Unit 1 Basic Concepts in Advertising Management Structure: 1.1 Introduction Objectives 1.2 Meaning of Advertising 1.2.1 Definitions of Advertising 1.2.2 Forms of Advertising and Sales Promotion 1.3 Importance of Advertising in Marketing 1.3.1 Information 1.3.2 Brand Image Building 1.3.3 Innovation 1.3.4 New Product Launch 1.3.5 Growth of Media 1.3.6 Long-term and Indirect Benefits 1.3.7 Limitations of Advertising Self Assessment Questions I 1.4 How does Advertising Persuade a Buyer? 1.4.1 Advertising and Buyers Behaviour 1.4.2 Level of Involvement 1.4.3 Speed of Response 1.4.4 Audience Perception 1.4.5 Perceptual Mapping 1.4.6 Primal Fabrics 1.5 Role of Advertising in Marketing Mix and Positioning Decisions 1.5.1 Communication with Consumer 1.5.2 Persuasion 1.5.3 Contribution to Economic Growth Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 2 1.5.4 Catalyst for Change Self Assessment Questions II 1.6 Advertisers and Advertising Agency 1.6.1 Effectiveness of Advertising 1.6.2 Communication Models 1.6.3 The Feedback 1.6.4 The AIDA Model 1.6.5 Lavidge and Steiner Model 1.6.6 Innovation Adoption Model 1.6.7 Operational Model 1.7 The Role of Account Executive Self Assessment Questions III 1.8 Choosing an Advertising Agency 1.8.1 Advertising Its Purpose and Functions 1.8.2 The Advertising Spectrum Self Assessment Questions IV 1.9 Summary 1.10 Terminal Questions 1.11 Answers to SAQs and TQs 1.1 Introduction Advertising is purposeful communication designed with a view to achieve a specific objective. It must reach the target audience identified for such communication. Consumers need information about various goods and services. Advertising serves the purpose of disseminating information about a company and its products/services and presenting them in a favourable light. Very often, advertising is used to build a brand image. Introductory offers of products need to be familiarised by way of advertising. In corporate world, advertising plays a significant role. This unit deals with the Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 3 importance of advertising, the impact of advertising on the buyer and the role of advertising in marketing mix and positioning decisions in detail. Objectives: After studying this unit, you will be able to: Define advertising. Describe the importance of advertising in marketing. Describe how advertising persuades the buyer. Explain the role of advertising in marketing mix and positioning decisions. Explain the role of Accounts Executive. State the criteria for choosing an advertising agency. 1.2 Meaning of Advertising 1.2.1 Definitions of Advertising One of the earliest attempts at formulating definitions of advertising sums it up as the dissemination of information concerning an idea, service or product to communicate in accordance with the intent of the advertiser. The above definition could include direct personal communication with persuasive selling appeal and it was considered necessary to exclude this overlap. The Definitions Committee of the American Marketing Association, therefore, defined advertising as any paid form of non-personal presentation of idea, goods or service by an identified sponsor. It was considered necessary to make a distinction between advertising and publicity. Feature, articles and write-ups on products and processes and companies initiated by media have become popular owing to the continued expansion of media and increasing journalistic interest in business and industrial activity. These also serve the purpose of disseminating information about a company and its products/services and presenting them in a Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 4 favourable light. This amounts to unpaid publicity over which the concerned company or organization would have no explicit control. 1.2.2 Forms of Advertising and Sales Promotion Persuasion and meaningful communication directed at a specific target audience, in the form of advertising through mass media, including outdoor advertising, may be effectively supplemented by offering incentives to the trade and prospective buyers. Such incentives are classified as sales promotion aids and are included in advertising and sales promotion or just promotion which is intended to cover all forms of advertising and sales promotion. Sales promotion programs for trade may provide direct financial incentives for distribution channel for special occasions or for new product introduction. There may be display which has become an essential promotional feature of shops and department stores, especially in industrial nations. Items such as dealers name boards, which carry a companys brand name and other advertising message, displayed at the point of purchase (POP), carry definite advertising value. Promotions directed at prospective buyers may take various forms. There may be contests to interest prospects in buying the products which, in turn, will entitle them to take part in contests where attractive prizes are offered. Special incentives may be attached to introductory offers of products. Advantage may be taken of established brand loyalty of a product for introducing or enhancing sales of other product. Certain concessions on purchase of the advertised product are offered in one form or another. Such approaches and methods constitute sales promotion directed at consumers. 1.3 Importance of Advertising in Marketing It will be useful to refer to direct or perceived benefits of advertising which include the following: Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 5 1.3.1 Information Consumers need information about various goods and services. Due to ignorance, a consumer may purchase an inferior product and pay higher prices or even may not know that a particular product exists. Information given in an advertisement may be about the company and its products or service. The advertisement for Zenith refrigerator, introduced in the year 1980, for example, incorporated details regarding the product feature. The inclusion of a water cooler in the refrigerator was emphasized. It was highlighted that this facility was available only in this brand of refrigerator, considering the need for cold water in a tropical country like India. 