ADVERTISING & SALES PROMOTION

A PROJECT REPORT

Under the guidance Of Ms. Tanu Malik

Submitted by

JATIN BEDI

in partial fulfillment o f the requirementfor the award of the degree

Of

MBA

IN

[Retail Operations]

March 2012

Acknowledgment

I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I would also like to express my special gratitude and thanks to industry persons for giving me such attention and time. My thanks and appreciations also go to my colleague in developing the project and people who have willingly helped me out with their abilities.

BONAFIDE CERTIFICATE

Certified that this project report titled ADVERTISING MANAGEMENT &

SALES PROMOTION is the bonafide work of JATIN BEDI who carried out

the project work under my supervision.

SIGNATURE

ADVERTISING MANAGEMENT

& SALES

PROMOTION

ADVERTISING MANAGEMENT

Advertising-meaning

Advertising is one of the four methods of promotion, via, sales promotion,

personal selling, public relations and advertising.

Advertising is a non personal communication of a sales message. It is also known

as mass selling. It is not an effective as personal selling but it does facilitate

communication with a large no. Of potential buyers at a time. It consists of non

personal forms of communication conducted through paid under clear

sponsorship .

Definition

“advertising is paid, non personal communication through various media by

business firms.”

According to american marketing association “as any paid form of non-

personal presentation and promotion of ideas, goods and services by an identified

sponsor.”

Evolution of advertising

Age of print:

1441 – johannes gutenberg creates movable type

Mid 1400 s printed hand bills

1472 – first ad in english “ pyes of salisburg”

1600’s -- news papers

1622 – 1st ad in london’s weekly relations news.

1655 – first use of the term advertising

1704 – 1st us newspapers to carry ads

1841 – volacy planner becomes first ad sales agent (boston)

Industrial revolution and emergence of consumer society:

1850’s – first branded items

1864 – j. Walter thompson forms agency.

1872 – 1st ward’s illustrated mail order catalog.

1879 – proctor & gamble introduces ivory soap.

1880 – john powers pioneers copywriting focuses on news.

1888 – george eastman creates 1st kodak camera.

1890’s – loud and thomas agency forms.

Modern advertising era:

1904 – 1940’s ---- albert lasker pioneers “ reason – why ” copy.

1905 – john e. Kennedy describes advertising as “salesmanship in print”

1905 – 1930’s -- claude hopkins develops scientific mail- under copy testing.

1906 – pure food and drug act.

1908 – beginners of celebrity endorsements – pepsi uses ad famed race car driver

barney old field.

1912 – “truth in advertising” movement

1914 – ftc act passed

Age of agencies:

1917 – american association of advertising agencies formed.

1918 – stanley & helen person develop account services, brand names and status

appeals.

1923 – young & \ \\\ agency formed

1930’s – radio advertising surpasses magazines as leading ad medium.

1932 – john caples applies scientific methods to mail – order copy and head lines

1940 – clyde bedell develops “ selling stratagems”

The creative era:

1950 – tv become important ad medium.

1950’s – posssee peevers develops “unique selling proposition”

1960’s leo bursnett creates brand icons and inherent drama.

Accountability era:

1960’s – bill bernbach focuses on the art of persuasion.

1980’s – 1990’s – mergers & globalization

1990’s – 200’s imc, niche marketing, growth of interactive technology,

relationship marketing, mass customization.

2001 – ad takes on new responsibilities

Nature of advertising

Element of marketing mix: - price, product, promotion and physical distribution.

Promotion mix: - personal selling, sales promotion, publicity and advertising.

Mass communication: - radio, television, news papers, bill boards and magazines etc,

Messages: - it motivates the customers.

Paid: - charges for the ad agency.

Persuasive: - information passing.

Sponsor: - ad is sponsored by some identifies advertiser, disclosing ideas, messages and

information.

Scope of advertising

Messages- message of the product.

Media- large no of media with those advantages and disadvantages cost and benefits.

Merchandise - demonstration of the attributes of the product.

Advertising functions- demand, promotion, image of the organization.

Advertiser-he helps the peoples to understand the product.

Objectives-increase sales, awareness, interest.

The 5 players of advertising

The advertiser- person of organization - song writers

The ad agency - printers

The media – channels of communication - market merchants

Vendors: direct- mail production houses

Free lance copy writers - telemarketers

Graphic artists - public relation consultant

The target audience - photographers

Classification and types of advertising

Product – related advertising

Pioneering advertising

Competitive advertising

Retentive advertising

Public service advertising

Functional classificaiton

Advertising based on demand influence level.

Primary demand (stimulation)

Selective demand (stimulation)

Institutional advertising

Product advertising

Informative product advertising

Persuasive product advertising

Reminder-oriented product advertising

Advertising based on product life cycle

Consumer advertising

Industrial advertising

Trade advertising

Retail advertising

Wholesale advertising

Advertising based on area of operation

National advertising

Local advertising

Regional advertising

Advertising according to medium utilized

1. Product – related advertising

It is concerned with conveying information about and selling a product or service. Product

advertising is of three types, viz,

A. Pioneering advertising

B. Competitive advertising

C. Retentive advertising

Pioneering advertising:

This type of advertising is used in the introductory stages in the life cycle of a product. It

is concerned with developing a “primary” demand. It conveys information about, and

selling a product category rather than a specific brand. For example, the initial

advertisement for black – and – white television and colour television. Such

advertisements appeal to the consumer’s emotions and rational motives.

Ii. Competitive advertising:

It is useful when the product has reached the market-growth and especially the market-

maturity stage. It stimulates “selective” demand. It seeks to sell aspecific brand rather than

a general product category. It is of two types: direct type: it seeks to stimulate immediate

buying action. Indirect type: it attempts to pinpoint the virtues of the product in the

expectation that the consumer’s action will be affected by it when he is ready to buy.

Example: airline advertising.

Air india attempts to bid for the consumer’s patronage either immediately - direct action-in

which case, it provides prices, time tables and phone numbers onwhich the customer may

call for reservations; or eventually – indirect action – when it suggests that you mention air

india’s name when talking to your travel agent.

Iii. Retentive advertising:

This may be useful when the product has achieved a favourable status in the market – that

is, maturity or declining stage. Generally in such times, the advertiser wants to keep his

product’s name before the public. A much softer selling approach is used, or only the

name may be mentioned in “reminder” type advertising.

2. Public service advertising

This is directed at the social welfare of a community or a nation. The effectiveness of

product service advertisements may be measured in terms of the goodwill they generate in

favour of the sponsoring organization. Advertisements on not mixing drinking and driving

are a good example of public service advertising. In this type of advertising, the objective

is to put across a message intended to change attitudes or behaviour and benefit the public

at large.

3. Functional classification

Advertising may be classified according to the functions which it is intended to fulfill.

(i) advertising may be used to stimulate either the primary demand or the selective

demand.

(ii) it may promote either the brand or the firm selling that brand.

(iii) it may try to cause indirect action or direct action.

I. Advertising based on demand influence level.

A. Primary demand stimulation

Primary demand is demand for the product or service rather than for a particular brand. It

is intended to affect the demand for a type of product, and not the brand of that product.

Some advertise to stimulate primary demand. When a product is new, primary demand

stimulation is appropriate. At this time, the marketer must inform consumers of the

existence of the new item and convince them of the benefits flowing from its use. When

primary demand has been

Stimulated and competitors have entered the market, the advertising strategy may be to

stimulate the selective demand.

B. Selective demand stimulation

This demand is for a particular brand such as charminar cigarettes, surf detergent powder,

or vimal fabrics. To establish a differential advantage and to acquire an acceptable sort of

market, selective demand advertising is attempted. It is not to stimulate the demand for the

product or service. The advertiser attempts to differentiate his brand and to increase the

total amount of consumption of that product. Competitive advertising stimulates selective

demand. It may be of either the direct or the indirect type.

Ii. Institutional advertising

Institutional advertising may be formative, persuasive or reminder oriented

In character. Institutional advertising is used extensively during periods of product

Shortages in order to keep the name of the company before the public. It aims at

Building for a firm a positive public image in the eyes of shareholders, employees,

Suppliers, legislators, or the general public. This sells only the name and prestige of

The company. This type of advertising is used frequently by large companies whose

Products are well known. Hmt or dcm, for example, does considerable

Institutional advertising of its name, emphasizing the quality and research behind its

Products.

Institutional advertisements are at consumers or focus them upon other groups, such as

voters, government officials, suppliers, financial institutions, etc. If it is effective, the

target groups will respond with goodwill towards, and confidence in the sponsor. It is also

a useful method or introducing sales persons and new product to consumers. It does not

attempt to sell a particular product; it benefits the organization as a whole.

It notifies the consumers that the company is a responsible business entity and is patriotic;

that its management takes ecologically responsible action, is an affair- motive-action

employer, supports the socialistic pattern of society or provides employment opportunities

in the community.

When indian oil advertisements describe the company’s general activities, such as public

service work, this may be referred to as institutional advertising because it is intended to

build an overall favorable attitude towards the company and its family of products. Hmt

once told the story of the small-scale industries supplying it with component parts, thus

indicating how it aided the development of ancillary industries.

Iii. Product advertising

Most advertising is product advertising, designed to promote the sale or reputation of a

particular product or service that the organization sells. Indane’s cooking gas is a case in

point. The marketer may use such promotion to generate exposure attention,

comprehension, attitude change or action for an offering. It deals with the non-personal

selling of a particular good or service. It is of three types as follows:-

A. Informative product advertising

B. Persuasive product advertising

C. Reminder-oriented product advertising

A. Informative product advertising:

This form of advertising tends to characterize the promotion of any new type of product to

develop an initial demand. It is usually done in the introductory stages of the product life

cycle. It was the original approach to advertising.

B. Persuasive product advertising:

Persuasive product advertising is to develop demand for a particular product or brand. It is

a type of promotion used in the growth period and, to some extent, in the maturity period

of the product life cycle.

C. Reminder-oriented product advertising:

The goal of this type of advertising is to reinforce previous promotional activity by

keeping the brand name in front of the public. It is used in the maturity period as well as

throughout the declining phase of the product life cycle.

4. Advertising based on product life cycle

A. Consumer advertising

B. Industrial advertising

A. Consumer advertising

Most of the consumer goods producers engage in consumer product advertising. Marketers

of pharmaceuticals, cosmetics, scooters, detergents and soaps, cigarettes and alcoholic

beverages are examples. Baring a few, all these products are all package goods that the

consumer will often buy during the year. There is a heavy competition among the

advertisers to establish an advantage for their particular brand.

B. Industrial advertising

Industrial executives have little confidence in advertising. They rely on this form of

promotion merely out of fear that their competitors may benefit if they stop their

advertising efforts. The task of the industrial advertiser is complicated by the multiple

buying influence characteristics like, the derived demand, etc. The objectives vary

according to the firm and the situation. They are:

to inform,

to bring in orders,

to induce inquiries,

to get the advertiser’s name on the buyer’s list of sources,

to provide support for the salesman,

to reduce selling costs,

to help get items in the news column of a publication,

to establish recognition for the firm or its product,

to motivate distributors,

to recognition for the firm or its products,

to motivate distributors, to create or change a company’s image,

to create or change a buyer’s attitude, and

The basic appeals tend to increase the rupee profits of the buyer or help in achieving his

non-monetary objectives. Trade journals are the media most generally used followed by

catalogues, direct mail communication, exhibits, and general management publications.

Advertising agencies are much less useful in industrial advertising.

