ALVAS INSTITUTION OF ENGINEERING AND

TECHNOLOGY (AIET)
SHOBHAVANA CAMPUS, MIJAR.

SUBJECT

: MARKETING MANAGEMENT

SUBJECT CODE

: 08MBA16

SUBMITTED TO

: Prof. RAVINDRA SHENOY

ASSISTANT PROFESSOR
DEPARTMENT OF BUSINESS ADMINISTRATION

DATE

: 27th November 2009

TEAM NUMBER

TEAM MEMBERS :

05
ANUPAMA .B.RAJU
GANESH PRABHU
MOHAMMED SALEEM
PRATIBHA BHAT
SANTHOSH .E
SIDVIN .S.SHETTY

CONTENTS

1.

INTRODUCTION

2.

MESSAGE CONTENT

3.

STRUCTURE OF ADVERTISE

4.

SOURCE OF ADVERTISING

5.

ADVERTISING BUDGET

6.

MEASURING EFFECTIVENESS OF ADVERTISING

7.

HIERARCHY OF EFFECTS IN ADVERTISING

8.

BIBLIOGRAPHY

ADVERTISING
MEANING AND DEFINITION:
Advertising involves communicating the companys or brands value proposition by using paid
media to inform, persuade and remind consumers.
According to Philip Kotler, advertising is any paid form of non personal presentation and
promotion of ides, goods and services by an identified sponsor.

INTRODUCTION:
Advertising can be traced back to the very beginning of recorded history. Archaeologists
working in the countries around the Mediterranean Sea have dug up signs announcing various
events and offers. The Romans painted walls to announce gladiator fights, and the Phoenicians
painted pictures promoting their wares on large rocks. During the golden age in Greece town
criers announced the sale of cattle, crafted items and even cosmetics.

Although advertising is used mostly by business firms, a wide range of not for profit
organization, professionals, and social agencies also use advertising to promote their causes to
various target publics.
In fact, today worlds 27th largest advertising spender, a not for profit organization i.e.; U.S
government.
Today worldwide ad spending exceeds an estimated $604 billion per year. Procter & Gamble, the
worlds largest advertiser, last year spent almost $7.9 billion on ad worldwide.
No matter how big the budget, advertising can succeed only if advertisements gain attention and
communicate well. Good advertising messages are especially important in todays costly and
cluttered advertising environment.

MESSAGE CONTENT:

Basically, the message must be able to attract the attention of the targeted audience, hold their
interest, arouse desire in the product and obtain action of buying
There are mainly 4 steps in creating effective advertising message. There are:

Message generation:

The first step in creating effective advertising messages is to plan a message strategy- to decide
what general message will be communicated to consumers. The purpose of advertising is to get
consumers to think about or react to the product or company in a certain way. People will react
only if they believe that they will benefit from doing so. Thus, developing an effective message
strategy begins with identifying customer benefits that can be used as advertising appeals.

Message evaluation and selection

The message of an advertisement should be carefully evaluated and selected. The creative
concept will guide the choice of advertising appeal. Advertising appeal should have three main
characteristics:
a)

It should be meaningful

b)

It should believable

c)

It should be distinctive

Social responsibility review:

The message before it is presented to the audience, it should be seen that it does not have any bad
influence on the society.

Message execution:

The planned message should be executed well and should be presented to the target audience in
more distinctive and memorable way.

STRUCTURE OF ADVERTISING

An agency, depending on its size, will likely have different departments which work on
the separate aspects of an account. An account manager or the account planning department will
coordinate the work of these departments to insure that all the client's needs are met. The
departments within a full-service agency will typically include:
RESEARCH: The research department will be able to provide clients with some details about
the prospective audience of the final advertising campaign, as well as information about the
market for the product being advertised. This should include specific market research which
leads to a very focused ad campaign, with advertising directed to the ideal target audience.
CREATIVE SERVICES: Advertising agencies employ experts in many creative fields that
provide quality, professional services that conform to the standards of the industry. Copywriters
provide the text for print ads, and the scripts for television or radio advertising. Graphic
designers are responsible for the presentation of print ads, and the art department is responsible
for providing the necessary images for whatever format advertisement is decided upon. Some
agencies have in-house photographers and printers, while others regularly employ the services of
contractors.
The individuals involved in creative services are responsible for developing the advertising
platform, which sets the theme and tone of the ad campaign. The advertising platform should
draw upon specific, positive features of the product advertised and extrapolate the benefits the
consumer could expect to receive as a result of using the product. The campaign, through the
development of this platform, should prove to be eye-catching, memorable, and in some way
unique. The advertising that is remembered by consumers is that which stands out from the rest;
it is the advertising agency's (and specifically the creative services department's) responsibility to
provide this quality for their clients.
The final advertising provided by an agency should be fully developed and polished. Television
commercials should be produced with professionalism; print ads should be attractive,
informational, and attention-getting; radio spots should be focused and of high audio quality.
MEDIA BUYING: One of the services provided by advertising agencies is the careful
placement of finished advertisements in various media, with an eye toward maximizing the

