Impact Of Advert ising On

International Ma rke ting

Presented To: - PROF. GAYATRI BHOIR

By
S.Y.BMS GROUP
DIV. A

PATKAR COLLEGE

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Preface

This report on ‘Impact of Advertising’ is prepared in fulfillment of

presentation in the International Marketing subject.

We present this report to Prof. Gayatri Bhoir who has helped us in

understanding this subject through a practical approach. She has

guided us through the preparation of this project and for this we are

grateful to her. We have prepared this report after a thorough

research and analysis of the topic. We would like to thank all those

who helped us make this project report worthwhile.

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 GROUP MEMBERS

1 Ibhrahim Khan 125

2 Devashree Korlekar 126

3 Prabhawati Kuckian 127

4 Siddhraj Masali 128

5 Shailesh Maurya 129

6 Abhishek Mishra 130

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INDEX

Sr.
Topic Pg. No.
No
1 International Marketing: A global marketplace 4
2 Advertising and its milestones 5
3 Advertising plan 7
4 Consumer and Market analysis 8
5 Marketing Plan 9
6 Advertising communication system 10
7 Media strategy & tactics 11
8 International Advertising concept 12
9 Brand ambassadors 14
10 Impact of advertising on sales: Hero Honda 18
11 Agencies 19
12 Fact file 20
13 Advertising expenditure 21
14 Top 10 advertising companies 22
15 Factors affecting advertising 23

International Marketing: A Global Marketplace

Trade is increasingly global in scope today. There are several reasons for
this. One significant reason is technological—because of improved
transportation and communication opportunities today, trade is now more
practical. Thus, consumers and businesses now have access to the very best
products from many different countries. Increasingly rapid technology
lifecycles also increases the competition among countries as to who can
produce the newest in technology. In part to accommodate these realities,
countries in the last several decades have taken increasing steps to promote
global trade through agreements such as the General Treaty on Trade and
Tariffs, and trade organizations such as the World Trade Organization

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(WTO), North American Free Trade Agreement (NAFTA), and the European
Union (EU).

Some forces in international trade.

Trade between countries is beneficial because these countries differ in

their relative economic strengths—some have more advanced technology
and some have lower costs. Products tend to be adopted more quickly in the
United States and Japan, for example, so once the demand for a product (say,
VCRs) is in the decline in these markets, an increasing market potential
might exist in other countries (e.g., Europe and the rest of Asia).
Internalization/transaction costs refers to the fact that developing certain very
large scale projects, such as an automobile intended for the World market,
may entail such large costs that these must be spread over several countries.

Advertising
Advertising is a persuasive communication attempt to change or reinforce
ones’ prior attitude that is predictable of future behavior.

Historical Milestones In Advertising

Advertising goes back to the very beginnings of recorded history.

Archaeologists working in the countries around the Mediterranean sea have
dug up signs announcing various events and offers. An early form of
advertising was the town crier. Another early advertising form was the mark
that trades people placed on their goods, such as pottery. As the person’s
reputation spread by word of mouth, buyers began to look for his special
mark, just as trademarks and brand names are used today. As production
became more centralized and markets became more distant, the mark became

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more important. The turning point in the history of advertising came in he
year 1450 when Johann Gutenberg invented the printing press. Advertising
no longer had to produce extra copies of a sign by hand. The first printed
advertisement in the English language appeared in 1478. In 1622,
advertising got a big boost with the launching of the first English newspaper,
The Weekly News. Advertising had its greatest growth in the United States.
Ben Franklin has been called the father of American advertising because his
Gazette, first published in 1729,had the largest circulation and advertising
volume of any paper in colonial America. The invention of radio and, later,
television created two more amazing media for the spread of advertising.

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Advertising's Two Important Virtues

 You have complete control. Unlike public relations efforts, you

determine exactly where, when and how often your message will
appear, how it will look, and what it will say. You can target your
audience more readily and aim at very specific geographic areas.
 You can be consistent, presenting your company's image and sales
message repeatedly to build awareness and trust. A distinctive identity
will eventually become clearly associated with your company, like
McDonald's golden arches. Customers will recognize you quickly and
easily - in ads, mailers, packaging or signs - if you present yourself
consistently.

