Chapter 1

Overview of Advertising Management

Introduction
Companies must do more than offer good products or services. They must inform consumers about product or service benefits and carefully position these in consumers' minds. To do this, they must skillfully use the mass-promotion tools of advertising, sales promotion and public relations.

What is Advertising?
Advertising is a paid non personal communication from an identified sponsor using mass media to persuade or influence an audience. Let s examine the key words in this definition. First: paid-for . An advertisement that is not paid-for is not, strictly, an advertisement at all. If no cost whatsoever is involved then the communication may be good publicity, and it may be persuasive, but it is not technically advertising unless it is an advertisement that has deliberately been given away free (perhaps to a charity, or something similar).

What is Advertising?
Second: communication . Every advertisement attempts to bridge a gap between the sender and the receiver. This bridge is a communication. Whether in words or pictures, or usually both, advertisements must communicate something to whoever sees or hears them. Third: intended . Not all advertisements work in the sense of achieving their intended aims. The fact that an advertisement does not achieve its aims does not detract from it being an advertisement. It is the intention that counts.

What is Advertising?
Fourth: inform and/or persuade . Many people, usually critics hostile to advertising, have tried to draw a distinction between informative advertising and persuasive advertising. The former is deemed to be acceptable and desirable, the latter to be less acceptable or even totally unacceptable. Finally: one or more people . All advertisements are addressed to people, more often to countless millions ( L Oreal. Because You re Worth It ). When the public thinks about advertising, it almost always thinks about mass advertising, in mass media.

What does advertising do?

Another apparently simple and boring question: surely everyone knows advertising sells things that is its purpose, isn t it? But is it really so simple? When charities advertise for funds, what are they selling? When the government advertises to stop people smoking, or drinking and driving, or to give blood, what are they selling? When the army, or the NHS, or any business, advertises to recruit people, what are they selling? In every case, the advertisements are intended to inform and/or persuade , so they fall squarely within our definition. But are they really selling things?

What does advertising do?

Everyone who works in advertising gets used to outsiders asking: What makes an advertising campaign successful? What is the secret of effective advertising? or something very similar. The question implies there must be some kind of Golden Key , which advertisers can use to unlock the secret of producing advertising that works. But there is no Golden Key and there is no single answer to the question What makes an advertising campaign successful?

Important Decisions in Advertising

Marketing management must make five important decisions when developing an advertising programme. Setting Objectives: The first step in developing an advertising programme is to set advertising objectives. These objectives should be based on decisions about the target market, positioning and marketing mix, which define the job that advertising must achieve in the total marketing programme. Advertising objectives can be classified by purpose: that is, whether their aim is to inform, persuade or remind.

Possible advertising objectives

To inform Telling the market about a new product. Suggesting new uses for a product. Informing the market of a price change. Explaining how the product works. To persuade Building brand preference. Encouraging switching to your brand. Changing buyer perceptions of product attributes. To remind Reminding buyers where to buy the product. Describing available services. Correcting false impressions. Reducing buyers' fears. Building a company image. Persuading buyers to purchase now.

Setting the Advertising Budget

After determining its advertising objectives, the company next sets its advertising budget for each product. The role of advertising is to create demand for a product. The company wants to spend the amount needed to achieve the sales goal. Budget depends upon the following factors: Stage in the product life cycle. New products typically need large advertising budgets to build awareness and to gain consumer trial. Mature brands usually require lower budgets as a ratio to sales. Market share. High-market-share brands usually need more advertising spending as a percentage of sales than do low-share brands. Building the market or taking share from competitors requires larger advertising spending than does simply maintaining current share. Competition and clutter. In a market with many competitors and high advertising spending, a brand must advertise more heavily to be heard above the noise in the market.

Setting the Advertising Budget

Advertising frequency. When many repetitions are needed to present the brand's message to consumers, the advertising budget must be larger. Product differentiation. A brand that closely resembles other brands in its product class (coffee, laundry detergents, chewing gum, beer, soft drinks) requires heavy advertising to set it apart.

The advertising strategy

Advertising" strategy covers two major elements: creating the advertising messages and selecting the advertising media. In the past, most companies developed messages and media independently. Media planning was often seen as secondary to the message creation process. First the creative department created the ad; then the media department selected the best media for carrying the advertisements to the desired target audiences. Separation of the functions often caused friction between creative's and media planners. Today, however, media fragmentation, soaring media costs and more focused target marketing strategies have raised the importance of the media planning function. In some cases, an advertising campaign might begin with a good media opportunity, followed by advertisements designed to take advantage of that opportunity. Increasingly, companies are realizing the benefits of planning these two activities jointly. Messages and media should blend harmoniously to create an effective overall ad campaign.

What do customers want from their brands?

advertisers have always appreciated that different people want different things, and that people buy goods for the benefits they provide. But if you look at any book of 19thcentury advertisements try Leonard de Vries s, excellent Victorian Advertisements, for example you will quickly see that in those days almost all advertisements concentrated on the product itself and how it functioned. Today most advertising campaigns concentrate on end-benefits. Consumers want and expect psychological and emotional, as well as functional, end-benefits from the goods they buy. Yes, they want them to function properly, to be fit for purpose , that goes without saying. But they also want their purchases to make them feel good, in any number of ways. In advertising terms, they want the brand image to be right for them.

What do customers want from their brands?

There is clear research evidence that emotional advertisements are, on average, more effective than unembellished factual advertisements. This is particularly true in those markets unlike drills where brand imagery is crucial to consumers, markets as diverse as automobiles, airlines, and alcohol; clothes, cosmetics, and carbonated drinks.

Types of Advertising
Political Advertising: This is an advertising use to persuade people to vote for political figures and their ideas. Direct Response Advertising: It uses any advertising medium, including direct mail, but the message is different and tries to stimulate a sale directly. In this type of advertising the consumer can respond by telephone or by mail and the product is delivered directly to the consumer. B2B Advertising: It only includes messages directed a retailers, wholesalers and distributors and from industrial purchasers and professionals such as lawyers and physicians to other businesses. Public Service Advertising: Public service announcements communicate a message on behalf of some good cause such as stopping drunk driving or preventing child abuse. Interactive Advertising: It is delivered to individual consumers who have access to computer and internet medium used are web pages banner ads and e mails.

Functions of Advertising
Informing Makes consumers aware of new brands. Educates them about a brand s distinct features and benefits. Facilitates the creation of positive brand images. Creating top-of-mind awareness (TOMA) established brands in mature product categories. for

Functions of Advertising
Influencing Advertising influences primary demand that is, creating demand for an entire product category. Advertising also attempts to build secondary demand, the demand for a company s brand.

Functions of Advertising
Reminding Advertising keeps a company s brand fresh in the consumer s memory. Advertising also increases the consumer s interest in mature brands and thus the likelihood of purchasing brands that otherwise might not be chosen. Advertising also influence brand switching.

Functions of Advertising
Adding Value Three basic ways by which companies can add value to their offerings: Innovating improving quality altering consumer perceptions It is said that Innovation without quality is mere novelty. Consumer perception without quality and/or innovation is mere puffery. And both innovation and quality, if not translated into consumer perceptions, are like the sound of the proverbial tree falling in the empty forest