Download MBA-Marketing (Master of Business Administration) 4th Semester Advertising and Sales Promotion Notes
ADVERTISING AND SALES PROMOTION
UNIT ? I
INTRODUCTION
Adverting is only one element of the promotion mix, but it often considered
prominent in the overall marketing mix design. Its high visibility and pervasiveness
made it as an important social and encomia topic in Indian society.
Promotion may be defined as "the co-ordination of all seller initiated efforts
to set up channels of information and persuasion to facilitate the scale of a good or
service." Promotion is most often intended to be a supporting component in a
marketing mix. Promotion decision must be integrated and co-ordinated with the
rest of the marketing mix, particularly product/brand decisions, so that it may
effectively support an entire marketing mix strategy. The promotion mix consists
of four basic elements. They are:-
1. Advertising
2. Personal Selling
3. Sales Promotion, and
4. Publicity
1. Advertising is the dissemination of information by non-personal means
through paid media where the source is the sponsoring organization.
2. Personal selling is the dissemination of information by non-personal
methods, like face-to-face, contacts between audience and employees of the
sponsoring organization. The source of information is the sponsoring
organization.
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3. Sales promotion is the dissemination of information through a wide variety
of activities other than personal selling, advertising and publicity which
stimulate consumer purchasing and dealer effectiveness.
4. Publicity is the disseminating of information by personal or non-personal
means and is not directly paid by the organization and the organization is
not the source.
ORIGIN AND DEVELOPMENT OF ADVERTISING
It has been wrongly assumed that the advertising function is of recent origin.
Evidences suggest that the Romans practiced advertising; but the earliest indication
of its use in this country dates back to the Middle Ages, when the use of the
surname indicated a mans occupation. The next stage in the evolution of
advertising was the use of signs as a visual expression of the tradesmans function
and a means of locating the source of goods. This method is still in common use.
The seller in primitive times relied upon his loud voice to attract attention
and inform consumers of the availability of his services. If there were many
competitors, he relied upon his own personal magnetism to attract attention to his
merchandise. Often it became necessary for him to resort to persuasion to pinpoint
the advantages of his products. Thus, the seller was doing the complete promotion
job himself.
Development of retail stores, made the traders to be more concerned about
attracting business. Informing customers of the availability of supplies was highly
important. Some types of outside promotion were necessary. Signs on stores and in
prominent places around the city and notices in printed matters were sometimes
used.
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When customers were finally attracted to the store and satisfied with the
service at least once, they were still subjected to competitive influences; therefore,
the merchants signs and advertisements reminded customers of the continuing
availability of his services. Sometimes traders would talk to present and former
customers in the streets, or join social organizations in order to have continuing
contacts with present and potential customers.
As the markets grew larger and the number of customers increased, the
importance of attracting them also grew. Increasing reliance was placed on
advertising methods of informing about the availability of the products. These
advertising methods were more economical in reaching large numbers of
consumers. While these advertising methods were useful for informing and
reminding and reminding, they could not do the whole promotional job. They were
used only to reach each consumer personally. The merchant still used personal
persuasion once the customers were attracted to his store.
The invention of hand press increased the potentialities of advertising. By
Shakespeares times, posters had made their appearance, and assumed the function
of fostering demand for existing products. Another important event was the
emergence of the pamphlet as an advertising medium. The early examples of these
pamphlets disclose their sponsorship by companies want to generate goodwill for
their activities. The low cost of posters and handbills encouraged a number of
publishers to experiment with other methods.
DEFINITION OF ADVERTISISNG
The word advertising originates from a Latin word advertise, which means
to turn to. The dictionary meaning of the term is "to give public notice or to
announce publicly".
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Advertising may be defined as the process of buying sponsor-identified
media space or time in order to promote a product or an idea.
The American Marketing Association, Chicago, has defined advertising as
"any form of non-personal presentation or promotion of ideas, goods or services, by
an identified sponsor."
What Advertisement Is?
Advertisement is a mass communicating of information intended to
persuade buyers to by products with a view to maximizing a companys profits.
The elements of advertising are:
(i)
It is a mass communication reaching a large group of consumers.
(ii)
It makes mass production possible.
(iii)
It is non-personal communication, for it is not delivered by an actual
person, nor is it addressed to a specific person.
(iv)
It is a commercial communication because it is used to help assure the
advertiser of a long business life with profitable sales.
(v)
Advertising can be economical, for it reaches large groups of people.
This keeps the cost per message low.
(vi)
The communication is speedy, permitting an advertiser to speak to
millions of buyers in a matter of a few hours.
(vii) Advertising is identified communication. The advertiser signs his name
to his advertisement for the purpose of publicizing his identity.
What is Included in Advertising?
(i)
The information in an advertisement should benefit the buyers. It should
give them a more satisfactory expenditure of their rupees.
(ii)
It should suggest better solutions to their problems.
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(iii)
The content of the advertisement is within the control of the advertiser,
not the medium.
(iv)
Advertising without persuasion is ineffective. The advertisement that
fails to influence anyone, either immediately or in the future, is a waste
of money.
(v)
The function of advertising is to increase the profitable sales volume.
That is, advertising expenses should not increase disproportionately.
Advertising includes the following forms of messages: The messages carried in-
Newspapers and magazines;
On radio and television broadcasts;
Circular of all kinds, (whether distributed by mail, by person,
thorough tradesmen, or by inserts in packages);
Dealer help materials,
Window display and counter ? display materials and efforts;
Store signs, motion pictures used for advertising,
Novelties bearing advertising messages and Signature of the
advertiser,
Label stags and other literature accompanying the merchandise.
What is excluded from Advertising?
Advertising is not an exact science. An advertisers circumstances are never
identical with those of another; he cannot predict with accuracy what results his
future advertising efforts will produce.
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(i)
Advertising is not a game, because if advertising is done properly, both
the buyer and the seller benefit from it.
(ii)
Advertising is not a toy. Advertiser cannot afford to play with
advertising. Advertising funds come from sales revenue and must be
used to increase sales revenue.
(iii)
Advertisements are not designed to deceive. The desire and hope for
repeat sales insures a high degree of honesty in advertising.
The activities excluded from advertising are:
The offering of premiums to stimulate the sale of products;
The use of exhibitions and demonstrations at fairs, show and conventions;
The use of samples and activities, involving news releases and the activities
of personal selling forces;
The payment of advertising allowances which are not used for advertising;
The entertainment of customers
Advertising Objectives
Each advertisement is a specific communication that must be effective, not
just for one customer, but for many target buyers. This means that specific
objectives should be set for each particular advertisement campaign. Advertising is
a form of promotion and like a promotion; the objectives of advertising should be
specific. This requires that the target consumers should be specifically identified
and that the effect which advertising is intended to have upon the consumer should
be clearly indicated. The objectives of advertising were traditionally stated in terms
of direct sales. Now, it is to view advertising as having communication objectives
that seek to inform persuade and remind potential customers of the worth of the
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product. Advertising seeks to condition the consumer so that he/she may have a
favourable reaction to the promotional message. Advertising objectives serve as
guidelines for the planning and implementation of the entire advertising
programme.
The basic objectives of an advertising programme may be listed as below:
(i)
To stimulate sales amongst present, former and future consumers. It
involves a decision regarding the media, e.g., TV rather than print ;
(ii)
To communicate with consumers. This involves decision regarding
copy ;
(iii)
To retain the loyalty of present and former consumers. Advertising may
be used to reassure buyers that they have made the best purchase, thus
building loyalty to the brand name or the firm.
(iv)
To increase support. Advertising impliedly bolsters the morale of the
sales force and of distributors, wholesalers, and retailers, ; it thus
contributes to enthusiasts and confidence attitude in the organizational. :
(v)
To project an image. Advertising is used to promote an overall image of
respect and trust for an organization. This message is aimed not only at
consumers, but also at the government, shareholders, and the general
public.
Importance of Advertising
Generally, advertising is a relatively low-cost method of conveying selling
messages to numerous prospective customers. It can secure leads for salesmen and
middlemen by convincing readers to request more information and by identifying
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outlets handling the product. It can force middlemen to stock the product by
building consumer interest. It can help train dealers salesmen in product uses and
applications. It can build dealer and consumer confidence in the company and its
products by building familiarity. Advertising is to stimulate market demand.
While sometimes advertising alone may succeed in achieving buyer
acceptance, preference, or even demand for the product, it is seldom solely relied
upon. Advertising is efficiently used with at least one other sales method, such as
personal selling or point-of-purchase display, to directly move customers to buying
action.
Advertising has become increasingly important to business enterprises ?
both large and small. Outlay on advertising certainly is the voucher. Non-business
enterprises have also recognized the importance of advertising. The attempt by
army recruitment is bases on a substantial advertising campaign, stressing the
advantages of a military career. The health department popularizes family planning
through advertising Labour organizations have also used advertising to make their
viewpoints known to the public at large. Advertising assumes real economic
importance too.
Advertising strategies that increase the number of units sold stimulate
economies in the production process. The production cost per unit of output is
lowered. It in turn leads to lower prices. Lower consumer prices then allow these
products to become available to more people. Similarly, the price of newspapers,
professional sports, radio and TV programmes, and the like might be prohibitive
without advertising. In short, advertising pays for many of the enjoyable
entertainment and educational aspects of contemporary life.
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Advertising has become an important factor in the campaigns to achieve
such societal-oriented objectives such as the discontinuance of smoking, family
planning, physical fitness, and the elimination of drug abuse.
Though in India, advertising was accepted as a potent and recognized means
of promotion only 25 years ago, its growing productive capacity and output
necessitates the finding of consumers and advertising plays an important role in this
process. Advertising helps to increase mass marketing while helping the consumer
to choose from amongst the variety of products offered for his selection.
In India, advertising as a profession is in its infancy. Because of this fact,
there is a tremendous scope for development so that it may be productively used for
the benefit of producers, traders, consumers, and the countrys economy.
CLASSIFICATION AND TYPES OF ADVERTISING
1. Product ? Related Advertising
A. Pioneering Advertising
B. Competitive Advertising
C. Retentive Advertising
2. Public Service Advertising
3. Functional Classificaiton
A. Advertising Based on Demand Influence Level.
A. Primary Demand (Stimulation)
B. Selective Demand (Stimulation)
B. Institutional Advertising
C. Product Advertising
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A. Informative Product Advertising
B. Persuasive Product Advertising
C. Reminder-Oriented Product Advertising
4. Advertising based on Product Life Cycle
A. Consumer Advertising
B. Industrial Advertising
5. Trade Advertising
A. Retail Advertising
B. Wholesale Advertising
6. Advertising Based on Area of operation
A. National advertising
B. Local advertising
C. Regional advertising
7. Advertising According to Medium Utilized
1. Product ? Related Advertising
It is concerned with conveying information about and selling a product or
service. Product advertising is of three types, viz,
A. Pioneering Advertising
B. Competitive Advertising
C. Retentive Advertising
i. Pioneering Advertising:
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This type of advertising is used in the introductory stages in the life cycle of
a product. It is concerned with developing a "primary" demand. It conveys
information about, and selling a product category rather than a specific brand. For
example, the initial advertisement for black ? and ? white television and colour
television. Such advertisements appeal to the consumers emotions and rational
motives.
ii. Competitive Advertising:
It is useful when the product has reached the market-growth and especially
the market-maturity stage. It stimulates "selective" demand. It seeks to sell a
specific brand rather than a general product category. It is of two types:
A. Direct Type: It seeks to stimulate immediate buying action.
B. Indirect Type: It attempts to pinpoint the virtues of the product in the expectation
that the consumers action will be affected by it when he is ready to buy.
Example: Airline advertising.
Air India attempts to bid for the consumers patronage either immediately -
direct action-in which case, it provides prices, time tables and phone numbers on
which the customer may call for reservations; or eventually ? indirect action ? when
it suggests that you mention Air Indias name when talking to your travel agent.
iii. Retentive Advertising:
This may be useful when the product has achieved a favourable status in the
market ? that is, maturity or declining stage. Generally in such times, the advertiser
wants to keep his products name before the public. A much softer selling approach
is used, or only the name may be mentioned in "reminder" type advertising.
2. Public Service Advertising
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This is directed at the social welfare of a community or a nation. The
effectiveness of product service advertisements may be measured in terms of the
goodwill they generate in favour of the sponsoring organization. Advertisements on
not mixing drinking and driving are a good example of public service advertising.
In this type of advertising, the objective is to put across a message intended to
change attitudes or behaviour and benefit the public at large.
3. Functional Classification
Advertising may be classified according to the functions which it is intended
to fulfill.
(i)
Advertising may be used to stimulate either the primary demand or the
selective demand.
(ii)
It may promote either the brand or the firm selling that brand.
(iii)
It may try to cause indirect action or direct action.
i. Advertising Based on Demand Influence Level.
A. Primary Demand Stimulation
Primary demand is demand for the product or service rather than for a
particular brand. It is intended to affect the demand for a type of product, and not
the brand of that product. Some advertise to stimulate primary demand. When a
product is new, primary demand stimulation is appropriate. At this time, the
marketer must inform consumers of the existence of the new item and convince
them of the benefits flowing from its use. When primary demand has been
stimulated and competitors have entered the market, the advertising strategy may be
to stimulate the selective demand.
B. Selective Demand Stimulation
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This demand is for a particular brand such as Charminar cigarettes, Surf
detergent powder, or Vimal fabrics. To establish a differential advantage and to
acquire an acceptable sort of market, selective demand advertising is attempted. It
is not to stimulate the demand for the product or service. The advertiser attempts to
differentiate his brand and to increase the total amount of consumption of that
product. Competitive advertising stimulates selective demand. It may be of either
the direct or the indirect type.
ii. Institutional Advertising
Institutional Advertising may be formative, persuasive or reminder oriented
in character. Institutional advertising is used extensively during periods of product
shortages in order to keep the name of the company before the public. It aims at
building for a firm a Positive public image in the eyes of shareholders, employees,
suppliers, legislators, or the general public. This sells only the name and prestige of
the company. This type of advertising is used frequently by large companies whose
products are well known. HMT or DCM, for example, does considerable
institutional advertising of its name, emphasizing the quality and research behind its
products.
Institutional advertisements are at consumers or focus them upon other
groups, such as voters, government officials, suppliers, financial institutions, etc. If
it is effective, the target groups will respond with goodwill towards, and confidence
in the sponsor. It is also a useful method or introducing sales persons and new
product to consumers. It does not attempt to sell a particular product; it benefits the
organization as a whole.
It notifies the consumers that the company is a responsible business entity
and is patriotic; that its management takes ecologically responsible action, is an
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affair- motive-action employer, supports the socialistic pattern of society or
provides employment opportunities in the community.
When Indian Oil advertisements describe the companys general activities,
such as public service work, this may be referred to as institutional advertising
because it is intended to build an overall favorable attitude towards the company
and its family of products. HMT once told the story of the small-scale industries
supplying it with component parts, thus indicating how it aided the development of
ancillary industries.
iii. Product Advertising
Most advertising is product advertising, designed to promote the sale or
reputation of a particular product or service that the organization sells. Indanes
Cooking Gas is a case in point. The marketer may use such promotion to generate
exposure attention, comprehension, attitude change or action for an offering. It
deals with the non-personal selling of a particular good or service. It is of three
types as follows:-
A. Informative Product Advertising
B. Persuasive Product Advertising
C. Reminder-Oriented Product Advertising
A. Informative Product Advertising:
This form of advertising tends to characterize the promotion of any new type
of product to develop an initial demand. It is usually done in the introductory stages
of the product life cycle. It was the original approach to advertising.
B. Persuasive Product Advertising:
Persuasive product advertising is to develop demand for a particular product
or brand. It is a type of promotion used in the growth period and, to some extent, in
the maturity period of the product life cycle.
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C. Reminder-Oriented Product Advertising:
The goal of this type of advertising is to reinforce previous promotional
activity by keeping the brand name in front of the public. It is used in the maturity
period as well as throughout the declining phase of the product life cycle.
4. Advertising based on Product Life Cycle
A. Consumer Advertising
B. Industrial Advertising
A. Consumer Advertising
Most of the consumer goods producers engage in consumer product
advertising. Marketers of pharmaceuticals, cosmetics, scooters, detergents and
soaps, cigarettes and alcoholic beverages are examples. Baring a few, all these
products are all package goods that the consumer will often buy during the year.
There is a heavy competition among the advertisers to establish an advantage for
their particular brand.
B. Industrial Advertising
Industrial executives have little confidence in advertising. They rely on this
form of promotion merely out of fear that their competitors may benefit if they stop
their advertising efforts. The task of the industrial advertiser is complicated by the
multiple buying influence characteristics like, the derived demand, etc. The
objectives vary according to the firm and the situation. They are:
To inform,
To bring in orders,
To induce inquiries,
To get the advertisers name on the buyers list of sources,
To provide support for the salesman,
To reduce selling costs,
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To help get items in the news column of a publication,
To establish recognition for the firm or its product,
To motivate distributors,
To recognition for the firm or its products,
To motivate distributors, to create or change a companys image,
To create or change a buyers attitude, and
The basic appeals tend to increase the rupee profits of the buyer or help in
achieving his non-monetary objectives. Trade journals are the media most generally
used followed by catalogues, direct mail communication, exhibits, and general
management publications. Advertising agencies are much less useful in industrial
advertising.
5. Trade Advertising
A. Retail Advertising
B. Wholesale Advertising
A. Retail Advertising
This may be defined as "covering all advertising by the stores that sell goods
directly to the consuming public. It includes, also advertising by establishments
that sell services to the public, such as beauty shops, petrol pumps and banks."
Advertising agencies are rarely used. The store personnel are usually given
this responsibility as an added task to be performed, together with their normal
functions. The result is that advertising is often relegated to a secondary position in
a retail store. One aspect of retail advertising is co-operative advertising. It refers to
advertising costs between retailers and manufacturers. From the retailers point of
view, co-operative advertising permits a store to secure additional advertising that
would not otherwise have been available.
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B. Wholesale Advertising
Wholesalers are, generally, not advertising minded, either for themselves or
for their suppliers. They would benefit from adopting some of the image-making
techniques used by retailers ? the need for developing an overall promotional
strategy. They also need to make a greater use of supplier promotion materials and
programmes in a way advantageous to them.
6. Advertising based on Area of Operation
It is classified as follow:
A. National Advertising
B. Regional Advertising
C. Local Advertising
A. National advertising
It is practiced by many firms in our country. It encourages the consumer to
buy their product wherever they are sold. Most national advertisements concentrate
on the overall image and desirability of the product. The famous national
advertisers are:
Hindustan Levers
DCM
ITC
Jay Engineering
TISCO
B. Regional advertising
It is geographical alternative for organizations. For example, Amrit
Vanaspati based in Rajpura claims to be the leading hydrogenated oil producer in
the Punjab. But, until recently, it mainly confined itself to one of the vegetable oil
brands distribution to Malihabad district (in U.P. near Lucknow).
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C. Local advertising
It is generally done by retailers rather than manufacturers. These
advertisements save the customer time and money by passing along specific
information about products, prices, location, and so on. Retailer advertisements
usually provide specific goods sales during weekends in various sectors.
7. Advertising According to Medium
The most common classification of advertising is by the medium used. For
example: TV, radio, magazine, outdoor, business periodical, newspaper and direct
mail advertising. This classification is so common in use that it is mentioned here
only for the sake of completeness.
ADVERTISING PLANNING FRAMEWORK
Plans are nothing, planning is everything.
- Dwight D. Eisenhower
The advertising management is mainly concerned with planning and
decision making. The advertising manager will be involved in the development,
implementation, and overall management of an advertising plan. The development
of an advertising plan essentially requires the generation and specification of
alternatives. Decision making involves choosing from among the alternatives. The
alternatives can be various levels of expenditure, different kinds of objectives or
strategy possibilities, and kinds of options with copy creation and media choices.
Thus, the essence of planning is to find out the feasible alternatives and reduce them
to decisions. An advertising plan reflects the planning and decision ? making
process and the decisions that have been arrived at in a particular product and
market situation.
Planning Framework
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Advertising planning and decision making depends on internal and external
factors. Internal factors are situation analysis, the marketing program, and the
advertising plan. The three legs of advertising planning concern are the
Objective setting and target market identification,
Message strategy and tactics, and
Media strategy and tactics.
The advertising plan should be developed in response to a situation analysis,
based on research. Once developed, the advertising plan has to be implemented as
an advertising campaign, in the context of social and legal constraints and with the
involvement of various facilitating agencies. Let us discuss these factors one after
another.
1. Situation Analysis
It involves an analysis of all important factors operating in a particular
situation. This means that new research studies will be undertaken on company
history and experience.
AT&T, for example, developed a new strategy for its long-distance
telephone services ? based on five year of research. The research encompassed
market segmentation studies, concept testing, and a field experiment. The field
experiment increased on testing a new advertising campaign called "Cost of Visit".
An existing "Reach Out" campaign although successful, did not appear to get
through to a large group of people who had reasons to call but were limiting their
calls because of cost. Research based on annual surveys of 3,000 residential
telephone users showed that most did not know the cost of a long-distance call or
that it was possible to make less expensive calls in off-peak periods.
Five copy alternatives were subsequently developed and tested, from which
"Cost of Visit" was chosen. This campaign was credited with persuading customers
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to call during times that were both cheaper for them and more profitable for AT&T
and, overall, was more effective that the "Reach Out" campaign. One estimate was
that by switching 530 million in advertising from "Reach Out" to "Cost of Visit",
an incremental gain in revenue of $22 million would result in the first year and
would top $100 million over five years.
This example highlights that a complete situation analysis will cover all
marketing components and involve finding answers to many questions about the
nature and extent of demand, competition, environmental factors, product, costs,
distribution, and the skills and financial resources of the from.
2. Consumer and Market Analysis.
Situation analysis begins by looking at the aggregate market for the product,
service, or cause being advertised, the size of the market, its growth rate,
seasonality, geographical distribution. Whereas Consumer and Market analysis is
concerned with the following factors:
* Nature of demand
- How do buyers (consumer and industrial) currently go about buying existing
products or services?
- Can the market be meaningfully segmented or broken into several homogeneous
groups with in respect to "what they want" and "how they buy"?
* Extent of demand
- What is the size of the market (units and dollars) now, and what will the future
hold?
- What are the current market shares, and what are the selective demand trends?
- Is it best to analyze the market on an aggregate or on a segmented basis?
* Name of competition
- What is the present and future structure of competition?
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- What are the current marketing programs of established competitors?
- Why are they successful of unsuccessful?
- Is there is opportunity for another competitor? Why?
- What are the anticipated retaliatory moves of competitors?
- Can they neutralize different marketing programs we might develop?
* Environmental climate
- What are the relevant social, political, economic, and technological trends?
- How do you evaluate these trends? Do they represent opportunities or problem?
* Stage of product life cycle
- In what stage of the life cycle is the product category?
- What market characteristics support your stage-of ?life-cycle evaluation?
* Cost structure of the industry
- What is the amount and composition of the marginal or additional cost of
supplying increased output?
Skills of the firm
- Do we have the skills and experience to perform the functions necessary to be in
the business?
- How do our skills compare with those of competitors?
* Financial resources of the firm
- Do we have the funds to support an effective marketing program?
- Where are the funds coming from, and when will they be available?
3. Competitive Analysis:
Advertising planning and decision making are affected by competition and
the competitive situation facing the advertiser. Competition is such a pervasive
factor that it will occur as a consideration in all phases of the advertising planning
and decision making process. It should include an analysis of what current share the
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brand now has, what shares its competitors have, what share of a market is possible,
from which competitors the increased share of a market is possible? The planner
also has to be aware of the relative strengths and weaknesses of the different
competing companies and their objectives in the product category. It is important to
look at competition as a precursor to the planning process.
The Advertising Plan
As pointed out earlier, advertising plan and decision making focus on three crucial
areas; objectives and target selection, message strategy and tactics, and media
strategy and tactics. Let us elaborate on these points:
1. Objectives and Target Selection
Objectives in advertising can be understood in many ways. An
important
part of the objective is the development of a precise, disciplined description of the
target audience. It is often tempting to direct advertising at a broad audience; but
everyone is a potential customer. It is best to consider directing the advertising to
more selected groups to develop stimulating copy. It is quite possible to develop
several campaigns, each directed at different segments of the market, or to develop
one campaign based on multiple objectives.
2. Message Strategy and Tactics
Messages strategy must decide what the advertising is meant to
communicate ? by way of benefits, feelings, brand personality, or action content.
Once the content of the campaign has been decided, decisions must be made on the
best-most effective-ways of communicating that content. The decisions, such as the
choice of a spokesperson, the use of humor or fear or other tones, and the selection
of particular copy, visuals, and layout, are what we call "message tactics"
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3. Media Strategy and Tactics
Message strategy is concerned with decisions about how much is to be
allocated to create and test advertising copy, media strategy concerns decisions on
how many media rupees to spend on an advertising campaign. Media tactics
comprise the decisions on which specific media (television, radio magazines, etc.)
or media vehicles (Readers Digest, etc.) to spend these dollars.
EXTERNAL FACTORS
The external factors in the planning framework are environmental, social
and legal considerations. To a considerable extent, these exist as constraints on the
development of an advertising plan and decision making. In developing specific
advertisement, there are certain legal constraints that must be considered. Deceptive
advertising is forbidden by law. What is deceptive is often difficult, because
different people can have different perceptions of the same advertisements. Thus, an
advertiser who attempts to provide specific, relevant information must be well
aware of what constitutes deception in a legal and ethical sense and of other aspects
of advertising regulation.
Even more difficult consideration for people involved in the advertising
effort is broad social and economic issues as stated below.
Does advertising raise prices or inhibit competition?
Is the use of sex or fear appeals is appropriate? Women and minority groups
are exploited in advertising by casting them in highly stereotyped roles.
Is it more irritating than entertaining?
Is an intrusion into an already excessively polluted environment?
Advertising directed at children.
Advertiser and the Advertising Agency interface
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From a situation analysis point of view, the advertiser needs to know what
kinds of facilitating agencies exist and the nature of the services they provide. From
a planning point of view much local advertising is done without the services of an
advertising agency or a research supplier. On the other hand, a national advertiser
may have under contract many different agencies and research suppliers, each
serving one or more brands in a product line. Many advertising decisions involve
choosing facilitating agency alternatives.
What advertising agency should be chosen?
What media should be used?
What copy test supplier will be best for our particular situation?
Concerning the question of agency selection, characteristics such as the
quality of personnel, reputation, integrity, mutual understanding, interpersonal
compatibility and synergism were very important.
Advertising Industry
The advertising industry consists of three principal groups:
(a)
Sponsors;
(b)
Media ; and
(c)
Advertising agencies or advertising departments.
Advertising agencies are of two basic types, viz., Independent; and House.
An independent agency is a business that is free to compete for and select its
clients.
A house agency is owned by its major client. A house agency is not
completely free to serve other clients. The advertising department an integral part of
the organization it serves.
The advertising agency provides for the client a minimum of:
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(i)
Media information, such as the availability of time and space ;
(ii)
Creative skills, such as "campaign planning" and "appeal planning"
and
(iii)
Research capabilities, such as providing brand preference data.
What is an Advertising Agency?
An advertising agency is an independent organization set up to render
specialized services in advertising in particular and in marketing in general.
Advertising agencies started as space brokers for the handling of the advertisements
placed in newspapers. Over the years, the function of the agencies has changed.
Their main job today is not to aid media but to serve advertisers.
Working with Advertising Agency
Some organization does not employ advertising agencies because they may
be eligible for the media discount. Others feel that they can accomplish the
advertising objectives more effectively than the agencies themselves. These
marketers often employ their own advertising specialists. Various organizations use
captive agencies that work primarily or solely for the organization.
Those organizations which do employ agencies are well-advised to establish
a strong working relationship with them. It is especially important that the marketer
fully inform the agency personnel of his marketing strategy and advertising
objectives.
Advantage of Using Agencies
1. The marketer gains a number of benefits by employing agencies. An agency
generally has an invaluable experience in dealing with various advertising and
marketing issues.
2. The lessons which agency learned in working with other clients are useful inputs
for the marketer.
25
3. An agency may employ specialists in the various areas of preparation and
implementation of advertising plans and strategies.
4. The personnel are not members of the marketers management team. They bring
objective and unbiased viewpoints to the solution of advertising and other
marketing problems.
5. The discounts that the media offer to agencies are also available to advertisers.
This is a strong stimulus to them to use an agency, for the media cost is not much
affected thereby.
6. The company normally does not have as many types of specialists as a large or
medium-sized advertising agency has because an agency can spread the costs or its
staff over many clients. It can do more for the same amount of money.
7. The company can also get an objective, outside viewpoint from an agency,
assuming that the agency representatives are not acting as "Yes man" in order to
keep the advertisers account.
8. A related point is that the company can benefit from the agencys experience
with many other products and clients.
9. Another advantage is that agency feels a greater pressure than the companys
own department to produce effective results. The relations between an agency and a
client are very easy to terminate; but it is difficult to get rid of an ineffective
advertising department.
10. The manner in which agencies are compensated, the use of an agency may not
cost the advertiser a single paisa.
Making the Final Decision
When you judge the final agency work, keep the following points in
mind :
26
If, despite your instructions, an expensive and glossy presentation
has been produced, it is clear that the agency is desperate for business and is
prepared to curt down on the service to existing clients in the hope of netting a new
account. Would you wish to join the ranks of those clients ?
A good example of glossy presentations going adrift was reported in
Advertising Age, October 9, 1967. Trans World Airlines (TWA) decided to remain
with Foote, Cone & Belding after hearing presentations from 17 other invited
agencies. The magazine states : "An executive from one of the losing shops said he
was prepared fir the gamble, but not for the reaction of one of his clients. The
Client, believing reports that the TWA presentations set back the contending
agencies by as much as one million dollars, asked his shop to invest a proportionate
amount of money in a new campaign for his top product.
"He said, in effect, that we are spending this money to make a
presentation for another account, and now we should spend some of his money to
improve his advertising," the advertising executive said.
Lastly, ask yourself, and if necessary, ask the agency, too :
Is the team the produced the advertising really made up of the people
who are going to handle your account afterwards? Or was it produced by the
agencys star performers who spend most of their time on new business
presentations and the rest of it on a few favoured accounts?
Selecting an Agency
While selecting an advertising agency, the importance of compatibility
should be borne in mind. An agency takes a long time to grasp the problems and
accumulate the facts that are necessary for the smooth functioning of a client.
27
Though this investment period is long, it pays rich dividends. Therefore, an agency
should not be frequently changed.
Here are some points that can help the advertiser to:
(i)
Choose an agency ; and
(ii)
Get the best out of an agency.
(i)
Choosing an Agency
The agency should be able to think independently on various problems, and
not solve them by pre-conceived notions which it is unwilling to change.
The agency should have experience in selling goods and ideas. It should be
able to bring in more results than anticipated.
The company should be financially sound and should be able to cover both
local and national advertising campaigns.
The size of the agency should not be seriously taken into account. A big
agency is not necessarily a better than a small agency.
The agency should not be one that hesitates to correct the advertiser if it
feels that he is wrong.