5. Trade advertising

A. Retail advertising

B. Wholesale advertising

A. Retail advertising

This may be defined as “covering all advertising by the stores that sell goods directly to

the consuming public. It includes, also advertising by establishments that sell services to

the public, such as beauty shops, petrol pumps and banks.” Advertising agencies are rarely

used. The store personnel are usually given this responsibility as an added task to be

performed, together with their normal functions. The result is that advertising is often

relegated to a secondary position in a retail store. One aspect of retail advertising is co-

operative advertising. It refers to advertising costs between retailers and manufacturers.

From the retailer’s point of view, co-operative advertising permits a store to secure

additional advertising that would not otherwise have been available.

B.wholesale advertising

Wholesalers are, generally, not advertising minded, either for themselves or for their

suppliers. They would benefit from adopting some of the image-making techniques used

by retailers – the need for developing an overall promotional strategy. They also need to

make a greater use of supplier promotion materials and programmes in a way

advantageous to them.

6. Advertising based on area of operation

It is classified as follow:

A. National advertising

B. Regional advertising

C. Local advertising

A. National advertising

It is practiced by many firms in our country. It encourages the consumer to buy their

product wherever they are sold. Most national advertisements concentrate on the overall

image and desirability of the product. The famous national advertisers are:

Hindustan levers, dcm, itc, jay engineering, tisco

B. Regional advertising

It is geographical alternative for organizations. For example, amrit vanaspati based in

rajpura claims to be the leading hydrogenated oil producer in the punjab. But, until

recently, it mainly confined itself to one of the vegetable oil brands distribution to

malihabad district (in u.p. Near lucknow).

C. Local advertising

It is generally done by retailers rather than manufacturers. These advertisements save the

customer time and money by passing along specific information about products, prices,

location, and so on. Retailer advertisements usually provide specific goods sales during

weekends in various sectors.

7. Advertising according to medium

The most common classification of advertising is by the medium used. For example: tv,

radio, magazine, outdoor, business periodical, newspaper and direct mail advertising. This

classification is so common in use that it is mentioned here only for the sake of

completeness.

Economic implications of advertisements

Effect on the value of products or services: advertising sets off a chain reaction of

economic events. In a free-market system, consumers have the option of choosing the

desired value in the products or services they buy. If price is more important to

consumers, they have options of buying less expensive alternatives. Others looking for

luxury and status may choose more fancy and expensive alternatives. Advertising

contributes to the self-interest of both consumers and advertisers by adding value to

products and services in a free-market system. Further it encourages competition, which

adds to serve the consumer’s self-interest.

Effect on prices: advertising also adds cost and affects prices. This means that if

companies stop this expensive advertising, products would cost less and be available at

lower prices. This is a major area of continuing debate among economists, advertisers

consumer advocates and policy makers. However, this view is not totally correct. While

some advertised products do cost more than the unadvertised products, and the costs are at

least partly borne by consumers, the opposite is true. Advertising may actually help lower

the overall cost of a product and keep down the prices because of economies of scale in

production.

Effect on consumer demand and consumer choice: it is generally agreed that the effect

of advertising and other promotions is an increase in aggregate consumption but to what

extent it effects consumption, is a highly debatable issue. Besides advertising, there are

other important forces such as technological advances, level of education, increases in

population, level of income, changing lifestyles etc. That exert a powerful influence on

aggregate consumption. Advertising can help stimulate demand of new products by

communicating relevant information and facts. Advertising restricts the choice of

alternatives to a few heavily advertised brands.

Effects of competition: economists are critical of advertising because it creates a ‘barrier

to entry’ of smaller firms, which have fewer resources, and cannot match the power of

large firms with huge advertising budgets. High costs may inhibit their entry and brands of

large firms probably benefit greatly from the barrier. There is a possible that adverting

may discourage competition.

Social implications of advertisements

It is generally agreed that advertising exerts a powerful social influence and is criticized

for encouraging materialism in society.

Advertising is blamed for manipulating consumers to buy things for which they have no

real need, depicting stereotypes and controlling the media.

Materialism is the tendency to accord undue importance to material interests and this

tendency perhaps, lessens the importance of freedom, love and intellectual pursuits of

society, which are non-material.

People from many countries and cultures believe that materialism tends to be negatively

related to happiness and hence is considered undesirable.

Advertisements should not attempt to persuade consumers by playing on their emotions,

anxieties and psychological needs, such as self-esteem, status, being attractive, etc, thus

fostering discontent and exploiting them to purchase products and services that they do not

need.

Stereotyping in advertising: stereotyping ignores differences among individuals and

presents a group in an unvarying pattern. Critics often point out that advertising

perpetuates stereotyping of women. The charge is that advertising has failed to portray the

changing role of women in society. Visuals and copies of ads present stereotypical images

of indian women in settings such as family illness, children, cooking, neighbours etc. Or

they are shown as dependent on men, subservient, less intelligent etc. They are also

shown as decorative objects or sexually provocative figures. There is perceptible

improvement in this regard as advertisers have started to recognize the role of working

women in family affairs and decision making.

Ethical implications of advertisements

Ethics are moral principles and values that govern the actions and decisions of an

individual or group.

Many laws and regulations are put into force that determines what is permissible in

advertising.

Cigarette smoking, for example, has been shown to be associated with high levels of lung

cancer and other respiratory tract diseases and many people would consider cigarette

advertising as unethical.

Sex appeal and / or nudity used simply to gain consumers’ attention and not even

appropriate to the product or service being advertised is in poor taste.

The primary criticism of advertising is that it is misleading and deceives consumers.

“puffery” is advertising that praises the product or service to be sold with subjective

opinions, exaggerations or superlatives without stating any facts and, for this, advertisers

have a right. This further complicates the issue of deception.

In india, advertising standards council of india (asci) enforces the ethical code for

advertisers. The council is a non-profit organization set up by 43 founder members and

has developed a regulating code. It proposes to adjudicate on whether an advertisement is

offensive or not. The council’s decisions are binding on its members and in case of any

disputes; it proposes to deal with the government.

Asci guidelines are as follows:

To ensure the truthfulness and honesty of representation and claims made by the

advertisements and to safeguard against misleading advertising.

To ensure that advertisements are not offensive to generally accepted standards of

public decency.

To safeguard against indiscriminate use of advertising for promotion of products,

which are regarded as hazardous to society or to individuals to a degree or of a

type, which is unacceptable to society at large.

To ensure that advertisements observe fairness in competition so that the

consumers’ need to be informed on choices in the market-place and the canons of

generally accepted competitive behaviour in business are both served.

Advertising principles of american advertising federation

Truth – advertising shall reveal the truth, and shall reveal significant facts, the omission of

which would mislead.

Substantiation – advertising claims shall be substantiated by evidence in possession of the

advertiser and the advertising agency prior to making such claims.

Comparisons – advertising shall refrain from making false, misleading, or unsubstantiated

statements or claims about a competitor or his products or services.

Bail advertising – advertising shall not offer products or services for sale unless such offer

constitutes a bona fide effort to sell the advertised products or services and is not a device

to switch consumers to other goods or service, usually higher priced.

Guarantees and warranties – advertising of guarantees and warranties shall be explicit,

with sufficient information to apprise consumers of their principal terms and limitations

or, when space or time restrictions preclude such disclosure, the advertisement shall

clearly reveal where the full text of the guarantee or warranty can be examined before

purchase.

Price claims – advertising shall avoid price claims that are false or misleading, or savings

claims that do not offer provable savings.

Testimonials – advertising containing testimonials shall be limited to those of competent

witnesses who are reflecting a real and honest opinion or experience.

Taste and decency – advertising shall be free of statements, illustrations, or implications

that are offensive to good taste or public decency.

Ad agency

Ad agency is an independent organization that provides one or more specialized

advertising and promotion related services to assist companies in developing, preparing,

and executing their advertising and other promotion programmes. Large and medium size

agencies used ad agencies.

Definition

“an ad agency is a service organization that specializes in planning and executing

advertising programs for its clients”

Types of ad agency

Full service agency: it offers a full range of marketing, communication, and promotion

services, including planning; creating and producing the ads performing research. Various

departments in full service agency.

Account services

Marketing services

Creative services

Management and finance – organization and structure

In house agencies:

It is an ad agency that is setup, owned and operated by the advertisers.

Creative boutiques:

It is an agency that provides only creative services.

Media buying services:

Media buying services are independent companies that specializes in the buying of

media, particularly radio and television time.

Agency compensation

Commission from media 15%

Fee, cost and incentive based system.

Fee arrangement

Fixed fee method

Fee commission combination

Cost plus agreement-cost + profit

Incentive based compensation sales on market store.

Percentage charges

Why agencies lose clients

Poor performance on service

Poor communication

Unrealistic demand by the client

Personality conflicts

Personnel charges

Changes in the size of the client on agency

Conflicts of interests

Changes in the clients corporate on marketing strategy declining sales

Conflicting compensation philosophies.

Changes in policies.

How agencies gain clients

Referrals

Solicitations

Presentations

Public relations

Image and reputation

ADVANTAGE OF USING AGENCIES

1. The marketer gains a number of benefits by employing agencies. An agency

Generally has an invaluable experience in dealing with various advertising and

Marketing issues.

2. The lessons which agency learned in working with other clients are useful inputs

For the marketer.

3. An agency may employ specialists in the various areas of preparation and

Implementation of advertising plans and strategies.

4. The personnel are not members of the marketer’s management team. They bring

Objective and unbiased viewpoints to the solution of advertising and other

Marketing problems.

5. The discounts that the media offer to agencies are also available to advertisers.

This is a strong stimulus to them to use an agency, for the media cost is not much

Affected thereby.

6. The company normally does not have as many types of specialists as a large or

Medium-sized advertising agency has because an agency can spread the costs or its

Staff over many clients. It can do more for the same amount of money.

7. The company can also get an objective, outside viewpoint from an agency,

Assuming that the agency representatives are not acting as “yes man” in order to

Keep the advertiser’s account.

8. A related point is that the company can benefit from the agency’s experience

With many other products and clients.

9. Another advantage is that agency feels a greater pressure than the company’s

Own department to produce effective results. The relations between an agency and a

Client are very easy to terminate; but it is difficult to get rid of an ineffective

Advertising department.

10. The manner in which agencies are compensated, the use of an agency may not

SELECTING AN AGENCY

While selecting an advertising agency, the importance of compatibility should be borne in mind. An agency takes a long time to grasp the problems and accumulate the facts that are necessary for the smooth functioning of a client. Though this investment period is long, it pays rich dividends. Therefore, an agencyShould not be frequently changed. Here are some points that can help the advertiser to:

(i) choose an agency ; and

(ii) get the best out of an agency.

(i) choosing an agency

The agency should be able to think independently on various problems, and not solve them by

pre-conceived notions which it is unwilling to change. The agency should have experience in

selling goods and ideas. It should be able to bring in more results than anticipated. The company

should be financially sound and should be able to cover both local and national advertising

campaigns.

The size of the agency should not be seriously taken into account. A big agency is not necessarily

a better than a small agency.

The agency should not be one that hesitates to correct the advertiser if it feels that he is wrong.

The agency should be able to use both research and brains to solve problems.

An agency that plans to make a profit on an account should be chosen, rather than one that

maintains that it will work on a no-profit-no-loss basis.

Advertising campaign management

“managing an advertising campaign is the process of preparing and integrating a

specific advertising program in conjunction with the overall imc message”

“an ad campaign includes a series of ads placed in various media, that are

designed to meet objectives and are based on an analysis of marketing and

communication situations”

Steps / process involved in ad campaign

SETTING ADVERTISING OBJECTIVES

Advertising is a method of communication with a specified objective. The Objectives of

advertising as explained before are grouped as sales objectives (measured in terms of increase

in sales, increase in market share and return on investment) and communication objectives.

Sales as an Advertising Objective

Sales are a convenient and really attractive advertising objective for many managers.

