Advertising & Promotion

What is advertising?
Advertising is a form of communication used to persuade an audience (viewers, readers or listeners) to take some action with respect to products, ideas, or services.

Definition
The non-personal communication of information usually paid for & usually persuasive in nature, about products (goods & services) or ideas by identified sponsor through various media. (Arenes 1996)

Introduction
The emergence of advertising is closely connected with the emergence of mass media The result has been a tremendous revolution in the shopping experience Because of widespread advertising, modern consumers enter a store with a wealth of information about alternative products, styles, qualities, and prices This has changed the ways that firms market products In turn, the development of sophisticated advertising has altered structure of markets nature of firms

Impact of Advertising
Without advertising lack of information about products shopping is generally local and based upon visual comparison firms can operate on a small scale as each competes for a small local market With advertising comparison shopping is considerably eased as consumers have better information about range of good on offer firms have an incentive to widen the range of goods they offer and to operate on a larger scale

Advertising Objectives
Create awareness for new products Inform consumers of product features and benefits price changes Important for building primary demand Persuasion Build brand preference or change buyer perceptions especially important for building demand in competitive markets. Reminder advertising: maintain top-of-mind awareness

Starting Points
Advertising is a free service to consumers But it is costly to produce Must, therefore, generate a benefit for the firms involved There is evidence that such benefits exist high advertising expenditures by industry associated with high levels of profitability High: cereals, perfumes, soap, pharmaceuticals Low: hats, carpets, jewelry

Starting Points (cont.)

This evidence though does not tell us the direction of causation does advertising increase profit? or does profits lead to advertising? Besides causation, other issues arise, too Advertising may permit new firms/products with lower costs to compete with established goods by increasing consumer information However, advertising may enhance existing brands and reduce competition

Advertising media
Advertising messages are usually paid for by sponsors and viewed via various traditional media; including mass media such as newspaper, magazines, television commercial, radio advertisement, outdoor advertising or direct mail; or new media such as websites and text messages.

Concept of Promotion
Promotion is all personal and impersonal efforts by a seller to Inform Persuade or Remind a target audience.

Promotion includes:
Personal Selling Advertising Sales Promotion Public Relations (PR)

Personal Selling
Direct presentation of a product to a prospective customer by a representative of the organization selling it.
Face to face Over the phone

Advertising
The non-personal communication of information usually paid for & usually persuasive in nature, about products (goods & services) or ideas by identified sponsor through various media.
Broadcast media (TV, Radio) Print media (newspapers, magazines) Outdoor media (billboards) Internet Mobile phones Other media

Sales Promotion
Incentives given to encourage sales and help personal selling.
Premiums Event sponsorships Contests Trade shows In-store displays, samples, rebates Discounts and coupons

If given to channel partners: Trade

Promotion

Public Relations
Efforts to develop favorable attitudes and opinions about products/organizations
Newsletters Annual reports Lobbying, charitable events etc.

Publicity
News stories about organization & products

Hierarchy of effects Communication Process

Awareness

Interest

Liking, Preference

Purchase, Action

History of advertising.. Thennow..and the future..

 Never write an advertisement which you wouldn't want your family to read. You wouldn't tell lies to your own wife. Don't tell them to mine.

. For the complete story, see the ppt titled The history of Marketing

Role of consumer research in Advertising

To be a bullfighter, you must first learn to be a bull

Consumer Research
You need to know as much about the consumer as possible. Who they are, where they live, how they live, how they spend money, what their likes and dislikes are, what interests and motivates them, their needs and desires and more.

 Understand your target audience:

Profile, personality, lifestyle, culture, motivations, buying behavior, attitudes, expectations from life

Identify key expectations

Needs, wants, benefits, identity

Find out three things:

Who they are (Demographics) Who they really are (Psychographics) Who they really are for us (Usergraphics)

Demographics
Age Life-cycle stage Occupation Lifestyle Economic status

Life cycle stages

Psychographics
Motivation Perception Beliefs and attitudes Personality

Usergraphics
How they think / feel about product category? (think - medicines, petrol / feel - clothes, watch) How involved they get in buying? (high
involvement car, furniture vs. low involvement soaps, chewing gum)

Who buys who decides who influences who uses the product?

Understand the media habits

Television habits, reading habits, traveling habits, social and professional group memberships etc. To find out how to reach them

Major advertising agencies:

Ogilvy and Mather Limited

Mudra communications Pvt. Ltd

Lintas India Pvt. Ltd JWT (Hindustan Thompson Associates Pvt. Ltd.) FCB-Ulka advertising pvt. Ltd Rediffusion DY&R Pvt Ltd McCann-Ericsson India Ltd Leo Burnett Grey worldwide (India) Pvt Ltd

Ad agency - Media Decisions

Types of media

Media Objectives
Exposure and GRPs The Reach Objective The Frequency Objective Effective Frequency
Gross impressions
The sum of the audiences of all the media vehicles used during a certain time span

Gross Ratings Points

Media planners convert impressions to gross ratings points in order to compare the efficiency of media schedules

Media Objectives
Exposure and GRPs The Reach Objective The Frequency Objective Effective Frequency
The percentage of the audience that is exposed at least once to the advertisers message during a specific time frame

Media Objectives
Exposure and GRPs The Reach Objective The Frequency Objective Effective Frequency
Estimates the number of times the exposure is expected to happen

Media Objectives
Exposure and GRPs The Reach Objective The Frequency Objective Effective Frequency
Combines the reach and frequency elements into one factor

Media Strategies
Cost Efficiency Cost per thousand Cost per point Scheduling Strategies Timing strategies
Duration: How long Continuity: How often

The media budget

An initial assessment of the amount of money available determines media used

Media Buying
Buying is a complicated process The American Association of Advertising Agencies (AAAA) lists no fewer than 21 elements in the authorization for a media buy Providing inside info Media buyers are important information sources for advertising agencies

Media Buying
Selecting Media Vehicles Choose the best vehicles that fit the target audiences aperture The media planner lays out the direction; the buyer is responsible for choosing specific vehicles Negotiation Media buyers pursue special advantages for clients

Monitoring the schedule

Media buyers and advertising agency tracks the schedule and performance of the advertisement on various media. Post-campaign evaluation done and plan and execution compared.

Measuring Advertising Effectiveness

Measuring Ad Recalls
How easily can the customers recall the message

A model for measuring ad effectiveness

The best ads are those that get results