potential audience. The research search conducted by the agency will inform any media-buying
decisions.
An agency will be able to negotiate the terms of any contracts made for placing ads in any of
various media. A full-service agency will deal confidently with television, radio, newspapers,
and magazines. Some agencies are also branching into direct mail marketing and point of
purchase incentives; some agencies have expanded into Internet advertising; and some agencies
will also place an ad in the local yellow pages, or utilize outdoor advertising or one of the more
creative avenues of incidental advertising, such as commercial signs on public buses or subways
or on billboards.
The media-buying staff of an advertising agency will draw on specific research done for the
client, as well as on past experience with different media. Through this research and careful
consideration, the agency will develop a media plan: this should be a fully realized plan of attack
for getting out the client's message. Some factors to be considered in the development of the
media plan include:
Cost per Thousand: This refers to the cost of an advertisement per one thousand potential
customers it reaches. Media-buyers use this method to compare the various media avenues they
must choose between. For example, television ads are considerably more expensive than
newspaper ads, but they also reach many more people. Cost per thousand is a straightforward
way to evaluate how to best spend advertising dollars: if a newspaper ad costs $100 and
potentially reaches 2,000 customers, the cost per thousand is $50. If a television ad costs $1000
to produce and place in suitable television spots, and reaches a potential of 40,000 viewers, the
cost per thousand is only $25.

Reach: This term is used when discussing the scope of an advertisement. The reach of an
ad is the number of households which can safely be assumed will be affected by the
client's message. This is usually expressed as a percentage of total households. For
example, if there are 1,000 households in a town, and 200 of those households receive the
daily paper, the reach of a well-placed newspaper ad could be expressed as 20 percent:
one-fifth of the households in the community can be expected to see the advertisement.

Frequency: The frequency of a message refers to how often a household can be expected
to be exposed to the client's message. Frequency differs widely between media, and even
within the same medium. Newspapers, for example, are read less often on Saturdays, and
by many more households (and more thoroughly) on Sundays. Fluctuation like this
occurs in all media.

Continuity: The media-buyer will also need to consider the timing of advertisements.
Depending on the client's product, the ads can be evenly spread out over the course of a
day (for radio or television advertisements), a week (for radio, television, or print
advertisements), or a month (radio, television, print, or other media). Of course, seasonal
realities influence the placement of advertisements as well. Clothing retailers may need to
run more advertisements as a new school year approaches, or when new summer
merchandise appears. Hardware stores may want to emphasize their wares in the weeks
proceeding the Christmas holiday. Grocery stores or pharmacies, however, might benefit
from more evenly distributed advertising, such as weekly advertisements that emphasize
the year-round needs of consumers.

Sources of advertising:Under the title source we need to study the source factor. Source attributes can be divided into
three basic categories namely
a)

Source credibility.

b)

Source attractiveness.

c)

Source power.

We use the term source to mean the person involved in communicating marketing message
either directly or indirectly. A direct source is a spokesman, who delivers a message or
demonstrates a product or services like Dhoni on a T.V.S Bike or Sachin Tendulkar on an
Adidas. An indirect source does not actually deliver a message but draws attention to enhance
the appearance of advertising. Eg. Boy in the Hutch Ad. Some ads use neither direct nor is
indirect source, the source the organisation with a message to communicate. Eg. Intel Pentium
4 inside. IBMs message Men should think machine should work. Companies must be very
careful while selecting the individuals for delivering the message. This is because, the

characteristics of the source will affect sales and advertising message. The source must be
knowledgeable, popular and physically attractive.