In case of sales as the advertising objectives, it would be quite simple to evaluate the

results of the ad campaign.

Many experts recognize that advertising creates delayed or ‘carryover effect’ and no

matter how much money is spent on advertising, it may not necessarily have an

immediate impact on sales.

Sales, as an advertising objective, offer little guidance to creative and media people

working on the account.

In spite of problems that sales objectives pose, there are certain situations when sales

objectives can be appropriate.

Some direct-action advertising attempts to induce a quick response from the members

of target audience such as ads offering some kind of incentive, or ads announcing

contests, or encouraging prospects to place orders by phone or through the Internet.

Communications Objectives

Advertising communications objective can be put in a pyramid form.

First the lower level objectives, such as awareness, knowledge or comprehension are

accomplished.

Subsequent objectives may focus on moving the prospects to higher levels in the

pyramid to elicit desired behavioural responses such as associating feelings with the

brand, trial, or regular use etc.

It is easier to accomplish ad objectives located at the base of the pyramid than the

ones towards the top.

Irrespective of the fact whether the brand is new or established, the pyramid can be

used to determine appropriate advertising objectives.

Communication-effect Pyramid

5%

Repurchase/

10% Trial

20% Preference

40% Liking

60% Knowledge / Comprehension

80% Awareness

The communication objectives of advertising can be grouped in to the following:

• Building awareness (informing): The first task of any advertising is to make the audience

appreciate that the product or service exists and to explain exactly what it is.

• Creating favorable attitudes (persuasion). The next stage and the one that preoccupies

most advertisers, is to crate the favorable attitude to the brand, which will eventually lead the

consumers to switch their purchasing pattern.

• Maintenance of loyalty (reinforcement) One of the tasks which is often forgotten is that

of maintaining loyalty of existing customers who will almost always represent the main

source of future sales.

There are general objectives of advertising that covers goals like encouraging

increased consumption of a product by current users, generating more sales leads,

increasing brand awareness, increasing repeat purchases and supporting the personal

selling efforts. Some of the broad advertising goals are explained as per the following:

1. Launch of New Products and Services: In a saturated market, the introduction of new

products and brands can give the seller a tremendous opportunity for increasing his sales.

In the case of innovative products (totally new to the market) such as Laptop Computers,

a great deal of advertising has to be done over an extended period of time to make people

aware of “What the product is” and What it does” and “How the customers would find it

useful”. In addition, the advertisement also carries information about the availability of

the product and facilities for demonstration/trial etc. Similarly new brands of existing

product categories are also promoted quite aggressively. Two recent examples are the

launching of “Pepsi Blue” soft drinks during the world cup and launch of “Mountain

Dew” in subsequent period.

2. Expansion of the Market to Include the New Users: Advertising can be used to tap a

new segment of the market, hitherto left unexplored. For example TV and Video Camera

manufacturers who have been concentrating on domestic users and professionals can

direct their advertising to the government institutions and large organization for closed

circuit TV networks, security systems and educational purposes. Another way of

expanding the consumer base is to promote new uses of the product. For example,

Johnson’s baby oil and baby cream were originally targeted to mothers. The same

products have now been directed towards the adult market for their personal use.

Similarly, Milkmaid was originally promoted as a substitute for milk. It is now being

advertised as an ingredient for making sweet dishes and also as a sandwich spread for

children.

3. Announcement of a Product Modification: For such advertising, generally, the terms

“new”, “improved”, “Excel” etc. Is used as prefixes to the brand name. For example,

“Surf Excel” gives the impression of an advanced detergent powder, although there may

be no tangible difference between the earlier brand and the new one. Sometimes the

customer as a modified product e.g. “a new refill pack for might perceive a minor

packaging change Nescafe”

4. Announcement of a Special Offer: Because of competition, slack season, declining

Sales, etc, advertising is used to make a special offer. For example, Colgate Dental Cream

campaign about 20% extra was to increase volumes through a sales promotion campaign.

Hotels offer special rates during off- season. Similarly many products like room heaters,

fans, air-conditioners, etc, offer off-seasons discounts to promote sales.

5. To Announce Location of Stockiest and Dealers: To support dealers, to encourage

selling of stocks and to urge action on the part of readers, space may be taken to list the

names and addresses of stockiest and dealers.

6. To Educate Customers: Advertisement of this type is “informative” rather than

persuasive”. This technique can be used to show new users for a well-established product.

It can also be used to educate the people about an improved product e.g. Pearl Pad odor

free jars and bottles. Sometimes societal advertising is used to educate people on the

usefulness or harmful effects of certain products. For example, Campaigns against unsafe

sex and aids are sponsored by government and voluntary agencies. Similarly,

advertisements discourage the consumption of liquor and drugs.

7. Reminder Campaigns: This type of advertising is useful for products, which have a high

rate of repeat purchase, or those products, which are bought frequently e.g. Blades,

cigarettes, soft drinks, etc. The advertisement is aimed at remaining the customer to ask X

for the same brand again. The campaign of “Dil Maange More” during television breaks

of cricket matches is to have a top of mind recall.

8. To Sought Dealer Cooperation and Motivation: A successful retail trader depends upon

quick turnover so that his capital can be reused as many times as possible. Dealer support

is critical, particularly for those who have limited shelf space for a wide variety of

products. Advertisers send “display” material to dealers for their shops, apart from

helping the retailer with local advertising.

9. To Create Brand Preference: This type of advertising does two things: (I) it creates a

brand image or personality (ii) It tells the target audience why Brand X is better than

Brand Y. In this type of advertisement, the product or brand acquires a ‘personality’

associated with the user, which gives the brand a distinctive ‘image’. The second type of

advertising also known as ‘comparative advertising’, takes the form of comparison

between two brands and proves why one brand is superior.

10. Few other objectives: Advertising also helps to boost the morale of sales people in the

company. It pleases sales people to see large advertisements of their company and its

products, and they often boast about it. Other uses of advertising could include recruiting

staff and attracting investors through “Public Issue” advertisements announcing the

allotment of shares etc. You must understand that an Advertising Objective is a

Communication Objective "An Advertising goal is a specific communication task, to be

accomplished among a defined audience to a given degree in a given period of time".

AD. CAMPAIGNS

According to Dunn and Barban “ An advertising campaign includes a series of ads,

placed in various media, that are designed to meet objectives and are based on an

analysis of marketing and communication situations.”

The ad campaign is guided by the promotion and advertising plans which evolve from

marketing objectives and strategy.

An advertising campaign includes seven essential steps:

o Appraisal of advertising opportunity

o Market analysis

o Setting advertising objectives

o Setting budget and necessary control systems

o Determining media and creative strategy

o Create ads, pretest and release ads

o Evaluate final results (post-testing)

The steps are not necessarily sequential and are individual activities; in practice,

advertises undertake two or more of them simultaneously.

Planning an Advertising Campaign

1. Appraisal of Advertising Opportunity – the marketer must determine whether

advertising is suitable in his particular marketing situation.

a. Presence of position primary demand

b. Good chances of product differentiation

c. Products have hidden or not readily noticeable qualities.

d. Presence of powerful emotional buying motives

e. Availability sufficient funds

2. Analyzing and defining the target market – good advertising starts with a clear

understanding of marketing goals based on a thorough market analysis.

a. Who buys the product

b. What do they really buy

c. When do they buy

d. How do they use the product

3. Setting Advertising Objectives – set objectives for an advertising campaign and also

for each ad in each medium used.

4. Determining the Advertising Budget – the budget controls all proposed expenditures

by fixing a limit. The advertising budget is basically a plan to allocate financial

resources to advertising for future operations.

5. Deciding Media and Creative Strategy – involves decisions about media and

creation of advertisements. Media plan is developed simultaneously with creative

plan. Creative strategy concerns what message to deliver to the audience for

accomplishing the objectives. Deciding the central theme, idea, image, or position is

a critical part of the creative process which becomes the cornerstone of all individual

ads that constitute the campaign.

6. Creating Ads, pre-test and Release Ads – pretesting advertising strategy and

execution, various techniques such as market tests, focus groups, surveys, compute

simulation tests, etc. Used before the ads are placed in the media.

7. Evaluating the final Results (post-testing) – is done to evaluate the final results of

the ad campaign. These results are concerned with measuring the campaigns

effectiveness.

Three Phases of Campaign Creation

There are three phases involved in the creation of any campaign.

(i) Strategy Development Phase,

(ii) The Briefing Phase and

(iii) The Creative Phase

.I. Strategy Development Phase

This phase decides the objectives and contents of communication. It analyses

the research data and decides positioning of a brand. The strategy formulation is in

modern day's agencies a team effort. The creative persons form a part of this team not

as creative persons but as a mind. There are brain- storming sessions. The team

throws up the ideas. These ideas ultimately make up the strategy. The brilliant in the

team pick up one or two ideas from the total ideas generated and develop them. Our

strategy should give us a competitive edge.

The strategy formulation leads to an advertising brief. If you want to catch

fish, you have to think like a fish. If you want to catch a consumer, you have to think

like a consumer. That's the first principle. What most companies do is they think like

themselves. They spend all their time with themselves' (AI Ries and jacktrout).

II. Advertising Brief to the Creative

As a matter of fact, the client has to brief the agency about the strategy.

However, most of the time this does not happen. The agency is supposed to brief

itself. The strategy formulated is communicated to the creative people. They are

briefed about how to create the advertising the product needs. The strategy should be

communicated with clarity. The strategist should be a good motivator for the creative

team.

Proper briefing is going halfway as far as creativity is concerned. Bad brief to

the creative team results into bad work. Good brief ensures good work. Within the

creative team, the copywriter and visualiser work together and it is difficult to

attribute the final product to either of them. Creative campaigns are creative due to a

good brief. Great briefs inspire great work. Briefs should have clarity and single-

minded objective. They should aim at a target person. The idea is to have the desired

response. All briefs must suggest a benefit or a product plus.

III. The Creative Phase

Here the lateral thinkers come on the scene. They leap from a single

unidirectional idea of the strategist to an advertising idea that will add value to the

product/brand. The creative persons are supposed to be right-brained - lateral thinkers,

irrational thinkers as against the accounts director who is left brained, i.e., logical.

They make connections that had not existed before. They rearrange the order of

things. They create abruptions in the consumer mind. There should be a beautiful

marriage between the strategy and the lateral thinking by the creative people.

The creative director's post has become a more responsible one. He does not

remain content with a clever copy or stimulating visuals. He is required to understand

the product and its market completely. He is now an overall ad man, an all-rounder.

He participates in research and has active role in positioning.

Advertising planning framework

Plans are nothing, planning is everything.

- dwight d. Eisenhower

The advertising management is mainly concerned with planning and

Decision making. The advertising manager will be involved in the development, implementation,

and overall management of an advertising plan. The development of an advertising plan

essentially requires the generation and specification of

Alternatives. Decision making involves choosing from among the alternatives. The alternatives

can be various levels of expenditure, different kinds of objectives or strategy possibilities, and

kinds of options with copy creation and media choices. Thus, the essence of planning is to find

out the feasible alternatives and reduce them

To decisions. An advertising plan reflects the planning and decision – making process and the

decisions that have been arrived at in a particular product and market situation.

Planning framework

Advertising planning and decision making depends on internal and external factors. Internal

factors are situation analysis, the marketing program, and the advertising plan. The three legs of

advertising planning concern are the

objective setting and target market identification,

message strategy and tactics, and

media strategy and tactics.

The advertising plan should be developed in response to a situation analysis, based on research.

Once developed, the advertising plan has to be implemented as an advertising campaign, in the

context of social and legal constraints and with the involvement of various facilitating agencies.

Let us discuss these factors one after another.