What Advertising Can Do For Your Business

 Remind customers and prospects about the benefits of your product or

service
 Establish and maintain your distinct identity
 Enhance your reputation
 Encourage existing customers to buy more of what you sell
 Attract new customers and replace lost ones
 Slowly build sales to boost your bottom line
 Promote business to customers, investors

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Advertising Plan
The manager needs to engage in situation analysis with respect to the
market conditions that are operating at the time and to assess the
consumer/market, competitive, facilitating agency, and social legal, and
global factors that will affect decision making and the development of the
plan. It is vital that the advertising plan be developed so as to mesh with and
support the various components of the marketing and communications mix
such as personal selling, pricing, public relation, and promotion. The
advertising manager also needs to know the major areas of his or her
planning and decision-making responsibilities.

There are three areas of major importance:

 Objective And Target Selection,
 Consideration,
 Message Strategy And Tactics,
 Media Strategy And Tactics.

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Consumer and Market Analysis
A situation analysis often begins by looking at the aggregate market
for the product, service, or cause being advertised: the size of the market, its
growth rate, seasonality, geographical distribution; the possible existence of
different segments; and trends in all of these aggregate market
characteristics.

Competitive Analysis
Advertising planning and decision-making are heavily affected by
competition and the competitive situation the advertiser faces. Competition is
such a pervasive factor that it will occur as a consideration in all phases of
the advertising planning and decision-making process. A type of market
structure analysis that involves the development of perceptual maps of a
market, for example, attempts to locate the relative perceptual positions of
competitive brands.

Situation analysis should usually include an analysis of what current

share the brand now has, what shares its competitors have, trends in these
shares, reasons for these trends, what share of a market is possible for the
brand, and from which competitors an increase in share will come. The
planner also has to be aware of the relative strengths and weaknesses
financial, production, and marketing of the different competing companies,
and the history of competitive moves and objectives in the product category.

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The Marketing Plan

Advertising planning and decision making take place in the context of

an overall marketing plan. The marketing plan includes planning,
implementation, and control functions for the total corporation or a particular
decision-making unit or product line. The marketing plan will include a
statement of marketing objectives and will spell out particular strategies and
tactics to reach those objectives. The marketing objectives should identify
the segments to be served by the organization and how it is going to serve
them. The needs and wants of consumers on which the firm will concentrate,
such as the needs of working men and women for easily prepared meals, are
identified and analyzed in a marketing plan.

There are several marketing tools that can be used to help an

organization achieve its marketing objectives. Most people are familiar with
the “4 Ps” the marketing mix which includes product, price, place, and
promotion. A marketing plan formulates the strategy and tactics for each of
these.

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Advertising Communication System

Advertising communication always involves a perception process and

four of the elements shown in the model: the source, a message, a
communication channel, and a receiver. In addition, the receiver will
sometimes become a source of information by talking to friends or
associates. This type of communication is termed word-of-mouth
communication, and it involves social interactions between two or more
people and the important ideas of group influence and the diffusion of
information.

An advertising message can have a variety of effects upon the receiver. It can
 Create awareness
 Communicate information about attributes and benefits
 Develop or change an image or personality
 Associate a brand with feelings and emotions
 Create group norms
 Precipitate behavior

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Message Strategy and Tactics

The actual development of an advertising campaign involves several

distinct steps. First, the advertising manager must decide what the
advertising is meant to communicate by way of benefits, feeling, brand
personality, or action content. Once the content of the campaign has been
decided, decisions must be made on the best and most effective ways to
communicate that content.

Media Strategy

Although there are many rules of thumb often used to decide how
much money to spend on advertising, the soundest rules involve beginning
with a detailed specification of what a corporation is attempting to
accomplish with advertising, and the resources necessary. It is only when the
job to be done is well specified that the amount and nature of the effort the
amount of money to be invested in advertising can be really determined

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International advertising

It entails dissemination of a commercial message to target audiences

in more than one country. Target audiences differ from country to country in
terms of how they perceive or interpret symbols or stimuli, respond to humor
or emotional appeals, as well as in levels of literacy and languages spoken.
How the advertising function is organized also varies.

