marketing communication as well as all marketing activities.

Tools of Marketing Communication Mix Personal Selling Direct Marketing TOOLS OF MARCOM MIX Public Relations Sales Promotion Advertising .

Marketing communicationan audience perspective Planned marketing communication Audience Experience Product experience based communication Service experience based communication Unplanned marketing communications .

An audience centred perspective of Marcom Tools Media Audience Experience People & Processes Messages .

Tasks of Marcom Marketing communication is used to influence audiences in 4 main ways: Differentiate Reinforcing Informing Persuading To position brand To remind/reassure To educate/aware To take action .

Role of Marketing communication Creating brand values THINKING & FEELING Provoking behavior DOING Generate audience engagement .

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An integrated marketing communication plan is focused so that all the messages convey the same meaning. IMC is about synergy and creativity.Introduction to IMC ‡ Integrated marketing communication is used where all methods are simultaneously used to convey the same message. executing and monitoring the brand messages that create customer relationships. ‡ IMC is a process of planning. integration and communication. . ‡ IMC focuses on customer relationships which will result in more sales and profit than focusing only on generating sales transactions.

etc. Evaluating and planning Customers brand experience One-and-two-way media Radio. packaging. low sales. customer service. enhancing brand equity Weak brand relationships Loss of customers. Direct response. newspaper. Strong brand relationships Increased sales and profits. Packaging. Events. sales promotion.etc. Outdoor boards. mail. Phone. TV. Loss of brand equity IMC Process Model .Brand messages Communicated thru Advertising. internet. sponsorships.

the messages will not produce the cumulative effect. this however. . ´It is a fundamental shift in the role and purpose of marketing from manipulation of the customer to genuine customer involvement: from telling and selling to communication and sharing of knowledge:µ -Regis McKenna. what maybe called: ´One voice. relationship marketing expert. requires more than making brand messages look and sound alike. one lookµ Integration must happen at every point where a customer comes in contact with the brand-if not.IMC aims at achieving integration and synergy.

Benefits of IMC ‡ Greater Brand Differentiation ‡ Accountability ‡ Cuts through message clutter in marketplace. ‡ Enhances customer and stakeholder trust. ‡ Fosters internal coordination and focus . ‡ Improves sales and profits-result of customer relationships.

.Advertisements are important for: ‡ standardized products ‡ products aimed at large markets ‡ products that have easily communicated features ‡ products low in price ‡ products sold through independent channel members and/or are new.

Sales Promotion Programs designed to build interest in or encourage purchase of a product during a specified time period. 4.Present an economic incentive to buyer to purchase product. What are the 4 main objectives to create immediate sales? 1.Create an invitation to buy now.Build awareness of the promoted product. . 2.Provide info about the product. This gets buyers to buy NOW and is done by giving them short-term incentives. 3.

Direct Marketing Public Relations (and publicity) Personal Selling Packaging Events and sponsorships-Trade Fairs and Exhibitions Customer service. .

Sales Promotion Mix the combo of tools (6) firms use to compliment the firms advertising efforts .

An increase in loyalty can amount to much larger profits Samples The offering of a product free or at a greatly reduced price Point of Purchase (POP) or Product Placement Located at high traffic areas near the cash register or the end of an aisle. Coupons Sales promotions that usually offer a discounted price to the consumer to encourage trial or purchase . you want to treat that 20% better b. This is done because if 80% of sales are from 20% of your customers.Contests and Sweepstakes the instant win game or offers an experience as the prize Money Offs and Rebates Discounted prices or rebates to the customer to encourage trial or purchase Loyalty Programs a.

Advertising informs and builds awareness about a product while sales promotion aims to close the deal with an urgency for purchase .

but not from advertisement. ‡Promotions cannibalize sales in competing brands while stimulating sales for complimentary brands (ex: a sale on art materials might increase the sale of art paper). ‡Heavily promoted products lose brand equity because the lowered price damages the brand image. ‡High market share brands do less sales promotion because it is difficult to increase their market share even further (Market Saturation).What are the 4 main points of Research on Sales Promotion? ‡Temporary price reductions increase sales substantially. a much greater response than advertising because it creates a sense of urgency and consumers get immediate benefits through sales. .

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