Advertising and Promotion Management Rajeswari.R, AJKIM
What is Advertising?
What is Advertising?
Advertising is a paid from of non-personal communication. Advertising promotes ideas, goods and services of an identified sponsors. The main purpose of advertising is to create sales.
Features (components of a good definition) ( Nature)
It is paid form of communication
It is non-personal in nature, because it is not directed towards an individual
Purpose is to promote ideas about products and services
It is done to create interest in goods and services
Advertising is issued by an identified sponsor and done by the source
It tries to persuade or influence the consumer to do something
It reaches a large audience of potential consumers
The message is conveyed through many different kinds of mass media, which are largely nonpersonal.
Advertising, Advertisements, Adv. Campaign, and Integrated Brand promotion
Advertising refers to a specific message that someone or some organisation has placed to persuade an audience
Advertising Campaign is a series of coordinated advertisements and other promotional efforts that communicate a reasonably cohesive and integrated theme
IBP is the use of many promotional tools, including advertising, in a coordinated manner to build and then maintain brand awareness, identity, and preference. When marketers combine contests, a web site, event sponsorship and point-of purchase displays with advertising, this creates and integrated brand promotion.
4 Elements of Advertising Strategy Creative Idea Execution Media Effective Advertising
4 elements of Advertising
Adv. Strategy:- strategy is the logic and planning behind the advertisement that gives it direction and focus. Advertiser develops the ad to meet specific objectives, carefully directs it to a certain audience, creates its message to speak to that audience’s most important concerns, and runs it in media that will reach its audience most effectively
Creative idea:- The creative concept is the ad’s central idea that grabs your attention and sticks in your memory. The word creative describes a critical aspects of advertising that drives the entire field of advertising
Creative Execution:- The details, photography. The writing, the acting, the setting, the printing, and the way the product is depicted all reflect the highest production values available to the industry.
Creative media use:- Every message has to be delivered somehow, effectively and efficiently. How well the company uses the 360* advertising
History of Advertising
In ancient times the most common form of advertising was by word of mouth. The archaeologists have found Babylonian clay tablet dated 3000 BC having inscription of a shoemaker, a scribe and an ointment dealer. Many more such discoveries are accounted for in literature.
The Early years of Advertising in America Source: http://scriptorium.lib.duke.edu/eaa/#note
History of Indian Advertising Indian Advertising starts with the hawkers calling out their wares right from the days when cities and markets first began.
History is about 5000 years old. There were three forms of advertisements before the print advertisement
Trade Mark:- Artisans
Trade Mark:- Artisans and craftsman placed their mark on the goods to get identified with respect to the skill they possess. Eg:- gold Jewelry- Hallmark certified, printing press marks their trade mark on the cards etc.
Town Criers:- The town criers are paid to go around streets of the town and make announcement. The announcement uses a tonga or a group of people beating the drum and make announcement by walkin along by lanes.
Signs:- In this mother, the product name is displayed on a rock by painting. People who pass by notice it. This type of outdoor advertising is common even today. See this while traveling on a highway.
Hand bill was the first printed form of advertisement across the UK. The first advertisement in USA was printed in Boston news letter.
The 4 major factors in the evolution
The rise of capitalism
The industrial revolution
Manufacturer’s pursuit of power in the channel of distribution
The rise of modern mass media
Some professional bodies
Indian Society of advertisers –ISA
Indian Newspapers society –INS
Advertising Agencies Association of India – AAAI
Some of the important personalities to remembered, who laid the foundation for modern advertisement are
David Ogilvy, J Walter Thompson
Types Focus on
Consumer Advertising- Service Ad
Industrial Advertising-Surrogate Ad (surrogate mean substitute, Alcohol ad is banned, hence ad of Kingfisher soda with something else)
Trade Advertising- Retail (Cooperative ads )and Whole Sale ads
Non-profit Advertising – Public service ads
Type of impact required
Promotional Demand Ad
Direct and indirect action demand ad
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Builds awareness of products and brands
Creates a brand image
Provides product and brand information
Provides incentives to take action
Provides brand reminders
Reinforces past purchases and brand experiences
To identify products and differentiate them from others
To communicate information about the products, its features, and its place of sale
To stimulate the distribution of a product
To build value, brand preference and loyalty
To lower the overall cost of sales
To increase the product use
Wells,Moriarty,Burnett .P.10& William F Arens P 33
Social Function:- Eg. Aids awareness, fighting chronic disease like cancer
Psychological Function:- Eg. Thirst -Thanda Matlab Coca Cola
Economic Function:- Value/price equation conveyed to cusotmer
Acc. Prof. Jagdish N.Shet
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Role of Advertising
Communication with the consumers
Effective communication vehicle
Catalyst for change:- it differentiates the products and induces the customer to change the product/brand. Also weight reduction tablet induces the customer to switch over for looking slim.