1.3.2 Brand Image Building Very often, advertising is used to build a brand image. Images are mental pictures of brands that may appeal to different segments of the target audience in varying degrees. These may have their origin in real or assumed features. The images projected are geared to match the needs and expectations of the target audience. Favourable images will help in generating brand loyally and a disposition to buy that brand in preference to another. Certain advertisements of toilet soaps in India aim at image building through opinion leaders. A well-known campaign of longstanding for Lux toilet soap uses film stars (Exhibits 1.4). The campaign for VIP travel luggage seeks to achieve the objective of attributing a superior image through the association of the product with affluent foreign nationals in a series of VIP interviews. 1.3.3 Innovation Advertising is seen to perform this task most effectively for new products. In a way, it reduces the risk of innovation. The cost of innovation can be more than the profit recovered by the sales which advertising may generate and this encourages manufactures to undertake research and development. New brand launches seem to abound in the toiletry, cosmetic Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 6 pharmaceutical, confectionery and tobacco markets advertising. At the same time, it must be pointed out that advertising does not guarantee the success of all new products. 1.3.4 New Product Launch Various strategies, including advertising, are employed to make potential buyers aware of new products. The term new product may include modifications of existing products, imitations of competitive products and product line acquisitions. Advertising can be used to promote new products and call attention to changes in old products. Advertising for the soft drink concentrate under the brand name Rasna aimed at enhancing the awareness of the product and creating a favourable disposition towards it. 1.3.5 Growth of Media The acceptance of advertising enhances the potential for raising revenues. This in turn helps the launching of new publications and expanding the media. This development has been a characteristic of the Indian media scene in recent years. A number of periodicals and newspapers have been launched during the seventies and this trend continued through the early eighties. 1.3.6 Long-term and Indirect Benefits Advertising is a feature of free competitive enterprise and can be a contributory factor towards greater availability of goods. It increases distribution not only of the advertised products, but of other products as well. Advertising helps to reduce the cost sold to the consumer. The costs of production and selling are lower when goods are produced and sold in larger quantities. It is also an important factor in product improvement. Advertising helps to make the purchase of commonplace products emotionally more satisfying. This may apply, for instance, to the consumers of Lijat Papad who may derive satisfaction out of buying advertised product, Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 7 or for that matter, users of perfumes and lipsticks where association with advertising may be instrumental in reducing dissonance. 1.3.7 Limitations of Advertising Advertising has several limitations. There is a view that advertising increases the cost of goods sold to the consumer. Advertising can be wasteful considering that only a small section of the audience covered by the media used may relate to the product advertising. The qualitative aspect of advertising is its strength. It can also be a major weakness when stereotyping an innovation. Advertising may encourage unsound or false values especially through its effect on children and youth. It creates an emotional appeal. Critics point out that any emotional appeal, in contrast to a rational appeal, is misleading. Finally, advertising can endanger competition. Big advertisers can monopolize the market. Self Assessment Questions I State whether the following statements are True or False: 1. Advertising can be used to build a brand image. 2. Any emotional appeal, in contrast to a rational appeal, is misleading. 3. Advertising increases distribution of the advertised products only. 1.4 How does Advertising Persuade the Buyer? 1.4.1 Advertising and Buyers Behaviour The extent to which the process of advertising communication may result in affecting buyer behaviour is subject to continuous discussion and debate. Attitudes and behaviour patterns are an amalgam of a variety of factors concerning individuals and their social and work alignments. Stidsen has evolved a paradigm for the advertising process viewed from the consumers communication point of view which is aimed at reflecting these Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 8 considerations by examining what people do to advertising instead of what advertising does to people. The following elements are specified: 1. Awareness: Conditions limiting or enabling communication. 2. Input system: Characteristics of channels or the media used by the consumer for input purposes. 3. Goal seeking: Purposes for which the consumer can, will, or feels he should, use advertising. 4. Integration: Standards used by the consumer for purposes of maintaining cognitive consistency. 