1. Situation analysis

It involves an analysis of all important factors operating in a particular situation. This means that

new research studies will be undertaken on company history and experience. At&t, for example,

developed a new strategy for its long-distance telephone services – based on five year of research.

The research encompassed market segmentation studies, concept testing, and a field experiment.

The field experiment increased on testing a new advertising campaign called “cost of visit”. An

existing “reach out” campaign although successful, did not appear to get through to a large group

of people who had reasons to call but were limiting their calls because of cost. Research based on

annual surveys of 3,000 residential

Telephone users showed that most did not know the cost of a long-distance call or that it was

possible to make less expensive calls in off-peak periods. Five copy alternatives were

subsequently developed and tested, from which “cost of visit” was chosen. This campaign was

credited with persuading customers to call during times that were both cheaper for them and more

profitable for at&t

And, overall, was more effective that the “reach out” campaign. One estimate was that by

switching 530 million in advertising from “reach out” to “cost of visit”, an incremental gain in

revenue of $22 million would result in the first year and would top $100 million over five years.

This example highlights that a complete situation analysis will cover all marketing components

and involve finding answers to many questions about the nature and extent of demand,

competition, environmental factors, product, costs, distribution, and the skills and financial

resources of the from.

2. Consumer and market analysis.

Situation analysis 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.

Whereas consumer and market analysis is concerned with the following factors:

* nature of demand

- how do buyers (consumer and industrial) currently go about buying existing products or

services?

- can the market be meaningfully segmented or broken into several homogeneous

Groups with in respect to “what they want” and “how they buy”?

* extent of demand

- what is the size of the market (units and dollars) now, and what will the future hold?

- what are the current market shares, and what are the selective demand trends?

- is it best to analyze the market on an aggregate or on a segmented basis?

* name of competition

- what is the present and future structure of competition?

- what are the current marketing programs of established competitors?

- why are they successful of unsuccessful?

- is there is opportunity for another competitor? Why?

- what are the anticipated retaliatory moves of competitors?

- can they neutralize different marketing programs we might develop?

* environmental climate

- what are the relevant social, political, economic, and technological trends?

- how do you evaluate these trends? Do they represent opportunities or problem?

* stage of product life cycle

- in what stage of the life cycle is the product category?

- what market characteristics support your stage-of –life-cycle evaluation?

* cost structure of the industry

- what is the amount and composition of the marginal or additional cost of supplying increased

output?

Skills of the firm

- do we have the skills and experience to perform the functions necessary to be in the business?

- how do our skills compare with those of competitors?

* financial resources of the firm

- do we have the funds to support an effective marketing program?

- where are the funds coming from, and when will they be available?

3. Competitive analysis:

Advertising planning and decision making are affected by competition and the competitive

situation facing the advertiser. Competition is such a pervasive factor that it will occur as a

consideration in all phases of the advertising planning and decision making process. It should

include an analysis of what current share the brand now has, what shares its competitors have,

what share of a market is possible, from which competitors the increased share of a market is

possible? The planner also has to be aware of the relative strengths and weaknesses of the

different competing companies and their objectives in the product category. It is important to

look at competition as a precursor to the planning process.

DAGMAR APPROACH

Russel H Colley (1961) prepared a report for the Association of National Advertisers

titled “Defining Advertising Goals for Measured Advertising Results” DAGMAR.

He developed a model for setting advertising objectives and measuring the results of

an ad campaign.

According to this model, communications effects are the logical basis for setting

advertising objectives and goals against which results should be measured.

According to the DAGMAR approach, advertising objectives involve a

communications task that is specific and measurable.

Colley proposed that communications objectives be based on a hierarchial model with

four stages:

o Awareness: involves making target audience aware of the existence of brand

or company.

o Comprehension: develop an understanding among audience of what the

product is and what it would do for them.

o Conviction: create a mental disposition among target audience members to

buy the product.

o Action: to motivate the target audience to purchase the product or service.

One important contribution of dagmar was its ability to clarify what consititutes a

good objective.

According to colley, the advertising objectives should have the following features:

o Stated in terms of concrete and measurable communication tasks.

o Specify a target audience.

o Indicate a benchmark or standard starting point and the degree of change

sought, and

o Specify a time period for accomplishing the objective or objectives.

ADVERTISING INDUSTRY

THE ADVERTISING INDUSTRY CONSISTS OF THREE PRINCIPAL GROUPS:

(A) SPONSORS;

(B) MEDIA ; AND

(C) ADVERTISING AGENCIES OR ADVERTISING DEPARTMENTS.

ADVERTISING AGENCIES ARE OF TWO BASIC TYPES, VIZ., INDEPENDENT; AND HOUSE.

AN INDEPENDENT AGENCY IS A BUSINESS THAT IS FREE TO COMPETE FOR AND SELECT ITS

CLIENTS.

A HOUSE AGENCY IS OWNED BY ITS MAJOR CLIENT. A HOUSE AGENCY IS NOT

COMPLETELY FREE TO SERVE OTHER CLIENTS. THE ADVERTISING DEPARTMENT AN

INTEGRAL PART OF THE ORGANIZATION IT SERVES.

THE ADVERTISING AGENCY PROVIDES FOR THE CLIENT A MINIMUM OF:

UNIT – II

Media Planning

“Media Planning is the series of decisions involved in delivering the promotional

message to the prospective purchasers and or on users of the product or brand”

“Media planning is a process, which means a number of decisions are made, each of

which may be altered on abandoned as the plan develops”.

Medium:

The Medium is the general category of available delivery systems, which includes

broadcast media (like TV and Radio). Print media (like Newspapers and magazines), direct

mail, outdoor advertising, and other support media.

Media Vehicle

Media vehicle is the specific carriers within a medium category.

The Media Plan / Activities

The media plan determines the best way to get the advertiser’s message to the market.

In a basic source, the goal of the media plan is to find that combination of media that enables

the marketer to communicate the message in the most effective manner to the largest no. Of

potential customer at the lowest cost.

Problems in Media Planning

1. In sufficient information

2. In sufficient terminology

3. Time pressure

4. Difficulty measuring effectiveness

Steps / Process / Stages involved in Developing the Media Plan

Situation Analysis Marketing strategy plan

Creative strategy plan

Setting media objectives

Determine media strategy

Selecting broad media class

Selecting media within class

Broad cast Print Other media

1. Market Analysis & Target market identification.

To whom shall we advertise?

Index = Percentage of users in a demographic segment / Percentage of population in

the same segment *100

What internal and external factors are operating?

Where to promote-Using Indexes to determine where to promote.

a) The Survey of buying index.

b) Brand development index (BDI).

It helps Marketers factor the rate of product usage by geographic area in to the decision

process.

BDI = % of brand to total country sales in the market / % of total country population in

the market *100

c) The Category Development Index (CDI)

CDI = % of product category total sales in the market / % of total country population in

market *100

Media analysis

Evaluation and follow up

Establishment of media objectives

Media strategy development and implementation

2) Establishing Media Objectives

Just as the situation analysis leads establishment of marketing and communication

objectives, the media situation analysis should lead to determination of specific media

objectives.

Setting Media Objectives

1. Finding target audience

2. Sales geography

3. Timing

4. Duration: How long to advertise?

3) Developing and Implementing Media Strategies

Criteria / Factors to be considered in the development of media plans:

a) The Media Mix:

The wide variety of media vehicles are available to advertisers, while it

is possible that only one medium and /vehicle might be employed, it is much more likely that

no of alternatives will be used.

b) Target Market Coverage:

Full market coverage

Partial market coverage

Coverage exceeding target market.

C) Geographic coverage

D) Scheduling:

The primary objective of scheduling is to time promotional effects so that they will

coincide with the highest potential buying times.

Types of scheduling

E) Reach Vs. Frequency:

Since advertise have a variety of objectives and face budget constraints, they usually must

trade off reach and frequency. They must decide whether to have the message be seen /heard

by more people (reach) / by fewer people more often (frequency). Reach is the percentage

of the target population exposed at least once to the advertiser’s message during a specific

time frame. Equally as important as the percentage of people exposed (reach) is the number

of times they are exposed. This rate of exposure is called frequency.

Average Frequency – the average number of times the reached audience is exposed to the

media vehicle during a specified period of time.

How much reach is necessary?

Determinants of reach

1. More prospective customers are reached by a media schedule using multiple media

rather than a single medium

2. Another influencing factor is the number and diversity of media vehicles used

2. Reach can be increased by diversifying the day parts used to advertise

What frequency level is needed?

Media Class – refers to the general category of delivery systems available to carry

advertising messages to a selected audience such as print media, broadcast media,

outdoor media, etc.

Media Vehicle – is the specific message carrier within a medium, such as computer at

home and Business today magazines are vehicles in print media.

Broadcast, press, outdoor, posters and cinema are often referred as ‘above-the-line

media’.

Direct mail, sales promotion, exhibitions, merchandising, sales literature, etc. Are

referred to as ‘below-the-line-media’

‘Media Planning’ refers to a series of decisions that need to taken in delivering the ad

message to the largest number of the target audience in the most effective manner at

the lowest cost. The plan specifies ‘media objectives’ and ‘media strategies’ to

accomplish the objectives.

‘Reach’ is a measure o the number of different audience members exposed at least

once to a media vehicle in a given period of time.

‘Coverage’ refers to the potential audience that might get exposed to the ad message

through a media vehicle.

‘Frequency’ refers to the number of times the audience is exposed to a media vehicle

in a given period of time.

Gross Rating Points (grps) – refers to the total weight of a media effort, quantatively,

it is equal to reach multiplied by average frequency.

Continuity – refers to message deliveries over a period of time or a season. It refers

to the timing of the media insertion.

The basic goal of a media plan is to formulate a particular combination of media that

would enable the advertiser to communicate the message successfully and effectively

to the maximum number of potential and existing customers in the target market at the

lowest cost.

Steps in the Development of Media Plan

(i) Market Analysis and Identifying the Target Market - The key questions at this

stage: (1) who is the target audience for advertising, (2) what internal and

external factors may influence the media plan? (3) where and when to focus the

advertising effort? The market analysis may reveal more than a few target

markets. To decide which specific groups need to be addressed, the media

planner works with the client, account executives, marketing department and the

creative directors. At this stage, the media planner may need some secondary or

primary data regarding the audience size, composition and exposure figures, etc.

(ii) Establishing Media Objectives – media objectives are formulated to help

accomplish the advertising communications task and marketing objectives. Media

objectives are translated into specific goals for the media programme and are

limited to those that can be achieved through media strategies. For examples, the

media objectives can be stated as,

a. Use print media to provide coverage of 80% of the target market over a six-

month period, staring May.

b. Reach 60% of the target audience at least three times over the same six-month

period.

c. Concentrate heaviest advertising between October and December, with lighter

emphasis in earlier months.

(iii) Develop and Implementing Media Strategies

a. Media Mix and Target Market Coverage – once media objectives are

established, planners develop suitable media strategies to accomplish these

objectives. The product characteristics, objectives, size of the media budget,

and individual preferences are some of the factors that may influence choice of

media combination. To effectively cover the target market, the media planner

determines the segments that should get the maximum media emphasis.

b. Geographic Coverage – geography is an important consideration in the media

planning process. The demand for certain types of products depends on the

Market Analysis

Set the MediaMedia

Objectives

Media Strategy development and implementation

Evaluation and follow-up

geographic locations of the markets. There may be regional differences in

consumption and accordingly media planners select secondary localized media

to supplement their national media schedule.

c. Scheduling – media schedule is the calendar of advertising plan. Scheduling

is concerned with timing the insertion of advertisements in the selected media.