International advertising can, therefore, be viewed as a

communication process that takes place in multiple cultures that differ in
terms of values, communication styles, and consumption patterns.
International advertising is also a business activity involving advertisers and
the advertising agencies that create ads and buy media in different countries.
The sum total of these activities constitutes a worldwide industry that is
growing in importance. International advertising is also a major force that
both reflects social values, and propagates certain values worldwide.

The Communication Process

The process of communication in international markets involves a
number of steps. First, the advertiser determines the appropriate message for
the target audience. Next, the message is encoded so that it will be clearly
understood in different cultural contexts. The message is then sent through
media channels to the audience who then decodes and reacts to the message.
At each stage in the process, cultural barriers may hamper effective
transmission of the message and result in miscommunication.

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International Advertising as a Business Practice

International advertising can also be viewed as a business

activity through which a firm attempts to inform target audiences in multiple
countries about itself and its product or service offerings. In some cases the
advertising message relates to the firm and its activities, i.e. its corporate
image. In other cases, the message relates to a specific product or service
marketed by the firm. In either case, the firm will use the services of an
advertising agency to determine the appropriate message, advertising copy
and make the media placement.

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Brand Ambassadors: their effect on International Marketing and
advertising

Soft drinks, chocolates, biscuits, paints, cars, tyres, scooters, suiting,

footwear, watches, pens, hair oil, insurance packages, diamonds, photo films
... The list could goes on. It appears that, of late, corporate India does not
want to sell anything to the consumer without using either a movie star or a
sports hero. This in itself is an important advertising strategy for majority of
the companies.

So, when Cadbury India wanted

to restore the consumer's
confidence in its chocolate
brands following the high-pitch
worms controversy, the company
appointed Amitabh Bachchan for
the job.

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 Last year, when the even more controversial pesticide issue shook up
Coca-Cola and PepsiCo and resulted in much negative press, both soft drink
majors put out high-profile damage control ad films featuring their best and
most expensive celebrities.

While Aamir Khan led the Coke fightback as an ingenious and fastidious
Bengali who finally gets convinced of the product's `purity,' PepsiCo brought
Shah Rukh Khan and Sachin Tendulkar together once again in a television
commercial which drew references to the `safety' of the product indirectly.

The success that the Aamir Khan commercial brought Coca-Cola is

universally acknowledged. A
creation of Prasoon Joshi,
National Creative Director,
McCann-Erickson, and the ad
has been exported to foreign
markets as well. Thus it proved
beneficial for international
marketing of the product.

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The Tata Group has some of India's most famous personalities from the
sports and entertainment fields endorsing its products and services, and the

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Tata brand like Narain Karthikeyan, Sourav Ganguly and Irfan Pathan, Sania
Mirza, Naseeruddin Shah and Aamir Khan who have greatly contributed to
the success if Tata’s products and services.

Highest Earning Celebrities

1. Amitabh Bachchan

2. Sachin Tendulkar

3. Narain Karthikeyan

4. Shahrukh Khan

5. Aamir Khan

6. Aishwarya Rai

7. Rahul Dravid

8. Saif Ali Khan

9. Saurav Ganguly

10.Sania Mirza

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Impact Of Advertising On Sales

HERO HONDA

Sales Performance

Apr'04- Apr'05-
Dec'04 Dec'05
Dec'04 Dec'05
Domestic 225250 238822 1892540 2155479
Exports 5501 6282 43441 72815

The Hero Honda Company achieved a solid growth of 35% as compared

with sales recorded during January 2005.

The cumulative sales of the company for the period April 2003 - January
2004 are 16,73,421 motorcycles, a notable jump from 14,27,052 units sales
achieved during the corresponding period last year (April 2002-January
2005). This reflects a growth of 17% in the cumulative sales of the company
owing to its advertising strategies.