5. Commitment: Values and ideas taken by the consumers to be unquestionably true. 1.4.2 Level of Involvement Another approach towards consumer perception of advertising has been suggested by Vaughn through a classification of various products by the level of likely involvement of decision-makers. Such a classification is used to demonstrate the relevance of various stages in the hierarchy of effects to high and low involvement product purchase decisions. In the case of decisions requiring high involvement for new products such as a car, house, furnishings and new products, the informative stage may be predominant. However, for the other type of high involvement products like jewellery, cosmetics, fashion apparel and motorcycles, affective aspects may be in the fore. Low involvement products such as food and household items may be relatively independent of both persuasive and informative advertising inputs. The other type of low involvement products such as cigarettes, liquor, chocolates etc. call for an awareness aspect more than for an elaboration of the cognitive stage, i.e. knowledge and comprehension. The above approach may be useful for advertising planning both in respect of creative emphasis as well as media selection. Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 9 1.4.3 Speed of Response Some attention should be given to the time dimension in the process of advertising communication. The speed of getting any reaction from constituent units of the target audience will depend on a number of factors relating to the content and appeal of the message, the media vehicles chosen and attitudinal and situational characteristics of the audience. It is, however, important for the advertiser to gauge the impact which successive exposures are making. Recent findings in the area of left and right brain activity have also attracted the attention of advertising researchers. Reading and speaking are left brain functions while the perception of images is a right brain function. It is accordingly implied that print media may relate more to left brain functions and visual media may tend to stimulate right brain activity. Krugman has suggested that three advertising exposures might be optional. The first exposure is likely to arouse curiosity and evoke cognitive response such as, what is it? The second exposure may then lead to an evaluative response what of it? The third exposure, depending on the evaluation at the second stage, may serve as a reminder or the beginning of disengagement. 1.4.4 Audience Perception Individuals remain predominant in the final response which may be obtained from advertising communication. Douglas, Field and Tarpey have enumerated the following factors which affect the perceptual process of human beings: This is a fairly comprehensive list. However, greater attention should be given to cultural and group factors after interpreting this item in a broader sense. Such factors may be of special importance to developing countries Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 10 where the influence of groups of communities is more predominant than in advanced countries. Moreover, word-of-mouth communication is an important element of decision-making and that reinforces the influence of group and cultural alignments. The understanding of the way the advertising process in relation to the objectives of an advertiser is facilitated when data on consumer behaviour and patterns of usage is available. In the absence of such information, it is difficult to differentiate between the possible effect of advertising communication and other influences such as trial and usage stimulated by the recommendation of a retailer or a friend or out of sheer curiosity, regardless of advertising communications. 1.4.5 Perceptual Mapping Advertising, in its rudimentary form, is primarily an element of market mix. At the other extreme, it is also supposed to create an aura of make-believe. The reality is perhaps somewhere between the two ends of the spectrum. It does have an effect of adding a new value to the existing value of the product. This must be considered when devising advertising communication. It is useful to obtain the views of the target of users and prospects of a product/service regarding their interpretation of the product. 1.4.6 Primal Fabrics This campaign is run primarily in the press and that too in colour for a product. The intention behind the campaign is to create an aura of high fashion so that the consumers opt for brands and products over and above the intrinsic features and functions of the product. The parameters of such measurement will refer to possible values assigned by the target segment regarding the perceived characteristics. Thus it is possible to obtain a perceptual map. The simple version of this map will be bivariate and can be expanded to a multi-dimensional level. Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 11 A perceptual map will help the advertiser and the advertising agency in trying to look at the product/service to be advertised from the angle of the consumers. Product characteristics by themselves may not be adequate bases for effective advertising communication. Understanding the consumers mind in addition to the segmentation framework can be instrumental in making the advertising process more efficient. This is particularly relevant as recent research work in the area of consumer behaviour has increasingly led to an erosion of the operational validity of models of hierarchy of effects. Constituent units of target audience apparently use multiple criteria, if possible, in different sets and sequences, in interpreting advertising message. These have to be integrated into advertising communication models in order to get a balanced perspective of how advertising works. Measures of Audience Exposure: The mere fact that consumers subscribe