lesson - 1 the purpose of advertising

8/13/2019 Lesson - 1 the Purpose of Advertising

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Promotion - the fourth P of the

Marketing Mix

About Advertising

(An element of the promotional mix)


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The Role of Promotion Promotion - the fourth P of the marketing mix has three

major roles to perform in the total marketing task These are to:

Communicate information about the product, service or idea(the offering) prepared by an organization or company for thebenefit of targeted customers (or other stakeholders)

Persuade them to choose the product, service or idea inpreference to other competitive offerings of a similar nature forsatisfaction of their needs and wants Promotional communication thus seeks a favourable response

from the targeted customers (or in some cases intermediaries)

Promotion also helps differentiate one product or brand fromanother

In effect, promotion is the last mile in the completion of thetotal marketing task (may be the first one, in some cases) All effort expended on creating an offering, pricing it right and

making it available is wasted until and unless the customers

buys the same. Promotion has a major role in this task


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Relationship with the other Ps The first three Ps also communicate information to customers

A product can communicate information through all 5 senses An aerodynamic shape of a sports car conveys speed

The aroma of cooking may convey how tasty food is likely to be etc

The price may convey quality, value for money, affordability

Wide or narrow availability can convey popularity or exclusiveness etc

This communication usually forms a base on which further

promotional communication is based

In case of new products, promotional communication may reach

customers before they have a chance to see the product or know its

price However even in these cases, promotional communication has to take

into account what the product, price or place parts of the mix will

communicate with customers

Promotional communication is also impacted by competitive

communications like the other Ps


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The Promotional Mix The promotional mix (or plan) consists of a large number of

elements (which have a degree of overlap) including: Advertising

Personal selling

Sales promotion

Direct marketing

Publicity/public relations

Corporate image related communication

Exhibitions

Events (seminars, trade shows, activities)

Sponsorships

Each has a role to play in the process of communication of

information from seller to customers and in persuasion

Inclusion of individual elements depends on communication

objectives and tasks to be carried from time to time


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The Promotional Mix .2

A promotional mix (or plan) specifies how much attention topay to each of the elements and how much money to budget

for each.

A promotional plan can have a wide range of objectives,

including: sales increases, new product acceptance, creationof brand equity, brand positioning, competitive retaliations, or

creation of a corporate image.

Fundamentally, however there are three basic objectives of

promotion. These as explained earlier are:

To present information to customers (as well as others)

To increase demand

To differentiate a product


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Integrated Marketing Communication Inclusion of individual elements depends on communication

objectives and tasks to be carried from time to time There is a need to ensure that marketing communications are

properly integrated in one cohesive whole to ensure that

To extend the reach of the message to the largest number of target

customers While ensuring that the message received is consistent across elements

and within these the media vehicles used

At the same time ensuring that the budget requirement is controlled

The objectives tend to be contradictory and striking balance between

reach, frequency and budgets is a in itself an objective of the mix

The Integrated Marketing Communication approach is

therefore used to ensure that each element is orchestrated to

convey the desired message with maximum efficiency


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Promotion, Advertising & Sales promotion

The terms promotion and advertising are often used together

or even interchangeably but are not really the same

Promotion is considered to be the broader concept

Promotion, as a general term, includes all the ways available

to make a product and/or service known to and purchased by

customers and clients

Advertising is thus just one specific action taken to promote the

product

This confusion probably arises due to the fact that the term promotion

is also used to refer to sales promotion Sales promotion includes a variety of strategies designed to offer

purchasers an extra incentive to buy, usually in the short-term. E.g.

discounts, one free on two, customer (or trade) contests etc.


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Advertising Advertising has been defined in various ways e.g.

Advertising is the non-personal communication ofinformation, usually paid for and usually persuasive in

nature, about products, services or ideas by identified

sponsor, through various media

Advertising is a form of communication to call the public'sattention to a business, usually for the purpose of selling

products or services, through the use of various forms of

media, such as print or broadcast notices

Paid form of a non-personal message communicatedthrough the various media by industry, business firms,

nonprofit organizations, or individuals which is persuasive

and informational and is designed to influence the

purchasing behavior and/or thought patterns of the

audience.


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Advertising.2 Wikipedia defines advertisingas a form of communication

for marketing and used to encourage, persuade, ormanipulate an audience (viewers, readers or listeners;

sometimes a specific group) to continue or take some new

action.

Most commonly, the desired result is to drive consumer

behavior with respect to a commercial offering, although

political and ideological advertising is also common.

This definition also draws attention to the fact the advertising is

meant to address a plural audience and is not one to one

(personal) communication Even in direct marketing the same message is sent to many

persons through a media such as direct mail, e-mail etc.

