Chapter 1

The World of Advertising

and Integrated Brand
Promotion

© 2009 South-Western, a part of Cengage Learning

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 The World of Advertising and
Integrated Brand Promotion

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
 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 and negative
(mis)perceptions about advertising and promotion

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 What are Advertising and
Integrated Brand Promotion?

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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 What are Advertising and
Integrated Brand Promotion?
Integrated Brand Promotion (IBP) is the process of using a wide range of promotional tools
working together to create widespread brand exposure.
 IBP is a process
 IBP uses a wide ranges of tools including:
– Advertising
– Point of Purchase (in-store) materials
– Direct Marketing (catalogs, infomercials, email)
– Personal Selling
– Internet advertising
– Blogs
– Podcasting
– Event sponsorship
– Brand entertainment (product placement on TV shows, in movies)
– Outdoor signage/billboards
– Public relations
– Influencer (peer-to-peer) communications
– Corporate advertising

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 Distinctions within Advertising

 Advertising Campaign
– An integrated series of ads and promotions that
communicate a central theme or idea

 Advertisements
– Specific messages designed to persuade an audience

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 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

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 Audiences for Advertising:
Audience Categories

 Household Consumers
 Business Organizations
 The Trade Channel
 Professionals
 Government

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 Audiences Geography

 Global advertising
 International advertising
 National advertising
 Regional advertising
 Local advertising

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 Ad in Context Example

This
This ad
ad ran
ran in in
Italy.
Italy. Do
Do you
you
think
think this
this is
is aa
“global”
“global” or
or
“international”
“international”
ad?
ad? What’s
What’s the the
difference?
difference?

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 Advertising as a Business
Process

1. The role of advertising in the marketing mix

2. Advertising in brand management
3. Advertising in market segmentation,
differentiation, and positioning
4. Advertising in revenue and profit generation

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 The Role of Advertising in the
Marketing Mix
The Marketing Mix

Product Distribution

Perceived Value

Promotion Price

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 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

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Advertising’s Role in Segmentation,
Differentiation and Positioning

Segmentation
•Distinct from
(heterogeneous >
other brands
homogeneous)

•Occupies a
“value” level

Differentiation
•External niche
(perceived as different or
ti s o P
vs. internal
unique)

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 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

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 Types of Advertising

 Primary demand stimulation

 Selective demand stimulation
 Direct response advertising
 Delayed response advertising
 Corporate advertising

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 Ad in Context Example

Is
Is this
this ad
ad an
an example
example of
of
primary
primary or or selective
selective
demand
demand stimulation?
stimulation?
What’s
What’s thethe difference?
difference?

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The Economic Effects of
Advertising

Gross Domestic Product

Business Cycles
Competition
Prices
Value
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 From IMC to IBP

Sp i ong Coordinated
Ev eci v is isin promotional
en al e le ert
ts T dv
A activities
reinforce one
C
o another
u
p
o
n
s
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 Check Your Understanding

Titleist, the manufacturer of golf balls, runs a commercial

featuring professional golfer John Daly. A group of people
watching the commercial at a country club all interpret the
commercial in a similar manner. When members of an
audience share a similar interpretation of an advertisement
like this, it is most likely the result of
A.the content of the commercial.
B.the choice of spokesperson.
C.the similar background and social standing of the audience.
D.the characteristics of the product being advertised.

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 Check Your Understanding

CampusTown Foods, a local grocery store, has decided to

run a series of advertisements. For this to be considered
an advertising campaign, which one of the following
conditions must be met?
A.The advertisements must communicate a cohesive and
integrated idea or theme.
B.The advertisements must appear over an extended
period of time.
C.The advertisements must appear in multiple media.
D.The advertisements must focus on store products rather
than store services.

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