to certain publications or listen to certain programmes does not mean that they notice or remember the advertisements they contain. There are organizations in the USA which provide information on the exposure of readers of magazines to advertising. Two such well-known services are Daniel Starch and Gallup Robinson. Daniel Starch, a pioneer in advertising research, started collection of audience exposure data for selected American publications in the 1930s. These publications have of course, varied over the years due to changes in their popularity and circulation. Known as starch ratings, the data is provided under three headings noted, seen associated and read most. Interviewers visit respondents at their houses and ask if they have read certain magazines. Readers of the concerned magazines are then asked to review, page by page, the advertisement they remember having seen. Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 12 The noted score refers to the percentage of respondents who declare having looked at an advertisement. The seen associated score refers to those who have looked at the brand name or realized that the advertisement was for a particular product. The seen associated score refers to those who have looked at the brand name or realized that the advertisement was for a particular product. The read most score refers to those who indicated that they had read most of the advertisement. Cost data on the number of readers per dollar and the cost per reader reached, compared with the competition, are also provided in the starch reports. The other research organization, Gallup Robinson, provides a service for measuring the impact of an advertisement based on recall. Consumers who have read certain magazines are identified and asked to recall the brand names from the advertisements they have seen the score based on this data has been termed Prove Name Registration, PNR information about specific copy point is also sought from them. This may help in determining the copy points. This information is valuable for the advertiser and the agency in developing subsequent advertisements and campaigns. 1.5 Role of Advertisi ng in Marketing Mix and Positioning Decisions Advertising is an all-pervasive facet of most growing communities. It has important consequences for the advertisers who use it and for individuals who are exposed to it. However, its economic and social impact is a subject of continuous controversy. The following aspects illustrate the basic purpose of advertising: Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 13 1.5.1 Communication with Consumer There is an increasing need for information about a wide variety of products as the economy expands and grows more complex. Advertising is a major way of establishing communications between manufactures and other organisations providing services or trying to put across ideas and concepts, on the one hand, and customers, buyers and potential acceptors, on the other. Advertising is a reminder to the existing consumers and it aims at cultivating new prospects as well. Advertising has, therefore, been described as effective communication with the target audience. 1.5.2 Persuasion Advertising attempts to persuade prospective buyers to buy a product/service. According to Clyde Miller, all success in business, industry and similar activities depends upon the process of planned persuasion. In modern markets, the producer who is content with advertising that merely identifies or informs may soon find himself in a vulnerable position. The consumer should be aware of the advertisers persuasive interest, no matter how restrained or informative the message may be. 1.5.3 Contribution to Economic Growth Advertising contributes to economic growth by helping to expand the market, particularly for new products, and by helping to develop new market segment. A company which invests in research and development in order to develop new products has to depend on advertising for establishing the market for these products. In the board social context, advertising can be motivating factor for the less privileged for increasing their purchasing power. Advertising is also a potent vehicle for achieving acceptance of desirable and useful concepts and ideas where the profit motive is minimal or missing altogether. This may be seen in the case of non-profit objectives, such as preventive aspects of public health, developing the small family Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 14 norm especially in over-populated countries, dissuading drunken driving, and so forth. 1.5.4 Catalyst for Change Creativity inherent in advertising leads to the discovery of new relationship that can change the perception of a prospect. Two aspects are of special significance: the originality of the message communicated, and the eventual effect on consumers standards of living. The ability to bring about changes comes from originality, ingenuity, innovation and imagination in advertising. This may be seen in promoting new products and ideas, as well as in the upgrading of products/ brands used by consumers. The contribution of advertising in bringing about a change is of special relevance to developing countries. Self Assessment Questions II State whether the following statements are True or False: 1. Creativity inherent in advertising leads to the discovery of new relationship. 2. Advertising contributes to economic growth by helping to expand the market. 3. Advertising is a reminder to the existing consumers and it aims at cultivating new prospects. 