MARKETING MIST

Marketing Management – III (Advertising and Sales Management) 

 MYSURU UNIVERSITY

SYLLUBUS

 1. Advertising: Meaning, Definition, Importance – Objectives – Classification of Advertising – Socio-Economic effects of advertising – Publicity-nature and importance.

2. Advertising Campaign Planning – Advertising Copy design-Advertisement – layout and its Components – essentials of a good copy – Advertising agency.

3. Advertising Media – Types, Merits and Demerits-Media planning and selection – Determining Advertising Budget.

4. Sales Management – Nature and importance – Organization for Sales Management – Sales force Management – Qualities of good salesman.

5. Customer Relationship Management – Meaning, Custom Value and Satisfaction – Customer Loyalty – Online Marketing – Ethical issues in Direct Marketing.

References:  

1. Advertising Management – Chuawalla & Sethia

2. Advertising and Salesmanship – K.S. Davar

3. Advertising and Sales Promotion – Debri Datta & others

4. Advertising – B.S. Rathore

5. Advertising Management – Rajiv Batra & Others

 
 KEY NOTES
ADVERTISING 

UNIT – I 

INTRODUCTION

Adverting is only one element of the promotion mix, but it often considered prominent in the overall marketing mix design. Its high visibility and pervasiveness made it as an important social and encomia topic in Indian society.

Promotion may be defined as “the co-ordination of all seller initiated efforts to set up channels of information and persuasion to facilitate the scale of a good or service.” Promotion is most often intended to be a supporting component in a marketing mix. Promotion decision must be integrated and co-ordinated with the rest of the marketing mix, particularly product/brand decisions, so that it may effectively support an entire marketing mix strategy. The promotion mix consists of four basic elements. They are:-

1.      Advertising

2.      Personal Selling

3.      Sales Promotion, and

4.      Publicity

1.      Advertising  is  the  dissemination  of  information  by  non-personal  means through paid media where the source is the sponsoring organization.

2.      Personal selling is the dissemination of information by non-personal methods, like face-to-face, contacts between audience and employees of the sponsoring organization. The source of information is the sponsoring organization.

3.      Sales promotion is the dissemination of information through a wide variety of activities other than personal selling, advertising and publicity which stimulate consumer purchasing and dealer effectiveness.

4.      Publicity is the disseminating of information by personal or non-personal means and is not directly paid by the organization and the organization is not the source.

 ORIGIN AND DEVELOPMENT OF ADVERTISING

It has been wrongly assumed that the advertising function is of recent origin. Evidences suggest that the Romans practiced advertising; but the earliest indication of its use in this country dates back to the Middle Ages, when the use of the surname indicated a man‟s occupation. The next stage in the evolution of advertising was the use of signs as a visual expression of the tradesman‟s function and a means of locating the source of goods. This method is still in common use.

The seller in primitive times relied upon his loud voice to attract attention and inform consumers of the availability of his services. If there were many competitors, he relied upon his own personal magnetism to attract attention to his merchandise. Often it became necessary for him to resort to persuasion to pinpoint the advantages of his products. Thus, the seller was doing the complete promotion job himself.

Development of retail stores, made the traders to be more concerned about attracting business. Informing customers of the availability of supplies was highly important. Some types of outside promotion were necessary. Signs on stores and in prominent places around the city and notices in printed matters were sometimes used.

               When customers were finally attracted to the store and satisfied with the service at least once, they were still subjected to competitive influences; therefore, the merchant‟s signs and advertisements reminded customers of the continuing availability of his services. Sometimes traders would talk to present and former customers in the streets, or join social organizations in order to have continuing contacts with present and potential customers.

As the markets grew larger and the number of customers increased, the importance of attracting them also grew. Increasing reliance was placed on advertising methods of informing about the availability of the products. These advertising methods were more economical in reaching large numbers  of consumers. While these advertising methods were useful for informing and reminding and reminding, they could not do the whole promotional job. They were used only to reach each consumer personally. The merchant still used personal persuasion once the customers were attracted to his store.