The agency should be able to use both research and brains to solve
problems.
An agency that plans to make a profit on an account should be chosen,
rather than one that maintains that it will work on a no-profit-no-loss basis.
Getting the Best Out of an Agency
The agency should be given all possible information if good service is
expected from it.
The advertiser should go as far as possible to keep the agency on its toes.
28
The agency should be challenged to produce results.
Criticism, when it is handed out, should not be only unfavourable. It should
also be favourable.
Unnecessary details should not be fussed over.
The advertiser should appoint a special person for liaison work between his
company and the agency, and not expect the agency to contact the junior
staff.
The advertiser should allow the agency, where necessary, to break away
from convention in its presentations.
The agency should be paid extra, if it does any extra work.
The advertiser should examine the work his agency does for other parties to
get new ideas.
It is about time that the top management looked upon advertising as a basic
capital investment ?a long-term investment ?which does not necessarily always
bring in immediate returns. The management should realize that advertising has two
functions to perform. It has to sell products today and sell the name of the company,
so that tomorrows products, too, will sell.
Setting Advertising Objectives
For one who has no objective, nothing is relevant.
- Confucius
29
Without objectives, it is nearly impossible to guide and control decision
making. Good performance occurred in the absence of objectives can rarely be
sustained. The challenge today is to bring effective management to the advertising
process in such a way as to provide simulation as well as direction to the creative
effort. The solution is the meaningful objective.
Advertising objectives, like organizational objectives, should be operational.
They should be effective communication tools, providing a line between strategic
and tactical decisions. A convenient and enticing advertising objective is immediate
sales or market share.
However, an increase in immediate sales is not operational in many cases
for two reasons:
(1) Advertising is one of many factors influencing sales, and it is difficult to isolate
its contribution to sales. The other forces include price, distribution, packaging,
product features, competitive actions, and changing buyer needs and tastes.
(2) The second reason involves the long-term effect of advertising on sales. If
advertising generates a substantial lagged effect on sales, then the impact of an
advertising campaign may not be known until an unacceptable length of time has
passed. For example, an important contribution of a 6-month campaign might be its
impact 12 months hence. If immediate sales of not the basis of operational
objectives, how does to proceed? The answer to the following questions will yield
useful and effective objectives.
1. Who is the target segment?
2. What is the ultimate behavior that advertising is attempting to precipitate,
reinforce, change, or influence?
30
3. What is the process that will lead to the desired behavior and what role can
advertising play in the process?
4. Is it necessary to create awareness, communicate information about the
brand, create an image or attitude, or associate feelings or a type of user
personality with a brand?
- Identify the target audience. The specification of the target audience should be a
part of the marketing objectives.
- The analysis of the ultimate desired behavior such as trial purchases of new
customers, maintenance of loyalty of excising customers, creation of a more
positive use experience, reduction of time between purchases, or the decision to
visit a retailer use experience, reduction of time between purchases, or the decision
to visit a retailer.
- An analysis of the communication and decision process the will affect the desired
behavior. It might be that the key variable in inducing a new customer to try your
brand is to inculcate high levels of brand awareness. The best way to maintain
loyalty is to strengthen an attitude. Which intervening variables provide the best
link to the desired behavior and which can be influenced economically by
advertising are to be determined.
An analysis of market dynamics can lead to behavioral measures that by
themselves can provide the basis for operational objectives. If the advertisings
target is new customers, the goal may be to get new customers to try a brand for the
first time. The results would be measured by the number of new customers attached.
The use of behavioral measure as objectives is often appropriate in retailing
(store traffic measures), direct marketing, and sales promotion and in lead
generation for salespeople. It is useful to analyze the communication and decision
process relevant to the desired behavior and to identify intervening variables on
31
which to base objectives. Some situations could dictate the joint use of intervening
and behavioral objectives.
ADVERTISING BUDGET
The size of the advertising budget can have an impact upon the composition
of the advertising mix. In general, a limited promotion budget may impel the
32
management to use types of promotion that would not be employed otherwise, even
though they are less effective than the others.
Industrial firms generally invest a larger proportion of their budgets in
personal selling than in advertising, while the reverse is true of most producers of
consumer goods. Organizations with small budgets may be forced to use types of
advertising that are less effective than others.
Some marketers find it necessary to restrict their efforts primarily to
personal selling and publicity. There are organizations with small promotion budget
which take the opposite course of action. They concentrate on advertising and sales
promotion, and neglect other methods. Some marketers advertise in expensive ways
(through classified advertisement in newspapers and magazines) and spend virtually
nothing on personal selling.
There is universal difficulty of relating advertising expenditures to sales and
profit results. Determining the results of advertising and consequently the amount of
money to be allocated in advertising budget are complicated by several major
difficulties as follows:
(i)
The effects of external variables such as population, or income, changes
on economics conditions and competitive behaviour ;
(ii)
Variations in the quality of advertising ;
(iii)
Uncertainly as to the time-lag effect of advertising ; and
(iv)
The effect of the firms other marketing activities, such as product
improvement and stepped-up personal selling.
The above complexities make the companies resort to more than one method
of determining the size of their advertising budget.
Advertising Budget involves the allocation of a portion of the total
marketing resources to the advertising function in a firm. The size of the budget
33
allocation should be based on the potential contribution that advertising can make.
Advertising budgeting should be based on a careful analysis of the opportunity for
using advertising.
Marginal analysis approach
The marginal analysis approach to the allocation of resources provides a
useful framework. How much should a firm spend on advertising? A firm may
choose to spend promotion funds up to the point where marginal cost equals
marginal revenue. Such analysis may be used for advertising budget decision.
The allocation procedure is to increase advertising expenditure until each
rupee of advertising expense is matched by an additional rupee of profit. This
marginal analysis results in the maximization of the productivity. The difficulty
arises in the identification of this optimal point. The following table illustrates this
point.
Marginal Analysis for Advertising Budgeting
(Rs. in thousands)
Alternative
Marginal
Net
Marginal
Total
Marginal
Advertising Advertising
Revenue
Revenue
Profit
Profit
Expenditure
Costs
30
-
20
-
-10
-1
35
5
24
+ 4
-11
-1
40
5
30
+6
-10
+1
45
5
40
+10
-5
+5
50
5
55
+15
+5
+10
55
5
77
+22
+22
+17
60
5
88
+11
+28
+6
65
5
95
+7
+30
+2
34
70
5
98
+3
28
-2
75
5
99
+1
24
-4
80
5
99
0
+19
-5
85
5
97
-2
+12
-7
90
5
95
-2
+5
-7
95
5
90
-5
-5
-10
100
5
83
-7
-12
-7
This analysis assumed that the management desires to maximize the profit
contribution from advertising. It is not feasible to spend on advertising in
increments of less than Rs.5,000. The net revenue refers to sales minus all the non-
advertising costs which are based on a pre-determined non-advertising marketing
mix. At lower levels of advertising (less than Rs. 5,000), the company cannot
generate sufficient sales to cover all the costs. So, Rs. 5,000 represents the absolute
minimum advertising budget for the company to make any profit at all.
According to the Marginal analysis the management must select
performance objectives for advertising expenditures. Marginal analysis relies on
sales and profitability, which are important to assess the potential contribution of
advertising expenditures. For advertising decisions for a new product introduction,
the management may determine a minimum budget level and then asses the
different levels above this.
Implementing the marginal analysis is a difficult task. Advertising is not the
only factor affecting product performance. It is also difficult to predict the time
pattern of the contribution, for it cannot be assumed that advertising will have an
immediate impact. All these factors make it difficult for us to assess precisely the
net sales marginal revenues, or other performance contribution estimates.
35
To cope with the realities of advertising budgeting, a variety of procedures
have been adopted, which vary considerably when compared with the marginal
analysis framework.
Advertising Budget Allocation by "Rule of Thumb"
Under this approach, the decisions on the amount to be spent are made by
advertising managers in co-operation with advertising agency. Many companies
resort to more than one method of determining the size of their advertising budgets.
Some methods which are in common use are as follows:-
1. Profit Maximization:
The best method for determining advertising expenditure is to identify a
relationship between the amount spent on advertising and profits, and to spend that
amount of money which maximizes the net profits. Since the effects of advertising
may be reflected in future sales too, the advertiser maximizes the present value of
all future profits at an appropriate rate. Therefore, a very few advertisers are able to
implement the profit-maximizing approach to determine their advertising
expenditure.
2. Advertising as a Percentage of Sales:
Advertising Allocation = % Rs. Sales
A pre-determined percentage of the firms past sales revenue (or projected
sales revenue) is allocated to advertising. But the question is - What is the
relationship between advertising expenditure and sales revenue? Though it looks
36
simple, it is not an effective way of achieving the objectives. Arbitrary percentage
allocation fails to provide for the flexibility.
This method ignores the real nature of the advertising job. It is not
necessarily geared to the needs of the total marketing programme. But this method
is widely used. Its wide use reflects the prevailing uncertainty about the
measurement of advertising effectiveness. It is an easy way of minimizing the
difficulties of annual budgeting negotiations. It is also safe method as long as
competitors use a similar method. The fixed sum per unit approach differs from the
percentage of sales approach in only one respect that it applies a pre-determined
allocation to each sales or production unit.
3. The Objective and Task Approach:
The most desirable method is the objective and task approach. It is goal-
oriented. The firm agrees on a set of marketing objectives after intensive market
research. The costs of advertising are then calculated. When the resulting amount is
within the firms financial means, it is the advertising budget. It involves the
following two steps:
(a)
First, the organization must define the goals the promotional mix is
to accomplish. For example, a 5 per cent increase in market share, or
a 10 per cent rise in gross sales, or a 3 per cent addition to net profit,
or more likely, a combination of several items.
(b) Second, it must determine the amount and the type of promotional
activity required to accomplish the objectives set. The sum of these
becomes the firms promotion budget.
37
A crucial assumption underlies the objective and task approach is that the
productivity of each advertising rupee is measurable. The task approach starts by
asking what the objectives of the advertising campaign are. The "advertisability" of
the product is more sharply defined. This approach requires that assumptions about
media, copy, and all the other parts of a campaign be co-ordinated to achieve a
specific set of objectives. The task approach has special merit in the introduction of
a new product.
The main problem with this approach is that it is not easy to determine the
cost of fulfilling an objective or to decide whether an objective is worth fulfilling.
The task method forces advertising managers to engage in advance planning.
4. Competitive Parity Approach
This approach ties its budget to the rupees or percentage of sales expended
by its competitions. This approach tries to match the competitors outlays and meet
competition either on absolute or relative basis. It involves an estimate of industry
advertising for the period and the allocation of an amount that equal to its market
share in the industry. Meeting competitions budget does not necessarily relate to
the objective of promotion and is inappropriate for most marketing programmes.
It is a defensive approach. It assumes that the promotion needs of the
organization are the same as those of its rival and makes it easy for analyzing the
realities of its own competitive situation and to ignore the possibility of other
strategies. But the needs will never be the same. It also assumes that budgets arrived
at by competitors are correct, but they may have arrived at in a haphazard manner.
Besides, their marketing strategies may also be different from our organization.
Therefore, this method may be recommended only as a supplement to others.
However, the imitate-competitors strategy is most applicable in industries
where competition is in order to prosper and even to survive. In a way, is better than
38
the per cent of sales method as it recognizes that the competition as a key element in
marketing and promotes stable relationships.
Competitive parity budgets can be determined in several ways; but all are
based on spending approximately the same amount or percentage of sales as ones
competitors. Some of the ways include:
(a) Spend the same rupee amount on advertising as a major competitor does.
(b) Spend the same percentage of sales on advertising as a major competitor
does.
(c) Spend the same percentage of sales on advertising as the average for the
entire industry.
(d) Use one of these "rules of thumb" in a particular market.
All these have one common characteristic, that is, the actions of competitors
determine the companys advertising budget. But under this situation, a company
faces several risks. Sufficient information may not be readily available to estimate
the competitors advertising budget. Such information is derived from secondary
sources for some products than others. When only partial information can be
obtained, such as expenditure on media, competitive parity may be misleading. It
implies that all firms in an industry have the same opportunities but not so in
practice. For example, a company introduces a new product to compete with a
competitors already established brand, the opportunity for advertising for these two
brands would be entirely different.
5. All the Organization can afford approach
It involves the income statement and the balance sheet. It asks how much is
available to the firm. This question is partially answered by anticipated sales and
margins. The decisions based wholly on them ignore the requirements of the
39
advertising. The basic weakness is that it does not solve the problem of "how much
should we spend" by asking: "What can we profitably spend?" In some instance,
companies adopt pricing policies or others strategies intended to yield more
advertising rupees. Some may spend whatever rupees are available for promotion,
the only limit being the firms need for liquidity.
This approach does ensure that advertising expenditures are assessed in the
light of the profit objectives. It does put advertising in perspective with other
corporate functions as contributors to the achievements of objectives.
6. By Using Judgment
This method relays upon the judgment of experienced managers. Over the
years, some of these individuals develop a feel for the market that permits them to
arrive at appropriate decisions, given the organizations objectives and limitations.
It is a vital input for the determination of the budget. When the management uses
other methods, it should temper them with the judgmental evaluations made by
experienced managers. Judgment is subject to error and bias. Other methods should
supplement this technique.
To conclude, promotion may be viewed as a long-run process. Joel Dean has
indicate that advertising should be seen as a business investment, in the same sense
as opening a new plant or spending additional funds on improved package design.
Media Brief
Each medium has its merits and its handicaps. The suitability and
profitability of any one type varies from manufacturer to manufacturer and may
vary for a single manufacturer too. Changes are the only rule. The buyers constitute
40
his market; they are to receive his advertising coverage consists of the advertisers
reaching the maximum number of these buyers include both his current and
prospective customers. The advertiser has to determine how many there are and
where they are. Then the selection process involves how to send an effective
advertising message economically to the group of buyers, the length of the
campaign period and the cost which he can afford-at a figure which will make the
advertising effort profitable.
Difficulties in Selection of Media Types
Audience Measurement:
The media sell circulation or the opportunity to develop circulation. There is
a gross aspect to circulation (how many products were bought last month) and a net
aspect (how many of those purchasers are prospects for the product saw the
advertisement in the broadcast media). Measurement of the same is not so easy as
advertisers would think.
Difficulty of Cost Comparisons:
There is a cost per thousand concept in every medium type such as cost per
thousand homes or thousand viewers, cost per thousand passersby, cost per page per
thousand copies sold. How does the reaction of a thousand housewives, who read a
food advertisement about Magi noodles, compare with that of a different thousand
housewives who watch the same on TV?
Reliance on a Particular type of Medium:
How much of his promotion effort should a manufacturer place in
magazines and how much on TV, how mach in outdoor or point of purchase?
Which should be dominant and which are supplementary? These factors play a key
41
role in selection of a particular type of media. Media costs, the costs of space and
time, are the largest single expense item in most advertising budgets. The selection
of media types to be used in an undertaking, therefore, deserves and even demands,
the very best thought and judgment of on the part of the top management. The
points to be considered are:
(i)
Availability: Regional markets may be so limited that national
circulation of magazines should not be used. A product may have so
slight a market that a medium such as the radio would not be
indicated for use.
(ii)
Selectivity: Some ideas demand visual presentation and others
demand oral presentation. The radio cannot accommodate stories
requiring a physical form, and outdoor advertising cannot
accommodate long stories.
(iii)
Competition is a matter which the advertiser cannot ignore. A
company may select media types not used by its competitors, based
on distinctiveness and domination.
Selection of Individual Media
Selection of individual media to carry advertising requires the consideration
of the points like circulation; the quality and quantity of a mediums circulation,
Prestige, Influence, Readership, etc.
The Advertising Schedule
What is the optimum schedule? There is no agreement; there is no formula:
there is only judgment. It appears that more advertisers make the mistake of using
too many than the mistake of using too few. The manufacturers proposed
42
advertising plans are consolidated into a schedule which contains the following
information:
- List of publications, broadcast stations, markets ;
- Dates of appearance of advertisements ;
- Size of advertisements (space or time ) ;
- Costs of advertisements.
Duplication
An advertiser must have coverage or else his message will not reach as
many buyers as he must reach. As an advertiser adds magazine after magazine to
his list to increase his coverage; he finds duplication inevitable. One way of
averting duplication is to use only one of the magazines; another is to run a different
advertisement. The duplication limits an advertisers coverage. The points in favour
of duplication are repetition and frequency.
Frequency
The term frequency refers to the number of advertisements of the same size
appearing in an individual medium for a given period such as per day, per week, per
month, or per campaign. There is no formula to determine the ideal frequency. The
two factors are the size of the advertising fund and the size of the advertisement to
be run. If these are known, frequency can be derived. The two other factors are the
number of media and the advertising period. As the number of media increases,
there is pressure for a lower frequency, or to shorten the advertising period. The
other possibilities are to enlarge the fund, or to reduce the size of the advertisement.
Manufacturers cannot ignore the fact that what the competitors are doing in respect
of frequency. The more often a message is repeated, the greater the proportion of it
the consumer remembers.
Size of advertisement
43
The size of advertisement influences the frequency. The size of an
advertisement can be derived if the advertiser:-
Determines the size of the advertising fund,
Decides the numbers of individual media to be used, and
Decides the number of advertisements to appear during the advertising
period.
The purpose of the advertisement may be the strongest influence in
determining its size; a large space is used to announce, a small space is used to
remain. The amount of copy, the number of products included in one advertisement
and the illustration needs of the advertisement all help to determine size. Salesmen
and dealers may also decide how large advertisements should be.
Colour
Colour is a factor which influences frequency. Colour influences the size of
the advertisement and size in turn determines frequency. Colour commands a
premium price.
Re-run on Advertisement
Repetition has a considerable effect on advertising costs, and its frequency.
Re-run is considered unless it has performed well on its first appearance. It is most
common in mail order business and advertising that uses small space. It is not
common for large advertisements. Indirect action advertisements should be re-run.
The reinforcement of consumer memory is another benefit of a re-run. There are
savings on a re-run. New readers are added whenever and advertisement is re-run.
Timing
The crucial questions under timing is when should a campaign start, and
when should it shop? For this purpose the seasonal angle and festival seasons
should be considered. Advertising can be scheduled heavily just before and during
44
the heavy buying season. Off-season advertising is used profitably during the off-
season to level out the. For example, tourists can be motivated through advertising
to visit tourist areas during the off-season.
Positioning
It involves the development of a marketing strategy for a particular segment
of the market. It is primarily applicable to products that are not leaders in the field.
These products are more successful if they concentrate on specific market segments
than if they attack dominant brands. It is best accomplished through an advertising
strategy, or theme, which positions advertisements in specified market segments.
Questions:
1. Define Advertising.
2. Trace out the origin of Advertising.
3. Enumerate the classification of advertising.
4. Bring out the relationship between advertiser and advertising agency.
5. Discuss the process of setting advertising objectives
6. Explain the steps involved in advertising budget.
Books for further study:
1. Wells, Burnett & Moraiarty ? Advertising Principles and Practices; Prentice
Hall
2. Wright, Winter & Zeigler ? Advertising ; Tata McGraw Hill
3. J. V. Vilanilam & A. K. Varghese ? Advertising Basics ? A Resource Guide
for Beginners: Response Books, Sage Publications.
45
UNIT-II
COPY DECISIONS - Visualization of Ad Layout - Elements of Ad Copy and
Creation -Principles of verbal versus visual thinkers, Styles and Stages in
advertising copy creation -Copy (Pre-) Testing methods and measurements.
COPY DECISION
2.1 Advertisement Layout
2.1 Meaning
Layout is the logical arrangement of components of an advertisement in the
copy. It refers to the overall structure, the position assigned to the various elements
of the copy and illustrations. It is deciding on the placement of headlines, copy,
illustrations, marketers name, logo and the amount of free space in an
advertisement copy. Thus, the physical arrangement of all the elements of
advertisement is called layout. It is concerned with placing all the elements of the
advertisement more attractively within the allotted space and time. The pattern of
layout varies according to the medium to be used.
Definition
According to Sandage and Fryburger, "The plan of an advertisement,
detailing the arrangement of various parts and relative spatial importance of each is
referred to as layout".
46
2.1.2 Preparation of a layout
A layout is a plan for the guidance of the printer in arranging the units of an
advertisement. Usually the layout man or visualiser prepares a rough Layout which
is submitted to the client for approval and he draws the finished layout for the
guidance of the printer. In the creation of television commercials the layout is
known as a ,,Storyboard' which a series of pictures is of frames that coincides with
the audio or sound script. A Radio does not utilize illustrations, except those that
the medium can create with a description. Television, of course makes an extensive
use of illustrations. A well conceived layout can be instrumental in obtaining
attention comprehension, attitude change and behavior change. Advertisers employ
various layout techniques to attain their objectives.
2.1.3 Functions of an Advertising Layout
An advertisement layout is a blueprint. The main functions of layout are:-
(i)
Assembling Different Parts ? The main function of layout is to
assemble and arrange the different parts or elements of an advertisement
illustration, headline sub headlines, slogans, body text and the identification mark
etc. And boarder and other graphic materials ? into a unified presentation of the
sales message. In all the layouts present these elements in the same size, form,
shape, position and proportion as desired by the advertiser in the final ad, proof ,
Thus layout gives both creative personals (copywriter and artists ) and the
advertiser who pays for it a good idea of how the finished ad will finally appear.
47
(ii)
Opportunity of Modification - The layout offers an opportunity to
the creative teams, agency management and the advertiser to suggest modification
before its final approval and actual construction and production begins.
(iii)
Specification for Costs ? The layout provides specification for
estimating costs and it is a guide for engravers typographers and other craft workers
to follow in producing the advertisement.
2.1.4 Principles of Design and Layout
It is not necessary that all elements of advertisement copy must form part of
the copy. They appear in todays ads with varying degree of frequency. The
components of the copy must be decorated or positioned on the basis of certain
basic principals regardless of the number of elements in an add. The following five
principles of good composition are important to anyone who creates or evaluates
the advertisement - (1) Balance ; (2) Proportion (3) Contrast and emphasis, (4)
Eye ?movement , and (5) Unity.
(1) Balance ? A layout may be called balanced if equal weight or forces are
equidistant from a reference point or a light weight is placed at a greater distance
from the reference point than a heavy weight. Balance is the law of nature. The
reference point or fulcrum is the optical centre of the advertisement. The artists
with a given area or space, are to place all the elements with in this space. Optical
centre of fulcrum of the ad is often a point approximately two ? thirds of the
distance forms the bottom. It is the reference of the layout.
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(2)
Proportion- Proportion is closely related to balance since it refers to
the division of space among layout elements for a pleasing optical effect. Good
proportion in an advertisement requires a desired emphasis on each element in
terms of size and position. If the major appeal in an advertisement is products
price. The price should be displayed in proportionate space position.
(3)
Contrast and Emphasis ? Contrast means variety. It gives life to
the whole composition and adds emphasis to selected important elements. An
advertiser always looks to advertisements from completion point of view and
desires the policy of the most important elements to attract the attention of the
people. An advertisement with good contrast may attract the attention of customers
Contrast maybe visible in a number of ways. It may be witnessed through sizes,
shapes and colours. Different colours sizes and shapes of elements in an
advertisement add contrast. The varying directions, of design elements (Vertical
trees, horizontal pavements arched rainbows) add contrast; too there must be sales
communication purpose behind every layout decision made.
(4)
Eye Movement ? Eye movement is the design principle which helps
move the eyes of the readers from element to element in the order given in the
hierarchy of effects model for effective communication of the message in
advertising. An effective ad uses movement to lead its reading audience from initial
message awareness through product knowledge and brand preference, to ultimate
action (intent to purchase). Direction and sequence are two terms for the same
element and artists may perform it in many ways. Mechanical eye direction may be
created by devices such as pointing fingers lines arrows or even a bouncing ball that
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moves from unit to unit. Planned eye movement should follow the established
reading patterns too, such as the tendency to start to top left corner of a page
and read through to the lower right corner. The eyes also moves naturally from
large items to small from dark to light and from colours to not ? colours.
(5)
Unity or Harmony ? Unity or harmony is another important design
principle. Although each element should be considered as a separate unit in striving
for balance, proportion, contrast and eye movement. The complete layout or design
should appear as a unified composition. Common methods of securing unity in
layouts are (i) use of consistent typographical design. (ii) repetition of the same
shapes and motifs, (iii) the overlapping of elements (iv) use of a boarder to hold
elements together and (v) avoidance of too much which space between various
element.
Although unity and contrast seem conflicting but they function quite
smoothly together if they operate at cross purposes ? if the artists strive for balance
here too as well as in the layout overall. Unity contributes orderliness to elements ?
a state of coherence. And if they are properly placed. Contrasting Size shapes
colours and directions can flow together beautifully.
2.1.5 Elements of a layout
An advertising copy is the means by which the advertisers ideas are
given expression to in a message to readers. Regardless of its length and brevity
copy refers to all the reading matters of an advertisement, including the headline,
sub- headlines, text or body, and the name of the firm or the standard initials of the
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advertiser. As we have seen that advertising has so many immediate purposes but
its ultimate goal is to stimulate sales. As a reader turns the pages of a magazine or
newspaper, he notices so many advertisements but a great variation in copy. Some
copy may be so sticking that the reader takes immediate action and rush to the
nearest dealer to purchase it while there may be some other copy or copies that he
does not like or it does not click to his mind. The first copy conforms to the
requisites of a good copy. A copywriter must take pains in making up a sound
advertisement copy containing its various components i.e. headlines, subhead lines,
illustrations etc. The following are the main components of an advertisement copy
1. Background
9. Name Plate
2. Border
10. Price
3. Caption
11. Product
4. Coupon
12. Slogan
5. Decoration
13. Space
6. Heading
14. Sub-heading
7. Illustration
15. Text
8. Mascot
16. Trademark16. Trademark
1. Background
The background for the advertisements should be somewhat catchy and
colourful. The arrangement of background differs from medium to medium and
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advertisement to advertisement. In short, background should be suitable for the
contents of the advertisement.
2. Border
It is defined as the frame of the advertisement. Border is employed to impart
the reading atmosphere. The border may be light or heavy, obvious, plain or
fanciful. The border may also contain a logo.
3. Caption
It refers to the subtitle. But in most of the advertisement it is converted into
heading or sub-heading.
4. Coupon
Coupon is that part of the advertisement which is intended for the
convenience of the prospective customer in communicating with the advertiser. The
coupon must contain the name and full postal address of the firm followed by the
offer. The offer should be brief and clear. There should be space for name and
address of the prospective customer. The usual shape of the coupon is triangular or
rectangular.
5. Decoration
Advertisement decoration is the ornament of the advertisement. This is done
to emphasis the advertisement message.
6. Heading
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The heading or headline is defined as the title of the advertisement. The
words in the heading should be short.
7. Illustration
Illustrations are the part of layout that pictures the basic theme of the
advertisement. It has the power to capture the attention of the reader. The
advertisements become richer by the use of illustrations.
8. Mascot
It is known as the trade character or trade figure. It is an illustration of either
a real or an imaginary figure or personality given in the advertisement.
9. Name Plate (logo)
The name plate or name block is the signature of the advertiser. It represents
the personality of the company and its product.
10. Price
It is another part of layout. The price of the product should be featured
clearly. The price is usually taken in the concluding lines of the copy.
11. Product
It refers to the representation of the product offered for sale. A very popular
practice is to show the product in use with illustrations.
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12. Slogan
Slogan is a sales argument. The arrangement of slogan in the layout is
determined by the importance of its relation to the advertising message.
13. Space
Space refers to the entire space left in the space hired by the advertiser. This
depends on the design of the copy.
14. Subheading
It is a secondary heading. It is given to support the heading or to pick out the
various selling points given in the text.
15. Text
Text or body of the advertisement refers to the general reading matter. It is
the subject matter of the copy. It should be neither too wide nor too narrow.
16. Trade mark
It is a word or design by which a product is defined. If the trade, marks are
registered it can be included in the layout.
2.2 CREATIVITY IN ADVERTISING
The creative part of advertising involves the process of selecting and
presenting the messages. The business of conceiving. Writing, designing and
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producing these messages is called "advertising creativity" and the key wordsmith
is called a copywriter or copy chief or copy supervisor. The success of advertising
depends to a great extent on the quality of the message or copy of advertisement
rather than the money spent on advertising.
The conventional theory of advertising includes the concept of AIDA
(Attention, Interest, Desire and Action). Most of the advertisers believe that the
message in advertisement copy must attract the attention and interest of the
consumer if buying is to result. But they forget that only good advertisement copy
or good message can attract the attention and interest of the receiver until and unless
the much advertise product attributes have a strong impact on consumers. The
consumers come to know the existence of the product only through the
advertisement. Advertising tries to persuade the consumers that they need the
product. But if the product attributes fail to satisfy the need of buyers, good
creativity will not pay.
Creativity is an art. An artiste, writer, poet, novelists, play writer takes well
known ideas, words and phrases and relates them in a fresh, often brilliant manner
while preparing an advertising copy. They combine the product attributes and the
ideas, words and phrases in such a manner that persuades the consumers to buy the
product. This combination really represents and art or a creativity. A child can
draw a smiling picture of a woman, but it does not carry a creative message of some
worth.
The advertising copy writer writes with a purpose to achieve clients
objectives to express features or attributes of particular products and services,
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presented in terms of consumer benefits and in the language most appropriate to
defined target audience. Thus advertising messages should present merchandise in
ways that interest people in buying. Print ads and broadcast commercials portray
products as problem solvers or methods whereby wants and needs may fulfilled.
When creating, copy writer builds messages according to specific plans, to fulfill
specific objectives, and he should follow a disciplined way in creating them. In the
words of Alfred Polite ?"Advertising creativity has to follow rules which are guided
by a well defined purpose, by an analysis of thoughts supplied by imagination, by a
selection of the useful ones which meet the purpose.
2.2.1 Activities Comprising Creative Design task Process
Although there is no one set form for designing the process. There are
various variables that are typically parts of the creative design process. These
activities are:
(1)
Advertising objectives- The main objective of advertising is to aid
the selling process through communication with existing and prospective customers.
Most advertisements inform and persuade. Some are designed to establish attitudes
and buying behaviours of the patterns. Still others strive to reinforce or to change
existing shopping habits brand images and usage patterns. The advertisement copy
must achieve the advertising communication objectives. Now, it is the
responsibility of the creative specialists to translate the information available to
them into an advertisement or a basic theme for an advertising campaign that will
achieve the advertisers objective.
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(2)
Information to creative People_ The second task of the creative
people, after getting the advertising objectives, is to product for collecting the
various information relating to the product and the marketing mix. Creative design
people prepare for the design task by examining the information on the product
which is to be offered in the advertising. This makes for the integration of
advertising messages with the other components of the marketing mix. Such types
of information may be gathered in meetings between the creative personnel and the
marketing managers for the product..
(3)
Target Audience- The next step in the creative process is to make
the copywriter available description of the demographic and psychographic make-
up of the specific target audience for whom the ad is being created vis-?-vis the
product. Quantitative data such as age, sex, marital status, occupation, income,
education, place of residence, must be supplemented by information on consumer
attitudes (related to advertised product, and its competitors as well as to the types of
creative claims being considered for the message)on relevant media, shopping and
buying habits and on product usages. Thus any information that describes target
audience is useful.