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Facilitating Agencies

Another external factor involves the agencies that facilitate advertising

and provide the means to advertise. From a situation analysis viewpoint, the
advertiser basically needs to know what kind of facilitating agencies exist
and the nature of the services they can provide. From a planning viewpoint,
much local advertising, for example, is done without the services of an
advertising agency or a research supplier. A national advertiser, on the other
hand, may have under contract many different agencies and research
suppliers, each serving one or more brands in a product line made up of
several products.

Many advertising decisions involve choices among facilitating

agency alternatives. What advertising agency should be chosen? What media
should be used? What copy-testing supplier will be best for our particular
situation? Concerning the question for agency selection, for example, Cagley
and Roberts found that the people factor” tends to dominate in agency
selection. Characteristics such as the quality of personnel, reputation,
integrity, mutual understanding, interpersonal compatibility, and synergism
were very important.

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Fact file

 The majority of large advertising agencies are headquartered in the

US. Of the ten largest advertising agency groups, seven are
headquartered in the US, and one each in the UK, France and Japan,
although WPP, the British agency holding company, is made up of two
large US-based agencies.

 With the exception of Dentsu, the Japanese agency, most other agency
networks generate the majority of their revenues outside their home
country.

 The largest agency group, Omnicom, places over $37 billion of

advertising for its clients around the world and derives half its revenue
from outside the US.

 US-based advertising agencies and their subsidiaries are responsible

for most of the advertising throughout the world.

 China is the next largest advertising market and is also growing

rapidly.

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Advertising Expenditure

The Table below shows advertising spending in the top ten global ad
markets.

1997 Advertising
Country Expenditures (millions) Percent
U.S. 117.0 50
Japan 35.7 15
U.K. 20.8 9
Germany 20.3 9
France 9.7 4
Brazil 8.8 4
Italy 7.2 3
Australia 5.5 2
Canada 5.4 2
S. Korea 5.3 2
Total: 235.7 100

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Top 10 Advertising companies.

Rank Company Total U.S Total U.S Advertising

Advertising Sales As A Recent
(Millions $) (Millions $) Of Sales

1 Philip Morris 2,058 20,866 9.9%

2 Procter & Gamble 1.507 11,805 12.8
3 General Motors 1,294 91,260 1.4
4 Sears 1,045 50,251 2.1
5 RJR Nabisco 815 12,635 6.4
6 Grand Metropolitan 774 3,211 24.1
7 Eastman Kodak 736 10,024 7.3
8 McDonald’s 728 11,380 6.4
9 Pepsi Co 712 10,551 6.7
10 Kellogg 683 2,766 24.7

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Factors Affecting Advertising

The final external factor in the planning framework concerns

environmental factor social, legal, and global. Law forbids deceptive
advertising. One solution is to create brand advertising that is vague and
contains little specific information. However, such an approach can result not
only in ineffective advertising; by it can lessen the social value of advertising
by reducing the amount for useful information that it provides to society.
Thus, and advertiser who attempts to provide specific, relevant information
must be well aware of advertising regulation.

Even more difficult consideration for people involved in the

advertising effort is broad social and economic issues. Another concern is
that advertising, especially when it is more irritating than entertaining, is an
intrusion into an already excessively polluted environment. A whole set of
rules is emerging to cover advertising directed at children, and advertising
for products such as alcohol and cigarettes, and the use of environmental and
health claims in advertising.
Thus advertising has a tremendous impact on international marketing
and the two concepts therefore go hand in hand and are dependent on each
other.

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Five Keys to Radio Advertising Success

Radio is an affordable ad medium that can reach a mass

audience. These five keys help increase your chances of having
a successful radio ad campaign.

Frequency of Ads

A radio commercial needs to air multiple times before it sinks in

with the listener. Running your commercial once a week for a
month isn't going to be enough. Frequency refers to how many
times your ad airs in a short amount of time. A commercial that
airs multiple times in a day has a better chance of reaching the
listener than a commercial that only airs a few times in a week.

Target Audience

Just like with every ad one create, you must know ones target
audience. Advertising your western gear store on a country
station makes sense. Advertising a teen clothing store on the
same station doesn't.

