The World of Advertising and Integrated Brand Promotion

Utkarsh Saxena

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

We need perspective on advertising and IBP!

• 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

Four criteria must be met for a communication to be classified as advertising:• The communication must be paid for• The advertiser must be identified• The communication must be delivered

through mass media• The communication must be attempting

to persuade

We need perspective on advertising and IBP!

Integrated Brand Promotion (IBP)is the process of using a widerange of promotional toolsworking together to createwidespread brand exposure.

We need perspective on advertising and IBP!

• Event sponsorship• Brand entertainment

(product placement on TV shows, in movies)

• Outdoor signage/billboards• Public relations• Influencer (peer-to-peer)

communications• Corporate advertising

•Advertising•Point of Purchase (in-store) materials•Direct Marketing (catalogs, infomercials, email)•Personal Selling•Internet advertising•Blogs•Podcasting

IBP is a processIBP uses a wide ranges of tools including:

We need perspective on advertising and IBP!

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

Model of theCommunicationsProcess

Model of theCommunicationsProcess

Encoding

Fields of Experience

Response Feedback Loop

DecodingChannel

MESSAGE

Source /Sender

Receiver /Audience

Advertising as a Communications Process:Mass Mediated

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

Audiences for Advertising: Audience Categories

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

Audiences for Advertising: Audience Geography

•Global advertising

•International advertising

•National advertising

•Regional advertising

•Local advertising

Ad in Context Example

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

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

Advertising as a Business Process

• The role of advertising in the marketing mix

• Advertising in brand management

• Advertising in market segmentation, differentiation, and positioning

• Advertising in revenue and profit generation

Advertising as a Business Process

• Definition of Marketing:• The process of planning and

executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.

• American Marketing Association, 1995

The Role of Advertising in the Marketing Mix

The Marketing Mix

Perceived Value

Product Distribution

Promotion Price

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

Advertising’s Role in Segmentation, Differentiation and Positioning

• Segmentation• (heterogeneous >

homogeneous)

• Differentiation• (perceived as • different • or unique)

•Distinct from other brands

•Occupies a “value” level

•External niche vs. internalP

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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

Types of Advertising

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

Ad in Context Example

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

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

The Economic Effects of Advertising

Gross Domestic Product

Business Cycles

Competition

Prices

Value

Gross Domestic Product

Business Cycles

Competition

Prices

Value

From IMC to IBP

Television

Television

Advertising

Advertising

Special

SpecialEvents

Events

CCoouuppoonnss

Coordinated promotional activities reinforce one another