(4)
Copy and Layout Design- The next task before the creative
personnel is to turn to the creative task which is the design of the copy and layout.
Creative personnel, including, artists, art directors, and copy writers, must design an
approach to the communication of the messages that carry pre-determined
advertising objectives. Part of the process involves writing copy, the verbal text of
the advertisement. The copy then must be integrated with illustrations into an
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overall design for the advertisements layout. The design of the copy and the layout
is an art that requires special skills..
(5)
Credibility or Back-up Claim_ whatever message is designed, it
must be a cluster of truth. Truth is essential in advertising. The truth is not truth
until people believe in it. They cannot believe in it if they do not know what we are
saying if they do not listen to us; they cannot listen to us unless we are interesting
and finally we cannot be interesting if we say facts in a fresh, original and
imaginative way. In order to establish credibility for our promises, we need to
support it with facts and with satisfactions. So, truth is essential in advertising and
must be supported with facts.
(6)
Copy Layout Tests- The role of creativity in advertising is very
important and should not be underestimated. An important aid to the creative
design task is the use of copy layout tests to assess and compare alternatives. After
the copy layout is released, samples can be drawn from target audiences to test its
effectiveness in specific conditions. Then respondents are asked to give their
opinion on the various aspects of the ad including how well it can be seen or read or
heard under specific conditions, how quickly and easily the message can be
understood, how interesting an ad is liked, how believable it is or how it will
influence audience behaviour.
(7)
Allocation to Creative Task- The next important task to creativity
is the allocation of funds towards this task. Since there is little in the way of
modeling effort to help in this decision, the allocation task is usually done
judgmentally.
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(8)
Creative Strategy and Tactics- Finally every copy strategy must
describe the mood and tone of all the forthcoming ad or commercial; cheerful,
dramatic, business like and whatever. All types of written materials, such as art
work, layout and script must be used as components of printed or broadcast
advertisements.
Thus, creativity in advertising is the most important part of the advertising
programme. It is an art and should be provided sufficient funds in order to achieve
the business and marketing objectives.
2.2.2 QUALITIES OF ADVERTISEMENT COPY-
The important of a good advertisement copy can hardly be overemphasized.
All the planning, research and expense would go waste if proper care is not taken in
drafting an advertisement copy that will achieve the purpose of advertising. The
psychological aims of an advertisement are that the public must be made to (i) look,
(ii) like, (iii) learn and (iv) buy. In other words a scientifically drafted copy should
(a) attract primary initial attention, (b) hold attention in an interesting way, awaken
and stimulate interest, (c) bring about an association of impression which will have
permanence or memory value, (d) convince persuade, and induce to purchase the
product, and (e) suggest and lead to specific response to encourage the decision to
buy.
The person who drafts and prepares the copy, must be thoroughly
acquainted with the mental process and be imaginative enough to think of words
and patterns which may produce at desired effect on prospects i.e., it must creates
an urge in the minds of prospects to go for the product advertised.
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A good copy of advertisement should possess the following characteristics
or qualities or values-
1.
Attention value,
2.
Suggestive value,
3.
Memorising value,
4.
Conviction value,
5.
Sentimental appeal value,
6.
Education value,
7.
Instinctive value,
1. Attention Value- An advertisement copy must attract the attention of the
potential consumers. If it fails in this mission, the whole money and efforts will go
waste though it possesses all other values because everything else follows this. So,
it must have display value. The copy should be planned, drafted and displayed so
ingeniously that it may compel even the most casual or involuntary reader to notice
it and read it with interest. It should be designed in such a fashion that the attention
of a busiest person may be drawn immediately. Various devices can be used to
make the copy attractive such as:-
(a)
Use of Pictures. Picture has the immense display and attention
value.
(b)
Use of Display Type or Heading. Use of appropriate to headings
enhances the value of an advertisement copy to a great extent. To invite attention,
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the heading should be brief and meaningful, made up of three or four words and
should be printed in emphatic bold display types.
(c)
Boarder etc. ? Attractive boarder can be used to compel the
attention of the readers. The boarder must have a distinctive look so as to separate
it from the rest of the setting.
(d)
Price Quotation ? Prices should not be quoted on the advertisement
copy except when they are very low as in clearance sale or special offers. But if an
appeal is being made to high class customers who care more for quality than for
price, a price quotation should be avoided and emphasis should be laid on quality.
(e)
Reply Coupons ? Reply coupons inserted in an advertisement in an
unusual setting are yet another way of attracting attention of the readers to the copy.
(2)
Suggestive Value - The next task would be to offer a suggestion
about the use and the utility of the product that may remain inscribed on the mind of
the reader even when he forget where he really saw the advertisement. Slogans,
Pictures, phrases and suggesting may be used for this purpose. They should be
drafted and used as to drive home to the reader the utility of the product in everyday
situation.
(3)
Memorising Value ? The copy of the advertisement should be so
drafted and laid out that the product will stick to the mind of the individual reader.
Repetition of advertisement with slogan is an effective method of creating a
memorising value. Pictures and photographs confirming to the suggestion will have
tremendous memorizing value.
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(4)
Conviction Value ? An advertisement copy can prove effective and
achieve the desired end when the suggestion contained in it is backed by convincing
arguments. The advertiser must be careful to include the statement in the
advertisement copy which does not conform to the product.
(5)
Sentimental Value ? Sentiments play a very important role in advertising,
particularly in the case of food articles. Sentiments reflect the personal feelings and
attitudes of an individual towards various things. They indicate reactions of a
person in favour or against a particular product. The advertiser or manufacturer
should make a sincere attempt to make an appeal to the sentiments of as may
prospects as possible.
(6)
Educational Value ? A good copy of advertisement must possess
educative value because the object of modern advertising is not merely to satisfy the
existing demand but to create future demand. So a good copy of advertisement
should educate the general public about the uses of the new product or the new uses
of the same product. It will certainly increase the demand of the product and
demand creation is one of the most important objectives of the advertisement.
(7)
Instinctive Appeal Value ? Human thoughts and actions are guided
by instincts and inclination. All that one thinks or does has its roots in one instinct
or the other. Instincts are the underlying forces which compel the men to act in
certain ways. The most important function of an advertisement copy is to induce,
persuade and motivate the prospects to think well of a product and to take to its
use. Advertising, essentially, is the motivation of the potential consumer and for
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this purpose; the advertiser should attempt to make an appeal to some basic instincts
to get success in motivating the prospects. Generally speaking, the following are
the basic instincts which an advertiser should keep in his mind-
a) Self Preservation Instinct ? Many of our thoughts and actions are
inspired by our anxiety to preserves our person our health, our family
and our belongings. The sale of products like medicines, clothes
etc., may be promoted by appeal to this anxiety.
b) Hoarding Instinct ? Banking institutions, insurance companies or
other government and non- government saving organizations serve to
hoarding instinct of the people. Slogans like ,,Up and Up go your
Savings may be used for this purpose.
c) Parental Instinct ? Parental instinct takes the form of love and
affection for the children. Those advertisers who deal in children
requirements like garments, toys baby food etc. May promote this
instinct in parents i.e., motherly feelings of women or parental
sentiments of men through their advertisement copy.
d) Self Display Instinct ? Instinct of self display is promoted by the
advertisers of readymade clothing, womens dresses. Jewellery etc.
An advertisement copy drafted for these products must be directed
towards the aesthetic sense of the people by showing happy and
likeable people in dresses and jewellery that are being advertised.
e) Something for Nothing Instinct ? Everybody has a vague desire to
get something without paying anything for it. This desire is, more or
less, present in everybody irrespective of the status or income. An
advertisement copy that contains an offer of a prize of a gift is likely
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to tempt quite a many of the customers. This instinct in widely used
by lottery ticket sellers by offering one free ticket with the purchase
of 10 tickets or by drycleaners by the offering ,,three for two
bargain.
On the basis of the above basic instincts, the following themes or central
ideas may be laid down for advertisement copies meant advertise different types of
product-
(i)
Pride ? This theme can be used to popularize luxury articles among
riches, the possession of which gives them a distinctive status and a
feeling of pride.
(ii)
Beauty ? This theme is used in advertisements for cosmetics,
perfumeries, toilet soaps etc., for men and women.
(iii)
Health - In drugs and food products advertisement they use of this
theme is used.
(iv)
Economy ? It is central theme in advertisement of clearance sales or
bargain purchases.
(v)
Comfort ? The advertisements for fans electric appliance
refrigerators etc. generally contain this feeling of comforts.
(vi)
Fear ? Themes stressing the fear of death accident personal loss
through burglary frenetic. and other untoward happenings in life are
generally used by insurance companies or banking companies. The
traffic police is also using this theme in their notes of caution i.e.,
life is short Dont make is shorter
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(vii) Parental Affection - All advertisement copies of products meant for
children such as toys body foods and dresses etc use this feeling.
(viii) Patriotism ? This theme may be used in advertisement for those
who use foreign products.
(ix)
Achievement ? This theme is used generally by large concerns
engaged in the production of goods necessary for the development of
countrys economy.
(x)
Emulation and Imitation ? This theme is used where people buy
more not to satisfy their genuine requirement, but as their neighbors
happen to possess them.
Thus, a good advertisement copy must possess the above qualities to make it
an ideal advertisement.
2.3 CLASSIFICATION OF COPY
It is true that copywriting is an art and the copywriter has a very important
role to play in advertising creativity. Copywriting does not admit any stereotyped
rules and classification. There are various styles in which a copy can be prepared
and presented. The following types of copy may be studied-
1.
Descriptive Copy ? This type of copy describes the pertinent and
relevant characteristics features of the product. It is very simple and of non-
technical nature. It does not have any specialty which can attract the attention of
the target consumers or may compel them to read it. It is very much similar to a
press account or news item simply giving relevant information to the public without
any stylish touch
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2.
Scientific Copy ? Such types of copies are technical in nature and
generally used by drugs and pharmaceutical firms elaborating the propositions of
properties and constituents of the product. It provides full information about the
product and the producer. This type of copy is usually meant for professional or for
those who are really interested in such types of information.
3.
Institutional Copy ? Institutional advertisement copy aims at selling
the name of the advertiser or the institution that is producing or selling the products
or services. The main objective of such type of advertisements is to create,
maintain or increase the goodwill of the product or of brand or of the department or
of the selling house as a whole, Institutional copy invites the target consumers to the
selling outlet. Such a copy seeks to build goodwill through publicizing the policies,
customer services, Conveniences and general features of superiority of the store
over the rivals.
4.
Topical Copy ? Herein and attempts is made to appeal to the general
public by linking the theme of the copy with some current event but it should not
look absurd. It commands a good deal of interest because of that sensational event
which lives in the minds of the public.
5.
Reason why Copy ? This type of advertisement copy offers the
readers reasons why they should buy the advertised goods. It narrates the positive
points of difference from other brands of the same product category in an endeavour
to convince the reader from products qualitative aspect. It directs its appeal to the
intellect or judgment rather than to emotions or senses. It substantiates the
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superiority of the merchandise with the tests performance. Records testimonials,
guarantees or construction data.
6.
Human Interest Copy ? It makes its appeal to the emotions and the
senses rather than to the intellect and judgment. Sympathy fear, bonus, curosity and
other emotional appeals like appeals to the senses of sight hearing touch taste, and
smell are used in such type of copy. Human interest copy presents the product in
relation to people instead of confirming to facts about product. As emotions are
many and always new it may be made more exciting an artful than reason why
copy. It affords a refreshing change. Human interest copy can take various forms:-
(a)
Humorous Copy - It exploits the sense of humor of the people. It
turns the reader laughter. All examples and statements in such
copy are fully to make the reader smile.
(b)
Fear Copy - It appeals to the sense of fear and arouses the interest
of people to save their lives, properties and other belongings.
Such copy of advertisement should be drawn carefully so that it
may not carry an unpleasant association of readers minds with the
advertisers product of business Lifer Insurance Corporation
General Insurance Companies and Bank generally use this type of
copy.
(c)
Story Copy - In such a copy a story is narrated me a very
interesting manner to create manner to create an impression in the
minds of the people about the product. Its ability to create interest
depends upon dramatic impact it produces. Experience of
customers can also be narrated in the story.
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(d)
Predicament Copy ? It is often used to advantage when it shows
an article of merchandise in a case that provides a dramatic
explanation of its advantages. Predicament copy usually overlaps
the other three kinds of human interest copies
7.
Colloquial copy or Conversational Copy ? The colloquial copy
presents the message in the way of conversation. It uses an informal language and
conversation takes place in terms of ,,I and ,,You with personal reference to reader
and the advertiser. In such copy the style is one of a personal talk or one of an
eyewitness account.
8.
Personality Copy - This copy attempts to encase the opinion of
personality ? real or imaginary ? about the product. Usually the personality is real.
The photograph of the personality (a person specialized to concerned field) is given
with the text of the copy with a view to convince the readers through the moral
influence of his name. Invariably, such copy shows a certificate or a testimonial of
such influential person.
9.
Prestige Copy - This pattern is usually for in institutional
advertising which aims at creating an atmosphere about the product or the firm and
may not directly advise the product for sale. Such a copy is occasionally used and
is very much similar to the personality copy in impression which also strives to
enhance the prestige of the advertising firm indirectly by visualizing the name of
the eminent personality.
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10.
Educational Copy ? The copy is designed to educate the general
public about the attributes of the product. Usually introductory appeal is made in
this style when the product is introduced in the market for the first time; it is the
duty of every producer or advertiser to tell everything relevant about the product to
the public in such a manner that it may get a warm welcome among customers.
Such an advertisement copy depicts the specialties to the product category. The
advertiser may insist only one or two attributes of the product which is more
sensational such as introduction of a low priced item without the loss of quality or a
product developed from a new technology indigenous or imported etc.
11.
Suggestive Copy - A suggestive copy tries to suggest or convey the
message to the readers directly or indirectly to pursue them to purchase the product.
It is useful where the reader is confused about the quality of a product brand and is
not in a position to take a decision about the purchase of the product.
12.
Expository Copy ? Just opposite of suggestive copy it expository
copy. It does not conceal anything about the product but exposes. The message is
quite clear and it needs no inference, no taxing on mind, no thinking, Even a
cursory glance rakes it quite easy to remembers or to pick ? up.
13. Questioning copy ? Questioning copy as the term suggests. in
Corporate a series of questions expected to be answered by them readers. The
advertiser puts no narration, statement or reason of its own in order to pursue the
readers to buy the product. The question arouses the curiosity in the minds of the
readers and makes them think of it.
Thus there are various types of copies of advertisement on the basis of their
style of presentation.
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2.4 Measuring Advertising Effectiveness
All advertising efforts are directed mainly towards the achievement of
business, marketing and advertising objectives i.e., to increase the sales turnover
and thus to market the maximum profit. The advertiser spends lakhs of rupees in to
this advertising activity. In the background of all these efforts, is an attempt to
attract the customer towards the product through advertising.
As soon as the advertising campaign is over, a need is generally arisen to
measure the effectiveness of the campaign. Whether, it has achieved the desired
results i.e. desired sales profitability or results in terms the change in customer
behaviour in favour of the companys product which will naturally, affect the future
sale of the product.
In order to measure the effectiveness of advertising copy, two types of tests-
pretests and post tests- can be undertaken. Pretests are generally conducted in the
beginning of the creation process or at the end of creation process or production
stage. There are several pre and post tests techniques to measure the effectiveness
of the advertising copy.
The effectiveness of advertising in a particular media may also be measured
in any of the following ways ? (a) by giving different addresses to different media,
(b) different newspapers may be selected for advertisements of different
departments, (c) coupon blank etc. May be provided with the advertisement or (d)
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enquiry from consumers should mention the name of the source of information.
The technique is known as keying the advertising.
Thus in measuring the effectiveness of advertising we include measuring of
the effectiveness of advertising campaign, advertising copy and the effectiveness of
individual media. This chapter deals these three problems.
2.4.1 Importance of measuring the Effectiveness of Advertising
(1) It acts as a Safety measure
Testing effectiveness of advertising helps in finding out ineffective
advertisement and advertising campaigns. It facilitates timely adjustments in
advertising to make advertising consumer oriented and result oriented. Thus waste
of money in faulty advertising can be avoided.
(2) Provides feed back for remedial measures
Testing effectiveness of advertising provides useful information to the
advertisers to take remedial steps against ineffective advertisements.
(3) Avoids possible failure
Advertisers are not sure of results of advertising from a particular
advertising campaign. Evaluating advertising effectives helps in estimating the
results in order to avoid complete loss.
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(4) To justify the Investment in Advertising
The expenditure on advertisement is considered to be an investment. The
investment in advertising is a marketing investment and its objectives should be
spelt out clearly indicating the results expected from the campaign. The rate and
size of return should be determined in advance. If the expected rate of return is
achieved in terms of additional profits, the advertisement can be considered as
effective one.
(5) To know the communication Effect
The effectiveness of the advertisement can be measured in terms of their
communication effects on the target consumers or audience. The main purpose of
advertising is communicated the general public, and existing and prospective
consumers, various information about the product and the company. It is therefore
desirable to seek post measurements of advertising in order to determine whether
advertisement have been seen or heard or in other words whether they have
communicated the theme, message or appeal of the advertising.
(6) Compare two markets
Under this procedure, advertising is published in test markets and results are
contrasted with other. Markets ? so called control markets ? which have had the
regular advertising programme. The measurements made to determine results may
be measurements of change in sales, change in consumer attitudes, changes in
dealer display. and so on depending upon the objectives sought by the advertiser.
2.4.2 METHODS OF MEASURING ADVERTISING EFFECTIVENESS
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Advertising is aimed at improving the sales volume of a concern so its
effectiveness can be evaluated by its impact on sales. Most of the managers believe
that the advertisement directly affects the sales volume and hence they evaluate the
effectiveness of the advertising campaign by the increase in the sales volume.
There may be two types measures (i) Direct measures: and (ii) Indirect
measures:-
(1)
Direct Measures of Advertising Effectiveness
Under direct measures, a relationship between advertising and sales
is established. A comparison of sales of two periods or two periods or two markets
may be done and the corresponding changes may be noted. The following are some
of the methods that are generally used in measuring that advertising effects.
(a)
Historical Sales Method
Some insights into the effectiveness of past advertising may be
obtained by measuring the relationship between the advertising expenditure and the
total sales of the product. A multiple regression analysis of advertising expenditure
and sales over several time periods may be calculated. It would show how the
changes in advertising expenditure have corresponding changes in sales volume.
This technique estimates the contribution that advertising has made to explaining in
a co relational manner rather than a casual sales, the variation in sales over the time
periods covered in the study
(b)
Experimental Control
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The other measure of advertising effectiveness is the method of
experimental control where a casual relationship between advertising and sales is
established. This method is quite expensive when related to other advertising
effectiveness measures yet it is possible to isolate advertising contribution to sales.
Moreover this can be done as a pre-test to aid advertising in choosing between
alternative creative designs. Media schedules expenditure levels or some
combination of these advertising decision areas.
One experimental approach to measuring the sales effectiveness of
advertising is test marketing.
(i)
Before-after with Control Group Design
This classic design uses several test and control cities (Fig. 14.1) in this
design two types of cities are selected. Cities in which advertising campaigns are
affected may be named as test cities and other cities may be called central cities.
First of all, the normal sales level is calculated for both type of cities prior to
advertising campaign, and then the advertising campaign is presented to the test
cities and not the central cities. The effect of advertising campaign, can then, be
measured by subtracting the amount of post campaign figure of sale from the pre
campaign sale figures in test cities.
A Before-after with Control Group Design for Measuring the
Effectiveness of Advertising Campaigns
Test cities
Control cities
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Pre-campaign measure of sales
Yes
Yes
Advertising campaign
Yes
No
Post-Campaign measure of Sales
Yes
Yes
The difference of post and pre campaign sales in cities is the result of
advertising and all other factors that affect the sales.
(ii)
Multivariable Experimental Designs
While the experimental design discussed above yields a reasonably accurate
estimate of the effects of the advertising on sales, it is not successful in explaining
the success or failure of the campaign itself. Multivariable designs
Produce these explanations and are, therefore used by some very large firm because
of their diagnostic value.
The power of this multivariable factorial design is explained by G.H.Brown,
former Fords Director of Marketing Research. For any single medium, eight
possible geographic areas have been exposed and eight have not been exposed.
Thus, in this experimental model it is possible to evaluate how each individual
medium behaves alone and in all possible to evaluate how each individual medium
behaves alone and in all possible combinations with other media.
(2) Indirect Measures
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As it is very difficult to measure the direct effect of advertising on
companys profits or sales, most firms rely heavily on indirect measures. These
measures do not evaluate the effects of advertisements directing on sales or profits
but all other factors such as customer awareness or attitude or customer recall of
advertising message affect the sales or profits or goals of the business indirectly.
Despite the uncertainties about the relationship between the intermediate
effects of advertising and the ultimate results, there is no other alternative but to use
indirect measures. The most commonly used measures are ?
(1) Exposure to Advertisement
In order to be effective, the advertisement must gain exposure. The
management is concerned about the number of target audiences who see or hear the
organisation message set in the advertisement. Without exposure, advertisement is
bound to failure.
Marketers or advertisers may obtain an idea of exposure generated by the
medium by examining its circulation or audience data which reveal the number of
copies of the magazine, newspaper or journal sold the number of persons passing
the billboards or riding in transit facilities, or the number of persons living in the
televiewing or radio listening area, and the number of persons switching on their
T.V. and radio sets at various points of time. This number can be estimated by
interviewing the numbers of the audience for different media.
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(2) Attention or Recall of Advertising Message Content
This is one of the widely used measures of advertising results. Under this
measure, a recall of the message content among a specified group or groups or
prospective customers is measured within 24 hours of the exposure of the
advertisement.
Attention value is the chief quality of the advertising copy the
advertisements cannot be said to be effective unless they attract the attention of the
target consumers. There are two methods for evaluating the attention getting value
of the advertisements. One is pre-test and the other is post-test.
In a pre-test evaluation, the consumers are asked to indicate the extent to
which they recognise or recall the advertisement, they have already seen. This test
is conducted in the laboratory setting. Here consumers read, hear or listen to the
advertisement and then researchers ask question regarding the advertisement just to
test the recall and then evaluate it.
In post-test method, the consumers are asked questions about the indication
of recognition or recall after the advertisement has been run.
These measures assume that customers can recall or recognise what they
have viewed or listened to.
Various mechanical devices are being used in the western countries which
provide indices of attention such as eye-camera etc.
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(3) Brand Awareness
The marketers who rely heavily on advertising often appraise its
effectiveness by measuring the customers awareness about the particular product or
brand. The assumption of this type of measure is that there is a direct relationship
between the advertisements and the awareness. This type of measure is also subject
to the same criticisms as is applicable to direct measures of effectiveness (sales
measures because awareness is also not the direct result of the advertisements. It is
also affected by many other factors. But, for new products, changes in awareness
can often be attributed to the influence of advertising.
(4) Comprehension
Consumers generally use advertisements as a means of obtaining
information about the product, brand or the manufacturer. They cannot be informed
unless they comprehend the message (grasp the message mentally and understand it
fully). Various tests for valuating comprehension are available ?
One is recall tests ? an indicator of comprehension because it is evident that
consumers recall what they comprehend. Another measure of the variable is to ask
questions about subjects how much they have comprehended a message they have
recently heard or seen. One may employ somewhat imprecise test of the
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comprehension of a newspaper and radio advertisement. One may ask typical target
consumers from time to time such questions like ,,what did you think of our new
commercial? and ,,Did it get the message across? The answers of these questions
will provide sufficient insight into advertising decision making.
(5) Attitude Change
Since advertising is considered to be one way of influencing the state of the
mind of the audience towards a product, service or organisation, the results are very
often measured in terms of attitudes among groups exposed to advertising
communication. Several measures are used ranging from asking the questions
about willingness to buy the likelihood of buying to the measurement of the extent
to which specific attributes (such as modern or new) are associated with a product.
(6) Action
One objective of advertisement may be assumed to be to stimulate action or
behaviour. The action or intention to take an action may be measured on the
intention to buy measuring instrument. Under this type of measure, consumers are
asked to respond why they are interested in purchasing the product or brand.
One type of action that advertisers attempt to induce is buying behaviour.
The assumption is that if an increase in sales follows a decrease in advertising
expenditure, the change in sales levels are good indicators of the effectiveness of
advertising. Logic suggests that measurement of sales is preferable to other
measurements.
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Thus, these above measures (direct or indirect) are used to evaluate the
effectiveness of advertisements. It seems from the analysis of the above methods of
measuring effectiveness that directly or indirectly changes in sales or profits are
taken as the measuring rod of the effectiveness of the advertising.
2.4.3 PRE-TEST AND POST-TEST OF ADVERTISING COPY
Almost every firm spends thousands of rupees on advertising every year; it
is very much pertinent to know the effectiveness of the advertisement copy. The
main purpose of every advertising is to arouse the interests of the people in the
firms product can everyone be perused by the same advertisement? Or will the
same advertisement satisfy all types of people? The simple answer is in negative
because people differ so greatly in their wants, in the economic and other motives
which actuate them, and in the various ways by which their interest is aroused. It is
why some advertisements are more effective than others. The amount is spent on
advertising not only because the advertisement does not get to the right people but
because it carries an appeal which does not interest those to whom it goes. An often
quoted remark about advertisement is that half the money spent on advertising is
wasted; but no one knows which half.
For this purpose, advertising copy research is done to see how will an
advertisement succeeds in attracting the attention and stimulating the desire and
action of the people for whom it is made and how will it delivers the intended
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message about a product or an idea. Advertisement copy is done to be sure of its
effectiveness.
2.4.4 Copy Testing
Copy testing is a tool involving a procedure where the effectiveness of an
advertisement is measured before it appears in its final form, during and after its
exposure to the audience to determine whether and to what extent, it has
accomplished its assigned task. In this way, the copy testing is a method used to
control the effectiveness of future advertising. It addresses the following questions
?
(a)
Will a proposed copy theme be effective at achieving advertising
objectives?
(b)
Does the set of advertisings that makes up an advertising campaign
create the
Desired interest level and image? And
(c)
Will an individual advertisement attract the attention of the
audience?
2.4.5 Types of Tests
The various methods of testing advertising copy are
1. Pre-test methods
2. Post-test methods
3. Concurrent methods
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1. Pre-Test Methods
Pre-test method refers to testing the potentiality of a message or copy before
printing or broadcasting. It is useful because the concepts in advertising may
appear to be simple and effective to the advertiser or advertising to be
simple and effective to the advertiser or advertising agency. It may be
difficult from the laymans point of view. All the elements in the advertising
copy requires careful pre-testing to see that the matter it intends to be
conveyed has been really conveyed, ,,prevention is better than care. Pre
testing methods are adopted on this basis. The following are some of the
pre-testing methods.
a. Check list method
b. Consumer Jury method
c. Sales Area Test
d. Questionnaire
e. Recall test
f. Reaction test
g. Readability test
h. Eye-movement test
a. Checklist Method
The copywriters use checklist method to test the effectiveness of advertising
copy. The purpose of this method is to ensure that all elements of the advertising
copy are included with due importance in the advertisement. As it is a pretest
method omissions can be included in the copy before release of the advertisement.
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A checklist is a list of good qualities to be possessed by an effective
advertisement. The researcher has to compare the advertisement with the checklist
and tick the items present in the advertisement copy. Accordingly a copywriter can
draw specific conclusions and make suitable changes in the advertising copy.
b. Consumer Jury method
This method essentially involves the exposure of alternative advertisements
to a sample of jury; of prospects and the securing of their opinion and reactions to
the advertisements. This test is designed to learn from a typical group of
prospective customers gathered in one place or a sample of prospects that are
independently, visited by interviewers or contacted by mail their preference for one
advertisement over the other or for several advertisements out of a group.
Advertisements which are unpublished are mocked up on a separate sheet and these
are presented before the consumer jury either in personal interviews or group
interviews.
c. Sales Area Test
Under this method advertising campaign is run in the markets selected for
testing purposes. The impact of the campaign is evaluated by actual sales in the
selected markets. The market with high sales is considered the best market for
effective sales campaign. In other markets suitable changes are made in the
advertising campaign.
d. Questionnaire Method
It is a list of questions related to an experiment. It contains questions and
provides space for answers. The draft of an advertisement along with some relevant
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questions is to be sent to a group of target consumers or advertising experts. Their
opinions are collected and analysed to find out whether the proposed advertisement
is satisfactory or not.
e. Recall test Method
Under this method, advertising copies are shown to a group of prospects.
After few minutes they are asked to recall and reproduce them. This method is used
to find out how far the advertisements are impressive.
f. Reaction test
The potential effect of an advertisement is judged with the help of certain
instruments, which measure heartbeats, blood pressure, pupil dilution etc. Their
reactions reveal the psychological or nervous effects of advertising.
g. Readability test
All the listeners of advertisements cannot read it equally. So respondents are
drawn from different socio economic and geographical backgrounds. This method
is used to find out the level of effectiveness when and advertisement is read.
h. Eye movement test
The movements of eyes of the respondents are recorded by using eye
observation camera when advertisements are shown to them in a screen. This helps
to find out the attention value of advertisement.
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2)
Post-Test Techniques
The following are the post-test techniques for measuring the effectiveness of
the advertisements ?
(1)
Recognition Test ? It determines the readership of the advertisement
in the newspapers and journals. This test is conducted by personal interviews with
readers, and magazines or newspapers. The interviewers locate the readers of the
particular issue of the magazine in question. They, then, go through the magazine
page by page with the respondent indicating those advertising elements which he
or she recognise as having read.
The data collected by this test indicate the proportion of qualified readership
of a publication who claims to have ,,seen, ,,read some or ,,read most of the
elements of the individual advertisement. These measurements may also seek to
obtain quantitative data regarding the parts of an advertisement which were seen or
heard.
(2)
Recall or Impact Test ? The recognition test measurers the stopping
power of the advertising but goes not tell us what the readers understood or retained
of the advertisement. The recall test is designed to measure the impression of
readers or viewers of the advertisement. If a reader has a favorable impression of
the advertisement, he will certainly retain something of the advertisement. The
measures of interest would be obtained by interviewing the readers or viewers or
listeners, days after the advertisement or commercial is appeared in the newspaper,
or on T.V. Interviewer asks the questions from the readers / viewers and in
85
response to the question asked, the reader reveals the accuracy and depth of his
impression by his answers.
(3)
Psychological Analysis ? The whole process of advertising is
psychological in character. It is therefore, natural to apply some psychological tests
to measure the effectiveness of the advertising.
Four psychological testing techniques are most commonly used ?
(a)
Tests of readability and comprehension;
(b)
Tests of Believability
(c)
Attitude tests; and
(d)
Triple Associates Test.
(a)Tests of Readability and Comprehension
It this technique, by means of a series of penetrating questions and
by other techniques developed by psychologists, the ease of readability and
comprehension is determined, in advance of publication. It is determined by
the interviewer under this method whether and to what extent the readers
have gone through the advertisement.