Make a list of the radio stations in your market. Listen to each

one to help identify your own target audience. What kind of
listeners will be tuning in and are they a potential customer for
your product or service?

Radio stations also offer programs you'll want to know more

about before you buy.

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Producing A Commercial

Unlike television commercials, production is simpler for a radio

commercial.

However, that doesn't mean one should just slap something

together. Your copy isn't relying on any visuals so it's vital you
capture the listener's attention from the start. The copy needs to
be crystal clear and not muddied by trying to be cutesy in your
pitch.

Frequency is the key so make sure your ad hits the mark and will
get the consumer's attention the first time. Research shows it
takes a few times before the consumer actually gets what your
company is all about. It's vital your ad stands out and conveys
your message repeatedly.

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 Advertising Legends
1)

A G Krishnamurthy
Ex Chairman & Managing Director

Mudra Communications
A G Krishnamurthy is the Captain who steered his agency from
a Rs. 35 lakh company to a Rs. 7 billion corporation in a
remarkably short 23 years. But little is known of his
considerable contribution in the agency’s creative reputation -
doubling up as copywriter/art director and quite often even as
creative director

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Brands: Rasna, Vimal Suitings & Sarees etc.

2)

Brendan Pereira

Chairman & Creative Director

From his palette of skills, Brendan Pereira has been imparting knowledge to a
wide audience over his 40 years in the business of art, advertising design and
communications.
His work with agencies in London and a stint as Brand Manager at
Beecham’s International, London, for a range of consumer products, created
a firm base for the task of leading Aiyars Advertising in Bombay as Creative
Director, and one of the first in the industry to be elected to the Board in that
capacity. As Deputy Managing and Creative Director, he was one of the
major shareholders who founded Chaitra Advertising, and led it on to
produce some of the outstanding work of that era.

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Spreading his talent, he published his first book “Changing Faces” in 1999.

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Indian Advertising Industry

 Concrete advertising history begins with classified

advertising
 Ads appear for the first time in print in Hickey's Bengal

Gazette. India's first newspaper (weekly).

 Studios mark the beginning of advertising created in India
(as opposed to imported from England) Newspaper studios
train the first generation of visualisers & illustrators
 Major advertisers: Retailers like Spencer's, Army & Navy
and Whiteaway & Laidlaw
 Marketing promotions: Retailers' catalogues provided early
example
 Ads appear in newspapers in the form of lists of the latest
merchandise from England
 Patent medicines: The first brand as we know them today
were a category of advertisers

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Case study: Knockout shoes

Agency: Weiden & Kennedy

Objective:

• Change what people expect of the brand from performance and

winning to possibility and creative self-expression

Target Audience:

• Young people -- open, ready and willing to have fun

• Active-minded 16 - 22 year olds during summer vacation

How Magazines Were Used:

• Speaking to the target, drawing them in with rich, inspiring copy

Results:

• Product sell through strong; basketball was prime success story -

complete sell through at urban and athletic specialty retailers
• Positive feedback from retailers and consumers

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Advertising Campaign Break-Through

1) Volkswagen
The Volkswagen campaign of the 1960’s is considered a
huge breakthrough in the history of advertising. During
this time, the auto industry tended focus on the beauty
and engineering stretch of the vehicle. However,
Volkswagen advertising broke through the clutter by
creating ads based upon the same principle that drew
drivers of Volkswagens in the first place: simplicity,
honesty, uniqueness and humor. Now, the brand
continues to stand out with maximum creativity.

2) Marlboro

Marlboro Cigarettes
The Marlboro Man smoking cigarettes has come to be
one of the biggest icons of advertising. The handsome
and suave person made smoking cigarettes look “cool.”

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It has demonstrated the powerful impact the industry
has on consumers.

Top Advertising Agencies in India

 Mammoth Graphic Communications

 Accord Advertising

 FCB-Ulka Advertising Ltd.

 Glare Advertising

 Marketing Consultants & Agencies Limited

 Mudra Communications Pvt. Ltd.

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Bibliography

Websites:

Books referred:

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