There are three approaches to scheduling:

i. Continuity – refers to a continuous pattern of advertising, which can

mean every day, every week,or every month.

ii. Flighting – refers to a less regular schedule of advertising messages

and is quite popular. There are intermittent periods of advertising and

no advertising.

iii. Pulsing – is a combination of continuity and flighting. The continuity

is maintained as a base throughout but, during certain periods, the level

of advertising stepped up.

d. Media Reach and Frequency – media planners face the essential task of

ensuring optimal use of media budget while deciding about the reach,

frequency and the number of advertising cycles affordable for the year. Media

planners make compromises and strike a balance between reach, frequency

and the number of advertising cycles in the planning period.

i. “programme rating” is a measure of potential reach of broadcast

media and is expressed as a percentage.

ii. “gross rating points (GRP)” is a numerical figure indicating how many

potential audience members are likely to be exposed to a series of

commercials. GRP = Reach x Frequency

iii. “Target Rating Points (trps)” refer to the number of times and the

number of individuals in the primary target audience that the media

will reach.

iv. “Impact” is the instrusiveness of the ad message which means whether

the ad message was actually perceived by the audience.

e. Qualitative Aspects of Media Vehicle Source – this concept refers to the

qualitative value of the media vehicle and there is general agreement that

vehicle source effect exists. There are at least six attributes that should be

considered while choosing a media vehicle:

i. Expertise – degree of expertise associated with its area of interest is

important.

ii. Prestige – for some products the prestige of a media vehicle is

considered to be important.

iii. Editorial “fit” – in a media vehicle, when the editorial matter discusses

some attribute, it is likely that even an ambiguous ad close by will be

interpreted being in mind, as the editorial matter makes discussed

attribute readily accessible in the memory.

iv. Mood created – media vehicles can enhance the creativity of a

message by creating a mood that affects the impact of a commercial

communication.

v. Involvement – the involvement of target audience members in a media

vehicle should generate more impact of an ad message as compared to

another vehicle that is less interesting to audience.

vi. Unbiased approach – it is also important that advertiser do not attempt

to influence the media objectivity.

Determining the relative cost of media:

Cost per thousand:

Magazine space is sold primarily on the basis of pages or some

increment of a page. It has been used by the magazine industry as a standard method to

provide cost break downs on the basis of cost per page per thousand circulation.

Cost per rating points:

This is used to compare cost figures of same medium broadcast vehicles and is also referred

as cost per point. One rating point means 1% of a broadcast station’s coverage area.

Milline rate:

Media buyers use the milline rate to compare the costs of space in newspapers. A milline rate

is the cost in rupees per line of standard dimensions to reach a newspaper circulation of one

million.

FREQUENCY

The term frequency refers to the number of advertisements of the same size appearing in an

individual medium for a given period such as per day, per week, per month, or per campaign.

There is no formula to determine the ideal frequency. The two factors are the size of the

advertising fund and the size of the advertisement to be run. If these are known, frequency can be

derived. The two other factors are the Number of media and the advertising period. As the

number of media increases, there is pressure for a lower frequency, or to shorten the advertising

period. The other possibilities are to enlarge the fund, or to reduce the size of the advertisement.

Manufacturers cannot ignore the fact that what the competitors are doing in respect Of frequency.

The more often a message is repeated, the greater the proportion of it the consumer remembers.

Message Design and Positioning

Message design identifies the consumer’s perceptions about the products. The following

questions give a good insight:

(i) What is the nature of the product: its generic category.

(ii) For whom it is meant: the segment.

(iii) What are the special characteristics of the product? How is the consumer going to

be benefited?

(iv) Who are the competitors? What is their promise?

(v) Is the product different from the other available products? How? Is it a

technological breakthrough?

(vi) On which occasions will the product be used? How often?

(vii) What would you like your consumer to perceive this brands as? What position it

would take?

The answer to these questions is given by marketing research and by the advertiser and his

agency. The creativity of the agency matters more here.

Message Presentation

Message are to be structured keeping the objective of the communication and the

audience in view.

Messages are presented either centrally or peripherally.

o A central message takes a direct route to persuasion. It is a well documented

ad. It compares advantages and disadvantages of a product. This central

presentation provokes active cognitive information processing.

o Peripheral presentation provides pleasant association, scenic background, and

favorable inferences about the product. These are distinct, rational and

emotional appeal ads.

Advertising Message Structure

The important aspects of message structure are:

Drawing conclusions: The question often raised is whether definite conclusions

should be drawn for the audience in the ad for quick understanding or should they be

left to them. In many instances, it is best to let the receivers of the promotion

message draw their own conclusions.

Repetition: repeating an ad message is often beneficial, for it develops a continuity of

impression in the minds of the target audience, and may increase the predisposition to

think and act favorably towards the products advertised. A repeated message increases

awareness and knowledge on the part of the prospect.

One-versus-two-sided arguments: This raises question whether the advertiser should

only praise the product of should also mention some of its shortcomings. The most

common approach in sales and advertising is a one-sided approach. Two-sided

arguments go well when audiences have an unfavorable opinion about the

communicator’s position.

Comparative Advantage: here a product is directly or indirectly compared with a

competitive product to show the advertised product to advantage. This trend has been

seen more and more in some recent campaigns.

Order of Presentation: Whether to put the strongest argument first or las in the

advertiser’s presentation is equally important. Sometimes this is considered a part of

copywriting strategy.

Message Format

Message format an important step in message development. By format, we mean the

organization, plan, style or type of ad message. The message format is the scheme by which

the message content and structure strategy are implemented. It is characterized by the type of

media vehicle in which the message is delivered.

MESSAGE DEVELOPMENT

There are so many media that carry the ad messages. There are so many products which are

advertised in these media. A number of companies advertise their products. We have

therefore a lot of communication in all directions—direct, indirect, zigzag and all-sided.

Perhaps there is over-communication. This leads us to the concept of clutter, and how to

overcome it.

2.1 MEANING

Layout is the logical arrangement of components of an advertisement in the copy. It refers to the

overall structure, the position assigned to the various elements of the copy and illustrations. It is

deciding on the placement of headlines, copy,

Illustrations, marketer’s name, logo and the amount of free space in an advertisement copy. Thus,

the physical arrangement of all the elements of advertisement is called layout. It is concerned

with placing all the elements of the advertisement more attractively within the allotted space and

time. The pattern of layout varies according to the medium to be used.

DEFINITION

According to sandage and fryburger, “the plan of an advertisement, Detailing the arrangement of

various parts and relative spatial importance of each is referred to as layout”.

INGREDIENTS OF A GOOD LAYOUT

The following are the ingredients of a good layout.

Background: Could have picture, tiles, blocks, and graphics but should not

overshadow the foreground.

Border: Is the frame of the advertisement. Could be,

o · Heavy

o · Light

o · Obvious

o · Unobtrusive

o · Plain

o · Fanciful

o · Useful

o · Useless

The practice you must know is the elimination of border in today’s context. Except when

you have to present a key point, or a sales pitch then it could be used.

Heading: This is the title of the ad. Should be short, but could be four, five or even

six decked. Words in the heading should be short and verbs should be used to attract

attention.

Illustration: It is the dominating picture in the ad. It could be the product itself or a

model. Large pictures are preferred than small ones but it is not a hard and fast rule.

Small pictures are to make the copy comfortable. The main picture tries to position

the picture. It can attract the right target audience by showing the right picture. People

showing the product could be a better picture than the product itself. The illustration

should show the benefit offered by the product.

Caption: Used to describe the sub-title. It tells the story quickly, clearly and

decisively. Sometimes difficult to locate. But it is an important part of the layout.

Coupon: This is a part of the advertisement that enables a consumer to get in touch

with the advertiser. The name and postal address is an integral part of any coupon.

The offer or the request must follow in close heal. The obligation of the customer is

given by their signature space. No hard and fast rule is there regarding the position of

the coupon in the layout. Although in most of the advertisements it normally lies at

the end. Both rectangular and triangular ones are in popular use. It is normally on the

right hand side keeping in mind that most people are right handed.

Decoration: Greater interest for the applicability of decoration is in the fact that it

should supplement or emphasize the message of the advertisement as a whole. Heavy

or light would be at the discretion of the layout person.

Mascot: It is also known as the ‘Trade Character’ or ‘Trade Figure’. It may be defined

as an illustration of either real or an imaginary figure or personality introduced into

the advertisement to personalize the sales message or the name of the product or

service. Maharaja of the Air India is a suitable example.

Logo or Name Plate: This is the signature of the advertisement. The inclusion of the

company’s name and address is not always important hence the logo or a specially

designed image of the brand or the company can replace that. The popular logos of

Tata, Mercedes Benz, Toyota, Star TV network, etc are a good example. The logo

goes on to make the Corporate Identity i.e. What does the company or the brand

stands for?

FUNCTIONS OF AN ADVERTISING LAYOUT

An advertisement layout is a blueprint. The main functions of layout are:-

(i) assembling different parts – the main function of layout is to

Assemble and arrange the different parts or elements of an advertisement illustration,

headline sub headlines, slogans, body text and the identification mark etc. And boarder and

other graphic materials – into a unified presentation of the sales message. In all the layouts

present these elements in the same size, form, shape, position and proportion as desired by

the advertiser in the final ad, proof , thus layout gives both creative personals (copywriter and

artists ) and the advertiser who pays for it a good idea of how the finished ad will finally

appear.

(Ii) opportunity of modification - the layout offers an opportunity to the creative teams, agency

management and the advertiser to suggest modification before its final approval and actual

construction and production begins.

(iii) specification for costs – the layout provides specification for Estimating costs and it is a

guide for engravers typographers and other craft workers to follow in producing the

advertisement.

Principles of design and layout

It is not necessary that all elements of advertisement copy must form part of the copy. They

appear in today’s ads with varying degree of frequency. The components of the copy must be

decorated or positioned on the basis of certain basic principals regardless of the number of

elements in an add. The following five principles of good composition are important to anyone

who creates or evaluates

The advertisement - (1) balance ; (2) proportion (3) contrast and emphasis, (4) eye –movement ,

and (5) unity.

(1) balance – a layout may be called balanced if equal weight or forces are equidistant from a

reference point or a light weight is placed at a greater distance from the reference point than a

heavy weight. Balance is the law of nature. The reference point or fulcrum is the optical centre of

the advertisement. The artists with a given area or space, are to place all the elements with in this

space. Optical centre of fulcrum of the ad is often a point approximately two – thirds of the

distance forms the bottom. It is the reference of the layout.

(2) proportion- proportion is closely related to balance since it refers to the division of space

among layout elements for a pleasing optical effect. Good proportion in an advertisement requires

a desired emphasis on each element in terms of size and position. If the major appeal in an

advertisement is product’s price. The price should be displayed in proportionate space position.

(3) contrast and emphasis – contrast means variety. It gives life to

The whole composition and adds emphasis to selected important elements. An advertiser always

looks to advertisements from completion point of view and desires the policy of the most

important elements to attract the attention of the people. An advertisement with good contrast

may attract the attention of customers contrast maybe visible in a number of ways. It may be

witnessed through sizes, shapes and colours. Different colours sizes and shapes of elements in an

advertisement add contrast. The varying directions, of design elements (vertical trees, horizontal

pavements arched rainbows) add contrast; too there must be sales

Communication purpose behind every layout decision made.

(4) eye movement – eye movement is the design principle which helps

Move the eyes of the readers from element to element in the order given in the hierarchy of

effects model for effective communication of the message in advertising. An effective ad uses

movement to lead its reading audience from initial message awareness through product

knowledge and brand preference, to ultimate action (intent to purchase). Direction and sequence

are two terms for the same element and artists may perform it in many ways. Mechanical eye

direction may be created by devices such as pointing fingers lines arrows or even a bouncing ball

that moves from unit to unit. Planned eye movement should follow the established reading

patterns too, such as the tendency to start to top left corner of a page and read through to the

lower right corner. The eyes also moves naturally from large items to small from dark to light and

from colours to not – colours.