Source credibility:Credibility refers to the extent to which the receiver of the message sees the source as having
relevant knowledge or experience. The receiver also believes that the source will give unbiased
and objective information. There are two important dimensions to credibility.
a)

Expertise

b)

Trustworthiness

Communicator, who has the expertise, is more persuasive than a person with less expertise. Also
the source should be trustworthy i.e., honest, ethical and believable. Information from credible
sources influences opinion, attitudes, or behaviour through a process called internalization. Once
the receiver internalizes an opinion or attitude, it becomes a part of his belief system.
The more, a customer has negative opinion about a product service or issue being promoted; the
message source has to be very highly credible. Higher credibility of the sources will lead to
lesser counter arguments and greater acceptance of the message. Eg. It is better to choose a
doctor as a source to send a message about toothpaste or skin care cream. This is because; doctor
words are treated to be authentic by the customer. Sometimes, companies use corporate leader as
a source. Eg; Bill Gates to promote Microsoft.
Limitations of credible source:Whether to choose a source, with high credibility or low credibility depends on whether the
initial belief of the recipient is in line with the message sent or not. For Eg. More the disbelief
recipient has in the beginning, the more credible the source should be. If an initial position of the
recipient is neutral, even a source with low credibility would serve the purpose.
Sometimes, a low credibility source can be as effective as credibility source. This effect is
known as sleeper effect. In the effect, persuasiveness of the message increases with the passage
of time. Immediate impact of message may not be effective but with a passage of time and the

association of the message, the receiver attention focuses more on favourable information in the
message which result in support to the message. Eg. Airtel Ad.
Source attractiveness:Source attractiveness refers to similarity, familiarity and likeability. Similarity is nothing but
resemblance between the source and the receiver of the message. Likeability refers to the
attraction of the source. i.e., physical appearance, personal traits, etc. for Eg. A film star
endorsing wrist watches. Familiarity refers to how familiar is the source; the consumer might
have come across the source else where.
Similarity:Marketers know that customer are more likely to be influenced by a message coming from one
with whom they feel a sense of similarity. If a communicator and a receiver have similar needs,
interests, life styles, then the source is better understood and received. Eg Young celebrity
addressing a message to teenage group i.e., sharukh khan in Pepsi, Ad
Similarity helps to establish a bond between the communicator and the receiver. It also increases
the level of persuasiveness. Eg. A cricket fan would very much appreciate a famous cricket
player as the source.
Celebrities can be either presenter or spokesperson:

Presenter: The individual who is a presenter of the product usually offers his or her own

opinion and experience frequently in the form of testimonials or endorsements.

Spokesman: A spokesperson does not endorse the product rather the personality speaks

for the company. Individuals selected as spokesperson are usually of high status with widespread
acceptance because they are frequently used for image advertising campaign.

Likeability:-

Marketers think that their famous celebrity will influence customer feeling, attitudes and
purchase behaviour. They also believe that celebrities can enhance the audience perception about
the product. Sometimes, this may not be true. Therefore, a number of factors have to be
considered when a company decides to use a celebrity.

Limitations of using celebrities:Sometimes, customers focus their attention on the celebrity, and fail to notice the product itself.
In this case, the message sent by the celebrity will be useless.

Overexposure: consumers know that celebrities are being paid, and therefore, some

times, they may not believe what is being said. This problem becomes very acute, when the
same celebrity endorses too many products or companies, this is known as overexposure.

Target audience receptive: The use of a celebrity depends on the extent of knowledge
that a customer has about a product or a service. If a customer having very good
knowledge about the product, he will be less influenced by the celebrity compared to
another customer, who has little or no knowledge.

Risk to the advertiser:

the celebrities personal life and background acts as an obstacle for using them by the advertisers.
Suppose a celebrity is contracted for three years to endorse a product. In this period, he becomes
unpopular for reasons such as, divorces his life partner, criminal charges levelled against him etc.
By using such celebrities, the companies does not benefit at all.
Use of decorative model: In this method, the advertiser chooses a very attractive person who
serves as a passive or a decorative model rather than an active communicator.
Advantages of using celebrities:Celebrities can differentiate the brand: With the proliferating product categories,
differentiation has become tough for the marketers. When believable differentiation is difficult,
celebrities are the easiest way to achieve it. Cadburys chocolate, advertisement endorsed by
amitabh bachchan is one of the successful campaigns of Cadbury. He is created a distinct

position for the product in the market. No doubt Amitabh bachachan gains the attention of the
customer to the advertisement.

