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BUS-3230 Study Guide - Midterm Guide: Integrated Marketing Communications, Marketing Communications, Advertising Management

Course Code
Grant Wainikka
Study Guide

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Advertising Mid-Term Review:
Chapter 1: Advertising in a Marketing Communications Environment:
Importance of Advertising:
-Advertising is the most visible form of marketing, and its an industry that is continuously evolving due
to technological changes.
-In, 2005 $12.6 billion industry in Canada. T.V #1; Newspaper #2
-All around us, consumers underestimate impact, plays a major role in achieving brand and company
objectives by helping to attract new customers and retain old ones.
Role of Advertising:
-Advertising is a paid form of marketing communication (usually informative or persuasive) through
the media that is designed to influence the thought patterns and purchase behaviour of a target
-Its primary role is to positively influence the behaviour of a target market (or target audience) in such
a way that members of the target market view the product, service, or idea favourably.
Advertising and Integrated Marketing Communications (IMC):
-See Figure 1.2 on Page 6 for advertisings place in marketing.
-Integrated Marketing Communications involves the coordination of all forms of marketing
communications into a unified program that maximizes the impact upon consumers and other types of
-Advertising merely one piece of the puzzle. With technology increase this has given way to non-
traditional media techniques (digital media). This has allowed agency and company relationships to
suffer slightly but agencies are learning to diversify and review operations to be more all encompassing
-These are the seven major components of the integrated marketing communications mix:
-Advertising - "A paid form of marketing communication through the media designed to
influence the thought patterns and purchase behaviour of a target audience."
-Public Relations – activities influencing the attitudes and opinions of various interest groups
to an organization.
-Sales Promotion – activities that encourage immediate response from customers (incentives
included with advertising)
-Personal Selling – personalized forms of communications whereby the seller presents the
benefits of a product to a buyer.
-Event Marketing and Sponsorship – planning a complete event or participating in an
existing event to yield the benefits (prestige or other benefits) of being associated with an event.
-Direct-Response Communications – delivering messages directly to potential customers on
an individual basis (mail, e-mail, 1-800 phone numbers)
-Online Interactive Communications – Internet delivery of commercial messages (banner
advertising, e-mail advertising, and TV-style ads that include motion and graphics).
-Marketers are under the gun to produce results. Therefore, the goal is efficiency in spending.
Technology is fuelling change in communications (e.g., the shift toward direct-response advertising
and Internet advertising and away from traditional media). Database marketing provides a means of
communicating more directly with customers, building stronger relationships in the process. Media $
are also moving toward digital media (Internet and mobile devices. Media planning is dominating over
the creative component in advertising.
Forms of Advertising:
-Consumer Advertising: persuasive communications designed to elicit a purchase response from

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-National advertising refers to the advertising of trademarked branded products or
services wherever that product is available. (e.g., Coca-Cola, Labatt Blue, Tide detergent, etc.
-Retail advertising refers to advertising done by retailers to build their image or attract
business (e.g., announce sales or other events). (e.g., Walmart, or The Bay)
-End-product advertising is advertising done by a firm that makes part of a finished
product (e.g., Intel inside.)
-Direct-response advertising involves advertising directly to consumers and bypassing
traditional channels of distribution (wholesalers and retailers) in the delivery of the product. (e.g.,
email advertising on Internet, DVD offers for music and movies, direct- mail offers)
-Advocacy advertising is any public communication paid for by an identified sponsor
that presents information or point of view on a publicly recognized, controversial issue.
-B2B Advertising: Ad. Directed by business and industry at business and industry.
-Trade advertising is advertising done by manufacturers and it is directed at channel
members. The objective of trade advertising is to communicate a convincing message that will
encourage intermediaries to carry and resell the product. (e.g., reaches customers by such industry-
related publications such as Canadian Grocer)
-Industrial advertising is advertising by industrial suppliers to industrial buyers. The
decision whether to purchase capital equipment, accessory equipment, fabricated parts, and raw
materials may be influenced most by personal selling. (e.g., Canadian Packaging, Heavy Construction
News, etc.)
-Service-industry advertising raises awareness and communicates detailed
information about products and services designed for companies in the service industry (e.g., The
Medial Post and Canadian Lawyer)
-Corporate advertising focuses on the broader services of a company and is designed
to convey a favourable impression of the company among its various publics (e.g., shareholders,
consumers, suppliers, and business customers). (e.g., see Pfizer example in textbook)
-Product and Promotional Advertising:
-Product: Advertising that informs customers of the benefits of a particular brand. (low-
cost financing for cars)
-Promotional: Communicates a distinct reason why buying now is better than buying
later. Take action now! (coupons on packaged goods)
-For Advertising to be effective certain conditions should be positive:
1. Market and Product Demand - How positive is primary and selective demand? It is preferable to
advertise when demand is positive but the degree of competition influences expenditure decisions if
demand is not that positive (e.g., mature market situations where brand leaders continue to spend
significant amounts on advertising). It is better to advertise in markets where demand is positive. When
other situations prevail advertisers must spend more wisely or differently. Primary demand refers to
demand for a specific product category. Selective demand refers to demand fro a specific product
(brand) within a product category.
2. Product Life Cycle - What stage is the product in and how does the stage influence advertising
strategy? The introduction and growth stages are critical stages to invest in advertising (e.g., to create
awareness, trial purchases and brand preference). Products that are mature or in decline will be better
served by less expensive marketing and marketing communications alternatives. Advertising is critical
in the introduction (creating demand and awareness) and growth stages (awareness and preference plus
the threat of competition) of the product life cycle.
3. Competitive Advantage - Is the product distinguishable from the competition (USP/benefits)?
Every brand needs something unique to say to consumers. Uniqueness can be expressed in terms of
superiority, hidden qualities, and lifestyle appeal techniques. Brands must clearly differentiate