Contribution to economic growth- development of new markets, create more demand, more production, more employment, hence economic growth
Non-commercial ads (NCA)
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Role of Advertising
Role in Marketing and integrated brand promotion
Role in Brand Development and management
Role in Revenue and profit generation
Benefits of Advertising
Benefits to the Advertisers
An advertiser is able to establish a link between the consumer and himself through advertisement
It enables manufacturers introduce new products/services
Advertisement helps the manufacturer keep the consumers well-informed
It helps in brand image building
It smoothens product adoption process
Benefits to the consumers
Acts as a guide in choosing the product
It saves time
Many products and services contribute to consumer welfare
Provides necessary information with regard to availability and price of the product.
SN Murthy,P 7
Advertising and Marketing Mix
Process William F Arens – P.186 & SN Murthy,P 19
The promotion mix and advertisement is just one of the elements that a company can use. Promotional mix itself is one element of marketing mix. Therefore, there is close relationship between advertising and marketing mix.
For a Physician ad plays only a little role but for a periodical, ad plays a vital role. Hence ad plays different roles in marketing various products/services. The role of advertising depends on how marketing mix is used to promote the product or services
Adv. & Product
Major activities like product is designed and classified, positioned, branded, and packaged. Each of these affects the way the product is advertised.
A product’s position in the PLC influences the target market selected and the kind of advertising used.
During Introductory phase, the company must spend significant advertising sums to establish a position as a market leader to gain a large share of market before the growth stage begins
Eg: when the cellular phones were introduced in the late 1980s, advertisers had to first create enough consumer demand to pull the product through the channels of distribution (Pull Strategy), educate consumers about the new product, its category, explained what cellular phones are, how they work, and the rewards of owning one. Sales promotion efforts aimed at the retail trade (called Push strategy) encouraged dustributors and dealers to stock, display and advertise the new products.
When sales volume begins to rise rapidly, the product enters the growth stage, which is characterised by rapid market expansion as more and more customers, stimulated by mass advertising and word of mouth, make their first, second and third phases. Competitors jump into the market – vital role for ad
Maturity stage the market place becomes saturated with competing products and the number of new customers dwindles, so sales reach a plateau. Companies increase their promotional efforts through USPs
In decline stage the company may cease all promotional activities and phase the products out quickly.
Ad and product
The type of promotion differ from the type of product. Marketers should select the right channel, right media and right message to advertise the product based on the product classification
Advertising plays a major role in product positioning
Product packaging etc.
Product classification Consumer goods:- Used in day to day living ( food, cloth, car etc.) Rate of consumption and tangibility Convenience goods: Purchased frequently with very little involvement Eg. Food items, matchbox, candle stick etc. Durable goods:- These will last for a long time. No bought frequently-car, oven, refrigerator. Shopping goods: Not frequently purchased and planning is required to but Eg. Furniture, car etc. Non-durable goods: these are consumed and need to be bought. Eg. Soap, Shampoo Speciality goods:- Extra effort is required to buy. Eg. Camera, electronic goods. Services:- Legal, medical etc. Services: Non-tangible products
Advertising communicate the price of the product (Just Rs.99 only). If there is a price reduction, it should be communicated to motivate the consumers to buy the product.
Generally companies launch products, the price is kept higher to increase the short term profits with good development cost.
As the product reaches the maturity stage, the company intends to get higher share of market, thereby reducing the price. At each of these phases, the advertising message will be different.
