Evolution OF Advertising AND Promotion OF Sales AS Strategic Decisions PDF

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Class notes on the scope of advertising and sales promotion, basic definitions, advertising history, and sales promotion....

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EVOLUTION OF ADVERTISING AND PROMOTION OF SALES AS STRATEGIC DECISIONS

The scope of advertising and sales promotion. The apple's introduction announcement of the Apple Macintosh demonstrates the great potential of advertising. Chiat/Day developed creativity with claw, humor and evocative ability. But there was also a clear distribution of a key advantage of the new product: the ease of use of autonomous personal computers. The spectacular announcement spurred Apple's sellers and distributors in their fight against a competitor as respected and entrenched as IBM. In addition, the campaign attracted a great deal of interest in the media, which quickly aroused consumer interest in the product. The success of the campaign was right for everyone who bet on it at the agency. The ad was a typical work of Chiat/Day, a company known for its bold and irreverent style. The spot also gave the reason to the entrepreneurs who had chosen that agency. However, the history of this campaign also suggests the fragility of the advertising process. At first Apple's executives were so reluctant to announce it. They then agreed to invest only a minimum budget in the campaign, which could have been suspended if the ad had not been as effective. They chose a medium (television) and a show (the Super Bowl) without completely noticing its great potential. In fact, many other commercials were aired during that Super Bowl, but none was so convincing. Many of them failed, although their promoters were probably more confident than that placed in "1984." I'm sure quite a few advertisers have been expecting similar success. The case of "1984" suggests a basic principle of advertising: it depends in part on the scientific judgment of entrepreneurs, partly on people's natural creativity, and partly on luck. However, after centuries of publicity and decades of extensive research on its effectiveness, knowledge of this technique has increased greatly. Today much more is known about when and why advertising works, and what a campaign does good. In this environment the role of creativity has not diminished at all. Science illuminates the path of communication strategists, art directors and screenwriters. Science is not a substitute for creativity. But it does reduce dependence on luck. For example, scientific research may indicate whether advertisers should employ a cold, rational stimulus or a warm, emotional stimulus. For each of these stimuli, creatives could generate a hundred different projects, among which only a few would succeed. Pretests make it possible to discern those who would probably succeed from those who would normally fail. But artists and writers could improve the project with convenient tinders. Research can also indicate how often an ad should be repeated to persuade the consumer, and what combination of means is

needed to achieve it. With these guidelines, the creative project that defines the medium, program, ad, and target audience can put the advertiser in a position of advantage over its competitors. One of the main premises of this manual is that today good publicity requires science and creativity. Basic definitions The term product is used generically to refer to any good, service, or idea that a person or organization offers to another person or organization. So product could refer to the Macintosh, a film on television, prudent driving or a candidate for president of government. The terms company or manufacturer are used interchangeably to refer to any person or organization that offers products to others. In the context of the examples cited, the companies would be The Apple Company, a television network, an institution that looks after road safety, or a political party. The terms buyer, consumer, and customer refer to individuals or organizations that can potentially purchase company products. The verb marketing refers to a number of management tasks related to each other: identifying the needs of the consumer in order to design, assess, communicate and distribute the products that meet such needs. Advertising is transmitting a company's offer to customers through paid spaces in the media. A sales promotion is a program that makes a company's offering more attractive to buyers and requires buyer participation. Some authors include two other activities within the communication: personal sales and unpaid advertising (publicity). Personal sales are the fact of transmitting the offer directly from the sellers to the consumer. Unpaid advertising consists of communicating the message to the consumer through means of communication that do not require financial consideration from the advertiser. Of the four marketing variables (product, distribution, price and communication) only the latter is the subject of this manual, for several reasons. Theadvertising and sales promotion are intimately linked and require a balance depending on the products, competitors and customers of a company. In fact, due to changes in markets over the last quarter century, the communication budget has shifted largely from advertising to sales promotion. Due to their inherent balance, these two activities cannot be fully and satisfactorily treated if studied separately. On the other hand, personal sales are closely tied to the sales address and that is the best context to analyze it. Unpaid advertising is in the domain of public relations and does not usually fall to the marketing department. Therefore, it deserves a separate study. Investment and key participants