Celebrity helps in commodity branding:

commodities are goods which are hard to differentiate with others. In this situation,

celebrities can make commodities more smart and classy; Indias No 1 actress Katrina kaif
endorsed nakshtra diamonds looks more beautiful than others. Juhi Chawla in Kurkure etc.
Celebrities represent brand personality:
celebrity endorsements would be very attractive, if the advertiser is able to link the
characteristics of the product and celebrity. HUL effectively used the Aishwarya Rai for Lux.
Beauty was the positioning message, so the link is built between the product and celebrity. Rahul
Dravid, Mr dependable and consistent player has been used by the companies to show
consistence performance of their product.
Celebritys credibility:
Success of endorsement depends on the credibility of the endorser. If the endorser is
controversial or outdated or out of form in his profession, it is advisable not to use that type of
endorser. Use of controversial endorser may affect the image of the brand.
Multiple celebrity endorsement: An advertising consisting of more than one celebrity is called
multiple celebrity endorsement. Samsung explored the heat of cricket during world cup season,
with an advertisement Team India. This advertisement consists of good number of Indian cricket
players influenced the customer by using emotional patriotic appeal.
Double trouble:
Instead of investing on several celebrities for the same product at the risk of cost, time and
perception difference on celebrities by the customer, a new concept is being identified by the
companies. Double action or several action of the one celebrity will be shown in the
advertisement. It means two or more faces of the same celebrity in different roles was shown.
Airtel was used this technique to promote their life time offer with Shahrukh khan in two
different roles.

Guidelines for successful celebrity endorsement:

Controversial or outdated celebrities should be avoided.

Advertisers should not sign up a celebrity, who does not really connect

Advertisers should not sign up a celebrity, because everyone is behind him.

Advertisers should not appoint a celebrity who has endorsed a variety of products

and brands, because customers will be bored of watching the same face in all advertisements.

Advertiser should not appoint the celebrity without understanding the celebritys

personality. Contradiction between celebritys personality and product may lead the customer to
confusion.

Source power:Only when the source exercise control over the customer, he will perceive that the source has
power. Eg. The source suggests ways and means of stopping alcoholism. In this case, an
alcoholic will consider that the source has power. A doctor, suggesting the consumer, regarding
the ways and means of reducing weight from health point of view is supposed to be having
power. Power as source characteristics is very difficult to apply in a non personal influence
situation such advertising. A communicator in advertising generally cannot apply any sanctions
(do and dont) to the receiver. An indirect way of using power is by using an individual with an
authoritative personality as a spokesman.

ADVERTISING BUDGETING
Budgeting is a very important function in advertising. Even though it is important ,planning an
ideal budget is hard. An advertising is not only promoting a product to the masses but also
include image building, branding , promotion & for all these things a suitable media or medium
through which the advertising is done. Advertising could be done in many ways like:
Television, radio, newspaper, sponsorship for events, organising fair, promotional activities are
all part of advertising.

The message content or message used to advertise the product or services are also important .As
it is said thatGood advertising creative strategy translates the brands positioning statement into
a persuasive and memorable message. A great creative will provide lasting impact even if
advertising budgets are constrained.
How you say it is as critical as what you say.
Advertising is used to make an impact on the minds of the consumers about its unique features
and its a way it is also mean to differentiate with other products, thus making the purchasing
impact.
So, while making an advertising budget, following points have to be taken into consideration.
They are:
1.

Stages in product life cycle:

It is very important to know which product is being advertised. A new product

introduced in the market requires heavy advertising to build awareness of the product and its
unique features, whereas an already set product requires just an moderate advertising.
2.

Market share & consumer base:

It is ideal to know the share of the market of its products & its relative sales. An

organization having greater market share does not require much of advertising whereas a new
product or an organization having lesser market share requires more expenditure on advertising
to create and build its brand image.
3.

Competition:
If an product or service have many players for the market share than the companies

need heavy advertising to be heard. If the product have heavy competition from its competitors
than to show the product with its unique features is required & also make the customers used to
of the features are very important, mainly in the FMCG where there is regular buying by an
individual.