Ad and pricing SN murthy.P-24 Pricing Strategy Advertising message Skimming strategy The ad will feature convenience as the key message. Penetration strategy Initial ad will emphasize low prices, while subsequent ad will promote the product quality, services, wider choice and location advantage Comparative Pricing Ad shows the regular offer with special package. By comparing the two the customer gets the impression that the store offers discount price on everything. Detergents and cosmetic companies follow this strategy. Promotional pricing This could clear the old stock. Buy two take one is one of the methods. Ad supports the promotion drive, specifies the time period during which this offer is valid. Most consumer durable companies follow this strategy during festive season. Prestige Pricing Here the ad will not mention the price, the retailer want only those clients, who could pay higher price in exchange for quality and better services
Before the first ad can be created, the distribution element or place, must be decided.
Direct distribution-network marketing:- ad responsibility is fully carried by the manufacturer
Indirect distribution:- the distribution channel- advertising used based on the product’s method of distribution- much of the ads are not prepared or paid for / by the manufacturer, but for/ by the distributor or retailer. The members of the distribution channel give enormous promotional support to the manufacturers they represent.
Intensive Distribution:- soft drinks, timex watches, and other convenience goods are available at every possible location because of intensive distribution. The sales burden is usually carried by the manufacturer’s national advertising. Ads in trade magazines push the product into the retail pipeline, and in mass media they stimulate the consumers to pull the products from the pipeline.
Selective Distribution:- by limiting the no. of outlets through selective distribution, manufacturers can cut their distribution and promotion costs. Many hardware tools, branded cloths are sold selectively through discount chains,. Here manufacturers may use national ads, but sales burden is on the retailer. Manufacturer may share part of the retailer ad costs through cooperative advertising.
Exclusive Distribution:- exclusive distribution agreements force manufacturers and retailers to cooperate closely in advertising and promotion programmes. Eg:- Bajaj Bikes – specific territory for a dealer.
Adv. & Promotion
Promotion relates to the communication between seller and buyer. Promotion mix constitutes, personal selling, advertising, sales promotion, public relations etc.
Advertising strongly supports the other promotion mix to make it effective.
It is how effectively the marketer uses these promotion mix for effective marketing
Expanded Marketing Mix for Services
Life cycle model of advertising has three stages
Pioneering stage:- product introduction.
Competitive Stage:- product difference
Retentive Stage:- Reminder advertising
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Two contradicting views
Advertisement is waste of money, since it adds to the cost of the product.
On the contrary, advertisement stimulates demand, which in turn lowers the cost of the product due to large scale production.
Advertising helps consumer to shift demand from one product to another.
It enlightens the consumer to make a rational choice about the product.
Impact on product:- the impact of ad translate the customer reaction into any of the following-I shall try to drink next time when feeling thirsty, Forgot about the ad, but when reminded, the answer is “Yes, I have heard about it”, what is new about the fruit juice? How does it differs from the other product?
Impact on Price:- Ad cost, like many other costs used in business is to be borne by the customer, ad may not have any impact on prices of commodities like agricultural products, the impact of ad on prices varies with the structure of the market eg., monopoly, oligopoly, pur competition etc., this is because each market structure has its own way of advertising practices.
Impact on competition:- The main subject of competition and advertising is in product differentiation.
Impact on consumer choice:- promotional activities leads to consumer demand. Advertising helps to launch a new product by stimulating consumer demand for its class. In the declining market, advertising can slow down the rate of growth. In the growing market, advertisers compete for their share in growth. In declining market advertisers compete for each other’s share. Eg. In India, the demand for products such as automobiles, cellular phones, television sets, packaged food will continue to grow irrespective of the ad due to the growing market.
Impact on Business cycle:- on one side people says ad is a wasteful expenditure, on the other side ad is responsible for increased consumption patterns of the consumer and hence increase in G.N.P. Those organisations who continue to advertise during the lean business cycle will reap the benefit when the business bounces up. Therefore, when the business cycle is up, advertising contributes to volume growth and it stabilises when business cycle is down.