(b)Tests of Believability
An advertisement message effective. ness can be measured by the
degree of credibility the readers have in the product. A scale technique is
generally employed to measure the credibility by putting several statements
or product claims before. the consumers and are created by them. The
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statement or product Claims gets the highest priority votes may be taken as
the most effective statement or claim.
?Attitude Tests
A number of attitude tests are developed by the psychologists who
can be applied to copy testing. Typical consumers are exposed to sample
advertising messages, either printed or oral. The interviewer then asks
series of penetrating questions, to determine the attitude produced by these
various message. Psychological reactions such as age, involvement, the eye
of person who would use the product and the personality of the product
reflected by the advertisement being tested, are obtained. The researcher
looks especially for elements in the advertising which arouse psychological
hostility.
(a)
Triple Hostility Tests ? these ties in advertising with recall by
seeking to learn the extent of the consumer association with the
product, the brand name and copy theme. The test is useful only
when the advertising features a specific theme or slogan, which the
reader may remember. This procedure is sometimes known as theme
penetration.
3) Concurrent Methods
Under this method, tests are conducted while the consumers are exposed to
different types of media. For instance, a magazine reader may be observed while
reading the magazine. Which carries an advertisement? The concurrent methods are
1. Consumer diaries
2. co-incidental surveys and
3. Electronic devices.
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1. Consumer diaries
Under this method, diaries are supplied to a few selected customers. They are
also informed to record the details of advertisements they listen or read. The diaries
are collected periodically. The result obtained from such a survey reveals the
effectiveness of advertisement.
2. Co-incidental surveys
This method is also called as co-incidental telephone method. Under this
method, samples of customers are selected and calls are made at the time of
broadcast of the advertisement programme. The data obtained and analysed will
give a picture about the effectiveness of an advertisement.
3. Electronic devices
Now days electronic devices are widely used to measure the effectiveness of an
advertisement. They are mainly used in broadcast media. These are auto meters,
track electronic units etc.
The following methods are also used to measure the impact of advertisement on
the sales volume.
I.
Historical method and
II.
Experimental method
I Historical method
Under this method, recorded facts related to sales before and after
advertisements are compared. If an advertisement is followed with more sales,
advertisement is considered to be more effective.
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II.Experimental method
Under this method, the entire sales territory is divided into three or four sub-
areas. The advertiser spent different amount for advertising in different areas. Then
collects facts regarding sales from these sub-areas The result is used to measure the
effectiveness of advertisement in boosting sales. Following the result obtained, the
advertiser prepares his advertising budget for future action.
An advertiser has to adopt some follow up measures to increase the
effectiveness of advertisement. For this consumers may be contacted through direct
mail after the advertisement is placed.
2.4.6 Keying the Advertising
It is a fashion to advertise. Every advertiser wants to assess the
effectiveness of advertising. The problem of assessment becomes more
complicated when advertiser advertises through various media. Selection of media
is not an easy job. Which media responded to the satisfaction of the advertiser? Is
not an easy question to be answered? In other words there arises the problem of
choosing how to advertise? and through which media Naturally one would select a
media ? mix that would serve one purpose the most. This can be easily done by
keying the advertising. Keying means to adopt such methods at the time of
adverting so that results may be very easily assured and to do so either of the
following may be adopted.
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1.
Different address may be given to difference media, so that enquiries
received may be scrutinized to find out which media, responds the
best. The best media may be selected and continued for
advertisements and the rest may be stopped to avoid unnecessary
waste of time and money.
2.
Different papers may be selected for the advertisement of different
departments. so as to know which paper suits the requirements and
of which department.
3.
A coupon, blank order or space may be provided with the
advertisement paper with a request that all requires should be media
along with the coupon, or blank order or space duly filled in.
4.
A request can be made to the enquirer or the prospective buyer,
along with the advertisement that he should mention the name of the
particular media which is the source of his information while making
any enquiry. A scrutiny of all those inquiries may give an idea which
paper or media is the best suited.
2.4.7 COMMUNICATION EFFECTS OF ADVERTISEMENT
The management should attempt to evaluate the effectiveness of the
advertising campaign if the firms advertising goals are to be achieved and the ad
effectiveness is to be increased. By regular evaluation of the effectiveness, the
short comings and the plus points would be revealed and the management would be
able to improve the campaign by negating the shortcomings and retaining the
90
favorable point. For this purpose, it is very necessary to know how advertising
affects the buyers behaviours. But this is very difficult task because measurements
are imperfect and imprecise.
The effectiveness of advertising can be measured by the extent, it to which it
achieves the objectives set for it. If it succeeds in attaining the objectives.
advertising can be said to be effective otherwise it will be a waste of money and
time. In this sense, advertising can be recognized as a business activity like other
activities.
In a very real sense the integrity of promotional activities rests on how well
those activities work. An advertising budget that is spent on some poorly defined
task or on undefined tasks may be regarded as an economic waste as compared to
that spent to achieve the well defined objectives for which the results can be
measured. Any social institution upon which a significant portion of our total
productive efforts is expanded should be able to point to its specific
accomplishment. Indeed, it is a source of discomfort that specific results of
advertising activities have not always been subject to precise measurement. Both
practitioners and critics feel that promotional activities should only be accepted
as socio ? economic ? institution with full right and privileges "when the means
exist to prove that advertising super are productive rupees It is undoubtedly a
source of embarrassment that we cannot exactly measure the effectiveness of
advertising in definitive terms.
The exact result of advertisement expenditure is very difficult to predict
because.-
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(a)
The reaction of consumer ? buyers to the advertising efforts cannot
be known in advance.
(b)
The reaction of competitors in the field cannot be guessed in
anticipation and
(c)
The unexpected events (such as change in social and economic
environment and the government policies etc.) cannot be accurately
anticipated. Such events may influence the results of the advertising
efforts.
If we take a hypothetical case of a retailer who contract to spent Rs.5000
on advertisement with a local newspaper for a special sales even. The
advertisement is seen and the response is much grater than it is anticipated. What
caused the success of sale? They message theme colours etc., of the advertisement
or the low prices quoted during the sale of the superior quality of the product or
absence of competition in the market on the day or the favorable. weather
conditions or the goodwill of the firm etc. The overwhelming success of the sale is
the joint result of all the above variables and it is quite impossible to isolate the role
of any one variable. It is so because the cause and effect ? relationship cannot be
established in advance when a multitude of variable impinge upon a particular
event. It is entirely possible that a poor advertising support may push up the sale
because everything else falls into its proper place or the reverse may be possible.
But it does not mean that that we cannot measure the effects of particulars
advertising effort.
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The advertising executives are much concerned about the assessment of the
effectiveness of the advertising efforts. For this purpose, the management needs
answers to such questions as: was the advertising campaign really successful in
attaining the advertising goals? Were our T.V. commercials as good as those of our
competitors? will the print advertisement, which we have designed, make
consumers a ware of our new product? To get answers of these questions, various
tests of effectiveness (Pre- tests and post ? tests ) are deeded to determine whether
proposed advertisement should be used, and if they are not satisfactory how they
might be improved, and whether on going campaign should be stopped continued
or changed. Pre- tests are conducted before exposing target consumers to the
advertisements and post tests after consumers have been exposed to them.
As indicated earlier, the advertisers are interested in knowing what they are
getting for their advertising rupees, So they test the proposed advertisement with
pretest and measure the actual results with a post test. In the past, protesting was
done by the advertising agencies but now the advertisers have been taking an
increasingly active role in protesting process. Pretest may be done either before an
advertisement has been designed or executed after it is ready for public distribution
or at both points.
During protesting there is often research on three vital questions:-
(i)
Do consumers feel that the advertisement communicates something
desirable about the product?
(ii)
Does the message have an exclusive appeal that differentiates the
product from that of the competitors?
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(iii)
Is the advertisement believable?
Although a lot of money is spent on protesting yet the advertisers
like to confirm the results by post testing of their promotional campaigns due to
the following reasons:-
(i)
There is a need produce more effective advertising by retaining the
good and removing the bad.
(ii)
The advertising executives can prove to the satisfaction of the
management that a higher advertising budget will benefit the firm.
(iii)
There is a need for measuring the results to determine the level of
expenditure that is most promising.
Most research focuses on the communication effect rather than sales
effect because it is a long run process. In the short run, however sales may be slight
and important but in the long run its effects ob brands and companies may be of
great importance. Indirectly it will affect the sales in the long run, by changing the
consumer awareness and attitude. The advertisers are therefore, concerned with
their impact on consumer awareness and attitude. The communication effect on
sales may be presented in the following figure:-
Communication Effect on Sales
Awareness
Attitude
Trial
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Satisfaction
Purchases or repurchase
Fig .2.4.1
Awareness builds a favorable or at least a curious attitude towards the
product which leads to experimentation. If consumer is satisfied with the trial he
may decide to purchase the product.
There are many critical and unresolved issues in determining how to test the
communication effects of advertising. Among these are:-
(1)
Exposure Conditions ? Should advertising be tested under realistic
conditions or under more controlled laboratory conditions?
(2)
Execution ? Protesting a finished advertisement as an expensive and
time consuming. Does protesting a preliminary execution produce
accurate and useful data?
(3)
Quality Vs. Quantity Data- Quantitative data are the easiest and the
almost precise measurement. But qualitative data collected through
interviews may provide information that short answer questions
never can.
Many types of advertising tests are conducted (different methods of pretests
and post ? test are given in question number) In T.V. commercials are tested by
inviting a group of people to the studio to view a programme. The audience is then
95
surveyed about the commercials. Print advertisements are tested through dummy
magazine portfolio tests.
2.4.8 Compunction Effectiveness Vs Sales Effectiveness
It is easier to assess the communication effect of advertising than the sales
effect. Many firms try to measure the effectiveness of advertising in terms of sales
results but this practice is always misleading. Since, the effect is the result of so
many variables, a distinct effect of advertising on sales cannot be correctly
measured, Although there may be some exceptions. For example direct mail
advertising can effectively be measured by the inquiries received. But in many
situations the exact relationship between advertising activity and sales cannot be
established satisfactorily.
We can correctly assume that some sales will occur even though there is no
advertising or little advertising or conversely there will be no increase in sales after
the point of saturation is reached or it may be that sales will show a decreasing trend
at this point in spite of large amount of expenditure on advertising is done. It is so
because advertising is no the only variable that effect the sales.
Thus, we may conduct that sales effect of advertising is difficult to measure
because a number of variables affect the quantum of tales and the contribution of
advertisement cannot be measured separately unless all other variables are
presumed to be constant. This situation is quite hypothetical and almost non-
existent. Added to this is the fact that advertisement itself is made of a variety of
variables such as media, messages, colours, page or time of the day, locations, the
size of the headline and the appeals used. Thus even if the advertising variable is
96
separated this would still not answer the question about the effectiveness of the
individual components of the advertising campaign. So advertisers try to measure
the communication effect of the advertising.
Conclusion
In order to measure the effectiveness of advertising, which approach
(communication effectiveness or sales effectiveness), is more suitable? Two factors
are to be considered in deciding the approach. They are
1. Relevance of advertising objectives on the overall performance
objectives:
Generally advertising managers would like to know the role of
advertisements on the overall performance of the business firm i.e., return
on investment and on profitability. A sale is a determining factor of
company performance.
2. Difficulty and cost of obtaining data needed to evaluate effectiveness:
Generally communication measures are easy to follow than sales
effectiveness measures. If the measures of advertising are more relevant
they will be difficult and costly. If it is less difficult and cheap the measures
will not be more relevant. Therefore, the advertising manager has to make a
balance between these two approaches.
Suitability
In small business firms where the marketing research resources are limited
advertising managers may decide on less expensive and less relevant measures. The
97
big business house, which has more access to research, may decide on the more
relevant and expensive measures.
Questions
1. Explain the methods of evaluating effectiveness of advertising?
2. Explain the various pre-testing methods?
3. Explain the various post testing methods?
4. What is creativity? Show the various activities that are typically parts of the
creative design process.
5. What qualities should be possessed by a good advertisement copy?
6. How would you classify advertising copy? Discuss
7. What are the various components of advertisement copy?
8. Define the term Design and Layout in relation to an advertisement copy.
9. Is there any necessity to measure the effectiveness of our advertisements?
Discuss
10. How can advertising manager evaluate the effectiveness of a firms
advertising?
11. How would you test the communication effects of an advertisement?
Discuss
Assignment
1. Write down important points while preparing a advertisement copy for
consumer durable product?
2. Prepare an advertisement copy for children product with important elements
3. Test the TV commercial advertisement with your friends and relatives and
point out the effective advertisement and analyse it
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4. Collect important Print advertisement in News paper , journal and books and
analyse the presentation and elements in it.
REFERENCES
1. Wells, Burnett &Moriarty: ADVERTISING PRINCIPLES AND PRACTICES,
Prentice-Hall
2. June Valladares: THE CRAFT OF COPYWRITING, Sage Publications.
3. J V Vilanilam & A K Varghese: ADVERTISING BASICS! A RESOURCE
GUIDE
FOR
BEGINNERS,
Response
Books,
Sage
Publications.
4. Wright, Winter & Zeigler: ADVERTISING; Tata McGraw Hill.
5.
Sandage,
Fryburger
&
Rotzoll:
ADVERTISING;
Irwin.
6. Aaker, Batra & Myers: ADVERTISING MANAGEMENT; Prentice Hall, India.
7. Subroto Sengupta: BRAND POSITIONING; Tata McGraw Hill.
8.
David
Ogilvy:
OGILVY
ON
ADVERTISING.
9. J. T Russel & Ronald Lane: KLEPPNER'S ADVERTISING PROCEDURE;
Prentice
Hall.
10. Don E. Schultz: STRATEGIC ADVERTISING CAMPAIGNS; NTC Business
Books.
11. Pran Nath Chowdhury: SUCCESSFUL SALES PROMOTION
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Unit - III
ADVERTISEMENT - AN INTRODUCTION:
Advertising is a powerful communication force, highly visible, and one of the most
important tools of marketing communications that helps to sell products, services,
ideas and images, etc. Many believe that advertising reflects the needs of the times.
One may like it or not but play advertisements are everywhere. Advertisements are
seen in newspapers, magazines, on television and internet and are heard on radio.
The average consumer is exposed to a very large number of advertisements
everyday, particularly the urban and semi-urban population.
It seems almost impossible to remain totally neutral and not take any notice of
modern day advertising. The most visible part of the advertising process is the
advertisements that we see, read, or hear and praise or criticize. Many suitable
adjectives are used to describe advertising, depending on how an individual is
reaching, such as great, dynamic, alluring, fascinating, annoying, boring, intrusive,
irritating, offensive, etc.
Advertising is an indicator of the growth, betterment and perfection of civilization.
It is part of our social, cultural and business environment. It is not at all surprising
that advertising is one of the most closely scrutinized of all business institutions. In
todays environment, not only are advertisers closely examined by the target
audience for whose that advertisements are meant, but by society in general.
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MARKETING-MIX AND PROMOTION-MIX:
Marketing Mix
Product
Price
Promotion
Place
Advertising
Personal
Sales
Publicity
Direct
Selling
Promotion
Marketing
ADVERTISEMENT ? DEFINITION:
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"Advertising is any paid form of non-personal presentation and promotion of ideas,
goods and services by an identified sponsor." ? American Marketing Association.
"Advertising is controlled, identifiable information and persuasion by means of
mass communications media."
"Advertising is the non-personal communication of marketing-related information
to a target audience, usually paid for by the advertiser, and delivered through mass
media in order to reach the specific objectives of the sponsor." ? John J Burnett.
"Advertising is a message paid for by an identified sponsor and delivered through
mass medium of mass communication. Advertising is persuasive communication.
It is not neutral; it is not unbiased; it says; ,,I am going to sell you a product or an
idea."
- J Thomas Russell and W. Ronald Lane
BRIEF HISTORY OF ADVERTISING:
Modern advertising is largely a product of the twentieth century, however,
communication has been a part of the selling process ever since the exchange of
goods between people started. The development of technology and research has
led to increased sophistication in advertising in recent decades. During ancient and
medieval times, advertising was crude if measured by present day standards,
however, the basic reason for using advertising was the same then as it is now.
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Institutions come into existence only when a need for them develops. A variety of
external forces support and nourish the growth and development of an institution.
To survive, the institution must be dynamic, flexible and adaptable to meet the
needs in the changing conditions of the environment.
The recorded history of advertising goes back to about 5000 years including the
modern satellite and internet age. Our knowledge of advertising in ancient times is
quite fragmented. Nevertheless, it seems that the urge to advertise is a part of
human nature since ancient times. The diggings by archaeologists, in countries
rimming the Mediterranean sea, has unearthed a Babylonian Clay tablet of
about 3000BC, Bearing inscription for an ointment dealer, a scribe , and a
shoemark, Romans and their predecessor knew that "it pays to advertise".
Papyri found in the ruins of Thebes (Egypt) show announcements offering
rewards for the return of runaway slaves about 3000 BC.
Before the invention of printing from movable type (about AD 1438) by
Johann Gutenberg there were three forms of advertising.
1. Trademarks: Craftsman, in early times, wanted to be identifes for their
skills and places their individual marks on goods that they crafted.
This led to reputation building of particular artisans by word of
mouth. Buyers learnt to look for distinctive marks just as we look
today for brands names and trademarks on products.
2. Signs: Phoenicians, and other traders, painted commercial messages on
prominent tocks along trade routes that they frequented. These
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messages highly praised the products that were for sale. This is an
example of ancient outdoor advertising, Archaeologists have revealed,
from excavations at Pompeii, that little shops had inscriptions on
walls near the entrance to inform the passers-by whether the shop
sold pottery, wine, bread, or any other goods.
3. Town Criers: This system of town criers was perhaps, present in all
developed civilizations of the ancient world. In Greece, during the
golden age, town criers were paid to go around town spreading news
and making announcements in the streets of Athens. Epics and history
books about ancient India reveal that the rulers used the system of
town criers in India to inform the public of various public interest
matters. In rural India, town criers were used till as late as the
1950s.
The first known printed advertisements in the English language appeared
nearly forty years after the invention of movable type. William Caxton of
London printed the first advertisements. It was a handbill of rules for the
guidance of clergy at Easter and was put on church doors. The printed
newspaper emerged form the newsletters which were handwritten by
professional writers for limited circulation among the nobles and others.
The first ad, in any language, to be printed on a circulated sheet appeared
in German news pamphlets in about 1525. The ad praised the virtues of a
mysterious drug. It was from such beginnings that the printed newspaper
emerged and the first printed newspaper in Engli8sh came out in 1622,
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called the Weekly News of London. The first advertisement appeared in an
English newspaper in 1625.
The first ad in America appeared in 1704 in the Boston Newsletter. The first ad that
appeared offered a reward for the capture of a thief. This was more like the
reward for returned slaves written on Egyptian Papyrus thousands of years
before present day advertising came into being.
By the middle of the 17th century, weekly newspapers called ,,mercuries,
started to appear in England. Most of the early advertisements in these
newspapers were in the form of announcements. Importers of products new to
England were prominent advertisers. The first ad offering coffee appeared in a
newspaper in 1652, followed by an offering of chocolate in 1657 and tea in
1658.
DEVELOPMENT OF MODERN ADVERTISING:
It is a fact that advertising as we know it really had its beginnings in mid 19th
century. Volney B Palmer was the first advertising agent who established an office
in Philadelphia. For a fee, he worked as an agent for newspapers numbering about
1400. He sold space to advertisers throughout the country. He did not provide any
creative or planning services to clients, except the media selection.
In the late 1880s, John E Powers emerged as great copywriter. He had a simple
approach-he believed in "printing the news of store...no catchy headings...no brag ,
no pressure." J Walter Thompson, a young advertising executive, signed an
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exclusive contract with twenty-five of the best American magazines and had an
impressive list of advertisers. He is also known as the inventor of the modern
advertising agency.
Albert Lasker and Claude C. Hopkins got together in the last decade of the 19th
century. Claude C Hopkins developed the ,,reason why approach to advertising
copy. Albert Lasker made the ad agency a professional business that included the
"records of results." This was the counterpart of todays research department.
The dominant approach to copy writing was "reason why" during this time.
However, a famous copywriter, Theodore F McManus of General Motors,
challenged this style. He believed in producing impressionistic copy by
incorporating original art, striking layouts and elegant writing, to create a positive
image of the company and its products.
An agency, Lord and Thomas, had two remarkable copywriters, John E Kennedy
(joined Lord and Thomas in 1898) and Claude C Hopkins, and enjoyed a reputation
for creative work. Hopkins had joined Lord and Thomas in 1907 and was regarded
by many as the greatest creator of advertising who ever practiced the art.
Hopkins was particularly good at understanding the consumer and how advertising
should be integrated in the total marketing effort. John E Kennedy believed that
advertising was "salesmanship in print." He tried to provide a reason why
customers should buy the advertised products.
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During the 1920s, modern marketing research entered the world of advertising. As
a result of this new development, advertising in this period started stressing on the
outcomes of consumer purchases such as health, happiness, status, love, etc.
Advertisements contained a bold headline, artwork, photography and plenty of
colour. Before the severe depression of the 1920s, radio was not being used for
advertising. Strange though it seems, during this period of depression, commercial
radio emerged, though it was not really a good period for advertising.
CONTEMPORARY ADVERTISING:
Most of the growth in advertising has happened after Second World War.
Excessive mechanized production and serious efforts to rebuild nations and
economies were under way. Western Europe and the Far East started to compete in
world markets and advertising became an essential part of this new economy.
Large corporations such as Coca-Cola, General Motors and IBM had long been
active all over the world. After 1946, quite a number of medium and small
companies entered the international market. Large advertising agencies of USA,
Western Europe and the Far East started opening their offices in several countries.
Specialists in market research, sales promotion, merchandising and public relations
started running the advertising industry during the 1950s. Creativity in advertising
was almost non-existent till then and ads were mostly "me too" type of messages
with a lot of worldly visualization and little copy. Rossers Reeves of Ted Bates
Agency was probably the most successful among copywriters. He originated the
concept of USP (Unique Selling Proposition). His argument was that the marketer
should discover one important attribute of his product. This attribute should be
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communicated properly and effectively to the audience and should be repeated over
and over. It was during the 1950s that television emerged as one of the most
spectacular development in the history of advertising. Television showed a
significant advantage over other media as it could combine both sight and sound.
It was mainly because of the efforts of Leo Burnett, David Ogilvy and William
Bernbach that creativity and soft sell were reintroduced in advertising.
Burnetts contribution in the late 1950s and 1960s brought drama and
warmth to advertising with unforgettable characters such as the Marlboro
Man. Ogilvy, with the Hathaway shirt man wearing an eye-patch, introduced
a unique type of intelligence and class to advertising. Bernbachs contribution
was combining copy, art and humour. "We try harder because we are No.2" is
the ad which has been hailed as one of the most remarkable advertisements
by Bernbach.
It seems relevant to especially look at the development of Indian advertising.
Two British advertising agencies, J. Walter Thompson and D J Keyemer, were
the ones that laid foundations of professional advertising in India in the early
1950s
J Walter Thompson is now HTA and D J Keymer became Ogilvy & Mather. The
positioning era had not dewaned till the 1950s and it was the time of "ART
in INDUSRTY". Major advertisers like Burmah Shell and Dunlop were more
concerned with "aesthetic creativity" rather than the compulsion of selling.
Even in the mid ? 1960s, advertising professionals had not heard of "positioning".
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Subroto Sengupta, a well-known personality in the field of advertising, a
renowned teacher of marketing and an author, was one of the founder-
directors of Clarion Advertising. He was formerly associated with D J Keymer.
Another agency that flourished was OBM of Mumbai. Indians started Dattaram,
Sistas and National in Mumbai and Tom and Bay in Pune. To Start with,
these agencies were only space buyers.
Kersey Kartrak, an exceptionally talented advertising professional, helped in
nurturing many talents that include Arun Nanda, Mohammad Khan and Ravi
Gupts in the mid-1960s. Gerson da Cunha introduces Alique Padamese who
today is consider as the orginal god in Lintas. Other important names in
Indian advertising include K Kurian, Sylvie da Kunha, Josephine Turor, Bobby
Kooka, Subbash Ghosal and some others. The collapse of some agencies,
such as MCM and Iyers , brought on the scene many new agencies. The
major trend of the 1970s was a professional approach and consolidation.
During the 1980s, the economy showed significant improvements and
advertising agencies flourished.
Advertising is rarely a stable business. I changes with business conditions,
social and cultural times and technology. Ads in the pre-independence period
in India were mainly addressed to the affluent classs. These ads were
generally for tea, gramophones, cars, hotels and restaurants and cotton goods,
etc. After independence, when the princely states and Zamindari system were
abolished, a new middle-class emerged. With this significant changed social,
cultural, and economic scenario, advertisers started paying attention to the
middle class.
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Advertising Club of Mumbai celebrated its silver jubilee in March 1980 and
there was a workshop on twenty-five years of Indian advertising. There are
now advertising clubs in al metropolitan cities and more than 500 advertising
agencies. There are professional bodies that represent the advertiser, the
advertising agency and the media. The names of these representative bodies are:
The Indian Society of Advertisers (ISA)
The Advertising Agencies Association of India (AAAI)
The Indian Newspaper Society (INS)
Indian advertising has taken rapid strides and is becoming more professional
by the day. The comment of former Chief Executive of Hindustan Thompson
Associates, Mr. Ghosal, about Indian advertising is interesting. He said,
"Advertising is absolutely essential. Unless a product sells, the investment
made in the project is rendered infructuous. But the trouble with Indian
advertising is that it is not rooted in our ethos. It is westernized, partly
because most of our advertising is aimed at the urban consumer. But there
should be a mix, so that advertising can sell and yet retain the Indian
flavor".
Or advertising in the last couple of decades has made much progress in
terms of technical excellence, copy and graphics. However, progress in the
area of relating to the customers is slow. There is a definite trend, both in
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audio-visual and print ads, to use appeals that are compatible with Indian
Culture.
Advertising in the 21st Century:
The past decade has witnessed a remarkable impact on advertising due to
rapid strides in technology. It is difficult to determine exactly what the
coming decades in this new century will bring, however, what looks certain
is that there will be much greater consumer involvement and control and
some degree of two-way communication. With the opening up of economies,
mass marketers will continue to increase their operations on a world wide
basis. More and more global players will increasingly adjust their strategies
to a local market; country-based or region-based; and advertising will
increasingly acquire a local colour. In this regard we are already witnessing
some interesting advertising campaigns by Coca-Cola and Pepsi.
Further progress in artificial intelligence will add a totally new dimension to
advertising and its planning. There will be major career opportunities for
talented people in the electronic media. There will be a number of
challenges unique to the coming generations and with these challenges there
will be opportunities, responsibilities, and rewards that advertises of the past
could not have imagined.
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STRATEGIC ADVERTISING DECISIONS
Setting Advertising Objectives:
The advertising objectives are determines on the following basis:
Message About Product ? Details about the product play a prominent role in
advertising for new and existing products. In fact, a very large percentage of
product-oriented advertising includes some mention of features and benefits
offered by the marketers product. Advertising can be used to inform
customers of changes that take place in existing products. For instance, if a
beverage company has purchased the brands of another company resulting in
a brand name change, an advertising message may stress "New Name but
Same Great Taste".
Message About Price ? Companies that regularly engage in price
adjustments, such as running short term sales (i.e., price markdown), can use
advertising to let the market know of price reductions. Alternatively,
advertising can be used to encourage customers to purchase now before a
scheduled price increase takes place.
Message About Other Promotions ? Advertising often works hand-in-hand
with other promotional mix items. For instance, special sales promotions,
such as contests, may be announced within an advertisement. Also,
advertising can help salespeople gain access to new accounts if the
advertising precedes the salespersons attempt to gain an appointment with a
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prospective buyer. This may be especially effective for a company entering a
new market where advertising may help reduce the uncertainty a buyer has
about a new company.
Message About Distribution ? Within distribution channels, advertising can
help expand channel options for a marketer by making distributors aware of
the marketers offerings. Also, advertising can be used to let customers know
locations where a product can be purchased.
Setting the Advertising Budget
Setting an advertising objective is easy, but achieving the objective requires a well-
thought out strategy. One key factor affecting the strategy used to achieve
advertising objectives is how much money an organization has to spend. The funds
designated for advertising make up the advertising budget and it reflects the amount
an organization is willing (i.e., approved by high-level management) to commit to
achieve its advertising objectives.
Organizations use several methods for determining advertising budgets including:
Percentage of Sales ? Under this approach advertising spending is set based
on either a percentage of previous sales or a percentage of forecasted sales.
For example, an organization may set next years advertising budget at 10%
of this years sales level. One problem with this approach is that the budget is
based on what has already happened and not what is expected to occur. If the
overall market grows rapidly in the following year, the 10% level from the
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previous year may be well below what is necessary for the company to
maintain or increase its market share. Alternatively, companies may consider
allocating advertising funds based on a percentage of forecasted sales. In this
way advertising is viewed as a driver of future sales and spending on
advertising is linked directly to meeting future sales forecasts. However,
since future sales are not guaranteed, the actual percentage spent may be
considerably higher than expected if the sales forecast is greater than what
actually occurs.
What is Affordable ? Many smaller companies find spending of any kind to
be constraining. In this situation, advertising may be just one of several
tightly allocated spending areas and, thus, the level spent on advertising may
vary over time. For these companies, advertising may only occur when extra
funds are available.
Best Guess ? Companies entering new markets often lack knowledge of how
much advertising is needed to achieve their objectives. In cases where the
market is not well understood, marketers may rely on their best judgment
(i.e., executives experience) of what the advertising budget should be.
Selecting Media Outlets
With an objective and a budget in place, the advertising campaign will next need to
focus on developing the message. However, before effort is placed in developing a
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message the marketer must first determine which media outlets will be used to
deliver their message since the choice of media outlets guides the type of message
that can be created and how frequently the message will be delivered.
An advertising message can be delivered via a large number of media outlets.
These range from traditional outlets, such as print publications, radio and television,
to newly emerging outlets, such as the Internet and mobile devices. However, each
media outlet possess different characteristics and, thus, offer marketers different
advantages and disadvantages.
The characteristics by which different media outlets can be assessed include the
following seven factors:
1. Creative Options
2. Creative Cost
3. Media Market Reach
4. Message Placement Cost
5. Length of Exposure
6. Advertising Clutter
7. Response Tracking
Creative Options
An advertisement has the potential to appeal to four senses ? sight, sound, smell and
touch. (It should be noted that promotion can also appeal to the sense of taste but
generally these efforts generally fall under the category of sales promotion which
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we will discuss in a later tutorial.) However, not all advertising media have the
ability to deliver multi-sensory messages. Traditional radio, for example, is limited
to delivering audio messages while roadside billboards offer only visual appeal.
Additionally, some media may place limits on when particular options can be used.
For instance, some search engines or websites may only accept graphical-style ads,
such as images, if these conform to certain large dimensions and limit small
advertising to text-only ads.
