Module 6. Elements of marketing mix – IV. promotion

Lesson 21

ADVERTISING

21.1 Introduction

There are various connotations of ‘advertising’ in marketing literature:

· The dissemination of information concerning an idea, service or product to compel action in accordance with the intent of the advertiser.

· Advertising is any paid form of non personal presentation and promotion of ideas, goods and services by an identified sponsor.

· Advertising is a message paid for by an identified sponsor and delivered through some medium of mass communication. Advertising is a persuasive communication.

· Advertising is controlled, identifiable information and persuasion by means of mass communication 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 medium in order to reach the specific objectives of the sponsor.

21.2 Objectives of Advertising

Advertising achieves two goals, one that of communicating and propagating the product and other of achieving the sales. Advertising objectives are classified as sales and communication objectives as given below:

21.2.1 Sales objectives

This are measured in terms of increase in sales, increase in market share and return on investment.

21.2.2 Communication objectives

It is related with increase in mind awareness, increase in comprehension, increase in brand attitude. Under Communication objectives, following specific communication objectives are performed by advertising.

21.2.2.1 Informing (Awareness generation)

The first and foremost task of all the advertisement is to inform the people and make them aware about the availability of the product or service and describe its characteristic features so as to explain what exactly is the product or services.

21.2.2.2 Persuasion for attitude formation (Forming Favorable attitude)

The advertising message aim at forming favorable attitude about the brand and finally make the consumers to purchase the product. For e.g. Tide advertising in TV channels to show the product features.

21.2.2.3 Reinforcement of desired behavior (Customer loyalty)

In today’s competitive business world, each company tries to increase its market share. Thus, repeated marketing communication should strengthen customer loyalty and build referrals for future sales. For e.g. AMUL advertisements by Amul for their dairy products.

21.3 Categories of Advertising

Advertising can be categorized into following types:

21.3.1 National advertising vs. local advertising

The word ‘National advertising’ indicates that such advertising is not limited to any specific geographic location. Such advertisements are undertaken by branded products with the objective of informing or reminding consumers about the brand. This advertising attempts to create an image of the product among specific target audience. For example, advertisement by some of the car manufacturers target specific consumer segment. For e.g., Tata nano cars are advertising targeting the people with low budget. i.e. lower middle class people Local advertising has a limited regional focus. It is undertaken by retailers so as to develop store loyalty among consumers. Example: Advertisement by the retailer on the paper box. Duliram penda of Baroda give their advertisement on paper box.

21.3.2 Co-operative advertising

In such type of advertising, the manufacturer and dealer bear the cost of advertising. The dealers generally put the advertisements in local magazine. They are guided by manufacturers. For e.g. Honda twister advertisement in newspapers, magazine etc.

21.3.3 End product advertising

The advertisements of different raw materials/ component parts which become part of final product are called end product advertising. For e.g. MRF Tires advertising in channels and magazines.

21.3.4 Trade advertising

Such advertising is aimed at resellers to motivate them to stock the products. From mass distributed products, it is necessary that more and more retail stores sell the product so as to achieve maximum distribution. Thus, trade advertising is used to create brand awareness among retailers. For e.g. Basmati rice advertising on packaging bags

21.3.5 Industrial advertising

In case of industrial goods which are purchased by manufacturers to produce finished good, personal selling is generally used. Industrial advertisements help to reduce personal selling costs. Industrial advertisements are more specific, detailed and aimed at small number of experts. Industrial advertisements use industry publications, direct mail, telephone, trade fair and internet. For e.g. A4 size Oriental Xerox paper give their advertisement on it packaging material.

21.3.6 Professional advertising

Professional like medical consultants, engineers, architects etc make purchases for their clients (final consumers). Professional advertisements are aimed at such professional and use professional journals and direct mail. For e.g. Bansal classes of Kota for IIT JEE give advertisement in newspapers.

21.3.7 Non product advertising

Besides products, ideas and services are also advertised.

21.3.7.1 Idea advertising

This advertising is used to sensitize general public towards some common subjects affecting the society e.g. polio eradication, save girl child, non discrimination of AIDS victims etc. For e.g. Gujarat tourism by Amitabh Bacchan on TV Channels

21.3.7.2 Service advertising

With the progress of economy, there is also growth of service sector. Contribution of service sector in employment highlighting virtues of any particular service may be regarded as service advertising. For example, educational services, financial services etc. For e.g. Bajaj Allianz giving insurance advertisement on TV Channels

21.3.7.3 Corporate or institutional advertising

This advertising is used to build the image of an institution or organization among its stakeholders e.g. sponsorship of any event by an institution. For e.g. Sharda university advertisement on TV Channels.

21.4 The Advertising Management Process

The advertising management process comprises of several distinct steps (Fig. 21.1):

Fig. 21.1 Advertising management process

21.5 The Advertising Budget

There is no standard rule for deciding advertising budget. Following guidelines are taken into consideration while deciding advertising budget:

21.5.1 Competitor similarity

The common method employed by many companies is to set their advertising budget similar to major competitors. This method does not give any idea about company’s advertising needs and marketing needs.

21.5.2 Affordable

This method is adopted by many small organizations where in the allocate some advertising budget amount which they can afford. This amount is not fixed any may even get reduced to transfer of allocated advertising budget to more pressing needs.

21.5.3 Fixed percentage of turnover

Under this method, a fixed percentage of annual sales turnover is set as a part as advertising budget. The limitation of the method is that it does not take into consideration the product life cycle or the competitive situation.

21.5.4 Budget in relation to function

This method overcomes the limitations of previous methods, amount of funds required to achieve the specified advertising goals is decided on a function to function basis. The budget is allocated based upon market to market, product to product and brand to brand basis.

21.5.5 Statistical method

The firms may also employ some of the statistical method like regression analysis to decide advertising budget. This method uses part historical time series or cross sectional data to approve at budget estimates.

21.6 Comparison of Advertising Media

Table 21.1 highlights the advantages and disadvantages of major media types.

Table 21.1 Advantages and disadvantages of major media types

Media	Advantages	Disadvantages
Television	Mass Coverage	Less selectivity
	High reach	Short message span
	Mixed impact of sound, sight and action	Higher total cost involved
	Less cost per exposure	Lead to clutter
	Effective in drawing attention
Radio	Less cost	Limited to local coverage
	High frequency	Only audio
	More focus on selection segment	Noise
		Less attention possibility
		Short life span and message.
News Paper	More coverage	Short life
	More space with less cost	Clutter
	Less lead time for ad placement	Less attention Possibility
	More choice for ad position	Selective exposure
	More suitable for current ads.	No audio – video
	Exposure controlled by reader
	Possibility of inserting coupons
Magazines	Possibility to have more focus on selected segment	More lead time for ad placing
	Longevity of information	No audio – video
	More information quantum	Less frequency
	Higher readership per copy	Less flexibility
Out door	Suitable for specific location	Short Message
	More repetition	Short exposure time
	More visibility
Direct Mail	More selectivity possible	More cost per contact clutter
	Exposure controlled by reader	Possibility of throwing as junk mail
	More information Content
	Possibility of repetition
Internet	Controlled by use	Less reach in developing countries
	More attention and involvement