Download Chapter One: Introduction to Advertising & Sales Promotion

Introduction to Advertising &
Sales Promotion
Bill Bernbach on Persuasion
"The truth isn't the truth until people believe you, and
they can't believe you if they don't know what you're
saying, and they can't know what you're saying if
they don't listen to you, and they won't listen to you
if you're not interesting, and you won't be interesting
unless you say things imaginatively, originally,
freshly”.
David Ogilvy on Selling
“In the modern world of business, it is useless to be a
creative, original thinker unless you can also sell
what you create”.
Agenda
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What is Communication?
What is Promotional Mix?
What is Advertising?
Advertising’s Evolution
Roles & Functions
Key Players
Types of Advertising
Characteristics of Effective Advertising
Current Trends
What is Sales Promotion?
Definition of Communication
Communication refers to the act, by one or more persons,
of sending and receiving messages that are distorted
by noise, occur within a context, have some effect and
provide some opportunity for feedback.
Types of communication
Intrapersonal Communication
You talk with yourself
Interpersonal Communication
You talk with others
Small Group and Organizational Communication
You interact with others, solving problems,
developing new ideas, and sharing knowledge and
experiences
Public Speaking/Communication
Through Public Speaking/Communication, others
inform and persuade you
Mass Communication
Through Mass Communication you are entertained,
informed, and persuaded by the mediator
Elements of Communication
Effect
Source
Encoder
Receiver
Decoder
Channels
Messages
Noise
Source
Encoder
Receiver
Decoder
Effect
Communication Context
All communication takes place in a context that has at least 4 dimensions
Physical
It is tangible or concrete environment in which communication takes place.
Room,Park etc
Cultural
Communicators’ Rules, Norms, Beliefs and attitude
Social-psychological Status relationships among the participants, the roles, the cultural rules of the
society.
Temporal
Time of the day as well as time in history when communication takes place
Sources-Receivers
Each person involved in communication is both a Source (or speaker) and a receiver (or listener)
Source-Receiver Encoding-Decoding
Encoding
Act of producing message. Example writing or speaking
Decoding
Act of receiving messages. Example reading or listening
Messages
Communications messages take many forms
We send and receive messages through any one or any combination of sensory organs.
Verbal
Non-verbal
oral or written
other than oral or written, Clothes you wear, the way you talk, shake hands, nod your head,
comb your hair, sit and smile---all send messages.
Communication Channel
It is the medium through which the message passes
Vocal Channel
Visual Channel
Olfactory Channel
Tactile Channel
Speak and listen
See
Smell odors
Touch
Feedback Messages
Messages sent back to the speaker reacting to what is said.
Verbal and/or non-verbal
Feedback has 5 dimensions
Positive or Negative
Person-focused or Message-focused
Immediate or Delayed
Low Monitoring (spontaneous and honest) or High Monitoring (saddarati bayan)
Supportive or Critical
Feedforward Messages
Verbal and/or non-verbal
It is information you provide before sending your primary messages revealing
something about the message to come.
 Preface of the book
 The opening paragraph of a chapter
 Movie Previews
 Magazine Covers
 Introduction in Public speeches
 Teaser ads
Communication Effects
Communication has always some effect on one or more persons involved in the communication act.
Type of effects
Intellectual or Cognitive Effects
Affective Effects
Psychomotor Effects
You may gain knowledge or learn how to analyze, synthesize,
or evaluate something
You may acquire or change your attitudes, beliefs, emotions,
and feelings.
You may learn new bodily movements as well as verbal or
non-verbal behaviors
Noise
Noise is a disturbance in communication that distorts the message.
Noise may be
Physical
Psychological
Semantic
Others talking in the background
Preconceived ideas
Misunderstood meanings
The purpose of Communication
5 general purposes
To discover
One of the major purposes of communication concerns personal discovery.
• Discover yourself
• Discover others (interpersonal encounters)
• Discover External world
To Relate
One of our strongest motivations is to establish and maintain close relationship with
others.
