Advertising - Module 1

8/2/2019 Advertising - Module 1

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What is Advertising ?

Advertising is any paid-for communication overtly intended toinform and/or influence one or more people.

Advertising says to people, 'Here's what we've got. Here's whatit will do for you. Here's how to get it.

Advertising

1. Identifies a current problem / opportunity for the product,service or corporate brand

2. Identifies the customers who can best solve / create thatproblem / opportunity3. Creates the most relevant and distinctive way ofcommunicating to them in creative & media terms


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Hence, Advertising is.

Anything that calls attention to a product

or service


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Advertising in Context

Who engages in advertising?

Businesses, governments, and individuals.


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Role of Advertising

Simply put: Advertising exists to help to sell

things.

It is mainly about brands

It is mainly designed to create and strengthen

consumer impressions of the brand

Exception is public service advertising


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Role of advertising

Marketing

Communication

Economic

Societal

The process a

business uses to

satisfy consumer

needs by providinggoods and services

Product category

Target market

Marketing mix

Brand


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Role of advertising

Marketing

Communication

Economic

Societal

Can reach a mass

audience

Introduces products

Explains importantchanges

Reminds and

reinforces Persuades


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Role of advertising

Marketing

Communication

Economic Societal

Moves from beinginformational tocreating demand

Advertising is anobjective means forproviding price-valueinformation, therebycreating a morerational andtransparent economy


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Role of advertising

Marketing

Communication

Economic

Societal

Informs consumers

about innovations and

issues

Mirrors fashion and

design trends

Teaches consumers

about new products

Helps shape consumer

self-image

Perpetuates self-

expression


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The importance of advertising

Involves a huge amount of money

Work is done by relatively few people

Major expense is for media time/space

Companies now spend a significantpercentage of sales on advertising


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Types of advertising

Product advertisingTries to sell a specific product

to final users or channel members

Services advertising Tries to sell specific services ofspecific industry to the consumers.

Corporate/institutional advertising

Tries to

promote an organisation's image, reputation or

ideasrather than a specific product


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The Functions of Advertising

Builds awareness of products and brands

Creates a brand image

Provides product and brand information

Persuades people

Provides incentives to take action

Provides brand reminders

Reinforces past purchases and brand experiences


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The Key Players

Advertiser

(client)

Agency

Media

Supplier

Audience

Uses advertising to send out

a message about its

products

Initiates the advertising

effort by identifying a

marketing problem

Approves audience, plan

and budget

Hires the advertising agency


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The Key Players

Advertiser(client)

Agency Media

Supplier

Audience

Has strategic andcreative expertise,media knowledge,workforce talent, andnegotiating abilities Advertising department

In-house agency

External Agency


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The Key Players

Advertiser(client)

Agency Media

Supplier

Audience

The channels ofcommunication that carrythe message to theaudience

Are also companies or hugeconglomerates

Mass media advertising canbe cost effective becausethe costs are spread over

the large number of peoplethe ad reaches


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The Key Players

Advertiser(client)

Agency Media

Supplier

Audience

Assist advertisers,agencies, and the mediain creating and placingthe ads

Vendor services areoften cheaper thanthose in-house


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The Key Players

Advertiser(client)

Agency

Media

Supplier

Audience

The desired audience forthe advertising message

Data-gathering technologyimproves accuracy ofinformation about

customers Advertisers must recognize

the various target audiencesthey are talking to andknow as much about them

as possible


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Types of Advertising

Brand advertising

Retail or Local advertising

Direct-Response advertising (Instant translation intosales like coupons, toll free numbers etc)

Business-to-Business advertising (e.g Naukri, Xeroxmachines etc)

Institutional advertising (more than a product, helps inpromoting the image of the institution)

Nonprofit advertising (e.g NGOs, political partiesadvertising their agendas etc.)

Public Service advertising


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What Makes an Ad Effective?

1. If it creates an impression for a product or

brand

2. If it influences people to respond in some

way

3. If it separates the product or brand from the

competition in the mind of the consumer


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7 primary services of an Ad Agency

complete a marketing analysis

develop an advertising plan

prepare a creative strategy

create advertising executions

develop and implement a media plan

handle billing and payments

integrate other marketing communications


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4 functions of full-service agencies

account management

creative

media planning and placement research


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Ad Agency organization structure

Broadly there are 5 departments in any

advertising agency

Account Servicing / Planning

Media

Creative

Production

Finance and Accounting


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Account service department

This department is the link between the ad agency andits clients. The account executive is mainly responsibleto gain knowledge about the clients business, profitgoals, marketing problems and advertising objectives.