Advertising is paid communication (the media carrying it

charges the advertiser for its service)


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Advertising.3

Advertising is thus a one way from of communication in

which, the communicating party (advertiser) utilizes some

media to convey a commercial message to a passive audience

The message seeks a commercial response (usually a

purchase) either immediately or within a short period of

time. It solicits the audience members (buyers) to take action

and purchase the goods

The word advertising is derived from Latin words ad vertere

which means to turn toward. Advertising is thus considered

to be a communication which turns the recipients attention

or interest towards what the advertiser is communicating


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History of advertising

Advertising has been around since historical times in differentforms

Most probably the oldest from of advertising seems to be out

of home advertising

Outdoor wall paintings have been traced back up to 4000 BCE in India

Advertisement on Papyrus have been found in ancient Egypt, Greece

etc (Egyptians used it to make sales messages and wall posters)

It has been found on the walls of ancient buildings in Pompeii and

Arabia

In the middle ages merchants put up signs displaying a pictureof what they sold (e.g. a shoe to represent a shoe seller) and

used town criers to shout out a message to the public about

their location (this was needed as most people could not

read)


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History of advertising.2

Thomas J. Barratt from London has been called "the father ofmodern advertising in the 19th. Century

Working for the Pears Soap company, Barratt created an

effective advertising campaign for the company products,

which involved the use of: Targeted slogans, images and phrases.

One of his slogans, "Good morning. Have you used Pears' soap?" was

famous in its dayand well into the 20th century.

Under Barratt's guidance, Pears Soap apparently became the world's

first legally registered brand and is therefore probably the world'soldest continuously existing brand. (unlike Chyawanprash which is now

not a generic product)


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History of advertising.3 Barratt is credited with many of the crucial ideas that lie

behind successful advertising and these were widely

circulated in his day.

He constantly stressed the importance of a strong and exclusive brand

image for Pears and of emphasizing the product's availability through

saturation campaigns.

He also understood the importance of constantly reevaluating the

market for changing tastes and mores, stating in 1907 that "tastes

change, fashions change, and the advertiser has to change with them.

An idea that was effective a generation ago would fall flat, stale, and

unprofitable if presented to the public today.

Not that the idea of today is always better than the older idea, but it isdifferent - it hits the present taste.

As the economy expanded across the world during the 19th

century, advertising grew alongside.

In the United States, the success of this advertising format eventually

led to the growth of mail-order advertising


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History of advertising.5 In the early 20th. Century, advertising increased dramatically in the United

States as industrialization expanded the supply of manufactured products.

In order to profit from this higher rate of production, industry needed to

recruit workers as consumers of factory products.

It did so through the invention of mass marketing designed to influence

the population's economic behavior on a larger scale.

In the 1910s and 1920s, advertisers in the U.S. adopted the doctrine that

human instincts could be targeted and harnessed"sublimated" into the

desire to purchase commodities

The tobacco industry was one of the firsts to make use of mass

production.

The tobacco companies pioneered the new advertising techniques to

create positive associations with tobacco smoking to be able to sell the

increased produce

The advertising industry was also became one of the first to offer women

employment (as women do purchasing, their insights helped)


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History of advertising.6

Over time new media became available in the 20thcentury,

beginning with the Radio in 1920s

Television became available in the 1950s.

Between 1960 to about the early 1990s is the golden period

of mass media advertising when few channels across the

nation enabled advertisers to cover most of the target

audience

Two developments have completely disturbed this model

Growth of local (FM) radio stations and introduction of cable TV, which

has lead to a dramatic increase in number of channels available, thussplitting the audience into smaller and smaller fragments

Growth of internet which permits interactive communication as well

as one on one communication

Broadcast has become narrow cast or individual messaging


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The Purpose of Advertising The overall purpose of advertising is the same as that

of promotion in general which is to Communicate information to customers about a product,

service or idea (offering) being advertised to target

customers

Persuade them to choose the same over competitiveofferings (as the one which provides the maximum

benefits, satisfaction etc)

Differentiating the advertisers product or brand from

those of all others However the task of individual advertisements or

campaigns and hence their purpose can differ

depending on the situation in the marketplace and of

the company itself


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The purpose of advertising.2

The objectives of advertising can include:

Making customers aware of a product or

service;

Convincing customers that the company's

product or service is right for their needs

Creating a desire for a product or service;

Enhance the image of the advertising

company;

Announcing development or availability of new

products or services;


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Reinforcing sales-persons messages Make customers take the next step (ask for more

information, request a sample, place an order, and

so on); and

Drawing customers to the companys business.

Negating a competitors claims etc

Educating the public about some social or other

issue Even prompting immediate sales by including a

coupon offering a discount

Etc


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The purpose of advertising.4 The actual objectives of a particular advertising campaign

should be decided during the development of the businessand marketing plan

The advertiser may want to obtain

A certain percentage of growth in sales,

Generate more inquiries for sales Build in-store traffic.

