MKTG 420 v3 and v4: Advertising and Promotion Report a Broken Link

It is difficult to imagine economic activities without marketing communications that include advertising, sales promotion, public relations, direct marketing, personal selling, and Internet marketing. Indeed, the success of many for-profit organizations depends, above all, on their abilities to communicate effectively and efficiently with their target audiences. Marketing communications have also invaded the not-for-profit sector. They are used with increasing frequency to promote causes, market political candidates, deal with societal problems, and support governmental programs and services. In this course, we advocate the use of an integrated marketing communications (IMC) approach to cope with these issues. In other words, we have adopted the view that to effectively and efficiently reach an organization’s marketing communication goals, it is necessary to design communication campaigns that create a multiplicative effect between various promotional mix elements and activities.

Supplementary Readings

Lesson 1

Duncan, T., & Moriaty, S. E. (1998). A communication-based marketing model for managing relationships. This paper discusses the intersections between communication and marketing and proposes a communication-based model of relationship marketing. The many points that link communication and marketing are identified, especially in the context of increase interactivity.

Lesson 2

Bush, A. J. & Bush, V. D. (2000). Potential challenges the Internet brings to the agency-advertiser relationship. This paper assesses and compares perceptions, usage, and implementation issues associated with marketing on the Internet among a national sample of advertising agencies and advertisers. Newer challenges in regard to Web-related activities and functions performed by agencies and outside Internet specialists from public relations firms, computer design boutiques, and studios are identified and discussed.

Lesson 3

Glazer, R. (1999). Winning in smart markets. This paper claims that understanding customer behaviour in a rapidly changing environment is critical to effective marketing communications. This can be achieved with the use of a single virtual database that captures all relevant information about a firm's customers. This information can then be processed and used to design individual customer-centric strategies to maximize the profitability per customer (sometimes referred to as "lifetime value of a customer") or customer share (the total share of a customer's purchases in a broadly defined product category). Credit card companies such as MBNA excel in designing customer-centric strategies.

Lesson 4

Wu, B. T., & Newell, S. J. (2003). The impact of noise on recall of advertisements. This paper defines noise as a barrier to learning and communication and discusses its theoretical background in past psychological and marketing literature. While there exist external and internal dimensions of noise, it is particularly the internal dimension that significantly affects or limits recall of advertisements.
Bendixen, M. T. (1993). Advertising effects and effectiveness. An econometric time-series model of advertising effectiveness is presented to assess three possible advertising effects: brand loyalty, current effects (both simple and compound), and carryover effects. It is shown that the inherent nature of these effects is related to the degree of involvement and purchase decision's affective or cognitive aspects.

Lesson 5

Jones, D. B. Setting promotional goals: A communications relationship model. The paper presents a communications relationship model for setting promotional goals. The model divides promotional objectives into short, mid-range, and long-range goals, and helps present advertising and related promotional tools as an ongoing process.

Lesson 6

Johar, G. V., Holbrook, M. B., & Stern, B. B. (2001). The role of myth in creative advertising design: Theory, process and outcome. This paper presents an empirical study in which five real-world creative teams from an advertising agency were given a strategic brief for a new beverage product and asked to design the layout for a print ad. The goal of the paper is to describe the creative process and its relationship to the created advertisement.
Pieters, R., Warlop, L., & Wedel, M. (2002). Breaking through the clutter: Benefits of advertisement originality and familiarity for brand attention and memory. It is believed that ad originality is an effective way to break through the clutter. This paper shows that this belief may not always hold true. In fact, ad originality may have detrimental effects when consumers pay more attention to the ad at the expense of the advertised brand. Also, the positive effects of originality may quickly wane when the ad becomes familiar.

