conducted tracking studies in the United Kingdom for many years to provide infor-
mation to help advertisers decide whether their advertising is benefiting their brand.^41
A Summary of Current Research
Professional researchers have drawn some general conclusions that are useful to mar-
keters.^42
■ The impact of advertising on brand switching:Tellis analyzed household purchases
of 12 key brands of a frequently purchased consumer product and concluded
that advertising appears effective in increasing the volume purchased by loyal
buyers but less effective in winning new buyers. Advertising appears unlikely to
have some cumulative effect that leads to loyalty; rather, features, displays, and
especially price have a stronger impact on response than does advertising.^43
These findings did not sit well with the advertising community, and several peo-
ple attacked Tellis’s data and methodology. A set of controlled experiments by
the research firm IRI found advertising’s impact is grossly underestimated when
only a one-year perspective is employed because of lagged effects.
■ The effect of surroundings:Ads may be more effective when their message is con-
gruent with their surroundings. A “happy” commercial placed within an upbeat
television show is more likely to be effective than a downbeat commercial in the
same place.^44 In addition, people are more likely to believe a TV or radio ad and
to become more positively disposed toward the brand when the ad is placed
within a program they like.^45
■ The effect of positive versus negative messages: Consumers may sometimes respond
more to negative messages than to positive messages. For example, a credit-card
company contacted customers who did not use the card for three months. To
one group of nonusers it sent a message explaining the benefits of using the
card. To another group it sent a message explaining the losses they could suffer
by not using the card. The impact of the loss-oriented message was much
stronger: The percentage of customers who started to use the card in the loss
condition was more than double and the charges of the former customers were
more than twice that of the positive message receivers.^46
ALES PROMOTION
Sales promotion is a key ingredient in marketing campaigns. We define it as follows:
■ Sales promotion consists of a diverse collection of incentive tools, mostly
short term, designed to stimulate quicker or greater purchase of particular
products or services by consumers or the trade.^47
Whereas advertising offers a reasonto buy, sales promotion offers an incentiveto buy.
Sales promotion includes tools for consumer promotion(samples, coupons, cash refund
offers, prices off, premiums, prizes, patronage rewards, free trials, warranties, tie-in
promotions, cross-promotions, point-of-purchase displays, and demonstrations); trade
promotion(prices off, advertising and display allowances, and free goods); and busi-
ness- and sales force promotion(trade shows and conventions, contests for sales reps,
and specialty advertising).
Sales-promotion tools are used by most organizations, including manufacturers,
distributors, retailers, trade associations, and nonprofit organizations. Churches, for
example, often sponsor bingo games, theater parties, testimonial dinners, and raffles.
A decade ago, the advertising-to-sales-promotion ratio was about 60:40. Today, in
many consumer-packaged-goods companies, sales promotion accounts for 65 to 75
percent of the combined budget. Sales-promotion expenditures have been increasing
as a percentage of budget expenditure annually for the last two decades.
Several factors contribute to the rapid growth of sales promotion, particularly in
consumer markets.^48 Internal factors include the following: Promotion is now more^597
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