Value addition:- ad can add value in the consumers mind. Eg. Those who want to buy cellular phone, might perceive that Nokia will add the greatest value in phone segment. Hence the consumers are willing to pay more. If price is value, then the customer will buy inexpensive mobile set. If features are his values, he will buy an expensive set. Ad thereby helps the people to satisfy the wants.
Ethics in Advertising
Ethics are moral standards and principles against which behaviour is judged. Honesty, integrity, fairness, and sensitivity are all included in a broad definition of ethical behaviour.
The ethical aspects of advertising can be discussed in three areas
Truth in advertising
Advertising to children
Advertising controversial products
Truth in ad – Deception- making false or misleading statements in an advertisement. The difficulty in this is to determine just what is deceptive.
Eg; a manufacturer who claims a laundry product can remove grass stains is exposed to legal sanctions if the product cannot perform the task. Another manufacturer who claims to have the “Best laundry Detergent in the world” however, is perfectly within its rights to employ superlatives. Just what constitutes “the best” is a purely subjective determination; it cannot be proved or disproved. The use of absolute superlatives such as no. 1 or best in the world is sometimes called Puffery and is considered completely legal
Ethics in ad
Advertising to children: a child between 2 and 11 yrs old may see over 20,000 ads in a year. One concern is that advertising promotes superficiality values founded in material goods. Another concern is that children are inexperienced consumers and easy prey for the sophisticated persuasions of advertisers, and as such, it influences children’s demands for everything from toys to snack foods. These demand in turn, create an environment of child-parent conflict, violence, child obesity, breakdown in early learning skills, and destruction of parental authority. Another concern is that many programs aimed at children constitute program-length commercials.
Advertising Controversial Products:- The controversy is on allowing ad of tobacco, alcoholic beverages, gambling and lotteries, and firearms (pistons, machine guns etc.). Researchers found that family, friends and peers are the primary influence on the use of these products. And the children are more influenced by parents and playmates that by the mass media. Advertising cannot create primary demand in mature product categories, but it influence the consumers’ choice of brands
An Advertising agency is an organisation of professionals who provide creative and business services to clients in planning, preparing, and placing advertisements.
The reason for, firms rely on ad agencies is that agencies house a collection of professionals with very specialised talent, experience, and expertise that simply cannot be matched by in-house talent.
Type of agency professionals who help advertisers in planning, preparation, and placement of advertising and other promotional activities include: Account planners Marketing specialists Account executives Media buyers Art directors Lead account planners Chief financial officers Chief technology officers Public relations specialists Creative directors Sales promotion and event planners Copywriters Direct marketing specialists Radio and television producers Web developers Researchers Interactive media planners Artists Technical staff – printers, film editors, and so forth
Different types of Advertising agencies
Full-Services Agencies:- Includes an array of advertising professional to meet all the promotional needs of clients. Eg. Omnicom Group and Grey Global Group.
Creative Boutiques:- It emphasizes creative concept development, copywriting and artistic services to clients. An advertiser can employ this alternative for the strict purpose of infusing greater creativity into the message theme or individual advertisement. Eg: Mc Cann-Erockson World wide and Leo Burnett
Interactive Agencies:- help advertisers prepare communications for new media such as the internet, interactive Kiosks. CD-ROMs, and interactive television. Interactive agencies focus on ways to use Web- based solutions for direct marketing and target market communications. EG. Ad4 ever.com created interactive campaigns for BMW, Oracle , Nintendo and the US Army.
In-House Agencies:- it is often referred to as the advertising department in a firm and takes responsibility for the planning and preparation of advertising materials. This option has the advantage of greater coordination and control in all phases of the advertising and promotion process. Some of the prominent advertisers who do most of their work in-house are gap, Calvin Klein, and Revlon.
Media Specialists:- they are organizations that specialize in buying media time and space and offer media strategy consulting to advertising agencies and advertisers. They are not technically agencies. Eg: Starcom Media Vest Group (SMG)
Types of promotion Agencies
While advertisers often rely on advertising agency as a steering organization for their promotional efforts, many specialized agencies often enter the process and are referred to as promotion agencies. This is because ad agencies, even full-service agencies, will concentrate on the advertising process and often provide only a few key ancillary services for other promotional efforts. Promotion agencies can handle everything from sampling to event promotions to in-school promotional tie-ins.
