2.1

Chapter 2:Chapter 2:

THE PROMOTION INDUSTRY:THE PROMOTION INDUSTRY:

MARKETERS, AGENCIES,MARKETERS, AGENCIES,

andand

MEDIA ORGANIZATIONSMEDIA ORGANIZATIONS

2.12.1

The Promotion Industry in Transition The Promotion Industry in Transition

ALTERED BY SIX TRENDSALTERED BY SIX TRENDS

Information in Marketplace is an Interactive SystemInformation in Marketplace is an Interactive Systembetween Marketers and Consumersbetween Marketers and Consumers

Proliferation of Cable TV, Direct-Marketing & Alternative New Proliferation of Cable TV, Direct-Marketing & Alternative New Media Causes Media FragmentationMedia Causes Media Fragmentation

Growing Investment in Advertising Causes Media ClutterGrowing Investment in Advertising Causes Media Clutter

New Communications/Distributions Channels New Communications/Distributions Channels are Growing in Influenceare Growing in Influence

Fragmentation of Marketing Budgets Resulting in Greater Fragmentation of Marketing Budgets Resulting in Greater Portions of Budgets going to Trade & Consumer PromotionsPortions of Budgets going to Trade & Consumer Promotions

Improved Information Systems Allow Retailers & Distributors Improved Information Systems Allow Retailers & Distributors more Control over Marketing & Promotional Decisionsmore Control over Marketing & Promotional Decisions

2.22.2

Structure of the Promotion Industry and Participants in the ProcessStructure of the Promotion Industry and Participants in the Process

Advertising agencies: Agency services: Agency compensation:Full-service agencies Account services CommissionCreative boutiques Marketing research Markup chargesMedia-buying services Creative and production Fee systemInteractive agencies services Pay-for-resultsIn-house agencies Media planning research

Promotion agencies:Direct marketing and database agenciesE-Commerce agenciesEvent planningDesign firmsPublic relations firmsSales staffing and training firms

Advertising agencies: Agency services: Agency compensation:Full-service agencies Account services CommissionCreative boutiques Marketing research Markup chargesMedia-buying services Creative and production Fee systemInteractive agencies services Pay-for-resultsIn-house agencies Media planning research

Promotion agencies:Direct marketing and database agenciesE-Commerce agenciesEvent planningDesign firmsPublic relations firmsSales staffing and training firms

Manufacturers Resellers, retailers, Government andand service firms wholesalers, and social organizations

distributors

Manufacturers Resellers, retailers, Government andand service firms wholesalers, and social organizations

distributors

MarketersMarketers

Advertising and Promotion Agencies

Advertising and Promotion Agencies

Marketing and Production facilitators advertising research Consultants firms Information

intermediators

Marketing and Production facilitators advertising research Consultants firms Information

intermediators

External FacilitatorsExternal Facilitators

Structure of the Promotion Industry and Participants in the Process Structure of the Promotion Industry and Participants in the Process (con’t)(con’t)

Media OrganizationsAnd Trade Partners

Media OrganizationsAnd Trade Partners

Media Organizations: Interactive media Trade Partners: Broadcast media Support media Wholesalers, distributors, Print media Media conglomerates retailers

B-to-B trade communities

Internet portals

Media Organizations: Interactive media Trade Partners: Broadcast media Support media Wholesalers, distributors, Print media Media conglomerates retailers

B-to-B trade communities

Internet portals

Household consumers Business and professional Government and socialTrade resellers buyer organizations

Household consumers Business and professional Government and socialTrade resellers buyer organizations

Target Audience(s)Target Audience(s)

Structure of Promotion IndustryStructure of Promotion Industry

MARKETERSMARKETERS Manufacturing and Service FirmsManufacturing and Service Firms Trade ResellersTrade Resellers Federal, State and Local GovernmentsFederal, State and Local Governments Social OrganizationsSocial Organizations