Creative Cost
The media type chosen to deliver a marketers message also impacts the cost of
creating the message. For media outlets that deliver a multi-sensory experience
(e.g., television and Internet for sight and sound; print publications for sight, touch
and smell) creative cost can be significantly higher than for media targeting a single
sensory experience. But creative costs are also affected by the expectation of
quality for the media that delivers the message. In fact, media outlets may set
minimal production standards for advertisements and reject ads that do not meet
these standards. Television networks, for example, may set high production quality
levels for advertisements they deliver. Achieving these standards requires
expensive equipment and high cost labor, which may not be feasible for small
businesses. Conversely, creating a simple text only Internet advertisement requires
very little cost that almost anyone is capable of creating.
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Media Market Reach
The number of customers exposed to a single promotional effort within a target
market is considered the reach of a promotion. Some forms of advertising, such as
television advertising, offer an extensive reach, while a single roadside billboard on
a lightly traveled road offers very limited reach.
Market reach can be measured along two dimensions: 1) channels served and, 2)
geographic scope of a media outlet.
Channels Served - This dimension relates to whether a media outlet is
effective in reaching the members within the marketers channel of
distribution. Channels can be classified as:
o Consumer Channel ? Does the media outlet reach the final consumer
market targeted by the marketer?
o Trade Channel ? Does the media outlet reach a marketers channel
partners who help distribute their product?
o Business-to-Business ? Does the media outlet reach customers in the
business market targeted by the marketer?
Geographic Scope ? This dimension defines the geographic breadth of the
channels served and includes:
o International ? Does the media outlet have multi-country
distribution?
o National ? Does the media outlet cover an entire country?
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o Regional ? Does the media outlet have distribution across multiple
geographic regions such as counties, states, provinces, territories, etc.?
o Local ? Does the media outlet primarily serve a limited geographic
area?
o Individual ? Does the media outlet offer individual customer
targeting?
Message Placement Cost
Creative development is one of two major spending considerations for advertising.
The other cost is for media placement; the purchase of ad time, space or location
with media outlets that deliver the message. Advertising placement costs vary
widely from very small amounts for certain online advertisements to exorbitant fees
for advertising on major television programs. For example, in the United States the
highest cost for advertising placement occurs with television ads shown during the
National Football Leagues Super Bowl championship game where ad rates for a
single 30-second advertisement exceed (US) $2.5 million. By contrast, ads placed
through online search engines may cost less than (US) $1 dollar.
Media outlets set placement cost using several factors though the most important
are determined by audience size, audience type and an advertisements production
characteristics:
Audience Size ? Refers to the number of people who experience the media
outlet during a particular time period. For example, for television outlets
audience size is measured in terms of number of program viewers, for print
publications audience is measured by number of readers, and for websites
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audience is measured by number of visitors. In general, the more people
experiencing a media outlet, the more the outlet can charge for ads.
However, actual measurement of the popularity of media outlets is
complicated by many factors to the point where the media outlets are rarely
trusted to give accurate figures reflecting their audience. Today nearly all
media outlets rely on third-party audit organizations to measure audiences
and most marketers rely on these auditors to determine whether the cost of
placement is justified given the audited audience size.
Audience Type ? As we have discussed many times in the Principles of
Marketing tutorial, the key to marketing is aligning marketing decisions to
satisfy the needs of a target market. A well-defined target market is critical to
successful marketing and vital to a successful advertising campaign. When
choosing a media outlet, selection is evaluated based on the outlets customer
profile (i.e., viewers, readers, website visitors) and whether these match the
characteristics sought by the marketers desired target market. The more
selectively targeted the audience, the more valuable this audience is to
advertisers since with targeted advertising promotional funds are being spent
on those with the highest potential to respond to the advertisers message.
The result is that media outlets, whose audience shares very similar
characteristics (e.g., age, education level, political views, etc.), are in a
position to charge higher advertising rates than media outlets that do not
appeal to such a targeted group.
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Characteristics of the Advertisement ? Media outlet also charge different
rates based on creative characteristics of the message. Characteristics that
create ad rate differences include:
o Run Time (e.g., length of television or radio ads )
o Size (e.g., print ads size, billboard size)
o Print Style (e.g., black-and-white vs. color)
o Location in Media (e.g., back magazine cover vs. inside pages)
Length of Exposure
Some products require customers be exposed to just a little bit of information in
order to build customer interest. For example, the features and benefits of a new
snack food can be explained in a short period of time using television or radio
commercials. However, complicated products need to present more information for
customers to fully understand the product. Consequently, advertisers of these
products well seek media formats that allot more time to deliver the message.
Media outlets vary in how much exposure they offer to their audience. Magazines
and other publications provide opportunities for longer exposure times since these
media types can be retained by the audience (i.e., keep old magazines) while
exposure on television and radio are generally limited to the time the ad was
broadcast.
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Advertising Clutter
In order to increase revenue, media outlets often include a large number of ads
within a certain time, space or location. For instance, television programs may
contain many ads inserted during the scheduled run-time of a program. A large
number of advertisements create an environment of advertising clutter, which
makes it difficult for viewers to recognize and remember particular advertisements.
To break through the clutter advertisers may be required to increase the frequency
of their advertising efforts (i.e., run more ads). Yet greater advertising frequency
increases advertising expense. Alternatively, advertisers may seek opportunities
that offer less clutter where an ad has a better chance of standing out from others.
This can be seen with online downloads (e.g., podcasts) of sports and news
programming where a 5-10 minute story will be presented with a single 30-60
second ad.
Response Tracking
As we noted in Part 13: Advertising, marketers are embracing new technologies that
make it easier to track audience response to advertisements. Newer media
developed using Internet technology offer effective methods for tracking audience
response compared to traditional media. But Internet-media are not alone in
providing response tracking. Other advertising outlets, such as advertising by mail
and television infomercial programming, also provide useful measures of audience
reaction.
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Type of Media Outlets
While just a few years ago marketers needed to be aware of only a few media
outlets, todays marketers must be well-versed in a wide range of media options.
The reason for the growing number of media outlets lies with advances in
communication technology, in particular, the Internet. As we discussed in the
Advertising Trends section in Part 13, the number of media outlets will continue to
grow as new technologies emerge.
Next we provide an overview of 10 leading media outlets:
1. Television
2. Radio
3. Print Publications
4. Internet
5. DirectMail
6. Signage
7. Product Placement
8. MobileDevices
9. Sponsorships
10. Others
Television Advertising
Television advertising offers the benefit of reaching large numbers in a single
exposure. Yet because it is a mass medium capable of being seen by nearly anyone,
television lacks the ability to deliver an advertisement to highly targeted customers
compared to other media outlets. Television networks are attempting to improve
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their targeting efforts. In particular, networks operating in the pay-to-access arena,
such as those with channels on cable and satellite television, are introducing more
narrowly themed programming (i.e., TV shows geared to specific interest groups)
designed to appeal to selective audiences. However, television remains an option
that is best for products that targeted to a broad market.
The geographic scope of television advertising ranges from advertising within a
localized geographic area using fee-based services, such as cable and fiber optic
services, to national coverage using broadcast programming.
Television advertising, once viewed as the pillar of advertising media outlets, is
facing numerous challenges from alternative media (e.g., Internet) and the invasion
of technology devices, such as digital video recorders (see more in the Advertising
Trends section in Part 13: Advertising), that have empowered customers to be more
selective on the advertisements they view. Additionally, television lacks effective
response tracking which has led many marketers to investigate other media that
offer stronger tracking options.
Radio Advertising
Promotion through radio has been a viable advertising option for over 80 years.
Radio advertising is mostly local to the broadcast range of a radio station, however,
at least three options exist that offer national and potentially international coverage.
First, in many countries there are radio networks that use many geographically
distinct stations to broadcast simultaneously. In the United States such networks as
Disney (childrens programming) and ESPN (sports programming) broadcast
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nationally either through a group of company-owned stations or through a
syndication arrangement (i.e., business agreement) with partner stations. Second,
within the last few years the emergence of radio programming delivered via satellite
has become an option for national advertising. Finally, the potential for national
and international advertising may become more attractive as radio stations allow
their signals to be broadcast over the Internet.
In many ways radio suffers the same problems as television, namely, a mass
medium that is not highly targeted and offers little opportunity to track responses.
But unlike television, radio presents the additional disadvantage of limiting
advertisers to audio-only advertising. For some products advertising without visual
support is not effective.
Print Publication Advertising
Print publications such as magazines, newspapers and Special Issue publications
offer advertising opportunities at all geographic levels. Magazines, especially those
that target specific niche or specialized interest areas, are more narrowly targeted
compared to broadcast media. Additionally, magazines offer the option of allowing
marketers to present their message using high quality imagery (e.g., full color) and
can also offer touch and scent experiences (e.g., perfume). Newspapers have also
incorporated color advertisements, though their main advantage rests with their
ability to target local markets. Special Issue publications can offer very selective
targeting since these often focus on an extremely narrow topics (e.g., auto buying
guide, tour guides, college and university ratings, etc.).
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Internet Advertising
The fastest growing media outlet for advertising is the Internet. Compared to
spending in other media, the rate of spending for Internet advertising is
experiencing tremendous growth. However, total spending for Internet advertising
remains relatively small compared to other media. Yet, while Internet advertising is
still a small player, its influence continues to expand and each year more major
marketers shift a larger portion of their promotional budget to this medium. Two
key reasons for this shift rest with the Internets ability to: 1) narrowly target an
advertising message and, 2) track user response to the advertisers message.
The Internet offers many advertising options with messages delivered through
websites or by email.
Website Advertising - Advertising tied to a users visit to a website accounts
for the largest spending on Internet advertising. For marketers, website
advertising offers many options in terms of:
o Creative Types ? Internet advertising allows for a large variety of
creative types including text-only, image-only, multimedia (e.g., video)
and advanced interactive (e.g., advertisement in the form of online
games).
o Size ? In addition to a large number of creative types, Internet
advertisements can be delivered in a number of different sizes
(measured in screen pixels) ranging from full screen to small square
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ads that are only a few pixels in size. The most popular Internet ad
sizes include banner ads (468 x 60 pixels), leaderboard (728 x 90
pixels) and skyscraper (160 x 600 pixels).
o Placement ? The delivery of an Internet advertisement can occur in
many ways including fixed placement in a certain website location
(e.g., top of page), processed placement where the ad is delivered based
on user characteristics (e.g., entry of words in a search box, recognition
of user via Internet tracking cookies), or on a separate webpage where
the user may not see the ad until they leave a site or close their browser
(e.g., pop-under).
o Delivery ? When it comes to placing advertisements on websites
marketers can, in some cases, negotiate with websites directly to place
an ad on the site or marketers can place ads via a third-party advertising
network, which has agreements to place ads on a large number of
partner websites.
Email Advertising ? Using email to deliver an advertisement affords
marketers the advantage of low distribution cost and potentially high reach.
In situations where the marketer possesses a highly targeted list, response
rates to email advertisements may be quite high. This is especially true if
those on the list have agreed to receive email, a process known as "opt-in"
marketing. Email advertisement can take the form of a regular email message
or be presented within the context of more detailed content, such as an
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electronic newsletter. Delivery to a users email address can be viewed as
either plain text or can look more like a website using web coding (i.e.,
HTML). However, as most people are aware, there is significant downside to
email advertising due to highly publicized issues related to abuse (i.e., spam).
Direct Mail
This method of advertising uses postal and other delivery services to ship
advertising materials, including postcards, letters, brochures, catalogs and flyers, to
a physical address of targeted customers. Direct mail is most effective when it is
designed in a way that makes it appear to be special to the customer. For instance, a
marketer using direct mail can personalize mailings by including a message
recipients name on the address label or by inserting their name within the content
of marketers message.
Direct mail can be a very cost-effective method of advertising, especially if
mailings contain printed material. This is due to cost advantages obtained by
printing in high volume since the majority of printing costs are realized when a
printing machine is initially setup to run a print job and not the because of the
quantity of material printed. Consequently, the total cost of printing 50,000
postcards is only slightly higher than printing 20,000 postcards but when the total
cost is divided by the number of cards printed the cost per-card drops dramatically
as more pieces are printed. Obviously there are other costs involved in direct mail,
primarily postage expense.
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While direct mail can be seen as offering the benefit of a low cost-per-contact, the
actual cost-per-impression can be quite high as large numbers of customers may
discard the mailing before reading. This has led many to refer to direct mail as
"junk mail" and due to the name some marketers view the approach as ineffective.
However, direct mail, when well-targeted, can be an extremely effective
promotional tool.
Signage and Billboards
The use of signs to communicate a marketers message places advertising in
geographically identified areas in order to capture customer attention. The most
obvious method of using signs is through billboards, which are generally located in
high traffic areas. Outdoor billboards come in many sizes, though the most well-
known are large structures located near transportation points intending to attract the
interest of people traveling on roads or public transportation. Indoor billboards are
often smaller than outdoor billboards and are designed to attract the attention of foot
traffic (i.e., those moving past the sign). For example, smaller signage in airports,
train terminals and large commercial office space fit this category.
While billboards are the most obvious example of signage advertising, there are
many other forms of signage advertising include:
Sky writing where airplanes use special chemicals to form words
Plane banners where large signs are pulled behind an airplane
Mobile billboards where signs are placed on vehicles, such as buses and
cars, or even carried by people
Plastic bags used to protect newspapers delivered to homes
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Advertisements attached to grocery carts
Product Placement Advertising
Product placement is an advertising approach that intentionally inserts products into
entertainment programs such as movies, TV programs and video games.
Placement can take several forms including:
visual imagery in which the product appears within the entertainment
program
actual product use by an actor in the program
words spoken by an actor that include the product name
Product placement is gaining acceptance among a growing number of marketers for
two main reasons. First, in most cases the placement is subtle so as not to divert
significant attention from the main content of the program or media outlet. This
approach may lead the audience to believe the product was selected for inclusion by
program producers and not by the marketer. This may heighten the credibility of
the product in the minds of the audience since their perception, whether accurate or
not, is that product was selected by an unbiased third-party. Second, as we discuss
in Part 13: Advertising, entertainment programming, such as television, is
converging with other media, particularly the Internet. In the future a viewer of a
television program may be able to easily request information for products that
appear in a program by simply pointing to the product on the screen. With the
information they may get the option to purchase the product. As this technology
emerges it is expected that product placement opportunities will become a powerful
promotional option for many marketers.
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Mobile Device Advertising
Handheld devices, such as cellphones, personal digital assistants (PDAs) and other
wireless devices, make up the growing mobile device market. Such devices allow
customers to stay informed, gather information and communicate with others
without being tied to a physical location. While the mobile device market is only
beginning to become a viable advertising medium, it may soon offer significant
opportunity for marketers to reach customers at anytime and anyplace.
Also, with geographic positioning features included in newer mobile devices, the
medium has the potential to provide marketers with the ability to target customers
based on their geographic location. Currently, the most popular advertising
delivery method to mobile devices is through plain text messaging, however, over
the next few years multimedia advertisements are expected to become the dominant
message format.
Sponsorships
A subtle method of advertising is an approach in which marketers pay, or offer
resources and services, for the purpose of being seen as a supporter of an
organizations event, program or product offering (e.g., section of a website).
Sponsorships are intended not to be viewed a blatant advertisement and in this way
may be appealing for marketers looking to establish credibility with a particular
target market. However, many sponsorship options lack the ability to tie spending
directly to customer response. Additionally, the visibility of the sponsorship may
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be limited to relatively small mentions especially if the marketer is sharing
sponsorship with many other organizations.
Others
While the nine media outlets discussed above represent the overwhelming majority
of advertising methods, there are several more including:
advertising using telephone recordings (e.g., political candidates messages)
advertising via fax machine (though there may be certain legal issues with
this method)
advertising through inserted material in product packaging (e.g., inside
credit card bill)
advertising imprinted on retail receipts (e.g., grocery store, cash machine)
Creating a Message
In our discussion of the communication process in Part 12: Marketing
Communication, effective communication requires the message source to create
(encoding) a message that can be interpreted (decoding) by the intended message
receiver. In advertising, the act of creating a message is often considered the
creative aspect of carrying out an advertising campaign. And because it is a
creative process, the number of different ways a message can be generated is
limited only by the imagination of those responsible for developing the message.
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When creating an advertising message the marketer must consider such issues as:
General Message Factors
Message Structure
Message Testing
General Message Factors
When developing the message the marketer must take into consideration several
factors including:
Characteristics of the Target Audience ? The makeup of the target audience
(e.g., age, location, attitudes, etc.) impacts what is conveyed in the message.
Type of Media Used ? The media outlet (e.g., television, print, Internet, etc.)
used to deliver the message impacts the way a message will be created.
Product Factors ? Products that are highly complex require a different
message than simpler products. Additionally, the target markets familiarity
with a product affects what is contained in a message. For instance, a new
product attempting to gain awareness in the market will have a message that
is much different than a product that is well-known.
Overall Advertising Objective ? As mentioned, the objective of the
advertising campaign can affect the type of ad that is designed. For example,
an advertisement with the objective of stimulating immediate sales for an
existing product will be different than an advertisement that seeks to build
initial awareness of a new product.
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Message Structure
Most advertising messages share common components within the message
including:
The Appeal ? This refers to the underlying idea that captures the attention of
a message receiver. Appeals can fall into such categories as emotional,
fearful, humorous, and sexual.
Value Proposition ? The advertising message often contains a reason for
customers to be interested in the product which often means the ad will
emphasize the benefits obtained from using the product.
Slogan ? To help position the product in customers mind and distinguish it
from competitors offerings, advertisements will contain a word or phrase
that is repeated across several different messages and different media outlets.
Message Testing
Before choosing a specific message marketers running large advertising campaigns
will want to have confidence in their message by having potential members of the
targeted audience provide feedback. The most popular method of testing
advertising for the marketer (or their ad agency) is to conduct focus groups where
several advertising messages are presented. On the Internet, advertising delivery
technology allows for testing of ads by randomly exposing website visitors to
different ads and then measuring their response.
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Evaluating Campaign Results
The final step in an advertising campaign is to measure the results of carrying out
the campaign. In most cases the results measured relate directly to the objectives
the marketer is seeking to achieve with the campaign. Consequently, whether a
campaign is judged successful is not always tied to whether product sales have
increased since the beginning of the campaign. In some cases, such as when the
objective is to build awareness, a successful campaign may be measured in terms of
how many people are now aware of the product.
In order to evaluate an advertising campaign it is necessary for two measures to take
place. First, there must be a pre-campaign or pre-test measure that evaluates
conditions prior to campaign implementation. For instance, prior to an advertising
campaign for Product X a random survey may be undertaken of customers within a
target market to see what percentage are aware of Product X. Once the campaign
has run, a second, post-campaign or post-test measure is undertaken to see if there is
an increase in awareness. Such pre and post testing can be done no matter what the
objective including measuring the campaigns impact on total product sales.
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UNIT ? IV
Chapter Objectives:
When you have completed this chapter you should be able to;
Understand what is advertising effectiveness
Appreciate measurement of advertising effectiveness
Explain the evolution of global marketing
Discuss the approaches to international advertising
Summarize how international management affects international advertising
List the special problems international advertisers face
Describe an IMC campaign and explain why it is more complex than
traditional advertising
Outline the structure of an IMC campaign plan
Explain the purpose of evaluating a campaign
MEASURING ADVERTISING EFFECTIVENESS: INTRODUCTION
Advertising may be extensive but ineffective in its approach. An
unnecessarily large amount is sometimes spent without any reward. An improper
display may tarnish the image of the product.
An advertising measurement is adopted both before and after an advertising
campaign is launched. After a campaign has been launched, it is essential to know
how far the advertising plans, strategies and programmes are successful in
achieving the objectives so that they may be modified and redesigned for better
performance if needed. This process is known as measuring the advertising
effectiveness. There are several questions which are to be answered by advertising
measurements. For example, How far was the campaign successful? Why was it not
successful? What were the reasons for not attaining the objectives?
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OBJECTIVES OF MEASURING ADVERTISING EFFECTIVENESS:
Some advertisers do not bother to measure advertising effectiveness. They
expect that the sales will ultimately increase by reason of advertising. But, recently,
problems and difficulties have compelled them to measure advertising
effectiveness. The producers also adopt a measuring device because they incur a
sizeable amount of expenditure on advertising. The effectiveness of media and
message are also assessed for their use in future.
The results of same amount of advertising budget vary for several reasons.
Only through the measuring of advertising effectiveness the success of a particular
campaign can be known. Various measuring techniques have been developed to
measure effectiveness at every stage to isolate the effects of advertising from those
of other promotional and marketing activities. The copy, media and other
advertising components have been tested. The factors like readership, consumer
opinion, belief or disbelief, recall, attention, comprehension, attitude, etc are taken
into consideration for measuring effectiveness. Positive relationships are established
between these factors and sales. The best read and highly rated advertisements are
determined by consumers under an advertising research programme. There are
different methods of measuring audience response.
MEASURING SALES AND COMMUNICATION PERFORMANCE
Two important aspects of measurements, viz., sales and communication
objectives are measured to judge the advertising effectiveness.
Sales Measurement:
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Where advertising is the predominant contributor to sales, the sales response
is immediate and when internal and external factors affecting sales are held constant
or are ineffective. Measuring effectiveness in terms of sales only is not very logical
or scientific as advertising is not the only contributory factor to sales. A non-linear
relationship exists between advertising and sales. The advertising effect is not
always immediate. There are the adverse effects of competition too. While
measuring the advertising with the yardstick of sales the measurement of
advertising effectiveness becomes easy if the controllable and uncontrollable factors
are taken as constant.
Measurement of Communication effects:
Advertising is basically a communication process. The effectiveness of
advertising can be measured by how much the communication process has been
useful in motivating consumers. The communication objectives, i.e., establishing
brand awareness, improving recall, increasing brand recognition, bringing about an
attitude change, etc., can be measured because these are realistic. Advertising
effectiveness is measured by its direct and immediate impact on consumer
behaviour.
The measurement of objectives in terms of sales is not scientific. The
measurement of attitude is not logical. If image building is the objective of
advertising, its effectiveness should be measured in terms of image building and not
in terms of sales or in terms of the attainment of any other communication
objectives.
WHEN TO MEASURE?
The measurement of advertising effectiveness can be done at any time from
planning stage to final stage. If advertising is tested before it is run, it is known as
pre-testing. It helps to develop more effective communication and exercises control
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over costs. The effectiveness of advertising activities is generally examined when
the campaign has been run and advertising functions have been performed. This is
known as post-testing because the effectiveness is measured after the final stage of
the campaign has been reached. The advertising effectiveness can also be tested
when the campaign is under way with a view to modifying it, if necessary. While
adopting a particular test, the cost of testing should be borne in mind.
Pre-testing is adopted to measure the effectiveness and accuracy of an
advertising plan before its implementation. Post-testing is done after the
advertising activities have been completed to examine the effectiveness of these
advertising activities. A mid-test involves a test before the completion of
advertising functions and after the implementation of the advertising plan.
METHODS OF MEASUREMENTS
There are two methods of measuring advertising effectiveness, viz,,
experimental method and survey method. Under experimental method, consumers
are given a controlled exposure to the message and the effects are measured on the
basis of the change in opinion or attitude. A base line is observed with the use of a
control group not exposed to the advertising campaign.
The results of the exposure in almost all the situations are recorded. The
alternative effects of each exposure are considered for comparison and with a view
to establishing a relationship between the exposure and the effects. Field
experiments are conducted to measure the effects of mass communication. Sample
surveys or interviews or questionnaires are used to obtain information about
people's exposure to the advertising campaign. The effectiveness is evaluated on the
basis of the correlations between the exposure and the attitude or action.
Pre testing methods
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Pre-testing is preferred because it enables one to know how effective an
advertisement is likely to be, before spending the budget and adopting advertising
actions. The advertiser should use only those messages and media which prove to
be the strongest in producing the desired results. It is important to adopt corrective
methods against mistakes. Pre-testing may be of the following types:-
consumer jury,
storyboard tests,
laboratory tests,
tachistoscope,
psychogalvanometer,
eye camera,
pupil dilation,
attitude test, and
Depth interviewing.
Consumer Jury
Consumer reaction has greater validity than the reactions of non-consumers.
Consumers can provide true information on reaction to an advertising campaign.
Others may underestimate or overestimate the reactions. The copy, illustrations,
filming techniques, layout, etc. can be properly evaluated by the consumers
concerned with the product. The consumer jury technique is adopted for print
media, broadcast media and direct mail.
Print Media: The consumers selected may be asked either to evaluate an
advertisement or rate two or more advertisements. Each respondent is asked to
express his preference for each advertisement. The most common method is to
insert a questionnaire in the advertisement and request the readers to indicate their
preferences. Copywriters test their creations on consumers. Some newspaper
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advertisers invite consumers their office and invite their reaction to the advertising
copy or copies of magazines are sent to some consumers to find out their reactions.
The reactions of consumers are evaluated and any inconsistency in advertising is
removed.
The major advantage is that they separate out the weak advertisements from
the strong at a low cost and high speed. The actual consumers may suggest
improvements and modifications. Only conscious ratings are evaluated. Reply to the
questions in a very conscious manner may not give a correct impression of
advertisements.
Broadcast Media: Consumers are asked to come to the television studio where they
are shown different television programmes for final consideration. Sometimes, the
television advertisement messages are pre-examined in different localities.
Direct mail test: The direct mail test is used through the mail. The post cards
containing copy appeal, each with a reply-paid card, is sent free-of-cost to
consumers, who are required to give their evaluation.
Storyboard Tests: The storyboard prepared for television advertising is tested
before it is used. The storyboard pictures are transferred to a film strip and the audio
section onto a tape. Vision and sound are synchronized and shown to an audience
for evaluation. This test uncovers the unnecessary part. The important part of
advertising is accepted for telecasting. The anteroom trailer method is used to test
the commercial. The anteroom contains magazines, newspapers, distractions and
television recorded programmes.
Laboratory Tests: The respondents are placed in laboratory situations and are
asked to explain the measurements regarding the effectiveness of the advertisement.
Laboratory conditions offer a controlled environment that excludes the variables
which may invalidate the test. It is used to measure awareness, attention, desire,
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retention, etc. For example, the respondents are taken to a theatre, mock-up
supermarkets or some other place for experimental purposes.
Tachistoscope: It is a projector that can project objects on to a screen at rates so
fast that the viewer cannot detect the message. It is slowed down to a level where
the message can be perceived easily. The respondents should understand and
appreciate the message, interesting words, slogans, headlines, etc. They can be
easily segregated from the less interesting message.
Psychogalvanometer: It is a mechanical device that measures the amount of
perspiration. It measures a respondent's reactions to new records and slogans.
Electrodes are attached to his palms to detect changes in electrical resistance arising
from perspiration. If the machine registers lower electrical resistance it is the
existence of tension. The main objective is to attract attention to the product which
is reflected by the galvanic skin response. But it should not be concluded that
greater tension reflects the greater success of the advertisement.
Eye Camera: The eye movements are recorded by a video camera. It records the
activity of the eye by is movements. The audience is asked to look at a series of
pictures on a screen but unaware that their eye actions are being photographed. It
shows what the respondent sees. If a commercial is interesting and if he is attracted
by it, his eyes will be fixed on that. The respondents may be asked some questions
about the advertisement.
Pupil Dilation: The size of the pupil changes as people see different things. The
change follows different advertising stimuli. It becomes wider as greater interest is
aroused. The pupil shrinks if the eye is not interested. A pupilometer records the
dilation which is involuntary and measures the interest shown by the respondent.
Attitude Test: The attitude is closely related to advertising effectiveness.
Respondents are asked to give answers to the questions on a seven-point bipolar
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scale about their feelings about a particular advertisement. The semantic differential
rating scale has been used extensively to measure advertising effectiveness. If the
attitudes of potential customers are changed toward the products, the advertisement
is considered effective. The attitude of potential customers or respondents can be
measured accurately on the attitude scale. This scale measures the position of the
consumers' attitudes on a continuum, varying from favourable at one end and to
unfavourable at the other end. This test is applied before the use of the advertising
media, message and campaign to find out how far they would influence consumer
attitudes.
Depth Interviewing: It is concerned with getting the respondent to react freely to
the brand, organisation and product. By suitable questions, the interviewer brings
out his unconscious reactions to the surface. The reactions are noted to bring out the
facts. Depth interviewing involves non-structured questions. The flexibility and
intelligence of the interviewer identify the significant points made in the interview
and achieve meaningful and valid results. This technique is useful for exploratory
research, for ideas and suggestions.
POST-TESTING METHODS
It is applied after the advertisement has ended to find out how far
advertising has been successful. The objective of advertising is to arouse consumer
awareness, his interest, desire and develop his attitude to the product. These are
recognition tests, recall tests, attitude change, sales and recognition tests
Recognition test: It is developed by Danial Starch. It measures the readership of
printed advertisements. It is also called the readership test. It is based on the
assumption that there is a high correlation between the reading of the advertisement
and the purchase of the product. A particular advertisement may be examined by
sending the whole newspaper or magazine wherein it is published. Afterwards
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readers are approached to find out whether they have read the advertisements or not.
The percentage of readership who have seen the advertisement and remember it,
who recall seeing or reading any part of it, identifying the product and brand, and
who reported reading at least one half of the advertisement is calculated. The
relationship between readers per rupee and the median readers per rupee can be
established. The advantage is that it measures something which has been realized
under normal conditions. The recognition tests show the importance of each type of
advertisement on the basis of the readership test. This is an uncontrolled interview
and suffers from the problems of uncontrolled techniques of examination.
Recall Tests
A recall test depends on the memory of the respondents. This test is applied
to measure the impression made by an advertisement on the reader's mind. It is
classified into two types ? aided recall and unaided recall. Some have combined the
two and made it a combined recall test.
(i) Aided Recall: It is used to measure the reading memory of magazine advertising
impressions. It is necessary to use a large sample size for statistical reliability. The
aided test measures television advertising. The interviewer may approach the
respondents over the telephone or in person to find out something about their recall
of the commercial. A radio advertisement may be given the aided recall test
followed by an unaided question. For example: "What products have been
advertised during the last two days?" Then the recall aid is provided by asking:
'Have you heard the advertisements of brand X? "The recall test may be
administered immediately or two or three days after the exposure.
(ii) Unaided Recall: Under this method, little or no aid is given. The purpose is to
measure the penetration of the advertisement. Respondents are asked whether the
advertisements included a particular picture or message. The name of the product is
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not given to the audience. They have to recall it themselves. If they do remember, it
is established that there was some impact of the advertisement.
(iii) Combined Recall Tests: It includes aided as well as unaided recall tests. This
test was developed by Gallup and Robinson. Respondents are asked whether they
have read the magazine or newspaper, or listened to the radio or watched television.
This technique involves following steps.
1. The respondents should recall and describe correctly at least one editorial
feature in the magazine or newspaper.
2. They are handed a group of cards on which are printed the names of brands-
advertised in the issue. They are asked which of the brands were advertised
in that issue.
3. The respondents are questioned in depth to evaluate the accuracy of their
recall.
4. A copy of the magazine is given to the respondents. They are asked whether
they have seen the advertisement: for the first time or seen it a second or
third time. The reply that they have seen it a second time or more often is
discarded from the recall test because they are included under the Proven
Name Registration (PNR).
