MK0016 B1809 SLM Unit 01
MK0016 B1809 SLM Unit 01
MK0016 B1809 SLM Unit 01
Unit 1
Unit 1
Structure:
1.1 Introduction
Objectives
1.2 Meaning and Framework of Advertising
How advertising works
1.3 Defining Advertising
Targeted advertising
Delayed reaction
1.4 Advertising to Persuade the Buyer
1.5 Importance of Advertising in Marketing
1.6 Role of Advertising in Marketing Mix and Positioning
Correct positioning of brand
1.7 Advertisers and Advertising Agencies
Full-service advertising agencies
Specialist agencies
1.8 Choosing an Advertising Agency
1.9 Summary
1.10 Glossary
1.11 Terminal Questions
1.12 Answers
1.13 Case Study
1.1 Introduction
Before we begin a discussion on advertising, let us take a moment to
recapitulate our understanding on advertisings higher order disciplines
marketing and marketing communication. As you have already learnt,
marketing includes many tasks right from identifying consumer needs and
wants to fulfilling them. These marketing tasks are marketing research, new
product development, distribution management, pricing, promotion, analysis
of competition, etc. These activities can be classified into four general
categories such as product, price, place (distribution) and promotion, which
are popularly known as the 4 Ps of marketing or the marketing mix.
Promotion or marketing communication refers to all activities concerned with
informing consumers about an organisations offering, persuading them to
buy it and reminding them about it from time to time. The fourth P, that is,
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Inform Let people know what the product is, where it would be
available, what problem it would solve, etc. Informative advertising is
most rampant in the introductory stage of the product or product
category because maximum information has to be given when
something is new.
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466 billion, and it will go up by USD 518 billion by 2013. This level of
spending supports thousands of companies and millions of jobs. In fact, in
many countries, most media such as television, radio and newspapers,
would not be in business without revenue generated through the sale of
advertising. While worldwide advertising is an important contributor to
economic growth, the role advertising plays in individual marketing
organisations differ.
For some products, advertising is the breath of life; without it, it will die a
quick death. FMCG, cars, scooters and motorbikes, fashion clothes, tasty
processed food, properties, recruitment, etc., ride primarily on the power of
advertising because they are in a highly competitive market and must
constantly keep their products in front of the prospective buyers.
In some organisations, like hospitals, there is hardly any money spent on
advertising. Instead, promotional money is spent on other options such as
personal selling through a sales team and other tools of the marketing
mix. For some smaller companies, advertising may consist of an occasional
advertisement that is on a small scale, such as placing small ads in the
classified section of a local newspaper. Even industrial goods do not require
much advertising, as opposed to other tools of promotion such as direct
marketing or personal selling.
But most organisations, large and small, that rely on marketing to create
customer interest, are engaged in consistent use of advertising to help meet
marketing objectives. This includes developing advertising campaigns
regularly, which involve a series of decisions for planning, creating,
delivering and evaluating an advertising effort.
Other roles of advertising
There is a lot of misconception about the role advertising plays in society. It
is often said that instead of wasting billions on seemingly useless
advertising, especially in the expensive electronic media, the money saved
can be used for further product development which in turn lowers the price
of products. This results in better sales of the products.
However, it really does not work like that. Advertising brings to the relevant
target audience the different options that are available in a particular product
category, because nobody can go from shop to shop and evaluate all the
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brands that are available in the different markets in the whole country before
making a purchasing decision. Moreover, even at lowered prices, the
products will not sell much because without advertisements consumers will
not be aware of the products existence, irrespective of the comparative
strength of each brand or where it is available.
Advertising also brings popular level entertainment to people. The price the
daily newspapers charge to their readers barely covers the delivery
expenses. The entire newsgathering and publishing industry is paid for by
the advertisements the paper carries. The same is true with radio and
television; even movies are largely supported by the ads they carry before
the show commences and not entirely by gate collections. Ads inform the
public about the concerts, shows and cultural events that take place in the
city. But for advertisements, life would be dull and uninformed.
Self Assessment Questions
8. For some products like FMCG, automobiles, fashion clothes, etc.,
advertising is the breath of life and they rely primarily on the power of
advertising because ___________________.
9. Most organisations do not engaged in consistent use of advertising to
meet marketing objectives as they feel it is a waste of money.
(True/False)
10. Without advertisements, consumers will not be aware of the products
existence (True/False)
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million rupee business in itself, which in turn sells it back to smaller agencies
who do not have the media clout to get good bargains and positions. Even
full-service advertising agencies themselves are specialised some
specialise only in FMCG or IT, technical, engineering, recruitment or tender
advertising and carry a whole team of highly skilled and specialised
professionals who are the toppers in their business. It is a highly competitive
world. Considering the proliferation of products, services and explosion of
media today, the specialisations are necessary.