(5) unity or harmony – unity or harmony is another important design

Principle. Although each element should be considered as a separate unit in striving for balance,

proportion, contrast and eye movement. The complete layout or design should appear as a unified

composition. Common methods of securing unity in layouts are (i) use of consistent

typographical design. (ii) repetition of the same

Shapes and motifs, (iii) the overlapping of elements (iv) use of a boarder to hold elements

together and (v) avoidance of too much which space between various element. Although unity

and contrast seem conflicting but they function quite smoothly together if they operate at cross

purposes – if the artists strive for balance

Here too as well as in the layout overall. Unity contributes orderliness to elements – a state of

coherence. And if they are properly placed. Contrasting size shapes colours and directions can

flow together beautifully.

2.1.5 elements of a layout

An advertising copy is the means by which the advertiser’s ideas are

Given expression to in a message to readers. Regardless of its length and brevity copy refers to all

the reading matters of an advertisement, including the headline, sub- headlines, text or body, and

the name of the firm or the standard initials of the advertiser. As we have seen that advertising

has so many immediate purposes but

Its ultimate goal is to stimulate sales. As a reader turns the pages of a magazine or newspaper, he

notices so many advertisements but a great variation in copy. Some copy may be so sticking that

the reader takes immediate action and rush to the nearest dealer to purchase it while there may be

some other copy or copies that he does not like or it does not click to his mind. The first copy

conforms to the requisites of a good copy. A copywriter must take pains in making up a sound

Advertisement copy containing its various components i.e. Headlines, subhead lines, illustrations

etc. The following are the main components of an advertisement copy

1. Background 9. Name plate

2. Border 10. Price

3. Caption 11. Product

4. Coupon 12. Slogan

5. Decoration 13. Space

6. Heading 14. Sub-heading

7. Illustration 15. Text

8. Mascot 16. Trademark16. Trademark

1. Background

The background for the advertisements should be somewhat catchy and colourful. The

arrangement of background differs from medium to medium and advertisement to advertisement.

In short, background should be suitable for the contents of the advertisement.

2. Border

It is defined as the frame of the advertisement. Border is employed to impart the reading

atmosphere. The border may be light or heavy, obvious, plain or fanciful. The border may also

contain a logo.

3. Caption

It refers to the subtitle. But in most of the advertisement it is converted into heading or sub-

heading.

4. Coupon

Coupon is that part of the advertisement which is intended for the

Convenience of the prospective customer in communicating with the advertiser. The coupon must

contain the name and full postal address of the firm followed by the offer. The offer should be

brief and clear. There should be space for name and address of the prospective customer. The

usual shape of the coupon is triangular or rectangular.

5. Decoration

Advertisement decoration is the ornament of the advertisement. This is done to emphasis the

advertisement message.

6. Heading the heading or headline is defined as the title of the advertisement. The words in the

heading should be short.

7. Illustration

Illustrations are the part of layout that pictures the basic theme of the advertisement. It has the

power to capture the attention of the reader. The advertisements become richer by the use of

illustrations.

8.mascot

It is known as the trade character or trade figure. It is an illustration of either a real or an

imaginary figure or personality given in the advertisement.

9. Name plate (logo)

The name plate or name block is the signature of the advertiser. It represents the personality of

the company and its product.

10. Price

It is another part of layout. The price of the product should be featured clearly. The price is

usually taken in the concluding lines of the copy.

11. Product

It refers to the representation of the product offered for sale. A very popular practice is to show

the product in use with illustrations.

12. Slogan

Slogan is a sales argument. The arrangement of slogan in the layout is determined by the

importance of its relation to the advertising message.

13. Space

Space refers to the entire space left in the space hired by the advertiser. This depends on the

design of the copy.

14. Subheading

It is a secondary heading. It is given to support the heading or to pick out the various selling

points given in the text.

15. Text

Text or body of the advertisement refers to the general reading matter. It is the subject matter of

the copy. It should be neither too wide nor too narrow.

16. Trade mark

It is a word or design by which a product is defined. If the trade, marks are registered it can be

included in the layout.

Importance of measuring the effectiveness of advertising

(1) it acts as a safety measure

Testing effectiveness of advertising helps in finding out ineffective

Advertisement and advertising campaigns. It facilitates timely adjustments in advertising to make

advertising consumer oriented and result oriented. Thus waste of money in faulty advertising can

be avoided.

(2) provides feed back for remedial measures

Testing effectiveness of advertising provides useful information to the advertisers to take

remedial steps against ineffective advertisements.

(3) avoids possible failure

Advertisers are not sure of results of advertising from a particular

Advertising campaign. Evaluating advertising effectives helps in estimating the results in order to

avoid complete loss.

(4) to justify the investment in advertising

The expenditure on advertisement is considered to be an investment. The investment in

advertising is a marketing investment and its objectives should be spelt out clearly indicating the

results expected from the campaign. The rate and size of return should be determined in advance.

If the expected rate of return is

Achieved in terms of additional profits, the advertisement can be considered as effective one.

(5) to know the communication effect

The effectiveness of the advertisement can be measured in terms of their communication effects

on the target consumers or audience. The main purpose of advertising is communicated the

general public, and existing and prospective consumers, various information about the product

and the company. It is therefore desirable to seek post measurements of advertising in order to

determine whether advertisement have been seen or heard or in other words whether they have

communicated the theme, message or appeal of the advertising.

(6) compare two markets

Under this procedure, advertising is published in test markets and results are contrasted with

other. Markets – so called control markets – which have had the regular advertising programme.

The measurements made to determine results may be measurements of change in sales, change in

consumer attitudes, changes in dealer display. And so on depending upon the objectives sought

by the advertiser.

AD APPEAL

Appeals and Advertising Message

The message content refers to what the advertiser has to say to the target audience that

will produce the desired response. It may be an appeal, a time, an idea or a unique

selling proposition.

In fact, the message content ultimately formulates some kind of benefit, motive or

reason why the audience should respond to, or do, something.

Appeals are broadly classified as rational, emotional and moral appeals.

Rational appeals are those directed at the thinking process of the audience. They

involve some sort of a deliberate reasoning process, which a person believes would be

acceptable to other members of his social group. They attempt to show that the

product would yield the expected functional benefit.

Rationality has come to be equated with substance. A rational ad becomes believable

and effective. Although there may be some disagreement regarding which motives are

rational and which are emotional.

The following are some buying motives, which are normally, considered rational

under ordinary circumstances:

(i) High Quality : People buy television, stereophonic music systems, furniture,

refrigerators, electric gadgets; kitchenware and a host of consumer durables for

their high quality. Many consumer goods, too, are bought for their quality, such as

clothing, beverages, food items, etc., and not merely because of their taste or

fashion, or style.

(ii) Low Price : Many people buy low-priced locally made air conditioners for their

homes because they believe that these products will show a product performance

similar to, or slightly inferior to, that of nationally reputed brands at higher price.

Whether this is true or not, a person, as long he believes this to be true, thinks his

reason will be accepted as a “good” one by his social group. In this case, he is

exhibiting a rational motive.

(iii) Long Life, as of a car tyre that will give 30,000 kms, before its utility has been

exhausted.

(iv) Performance, as of a ballpoint pen that won’t release excessive ink or skip under

any circumstances.

(v) Ease of use, as of a screwdriver with a magnetized tip which clings to the metal

head of the screw, or a timer in the kitchen mixer which switches off

automatically after a predetermined time period.

(vi) Re-sale Value, as of a two-wheeler scooter. “Bajaj” has a better re-sale value than

any other make.

(vii) Economy, in the operating expenses of some brands of refrigerator is greater

because they consume less electricity. Many two-wheeler vehicles claim a better

mileage per litre consumption of fuel than similar other vehicles.

Consumer durables of high value ‘are also often bought on the basis of rational

appeals.

People are ready and willing to give rational motives if asked why they have made a

particular [purchase.

Emotional appeals are those appeals, which are not preceded by careful analysis of

the pros and cons of making a buying.

Emotions are those mental agitations or excited states of feeling which prompt us to

make a purchase.

Emotional motives may be below the level of consciousness, and may not be

recognized by a person; or even if he is fully aware that such a motive is operating, he

is unwilling to admit it to others because he feels that it would be unacceptable as a

“proper” reason for buying among his associates and colleagues.

Emotional appeals are designed to stir up some negative or positive emotions that will

motivate product interest or purchase.

Different emotional appeals, which are particularly important from the advertising

point of view, are listed below.

Following several motivation research studies, it has been found that negative

emotional appeals are more effective than positive ones.

We shall also, therefore, name the negative appeals first.

Negative Emotional Appeals : An advertiser may try to induce a particular behavioral

change by emphasizing either positive or negative appeals, or a combination of both.

For example, an advertising campaign to get the target audience to buy fire insurance

may stress the positive aspect -low cost relative to other investment, the services the

insurance company provides, early settlement of claims, and so on; or it may stress

the negative aspect of not getting insurance - the danger of losing one’s possessions or

the ravages of fire. Positive appeals use the strategy of “reducing” a person’s anxiety

about “buying and using” a product, while negative appeals use the strategy of

“increasing” a person’s anxiety about “not using” a product or service.

In general, a positive appeal stresses the positive gains to a person from complying

with the persuasive message; the negative appeal stresses his loss if he fails to

comply. We give here the different dimensions of emotional appeals.

Precautions While using the Emotional Route

(i) The advertising should have relevance. If the product needs attribute-based

rational advertising, emotional appeals should be avoided.

(ii) There should be a natural flow of feelings.

(iii) Execution should not be exaggerated. The level of emotionality should not exceed

that experienced by the consumer.

(iv) There is a difference between a consumer’s emotions associated with the product /

brand and a consumer’s emotional reaction to the ad copy itself. Preferably, these

two should be compatible.

Fear Appeals

The fear appeal is most important among emotional appeals, and also the most

effective. It is said that the message’s effectiveness increases with the level of fear it

generates. The use of fear appeal in getting people to start doing things they should is

very common.

Many ad messages of toothpaste employ this appeal. They present the fear of tooth

decay or unhealthy gums or bad breath, and then suggest the use of a specific brand of

toothpaste to get rid of such fears.

Positive Emotional Appeals

Positive appeals highlight product benefits and attributes capable of influencing

consumer behavior. They are love, humor, pride, prestige and joy.

Most baby food products have a mother’s love appeal. Love for family is perfectly employed

in an ad of Dettol soap that has been called “The Love & Care Soap.” In the closing sentence,

the ad appeals by saying: “Give your family the Loving Care of Dettol Soap.” Mother’s love

for the baby has been appealed to in ad of Johnson’s baby soap. It says: “Gentle as a kiss on

your baby’s tender skin.” It further, goes on to say: ‘’Johnson’s Baby Soap. Because Johnson

& Johnson care for your baby almost as I much as you do.”

Other emotional motives are illustrated in the following list:

(i) Desire to be different, as illustrated by people who build an ultra modem home in

an area of traditional homes.

(ii) Desire to confirm, as in the case of teenage boy and girls who want to be “in

jeans” because all their friends wear jeans.

(iii) Desire to attract the opposite sex, as shown by a teenage girl who buys a new

cosmetic in order to make her skin more beautiful.

(iv) Desire for prestige, as shown by a person who buys the most expensive

automobile (Mercedes, Toyota, etc.) He can afford in order to impress his friends.

Sex Appeals in Advertising

Sex appeal is being increasingly used in Indian advertising to overcome the culture in

the print as well as broadcast media and to grab attention.