The information on age, sex, education, occupation, etc. may establish a
relationship between these factors and recall. This method measures the recall of
qualified readers to assess the depth of penetration achieved by the advertised
message.
The limitation of the test is the heavy cost involved in the study. It is
affected by the variation in human memory. The audience may recall because it has
seen the previous advertisements of the product.
Attitude Change
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There are several techniques for the measurement of attitude change after
the advertising has ended. These techniques are as follows:
Semantic differential,
Likert scale,
Ranking techniques and
Projective technique.
(i) Semantic Differential: It is used to measure attitude in the field of marketing
and advertising research. It uses a bi-polar (opposite) adjective statement about the
subject of evaluation. The attitude is measured in the light of some objectives. The
two-way scale is used for the purpose. The neutral is mid-point, while the three
points on both the sides of the neutral point, on the same scale, provide the degree
of favourable and unfavourable characteristics. The semantic differential is
illustrated below.
SEMANTIC DIFFERENTIALS
Known ------------------------------------------------------------------------------- unknown
Informative.------------------------------------------------------------------. Un informative
Realistic-----------------------------------------------------------------------------Unrealistic
Persuasive ---------------------------------------------------------------------Not persuasive
Instructive -------------------------------------------------------------------------Destructive
Effective ---------------------------------------------------------------------------Ineffective
Useless-----------------------------------------------------------------------------------Useful
The above points are merely illustrative. Depending upon the characteristics
and features of an advertisement more number of points may also be used.
(ii) The Likert Scale: The Likert scale is used to measure audience attitude to
advertisements. A series of statements are described to measure the attributes of the
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advertisement. Only the relevant statements are used for the purpose. Each
statement is measured on a five-point scale. It is being illustrated as follows:
THE LIKERT SCALE
Particulars
Strongly
Agree
Uncertain Disagree Strongly
agree
disagree
Radio advertising has been
heard by a majority of the
population.
Nirma
Advertisement
appealed to people who
have accepted it.
Repetition of advertisement
has reminded people about
the product
(iii) Ranking techniques: The preferences to several types of advertisements are
ranked to find out the place of a particular advertisement among the several
advertisements. An advertisement of one product can be measured with the
advertisements of other products taken together. This is done to find out the
effectiveness of the advertisement in a competitive atmosphere. The winner may be
given rank 1 and loser is given rank 5. The ranking is based on awareness, interest,
attitude change, attractiveness, usefulness, entertaining respect, effectiveness, etc. A
sufficient number of consumers are selected for a sample survey. The overall rank is
summed up to determine the final rank of the advertisement of the brand.
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(iv) Projective Techniques: It is used to measure attitude change. Association
techniques, completion techniques, construction techniques and expressive
techniques are used to measure the change in attitude.
Sales Test
It is designed to evaluate the effects of advertising on the purchase
behaviour of the consumer. It is successfully applied to examine the consumer
behaviour to advertisements of consumption goods. Sales are effected after creating
an image of and interest in, the product. With the help of sales audit and audience
response, it is possible to evaluate the effects of advertising on sales. There are
generally three types of sales tests, viz.,
Measure of past sales,
Field experiments, and
Matched samples.
(i) Measure of Past Sales: Advertising and sales are correlated by using the past
sales data. The past data on sales are diversified and their advertising expenses are
correlated to establish their relationship Sales data for the past ten years as well as
the advertising expenses are collected and tabulated to establish the correlation
between the sales volume and advertising expenses. All other factors influencing
sales are also correlated with the sales. The differences between their correlations
show the importance of each individual factor influencing sales.
(ii) Field Experiments: Field experiments may show the extent to which a
particular advertising campaign has affected sales. The whole market may be
divided into test and control areas. One treatment may be randomly administered to
each area to know how a particular factor has influenced the sales in that area. The
different treatments may be used to eliminate irrelevant variables. The results of
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each variable are recorded for different periods. These figures give the total impact
of advertising on sales.
(iii) Matched Samples: The respondents belonging to the same age, educational
status, occupation, sex, etc. are selected for comparison of advertising effectiveness.
They are matched in every respect but not for the test treatment. One group has seen
the advertisements and other group has not seen the advertisements. The sales of the
treated group should he higher than those of the not-treated group. This would show
the difference between the sale of the advertised products and of the non-advertised
products.
Control on Advertising by practitioners; media and market
Advertising puts across messages and their presentation may be against the
accepted values of society. Moral and ethical values have been discarded by several
advertisers. These unsocial, immoral and unethical values are controlled by
government and by consumers.
With the growing criticisms of advertising, advertisers have been
considering the idea of self-regulation. Self- regulation would result in true and
accurate messages. Many advertisers were skeptical of the success of self-
regulation. Yet many advertisers have declared that they should exercise control
over, and restraint on, their activities. Therefore, they opted for self-regulation in
1970 in USA. Consequently, the Council of Better Business Bureaus and National
Advertising Review Board were established.
The first self-regulatory organization was established by the Advertising
Club of Cleveland. It was known as Better Business Bureau. The Better Business
Bureau (BBB) operated at local levels. In 1976, there were about 240 Better
Business Bureaus throughout the USA. They were fighting immoral and unethical
advertising to raise its standards. Advertising agencies, advertising media and other
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agencies were determined to stamp out deceptive advertising. Each Better Business
Bureau was assigned the job of spearheading a movement for improvements in
advertising in its locality. The BBB persuades advertisers to discard questionable
modes and practices of advertising. It maintains a register of consumer complaints.
The Better Business Bureaus are interested in people operating advertising
agencies. These Better Business Bureaus were reorganized under the Council of
Better Business Bureaus (CBBB) in 1970. The CBBB achieved prominence for
national advertising regulation. This council performs nation-wide activities. It
consists of eight members drawn from leading advertising agencies. The local
Better Business Bureau has three divisions,-merchandise division, financial division
and solicitation division. They see to it that no false or misleading copy, layout, etc.
is employed in advertising.
The CBBB has a wing known as National Advertising Division (NAD)
composed of knowledgeable individuals from the local bureaus. The NAD
evaluates the reports of the CBBB. The reports of CBBB are prepared in the light of
the recommendations of the local people. The NAD asks the advertiser to submit
the logic and rationale of his challenged advertisements. After evaluating the reports
of the CBBB and the claims of the advertiser, the NAD may dismiss the complaint
on the ground that the advertisers claims are correct and substantial. The
complaints may be accepted by the NAD, and it may direct the advertiser to modify
the challenged advertising. If the advertiser does not comply with the direction of
the CBBB, its point of view and the complaints of the public are forwarded to the
National Advertising Review Board. If the advertiser does not accept the verdict of
the NARB, his case is forwarded to the Federation of Trade Commissions or to the
Federal Communication Commission.
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The National Advertising Review Board started its functions in 1971 in the
USA. It has 50 member-forty representing advertising agencies and ten representing
the public Complaints about any advertisement are made to this Board through the
National Advertising Division (NAD) which receives complains from the public,
the industry, business and other sources. The NAD suggests appropriate changes in
the advertisement. If the advertiser does not change the message and continues to
advertise, the complaint is forwarded to the National Advertising Review Board.
The NARB appoints a five-member panel composed of three representatives of
advertisers, one agency person and one public representative to review the
complains forwarded by the NAD and the stand taken by the advertiser. If the panel
upholds the decision of the NAD, it calls upon the advertiser to modify or withdraw
the advertisement. The NARB publishes the complaints if the advertiser does not
accept the suggestion of the NARB. As a final step, the case be referred to a
government authority for appropriate action against the defaulting advertiser. The
local Better Business Bureaus, too, have been approaching the NARB for the
settlement of the complaints filed by the public, The NARB has special cells to hear
the complains of children, women, minorities and other sections of society. The
NARB bas reported many cases to the Federal Trade Commission (FTC) for final
settlement. The FTC can call for suitable correction of misleading or incorrect
advertisements.
Self-Regulation by Media
The media people can reject any advertisement if they consider that it is
misleading and incorrect. The objectionable advertisements are not published or
viewed or advertised by the media. Television in India and France is quite selective
in accepting a particular message or mode of advertising. Television and radio are
more concerned about the content of advertisements than the print media.
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Television does not accept bait advertising, advertisement bearing on sexual themes
and representations of certain professions. The time allotted to advertisers is
restricted by television and radio. Many newspapers do not accept objectionable
advertisements. They are famous for refusing to publish such advertisements. Sex
selling, patent medicines with high alcohol content, etc., are frowned upon;
advertisements bearing on these are not accepted by newspapers. Many magazines
also impose restrictions on advertisement content.
CONTROL BY CONSUMERS
Consumers have started exercising control over misleading advertisements
since the latter part of the nineteenth century. They exert control in different forms:
direct and indirect, formal and informal, short as well as long-range. They have
devastating power to accept or boycott the product, which they do through
consumer groups, through businessmen and through a law-enforcing authority. We
have discussed the control by businessmen.
CONTROL BY GOVERNMENT
Control by the government is felt to be necessary to check deceptive,
misleading, highly competitive and immoral advertising. The government is after all
responsible to see to it that there is no undesirable advertising. It has the power to
control it. It should exercise this power to protect the interests of consumers, small
businesses and other sections of society and to ensure that there is no deceptive and
misleading advertising. The content of advertisements has to be regulated by the
Government. In India, regulations concerning advertising are limited. Only the
public laws and Sale of Goods Act are employed to control advertising. The Penal
Code and the Criminal Procedure Code have been used against deceivers and
lawbreakers. The Consumers' Protection Act and other relevant laws have been
enacted to control objectionable advertising. Advertising has become an integral
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part of life and has lasting effects on society. It has to demonstrate greater social
responsibility. Its manipulative and undesirable activities have to be controlled.
Truthful advertising leads to consumer satisfaction. It is true that very few
advertisers resort to deceptive advertising. They compete with others on the basis of
dishonest presentation. Therefore, the government has enacted several laws. The
USA has been very active in this field. The Indian Government too has enacted
some laws to protect the interests of consumers, honest advertisers, producers and
traders. In the USA such legislation has been enacted by the federal government,
state governments, and municipalities.
Growth of Consumerism:
The term "consumerism" refers to the resistance of consumers to misleading
advertising, sales techniques and products. The development of consumer power
took place in the USA between 1889 and 1925 when consumers developed their
strength and realized the need for resisting misleading and unrealistic advertising.
Women's organizations developed to resist "black" sales. In India, consumer power
developed during the Swadeshi Andolan in 1922, which continued till 1950. The
second period of growth of consumerism was between l926 and 1959 in the USA"
Many books, articles and seminars were held on consumerism. Consumers' Union,
Drug Control, etc., came into being during this period. In India, the growth of
consumerism took place between 1951 and 1985. The third period, i.e. the surge of
modern consumerism, started in India in 1986 when various organizations
developed to protect the interests of the consumer. The consumers' Safety Act was
enacted in 1989. In America, consumers insisted on the right to safety, the right to
be informed, the right to choose and the right to be heard. Many books on
consumerism were written, which brought pressure to bear on manufacturers and
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traders so that there might be the right type of packaging, true labeling, truth in
credit and substantiation of claims of deceptive products. In India, many voluntary
organizations were formed to protect the interests of consumers. The misleading
activities of advertisers were brought to the notice of the public. The government
was apprised of the widespread practice of adulteration. Consumerism in India
developed rapidly. Women's organizations have become very active in India to
educate people about misleading advertising and products. There has been a great
pressure on the government to enact suitable legislation to protect the interests of
consumers. Advertising is criticized vehemently. The present laws in India may not
be very useful unless consumers are educated and motivated to protect their
interests. Consumerism in India has to be developed rapidly. The present state of
consumerism in India is worse than it is in the USA. In America a tax was levied on
advertising, to restrict the putting up of billboards along highways and to create a
sense of purpose among consumers. The reasons for the growth of consumerism are
technological development, water and air pollution, soaring prices, heavy taxes and
other economic factors. Education and social consciousness have motivated people
to safeguard their interests. In the Indian context, consumer protests have to be
developed on a large scale.
Consumerism has a direct as well as indirect impact on advertising. If
advertisers get the feedback that their presentation and announcements have been
resisted by people, they would avoid misleading advertising. If they do not, their
image would be tarnished. Advertisers have to evaluate the end results of their
advertisements. Pre-assessment and evaluation will avoid unnecessary expenses on
advertising. Therefore, advertisers should not feel that consumers are adversaries.
They are, in fact, true guides for the success of advertising. Consumerism gives a
boost to government control. The advertising research will not be required if
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consumer organizations provided adequate information and feedback on
advertising. There-fore, consumers now receive the cooperation and assistance of
many sound advertising agencies. Advertisers look upon their reactions as clues to
the need for further development.
Advertising in the international market place
The top world-wide markets began spending more then 50 percent of their
advertising dollars outside the United States in the early 1990s. The non-U.S. gross
income of the top 500 agencies reached $9 billion as the twentieth century drew to a
close. Of the top 25 agencies, more than half are headquartered in the United States,
with the remainder in Great Britain or Japan. The following discussion would
explore the evolution of advertising from a local venture to a global one.
EVOLUTION OF GLOBAL MARKETING
Generally markets are composed of local, regional, and international brand.
A local brand is one marketed in a single country. A regional brand is one
marketed throughout a region (for example, North America or Europe). An
international brand is available virtually everywhere in the world. Marketing
emerged when the emphasis changed from importing products (tea and
species, silk, gold, and silver) to exporting products. Advertising was used
to introduce, explain and sell the benefits of a product especially a branded
product in markets outside the home country. Advertising that promotes the
same product in several countries is known as international advertising. It
starts with product that begins to reach the saturation point in its home
market and cannot grow faster. Recapture strategy is used either by
introducing new products in its home market or expanding into foreign
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markets. The following are the reasons for companies to venture outside the
home market:
Saturation of the home market
Market research that shows market potential for products in other countries,
Mergers and acquisitions with foreign businesses, and
Moving into other markets to preempt development by competitors
Export
Exporting a product, requires placing the product in the distribution system
of another country. The exporter typically appoints a distributor or importer, who
assumes responsibility for marketing and advertising in the new country. As volume
grows, the complexity of product sizes, product lines, pricing, and local adaptation
increases. The exporter might send an employee to work with the importer and act
as a liaison between the exporter and the importer. Some companies prefer to
appoint a local distributor who knows the language and the distribution system and
can therefore handle customers and the government better than a foreigner could.
Starbucks, for instance, appointed a local distributor in several Asian countries,
including Thailand. Exporting is still the first step in international marketing. For
example, 2 years ago Brazil-based chocolate manufacturer Garoto (which means
"boy" in Portuguese) decided to export to other Latin American countries. Even
though only $25 million of Garoto's $592 million sales come from exports, the
company is already Latin America's biggest chocolate exporter. Although sales
outside Latin America aren't big enough to merit media advertising beyond the
region, Garoto does participate in promotional opportunities such as major food
fairs. International marketing and advertising is not the exclusive province of large
companies.
Nationalization and Regionalization
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If the sales grow in export markets, the exporter may send a manager to
work in the importer's organization or to supervise the importer. That manager
typically must secure approval of plans, obtain funds for operations, and defend
sales forecasts to a company management that is concerned chiefly with its
domestic market.
If sales grow even further, the exporter may want greater control or a larger
profit share and may either buy back the importer's rights and handle distribution or
set up assembly (or manufacturing) facilities in the importing country. That is,
management and manufacturing get transferred from the home country to the
foreign one At this point, key marketing decisions focus on acquiring or introducing
products specifically for the local market. For example, BMW set up a U.S.
manufacturing plant to build American versions of its German cars. Once the
exporter becomes nationalized in several countries in a regional bloc, the company
establishes a regional management center and transfers day-to-day management
responsibilities from the home country to that office. When a company is
regionalized, it may still focus on its domestic market, but international
considerations become more important as that of Coca-Cola.
THE GLOBAL PERSPECTIVE
A company that has domestic operations and established regional operations
in Europe, Latin America, North America, the Pacific, or elsewhere, has to
ultimately decide whether it should establish a world corporate headquarters to
ensure the company a truly global perspective. It means the company must
internationalize the management group. Example: Unilever and Shell (both of
which have twin world headquarters in the United Kingdom and the Netherlands),
Arthur Andersen, IBM, Nestle and Inter public have changed to a global
management structure.
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Every product category can be divided into local (or national), regional
(trading bloc), and international brands. International brands are those that are
marketed in two or more of the four major regional market blocs: North America,
Latin America, Europe, and Asia-Pacific. Although the Eastern European bloc will
exist as a trading region for years, several of the westernmost countries in this group
have been subsumed into the European Union, and Russia and the Asian republics
of the former Soviet Union ma1 coalesce into a smaller fifth bloc. The sixth bloc-
Africa, the Middle East, and Southern Asia-is so much smaller economically than
the others that it is often attached to Europe or Asia-Pacific.
Global Brands
A global brand is one that has the same name, design, and creative strategy
everywhere in the world and is marketed in most of the major regional market
blocs. Example: Coca-Cola, McDonald's, Henkel, Rolex, Nissan, Toyota, Gillette,
and Avis.
Approaches To Global Advertising
Globalization (standardization). This school of thought contends that differences
between countries are more a matter of degree than direction, so advertisers must
instead focus on the similarities of consumers around the world
Localization (adaptation). This school of thought argues that advertisers must
consider differences among countries, including culture, stage of economic an:
industrial development, stage of life cycle, media availability, research availability,
and legal restrictions.
Contingency (moderate). This school of thought reasons that neither complete
standardization nor compete adaptation is necessary and that a combination of the
two approaches can guide advertising in multiple countries after a careful
evaluation of factors that can affect the effectiveness of such advertising. Note that
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most companies use the middle-of-the-road approach or lean toward localization.
Starbucks uses this approach. Tea is offered in stores in the far-east, stronger
coffees in Europe, and gourmet coffees in the United States. Furthermore individual
elements often are standardized (product name, logo, and packaging).
No single approach is always the right one. In actuality no business has a
completely global campaign. The reality of global advertising suggests that the
contingency approach is best. Marketers are restricted by language, regulations, and
a lack of completely global media. The challenge in advertising is the careful and
sophisticated use of Kotler's "variations" nationally or regionally under a basic
Levitt-style global plan to maintain efficiency.
The Global Advertising Plan
The strategic advertising plan usually is prepared in conjunction with the
budget. Basically, the plan outlines the marketing strategy, whereas the budget
allocates the funds. Two major approaches to advertising in foreign cultures differ
in their orientation: one is market oriented and the other is culture oriented.
The Market Analysis Model
This model is based on data and observation from several countries. It
recognizes the existence of local, regional, and international brands in almost every
product category. The two major variables are the share of market of brands within
a category and the size of the category. For example, the brand's percentage share of
the category market might vary substantially in four countries:
Country A
Country B
Country C
Country D
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Global Brand
25
30
50
20
Regional
60
30
10
55
Brand
Local Brand
15
40
40
25
According to this example, Country C looks very valuable for the global
brand. Considering the size of the market changes the picture, however. Assume
that the size of the category market in the four countries is as follows:
Country A
Country B
Country C
Country D
Global Brand
2,00,000
1,00,000
50,000
3,00,000
Regional
25,000
30,000
50,000
20,000
Brand
Local Brand
50,000
30,000
25,000
60,000
According to this market analysis, Country C actually is much less
important. Half of this smaller market is already in global brands. Country D not
only is a larger global brand market but also is a much larger total market. A
marketing manager must look not only as share but also at market size, growth
rates, and growth opportunities. For instance, cola-flavored soft drinks are not
nearly as dominant in Germany as they are in the United States. To generate sales in
Germany, then, a soft-drink company would have to develop orange and lemon-
lime entries. McDonald's serves beer in Germany, wine in in France, a local fruit-
flavored shake in Singapore and Malaysia, and even a Portuguese sausage in
Hawaii, in addition to the traditional Big Macs, fish sandwiches, and French fries to
cater to local tastes.
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The Culture-Oriented Model
The second model of international advertising emphasizes the cultural differences
among peoples and nations. This school of thought recognizes that people
worldwide share certain needs, but it also stresses the fact that these needs are met
differently from culture to culture. Although the same emotions are basic to all
humanity, the degree to which these emotions are expressed publicly varies. The
camaraderie typical in an Australian business office would be unthinkable in Japan.
The informal, first-name relationships common in North America are frowned on in
Germany, where co-workers often do not use first names. Like-wise, the ways in
which we categorize information and the values we attach to people, places, and
things depend on the setting in which we were raised. How do cultural differences
relate to advertising? According to the high-context/low-context theory, although
the function of advertising is the same throughout the world, the expression of its
message varies in different cultural settings. The major distinction is between high-
context cultures, in which the meaning of a message can be understood only within
a specific context, and low-context cultures, in which the message can be
understood as an independent entity. It is observed that Japanese has the highest-
context culture. This model helps explain the difficulties of advertising in other
languages. The differences between Japanese and English are instructive. English is
a low-context language. English words have very clearly defined meanings that are
not highly dependent on the words surrounding them. In Japanese, however, a word
can have multiple meanings. Listeners or readers will not understand the exact
meaning of a word unless they clearly understand the preceding or following
sentences, that is, the context in which the word is used. Advertising messages
constructed by writers from high-context cultures might be difficult to understand in
low-context cultures because they may offer too much detail to make the point
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clearly. In contrast, messages authored by writers from low-context cultures may be
difficult to understand in high-context cultures because they omit essential con-
textual detail. In discussing the Japanese way of advertising, Takashi Michioka,
president of DYR, joint-venture agency of Yoirng & Rubicam and Dentsu, put it
this way: In Japan, differentiation among products, does not consist of explaining
with words the points of difference among competing products as in America.
Differentiation is achieved by bringing out the people appearing in the commercial-
the way they talk, the music, the scenery-rather than emphasizing the unique
features and dissimilarities of the product itself.
Agencies have to develop techniques to advertise brands that are marketed
around the world. Some agencies exercise tight control, whereas others allow more
local autonomy All of these techniques fall into three groups: tight central
international control, centralized resources with moderate control, and matching the
client. Henkel, a large German manufacturer of household and cleaning products,
provides -: example of how centralized management with similar products works.
Henkel's international strategy was designed to accomplish three goals: eliminate
duplication of effort among its national companies, provide central direction for
new products, and achieve efficiency in advertising production and impact. It
included these steps:
l. Identifying how a product fulfills a need or functions beneficially.
2. Determining the common need or product benefit for consumers in Europe or
larger area.
3. Assigning that specific need or benefit to one product with one brand name.
4. Assigning that brand to one brand manager and one advertising agency to
develop and market.
5. Disallowing the use of that one brand's benefit, name, or creative campaign for
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any other brand in the company.
The organizational structure for managing international advertising depends heavily
on the globalization-versus-localization marketing and advertising strategy. For
highly globalized advertising efforts, there may be one advertising plan for each
product regardless of the number of markets entered. For a product using localized
advertising, there probably will be a separate advertising plan for each foreign
market. For globalized advertising plans, the business is more likely to centralize
the development and control of the advertising. Quaker adopted standardized
advertising for Gatorade and its other international products. As a first step in
implementing its pan-European approach, Quaker centralized advertising
management for all of Europe. If the marketing effort, including the advertising, is
more localized, then the company is likely to centralized advertising management in
each individual foreign market. Colgate Palmolive Company decided to take a
country-by-country approach in its advertising.
APPROACHES TO THE INTERNATIONAL ADVERTISING CAMPAIGN
'All business is local." This proverb should be modified to read 'Almost all
transactions are local." Although advertising campaigns can be created for
worldwide exposure, the advertising is intended to persuade a reader or listeners to
do something buy, phone, and order. Even this will change as multi-national direct-
mail campaigns become possible in a unified common market. Some advertisers
develop tightly controlled global campaigns with minimum adaptation for local
markets. Others develop local campaigns in every major market.
Centrally Controlled Campaigns
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International advertising campaigns have two basic starting points: (l ) success in
one country and (2) a centrally conceived strategy, a need, a new product, or a
directive.
A National Success Story
A successful advertising campaign, conceived for national application, is modified
for use in other countries. Wrigley, Marlboro, IBM, Waterman Pen, Seiko Watches,
Philips Shavers. Procter & Gamble, Ford, Hasbro and many other companies have
taken successful campaigns from one country and transplanted them around the
world.
Centrally Conceived Campaign
A centrally conceived campaign was pioneered by Coca-Cola and is now
used increasingly in global strategies. Although the concept is simple, the
application is difficult. A work team, task force or action group assembles from
around the world to present, debate, modify if necessary, and agree on a basic
strategy as the foundation for the campaign.
The one word theme replaced one of the most successful ad slogans in
aviation history, "Fly the Friendly Skies of united."' Some circumstances require
that a central strategy be imposed even if a few countries object. Cost is a huge
factor. A centralized campaign could include television, radio, newspaper,
magazine, Web, outdoor advertising, and collateral extensions (brochures, mailings,
handouts, take-one folders, or whatever is appropriate). The team can stay together
to finish the work, or it can ask the writer or campaign developer to finish pervise
the completion of the entire project.
Positioning the Global Product
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Research must be conducted to identify the problems and opportunities facing the
product in each of the international markets to be entered. The normal approach of
conducting consumer and market analysis works well for international analysis.
Emphasis should be placed on identifying local market differences to which the
advertising programs must adjust. The analysis portion of the advertising plan
develops the information needed for positioning the product in the foreign markets.
Particularly important is a good understanding of consumer buying motives in each
market. This is almost impossible to develop without locally based consumer
research. If analysis reveals that consumer buying behavior and the competitive
environment are the same across international markets, it may be possible to use a
standardized positioning in all international markets. In exploring the international
marketing opportunity for Gatorade, Quaker discovered that the active, outdoor
lifestyle that created demand for sports beverages was an international, not domestic
phenomenon. Starbucks' consumer research suggested that perceptions of a store
such as Starbucks varied from market to market. In Japan, Starbucks was positioned
as a daytime meeting place for business people and an evening place for socializing.
The position of Hawaiian gores was as a place to relax, any time of the day or night.
Selecting Media for International Campaigns
Advertising practitioners can debate global theories of advertising, but one
fact is inescapable: Global media do not currently exist. Television can transmit the
Olympics around the globe, but no one network controls this global transmission.
An advertiser seeking global exposure must deal with different networks in
different countries.
Media Choices
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Once the company has approved the basic global media strategy and plan
the central media planner will look for regional or multinational media. If
magazines are part of the plan the media buyer may purchase advertising space in
Time, Newsweek' The Economist' Reader's Digest, and other magazines with
international editions. The International Herald Tribune and the wall street Journal
newspapers are published simultaneously in a number of major cities using satellite
technology. Magazines published by international airlines for their passengers are
another option Multinational satellites, such as British Satellite Broadcasting in
Europe and Star in Hong Kong, also provide opportunities to place the same
message before a target audience at the same time across national boundaries if the
audience is targeted for a consumer product, local planning and purchase are
required. This is accomplished through an international advertising agency (or
international consortium of agencies) or through an international media-buying
service If these two methods are not used, the media executive must execute the
plan through a multitude of local, national, or regional media-buying services or
advertising agencies. International media-buying services usually work effectively
for smaller international companies that do not have well-developed agency
relationships in each country in which they operate. Regional media-buying
services, such as Carat of France, are gaining great strength in Europe.
The Global Creative Effect
Global campaigns, like domestic campaigns, require ad work that addresses
the advertising objectives and reflects the product's positioning. The opportunity for
standardizing the campaign exists only if the objectives and strategic position are
essentially the same. The creative process requires three steps: to determine copy
content, to execute the content through a central idea, and to produce the
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advertising. Standardizing the copy content by translating the appeal into the
language of the foreign market is fraught with possible communication blunders. It
is rare to find a copywriter who is fluent in both the domestic and foreign language
and familiar with the culture of the foreign market. It is best if the central creative
idea is universal across markets, or at least can be converted easily from market to
market. Adaptation is especially important if the advertiser wants its products
identified with the local market rather than as a foreign import. Advertisements may
be produced centrally, in each local market, or a combination of both. With a
standardized campaign, production usually is centralized and all advertisements
produced simultaneously to reap production cost savings.
SPECIAL INTERNATIONAL CONSIDERATIONS
International advertising, despite its glamorous image, is tough work
because it poses formidable challenges. We have already discussed the problems
that language creates. Other concerns relate to laws, customs, time, inertia,
resistance, rejection, and politics.
Laws and Regulations
International advertisers do not fear actual laws; they fear not knowing those laws.
For example, a marketer cannot advertise on television to children under l2 in
Sweden or Germany cannot advertise a restaurant chain in France, and cannot
advertise at all on Sunday in Austria. In Malaysia jeans are considered to be
Western and decadent, and are prohibited. A commercial can be aired in Australia
only if it is shot with an Australian crew. A contest or promotion might be
successful in one country and illegal in another.
Customs and Culture
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Customs can be even stronger than laws. When advertising to children age 12 and
over was approved in Germany, local custom was so strong that companies risked
customer revolt by continuing to advertise. In many countries, naming a competitor
is considered bad form Customs are often more subtle and, as a result, are easier to
violate than laws. Quoting an obscure writer or poet would be risky in the United
States, whose citizens would not respond to the unknown author. In Japan the
audience would respect the advertiser for using the name or become embarrassed at
not knowing a name they were expected to recognize. A campaign that made such a
reference might irritate U.S. audiences and engage Japanese consumers. Companies
that are starting to do business in the Middle East have to learn new selling methods
because the region is so devoutly religious. For example, there are major restrictions
on how women are presented in advertising. Many Asian cultures emphasize
relationships and context. To be effective, the advertising message must recognize
this cultural difference. Many oppose the move to a global perspective because of
concerns about the homogenizing of cultural differences. Marketing or cultural
imperialism is a term used to describe what happens when Western culture is
imposed on others, particularly cultures such as the Middle Eastern, Asian, and
African cultures that are considerably different. Countries in Southeast Asia have
advertising codes. Singapore has an ad code deter-mined to prevent Western-
influenced advertising from impairing Asian family values. Malaysia requires that
all ads be produced in the country, which cuts back dramatically on the number of
foreign ads seen by its public.
Time
Everything takes longer internationally--count on it. The New York business
day overlaps for only 3 hours with the business day in London, for 2 hours with
most of Europe, and for I hour with Greece. Normal New York business hours do
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not overlap at all with those in Japan, Hong Kong, the Middle East, or Australia.
Overnight parcel service is dependable to most of Europe, and other regions, if the
planes are able to take off and land. For these reasons e-mail that permits electronic
file transfer and telecopy transmission are popular modes for international
communication. E-mail and fax numbers have become as universal as telephone
numbers on stationery and business cards in international companies.
Time is an enemy in other ways. France and Spain virtually close down in
August for vacation. National holidays are also a problem. U.S. Corporations
average l4 to l5 paid legal holidays a year. The number is more than 20 in Europe,
with more than 30 in ltaly.