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themselves from the competition in the mind of consumers. Products need a unique selling point that
will make them stand out from competitors. Typically, they portray superiority, capitalize on innovation
or draw upon a hidden quality to do so.
4. Competitive Advertising Environment - Who is spending and how are they spending? Are any
other promotion alternatives attractive? If a company does not have the financial resources to compete
on the basis of advertising (investment required to compete) it should concentrate on other aspects of
the marketing communications mix and marketing mix that are less costly to implement. Position in
the market often dictates a brand’s ability to keep pace with leading advertisers. Share of mind is often
related to the amount invested in advertising. Alternate strategies may be more beneficial than
5. Product Quality - Does the product live up to the promise (as communicated by advertising)?
Securing trial purchase is costly whereas subsequent purchases are much less costly if the customer is
sold on the product benefits (based on experience). The product must live up to the promises made
through advertising otherwise considerable sums of money are wasted. Advertising encourages the
first purchase. The product must live up to the promise of advertising and encourage additional
purchases. Good advertising is no substitute for an inferior product.
6. Management Commitment - Is advertising viewed by management as a short-term expense or a
long-term investment? How committed is management to the advertising plan? Lack of commitment
means budget cuts in mid-stream of a plan. Cuts can magnify problem situations further. Management
must be committed to seeing and advertising strategy (plan) through to completion. Managers with
short-term outlooks often pull the plug on campaigns and do more damage to the brand. The more
longer-term the orientation the stronger the likelihood of success through advertising investment.
-Issues in Contemporary Advertising: Transition to IMC, Adapting to New technologies
(fragmentation of eyeballs), reacting to an on-demand media environment (PVR), reaching the mobile
multi-tasking consumer(digital media), changing business environment (demographic changes),
clutter(delivery of inappropriate or controversial messages), and misleading advertising (“fastest”).
Extreme advertising-depicting dangerous or disturbing situations in advertising messages has come
under much scrutiny in recent year.s
-Laws and Regulations:
1) Canadian Radio-Television Communications Commission (CTRC): Independent public
authority in charge of regulating and supervising Canadian broadcast and telecommunications.
Governed by Broadcasting and Telecommunications Acts.
2) Advertising Standards Canada (ASC): Industry body committed to creating and maintaining
community confidence in advertising. Mission to ensure the integrity and viability of
advertising through self regulations. Canadian Code of Advertising Standards is the principle
instrument of self regulation (sets out accuracy, price claims, guarantees, safety, child ads, etc.)
3) Competition Bureau: reponsible for the administration and enforcement of the Competion Act, a
law that governs buisness conduct and marketing practices in Canada. To address false,
misleading, and deceptive marketing practices.
Chapter 2: The Advertising Industry:
-Composition of the Advertising Industry (3 primary groups):
-Advertisers (the Client):they are represented by the Association of Canadian Advertisers
(ACA). The ACA advances the interests and responsibilities of advertisers. All organizational types:
manufacturers, retailers, governments, etc.
-Advertising Agencies:they are represented by the Institute of Canadian Advertising (ICA). The
ICA acts on behalf of full-service agencies as spokesperson, negotiator and defender of advertising.
Most large ad agencies in Canada are subsidiaries of American companies. Service organizations
responsible for creating, planning, producing and placing advertising messages for clients. Full-service
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