• Make or break Personal relationship
• Make or break Social relationship
To help
Therapist, counselors, teachers, parents, and friends who often communicate to help
We use this function of communication when:
• We constructively criticize
• Express empathy
• Work with others to solve a problem
• Listen attentively and supportively to a public speaker
To Play
We spend a great of our communication behavior on play.
Communication as play includes motives of pleasure, escape and relaxation
We hear comedians and friends largely because it is fun, enjoyable and exciting.
To persuade
The mass media exist largely to persuade you to change your attitudes and behaviors
Definition of Marketing
An organizational function and set of processes for creating, communicating and
delivering value to customers and for managing customer relationship in ways that
benefit the organization and its stake holders.
What is Marketing Mix?
The tools available to a business to gain the reaction it is seeking from its target market in relation to its
marketing objectives
The major marketing management decisions can be classified in one of the following four categories:
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Product
Price
Place (distribution)
Promotion
These variables are known as the marketing mix or the 4 P's of marketing.They are the variables that
marketing managers can control in order to best satisfy customers in the target market.
The firm attempts to generate a positive response in the target market by blending
these four marketing mix variables in an optimal manner.
Product
The product is the physical product or service offered to the consumer. In the case of
physical products, it also refers to any services or conveniences that are part of the
offering.
Product decisions include aspects such as function, appearance, packaging, service,
warranty, etc.
Price
Pricing decisions should take into account profit margins and the probable pricing
response of competitors. Pricing includes not only the list price, but also discounts,
financing, and other options such as leasing.
Place
Place (or placement) decisions are those associated with channels of distribution that
serve as the means for getting the product to the target customers.The distribution
system performs transactional, logistical, and facilitating functions.
Distribution decisions include market coverage, channel member selection, logistics,
and levels of service.
Promotion
Promotion decisions are those related to communicating and selling to potential
consumers. Since these costs can be large in proportion to the product price, a breakeven analysis should be performed when making promotion decisions. It is useful to
know the value of a customer in order to determine whether additional customers are
worth the cost of acquiring them.
4Ps are marketing tools and communication about
these 4Ps i.e. Marketing
communication is called promotion and so advertising is
marketing communication
tool.
PROMOTION
Communication activities that inform potential consumers
about the existence of goods, services, or ideas and persuade
them to buy
THE BEST BLEND
• PROMOTIONAL MIX: The most effective
combination, or blend, of the marketing
communication channels that a business uses to
seen its messages to consumers
IMPORTANCE OF PROMOTIONAL MIX
• Plays a key role in obtaining and keeping customers
• Enables businesses to communicate effectively with
consumers
• Informs potential consumers about the existence of goods
and persuades them to buy
Promotion and Promotional Mix
• Promotion is persuasive communication
– companies rely on promotion to inform people about their products
and services
– companies use promotional techniques to enhance their public image
and reputation and persuade people that their products are valuable
– goals of promotional activities is summarized by the phrase AIDA
AIDA
• Attract Attention to product
• Build Interest in product
• Create Desire for product
• Ask for Action
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Exposure
Awareness
Knowledge
Preference
Trial
Repurchase
Product Promotion
• businesses use product promotion to convince prospects to
select its products or services instead of a competitor’s
brands
• explains
– major features and benefits of the product or service
– where it is sold
– advertise sales
– introduce new offerings
• product promotion also helps companies foster good
relations with existing customers, thereby enhancing their
loyalty
Institutional Promotion
• used to create a favorable image for a business
• help the business advocate for change
• take a stand on trade or community issues
** do not directly sell a product or service these activities do
foster a favorable image for the company
Promotional Mix
Advertising
Non-personal Presentation by an Identified Sponsor
Personal Selling
Personal Presentations by a Firm’s Sales Force
Sales Promotion
Short-term Incentives to Encourage Sales
Public Relations
Building Good Relations withVarious Publics by obtaining Favorable Unpaid Publicity
Direct Marketing
Direct Communications With Individuals to obtain an Immediate Response
What is Advertising?