Inertia, Resistance, Rejection, and Politics
Inertia, resistance, rejection and politics are sometimes lumped together as
"not invented here" situations. Advertising is a medium for change, and change may
frighten people. Every new campaign is a change. A highly successful campaign
from one country might or might not be successful in another country. (Experience
suggests that the success rate in moving a winning campaign to another country is
about 60 percent.) Creative directors often resist advertising that arrives from a
distant headquarters rather than advertising created within the local agency. This
resistance is partially the result of a very real problem in local offices of
international agencies: an inability to develop a good creative team or a strong
creative reputation when most of the advertising emanating from the office
originates elsewhere.
Government approval of television commercials can also be difficult to
secure in some countries. Standards may seem to be applied more strictly to
international than to national products. Flat rejection or rejection by delay or lack of
support must be anticipated with every global strategy and global campaign. The
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best solution is to test two ads that are both based on the global pattern advertising:
a locally produced version of the advertising and an original ad. As mentioned, the
global strategy usually works 60 percent of the time. If the locally produced
advertising of the global strategy wins, the victory must be decisive or the costs of
the variation may not be affordable. Global companies must remain flexible enough
to adopt the strategy that emerges as the winner.
At times the resistance and rejection are political. These may be the result of
office politics or an extension of international politics. Trying to sell a U.S.
campaign in a foreign country can be difficult if relations between the two nations
are strained. To overcome local resistance and build consensus companies should
have frequent regional and world conferences, maintain a constant flow of
communication, transfer executives, and keep their executives well informed
through travel, videotapes, e-mail, teleconferences and consultation.
THE INTEGRATED MARKETING COMMUNICATION
Integrated marketing communication (IMC) is the practice of unifying all
marketing communication tools and corporate and brand messages to communicate
in a consistent way to and with stakeholder audiences (that is, those who have a
stake or interest in the corporation). An IMC campaign plan is even more complex
than a traditional advertising plan because it considers more message sources, more
communication tools, and more audiences. IMC programs are designed to
coordinate all the various communication messages and sources.
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We can group these messages as planned (or controlled) messages by the
company and unplanned (or uncontrolled) messages. In addition, unconsidered
messages-those delivered by other aspects of the marketing mix (price, product, and
distribution) and other contact points (such as the appearance of the parking lot
outside the store)-communicate important information to stakeholders that can
negate the advertising.
The Tools of IMC
The tools used in an IMC campaign include traditional marketing
communication tools such as advertising and sales promotion. However, the IMC
approach recognizes that other areas of the marketing mix too. The price of the
product signals a level of quality. The cleanliness of the store and helpfulness of the
customer service department send powerful messages. The product's reliability also
communicates. IMC planners should consider all message sources and marketing
communications that reach stakeholder audiences.
Stakeholder Audience
In addition to managing the total communication program, IMC campaigns
also address a wide variety or stakeholder, all of whom have a different stake or
interest in a company and its brand messages. The different stakeholder audiences
are as follows:
Corporate Level
o Employees
o Investors
o Financial Community
o Government Regulators
Marketing Level
o Consumers
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o Target markets
o Retailers
o Distributors
o Competition
o Suppliers
o Vendors
Marketing Communication Level
o Consumers
o Target audiences
o Trade audiences
o Local community
o Media
o Interest groups
o Activist groups
o General Public
Why is IMC concerned with all these audiences? The support (or lack of it)
that each stakeholder group gives to the company can affect that company's brands
positively or negatively. Maintaining consistent communications from all message
sources to stakeholders is particularly difficult. It works only if a company or brand
has a focused business philosophy or mission, clearly understood core values, and a
strong corporate culture. Even though different areas of the company may be
sending messages, the person the receiving end is an individual who has to make
sense of all the messages, impressions and experiences. As IMC experts Don
Schultz, Starley Tannenbaum, and Robert Lauterborn explain, IMC realigns
marketing communication "to look at it the way the consumer sees it as a flow of
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information from indistinguishable sources. If the messages dont reflect some
central core values and deliver a consistent image, they may conflict and ate
confusion.
Coordination
Coordinating all these messages is an organizational problem best solved
through cross- functional management which means using teams of people who are
from different parts of the company, outside agencies, or both. These teams manage
the planning process and monitor the way the plan is implemented. Cross-functional
management may even mean getting different agencies together who are producing
the marketing communication.
The Structure of A Campaign Plan
A campaign, whether advertising or IMC, is a complex set of interlocking,
coordinated activities. A campaign results from a comprehensive plan for a series of
different but related marketing communication efforts that appear in different media
and marketing communication areas across a specified time period. The campaign is
designed strategically to meet a set of objectives and to solve some critical problem.
It is short-term plans that usually run for a year or less. Many advertisements are
single-shot ads. In other words, they are free-standing ad unrelated to ads that
preceded or followed them. Companies that create one ad at a time and constantly
change the core message are not involved in a campaign process. However, a great
deal of national advertising is developed as part of a campaign with an umbrella
theme that extends across time, different stakeholder audiences, and different
advertising vehicles or marketing communication opportunities. A campaign may
focus or one specific product attribute or one audience, or it may cover a variety of
attributes and reach all the audiences. A campaign plan summarizes the marketplace
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situation, the underlying campaign strategy, the main creative strategies and tactics,
media, and the other marketing communication.
The following table gives a birds eye view of various elements involved in
IMC campaign.
I Situation Analysis
Product and company research
Consumer and stakeholder research
Market analysis
Competitive situation
Industry analysis
Marketplace analysis
II SWOT Analysis
Internal factors: strengths and weaknesses
External factors: opportunities and threats
Problem identification
III Campaign strategy
Objectives
Targeting
Positioning
Scheduling strategy
IV Communication strategy
Message development research
The creative theme
Creative tactics and executions
V
Media plan
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VI
Other Marketing communication activities
VII The appropriation and budget
Situation Analysis
The first step in campaign plans is a situation analysis that summarizes all
the relevant information available about the product, the company, the competitive
environment, the industry, and the consumers. Sometimes called a business review,
this information is obtained using primary and secondary research techniques. The
six most important research areas are
product and company research,
consumer and stakeholder research
market analysis,
competitive analysis,
industry analysis, and
market place analysis.
SWOT Analysis
Situation analysis evaluates the significance of the research. During the
situation analysis planners compile all the information they can about the brand and
its competitive situation, marketplace factors such as the health of the category, and
the behavior of consumers toward this brand and some recast this information in
terms of internal factors (strengths and weaknesses) and external factors
(opportunities and threats). Once the information is gathered and sorted into SWOT
categories, the analysis begins. In this stage, the key areas on which the campaign
strategy has to be built are identified. Problem Identification focuses on a set of
serious communication problems that this campaign must address. These problems
differ from year to year and situation to situation. For example in one year's
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marketing plan, a brand may be launching a line extension, which means the
advertising will address the problem of launching a new product under a familiar
brand name. The next year the marketing plan may focus on increasing distribution,
so the advertising probably address opening up new territories where the brand is
unknown. Each type of problem calls for a different advertising and marketing
communication strategy. Different audiences are reached with different messages;
different marketing communication tools may be used: and different
communication objectives are set.
Campaign Strategy
After the situation analysis and the SWOT analysis, most advertising
campaign plan focus on the key strategic decisions that will guide the campaign.
The strategy section of a campaign plan identifies the objectives that will solve the
key problems identified at the end of the SWOT analysis. It will also specify the
target stakeholder audiences and how the strategy will handle competitive
advantage and the product's position. Other strategic decisions revolve around the
scheduling and timing of the different phases of the campaign act.
Objectives
As objectives provide the goal, they can then be used at the end of the
process to measure the campaign's results. These objectives are established based
on an understanding the hierarchy of effects and the various ways advertising can
affect its audience.
Targeting
Potential target markets are pinpointed and segmented into groups identified
by certain demographic or psychographic characteristics, such as environmentalists,
bike riders, or mall teens. These target audiences (that is, groups of people to whom
a marketing communication message is directed) shift with each campaign, its
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situation, key problems, and objectives. For example, if you are launching a line
extension, you will probably target current users of the brand. However, if you are
opening up new territory there aren't current users, so you will have to target
competitors' users. For both audiences, however, the objective may remain the
same, which is to convince the target audiences to try a new product.
Positioning
Although objectives and targeting differ from campaign to campaign, the
product's positioning remains the same. Does the position mean the same thing to
familiar brand users considering a new line extension? What would it mean to
entirely new users in a new market territory who are un-familiar with the brand?
They may not respond to the position in the same way, which means that the way
the position is presented in the message strategy may need to be adjusted to the
target audience's needs, interests, and level of knowledge.
Scheduling
Timing and scheduling are an important part of the media plan and are also
tied into the over-all campaign strategy. Many campaigns have phases, such as the
launch, the continuing campaign, and the close. In some cases, particularly with
campaigns that continue for a number of years, such as the classic "Milk Mustache"
campaign, the campaign may be launched with one strategy that evolves into
another strategy as the campaign matures.
Media Plan
The media plan and the creative plan are equally important and are
developed simultaneously. The overall appropriation, or available money for the
campaign, determines the media. Initial decisions about which media to use usually
reflect the availability of a budget big enough to use television, which is the most
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costly of all media. The media mix is created by selecting the best combination of
media vehicle traditional media, and marketing communication tools to reach the
targeted stakeholder audiences. If a product has an awareness problem, widespread
mass media will probably used to increase the general level of awareness. If the
problem is one of trial, Sales promotion may be the most important tool. However,
if the product only appeals to a small target such as martial arts clothes for aikido
devotees, direct mail (assuming, of course, that ' ?can find a list or build one) and
the Internet may be more effective ways to reach that target. In fact, although there
may be a lead tool, such as advertising, often a mix of supporting media is used to
reach different stakeholder groups. Media planners allocate media dollars to
accomplish reach and frequency objectives. In a high-reach campaign, money is
spent to get the message to as many people as possible. In a high-frequency
campaign, the money is spent on fewer media reaching fewer people, but repetition
of the message is increased. The media plan includes media objectives (reach and
frequency), media strategies (targeting, continuity, timing), media selection (the
specific vehicles), geographic strategies, schedules, and the media budget. Usually a
pie chart is used to show how the budget is allocated to the various media activities.
Other Marketing Communication Activities
The decision about which tools to use is based on an analysis of the
strengths and weaknesses of the various marketing communication tools. The tools
are then matched to the problem identified in the situation analysis. In other words,
which area can best reach a mass audience (advertising), involve an audience
(events), or build credibility and believability (public relations)? This is a process
called zero-based planning. Subsections of the plan are devoted to these other
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important marketing communication areas. A competitive sales campaign targeted
business owners and managers during competitors' sales canvassing periods.
The Appropriation and Budget
The amount of money available from the client, or advertiser, governs all
strategic decisions. Some sense of the amount of money that has been appropriated
for the campaign is used at the beginning of the planning to determine the general
scope and scale of the campaign effort. Then, after the plan has been developed, a
budget is developed that costs out the various recommendations. If this budget is
much higher than the appropriation, either costs have to be shaved or the
appropriation has to increase. The budget size for advertising and marketing
communication programs has a tremendous range. If you are working on a
campaign for a major marketer, you may have plenty of money {or the most
expensive form of television advertising. Most campaigns are somewhere in
between and their planners rarely have as much money as they feel they need to do
the job right. Once the appropriation is set, the money can be allocated among the
various advertising and marketing communication activities.
Evaluating the Campaign Plan
The final step in campaign plan is to prepare a proposal stating how the campaign
will be evaluated. The key part of an evaluation plan is to measure a company or
brand's effectiveness against its stated objectives. If not done formally through a
research project, some sort of evaluation is always done informally to determine
whether the effort was successful. This information is concerned with questions of
effectiveness: Is the campaign working? What were the results? It is also concerned
with questions of taste and judgment. Is the campaign fair and accurate? Is it
building the brand or corporate reputation?
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Questions:
1. What is Advertising Effectiveness?
2. Explain the objectives of measuring advertising effectiveness
3. Explain the process of measuring advertising effectiveness
4. What is global brand?
5. Explain the market analysis model for international advertising.
6. Explain various approaches to the International advertising campaign.
7. What is called Integrated Marketing Communication?
8. Explain the tools of Integrated Marketing Communication.
9. Explain and elaborate the structure of a campaign plan.
10. What is global creative effect?
Books for further study:
4. Wright, Winter & Zeigler ? Advertising ; Tata McGraw Hill
5. J. V. Vilanilam & A. K. Varghese ? Advertising Basics ? A Resource Guide
for Beginners: Response Books, Sage Publications.
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Unit ? V
Lesson ? 1
Sales Promotion
Lesson ? 2
Sales Promotion Strategies and Practices
Lesson ? 3
Brand Equity
UNIT ? 5 Sales Promotion And Brand Equity
UNIT OUTLINE
Sales Promotion
Consumer and Trade Promotion
Sales Promotion Strategies & Practices
Brand Equity Concepts
Building, Measuring and Managing Brand equity
Advertising & Sales promotion
Brand values for Business and non-business organisation
Learning Objectives
After reading this unit you should be able to :
Understand the meaning and rationale of sale promotion
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Know the types of sales promotion tools
Identify the strategies and practices of sales promotion
Know the meaning of Brand equity
Examine the method of building, measuring & managing brand
equity
Link advertising and sales promotion to achieve brand standing
Know the role of brand values for Business and non-business
organisation.
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UNIT ? v
LESSON ? 1
SALES PROMOTION
LESSON ? 1
Sales Promotion
Introduction
Sales promotion is one of the most loosely used terms in the marketing
vocabulary. We define sales promotion as demand. Stimulating devices designed to
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supplement advertising and facilitate personal selling. In other words, sales
promotion signifies all those activities that supplement, co-ordinate and make
the efforts of personal selling and advertising more effective. It is non recurrent in
nature which means it cant be used continuously.
Concept of Sales Promotion
Sales promotion consists of diverse collection of incentive tools, mostly
short-term designed to stimulate quicker and / or greater purchase of a particular
product by consumers or the trade. Where as advertising offers a reason to buy,
sales promotion offers an incentive to buy. Sales promotion includes tools for
consumer promotion (for example samples, coupons, prizes, cash refund,
warranties, demonstrations, contest); trade promotion (for example buying
allowances, free goods, merchandise allowances, co-operative advertising,
advertising and display allowances, dealer sales contests); and sales-force
promotion (for example bonuses, contests, sales rallies).
Sales promotion efforts are directed at final consumers and designed to
motivate, persuade and remind them of the goods and receives that are offered.
Sales persons adopt several techniques for sales promotion. Creative sales
promotion can be very effective. It is the marketing managers responsibility to
specify promotion objectives and policies.
Definitions of Sales Promotion
According to American Marketing Association " Those marketing activities
other than personal selling advertising and publicity that stimulate consumer
purchasing and dealer effectiveness such as display shows and exhibitions,
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demonstrations and various non-recurrent selling efforts not in the ordinary
routine."
W.J. Stanton defines sales promotion as all those activities other than
advertising, personal selling, public relations and publicity that are intended to
stimulate customer demand and improve the marketing performance of sellers.
Purpose of sales Promotion
Sales promotion tools vary in their specific objectives. A free sample
stimulates consumer trial, while a free management advisory service cements a
long-term relationship with a retailer.
From the marketers perspective, sales promotion serves three essential roles
it informs, persuades and reminds prospective and current customers and other
selected audiences about a company and its products. The relative importance of
those roles varies according to the circumstances faced by a firm.
The most useful product or brand will be a failure if no one knows it is
available! Because distribution channels are often long, a product may pass through
many lands between a producer and consumers. Therefore, a producer must inform
middlemen as well as the ultimate consumers or business users about the product.
Wholesalers, in turn must inform retailers and retailers must inform consumers. As
the number of potential customers grows and the geographic dimensions of a
market expand, the problems and costs of informing the market increase.
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Another purpose of sales promotion is persuasion. The intense competition
among different industries, puts tremendous pressure on the promotional
programmes of sellers. In India, even a product designed to satisfy a basic
physiological need requires strong persuasive promotion, because consumers have
many alternatives to choose from. In the case of luxury product, for which sales
depend on the ability to convince consumers that the products benefits exceed those
of other luxuries, persuasion is even more important.
Consumers also must be reminded about a products availability and its
potential to satisfy. sellers bombard the market place units hundreds of messages
every day in the hope of attracting new consumers and establishing markets for new
products. Given the intense competition for consumers attention, even an
established firm must constantly remind people about its brand to retain a place in
their minds. Much of a firms sales promotion may be intended simply to offset
competitors marketing activity by keeping its brand in front of the market.
Objectives of Sales Promotion
The basic objectives of sales promotion are:
i)
To introduce new products
To induce buyers to purchase a new product, free samples may be
distributed or money and merchandise allowance may be offered to business
to stock and sell the product.
ii)
To attract new customers
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New customers may be attracted through issue of free samples, premiums,
contests and similar devices.
iii)
To induce present customers to buy more
Present customers may be induced to buy more by knowing more about a
product, its ingredients and uses.
iv)
To help firm remain competitive
Sales promotions may be undertaken to meet competition from a firm.
v)
To increase sales in off season
Buyers may be encouraged to use the product in off seasons by showing
them the variety of uses of the product.
vi)
To increase the inventories of business buyers
Retailers may be induced to keep in stock more units of a product so that
more sales can be effected.
Rationale of sales promotion
Rationale of sales promotion may be analysed under the following points.
Short-term results
Sales promotion such as coupons and trade allowances produce quicker,
more measurable sales results. However critics of this strategy argue that these
immediate benefits come at the expense of building brand equity. They believe that
an over emphasize on sales promotion may under mine a brands future.
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Competitive Pressure
If competitors offer buyers price reductions, contest or other incentives, a
firm may feel forced to retaliate with its own sales promotions.
Buyers' expectations
Once they are offered purchase incentives, consumers and channel members
get used to them and soon begin expecting them.
Low quality of retail selling
Many retailers use inadequately trained sales clerks or have switched to self
service. For these outlets, sales promotion devices such as product displays and
samples often are the only effective promotional tools available at the point of
purchase.
Types of Sales Promotion
In using sales promotion, a company must fulfill the objectives of the
organization. Sales promotion objectives are derived from broader promotion
objectives, which are derived from more basic marketing objectives developed for
the product. The specific objectives set for sales promotion will vary with the type
of target market.
For consumers, objectives include encouraging purchase of larger-size units,
building trial among non users and attracting switches away from competitors
brands. For retailers objectives include inducing retailers to carry new items and
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higher levels of inventory, encouraging off-season buying, encouraging, stocking of
related items, off setting competitive promotions, building brand loyalty of retailers
and gaining entry into new retail outlets. For sales force, objectives include
encouraging support of a new product or model, encouraging more prospecting and
stimulating off-season sales.
Many sales promotion tools are available to accomplish these objectives at
the consumer level, and at the middle men level. For the purpose of convenience,
the types of sales promotion methods may be grouped under three categories:
1. Types of sales promotion directed at consumers.
2. Types of sales promotion directed at dealers and distributors.
Consumer Promotion Tools
The main consumer promotion tools include samples, coupons, cash refund
offers, price packs, premiums, prizes, patronage rewards, free trials, product
warranties, tie-ins, and point of purchase displays and demonstrations.
Samples
Samples are offers of a free amount or trial of a product to consumers. The
sample might be delivered door to door sent in the mail, picked up in a store, found
attached to another product or featured in an advertising offer. Sampling is the most
effective and most expensive way to introduce a new product.
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Coupons
Coupons are certificates entitling the bearer to a stated saving on the
purchase of a specific product. Coupons can be mailed, enclosed in or on other
products or inserted in magazine and newspaper advertisements. Coupons can be
effective in stimulating sales of a mature brand and inducing early trial of a new
brand.
Cash Refund Offers or Rebates
These are like coupons except that the price reduction occurs after the
purchase rather than at the retail shop. The consumer sends a specified "proof of
purchase" to the manufacturer, who in turn ,,refunds part of the purchase price by
mail. Cash refunds have been used for major products such as automobiles as well
as for packaged goods.
Price Packs
These are offers to consumers of savings off the regular price of a product,
flagged on the label or package. They may take the form or a reduced-price pack
which is single packages sold at a reduced price (such as two for the price of one) or
a banded pack, which is two related products banded together (such as a tooth brush
and tooth paste). Price packs are very effective in stimulating short term sales, even
more than coupons.
Premiums or Gifts
These are merchandise offered at a relatively low cost or free as an incentive
to purchase a particular product. Sometimes the package itself, is a reusable
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container may serve as a premium. A self-liquidating premium is an item sold
below its normal retail price to consumers who request it.
Prizes
These are offers of the chance to win cash, trips or merchandise as a result
of purchasing something. Pepsi-cola offered the chance to win cash by matching
numbers under the bottle cap with numbers announced on television. Sometimes the
prize is a person, offering the winner either cash or dinner with actor Sharuk Khan.
Patronage Awards
These are values in cash or in other forms that are proportional to ones
patronage of a certain vendor or group of vendors. Most airlines offer "frequent
flyer plans" providing points for miles traveled that can be turned in for free airline
trips. Cooperatives pay their members dividends according to their annual
patronage. Le Meridian adopted an "honoured guest" plan that awards points for
users of their hotels.
Free Trials
Free trails consist of inviting prospective purchasers to try the product
without cost in the hope that they will buy the product. Thus, often we see, auto
dealers encourage free test drives to stimulate purchase interest.
Product Warranties
These are an important tool, especially as consumers become more quality
sensitive. When My TVS offered a two year car warranty, substantially longer than
other competitors customers took notice. They inferred that My TVS quality must
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be good or else the company would be in deep trouble. Companies must carefully
estimate the sales-generating value against the potential costs of any proposed
warranty programme.
Tie-in Promotions
These are becoming increasingly popular. In a tie in promotion two or more
brands or companies team up on coupons, refunds and contests to increase their
pulling power. Companies pool funds with the hope of broader exposure, while
several sales forces push these promotions to retailers, giving them a better shot at
extra display and ad space.
Point-of-Purchase Displays
These take place at the point of purchase or sale. Display of visible mark or
product at the entrance of the store is an example. Unfortunately many retailers do
not like to handle the hundreds of displays, signs and posters they receive from
manufacturers. Hindustan Lever often use this tool to promote its products in the
retail market.
Product Demonstrations
Products are being shown in action. Consumers can visit the store and see
the usage of product in live action so that doubts of the consumers can be clarified
in the store itself. When a new product is introduced in the market, the sales
promotional tool is often used. For example ultra modern grinder mixie being used
by the company to demonstrate its speciality than the other product.
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Trade Promotion Tools
More sales promotion rupees are directed to the trade than to consumers.
Manufacturers seek the following objectives in awarding money to the trade:
i.
Trade promotion can persuade the retailer or wholesaler to carry the
brand.
ii.
Trade promotion can persuade the retailer or wholesaler to carry
more than it normally carries.
iii.
Trade promotion can induce the retailers to promote the brand
through featuring, display, and price reduction.
iv.
Trade promotion can stimulate retailers and their sales clerks to push
the product.
Manufacturers use several promotion tools. Some of which are mentioned
below:
Price ? Off
Manufacturers may offer a price ? off, which is straight discount off the list
price on each case purchased during a stated period of time. The offer encourages
dealers to buy a quantity or carry a new item that they might not ordinarily buy. The
dealers can use the buying allowance for immediate profit or price reductions.
Allowance
Manufacturers may offer an allowance in return for the retailers agreeing to
feature the manufacturers products in some way. An advertising allowance
compensates retailers for advertising the manufacturers product. A display
allowance compensates them for carrying a special display of the product.
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Free Goods
Manufacturers may offer free goods, which are extra cases of merchandise
to middlemen who buy a certain quantity of items.
Push Money
Manufacturers may offer push money which is cash or gifts to dealers or
their sales force to push the manufacturers goods.
Speciality Advertising Items
Manufacturers may offer free specialty advertising items to the retailers that
carry the companys name such as pens, pencil, calendars, paper weights, and
memo pads.
As the number of competitive sales promotions have increased, friction has
been created between the companys sales force and its brand managers. The sales
force says that the retailers will not keep products on the shelf unless they receive
more trade promotion money, while the brand managers want to spend their funds
on consumer promotion and advertising.
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Lesson ? 2
Sales Promotion Strategies and Practices
The sales promotion strategy is an important element in overall marketing
strategy. Sales promotion strategy involves identification of objectives, effective
communication for attracting attention, allocation of budget, determining the correct
promotional mix, introduction of strategic approach and finally evaluation. We
shall study about each one of them briefly here.
1.
Objectives
The marketer should determine his sales promotion objectives. He should
determine what is to be accomplished and what kind of buyer responses are desired.
Sales promotion tasks should be objective oriented. These tasks are informing,
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persuading and reminding the customers about the products. The sales manager
should inform consumers about his product and should highlight its special features.
He has not only to inform the customers but persuade them to buy it.
2.
Communication
Sales promotion should attract the attention of the target audience. If the
prices, discounts, off season facilities etc, are not adequately and effectively
communicated, the effort of sales promotion would be wasted. A point to be noted
here is that the audience evaluates not only the message but also the source of the
message in terms of its credibility. The purpose of communication is to persuade
potential customers to purchase the product.
The sales manager determines the message to be aimed at the target market
to gain product acceptance. The overall marketing objectives define the role of
communication in sales promotion. Identifying the target audience is the main task
of a sales promotion communication. The audiences response to the message
source helps determine the effectiveness of the message.
3.
Medium of Reach
Sales promotion may adopt different methods for approaching people.
Strategic variables are taken into account while deciding a particular method of
sales promotion. Consumer promotion has been considered a very effective mode
of sales promotion; potential consumers are offered samples, coupons, etc; to
promote sales. The point of purchase display is a silent strategy to trigger off
buying decisions. Retailers rely on in-stone displays to familiarize customers with
their product. A showroom display makes it easy for prospective buyers to
familiarize themselves with the different features of the product.
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Trade promotion through buying allowance, free goods, merchandise
allowances, push money etc; help to enhance sales by retailers and traders.
Packaging is another important form of promotion, particularly for consumer goods.
It may carry selling messages and information about the product. A good package
design attracts the shoppers attention away from other products. It is a proper of
blend of colour, design and shape.
The following chart shows major sales promotion devices, grouped by
Target Audience.
Business users or Households
Middlemen and their Sales Forces
Coupons
Free goods
Cash rebates
Advertising allowances
Premiums (Gifts)
Contests for sales people
Free samples
Product demonstrations
Contests
Trade shows
Point of purchase displays
Exhibitions
Product demonstrations
Advertising specialties
Trade shows and exhibitions
Point-of-purchase displays
Advertising specialties
Training sales forces
4.
Budget
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One of the most difficult marketing decisions facing companies is how
much to spend on promotion. It is not surprising that industries and companies vary
considerably in how much they spend on promotion. It is important to determine
sales promotion budgets before resorting to sales promotion activities. The
resources and sales potentials are estimated before the formulation of budgets.
Sales promotion budgets should be adequate so that they achieve the promotion
objective.
Affordable method
Many companies set the promotion budget at what they think the company
afford. This method of setting budgets completely ignores the role of promotion as
an investment and the immediate impact of promotion on sales volume. It leads to
an uncertain annual promotion budget, which makes long range market planning
difficult.
Percentage of sales method
Many companies set their promotion expenditures at a specified percentage
of sales or of the sales price. Automobile companies typically budget a fixed
percentage for promotion based on the planned can price. A number of advantages
are claimed for this method.
(i)
the percentage-of-sales method means that promotion expenditures are
likely to vary with what the company can afford ? which satisfies the
financial managers, who feel that expenses should bear a close relation
to the movement of corporate sales over the business cycle.
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(ii)
this method encourages management to think in terms of the relationship
between promotion cost, selling price and profit per unit.
The major drawback of this method is that it does not provide a logical basis
for choosing the specific percentage except what has been done in the past or what
competitors are doing. It also does not encourage building up the promotion budget
by determining what each product and territory deserves.
Competitive ? Parity Method
Some companies set their promotion budget to achieve share-of-wice parity
with their competitors. Two arguments are advanced for this method. One is that
the competitors expenditures represent the collective wisdom of the industry. The
other is that maintaining a competitive parity helps prevent promotion wars.
There are no grounds for believing that the competition knows better than
the company itself what it should be spending on promotion. Company reputations,
resources, opportunities, and objectives differ so much that their promotion budgets
are hardly a guide. Further more, there is no evidence that budgets based on
competitive parity discourage promotional wars from breaking out.
Objective-and-Task-Method
The objective-and-task method calls upon marketers to develop their
promotion budgets by defining their specific objectives, determining the tasks that
must be performed to achieve these objectives and estimating the costs of
performing these tasks. This method has the advantage of requiring management to
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spell out its assumptions about the relationship between rupees spent, exposure
levels, trial rates and regular usage.
5.
Promotional Mix
Companies face the task of distributing the total promotion budget over the
four promotion tools of advertising, sales promotion, publicity and sales force.
With in the same industry, companies can differ considerably in how they allocate
their promotional budget.
Companies are always searching for ways to gain efficiency by substituting
one promotional tool for another as its economics become more favourable. Many
companies have replaced some field sales activity with ads, direct mail and
telemarketing. Other companies have increased their sales promotion expenditures
in relation to advertising, to gain quicker sales.
The trial and error method, past performance and corporate policies may
influence the appropriate promotional mix. Many firms have increased their sales
with the application of appropriate combinations of the promotion media, sales
promotion and personal selling are supported with publicity. The promotion mix is
a variable in the marketing strategy. It should be clearly decided how fare a
particular element should be used in combination with other promotional methods.
6.
Strategic Approach
The kind of promotional mix employed determines the promotional strategy.
Generally speaking a particular combination, type or amount of sales promotion,
personal selling, publicity and advertising are brought into the promotional mix,
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which becomes the promotional strategy in the course of implementation. The
marketing strategy as much guides the determination of the promotional strategy,
which may be divided into sale promotion strategy, personal selling strategy,
publicity strategy and advertising strategy. The strategies, sustaining promotional
strategy, developmental promotional strategy or promotional appropriation.
(i).
Push and Pull Strategies
The push and pull promotional strategies may be used to enhance sales. The
push strategy concentrates on middlemen or retailers who push the sale of the
product to the final consumers. This strategy covers cooperative advertising,
attractive terms of sale, coupons and discount facilities.
The pull strategy is directed toward the final buyers. It persuades the buyers
to go to the sellers to buy. Sales promotion, particularly customer promotion, is an
important form of the pull strategy. Customer promotion, may call for the offer of
samples, money-refund offers, prices-off, premiums and so on.
The push strategy asks the sellers or retailers to attract the layers.
Trade promotion is thus the main form of the push strategy. Trade promotions refers
to buying allowances, free goods, co-operative advertising, push money, sales
contests and so on. The marketing manager has to adopt both these strategies to
promote sales.
Features of pull strategy
Pull strategies depend upon mass communication. Products are literally
pulled by buyers through the channels on the basis of mass promotional efforts. In a
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pull strategy, the product is pulled through the channel by creating end- user
demand. Customers force retail shops to stock those mass- promoted products. In
turn, retailers demand the highly advertised product from wholesalers. The firms
having well- known brands can exercise control over channels through pull
promotion strategies. Personal salesmanship plays a secondary role in pull
promotion. Marketer rely on intensive distribution. Dealer margins are also lower in
pull promotion.