U.S. commercial communication spending during 1995 was divided by 61 percent for advertising and 39 percent for sales promotion. Unfortunately, it is very difficult to establish similar divisions in other countries, because measuring sales promotion is too complicated, even if a smaller spending is assumed than on advertising. Hence, the following paragraphs are to compare only the advertising investment of several geographical areas. It should be noted beforehand that advertising investment mainly includes the cost of spaces purchased in conventional media: television, press, magazines, radio, cinema and outdoor media (advertising media located outside the home, such as fences, buses, canopies or stadiums, among others). However, it excludes expenses in non-conventional media: mail advertising, telephone marketing, pointof-sale advertising, gifts, etc. America's superiority is evident, as it concentrates more investment than Europe and Japan combined, or than Europe and the rest of American countries. In addition, the United States has a much higher per capita expenditure than any area. And its GDP investment clearly outperforms the other rich countries. Five groups participate in decisions about advertising investment and sales promotion: promoters, agencies, media, distributors and consumers. Promoters are companies that want to sell products to consumers. Each person or organization will likely be a promoter at some point. For example, most people put an ad in newspapers sometimes communicating their need or desire to sell something. Also, almost everyone on occasion we wrote a resume, which is a statement in which we communicate our experiences and skills to perform certain jobs. However, those who spend the most on commercial communication are a few companies that hold large shares in consumer markets. Consumers are exposed to ads and promotions from these companies, even when they prefer not to be. For this reason, some large companies are reluctant to advertise and promote. The orientation is fundamentally business. It aims to explain how individuals or organizations students, professionals, companies, public administrations, NGOs, religious institutions, trade unions or politicians can use advertising and advocacy to achieve their goals. Agencies are the entities that prepare or place business ads or promotions. They can always make their own ads although, given the advantages of specialization, it compensates them more to concentrate on producing and selling their products, leaving the preparation of the campaign to the expertise of the agencies. Ads reach the consumer through the media. Television, newspapers, radio, magazines, mail and the phone are currently the main stream and comprise the bulk of advertising and sales promotion. Media groups are organizations that own one or more media, such as CBS or Prisa Group.

The term distributors covers wholesalers, retailers and other agents who carry out the physical transfer of products from businesses to consumers. Distributors therefore play a crucial role in the marketing of products. A small part of advertising and a large part of the promotion are aimed at motivating distributors to bring goods closer to and promote consumers. The consumer is the raison d'eorry of the other groups involved and, therefore, of any advertising and promotion of sales. The only exception is the media, which provide entertainment and information to the consumer, as well as advertising. Some media could survive without advertising revenue, but the vast majority have a huge reliance on this source of funding. For example, advertising and promotions contribute most of the revenue to Spanish media: 98 percent to television, 57 to the press, 96 to radio, and 36 percent to magazines. THE HISTORY OF ADVERTISING AND SALES PROMOTION Reviewing the history of advertising and sales promotion allows for a better framing of both subjects. It offers a good view of how some products and advertising practices have been developed over the years. It also gives an indication of the firmness of certain systems, suggests the causes of some phenomena and forecasts future trends. Although advertising and sales promotion have become the symbol of American capitalism around the world, they already existed long before the United States was founded. Indeed, there is written record of advertisements for slaves and domestic goods in ancient civilizations. However, the particular form of advertising today developed with capitalist markets in the United States. As soon as the United States gained independence from England, a great eagerness for self-sufficiency among its citizens arose. People wanted to buy products made in the United States and rejected foreign products, especially those of British origin. The U.S. economy remained primarily local and regional. There was quite little serial manufacturing and little was taken from one region to another. Most of the goods consumed daily were manufactured in the house itself or in the locality of residence. This was the case with meat products, fruits, vegetables, dairy products, cosmetics, medicines and personal hygiene products. For example, households made a soft soap made from melting and mixing fat, salt and bleach. Bleach could be obtained by filtering ash from stoves. The process was cumbersome and gave an unforeseeable quality soap, but it was cheap and selfsufficiency was guaranteed. At the time, most of the publicity focused mainly on three highly demanded articles: land, runaway slaves, and transportation. The transport advertising mainly announced the arrival and departure of the boats as well as the stagecoaches with their shipments. The rest of the advertising advertised the availability of basic goods, such as coffee, salt, clothing, tools and medicines. The main advertising

media were posters, brochures and newspapers. Posters used to be put in storefronts and near frequented public places. There were only a few newspapers. Your imageless ads were dimensioned in a space ranging from 2.5 to 8 centimeters – similar to the current word ads. The limit was partly due to newspaper shortages, but it also intended not to harm small traders who could not afford larger advertisements. The newspapers themselves consisted mainly of advertisements accompanied by a few news: they looked more like current advertising brochures than national newspapers. Some newspapers also limited the duration of the ad, specifically to two weeks. Press advertising creativity was based on designing engaging phrases or texts, which could be repeated several times in each ad. Those texts were probably anticipating today's slogans. From the Civil War to World War I, there were very notable changes in the markets, and therefore also in advertising practice. The U.S. Civil War demanded a large number of military equipment and uniforms in a short time, which encouraged the mass production of industrial products. In addition, the men's march to the contest prompted women to buy more than before and be less reluctant towards products made outside the home, such as bread, soap, biscuits, and clothing. The massive expansion of the U.S. railroad facilitated the transportation of massproduced products. The total railway lines rose from 56,000 kilometres in 1865 to 309,000 kilometres in 1900. America's population grew at a very rapid rate and in the last thirty years of the 19th century it almost doubled to 40 million to 76 million people. Many of the new inhabitants were immigrants. The population growth was a major stimulus for the economy and created a huge demand for new and basic consumer products. The advancement in the manufacture of appliances, cosmetics, meals and cleaning supplies radically changed people's lifestyles. For example, a series of devices were being invented that made professional and domestic tasks much more bearable, even sometimes entertaining. The sewing machine, typewriter, light bulb, razor, Kodak camera, car and some kitchen items became very famous in the second half of the 19th century and the first decades of the XX. Pharmacists produced a number of basic but innovative beauty products such as cleansing cream (Pond's), petroleine and talcum powder. These cosmetics, together with the greater independence of women, popularized the use, purchase and marketing of beauty products. Similarly, there were great advances in the preparation and preparation of meals and perfumery products, such as breakfast cereals, soft drinks, soaps and toilet paper. These goods transformed the consumer lifestyle and the structure of the economy.