Direct marketing agencies and data base agencies (Direct response agencies) provide a variety of direct marketing services. These firms maintain and manage large databases of mailing lists as one of their services. These firms can design direct marketing campaigns either through email or via telemarketing, or direct response campaigns using all forms of media. These agencies help advertisers construct databases of target customers, merge databases, develop promotional materials, and then execute the campaign . In many cases, these agencies maintain fulfillment centers, which ensure that customers receive the product ordered through direct mail.
E-Commerce Agencies:- there are so many new and different kinds of e-commerce agencies that is hard to categorize all of them. These agencies handle a variety of planning and execution activities related to promotions using electronic commerce. These agencies are different from the interactive agencies (discussed earlier). They do not create web sites or banner ads, but rather help firms conduct all forms of promotion through electronic media, particularly the internet.
Eg:- Old Navy, American Airlines, the World Wildlife Fund, Cisco, and 3M are few firms that have signed on with e-commerce agencies to add another dimension to their IBP campaigns.
Sales Promotion Agencies:- These specialists design and then operate contests, sweepstakes, special displays, or coupon campaigns for advertisers. It important to reorgnise that these agencies can specialise in consumer sales promotions and will focus on price-off deals, coupons, sampling, rebates and premiums. Other firms will focus on price-off deals, coupons, sampling, rebates and premiums. Other firms will spcialise in trade sales promotions designed to help advertisers use promotions aimed at wholesales, retailers, vendors, and trade resellers. These agencies are experts in designing incentives programs, trade shows, sales force contests, in-store merchanidising, and point-of-purchase materials.
Event-Planning Agencies:- Event sponsorship can also be targeted to household consumers or the trade market. The agencies and organisers are experts in finding locations, securing dates, and putting together a team of people to pull off a promotional event: audio/visual people, caters, security experts, entertainers, celebrity participants, or whoever is necessary to make the event come about.
Design firms:- they help a firm to create a logo, and involved in the execution of the ad or IBP effort
Public Relations firms: they manage an organisation’s relationships with the media, local community, competitors, industry associations and government organisations.
Organisation of Ad Agency
If the agency is large enough, it usually has a chief executive officer, perhaps one or two vice presidents, and several different functional areas.
Account management:- acts a liaison between the client and the agency
Creative Development and production:- creative directors, creative department managers, copywriters, art directors and producers
Media planning and production:- Agencies that don’t rely on outside media specialists will have a media department that recommends to the client – or another department- the most efficient means of delivering the message to the target audience.
Account Planning and Research:- A full service agency usually has a separate department specifically devoted to planning and sometimes to research. – Account Planner – is a type of planner who gathers all available intelligence on the market and consumers and acts as the voice of the consumer.
Internal Agency services:- the departments that serve the operations within the agency include the traffic department and print production, as well as the more general financial services and human resources or personnel – Traffic department- is responsible for internal control and tracking of projects to meet deadlines. Print production department – taking a layout, a visual, and a page of copy and turning them into a four-color magazine page or a full-page newspaper ad is the work of the this dept.
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Selection of an Ad Agency
First and the foremost, the Agency must be well known
Agency must have creativity in pursuit
Agency must have good antecedents with rich work experience
The accounts Executive in the ad Agency must have the ability to understand the client’s problem.
Ascertain the no. of clients gained and lost by proper scrutiny
There should be a compatibility between the sponsor and the ad agency
They should have ability to make a successful presentation, ability to conduct MR, should have a consumer-oriented dependable approach, whether they have a media understanding.
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Account services:- keep the agency teams’ creative, production, and media on schedule and within budget.
Marketing research services
Creative and production services
Media planning and buying services
a series of coordinated advertisements
single advertisement placed in multiple media
several different advertisements with a similar look, feel, and message
Building a strong brand image
Accelerate growth and market share
Influence buying decision
Enhance perceived value
Support selling and other means of communication
Retrieve lost sales
Keep product in public eye
Two types of advertising campaign
a concentrated period of advertising for a product, such as before the launch of a new product line
a steady low-level stream of advertising for a product, to maintain awareness of the brand in general