Origin
• Latin root
ADVERTER
• To turn towards
• To attract attention
Definition
Advertising is a paid, mediated form of communication from
an identifiable source, designed to persuade the receiver to
take some action, now or in the future
Elaboration
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Paid
Mediated form of communication
Identifiable source
Designed to persuade
The receiver
Take some action, now or in the future
Illustration
Paid
Mediated
Identifiable
Source
To persuade
Take action
Objectives of Advertising
• Provide information
What the consumer needs to know
• Provide incentives to buy Tell them why
• Reminds and Re-enforces
Repetition
Functions of Advertising
• Create awareness of products & brands
• Provide product and brand information
• Create brand image
• Persuade / Convince people
• Provide incentives to take action
• Provide brand reminders
• Reinforce past purchases & brand experiences
Key Concepts
• Strategy
Methodology of meeting objectives and addressing the market in the most effective manner. Strategy is the logic and
planning that gives the advertisement direction and focus
What & Who
• Creative Idea
Grab your attention and sticks to your memory
• Creative Execution
How
What makes the ad memorable?
• Effective & Efficient Media Use
Effective ads are well executed, that means that details such as photography, setting, printing and production values
are all fine-tuned
When
& Where
Advertising Effectiveness
Strategy
Creative Idea
Execution
Media
Sound Strategy + Great Creativity = Effective Advertising
Introduction to Advertising
Evolution of Advertising
• Prehistoric Era
1. Age of Print
2. Industrial Revolution & Consumer Society
3. Modern Advertising Era
4. Age of Agencies
5. Creative Era
6. Accountability Era
Timelines
Written Ad
offering whole
gold coin for
runaway slave
Political & trade
graffiti on
Pompeii walls
3000 B.C.
500 B.C.
Pre-historic Era
Printed Handbills First printed ad in
English tacked
on London
church doors
Mid 1400s
1472
1st print ad in
London Gazette
1st use of the
London’s Weekly term Advertising
offers 1st
Relations News
advertising
supplement
1622
1655
Age of Print
1662
1st US
newspaper to
carry ads
1704
Volney B. Palmer
becomes the 1st
ad sales agent
(Boston)
1841
Timelines
1st branded items
J. Walter
such as Baker’s Thompson forms
Chocolate
JWT (1st account
appears in stores
executive)
1864
1850s
John Powers
pioneers
copywriting;
focuses on news
1880s
Printer’s Ink, 1st
US publication
for advertising
profession
1888
E. E. Calkins &
R. Holder
develop image
copy
1890s
Industrial Revolution & Consumer Society
Studies on the
attention-getting
& persuasive
qualities of
advertising
1900
Albert Lasker
pioneers
‘Reason-Why’
copy
1904-40s
1st Ad censor
appointed by
Scripps-McRoe
League of NPs
1903
Start of celebrity
endorsement
with Pepsi
(Barney Oldfield)
1908
Modern Advertising Era
1st Truth in
Advertising Act
passed
1912
Timelines
American
Association of Ad
Agencies formed
1917
1st ad
testimonials by
movie stars
appear
1st Radio ad
solves radio’s
financing needs
1920s
TV becomes
leading
advertising
medium
1940s-50s
1922
Rosser Reeves
develops USP
concept
1950s
Age of Agencies
D.D. B. ‘Think
Small’ campaign
for VW / Visa’s
‘We try harder’
1960s
Ogilvy develops
research-based
image
advertising &
storytelling
1960s
Leo Burnett
creates brand
icons and
inherent drama
Bill Bernbach
focuses on art of
persuasion
1960s
1960s
Creative Era
Mega mergers
take place
worldwide
IMC, niche
marketing,
interactive
media, mass
customization…
1980s-90s
90s-2000s
Internet is the
fastest growing
ad medium since
TV
2000s
Accountability Era
Advertising in Pakistan
• 1947 to 1950s
– Few foreign-based agencies
– Press only available medium
– Stunted growth of commerce & industry
– Press ads from 50s
• 1960s onwards
– Radio Pakistan launched commercial services
– State-owned PTV launched in Lahore in 1964
– 1979 PIA Ad
• 1980s