Sex appeals in contraceptive ads have become explicit, and are more visual than

verbal.

Does sex really sell? Or is it a negative influence on consumer?

The answer is not either affirmative or negative for these questions, and depends upon

a number of factors.

Functional sex appeals have highest recall and so also symbolism. Inappropriate sex

appeals have lowest recall.

Fantasies are also used as sex appeals. Appeal that are consistent with the product,

lead to a higher recall.

There might be gender-related responses to sex appeal.

Females may find the sexual ad offensive and so its use for a female targeted product

runs a risk.

The sexual appeals are justified in case of products like personal products, panties,

bras, undergarments, and swimsuits. They may not go well with industrial products.

The relevance of the appeal to the product is very important. The manner of sex

portrayal, the sex of the models and the target segment also affect the effectiveness of

the ad.

Blatant references to sex are suddenly the in-thing in American advertising. Marketers

promoting perfumes, jeans, alcohols, gloves, watches and cars are resorting to this

route.

Media clutter may be one reason that leads to the explosion of sexual imagery in

advertising.

Ads of perfumes have traditionally focused on the sensuous. For Calvin Klein, sex has

always been a favorite selling point. Sex appeals are interpreted differently from time

to time, region to region, person to person, country to country, and society to society.

Even the same person reacts to them differently at different stages of his life cycle.

Direct and Indirect Appeals

Another way of classifying ad appeals, comes about whether we they are linked directly or

indirectly with consumer needs.

Direct Appeals

Direct appeals are those that clearly communicate with the consumers about a given

need, followed by a message that extols the advertised brand as a product that satisfies

that need.

In Industrial advertising, some ads may have a direct appeal, satisfying the customer’s

technical need; but, in consumer advertising, the direct appeal plays a very limited

role.

Indirect Appeals

Indirect appeals are those that do not emphasize a human need, but allude to a need.

Because advertisers understand the influence of needs upon selective perception, they

leave some ambiguity in the message so that the consumers may be free to interpret it

and the need to which the advertiser is appealing.

Product-Oriented Indirect Appeals:

They are Grouped into three Classifications

I. Feature-oriented Appeals: The basic message is about product features, characteristics and

attributes. Examples: Instant Shine, Cherry shoe polish, ‘’Promise,’’ the unique toothpaste

with the time-tested clove oil.

Ii. Use-oriented Appeals: The basic message emphasizes specific in-operation and/or post-

operation advantages of the brand advertised. Examples: Anne French hair remover ad: “How

much cruelty can a woman’s skin bear?” The headline is a searching question. The- ad

message discards other methods of hair removing - they are shaving, waxing, and threading.

Then it goes on to inform you how gently hair is removed with Anne French.

Iii. Product Comparison Appeals: “The basic message emphasizes the differences between

the advertised brand and the competing brands. The advertised brand, of course, has a net

advantage over those with which it is compared; otherwise the whole exercise becomes futile.

Consumer-Oriented Indirect Appeals:

They are Further Divided as Follows

(i) Attitude-oriented Appeals: The basic message is one that is in line with the

consumer’s attitude - his value – belief structure. Example: The ad series by

Shriram group, namely: “Indian Corporate Evolution. The Shriram Experience.”

In one of the ads, it says: “we are Indians. We must remember our roots.” Then it

goes on to state the group’s belief in Indian traditions and the advantages it shares

with the country. This message refers indirectly to Maslow’s esteem need.

(ii) Significant Group-oriented Appeals: The basic message emphasizes the kind of

group that uses or approves of the advertised brand. The group may be a reference

group, a social group, or a peer group, or any other group that is significant for the

consumer target. The ad says: “Some possessions define a character. Some

distinguish it. A cigarette so distinguished, it’s by appointment to your Majesty.”

(iii) Life Style-oriented Appeals: The basic message emphasizes an identifiable life

style relevant to a defined target market. Example: An ad of Charminar cigarette

making an appeal with its strong taste. For some hard smokers, a “strong”

cigarette can only give relaxation, particularly after a day’s hard work. One needs

a Charminar.

(iv) Sub-conscious-oriented Appeals: The basic message is distinguished and is

directed at the consumer’s subconscious or unconscious) need. These messages

are aimed at the buyer’s dream world, but are veiled in some manner by messages

appealing to the buyer’s conscious mind. Example: ‘Petals’ brassieres of VIP are

advertised with a dreamy message: “As you flower into a woman, you discover

the epitome of international fashion. Discover Petals.”

(v) Image-oriented Appeals: Although all advertising appeals create a brand image in

the minds of consumers, the image oriented approach is distinct in the sense that

here the advertiser, consciously and purposefully, makes an effort to mould a

brand image. There is an intention to create a specific brand image. One strategy

is to create a brand image that “fits” either the self-image or self-ideal image of

the target market.

Essentials of an Advertisement Appeal

I. It must be thematically sound.

Ii. It must be communicative.

Iii. It must be interesting.

Iv. It must have credibility.

V. It must have finality and be complete.

Vi. It must contain truthful” information.

Selling Points and Appeals

Selling points are those product attributes that are listed in the advertisement copy to impress

upon the consumer the significance of a product to him. They could be specifications, quality

statements, composition statements, descriptive or narrative or performance statements. Some

selling points are primary selling points and the rest are subsidiary selling points. Selling

points in order to be effective must have the force to appeal to a particular buying motive. So

selling points successfully touch upon the buying motives.

SALES PROMOTION TECHNIQUES /TOOLS

CONSUMER-ORIENTED SALES PROMOTIONS

Consumer sales promotions are steered toward the ultimate product users—typically

individual shoppers in the local market—but the same techniques can be used to

promote products sold by one business to another, such as computer systems, cleaning

supplies, and machinery. In contrast, trade sales promotions target resellers—

wholesalers and retailers—who carry the marketer's product.

Following are some of the key techniques used in consumer-oriented sales

promotions.

PRICE DEALS

A consumer price deal saves the buyer money when a product is purchased. The main

types of price deals include discounts, bonus pack deals, refunds or rebates, and

coupons.

Price deals are usually intended to encourage trial use of a new product or line

extension, to recruit new buyers for a mature product, or to convince existing

customers to increase their purchases, accelerate their use, or purchase multiple units.

Price deals work most effectively when price is the consumer's foremost criterion or

when brand loyalty is low.

Price Discounts: Buyers may learn about price discounts either at the point of sale or

through advertising. At the point of sale, price reductions may be posted on the

package, on signs near the product, or in storefront windows. Many types of

advertisements can be used to notify consumers of upcoming discounts, including

fliers and newspaper and television ads. Price discounts are especially common in the

food industry, where local supermarkets run weekly specials. Price discounts may be

initiated by the manufacturer, the retailer, or the distributor. For instance, a

manufacturer may "pre-price" a product and then convince the retailer to participate in

this short-term discount through extra incentives. For price reduction strategies to be

effective, they must have the support of all distributors in the channel. Existing

customers perceive discounts as rewards and often respond by buying in larger

quantities. Price discounts alone, however, usually do not induce first time buyers.

Bonus Pack or Banded Pack: Another type of price deal is the bonus pack or banded

pack. When a bonus pack is offered, an extra amount of the product is free when a

standard size of the product is bought at the regular price. This technique is routinely

used in the marketing of cleaning products, food, and health and beauty aids to

introduce a new or larger size. A bonus pack rewards present users but may have little

appeal to users of competitive brands. A banded pack offer is when two or more units

of a product are sold at a reduction of the regular single-unit price. Sometimes the

products are physically banded together, such as in toothbrush and toothpaste offers.

Refund or Rebate: A refund or rebate promotion is an offer by a marketer to return a

certain amount of money when the product is purchased alone or in combination with

other products. Refunds aim to increase the quantity or frequency of purchase, to

encourage customers to "load up" on the product. This strategy dampens competition

by temporarily taking consumers out of the market, stimulates the purchase of

postponable goods such as major appliances, and creates on-shelf excitement by

encouraging special displays. Refunds and rebates are generally viewed as a reward

for purchase, and they appear to build brand loyalty rather than diminish it.

Coupons: Coupons are legal certificates offered by manufacturers and retailers. They

grant specified savings on selected products when presented for redemption at the

point of purchase. Manufacturers sustain the cost of advertising and distributing their

coupons, redeeming their face values, and paying retailers a handling fee. Retailers

who offer double or triple the amount of the coupon shoulder the extra cost. Retailers

who offer their own coupons incur the total cost, including paying the face value. In

this way, retail coupons are equivalent to a cents-off deal. Manufacturers disseminate

coupons in many ways. They may be delivered directly by mail, dropped door to

door, or distributed through a central location such as a shopping mall. Coupons may

also be distributed through the media—magazines, newspapers, Sunday supplements,

or free-standing inserts (FSI) in newspapers. Coupons can be inserted into, attached

to, or printed on a package, or they may be distributed by a retailer who uses them to

generate store traffic or to tie in with a manufacturer's promotional tactic. Retailer-

sponsored coupons are typically distributed through print advertising or at the point of

sale. Sometimes, though, specialty retailers or newly opened retailers will distribute

coupons door to door or through direct mail.

CONTESTS/SWEEPSTAKES

The main difference between contests and sweepstakes is that contests require

entrants to perform a task or demonstrate a skill that is judged in order to be

deemed a winner, while sweepstakes involve a random drawing or chance contest

that may or may not have an entry requirement.

At one time, contests were more commonly used as sales promotions, mostly due

to legal restrictions on gambling that many marketers feared might apply to

sweepstakes.

Furthermore, participation in contests is very low compared to sweepstakes, since

they require some sort of skill or ability.

SPECIAL EVENTS

According to the consulting firm International Events Group (IEG), businesses spend

over $2 billion annually to link their products with everything from jazz festivals to

golf tournaments to stock car races. In fact, large companies like RJR Nabisco and

Anheuser-Busch have special divisions that handle nothing but special events.

Special events marketing offer a number of advantages. First, events tend to attract a

homogeneous audience that is very appreciative of the sponsors. Therefore, if a

product fits well with the event and its audience, the impact of the sales promotion

will be high. Second, event sponsorship often builds support among employees—who

may receive acknowledgment for their participation—and within the trade.

Finally, compared to producing a series of ads, event management is relatively

simple. Many elements of event sponsorship are prepackaged and reusable, such as

booths, displays, and ads. Special events’ marketing is available to small businesses,

as well, through sponsorship of events on the community level.

PREMIUMS

A premium is tangible compensation that is given as incentive for performing a

particular act—usually buying a product.

The premium may be given for free, or may be offered to consumers for a

significantly reduced price. Some examples of premiums include receiving a prize in

a cereal box or a free garden tool for visiting the grand opening of a hardware store.

Incentives that are given for free at the time of purchase are called direct premiums.

These offers provide instant gratification, plus there is no confusion about returning

coupons or box tops, or saving bar codes or proofs of purchase.

Other types of direct premiums include traffic builders, door openers, and referral

premiums. The garden tool is an example of a traffic-builder premium—an incentive to lure a

prospective buyer to a store. A door-opener premium is directed to customers at home or to

business people in their offices. For example, a homeowner may receive a free clock radio for

allowing an insurance agent to enter their home and listening to his sales pitch. Similarly, an

electronics manufacturer might offer free software to an office manager who agrees to an on-

site demonstration. The final category of direct premiums, referral premiums, rewards the

purchaser for referring the seller to other possible customers.

Mail premiums, unlike direct premiums, require the customer to perform some act in order to

obtain a premium through return mail. An example might be a limited edition toy car offered

by a marketer in exchange for one or more proofs-of-purchase and a payment covering the

cost of the item plus handling. The premium is still valuable to the consumer because they

cannot readily buy the item for the same amount.