Features of push strategy
Industrial marketing strategies are mostly the push type strategies relying
primarily on personal selling. Also in the sale of medical products and in life
insurance, marketers have to employ a lot of salesmen to call on physicians and
prospects for life insurance. In push type promotion, personal selling expenses are
considerable and dealer margin is also higher. In this, after ? sale service is also
important and marketers rely on selective distribution. Push strategy can be
successfully used when:
1. We have a high quality product with unique selling points.
2. Where we have a high priced product.
3. We can offer adequate incentives (financial) to middlemen and their
salesmen.
Push ? Pull strategy
Most consumer goods manufacturers generally employ a push- pull
(combination) strategy to sell their products. The ratio of pull to push may differ
according to the requirements of market situation. Salesmen are used to push the
goods through the marketing channel, while advertising and sales promotion will
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support personal selling to accelerate sales. Thus, all tools of promotion work
together.
(ii). Sustaining Promotional Strategy : The main aim of this strategy is to
stablise the market share. Sales promotion becomes necessary to sustain a market
share. At a laggard stage, the markets may shrink. Unless appropriate steps are
taken, the marketer may find that the market may be slipping away for, to his
product. But this strategy can be adopted only after employing the penetrating
strategy. That is, the market share should not decline after a higher level of sale has
been attained. The sustaining promotional strategy stabilies the market share. Sales
force promotion by way of bonus and other incentives many contain the market
from slipping away. Steps are taken to prevent the sales force from going across to
the competitors. Brand loyalty of customers is fostered and reinforced.
(iii) Developmental Promotional Strategy: The introduction of new
products may require expansion of the market. Innovators need to have a
developmental strategy. New products or brands are popularized by offering trade
discounts, cash rebates, premiums, money refunds, and so on. The new consumers
are given effective after- sales service. Consumer franchise building is done with
development strategy. The promotional mix for a brand not yet popular may require
emphasis on both personal selling and sales promotion.
(iv) Promotional Appropriation : Promotional objectives determine
promotional appropriation. The forms of promotion, the costs of each component of
promotion, the activities to be performed and appropriation on personal selling,
sales promotion, advertising and publicity are determined under this strategic
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approach. The marketing manager has to arrive at the optimum promotional mix of
the given objectives. And this requires proper planning and programme evaluation.
Product attributes, brand differentiation, purchase frequency, the nature of
the market, the size of market and its location, the nature of prospective buyers,
their purchase frequency, distribution and price strategies are evaluated before the
formulation of an appropriate sales promotion strategy.
7.
Evaluation of sales promotional strategy
Sales promotional strategies should be evaluated twice. First at the stages of
implementation and secondly after the final performance because implementation
control will suggest improvements during the application of the promotional
strategy, while ,,performance control will be a guide for the future. Implementation
control covers initial planning, objectives, promotional packages, and printing of
special premiums and packaging materials, distribution to retailers, etc. Even
though it has proved successful whenever tried, very few firms adopt this strategy.
Many manufacturers believe only in performance control. Performance is evaluated
in the light of planned objectives. Consumer surveys and consumer experiments are
used to evaluation techniques show how far the sales promotion techniques have
been effective in increasing sales through motivating consumers and sellers, and
point the way to improvement in sales promotion.
Sales promotion and product life cycle
The promotional tools vary in their cost effectiveness at different stages of
the product life cycle.
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In the introduction stage, advertising and publicity have high cost effeteness,
followed by sales promotional to induce trial and personal selling to gain
distribution coverage.
In the growth stage, all the tools can be toned down because demand has its
own momentum through word-of-mouth.
In the maternity stage, sales promotion, advertising and personal selling all
become more important in that order.
In the decline stage, sales promotion continues strong, advertising and
publicity are reduced and sales people give the product only minimal attention.
Cross Promotion
Under this sales promotion strategy, the manufacturer may use all the
potential tools such as advertisement, personal selling and sales promotion to hit the
market simultaneously so that the buyer will be induced to buy a product. For
example when Deccan Chronicle, a daily newspaper, was introduced in Chennai,
the management had used all promotional activities, such as display, holding, price
off and media to influence the reader to buy the paper. This promotional strategy in
called cross promotion.
Surrogate selling
Under this strategy, when the manufacturer is unable to sell his product in
the market he may handover the product to a well known organization to sell on
behalf of the manufacturer. This strategy is called surrogate selling.
For example, shampoo products are manufactured at Puducherry by
a number of small and medium manufactures. But they find it difficult in selling the
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product in the market. What they have done was, handing over the finished product
to Hindustan Lever, Proctor and Gample who have sufficient logistics in selling the
product, there by relieving the burden of converting the product into cash. They
have in fact act as a surrogate in selling their merchandise in the market.
Bait and Switch advertising
Bait means something that is meant to tempt someone. Under this
strategy, the marketing manager use AIDAS formula to tempt someone to look the
advertisement and influence him to buy a product. For example, Bharat Sanchar
Nigam Limited has used 10 paise prominently in its advertisement to bring the
attention of its users in mind which will influence them to go for using the BSNL
service. This way of tempting the viewer to opt for BSNL is called Bait advertising.
Switch means a device that is pressed or turned to stop or start something
working especially by electricity. Switch advertising means when an advertisement
is released, it should ignite the minds of the buyer to notice the advertisement and
take a decision to buy the product. For example during festival times manufacturer
may offer some discount on cash price to the buyer on some selected products. So
he has put this in the local newspaper-which would have ignited the minds of the
buyers. Buyers will certainly be influenced to buy the product. This strategy is
called switch advertising strategy.
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LESSON ? 3
BRAND EQUITY
INTRODUCTION
A Brand Is A Term Used To Identify Its Products; While Branding Is The
Practice Of Identifying A Product Or Line Of Products By A Special Name Or
Symbol. Its Use Goes Back To The Middle Ages For Promoting Sales. It Is Said
That Egyptians Were Using Some Or Other Identification To Market Their Pottery.
The Continued Use Of Brands To The Present Times In Business Has Been Largely
Due To:
(I).
Growth In Competition.
(Ii).
Growth Of National And Local Advertising.
(Iii). Growth Of Packaging And
(Iv). The Development Of Consumer Brand Consciousness.
Such Sales Promotion Devices Are Intended:
(I).
To Gain Recognition For Their Products.
(Ii).
To Bring About A Certain Amount Of Consumers Preference And
(Iii). To So Firmly Fix The Product In The Mind Of The Buyer That He
Will Believe That It Is The Only One Which Will Satisfy His Wants
And As A Result Will Refuse To Accept A Substitute.
Definition
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A Brand Is A Name, Term, Symbol, Or Design, Or A Combination Of
Them Which Is Intended To Identify The Goods Or Services Of One Seller Or
Group Of Sellers And To Differentiate Them From Those Of The Competitors.
- American Marketing Association
A Brand Name Consists Of Words, Letters And/Or Members Which May
Be Vocalized; And Refers To Products. Ambassador, Padmini, Tata, Tcs Are
Examples Of Brand Names.
Brand Names Should Not Be Confused With Trade Names, Where Brand
Refers To Product, Trade Name Refers To Company. The Name Of The Firm Is Its
Trade Name. The Brand Name Can Come From Its Trade Name.
Brand Equity
In Recent Years, The Debate About The Value Of Brands Has Been
Crystallized In The Phrase ,,Brand Equity Except That Crystallized Is Probably The
Wrong Word, Since The Concept Is Anything But Sharp And Crystal Clear.
The Phrase Is Used In Varying Ways, And Seldome Precisely.
Let Us Start Then One Attempt To Be Clear. Aaker Defines Brand Equity
As: A Set Of Assets And Liabilities Linked To A Brand, Its Name And Symbol,
That Add Value Or Subtract From The Value Provided By A Product Or Service To
A Firm And/Or To That Firms Customers. He Explains Further That These Assets
And Liabilities Can Be Grouped Under Five Categories:
I).
Brand Loyalty
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Ii).
Name Awareness
Iii).
Perceived Quality
Iv).
Brand Associations In Addition To Perceived Quality And
V).
Other Proprietory Brand Assets - Patents, Trademarks And Channel
Relationships.
Concepts And Criteria
It Should Not Be Forgotten That Branded Goods, To Be Useful, Must Be
Distinctive. Its Name Must Only Be Used In Connection With One Grade, Quality
And Style Of Product. Unless Strict Similarity In These In Maintained, The Buying
Public Will Soon Find Out That The Brand Name Or Trade Mark Has No Particular
Meaning And Will Always Be Suspicious In Future.
A Brand Therefore Has Got Some Value. Its Value Must Come From The
Article. Advertising Simply Makes It Popular And Gives It Permanent Value.
When A Man Buys A Branded Article, Especially One That Is New, He Is Critical.
He Uses It And Forms His Own Opinion Of It. If He Likes It He Will Continue To
Purchase And He If He Dislikes It, He Will Avoid Further Buying And Will Tell
His Friends Not To Waste Money On It. This Is Called Self-Advertisement Of A
Particular Brand.
For Consumers Brands Make It Easy To Identify Goods Or Services. They
Aid Shoppers In Moving Quickly Through A Supermarket, Discount Outlet Or
Other Retail Store And In Making Purchase Decisions. Brands Also Help Assure
Consumers That They Will Get Consistent Quality When They Reorder.
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For Sellers, Brands Can Be Promoted. They Are Easily Recognised When
Displayed In A Store Or Included In Advertising. Branding Reduces Price
Comparisons. That Is, Because, Brands Are Another Factor To Be Considered In
Comparing Different Products, Branding Reduces The Likelihood Of Purchase
Decisions Based Solely On Price. The Reputation Of A Brand Also Influences
Customer Loyalty Among Buyers Of Services As Well As Business And Consumer
Goods. Finally Branding Can Differentiate Commodities.
Not All Brands Are Widely And Favourably Recognised By Their Target
Markets. And Among Those That Are, Many Are Unable To Maintain A Position
Of Prominence. However As A Result Of Such Activities As Aggressive
Promotion And Careful Quality Control A Few Brands Retain Their Leadership
Positions Over A Long Time. Consequently, Enormous Amounts Of Money Are
Spent To Purchase Companies That Have Widely Recognised Brands.
Criteria For Measuring Brand Loyalty
Brand Loyalty Could Be Measured Simply By The Number Of Purchases
That A Brand Obtained In A Certain Number Of Purchase Occasions. More
Modern Measures Are Also Available That Involve Models That Examine The
Pattern Of Purchases One Brand Receives Versus Another. The Following Criteria
Is Used To Measure Brand Loyalty.
Number Of Times The Same Brand Is Purchased By The Buyer.
Popularity Of The Brand.
Frequency Of The Buyers In Making Repeat Purchases.
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Word-Of-Mouth Communication In Spreading The Name Of The Brand.
Building And Using Brand Equity
In The Minds Of Many Consumers, Just Having The Brand Name Such As
Sony, Or Hall Mark Adds Value To A Product. In Particular, Brands Like These
Connote Favourable Attributes (Such As Quality Or Economy). What Were
Talking About Is Brand Equity, Which Is The Value A Brand Adds To A Product.
Brands Rated The Best In India And For Comparison Purposes-In
Automobile Industry / Cars. In Fact, Only Four Brands ? Tata, Hyundai, Maruthi
And Ford ? Were On The High Lists Of Brands. Also Note That Only Two Cars ?
Maruthi And Hyundai ? Were Toping The List And Both Were Given High Marks
By Users In India.
Brands Are Considered Very Important Assets For A Company. Given The
Importance Of Brands, Several Methods Have Been Developed To Measure Their
Value One Is Consumer Evaluations. Another Method, Developed By The
Interbrand Consulting Firm, Considers The Worth Of A Particular Brand To Be The
Present Value Of Future Profits That Will Be Derived From Products Carrying That
Brand. In Interbrands Latest Ranking, All Of The Top ? 10 Brands Are Part Of
U.S. Companies, With Coca-Cola, Microsoft And Ibm At The Top Of The Pack.
The Top-Ranked Brand From Outside The U.S. Is Nokia Of Finland.
If You Are Not Convinced That A Brand Name By Itself Can Have Much
Value, Consider Some Research Results. In One Study, The Proportion Of Subjects
Choosing Corn Flakes Cereal Jumped From 47% When The Brand Was Not Known
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To 59% When The Brand Was Identified As Kellogs. In Two Mid ? 1990s
Studies, When Samples Of Computer Buyers Were Asked How Much More Or
Less They Would Pay For Particular Brands Rather Than The Average Computer
Brand, There Was A Range Of Rs.40,000. Brands Commanding A Premium
Included Ibm, Compaq, Hewlett ? Packard And Dell. Its Evident That Kellogs,
Ibm, Compaq, And Many Other Brands Have Substantial Equity.
We Tend To Think Of Brand Equity As A Positive Aspect Of A Product.
Occasionally A Brand Will Lack Equity Or Even Have Negative Equity. In Such A
Situation, A Brand Adds Nothing Or Even Detracts From The Perceived Ability Of
A Product To Do What Its Supposed To Do.
For Example, In The Research About Computers, Consumers Typically
Indicated They Would Need A Discount To Select The Packard Brand. Not
Surprisingly, Packert Is Now Struggling To Survive. In The Services Field, During
The Late 1990s, Transworld, Airlines Suffered From Financial Problems And
Uneven Customer Service. Therefore, In The Minds Of Many Air Travelers, The
Twa Airlines Brand Had Negative Equity. Seeking To Establish Positive Equity As
The 1990 Ended, Twa Promoted Its Improved Performance With Respect To On-
Time Arrivals And Frequent-Traveller Satisfaction, Even Running Large
Advertisements In Business Periodicals.
Building A Brands Equity Consists Of Developing A Favourable,
Memorable And Consistent Image ? No Easy Task. Product Quality And
Advertising Play Vital Roles In This Endeavour. However, It Substantial Brand
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Equity Can Be Achieved, The Organisation That Owns The Brand Can Benefit In
Several Ways:
The Brand Itself Can Become An Edge Over Competition What We Call A
Differential Advantage, Influencing Consumers To Buy A Particular
Product. Examples, Ford Ikon And Samsung.
Because It Is Expensive And Time Consuming To Build, Brand Equity
Creates A Barrier For Companies That Want To Enter The Market With A
Similar Product.
The Widespread Recognition And Favourable Attitudes Surrounding A
Brand With Substantial Brand Equity Can Facilitate International
Expansion.
Brand Equity Can Help A Product Survive Changes In The Operating
Environment, Such As A Business Crisis Or A Shift In Consumer Tastes.
Brand Equity Is Often Used To Expand A Product Mix, Especially By
Extending A Product Line. The Rationale For Using An Existing, Strong Brand
Name On A New Item Or Line Is That The Brands Equity Will Convey A
Favourable Impression Of The Product And Increase The Likelihood That
Consumers Will At Least Try It.
If A Brand Has Abundant Equity, That Does Not Necessarily Mean It
Should Be Applied To Other Products. Procter And Gamble Decided Its Hugely
Successful Pepsodent Name Could Be Used On Different Kinds Of Toothpaste But
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Not On Other Product Categories Such As Mouthwash. Strong Equity Does Not
Guarantee Success For New Items Or Lines Using The Well Regarded Brands. For
Example, Levis Tailored Mens Clothing And Stop And Shop Of Chennai Brand
Did Not Pass The Test Of Continuing Consumer Acceptance.
Managing A Portfolio Of Brands
Most Companies Have More Than One Brand; Often They Have More
Than One Brand In A Single Product Field. Each Brand Needs To Be Managed
Separately, But They Also Need To Be Managed Together To Avoid Sub
Optimization.
The Ideal Situation Is That Each Brand Takes As Many Sales As Possible
Away From Competitors, But Takes As Few As Possible From, Other Brands. If
Each Brand Appeals To A Completely Separate Segment From All Others, There Is
No Problem. Unfortunately, Segments Are Rarely Watertight And Targeting Is At
Best An Inexact Science.
Careful Segmentation And Positioning Are The Usual Approach, And With
Constant Refinement They Can Work Well. Normally A Firm With Several Brands
In A Product Field Will Offer :
A Premium Brand I.E. One That Offers High Quality And Price ;
One Or More ,,Flanker Brands Offering Either A Value Proposition (I.E.,
Lower Price For Slightly Lower Quality) Or A Different Set Of Benefits;
And
Possibly A ,,Fighting Brand To Compete With The Own Label.
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The Main Brand Should Occupy The Centre Of The Defined Market, In The
Segment Containing The Most Consumers. Other Brands Can Then Be Used Either
To Increase Total Market Share ? By Appealing To Other Segments ? Or As
Blockers To Present Competitors Taking Over Those Positions. If The Central
Position Is Already Occupied By A Very Strong Competitor, It May Not Take
Sense To Attack It Head On, But To Use Flanking Brands As The Main Assault.
A More Recent Name For Arranging The Portfolio Is ,,Category
Management. This Means Developing A Strategy For The Category As A Whole
Rather Than For Individual Brands Separately And May Include Own Label
Products Packed For Retailers. This Has Some Appeal, And Is Often Welcomed
By The Retailers Themselves. This Should Make Any Company Suspicious And
Indeed One Of The Dangers Of Category Management Is That, In The Short Term,
It Is Usually Easier To Maintain Or Increase Sales By Meeting Retailers Demands
Than By Concentrating On Owned Brands.
There Is A Tendency For The Own Label Or Brands Designed Especially
For The Retailer, To Be Given Greater Prominence Than The Manufacturers
Brands. Unless This Tendency Is Resisted, The Brands Will Gradually Decline.
The Retailer Is Also Not Being Entirely Altruistic In Accepting The Manufacturers
Offer Of Help In Category Management; Since It Involves Considerable Data
Collection, Analysis, Planning And Monitoring, It Is Useful To Have Someone On
The Suppliers Pay Roll Do It Rather Than Attempting It On Ones Own.
Advertising, Promotion And The Brand
By Now It Is Clearly Understood That The Role Of Advertising And
Promotion In Fast Moving Consumer Good Markets. Advertising Has Been Seen
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As One Of The Primary Tools Of Brand Building. The High Cost And Difficulties
Of Mass Advertising Are Seen As One Of The Major Challenges To Fast Moving
Consumer Good Brands.
Do All Brands Need Advertising?
The Basic Assumption Is That Brands Need Advertising But Some Strong
Brands Apparently Do Not. Spencer Used To Spend Almost Nothing On
Advertising, Yet It Was An Enormously Powerful Brand. The Body Focus Seems
To Have Built Up A Distinct Brand Personality Without Heavy Advertising. Of
Course, Both These Are Retailers; They Have Stores Which People Pass By Go
Into. The Stores Themselves Are ? In Their Way ? Advertising, And It Is Difficult
To Think Of Major Brands Other Than Retailers That Have Done Without
Advertising.
It Is Extremely Difficult To Adjust Brand Reputations Without Controlled
Communications ? Both. It Is Noticeable That In Early 1990s When Spencer Was
In Serious Trouble, It Started To Use Advertising To Help Recover Its Reputation.
There Are Niche Brands That Have Built Up A Reputation By Word Of Mouth, Or
By Making Sure That They Were Newsworthy. Sometimes They Achieve This
Through Public Relations, At Other Times They Achieve It Just By Being
Controversial And There Are Many Ways In Which A Brand Can Try To Become
Famous.
We Can Safely Make Three Statements About Brand Communication :
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Every Brand Must Have Some Means Of Communicating With Its Buyers.
This May Not Be Advertising, But It Must Be Direct If It Is To Be
Controllable.
Many Other Methods Of Communication Are Available, And Can Be Used
To Gear Up And Multiply The Effects Of Advertising. Newsworthiness
And Fame Can Be Achieved, But The Message Has To Be One That Is
Really New And Interesting.
All The Means Of Communication And The Messages Transmitted Must Be
Co-Ordinated To Make Some That They Are Saying The Sense Thing,
Confused Consumers Dont Buy.
What Can Advertising Do ?
So Much Money Is Spent On Advertising, By So Many Bright People, That
It Is Not Surprising That Theories Abound As To What It Does And How It Does
It. Sadly, Most Of These Are Based On Myth And Personal Experience Rather
Than Hard, Scientific Evidence.
Large, Sophisticated Companies ? The Hindustan Lever, Procter And
Gamble ? Have Been Working For Decades On The Problem. Any Firm That
Really Wishes To Find Out How Advertising Works For Them Must Commit Itself
To The Same Sort Of Long-Term Experimentation, Data Collection And Model
Building That The Organisations Have. Ready ? Mode Solutions Are Not Likely
To Be Of More Than General Help.
Advertising Elasticity's ? That Is The Measure Of How Sales Change In
Response To A Change In Advertising Spend ? Are Low. There Are Significant In
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35 Per Cent Of Cases For Established Brands And 55 Per Cent Of Cases For New
Brands. The Findings Show That :
In Two-Thirds Of Campaigns For Existing Brands And Almost Half Those
For New Brands, The Advertising Does Not Significantly Affect Sales And
Short Term Advertising Elasticities Can Be Measured But They Are Likely
To Be Very Small.
Advertising Effects Are Weaker In Unambiguous Product Fields And
Stronger Where Products Are New And / Or Ambiguous.
Long Term Effects May Last Two Or Three Years After The Initial
Campaign, So Where Advertising Does Produce A Sales Effect, Its Profitability
Should Be Measured Over That Period. Even If Advertising Produces No Sales
Increase, It May Be Contributing To The Maintenance Of Brand Share Or Building
Up Brand Equity.
There Is A Price Paradise
The Standard Model Of Advertising And The Brand Suggests That A Strong
Brand Is Less Sensitive To Price Than A Weaker One. When Advertising Increases
Sales, The Average Sensitivity To Price Also Increases. In Other Words, A
Seemingly Successful Campaign Has Made Buyers More Sensitive To Price, Where
As We Would Expect Our Brand Buyers To Be, If Anything, Less Sensitive.
What Can Promotion Do?
Like Advertising, Promotion Can Do More Things Than Just Affect Sales.
First It Can Induce Consumers To Try A Product ; Because Trial Is Hugely
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Important In Producing Market Share, Anything That Increases It Is Invaluable. A
Successful Promotion That Induces New Triers To Buy Is Therefore A Vital
Weapon. It Is Then Upto The Performance Of The Product Itself ? And The
Subsequent Actions Of The Rest Of The Marketing Mix ? To Persuade That Buyer
To Continue Buying.
Promotion Can Also Create Excitement. In Any Crowded Market Place,
You Need To Stand Out. One Way Of Doing This Apart From Advertising Is
Having Occasional Creative Promotions. Finally Promotions Can Produce A Trade
Push ; If Advertising Produces Consumer Pull, The Trade Promotion Ought To
Produce Channel Push I.E. Pushing Products Into The Distribution Chain And
Relying On The Channel Members To Sell Them On.
There Is A Potentially Much More Deadly Long-Term Effect Of Too Much
Promotion ? The Subconscious, Message That Constant Promotion Sends To
Consumers. Constant Promotion May Devalue The Brand, Sending Almost The
Opposite Message To The One You Want To Send.
Integrating Advertising And Promotions
The Answer To The Problem Of Conflicting Communications Must Be To
Integrate Advertising And Promotion. There Are Two Common Sense Reasons For
Integration.
The First Reason Is That Integration Creates Synergy. This Is A Much ?
Abused Word, But The Evidence Shows Clearly That Advertising And Promotion
Can Work Together To Produce A Greater Effect. In Addition, The Integration Of
Advertising And Promotion Gives The Consumer A Coherent Message. If
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Advertising And Promotion Are To Achieve Synergy And To Build A Cumulative
Effect In Consumers Minds, They Must Be Mutually Consistent.
Planning Advertising And Promotion
The Advertising And Promotion Plan Is Only One Part Of The Overall
Marketing Plan And Must Fit Within It. In Order To Start The Advertising Plan,
We Need Some Background ? Which Is Not A Very Formal Restrictive Planning,
But For A Process Of Thinking Through What The Advertising And Promotion Are
Trying To Achieve.
From The Brand Plan We Should Expect To Find The Following Elements.
A Situation Analysis (Where We Are And Why)
Objectives (What The Brand Is Aiming For In Sales, Share And Other
Targets)
Positioning (How The Brand Is Positioned In The Consumers Mind, And
How We Wish To Change This);
Strategy (How The Brand Is Going To Compete In This Market)
Advertising Strategy (What Role Advertising Has Next Period With In The
Overall Strategy) And
Budget (What Moneys Are Available To Spend On Advertising Promotion).
Advertising Objectives Must Include Long-Term Brand Building. They
May Of Course Also Include Shorter-Term Tasks Such As Announcing A New
Variation Or Promotion.
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Promotions Should Be Integrated Into The Overall Marketing Process.
Irrelevant Promotions May Harm The Brand. Good Practice Sees The Objectives
Of Promotions Set At The Beginning And In The Context Of The Communications
Strategy, So That Suitable, Relevant Promotions Consistent With The Brands
Values Can Be Planned. Promotions Agencies Are Very Good At Coming Up With
Ideas, As Are Advertising Agencies, But The Ideas Must Contribute To, And
Express, The Brands Values.
Leveraging Brand Values For Business And Non-Business Contexts
The Reputation Of The Brand Is A Source Of Demand And Lasting
Attractiveness, The Image Of Superior Quality And Added Value Justifies A
Premium Price. A Dominant Brand Is An Entry Barrier To Competitors Because It
Acts As A Reference In Its Category. The Brand Can Enter Other Markets When It
Is Well Known, Is A Symbol Of Quality And Offers A Certain Promise Which Is
Valued By The Market. The Palmolive Brand Name Has Become Symbolic Of
Mildness And Had Been Extended To A Number Of Markets Besides That Of
Soap, For Example Shampoo, Shaving Cream And Washing Up Liquid.
In Determining The Financial Value Of The Brand, The Expert Must Take
Into Account The Sources Of Any Additional Revenues, Which Are Generated By
The Presence Of A Strong Brand. Additional Buyers May Be Attracted To A
Product Which Appears Identical To Another But Which Has A Brand Name With
A Strong Reputation. If Such Is The Companys Strategy The Brand May
Command A Premium Price In Addition To Providing An Added Margin Due To
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Economies Of Scale And Market Domination. Brand Extentions Into New Markets
Can Result In Royalties And Important Gearing Effects. To Calculate This Value It
Is Necessary To Subtract The Costs Involved In Brand Management; The Costs
Involved In Quality Control And Investing In R & D, The Cost Of National, Indeed
International Sales Force, Adverting Costs, The Cost Of A Legal Registration And
The Cost Of Capital Invested.
The Financial Value Of The Brand Is The Difference Between The Extra
Revenue Generated By The Brand And The Associated Costs For The Next Few
Years, Which Are Discounted Back To Today. The Number Of Years Is
Determined By The Business Plan Of The Values. The Discount Rate Used To
Weigh These Future Cashflows Is Determined By The Confidence Or The Lack Of
It That The Investor Has In His Forecasts. However, A Significant Fact Is That The
Stronger The Brand, The Smaller The Risk. Thus Future Net Cash Flows Are
Considered More Certain The Stronger The Brand.
The Following Are The Three Generations Of Profit Of The Brand ;
The Acceptable Price Premium
The Differential Of Alteration And Loyalty And
The Differential Of The Margin
These Gearing Effects Work On The Original Market For The Brand But
They Can Be Offered Subsequently In A Variety Of Forms On Other Markets And
For Other Product Categories, Either Through Direct Brand Extension Or Through
Licensing From Which The Manufacturer Benefits From Royalties.
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Once These Generations Are Measured In Rupees Or Any Other Currency
They May Serve As A Base For Evaluating The Marginal Profit Which Is
Attributable To Brand Management. Now-A-Days A Key Element Of Brand
Equity Is Understanding And Adapting To The Logic Of Distributors And
Developing Good Relations With The Channels.
The Value Of The Brand And The Legitimacy Of A Company
Implementing Brand Policy, Depends On The Difference Between The Marginal
Revenues Coming From The Generators Of Profitability And The Necessary
Marginal Costs Associated With Brand Management.
Brand Values For Non-Business Organisations
Most Of The Marketing Examples Are Generally Drawn From The Business
Sector. Starting In 1990s, There Has Been A Broadening Of Marketing To Cover
All Organisations. All Organisations Have Marketing Problems And Need
Marketing Skills. The Non-Profit And Public Sectors Account For More Than A
Quarter Of The Indian Economy And Are In Great Need Of Management And
Marketing Skills.
Many Non-Business Organisations ? College, Hospitals, Social Service
Organisations, Charities, Museums, Government Agencies, Trusts ? Are
Experiencing Difficult Times. They Are Losing Clients On The One Hand And
Finding It More Difficult To Raise Public And Private Funds On The Other Hand.
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Many Are Being Forced To Charge Fees For Formerly Free Services To Earn Extra
Income. In Certain Cases, Commercial Businesses Are Complaining About Unfair
Competition From The Non-Profits.
All Of This Has Increased The Interest Of Non-Profits In The Area Of
Marketing. Many Non-Business Organisations Are Vying With Each Other To
Promote Their Brand Value In The Market. They Use Brand As A Tool To
Mobilise Finds From The Public To Fulfill Their Objectives. For Example, In
Chennai, Banyan, A Non-Profit Organisation Which Looks After The Socially,
Economically And Mentally Retard Women, Promotes Its Brand Effectively In
India And Abroad So As To Raise Funds For Its Noble Cause. Another
Organisation Is ,,Vuthavum Karangal (Helping Hands) Which Is Taking Care Of
Socially And Economically Deprived Children In Chennai. It Is Also Taking Steps
To Promote Its Brand To Get Recognition From The Corporate World So That It
Can Get Funds For Its Social Cause.
There are several dangers in the aggressive promotion of brand value. In
fact, aggressive promotion can create negative reactions especially the donor, who
regards hard branding as offensive. Also, hard promotion may turn off as many
clients as it turns on. Care must be the best word to be followed by Brand managers
of non-business organisations.
Questions
1. Briefly explain the concept of sales promotion.
2. What are the different methods of sales promotion?
3. What are the objectives of same promotion.
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4. Explain in detail the stages involved in implementing a sales promotion
strategy.
5. Write short notes on :
i) Push strategy
ii) Pull strategy
iii) Sales promotion and product life cycle.
6. Does a sales promotion scheme induce buying? Substantiate your answer.
7. List out the various sales promotion tools available and briefly explain their
features.
8. Write a note on :
(i). Surrogate selling
(ii). Bait and switch advertising
9. Define Brand equity. Explain the method of building, measuring and
managing brand equity.
10. How advertising and sales promotion is linked to achieve brand standing?
11. Explain the role of brand value for business and non-business organizations.
References :
1. Advertising Management ? concepts and cases Mahendra Mohan.
2. Marketing Management ? Philip Kotler
3. Branding ? Geoffrey Randoll
4. Strategic Brand Management ? Kapferer
5. Advertising and Sales Promotion Management ? S.L.Gupta, V.V.Ratra
6. Principles and Practice of Marketing ? C.B. Memoria and R.L.Joshi
7. Advertising and Salesmanship ? P.Saravanavel.
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This post was last modified on 14 March 2022