Promotion - the fourth P of the Marketing Mix

About Advertising (An element of the promotional mix)

The Role of Promotion

Promotion - the fourth P of the marketing mix has three major roles to perform in the total marketing task These are to:
Communicate information about the product, service or idea (the offering) prepared by an organization or company for the benefit of targeted customers (or other stakeholders) Persuade them to choose the product, service or idea in preference to other competitive offerings of a similar nature for satisfaction of their needs and wants
Promotional communication thus seeks a favourable response from the targeted customers (or in some cases intermediaries)

Promotion also helps differentiate one product or brand from another

In effect, promotion is the last mile in the completion of the total marketing task (may be the first one, in some cases)
All effort expended on creating an offering, pricing it right and making it available is wasted until and unless the customers buys the same. Promotion has a major role in this task

Relationship with the other Ps

The first three Ps also communicate information to customers
A product can communicate information through all 5 senses
An aerodynamic shape of a sports car conveys speed The aroma of cooking may convey how tasty food is likely to be etc

The price may convey quality, value for money, affordability Wide or narrow availability can convey popularity or exclusiveness etc

This communication usually forms a base on which further promotional communication is based
In case of new products, promotional communication may reach customers before they have a chance to see the product or know its price However even in these cases, promotional communication has to take into account what the product, price or place parts of the mix will communicate with customers

Promotional communication is also impacted by competitive communications like the other Ps

The Promotional Mix

The promotional mix (or plan) consists of a large number of elements (which have a degree of overlap) including:
Advertising Personal selling Sales promotion Direct marketing Publicity/public relations Corporate image related communication Exhibitions Events (seminars, trade shows, activities) Sponsorships

Each has a role to play in the process of communication of information from seller to customers and in persuasion Inclusion of individual elements depends on communication objectives and tasks to be carried from time to time

The Promotional Mix .2

A promotional mix (or plan) specifies how much attention to pay to each of the elements and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, brand positioning, competitive retaliations, or creation of a corporate image. Fundamentally, however there are three basic objectives of promotion. These as explained earlier are:
To present information to customers (as well as others) To increase demand To differentiate a product

Integrated Marketing Communication

Inclusion of individual elements depends on communication objectives and tasks to be carried from time to time There is a need to ensure that marketing communications are properly integrated in one cohesive whole to ensure that
To extend the reach of the message to the largest number of target customers While ensuring that the message received is consistent across elements and within these the media vehicles used At the same time ensuring that the budget requirement is controlled The objectives tend to be contradictory and striking balance between reach, frequency and budgets is a in itself an objective of the mix

The Integrated Marketing Communication approach is therefore used to ensure that each element is orchestrated to convey the desired message with maximum efficiency

Promotion, Advertising & Sales promotion

The terms promotion and advertising are often used together or even interchangeably but are not really the same Promotion is considered to be the broader concept Promotion, as a general term, includes all the ways available to make a product and/or service known to and purchased by customers and clients
Advertising is thus just one specific action taken to promote the product This confusion probably arises due to the fact that the term promotion is also used to refer to sales promotion Sales promotion includes a variety of strategies designed to offer purchasers an extra incentive to buy, usually in the short-term. E.g. discounts, one free on two, customer (or trade) contests etc.

Advertising
Advertising has been defined in various ways e.g.
Advertising is the non-personal communication of information, usually paid for and usually persuasive in nature, about products, services or ideas by identified sponsor, through various media Advertising is a form of communication to call the public's attention to a business, usually for the purpose of selling products or services, through the use of various forms of media, such as print or broadcast notices Paid form of a non-personal message communicated through the various media by industry, business firms, nonprofit organizations, or individuals which is persuasive and informational and is designed to influence the purchasing behavior and/or thought patterns of the audience.

Advertising.2
Wikipedia defines advertising as a form of communication for marketing and used to encourage, persuade, or manipulate an audience (viewers, readers or listeners; sometimes a specific group) to continue or take some new action.
Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common. This definition also draws attention to the fact the advertising is meant to address a plural audience and is not one to one (personal) communication Even in direct marketing the same message is sent to many persons through a media such as direct mail, e-mail etc. Advertising is paid communication (the media carrying it charges the advertiser for its service)

Advertising.3
Advertising is thus a one way from of communication in which, the communicating party (advertiser) utilizes some media to convey a commercial message to a passive audience The message seeks a commercial response (usually a purchase) either immediately or within a short period of time. It solicits the audience members (buyers) to take action and purchase the goods The word advertising is derived from Latin words ad vertere which means to turn toward. Advertising is thus considered to be a communication which turns the recipients attention or interest towards what the advertiser is communicating

History of advertising
Advertising has been around since historical times in different forms Most probably the oldest from of advertising seems to be out of home advertising
Outdoor wall paintings have been traced back up to 4000 BCE in India Advertisement on Papyrus have been found in ancient Egypt, Greece etc (Egyptians used it to make sales messages and wall posters) It has been found on the walls of ancient buildings in Pompeii and Arabia