CONTINUITY PROGRAMS

Continuity programs retain brand users over a long time period by offering ongoing

motivation or incentives.

Continuity programs demand that consumers keep buying the product in order to get

the premium in the future.

Trading stamps, popularized in the 1950s and 1960s, are prime examples. Consumers

usually received one stamp for every dime spent at a participating store. The stamp

company provided redemption centers where the stamps were traded for merchandise.

A catalog listing the quantity of stamps required for each item was available at the

participating stores.

Today, airlines' frequent-flyer clubs, hotels' frequent-traveler plans, retailers' frequent-

shopper programs, and bonus-paying credit cards are common continuity programs.

When competing brands have reached parity in terms of price and service, continuity

programs sometimes prove a deciding factor among those competitors.

By rewarding long-standing customers for their loyalty, continuity programs also

reduce the threat of new competitors entering a market.

SAMPLING

A sign of a successful marketer is getting the product into the hands of the consumer.

Sometimes, particularly when a product is new or is not a market leader, an effective

strategy is giving a sample product to the consumer, either free or for a small fee. But

in order for sampling to change people's future purchase decisions, the product must

have benefits or features that will be obvious during the trial.

There are several means of disseminating samples to consumers. The most popular

has been through the mail, but increases in postage costs and packaging requirements

have made this method less attractive.

An alternative is door-to-door distribution, particularly when the items are bulky and

when reputable distribution organizations exist. This method permits selective

sampling of neighborhoods, dwellings, or even people.

Another method is distributing samples in conjunction with advertising. An ad may

include a coupon that the consumer can mail in for the product, or it may include an

address or phone number for ordering.

Direct sampling can be achieved through prime media using scratch-and-sniff cards

and slim foil pouches, or through retailers using special displays or a person hired to

hand out samples to passing customers.

Though this last technique may build goodwill for the retailer, some retailers resent

the inconvenience and require high payments for their cooperation.

A final form of sample distribution deals with specialty types of sampling. For

instance, some companies specialize in packing samples together for delivery to

homogeneous consumer groups, such as newlyweds, new parents, students, or

tourists. Such packages may be delivered at hospitals, hotels, or dormitories and

include a number of different types of products.

TRADE-ORIENTED SALES PROMOTIONS

A trade sales promotion is targeted at resellers—wholesalers and retailers—who

distribute manufacturers' products to the ultimate consumers.

The objectives of sales promotions aimed at the trade are different from those directed

at consumers.

In general, trade sales promotions hope to accomplish four goals:

o Develop in-store merchandising support, as strong support at the retail store

level is the key to closing the loop between the customer and the sale.

o Control inventory by increasing or depleting inventory levels, thus helping to

eliminate seasonal peaks and valleys.

o Expand or improve distribution by opening up new sales areas (trade

promotions are also sometimes used to distribute a new size of the product).

o Generate excitement about the product among those responsible for selling it.

Some of the most common forms of trade promotions—profiled below—

include point-of-purchase displays, trade shows, sales meetings, sales contests,

push money, deal loaders, and promotional allowances.

POINT-OF-PURCHASE (POP) DISPLAYS

Manufacturers provide point-of-purchase (POP) display units free to retailers in order

to promote a particular brand or group of products.

The forms of POP displays include special racks, display cartons, banners, signs, price

cards, and mechanical product dispensers.

Probably the most effective way to ensure that a reseller will use a POP display is to

design it so that it will generate sales for the retailer. High product visibility is the

basic goal of POP displays.

In industries such as the grocery field where a shopper spends about three-tenths of a

second viewing a product, anything increasing product visibility is valuable.

POP displays also provide or remind consumers about important decision

information, such as the product's name, appearance, and sizes.

The theme of the POP display should coordinate with the theme used in ads and by

salespeople.

TRADE SHOWS

Thousands of manufacturers display their wares and take orders at trade shows. In

fact, companies spend over $9 billion yearly on these shows.

Trade shows provide a major opportunity to write orders for products. They also

provide a chance to demonstrate products, disseminate information, answer questions,

and be compared directly to competitors.

Related to trade shows, but on a smaller scale, are sales meetings sponsored by

manufacturers or wholesalers. Whereas trade shows are open to all potential

customers, sales meetings are targeted toward the company's sales force and/or

independent sales agents. These meetings are usually conducted regionally and

directed by sales managers. The meetings may be used to motivate sales agents, to

explain the product or the promotional campaign, or simply to answer questions.

For resellers and salespeople, sales contests can also be an effective motivation.

Typically, a prize is awarded to the organization or person who exceeds a quota by the

largest percentage.

PUSH MONEY

Similarly, push money (PM)—also known as spiffs—is an extra payment given to

sales-people for meeting a specified sales goal.

For example, a manufacturer of refrigerators might pay a $30 bonus for each unit of

model A, and a $20 bonus for each unit of model B, sold between March 1 and

September 1.

At the end of that period, the salesperson would send evidence of these sales to the

manufacturer and receive a check in return.

Although some people see push money as akin to bribery, many manufacturers offer

it.

DEAL LOADERS

A deal loader is a premium given by a manufacturer to a retailer for ordering a certain

quantity of product. Two types of deal loaders are most typical.

The first is a buying loader, which is a gift given for making a specified order size.

The second is a display loader, which means the display is given to the retailer after

the campaign.

For instance, General Electric may have a display containing appliances as part of a

special program. When the program is over, the retailer receives all the appliances on

the display if a specified order size was achieved.

TRADE DEALS

Trade deals are special price concessions superseding, for a limited time, the normal

purchasing discounts given to the trade.

Trade deals include a group of tactics having a common theme—to encourage sellers

to specially promote a product.

The marketer might receive special displays, larger-than-usual orders, superior in-

store locations, or greater advertising effort. In exchange, the retailer might receive

special allowances, discounts, goods, or money. In many industries, trade deals are

the primary expectation for retail support, and the marketing funds spent in this area

are considerable.

There are two main types of trade deals: buying allowances and advertising/display

allowances.

o BUYING ALLOWANCES A buying allowance is a bonus paid by a

manufacturer to a reseller when a certain amount of product is purchased

during a specific time period. For example, a reseller who purchases at least

15 cases of product might receive a buying allowance of $6.00 off per case,

while a purchase of at least 20 cases would result in $7.00 off per case, and so

forth. The payment may take the form of a check or a reduction in the face

value of an invoice. In order to take advantage of a buying allowance, some

retailers engage in "forward buying." In essence, they order more merchandise

than is needed during the deal period, then store the extra merchandise to sell

later at regular prices. This assumes that the savings gained through the buying

allowance is greater than the cost of warehousing and transporting the extra

merchandise. Some marketers try to discourage forward buying, since it

reduces profit margins and tends to create cyclical peaks and troughs in

demand for the product. The slotting allowance is a controversial form of

buying allowance. Slotting allowances are fees retailers charge manufacturers

for each space or slot on the shelf or in the warehouse that new products will

occupy. The controversy stems from the fact that in many instances this

allowance amounts to little more than paying a bribe to the retailer to convince

them to carry your company's products. But many marketers are willing to pay

extra to bring their products to the attention of consumers who are pressed for

time in the store. Slotting allowances sometimes buy marketers prime spaces

on retail shelves, at eye level or near the end of aisles. The final type of buying

allowance is a free goods allowance. In this case, the manufacturer offers a

certain amount of product to wholesalers or retailers at no cost if they

purchase a stated amount of the same or a different product. The allowance

takes the form of free merchandise rather than money.

ADVERTISING ALLOWANCES An advertising allowance is a dividend paid by a marketer to a

reseller for advertising their product. The money can only be used to purchase advertising—

for example, to print flyers or run ads in a local newspaper. But some resellers take advantage

of the system, so many manufacturers require verification. A display allowance is the final

form of trade promotional allowance. Some manufacturers pay retailers extra to highlight

their display from the many available every week. The payment can take the form of cash or

goods. Retailers must furnish written certification of compliance with the terms of the

contract before they are paid. Retailers are most likely to select displays tha

CHARACTERISTICS OF SUCCESSFUL SALES PROMOTION

Some aspects that are important to consider in marking sales promotions successful are as

follows:

1. Maximum effect at minimum cost: when the nature of promotion objective is such

that is can best be achieved by sales promotion, rather than advertising alone, and the

objective is achieved at minimum cost.

2. Motivates consumers to buy now: successful sales promotions induce a sense of

urgency to buy now and avoid postponing purchases.

3. Offers what the consumers want: sales promotion must not attempt to push any offer

that is not regarded as desirable by target consumers.

4. The promotion should be clear and uncomplicated: simple and clear language must

be used in communicating with the consumers.

5. Promotion should be highly visible: the offer must draw attention of target

consumers. Effective promotions draw attention from high visibility and from creative

qualities.

6. Promotion should benefit all concerned: usually promotions involve cooperation of

sales force and channel members. They need to be motivated to make the efforts

successful.

7. Promotion must be believable and honest: it makes reasonable and believable

claims, tells the truth, there are no exaggerations, and it respects public’s intelligence.

8. Promotion must be legal: the marketers must check the legality of promotion before

announcing it.

9. Promotion must be implemented efficiently: proper arrangements must be made with

handling houses and premium suppliers to avoid any complications.

SALES PROMOTION EVALUATION

Measurements of results, in any are of business activity, is related to the objects that are

set. The sales promotion can be evaluated at three different stages:

1. Pre-testing: how sales promotion is to be communicated and what would be

communicated to the target groups is important and can be pre-tested. Pre-testing

consists of experimenting certain markets or individual stores in a market. The

simplest way is to visit several important retailers and wholesalers and discuss the

programme and seek their opinion and suggestions.

2. Concurrent Testing: this testing is done when the sales promotion is in progress.

Concurrent testing is conducted in terms of sales data, which can be obtained on

weekly or monthly basis.

3. Post-testing: post-testing done after the promotion period is over. To asses the

change in consumer awareness and attitude, telephone calls, questionnaire mailed

to consumers, and personal interviews can be used.

To measure the sales effect, sales figures before the promotion period can be compared with

figures at the end of promotion, and one month after the promotion ends.

DESIGN AN INTEGRATED SALES PROMOTION PROGRAM

Design an integrated Sales Promotion Program for the following channel of

distribution: Manufacturer-to-Independent Sales Rep-to-Retailer-to-Consumer

A new product in a mature category, such as LIME COKE

Background Information

The cola market is a mature market with lots of variety. Consumers are trying new and

innovative products. There’s strong growth in bottled water, juices, sports drinks and energy

drinks. Consumers are conscious cola drinkers; they are calorie conscious especially in their

20s and 30s. The Lime Coke is a new product in the market. Sprite, Coca-Cola’s ‘solid’

performer continues to be a great success as a strong competitor to this new product.

The nature of product is revolutionary; it should create emotional connection with the

consumers. The Lemon Cola drinkers, driven by youthful liberation, relate to life’s more

light-hearted and fun experiences. It is a drink of choice for people who are younger and

more exciting.

Objectives

New distribution of Lime Coke products through the channel distribution by motivating top

20% of the Manufacturer’s independent salespeople to move more Lime Coke products to

Retailers in order to generate an ultimate 40 to 50% sales during the Christmas season by

attracting consumers.

Channel Distribution Strategy

The distribution system has only two divisions (Independent Sales Rep and Retailer) before it

reach the consumer.

The product is new in a matured market, needs additional explanation and education for the

sales reps to have that carried over to the retailer to gain maximum consumer exposure in this

dominant market position.

There is a competitor product such as Sprite, certainly, there is a competition for distributor

resources in order to get attention. The channel function will only be selling, inventory

support, physical distribution and post sales services.