March of DimesMarch of Dimes Nature ConservancyNature Conservancy

2.2.55

The U.S. Government is a The U.S. Government is a Marketer that Relies onMarketer that Relies onAdvertisingAdvertising

2.5

Structure of Promotion Industry Structure of Promotion Industry (con’t)(con’t)

AGENCIESAGENCIES Advertising AgenciesAdvertising Agencies

Full Service AgencyFull Service Agency Creative BoutiqueCreative Boutique Interactive AgencyInteractive Agency In-House AgencyIn-House Agency Media-Buying AgencyMedia-Buying Agency

2.2.77

Advertising Agencies Advertising Agencies Use Advertising to PromoteUse Advertising to PromoteTheir Services to New ClientsTheir Services to New Clients

2.7

AGENCIES (con’t)AGENCIES (con’t)Promotional AgenciesPromotional Agencies

Direct Marketing and Database AgenciesDirect Marketing and Database AgenciesFulfillment CentersFulfillment Centers

E-Commerce AgenciesE-Commerce AgenciesSales Promotion AgenciesSales Promotion Agencies

Consumer Sales PromotionConsumer Sales PromotionTrade Sales PromotionTrade Sales Promotion

Event-Planning AgenciesEvent-Planning AgenciesDesign FirmsDesign Firms

Logo DesignLogo DesignPublic Relations FirmsPublic Relations FirmsSales, Staffing, Training & Assessment FirmsSales, Staffing, Training & Assessment Firms

2.2.99

Structure of Promotion Industry Structure of Promotion Industry (con’t)(con’t)

Design Firms HelpDesign Firms HelpMarketers Develop LogoMarketers Develop LogoDesigns that Last, Designs that Last, Like this Pillsbury LogoLike this Pillsbury Logo

2.9

AGENCIES (con’t)AGENCIES (con’t)Agency ServicesAgency Services

Account ServicesAccount ServicesMarketing ResearchMarketing ResearchCreative & ProductionCreative & Production

Creative ServicesCreative ServicesProduction ServicesProduction Services

Media-Planning and BuyingMedia-Planning and BuyingAdministrativeAdministrative

2.2.1111

Structure of Promotion Industry Structure of Promotion Industry (con’t)(con’t)

AGENCIES (con’t)AGENCIES (con’t) Agency CompensationAgency Compensation

CommissionsCommissions Markup ChargesMarkup Charges Fee SystemFee System Pay-for-ResultsPay-for-Results

2.2.1212

Structure of Promotion Industry Structure of Promotion Industry (con’t)(con’t)

Structure of Promotion Industry (con’t)Structure of Promotion Industry (con’t)

EXTERNAL FACILITATORSEXTERNAL FACILITATORS Marketing and Advertising Research FirmsMarketing and Advertising Research Firms ConsultantsConsultants Production FacilitatorsProduction Facilitators Information IntermediatorsInformation Intermediators Trade PartnersTrade Partners

2.2.1313

2.2.1414

Media OrganizationsMedia Organizationsand Trade Partners and Trade Partners Available to MarketersAvailable to Marketers

Broadcast MediaBroadcast Media

Interactive MediaInteractive Media

Print MediaPrint Media

Support MediaSupport Media

Media ConglomeratesMedia Conglomerates

Wholesalers, Retailers, Wholesalers, Retailers, B2B Communities, PortalsB2B Communities, Portals

Portals Offer Marketers aPortals Offer Marketers aNew Media Outlet for New Media Outlet for Placing Advertising andPlacing Advertising andPromotional MessagesPromotional Messages

2.14

Structure of Promotion Industry Structure of Promotion Industry

AUDIENCESAUDIENCES Household ConsumersHousehold Consumers Trade ResellersTrade Resellers Business and Professional BuyersBusiness and Professional Buyers Government and Social OrganizationsGovernment and Social Organizations

2.2.1616

Marketers Use Promotion toMarketers Use Promotion toReach the Business and Reach the Business and Professional Buyer AudiencesProfessional Buyer Audiences

2.16