In the middle ages merchants put up signs displaying a picture of what they sold (e.g. a shoe to represent a shoe seller) and used town criers to shout out a message to the public about their location (this was needed as most people could not read)

History of advertising.2
Thomas J. Barratt from London has been called "the father of modern advertising in the 19th. Century Working for the Pears Soap company, Barratt created an effective advertising campaign for the company products, which involved the use of:
Targeted slogans, images and phrases. One of his slogans, "Good morning. Have you used Pears' soap?" was famous in its day and well into the 20th century. Under Barratt's guidance, Pears Soap apparently became the world's first legally registered brand and is therefore probably the world's oldest continuously existing brand. (unlike Chyawanprash which is now not a generic product)

History of advertising.3
Barratt is credited with many of the crucial ideas that lie behind successful advertising and these were widely circulated in his day.
He constantly stressed the importance of a strong and exclusive brand image for Pears and of emphasizing the product's availability through saturation campaigns. He also understood the importance of constantly reevaluating the market for changing tastes and mores, stating in 1907 that "tastes change, fashions change, and the advertiser has to change with them. An idea that was effective a generation ago would fall flat, stale, and unprofitable if presented to the public today. Not that the idea of today is always better than the older idea, but it is different - it hits the present taste.

As the economy expanded across the world during the 19th century, advertising grew alongside.
In the United States, the success of this advertising format eventually led to the growth of mail-order advertising

History of advertising.4
In June 1836, French newspaper La Presse was the first to include paid advertising in its pages, allowing it to lower its price, extend its readership and increase its profitability and the formula was soon copied by all titles. Around 1840, Volney B. Palmer established the roots of the modern day advertising agency in Philadelphia. (By some accounts the first agency William Taylor started in 1786 in UK, but it also did not create ads)
In 1842 Palmer bought large amounts of space in various newspapers at a discounted rate then resold the space at higher rates to advertisers. The actual ad the copy, layout, and artwork was still prepared by the company wishing to advertise; in effect, Palmer was a space broker.

The situation changed in the second half of the 19th. century when the advertising agency of N.W. Ayer & Son was founded in 1869 in Philadelphia in the US. Ayer and Son offered to plan, create, and execute complete advertising campaigns for its customers. Before the end of the century itself, the advertising agency had become the focal point of creative planning, and advertising was firmly established as a profession

History of advertising.5
In the early 20th. Century, advertising increased dramatically in the United States as industrialization expanded the supply of manufactured products. In order to profit from this higher rate of production, industry needed to recruit workers as consumers of factory products. It did so through the invention of mass marketing designed to influence the population's economic behavior on a larger scale. In the 1910s and 1920s, advertisers in the U.S. adopted the doctrine that human instincts could be targeted and harnessed "sublimated" into the desire to purchase commodities The tobacco industry was one of the firsts to make use of mass production. The tobacco companies pioneered the new advertising techniques to create positive associations with tobacco smoking to be able to sell the increased produce The advertising industry was also became one of the first to offer women employment (as women do purchasing, their insights helped)

History of advertising.6
Over time new media became available in the 20th century, beginning with the Radio in 1920s Television became available in the 1950s. Between 1960 to about the early 1990s is the golden period of mass media advertising when few channels across the nation enabled advertisers to cover most of the target audience Two developments have completely disturbed this model
Growth of local (FM) radio stations and introduction of cable TV, which has lead to a dramatic increase in number of channels available, thus splitting the audience into smaller and smaller fragments Growth of internet which permits interactive communication as well as one on one communication Broadcast has become narrow cast or individual messaging

The Purpose of Advertising

The overall purpose of advertising is the same as that of promotion in general which is to
Communicate information to customers about a product, service or idea (offering) being advertised to target customers Persuade them to choose the same over competitive offerings (as the one which provides the maximum benefits, satisfaction etc) Differentiating the advertisers product or brand from those of all others

However the task of individual advertisements or campaigns and hence their purpose can differ depending on the situation in the marketplace and of the company itself

The purpose of advertising.2

The objectives of advertising can include:
Making customers aware of a product or service; Convincing customers that the company's product or service is right for their needs Creating a desire for a product or service; Enhance the image of the advertising company; Announcing development or availability of new products or services;

The purpose of advertising.3

Reinforcing sales-persons messages Make customers take the next step (ask for more information, request a sample, place an order, and so on); and Drawing customers to the companys business. Negating a competitors claims etc Educating the public about some social or other issue Even prompting immediate sales by including a coupon offering a discount Etc

The purpose of advertising.4

The actual objectives of a particular advertising campaign should be decided during the development of the business and marketing plan The advertiser may want to obtain
A certain percentage of growth in sales, Generate more inquiries for sales Build in-store traffic.