The desired result can simply be increasing name recognition

or modifying the image projected

Objectives vary depending on the industry and market thebusiness is in e.g.

In FMCG industry advertising has greater role than say B2B industry

because of the large number of consumer who are easier to reach

through media based communication than personally and vice-versa


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All products and businesses go through three stages,with different advertising goals for each one.

The start-up business:When a company is new in the

market and needs to establish its identity. The company

needs high levels of promotion and publicity to grabconsumers' attention.

The growing business:Once the identity is established, a

company need to differentiate itself from the competition

and convince buyers that it provides the best service or

product to try.

The established business:The purpose at this point is to

remind consumers why they should continue buying from

the company


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The advertising industry The advertising industry is fairly large industry

internationally

It size is estimated to be around US $ 467 billion

globally in 2011

US accounted for $ 142.5 billion or 30.5% of the totalglobal ad spend

In US advertising industry account for 24% of GDP

Internationally, the largest ("big four") advertising

conglomerates are Interpublic, Omnicom, Publicis,and WPP.

Recently Omnicom + Publicis have announced a

merger. It will have a revenue of US $ 22.7 billion )


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The advertising industry in India

In India the media advertising spend was estimatedto be estimated to be Rs. 327.4 billion (Rs. 32,740

crore) in 2012

This is equivalent to US $ 5 billion approx.

The media advertising spend grew by 9% over previous

year

It continues to be dominated by the print media

which accounts for Rs. 150 billion (or 45.8%)followed by TV

These figures exclude expenditure on promotion and

POP advertising etc.


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The advertising industry in India.2

Industry estimates show that India's onlineadvertising market is likely to touch Rs 2,938 crore by

2014.

The online advertising market, which includessearch, display, mobile, social media, email and video

advertising has grown by 29 per cent year-on-year to

Rs 2,260 crore by March, 2013.

It was valued at Rs 1,750 crore in March, 2012. The online advertising market on an average is

expected to grow by 40% annually for four years


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The advertising industry in India.3

Search and display advertising formed a large portion ofoverall online advertising in 2011-2012.

Its percentage share however, declined somewhat in 2012-

2013, owing to the rise in the mobile, social media and video

advertising. The spends on mobile advertising doubled from Rs 115 crore

in 2011-12 to Rs 230 crore in 2012-13.

Advertisements on mobile phones and tablets grew from a 7% share in

FY 2011-2012 to 10% of the Indian online ad market in FY 2012-2013,

totalling to spends of around Rs 230 crore.

Social media, email and video advertising constitute 13% (Rs

300 crore), 3% (Rs 68 crore) and 7% (Rs 150 crore) of the

online advertising market, respectively.


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Players in the Advertising Industry

The players in advertising industry can be broadly divided intothree classes

The advertisersorganizations which wish to communicate with a

target audience and therefore need to carry out an advertising

campaign.

They offer products, services or ideas to their customers

They set the objectives of the campaign, decide the budget and have a

final say on its execution

Media owners who provide content for information, education and

entertainment of their respective audiences

Media owners intersperse advertisements within the editorial content,thereby providing advertisers a captive audience

Media owners charge the advertisers money for providing this captive

audience

Usually the major share of expenditure spent on advertising campaigns

goes to media owners


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Players in the Advertising Industry

Advertising agencies who help the advertiser plan,

create, and execute the campaign.

Advertising agencies have the following main roles

Creative role: Developing creative ideas to develop

memorable and effective campaigns

These need to be based on the clients (advertisers)

brief and must ensure that campaign objective is met

A single advertising campaign may need to be executed in

variety of media vehicles as well as in many languages

The agency has to make sure that the idea can be executed

across multiple media

It must also ensure the creative idea travels equally well

across different languages


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Players in the Advertising Industry Media planning role: Prepare media plans using a mix

of media vehicles e.g. TV, press, radio, cinema, OOH etc as necessary

Ensure highest possible reach and frequency of advertising at

the target audience members within budget constraints

Media buying role: Negotiate with media owners on

behalf of clients to get the lowest possible rate for

placing advertisements

Account planning role: [a more internal to agency role -

the primary function is to find consumer truth and

insight (through research if needed)]

The objective is to help the creative teams, create work that

is not only entertaining and highly memorable, but which is

relevant to the consumer and effective in the marketplace

Good account planning is useful to client in terms of providing

consumer insights


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Types of advertising agencies In a huge industry (over $ 5 billion even in

India) a wide variety of agency types co-existin the market

Full service agencies: These agencies fulfill all the

main roles that an agency can provide to a client

They provide creative, media planning, media buying

and account planning services under one roof

Specialist agencies: These are of two/three types

Those which specialize in a particular role - creativeshops or media agencies

Those which provide specialized knowhow on dealing

with or using particular media (e.g. online advertising)

Specialize in a particular industry (financial advertising)


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lesson - 1 the purpose of advertising

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