– Strict censor laws on broadcast media
– Memorable Pakistani TV Ads
Advertising in Pakistan
• 2000 onwards
– PEMRA issued licenses to several satellite channels
– Adspend increasing 25% annually (2007)
– Consumerism on the rise
Roles of Advertising
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Marketing
Communication
Economic
Societal
Marketing & Communication Role
Product
• Marketing Mix
• Mass communicate to
to connect buyers
& sellers
Features
Style
Brand name
Packaging
Services
Place
Promotion
Advertising
Personal selling
Sales Promotion
Direct Marketing
PR
Collateral
Marketing Mix
Price
List price
Discounts
Allowances
Payment period
Credit terms
Location
Transport
Coverage
Channels
Inventory
Economic Role
• Economy grows  Advertising flourishes
• 2 perspectives on how advertising creates economic impact
– Informational role
– Persuasion role
Societal Role
• Adds to our Aesthetic sense
• New products and information
• Helps us create self-image & express ourselves through the
things we use/wear
– Has both negative & positive effects
Types of Advertising
Type
Example
Brand
Mirinda, Nestle Water
Retail/Local Advertising
Hyperstar, Al-Fatah
Direct-Response
Bestbuy, Real Estate Ads
Business to Business
Medical advertising
Institutional / Corporate
Bank Alfalah, MCB
Non-Profit
Edhi Trust, Colleges
Public Service
Anti-Smoking/Anti drugs
Political
PML-N, Moonis Elahi
Directory
Yellow Pages
Key Players
1.
2.
3.
4.
5.
6.
Advertiser / Client
Advertising Agency
Media
Vendors / Suppliers
Regulatory Bodies
Target Audience
The Advertiser / Client
• Roles:
– Identify marketing & communication needs
– Initiate advertising effort
– Make decisions about target audience, budget, when to
advertise
– Selects, evaluates pitch & hires agency
– Approves advertising plan (strategy, creative, media)
Advertisers / Clients
• Types of Advertisers
– Government vs. Private
– Product vs. Services vs. Ideas
– MNC vs. National
The Agency
• Why use agency?
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–
–
–
Strategic & creative expertise
Workforce talent
Media knowledge
Negotiation with media
• Types of agencies:
– Multinational Vs. NationalVs. Regional
– BigVs. MediumVs. Small
– Niche agencies
The Agency
• Agency-Client relationship
– Advertising department
• Liaison role
• Ex: Coca-Cola (SOHO Square),Warid (Synergy),
– In-house agency
• For more control over brand image / quick results
• Ex:Waves, fashion brands
The Media
• Channels of Communication / MediaVehicles
– Newspaper, magazines, radio,TV station, billboard company, etc.
• Media-agency relationship
– Planning, buying, negotiating deals
– Media mix
Vendors
• Specialized services
– Artists, photographers, film directors, printers, production
studios, calligraphers, consultants, freelancers, etc.
– Example: Jami / Saqib Malik (Film director), Khawar Riaz /
Qayyum (Photographer), Khawar Jawad (Composer)
Regulatory Bodies
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•
PEMRA
APNS
PBC
PAA
Target Audience
• Target audience:
–
–
–
–
Purchaser / Buyer / Customer
Consumer / User
Purchase influencers
Ex: Kellog’s target audience is kids and parents
• Interactive technology allows customization
– Ex: Amazon.com shows you books you would like
Awards
• Effectiveness Awards
– EFFIE Award / Advertising & Marketing Effectiveness (AME) Award / Institute of Practitioners
(IPA) Award
• Creative Awards
– CLIOS / Cannes Lion Award / The NY Art Director’s Award
– Abby Award (India) / Aurora Advertising Awards (Pakistan)
• Media Planning
– Adweek’s Media Plan of theYear
Current Trends in Advertising
• New Advertising
– Digital Media (Internet, mobile communications, wireless)
– Unconventional media & tactics
• IMC Approach
– Unifying marketing communications
– Creates synergy
• Globalization
– Adaptation vs. standardization debate
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1959 Pakistani newspaper ads
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