He is responsible for getting approved the mediaschedules, budgets and rough ads or story boards fromthe client. The next task is to make sure that the

agency personnel produce the advertising to theclients satisfaction. The biggest role of the accountexecutive is continuous follow-up and communication.


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Media department

The responsibility of this department is todevelop a media plan to reach the targetaudience effectively in a cost effective manner.

The staff analyses, selects and contracts formedia time or space that will be used todeliver the ad message. This is one of themost important decisions since a significantlylarge part of the clients money is spent on themedia time and/or space.


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Creative department

The success of an ad agency depends upon the creativedepartment responsible for the creation and executionof the advertisements.

The creative specialists are known as copywriters. They

are the ones who conceive ideas for the ads and writethe headlines, subheads and the body copy.

They are also involved in deciding the basic theme ofthe advertising campaign, and prepare the roughlayout of the print ad or the visual ad or commercial.

Creation of an ad is the responsibility of thecopywriters and the art department decides how thead should look.


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Production department

After the completion and approval of the copy and theillustrations the ad is sent to the production department.

Generally agencies do not actually produce the finished ads;

instead they hire printers, photographers, engravers,

typographers and others to complete the finished ad.

For the production of the TV commercial, the production

department may supervise the casting of actors to appear in

the ad, the setting for scenes and selecting an independent

production studio.

The production department sometimes hires an outside

director to transform the creative concept to a commercial.


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Finance and accounting department

An advertising agency is in the business of

providing services and must be managed that

way. It has to have a specific department for

finance and accounting. This department is important since bulk of the

agencys income approx. 65% goes as salary and

benefits to the employees. It has to keep track of the payments receivable,

received and the resource allocation.


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Branding

Branding means

A name, term, sign, symbol or design, or acombination of them, intended to identify the

goods or services of one seller, and to

differentiate them from those of competitors


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How brands add value for the consumer

Brands simplify the decision-making process:

by identifying the product as from a reliablecompany,

by recalling advertising messages at the point ofsale

by remembering previous experience


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Brands as risk-reducers

Brands convey

Guarantee of consistent quality. They allow the customer to choose the best or

most suitable product for his/her needs.

They can act as symbols of his/her status orself- image.

d f l


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Brands as a source of pleasure

Continuity the satisfaction of familiarity andintimacy with the brand from consuming it regularlyover a long period of time

Hedonism the satisfaction of using a stylish,fashionable, well-made and well-advertised brand

Ethical responsibility the satisfaction of making aresponsible, caring choice, showing concern for theirenvironment or the conditions of the companys

workers.


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LIFE CYCLE OF A BRAND

BRAND RECOGNITION- They know your name but donot prefer it over competition.

BRAND PREFERENCE- They pick your brand based onprevious experience with it.

BRAND INSISTANCE- Will not accept alternatives.

GENERIFICATION- Brand becomes synonymous withthe category .


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POSITIVE IMPACT OF BRANDING

Recognition and Loyalty - The main benefit of branding is that

customers are much more likely to remember your business. Astrong brand name and logo/image helps to keep your companyimage in the mind of your potential customers.

Image of Size - A strong brand will project an image of a large and

established business to your potential customers. E.g.- The CocaCola Company uses the brand name Coca Cola and BBC is the brandname for the British Broadcasting Corporation.

Image of Quality- A strong brand projects an image of quality inyour business, many people see the brand as a symbol of qualityand value.

Image of Experience and Reliability- A strong brand creates animage of an established business that has been around for longenough to become well known. This induces a sense of security in

the consumer.


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SOME NEGATIVE ASPECTS OFBRANDING

Cost - If you wish to create and maintain a strong brandpresence, it can involve a lot of design and marketing costs.

Impersonal - One of the main problems with many brandedbusinesses is that they lose their personal image.

Fixed Image - Every brand has a certain image to potentialcustomers, and part of that image is about what productsor services you sell.

Time scale - The process of creating a brand will usuallytake a long period of time.


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4 Dimensions of Effective Branding

Effective branding basically includes four dimensions. Lets demonstrate thisusing the example of Airtel -

The Functional Dimension - Airtel says, "Your world of communication justgot simpler. This implies that even the simplest of the consumer can usetheir products and services.

The Social Dimension - Airtel is a recognized brand to be associated with.It is associated with a high level of social value.