1.6 Advertisers and Advertising Agency 1.6.1 Effectiveness of Advertising The ultimate test of effectiveness of advertising obviously consists in the degree of achievement of the objectives set by an advertiser in consultation with the advertising agency working on the account. In the case of typical marketing situations, this may take the form of an increase in the sales or market share or penetration into a new market segment. There has been a continuing debate on the subject of whether advertising works or does not Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 15 work as measured in terms of specific marketing parameters. A recent study sponsored by the Institute of Parishioners in advertising has sought to give a definite lead in this direction. This took the form of unitizing entries for awards on the theme, Advertising Works. Submissions by advertisers and their advertising agencies, of case histories of specific campaign made it possible to establish causal relations. 1.6.2 Communication Models There are various models of the advertising communication process which aim at explaining the possible sequence through which advertising may eventually affect buyer user behaviour. 1.6.3 The Feedback The feedback can be built in by a reverse arrow from the audience to the communicator under the caption, To What Effect. 1.6.4 The AIDA Model The effect is the action into which a prospect may be included as a result of advertising. The following sequence may operate: This was one of the earliest of such models developed in the 1920s in the USA and has come to be known as the AIDA model of hierarchy of effects. It highlights the importance of catching the eye/ear of the prospects and creating interest through the advertising message and its presentation. The desire to obtain advertised goods/services may be generated, albeit to varying degrees, amongst those who respond to advertising. The final stage of action will depend not only on the determination of the prospect but also on other factors, such as availability, which is a function of the distribution system and its efficiency. 1.6.5 Lavidge and Steiner Model Models of hierarchy of effects developed later gave more importance to cognitive stages. It was apparently felt that with an increase in competition Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 16 and an enhancement in discerning abilities of potential buyers and users, information would play a greater role. The persuasive power of advertising could in itself be a function of the information content. This model is slightly more elaborate than that devised by Colley for the Association of National Advertising under the auspices of the ANA Committee on Corporate Management Approach to Advertising Development. The Lavidge and Sterner model takes cognizance of the competitive situation. Such competition may arise between brands of a product or even between substitute products as perceived by prospects constituting the target audience. The stage of Liking following those of Awareness and Knowledge may refer to the advertising, thus emphasizing the creative aspects. Preference for the product may be the combined effect of product characteristics and their relevance to the target audience, and advertising. 1.6.6 Innovation Adoption Model A variation of the hierarchy of effects model, which builds on the experience of usage, was provided by Rogers in his Innovation Adoption Model depicted below: Rogers Model is of special relevance to new product introductions and particularly useful for adoption of non-commercial service or practices in developing countries. The stages or evaluation are typical before adoption (or purchase) in uninitiated communities where benchmarks for comparison might not exist. In this context, the importance of word-of-mouth of communication may also be pointed out. Word-of-mouth is also a possible effect of advertising. It can serve as an important input for buying decisions as well as for moving prospects from the stage of interest to that of evaluation. The decision in favour of marking an evaluation is likely to be influenced by information available from various sources including Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 17 advertising. Evaluation, obviously, is a major step towards the adoption of the product service. 1.6.7 Operational Model O Brien has tried to develop an Operational Model which could integrate various stages of decision-making by buyers, as shown below: In order to identify the major elements of the Model, a research study on the purchasing behaviour of 634 housewives for a brand of convenience food over a period of five months was undertaken. Purchase diaries were maintained for 20 weeks and telephone interviews were conducted during the 5 th , 9 th and 21 st weeks. The study indicated that building up of confidence in the brand was an important cognitive stage operating between awareness and attitude alteration of formation. Favourableness of word-of- mouth communication contributes to building of confidence. 1.7 The Role of Accounts Executive It will be Accounts Executives efficiency, professionalism and customer- orientated approach that deliver the necessary results to maintain and grow excellent Customer Service Department. In handling all customer-related issues from initial enquiry, order processing to invoicing and dispatch, one will work closely with the Operations Manager to deliver customer requirements, adapting ones response and reprioritizing tasks to meet the internal and external deadlines. Experience in a customer-facing role within an order-focused environment working to defined quality standards, the ability to react positively to changing priorities, a high standard of written and verbal communication at all levels and a good working knowledge of Microsoft Office are essential for this role. Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 18 Experience of the SAP Management Information System or a Stock Management System, previous experience of dealing directly with export and freight forwarding companies and producing documentation for national and worldwide deliveries would be advantageous. Self Assessment Questions III 1. ______________ tried to develop an Operational Model which could integrate various stages of decision-making by buyers. 2. _________ is of special relevance to new product introductions and particularly useful for adoption of non-commercial service or practices in developing countries. 1.8 Choosing an Advertising Agency 1.8.1 Advertising Its Purpose and Functions Advertising is a measure of the growth of civilization and an indication of the striving of the human race for betterment and perfection. The drive for survival and satisfaction and limits of human endeavour has been succinctly summed up by Maslow in his holistic, dynamic theory which brings together several schools of thought on the subject. Maslows theory also has the advantage of experimental validity. There are five better known stages in Maslows hierarchy of needs, viz. physiological needs, safety needs, need for love and belongingness, self esteem needs and self actualization needs. There are two further goals to achieve, namely knowledge and beauty. The aspiration for knowledge arises from the need to know more and to develop greater understanding. The longing for beauty represents the ultimate in aesthetic satisfaction. Maslows hierarchy of needs may be analytically viewed as a two dimensional paradigm. The satisfaction of physiological or safety needs, at the lower range of the hierarchy, may not be entirely devoid of the Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 19 manifestation of needs of belongingness and love. For instance, a dish specially prepared for an occasion, such as an anniversary celebration, serves a dual purpose of a meal as well as a form of expression of closeness for the period concerned. Advertising has both forward and backward linkages in the process of satisfaction across the entire spectrum of needs. The explicit audience aware of the existence of the product, service or idea would fulfil their felt needs and spell out the differential benefits in a competitive situation. On advertising also lies the onus, at least marginally, of motivating prospects to strive for creation of resources for fulfilling the new needs, or alternatively, to aid re-allocation of available resources. Advertising is not merely directed at selling, or for that matter, at achieving the objective of gaining acceptance for a worthwhile idea or programme. It may also be an instrument for developing basic motivations for creating resources for buying goods and services or generating favourable conditions for the acceptance of an idea. Dwelling for a while on the motivational construction, the advertiser and the support systems, namely advertising agencies and media, have only a very limited role. Social scientists gave advertising a form and a focus, using the base of psychology against the background of socio-economic norms. Marketing men, quick on the uptake, assimilated the advertising concept swiftly and adopted it as a part of the marketing mix. Needs excavate and consumer perceptions of products and services also change, buyers attitudes towards products may be determined not merely by products as manufactured in factories, but also by what is added in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing and other things that people value. Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 20 1.8.2 The Advertising Spectrum Advertising is purposeful communication designed with a view to achieve a specific objective. It must reach the target audience identified for such communication. The resource allocation for advertising, as for other marketing inputs, is expected to have the effect of value imputation which may be measured in a variety of ways in order to estimate the cost-benefit ratio or payoff. The measurement of payoff or return on advertising is quite complicated, owing to problems in identifying measurable parameters and taking into account the influence of a large number of environmental factors which contribute in varying degrees to the total impact of advertising. Advertising can be seen to operate at various levels and has a specific purpose to serve at each of these interfaces. We may describe it as the advertising spectrum where the intended recipients of the message in a typical situation may be the following: a. Customers and prospects for commercial good or services, b. A specified audience for certain ideas or information, as in the case of non-commercial advertising, and c. A wide cross-section of audience for institutional advertising aimed at creating goodwill or amplifying certain issues, including political issues. However, the coverage of advertising is not confined to such groups alone. There are other major audiences as well: a) Sales Organization The major objective of advertising is to make the job of sales personnel less difficult and more efficient, as measured by sales achieved per person where direct selling efforts is an essential input. This applies to customer products and industrial products as well as service. Sales personnel of consumer goods deal mainly with various levels of distribution channels, and advertising can be an aid to them because of the consumer pull it may Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 21 create. In the case of new products, or products facing sales problems, the contribution of advertising may be seen directly in overcoming dealer resistance towards ordering such products. Sales personnel, in the first place, constitute an audience of their companys advertising. They should believe in that and be fully conversant with the advertising content and programme. It is, therefore, considered desirable to take sales