4.

Advertising frequency:
Depending about the type of the product & its usage the times the advertising message

to be repeated will be calculated to make & build the impression on the minds of the customers.

2.

Product substitutability :
It is for a commodity product for which heavy advertising is required for

differentiating about the product against their substitutes. The best example would be tobacco
industry where you can find many substitutes or alternatives say cigarattes, cigars, pipes as well
as different brands like malbaro,555,goldflake etc(in India marketing of such commodities is
banned).

MEASURING ADVERTISING EFFECTIVENESS

Good planning and control of advertising depend on measures of advertising effectiveness. Most
advertisers try to measure the communication effect of an ad- that is its potential effect on awareness,
knowledge, or preference. They would also like to measure the ads sales effect.

COMMUNICATION EFFECT RESEARCH:

Communication- effect research seeks to determine whether an ad is communicating effectively.
Called copy testing, it can be done before an ad is put into media and after it is printed or broadcast. There
are three major methods of pretesting. The consumer feedback method asks consumers for their reactions
to a proposed ad.
Portfolio tests ask consumers to view or listen to a portfolio of advertisements consumers are then
asked to recall all the ads and their content aided or unaided by the interviewer. Recall level indicates an
ads ability to stand out and to have its message understood and remembered.
Laboratory tests are equipment to measure physiological reactions- heartbeat, blood pressure,
pupil dilution galvanic skin response. Perspiration- to an ad; or consumers be asked to turn a know to
indicate their moment-to-moment liking or interest while viewing sequenced material. These tests

measure attention getting power but reveal nothing about impact on beliefs, attitudes, or intentions. It
describes some specific advertising research techniques.
Pretest critics maintain that agencies can design ads that test well but may not necessarily perform
well in the marketplace. Proponents of ad pretesting maintain that useful diagnostic information can
emerge and that pretests should not be used as the sole decision criterion anyway. Widely acknowledged
as being one of the best advertisers around. Nike is notorious for doing very little and pretesting.
Marketing Memo: How to sell in Hard Times offers some communication insights from its ad agency,
Weiden & Kennedy.
Many advertisers use posttests to assess the overall impact of a completed campaign. If a
company hopes to increase brand awareness from 20 percent to 50 percent and succeeded in increasing it
to only 30 percent, then the company is not spending enough, its ads are poor, or some other factor has
been ignored.

SALES EFFCT RESEARCH:

What sales are generated by an ad that increases brand awareness by 20 percent and brand
preference by 10 percent? Advertisings sales effect is generally harder to measure than its
communication effect. Sales are influenced by many factors, such as features, price and availability as
well as competitors actions. The fewer or more controllable these other factors are, the easier it is to
measure effect on sales. The sales impact is easier to measure in direct marketing situations and hardest to
measure in brand or corporate image building advertising.
Companies are generally interested in finding out whether they are overspending or under
spending on advertising. One approach to answering this question is to work with the formulation.
A companys share of advertising expenditures produces a share of voice(i.e., proportion of
company advertising of that product to all advertising of that product) that earns a share of consumers
minds and hearts and ultimately a share of market.
Researchers try to measure the sales impact through analyzing historical or experimental data.
The historical approach involves correlating past sales to past advertising expenditures using advanced
statistical techniques. Other researchers use an experimental design to measure advertisings sales impact.

Marketing Insight: Understanding the Effects of Advertising and Promotion provides a summary
of a meta-analysis of IRI research studies.
A growing number of researchers are striving to measure the sales effect of advertising
expenditures instead of settling for communication effect measures. Millward Brown International has
conducted tracking studies in the United Kingdom for many years to provide information to help
advertisers decide whether their advertising is benefiting their brand.
Share of
Expenditures