The Spiritual Dimension - "Building telecom, building relationships." Airtel

encourages everyone to be more involved in building relationships andspreading happiness.

The Mental Dimension - Airtel gives me the opportunity to "ExpressMyself."


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HOW DO WE BRAND A PRODUCT

Associate your brand with a key customerpromise

Keep in mind precisely whom you are targeting

Differentiate your brand

Keep your brand focused

Repeat, repeat, repeat your message


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Sales Promotion


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Whereas advertising gives a reason

to buy, SP gives an incentive to buy

It is a part of the Marketing spend of allcompanies. In the present times, SP

spends in many companies exceed that ofthe ad-spends


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Why Sales Promotion - Internal reasons

Top management is more conducive to

spending on promotions

Line managers under greater pressure to

achieve targets

Justification of expenditure is easy


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Why Sales Promotion - External reasons

Increase in number of brands

Consumer is more price savvy

Greater pressure to liquidate stocks

Ad-effectiveness declining owing to rising

costs, media clutter and legal constraints


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SP is a push strategy

Since it is at the last point where the consumer

is often at the point of buying, the additional

incentive makes a last ditch effort to convert the

customer on to the incentivized brand


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SP is of two types

Trade

Consumer


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Trade promotion

Liquidating heavy inventories

Persuade retailers to carry stock, carry more

than usual stock, promote brand franchise


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Consumer promotion

Stimulate purchase

Induce trial

Create new users

Increase repurchase from occasional

customers

Reward loyal customers


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Forms of trade promotion

Bulk discounts

Free materials

Display windows

Shelf hiring

Lucky draws

Shop salesmen incentives


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Forms of consumer promotion

Free samples

Free gifts

Coupons

Price packs

Discounts

Lucky draws

Bundling offers (combination of related products ofsame company)


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SP spurs action because they are

supposed to run for a limited time


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The more the products quality and

its advertising persuasiveness fail to

meet competition, the greater is the

need for promotion.


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Promotion at different stages of the PLC

Introduction wise to use heavy promotion toinduce trials and promote brand franchise

Growth promotion should be limited ,if any

Maturity Higher promotions required since thebrand is under attack from competitors or productquality or advertising effectiveness is tapering off

Decline Heavy promotions. Used only to retain aset of loyal customers. Prior to withdrawal of theproduct, it could be used as a one time stockclearance from the trade


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Branded Entertainment

Branded entertainment is also called as

ADVERTAINMENT.

Combination of an audio-visual program and abrand.

Initiated either by the brand or by the

broadcaster.


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Briefly, branded entertainment is

It is the integration of a product or a brand

into a film or televised series.

Simply advertisements in entertainment.

Film ,Tele series , play , novel , song, stage-show, videogame etc.


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PURPOSE

Promotes brand image to their target audience

by creating positive links between the brand

and the program for viewers.

Branded Entertainment is not simply product

advertising or product placement - branded

entertainment is a piece of entertainment thatperfectly aligns with the brand attributes, and is

a reflection of the advertiser's brand personality

S l


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Some examples

Don - TagHuer ,Motorola, Garnier, Citibank.

Dhoom 2 - Coke, Pepe , Sony, Disney.

Krrish Singapore Tourism Board , Sony , John Players ,

Bournvita , Tide, Boroplus, HP.

Indian Idol Garnier, Nokia, Coke

Fear factor Thums up

Star voice of India Amul


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ETHICAL ISSUES OF ADVERTISING

DETERMINE WHAT IS ETHICAL

WHO SHOULD AND SHOULD NOT BE TARGET

MARKET

WHAT SHOULD OR NOT BE ADVERTISED


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Common criticism of advertising

Deception in advertising (Puffery) Impact on value systems(artificial demand)

Advertising controversial products( tobacco,

alcohol, prescription drugs etc.) Use of stereotypes in advertising

Creating a wrong perception (being fair means

being successful) Offensiveness in advertising(vulgarity)


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Social benefits of advertising

creates employment

acceptance of new products and

technology provides choices

keep prices down

create healthy competition


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Government regulations for advertisements

freedom of commercial speech (should not bemisused)

privacy rights-online advertising

advertising to children(children advertisingreview unit)

tobacco advertising


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Advertising regulatory agencies

Federal Trade/Communication Commission

Food and Drug Administration

Patent and Trademark Office

State Government Offices

National Advertising Review Council

Regulation by media itself Consumer Advocates

Advertising - Module 1

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