personnel into confidence when developing new advertising plans and they should certainly be given a preview of the companys advertising. b) Distribution Channels Channels of distribution, especially when they are multilevel and long, are influenced to a certain extent in their buying and stocking decisions by the advertising and sales promotion support they get from the manufacturing/ marketing organization. When the process of change with regard to an expansion in the product range or opening new market segments is rapid, or when there is keen competition, the deployment of promotional inputs becomes all the more relevant. c) Employees Another audience for an organisations advertising consists of its own employees organisation-wide, and not merely the sales personnel. Franklin Acito and J efferey Ford term this contribution as employees effects as distinguished from target group effects relating to buyers and prospects. Employees are exposed to characteristics of the organisation and also in some measure to its advertising. It is pointed out that the customers of a company are indeed subject to the target effect of advertising. In turn, indirect effects arising from the reception and absorption of advertising by customers and actions taken by them are transmitted to employees. Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 22 The effects of direct advertising on employees are likely to be much higher for consumer goods and consumer service organisations than for technical and industrial products. The amount of advertising and the type of media used are likely to increase chances of exposure for employees. In the case of service organization such as banks, hotels, travel agencies, airlines and insurance companies, indirect effects transmitted by the prospects and customers to employees of the concerned organisation would be appreciable. d) Advertising for Media There is yet another category of advertising which must be considered in respect of diversity of target audiences. In a competitive environment, space or time in media for this purpose can take the form of direct mailing apart from sales contacts. In addition or in lieu of that, the media may undertake to advertise in the mass media. Such advertising may serve the dual purpose of addressing the appeal to advertisers and attracting newreaders. It may help reinforce the loyalty of regular readers of the print media, or listeners and viewers in the case of radio and television. The contents of the advertisement will indicate which of the two is meant to be the primary audience. The Times of India advertising campaign serves as a useful illustration of a multi-faced approach to different types of audience. In the first place, an appeal is made to the readers by highlighting the value of advertisements as well as of the additional content. The attention of advertisers, advertising agencies and others concerned with buying and selling space is drawn to the question of reach ad cost economies available. There has been a substantial growth in the print media, especially periodicals, in recent years. Therefore advertising by media for securing advertisement has become very popular. Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 23 e) Non-commercial Advertising Advertising is concerned with much more than the promotion of tangible goods. Although use of advertising has been made largely for promoting goods and services, it is, now, also being increasingly used to further public interests as well as goods and service with limited or little profit motive. The Indian Cancer Society ran an advertising campaign in 1979-1980. The theme centered on a positive approach to an otherwise fearful disease and gave valuable information on facilities for regular check-ups. The campaign was highly successful and was also applauded as a professional masterpiece. The word idea which can very often be substituted for achieving socially desirable aims such as conservation of energy can be evolved by using the same basic principles as those applied in the case of usual products and service. Self Assessment Questions IV 1. Advertising is concerned with much more than the promotion of tangible goods. 2. Sales personnel, in the first place, constitute an audience of their companys advertising. 3. Advertising is not a purposeful communication designed with a view achieving specific objective 1.9 Summary Advertising is the dissemination of information concerning an idea, service or product to communicate in accordance with the intent of the advertiser. Information given in an advertisement may be about the company and its products or service. Advertising in marketing plays a major role in bringing a product out to the customers environment. The advertising agencies play an important role in retaining the customers expectations. Advertising can be seen to operate at various levels and has a specific purpose to serve at Advertising Management and Sales Promotion Unit 1 Sikkim Manipal University Page No. 24 each of these interfaces. The criteria followed while choosing the advertising provides a strong platform for product launching. 1.10 Terminal Questions 1. Describe the importance of advertising in marketing. 2. Define advertising. 3. How does advertising contributes to economic growth? 4. Explain the role of advertising in marketing mix and positioning decisions. 5. Explain the role of Accounts Executive. 7. What are the criteria for choosing an advertising agency? 1.11 Answers to SAQs and TQs SAQs I 1. True 2. True 3. False SAQs II 1. True 2. True 3. True SAQs III 1. O Brien 2. Rogers Model SAQs IV 1. True 2. True 3. False Answers to TQs: 1. Refer to 1.3 2. Refer to 1.2 3. Refer to 1.5 4. Refer to 1.5 5. Refer to 1.7 6. Refer to 1.8
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