The desired result can simply be increasing name recognition or modifying the image projected Objectives vary depending on the industry and market the business is in e.g.
In FMCG industry advertising has greater role than say B2B industry because of the large number of consumer who are easier to reach through media based communication than personally and vice-versa

The purpose of advertising.5

All products and businesses go through three stages, with different advertising goals for each one.
The start-up business: When a company is new in the market and needs to establish its identity. The company needs high levels of promotion and publicity to grab consumers' attention. The growing business: Once the identity is established, a company need to differentiate itself from the competition and convince buyers that it provides the best service or product to try. The established business: The purpose at this point is to remind consumers why they should continue buying from the company

The advertising industry

The advertising industry is fairly large industry internationally It size is estimated to be around US $ 467 billion globally in 2011
US accounted for $ 142.5 billion or 30.5% of the total global ad spend In US advertising industry account for 24% of GDP

Internationally, the largest ("big four") advertising conglomerates are Interpublic, Omnicom, Publicis, and WPP. Recently Omnicom + Publicis have announced a merger. It will have a revenue of US $ 22.7 billion )

The advertising industry in India

In India the media advertising spend was estimated to be estimated to be Rs. 327.4 billion (Rs. 32,740 crore) in 2012
This is equivalent to US $ 5 billion approx. The media advertising spend grew by 9% over previous year

It continues to be dominated by the print media which accounts for Rs. 150 billion (or 45.8%) followed by TV These figures exclude expenditure on promotion and POP advertising etc.

The advertising industry in India.2

Industry estimates show that India's online advertising market is likely to touch Rs 2,938 crore by 2014. The online advertising market, which includes search, display, mobile, social media, email and video advertising has grown by 29 per cent year-on-year to Rs 2,260 crore by March, 2013. It was valued at Rs 1,750 crore in March, 2012. The online advertising market on an average is expected to grow by 40% annually for four years

The advertising industry in India.3

Search and display advertising formed a large portion of overall online advertising in 2011-2012. Its percentage share however, declined somewhat in 20122013, owing to the rise in the mobile, social media and video advertising. The spends on mobile advertising doubled from Rs 115 crore in 2011-12 to Rs 230 crore in 2012-13.
Advertisements on mobile phones and tablets grew from a 7% share in FY 2011-2012 to 10% of the Indian online ad market in FY 2012-2013, totalling to spends of around Rs 230 crore.

Social media, email and video advertising constitute 13% (Rs 300 crore), 3% (Rs 68 crore) and 7% (Rs 150 crore) of the online advertising market, respectively.

Players in the Advertising Industry

The players in advertising industry can be broadly divided into three classes
The advertisers organizations which wish to communicate with a target audience and therefore need to carry out an advertising campaign.
They offer products, services or ideas to their customers They set the objectives of the campaign, decide the budget and have a final say on its execution

Media owners who provide content for information, education and entertainment of their respective audiences
Media owners intersperse advertisements within the editorial content, thereby providing advertisers a captive audience Media owners charge the advertisers money for providing this captive audience Usually the major share of expenditure spent on advertising campaigns goes to media owners

Players in the Advertising Industry

Advertising agencies who help the advertiser plan, create, and execute the campaign. Advertising agencies have the following main roles
Creative role: Developing creative ideas to develop memorable and effective campaigns These need to be based on the clients (advertisers) brief and must ensure that campaign objective is met
A single advertising campaign may need to be executed in variety of media vehicles as well as in many languages The agency has to make sure that the idea can be executed across multiple media It must also ensure the creative idea travels equally well across different languages

Players in the Advertising Industry

Media planning role: Prepare media plans using a mix of media vehicles e.g.
TV, press, radio, cinema, OOH etc as necessary Ensure highest possible reach and frequency of advertising at the target audience members within budget constraints

Media buying role: Negotiate with media owners on behalf of clients to get the lowest possible rate for placing advertisements Account planning role: [a more internal to agency role the primary function is to find consumer truth and insight (through research if needed)]
The objective is to help the creative teams, create work that is not only entertaining and highly memorable, but which is relevant to the consumer and effective in the marketplace Good account planning is useful to client in terms of providing consumer insights

Types of advertising agencies

In a huge industry (over $ 5 billion even in India) a wide variety of agency types co-exist in the market
Full service agencies: These agencies fulfill all the main roles that an agency can provide to a client
They provide creative, media planning, media buying and account planning services under one roof

Specialist agencies: These are of two/three types

Those which specialize in a particular role - creative shops or media agencies Those which provide specialized knowhow on dealing with or using particular media (e.g. online advertising) Specialize in a particular industry (financial advertising)

Types of advertising agencies.2

Specialized agencies often create alliances to be able to offer a client every type of service as needed from time to time. Clients (particularly large ones) also tend to use more than one agency
This helps them get different ideas from different sources It also ensures that competing brands in their own brand portfolio get undivided attention