This combination of advances generated massive demand for manufactured goods in the United States. The evolution of the economy led to radical changes in brand ingess, the media and advertising agencies. Branding. Serial manufacturing affected advertising in two ways. First of all, thanks to it a manufacturer was able to supply large markets. The producer could thus make significant profits even if the profit margin per item was reduced. All he had to do was produce an item that was somewhat better than competitors to engage customers. However, consumers would only ask for that particular article if the manufacturer created a mark for that generic product. In this way, serial manufacturing and marketing could be very profitable if a brand was created. The history of Ivory soap is a clear example. Second, serial manufacturing required proper packaging of the product. In the teens, stores sold most items per unit or at weight, at the buyer's liking. For example, cookies were sold in units, bacon in slices cut at the time, flour in paper bags filled from a ton and pickles individually from their container. Serialing of cheap paper and metal packaging allowed manufacturers to package their products in sizes according to domestic needs. That in turn made it easier for them to create a brand for packages, with a unique design and name. Advertising was the way to convey to the consumer the unique quality of products that were identified by specific brands and packages. The era of marks had begun. Some well-known ones had its genesis then: Borden's Eagle condensed milk (1866), Campbell soup (1869), Coca-Cola (1886), Ivory soap (1879) or Levi Strauss pants (1873). That doesn't mean all the marks then last. Probably hundreds of them disappeared over the years. The media. That time was characterized by radical changes in the advertising of three media: magazines, mail-order catalogues and newspapers. By the end of the Civil War there were a few well-known magazines, such as Harper's Illustrated Weekly. However, these were mainly literary publications that offered support for novels by deliveries. They weren't open to publicity. F. G. Kinsman, a patented drug bottler in Augusta, realized the potential of advertising in magazines and began taking out weekly and monthly titles to serve ads. By linking his magazines to religion he quickly disseminated, and was able to publish a large number of periodical stomps that interested various religious groups. Kinsman's success opened the doors of literary magazines to advertising and prompted entrepreneurs to publish many other types of mass-spreading publications. A new advertising medium had begun: magazines. By the end of the 19th century, two-thirds of magazine revenue came from advertising and the same proportion had been achieved in the press. However, there was a big difference between the two media from the origin of advertising revenue: in magazines, two-thirds of the revenue came from national advertisers and one-third from local advertisers, while newspapers found inverse proportion.

Montgomery Ward was a representative of a Chicago clothing store. Thanks to his experience he realized that he could teach people a catalog of products to order them by mail, without the need for intermediaries or stores. In 1872, with the help of $2,400 from a friend, he published his first catalogue, which measured 9x18 centimeters and had a hundred pages. The idea worked just as he hoped. Ward had realized two important principles for advertising. First, that an ad with a product image increased sales compared to a text-only ad. Second, a color ad sold three times as many items as one in black and white. Serial color printing technology was developed at the time. Ward not only pioneered modern catalog advertising, but also introduced the basic principle of using color and incorporating product images. The postal mailing of catalogues was facilitated by the creation in 1879 of the regular postal service and the achievement in 1890 of rural coverage by the United States Postal Service. By the end of the 19th century, press advertising had shifted from the lackluster style of word ads to the persuasive mix of text and image we know today. This change was facilitated in part by the increased availability of newspapers, but also contributed to the publication of more eye-catching advertisements in magazines and catalogues. Advertising agencies. Current agencies have their origins in advertising agents. In the mid-19th century, as the market for goods and advertisements expanded from narrow local boundaries to beyond state and national borders, newspaper and magazine publishers had to sell their spaces to a greater number of manufacturers. These in turn had to buy spaces in media far from their localities. That's how the advertising agents came in. They would hire large ad blocks to publishers and promise to sell them to advertisers at a fixed price. Dealers also emerged to engage in print advertising on other media, such as matchboxes. Because the agents worked exclusively for the media, the latter gave them a commission for their services. Agents charged advertisers the price set by publishers, but only gave them 85 percent of what was raised. The remaining 15 percent was his commission. This was the start of the commission remuneration system. Note that, in finding the publisher's share of revenue, 15 per cent of the commission is 17.6 per cent. By increasing the number and experience of agents, and complicating the needs of manufacturers, agents began to offer more services, including media planning, material design and production, and even some research markets. This is how today's full-service agencies were born, working more for advertisers than for publishers. However, their mode of remuneration remained in the commission system, which resulted in a major conflict of interest within the agencies: they worked for advertisers, apparently to increase the effectiveness of the advertisement, but received their income in proportion to the amount spent on the media, as if they were working for publishers.

Implications. Analyzing the history of advertising step...