Self Assessment Questions
11. The ___________ is the company, individual, institution or government,
which places an advertisement in the mass media and pays for it.
12. The advertisers goal is twofold - dissemination of ____________ about
his/her product or service and ________ in order to influence the
purchasing decision.
13. An advertising agency is the organisation that deals with the advertiser
in meeting the communication requirements of a product. (True/False)
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Most small advertisers do not have any regular agency at all. They contact
an agency for specific needs, usually through personal contacts, with no
commitments on either side. Different advertisers have different needs as
far as advertising is concerned. Indeed, the same advertiser may have
different needs at different times. Since ad agencies are highly specialised
now, an advertiser may maintain a whole panel of agencies to serve its
different needs much to the annoyance of the big agencies. These big
agencies may feel that one single agency can give a more integrated
service to the company, which projects a better image in the market.
Depending on the volume of business, an advertiser, especially FMCG
companies and government departments with huge budgets, may use
different agencies to handle their different requirements. These include
press, television, outdoor, event management, print and production,
recruitment, photography, exhibition design and creation, packaging design,
etc., hiring an expert agency in each field. While the advertiser gets the best
in each specialisation, there is the danger of ending up with a muddled and
fragmented image that confuses the market at a subliminal level. The ideal
solution of course is to ensure that all of them work together to maintain
some uniformity of the image, but that rarely happens.
On the professional front, selection of an advertising agency largely
depends on the budget and requirements of the advertiser on the one hand
and the size, creativity, experience, expertise, competitiveness, business
acumen and media influence of the agency on the other. However,
compatibility and the comfort level between the advertiser and the
advertising agency is an important factor because this is an intense
relationship of mutual trust and expectation between the two.
Many small advertisers make use of the services of small agencies having
few employees, who in turn subcontract the more specialised work.
Medium-sized companies rely on full-service agencies to provide whatever
services they need. Going up the food chain, only gigantic international
agencies can serve giant companies due to their media connections,
capacity to retain the best of creative professionals, global accreditations
and freedom with foreign exchange.
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1.9 Summary
Let us recapitulate the important concepts discussed in this unit:
There are full-service advertising agencies who meet all of their clients
communication needs. There are also specialist agencies that do highly
specific functions. Selection of an agency depends not only on the
advertisers needs and budget, but also on the agencys expertise,
experience and media contacts.
1.10 Glossary
Persuasive: convincing or the ability to persuade or influence
Positioning: a marketing strategy that aims to make a brand occupy a
distinct position in the mind of the customer.
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1.12 Answers
Self Assessment Questions
1. non-personal, identified sponsor
2. attitudes
3. True
4. True
5. True
6. unconscious
7. clutter, resistance
8. they are in a highly competitive market
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9. False
10. True
11. Advertiser
12. accurate information, persuasion
13. True
Terminal Questions
1. Advertising is any paid form of non-personal presentation and promotion
of ideas or products by an identified sponsor. Refer section 1.3.
2. The objectives are to inform, persuade, remind and re-inforce. Refer
section 1.3 for further details.
3. Advertising was traditionally considered a one-way form of marketing
communication. However, this trend is changing. Refer section 1.3.2 for
further details.
4. A human mind develops natural defense against what it does not need
and allows to pass through and process only that information which is
useful. This is called mind filter. Refer section 1.4 for further details.
5. The significance of advertising is immense. Most organisations engage
in consistent use of advertising to help meet marketing objectives. Refer
section 1.5 for further details.
6. An advertising agency is the organisation that deals with the advertiser
in meeting the communication requirements. Full-service ad agency
offer several services. Refer section 1.7.1 for further details.
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3. What role could BBDO have played in designing and executing the
Heart Health campaign? Visit its Website www.bbdoindia.in and find
out if it is a full-service or a specialised agency.
(Sources: www.PepsicoIndia.co.in; Surina Sayal, Effies 2010: Knorr and Quaker
Oats open up their respective markets, while 7Up dances to glory, Retrieved on
December 6, 2010, www.afaqs.com; Gunjan Prasad, Quaker Oats pushes heart
health through integrated campaign, Retrieved on September 16, 2009,
www.campaignindia.in; www.web2visit.com)
References:
Jethwaney, J. N., & Jain, S. (2006). Advertising Management. Oxford
University Press.
E-References:
www.mudra.com
www.e2necc.com
www.PepsicoIndia.co.in
Surina Sayal, Effies 2010: Knorr and Quaker Oats open up their
respective markets, while 7Up dances to glory, Retrieved on December
6, 2010, www.afaqs.com
Gunjan Prasad, Quaker Oats pushes heart health through integrated
campaign, Retrieved on September 16, 2009, www.campaignindia.in
www.web2visit.com
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