Advertising Review

Advertising Review - Advertising Review Exam 1 Chapter 1 I...

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Advertising Review: Exam 1 Chapter 1 I. Trends in ad vs. sales promotion expenditure in the US between 1980 and 2002 a. In 1980, advertising expenditures in the US were $53 billion, and $49 billion was  spend on sales promotion techniques such as product samples, coupons, contests,  sweepstakes, premiums, rebates, allowances, and discounts to retailers. By 2005, over  $276 billion was spent on local and national advertising, while spending on sales  promotion programs targeted toward consumers and retailers increased to nearly $300  billion.  II. Per capita spending in the US a. Companies bombarded the U.S. consumer with messages and promotional offers,  collectively spending more than $30 a week on every man, woman, and child in the  country – nearly 50 percent more per capita than in any other nation.  III. Trends in international ad expenditures a. Promotional expenditures in international markets have grown as well. Advertising  expenditures outside the US increased form $55 billion in 1980 to nearly $294 billion  by 2005. IV. Characteristics of marketing revolution and shifting tides a. A major reason for the growing importance of the IMC approach is the ongoing  revolution that is changing the rules of marketing and their role of the traditional  advertising agency. i. A shifting of marketing dollars from media advertising to other forms of  promotion, particularly consumer and trade oriented sales promotions.  1. Escalating price competition in many markets has resulted in  marketers’ pouring more of their promotional budgets into price  promotions rather than media advertising ii. A movement away from relying on advertising-focused approaches, which  emphasized mass media such as network television and national magazines,  to solve communication problems. iii. A shift in marketplace power from manufacturers to retailers.  1. This is leading many marketers to shift their focus to promotional  tools that can produce short-term results, such as sales promotion iv. The rapid growth and development of database marketing 1. Advocates of the approach argue that database marketing is critical 
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to the development and practice of effective IMC.  v. Demands for greater accountability from advertising agencies and changes in  the way agencies are compensated. 1.  Many companies are moving toward incentive-based systems  whereby compensation of their ad agencies is based, at least in part,  on objective measures such as sales, market share, and profitability.  vi. The rapid growth of the Internet, which is changing the very nature of how  companies do business and the ways they communicate and interact with  consumers.
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