Lesson 7

Reichert, T. (2003). The prevalence of sexual imagery in ads targeted to young adults. An empirical study was conducted to determine if advertisers use sexual imagery to appeal to young and mature adults. The findings suggest that advertisers use sexual imagery, primarily by means of female models, to appeal to young audiences.
Sawyer, A. G., & Howard, D. J. (1991). Effects of omitting conclusions in advertisements to involved and uninvolved audiences. The paper presents the results of two experiments in which the audience's level of involvement in processing an advertisement as well as whether the ad is open-ended or closed-ended are manipulated. The results of both experiments show, among others, that the open-ended ad is superior to the closed-ended one for an involved audience in terms of brand attitude, purchase intention, and choice.
Unnava, H. R., & Burnkrant, R. E. (1991). Effects of repeating varied ad executions on brand name memory. The paper presents the results of two experiments that test the encoding variability explanation for the superior memorability of varied advertisement executions over repeated same executions. The results showed that attention and encoding variability contribute independently to brand name memory and that encoding variability effects are obtained even when differences in attention are controlled.

Lesson 10

Verhoef, P. C., Hoekstra, J. C., & van Aalst, M. (2000). The effectiveness of direct response radio commercials: Results of a field experiment in the Netherlands. This paper considers the influence of the day of the week, the time of the day, the position of an ad in the commercial break, the length of the commercial break and the type of the preceding program on two effectiveness measures: responses per rating point and responses per cost using a field experiment. The findings suggest that the most effective direct response radio commercials are those broadcast on Monday, Tuesday, and Wednesday and those broadcast between 2.00 p.m. and 4.00 p.m.

Lesson 12

Ailawadi, K., Farris, P., & Shames, E. (1999). Trade promotion: Essential to selling through resellers. This paper focuses on how certain trade promotions increase total channel profits and the manufacturer's share of those profits beyond levels achievable with a single price and without promotions. It is claimed that contrary to the way it is sometimes portrayed, pricing can be a creative area of marketing, and promotion is an important tool in this creative process. The manufacturer must design pricing schedules so the retailer finds it optimal to price at a level that maximizes total channel profit.
Sigué, S. P. (2008). Consumer and retailer promotions: Who is better off? This paper examines the use of both consumer and retailer promotions in marketing channels. It is shown analytically that retailers always invest in retailer promotions, while manufacturers may find it optimal to not invest in consumer promotions. The economic power does shift from manufacturers to retailers when consumer promotions significantly expand the baseline demand in the long-term. Otherwise, manufacturers remain economically more powerful. Trade promotions or other forms of profit transfer mechanisms may be indispensable in easing conflicts over who should undertake promotions, especially when these promotions substantially increase future sales.
Martín-Herrán, G., Sigué, S. P., & Zaccour, G. (2010). The dilemma of pull and push price promotions. Journal of Retailing, 86(1), 51-68. Should manufacturers of products such as automobiles and household appliances offer cash rebates to all consumers at the time of purchase, or offer trade deals to retailers? The authors conduct an analytical inquiry that shows that choosing between these two types of price promotion critically depends on the consumer sensitivity to both regular and promotional prices.

Lesson 14

McWilliam, G. (2000). Building stronger brands through online communities. The popularity of communities on the Internet has captured the attention of marketing professionals. Consumer brand companies need new management skills, and brand managers must understand online behavior if they wish to develop strong, sustainable, and beneficial online communities around their brands. The reasons why successful online communities thrive are discussed, along with what skills will be required to manage a successful online community.
Cho, C.-H. (2003). The effectiveness of banner advertisements: Involvement and click-through. This study indicates that people who are highly involved with a product are more likely to click a banner ad than those with low product involvement. In addition, this study found an interaction effect of peripheral cues (ad size and animation) and level of product involvement on clicking of banner ads; i.e., the positive relationship between peripheral cues and banner clicking is found to be more pronounced among those with low, rather than high, product involvement.

Lesson 15

Trudel, R., & Cotte, J. (2009). Does it pay to be good? This study questioned whether consumers would pay a higher price for goods that are “ethically produced.” Experiments proved that they will, and that they will also demand a lower price from companies they do not see as ethical. The research also showed that even a small degree of “ethicalness” pays off because “the ethicality of a company's behavior is, indeed, an important consideration for consumers (as demonstrated in their willingness-to-pay decisions).”
Cialdini, R. B., Petrova, P. K., & Goldstein, N. J. (2004). The hidden costs of organizational dishonesty. Loss of reputation, discrepancies between values of the organization and its employees, and increased surveillance are three types of consequences to organizational dishonesty that can lead to increases in worker turnover, employee theft, and other hidden costs, as well as decreases in repeat business and job satisfaction.