Share of
Voice

Share of Mind
and heart

Share of
Market
1. Avoiding Costly Mistakes: The only way to ensure that this money is not being wasted on ineffective
advertising programs is to continuously evaluate the effectiveness of the chosen programs and to ensure
that these programs are achieving their intended purpose. Evaluating the effectiveness of the chosen
programs is not all about money, it also gives the e-marketer the opportunity to analyze the non-tangible
effects of the chosen program.
2. Evaluating Alternative Strategies: Not only is it important to evaluate the effectiveness of the chosen
method, but also the opportunity costs of choosing that method. Often after companies have chosen a
method, they focus their attention exclusively on that method ignoring the potential profits that would
have come about if they went with an ulterior method. A good evaluation program will be able to analyze
the effectiveness and the opportunity costs of the chosen method.
3. Increasing the Efficiency of Advertising: often after companies choose a particular method, they
become attached to that method and lose sight of the initial goal they were aiming for. Because the

marketers know what the intended message of that chosen program is, they expect their customers to
know that message as well. A continuous evaluation of the chosen program will ensure that the message
the consumers are receiving from this program is aligned with the message the marketer intended to send.

HIERARCHY OF EFFECTS IN ADVERTISING

The levels of communication response are presented as a hierarchy of effects. A
hierarchy of effects model is a description of a series of stages of response that brand decision
makers move through.
A classical hierarchy of effects model of message response is the AIDA sequence. AIDA
is an acronym identifying four desired effects that a brand message might have on customers and
prospects: attention, interest, desire and action. To begin with, before they will make a purchase
decision, consumers needs to be aware that the product exits, what it is, what it does, and where
and when it is available.
Next, consumers need to be stimulated to take some interest in the product. What special
feature does the product have? What benefits does it offer to customer? During this stage the
consumer develops a reaction to the product, usually either favorable or unfavorable.
If the response is favorable and the advertisement is successful in awaking interest, it
then attempts to create in the consumers mind a desire to purchase. It does this by successfully
connection the product with the consumers needs and wants. The final stage is action where
consumers actively seek the product and buy it.
AIDA Model
ATTENTION

INTEREST

DESIRE

ACTION

THINK/FEEL/DO MODEL
Brand decision-making is not predictable in AIDS model. This model shows that buyer
dont always take the decision steps in a specific. It identifies three kinds of responses-thinking,
feeling and doing-and their components. The order of think/feel/do depends on the level of
involvement-the degree of personal relevance a product or message has for a decision maker.
Products such as food staples (milk, bread, butter) and utility products (brooms, detergents,
batteries, gasoline) are perceived as low-involvement products. Such products are relatively
cheap, are bought frequently without much consideration, and are perceived as low risk. In
contract, high-involvement products such as cars and computers are products for which people
perceive difference among brands and are willing to invest prepurchase decision-making energy.
Messages for high-involvement products are likely to be detailed, quality assuring, and so onif they link a brand promise to important personal goals,

such as getting the highest-quality

computer or the best price on car. In contrast, message for low-involvement products are often
designed to stimulate impulsive purchase decisions for products like chewing gum and candy.
Such messages are likely to emphasize fun or convenience.
THINK

FEEL

Problem
recognition
Information
search

Attitude,
Liking,

BRAND
DECISION
PROCESS

Evaluation

Preference,
Conviction,
Satisfaction

Try
Buy
Other
action
responses
Repurchase

do

The Think/Feel/Do Response Wheel

The think/feel/do model sets up several different message responses that can lead to
a brand decision. It depends to a large extent on involvement and the degree to which people find
themselves elaborating on the message.
ELABORATION LIKELIHOOD MODEL
The elaboration likelihood model (ELM) is used to help analyze customer behavior.
Elaboration refers to the degree to which customers think about a message and
relate the information to their own lives as they make purchase decision. It proposes two paths
that customers use in processing information about the product. They follow the central route
when they are highly involved in the decision and the product is highly relevant. They follow the
peripheral route when they are less involved and the product has a lower level of personal
relevance.

Peripheral route

Central route
Brand
decisio
n
High involvement:
cognitive analysis of
brand features &
benefits

Low involvement: emotional

Analysis of situation & feelings

BIBLIOGRAPHY
Debraj Datta, Mahua Datta, Marketing Management, 2006, Vrinda Publication (P) LTD.

Philip Kotler, Kelvin Lane Keller, Pearson, Principles of Marketing, PHI,

12th Edition, 2006.

S . N. Murthy & U . Bhojanna ADVERTISING An IMC Perspective, First Edition ,Excel

books, New Delhi.
Tom Duncan, Principles of Advertising &IMC,2ND edition, Tata McGraw-Hill Publishing
Company limited, New Delhi.

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