The invention of hand press increased the potentialities of advertising. By Shakespeare‟s times, posters had made their appearance, and assumed the function of fostering demand for existing products. Another important event was the emergence of the pamphlet as an advertising medium. The early examples of these pamphlets disclose their sponsorship by companies want to generate goodwill for their activities. The low cost of posters and handbills encouraged a number of publishers to experiment with other methods.

DEFINITION OF ADVERTISISNG

The word advertising originates from a Latin word advertise, which means to turn to. The dictionary meaning of the term is “to give public notice or to announce publicly”.

Advertising may be defined as the process of buying sponsor-identified media space or time in order to promote a product or an idea.

The American Marketing Association, Chicago, has defined advertising as “any form of non-personal presentation or promotion of ideas, goods or services, by an identified sponsor.”

What Advertisement Is?

Advertisement is a mass communicating of information intended to persuade buyers to by products with a view to maximizing a company‟s profits. The elements of advertising are:

(i)                 It is a mass communication reaching a large group of consumers.

(ii)               It makes mass production possible.

(iii)             It is non-personal communication, for it is not delivered by an actual person, nor is it addressed to a specific person.

(iv)             It is a commercial communication because it is used to help assure the advertiser of a long business life with profitable sales.

(v)               Advertising can be economical, for it reaches large groups of people.

This keeps the cost per message low.

(vi)             The  communication  is  speedy,  permitting  an  advertiser  to  speak  to millions of buyers in a matter of a few hours.

(vii)           Advertising is identified communication.  The advertiser signs his name to his advertisement for the purpose of publicizing his identity.

What is Included in Advertising?

(i)                 The information in an advertisement should benefit the buyers.  It should give them a more satisfactory expenditure of their rupees.

(ii)               It should suggest better solutions to their problems.

(iii)             The content of the advertisement is within the control of the advertiser, not the medium.

(iv)             Advertising without persuasion is ineffective. The advertisement that fails to influence anyone, either immediately or in the future, is a waste of money.

(v)       The function of advertising is to increase the profitable sales volume.

That is, advertising expenses should not increase disproportionately.

 Advertising includes the following forms of messages: The messages carried in-

v  Newspapers and magazines;

v  On radio and television broadcasts;

v  Circular  of  all  kinds,  (whether  distributed  by  mail,  by  person, thorough tradesmen, or by inserts in packages);

v  Dealer help materials,

v  Window display and counter – display materials and efforts;

v  Store signs, motion pictures used for advertising,

v  Novelties   bearing   advertising   messages   and   Signature   of  the advertiser,

v  Label stags and other literature accompanying the merchandise.

 What is excluded from Advertising?

Advertising is not an exact science. An advertiser‟s circumstances are never identical with those of another; he cannot predict with accuracy what results his future advertising efforts will produce.

 (i)                 Advertising is not a game, because if advertising is done properly, both the buyer and the seller benefit from it.

(ii)               Advertising is not a toy. Advertiser cannot afford to play with advertising. Advertising funds come from sales revenue and must be used to increase sales revenue.

(iii)             Advertisements are not designed to deceive.   The desire and hope for repeat sales insures a high degree of honesty in advertising.

 The activities excluded from advertising are:

Ø  The offering of premiums to stimulate the sale of products;

Ø  The use of exhibitions and demonstrations at fairs, show and conventions;

Ø  The use of samples and activities, involving news releases and the activities of personal selling forces;

Ø  The payment of advertising allowances which are not used for advertising;

Ø  The entertainment of customers

Advertising Objectives

 Each advertisement is a specific communication that must be effective, not just for one customer, but for many target buyers. This means that specific objectives should be set for each particular advertisement campaign. Advertising is a form of promotion and like a promotion; the objectives of advertising should be specific. This requires that the target consumers should be specifically identified and that the effect which advertising is intended to have upon the consumer should be clearly indicated. The objectives of advertising were traditionally stated in terms of direct sales. Now, it is to view advertising as having communication objectives that seek to inform persuade and remind potential customers of the worth of the  product. Advertising seeks to condition the consumer so that he/she may have a favourable reaction to the promotional message. Advertising objectives serve as guidelines for the planning and implementation of the entire advertising programme.

 The basic objectives of an advertising programme may be listed as below:

(i)                 To stimulate sales amongst present, former and future consumers. It involves a decision regarding the media, e.g., TV rather than print ;

(ii)               To communicate with consumers. This involves decision regarding copy ;

(iii)             To retain the loyalty of present and former consumers. Advertising may be used to reassure buyers that they have made the best purchase, thus building loyalty to the brand name or the firm.

(iv)             To increase support. Advertising impliedly bolsters the morale of the sales force and of distributors, wholesalers, and retailers, ; it thus contributes to enthusiasts and confidence attitude in the organizational. :

(v)               To project an image. Advertising is used to promote an overall image of respect and trust for an organization. This message is aimed not only at consumers, but also at the government, shareholders, and the general public.

 Importance of Advertising

Generally, advertising is a relatively low-cost method of conveying selling messages to numerous prospective customers. It can secure leads for salesmen and middlemen by convincing readers to request more information and by identifying outlets handling the product. It can force middlemen to stock the product by building consumer interest. It can help train dealers salesmen in product uses and applications. It can build dealer and consumer confidence in the company and its products by building familiarity. 

Advertising is to stimulate market demand.

While sometimes advertising alone may succeed in achieving buyer acceptance, preference, or even demand for the product, it is seldom solely relied upon. Advertising is efficiently used with at least one other sales method, such as personal selling or point-of-purchase display, to directly move customers to buying action.

Advertising has become increasingly important to business enterprises – both large and small. Outlay on advertising certainly is the voucher. Non-business enterprises have also recognized the importance of advertising. The attempt by army recruitment is bases on a substantial advertising campaign, stressing the advantages of a military career. The health department popularizes family planning through advertising Labour organizations have also used advertising to make their viewpoints known to the public at large. Advertising assumes real economic importance too.

Advertising strategies that increase the number of units sold stimulate economies in the production process. The production cost per unit of output is lowered. It in turn leads to lower prices. Lower consumer prices then allow these products to become available to more people. Similarly, the price of newspapers, professional sports, radio and TV programmes, and the like might be prohibitive without advertising. In short, advertising pays for many of the enjoyable entertainment and educational aspects of contemporary life.

Advertising has become an important factor in the campaigns to achieve such societal-oriented objectives such as the discontinuance of smoking, family planning, physical fitness, and the elimination of drug abuse.

Though in India, advertising was accepted as a potent and recognized means of promotion only 25 years ago, its growing productive capacity and output necessitates the finding of consumers and advertising plays an important role in this process. Advertising helps to increase mass marketing while helping the consumer to choose from amongst the variety of products offered for his selection.

In India, advertising as a profession is in its infancy. Because of this fact, there is a tremendous scope for development so that it may be productively used for the benefit of producers, traders, consumers, and the country‟s economy.

CLASSIFICATION AND TYPES OF ADVERTISING

 1.      Product – Related Advertising

A.      Pioneering Advertising

B.      Competitive Advertising

C.      Retentive Advertising

2.      Public Service Advertising

3.      Functional Classificaiton

A.      Advertising Based on Demand Influence Level.

A.    Primary Demand (Stimulation)

B.     Selective Demand (Stimulation)

B.      Institutional Advertising

C.      Product Advertising

A.  Informative Product Advertising

B. Persuasive Product Advertising

C. Reminder-Oriented Product Advertising

4.      Advertising based on Product Life Cycle

A.      Consumer Advertising

B.      Industrial Advertising

5.      Trade Advertising

A.      Retail Advertising

B.      Wholesale Advertising

6.      Advertising Based on Area of operation

A.      National advertising

B.      Local advertising

C.      Regional advertising

7.      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

i.   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 a specific brand rather than a general product category.  It is of two types:

A.  Direct Type: It seeks to stimulate immediate buying action.

B.  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 on which 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:

v  To inform,

v  To bring in orders,

v  To induce inquiries,

v  To get the advertiser‟s name on the buyer‟s list of sources,

v  To provide support for the salesman,

v  To reduce selling costs,

v  To help get items in the news column of a publication,

v  To establish recognition for the firm or its product,

v  To motivate distributors,

v  To recognition for the firm or its products,

v  To motivate distributors, to create or change a company‟s image,

v  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.