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ADVERTISING AND

PROMOTIONAL STRATEGIES

WEEK 1:-
ADVERTISING:-

DEFINITION: It is the paid form of


non-personal communication of
information about product or ideas by
an identified sponsor through the
mass media in an effort to persuade
or influence behavior.
 Advertising communicate information about
products or ideas.

 The Advertiser, Advertising Agencies, Media.

 Its words and images reflect the present


and the past.

 Advertising is purely an economic activity


with one purpose to sell.

 Advertising creates, “magic in the market


place”.
 PUBLICITY:-

 DEFINITION: Publicity is any


promotional communication
about an organization or the
products that is presented by the
media but is not paid for by the
organization.
 CHANNELS OF PUBLICITY:
 Prepare a story and circulate it to
the media.
 Personal communication with a
group.
 One-on-One personal
communication, (lobby).
SPECIFIC OBJECTIVES OF ADVERTISING:
 Support personal selling.

 Reach people inaccessible to the sales force.

 Improve dealer relation.

 Enter a new geographic market or attract a

new market segment.


 Introduce a new product.

 Expand industry sales contract substitution.

 Build goodwill for the company.


TYPES OF ADVERTISING:-
By target audience:
Advertising aimed at a specific group of people.

a) Consumer Advertising:
The individual and families who buy goods and
services for personal or family use.

b) Business Advertising:
Directs messages toward people who buy or use
products in business. Most business advertising
appears in business or professional publications or in
direct mail.

The four distinctive classifications.


Industry Advertising:
Targets people who buy or use the
materials and services needed to conduct
business or to manufacture other products.

Trade Advertising:-
Targets intermediaries that buy goods for
resale to customers.

Professional Advertising:-
It is directed toward
licensed professional practitioners E.g.
Doctor, Lawyers etc.

Agricultural Advertising:-
It is used to sell products such
as tractors and insecticides.
By Geographic Area:

International Advertising:-
When organization crosses
national boundaries to advertise in more
than one country.

National Advertising:-
When an organization advertise in
more than one region of a single country.

Regional Advertising:-
Advertising in a specific region
without covering the entire country.

Local Advertising:-
Advertising only in a city.
By Media:

Newspaper, magazine, radio,


television, outdoor and transit.
The Advertising Department:-

 The advertising manager as a head.


 The centralized advertising department.
 One group plans, controls and coordinates
all advertising efforts.
 Cost effective.
 The Decentralized advertising deptt: MNC’s.
 Each division has its own advertising deptt:
 Organizations assign each product or brand
to a brand manager.
 Category manager division manager.
FUNCTIONS OF ADVERTISING:
1. To differentiate products from

their competitors.
2. To communicate product
information.
3. To urge product use.

4. To expand product distribution.

5. To increase bond preference

and loyalty.
6. To reduce overall sales costs.
THE MARKETING MIX:-

 PRODUCT: The most essential element in the


marketing mix is the product. Much more
than a collection of features, the product is a
“bundle of value” that meets customer
expectations.

 BRAND: A name, a word, a phrase, a symbol, or a


combination of these elements.
 BRAND NAME: It is the portion of a brand that can
be expressed verbally (including letters, words, or
numbers), and
 BRAND MARK: It is the portion of a brand that
cannot be expressed verbally (including graphic
designs or symbols).
Payment Receive In Commodity
Exchange

PRICE:
Price is the value, usually in
monetary terms, that seller ask
for their products.
DISTRIBUTION:
The process of moving products
from the producer to the
customer is distribution.
Managing product transportation
and storage, processing orders,
and keeping track of inventory
are also distribution activities.
PROMOTION:
Promotion covers the variety of
techniques used to communicate
with customers and potential
customers and this is where
advertising comes in.

PUBLIC RELATIONS:
It is the relationship between a
business and the media, including
press conferences.
COMMUNICATION PHASES IN ADVERTISING:

 Phase 1. Awareness. Make sure your audience is aware of


your products.

 Phase 2. Comprehension. In your marketing


communication, make sure that potential customers
understand your products features and benefits.

 Phase 3. Acceptance. Prospective customers must decide


whether your product can meet their needs.

 Phase 4. Preference. Buyers choose a favorite among the


products they believe meet their needs.

 Phase 5. Ownership. The element of your advertising


known as the call to action motivates people to actually
buy your product or to vote for your candidate.

 Phase 6. Reinforcement. Use advertising to bolster your


customers’ sense of satisfaction about the action or
purchase.
ORGANIZING THE ADVERTISING DEPARTMENT:

The head of the advertising department is the


advertising manager (or the advertising director),
who reports to the advertiser’s marketing manager
(or the marketing director).

In a centralized advertising department, one group


plans, controls, and coordinates all advertising
efforts.

A decentralized advertising department for each division


or business.

Many organizations assign each product or brand to a


brand manager, who is responsible for sales and
profits and for supervision of advertising as well as
other functions (with the help of one or more
assistant brand managers). In some corporations,
such as Procter & Gamble, the brand manager reports
to a category manager. In turn, the category manager
reports to a division manager.
FUNCTIONS OF THE ADVERTISING
MANAGER:

Planning and budgeting


advertisement.
Creating and producing ads.
Handling administration.
Coordinating advertising efforts.
THE ADVERTISING AGENCY: The invisible partner.

Advertising agencies play a key but invisible role in


the advertising process by translating the
advertisers’ goals—for higher scales, more votes, or
more donations—into creative messages that are
placed with the media to reach the target audience.
Independent agencies serve a variety of advertisers
and see a wide range of marketing problems, so they
build a storehouse of knowledge, experiences and
ideas they can use to help all their clients.

Advertising agencies, like advertisers, come in all


shapes and sizes. The majorities are small agencies
employing a handful of specialists, and many stay
small by using free-lancers and suppliers as needed.
Organizing an Advertising Agency by Function:

CHIEF
EXECUTIVE
OFFICIER

Marketing
Creative Agency
Account Services
Services Research Managemen
Managemen
Copy Creative t
t Art services Human
Client Production Account resources
services Finance and
traffic planning accounting
media
Organizing an Advertising
Agency by groups:
Chief
Executive
officer

Client
Client Client Client
Group 2
Group 1 Group 3 Group 3

Account Creative Media Research


Management Services Services Services
How agencies are structured:

If you were to diagram the structured of a typical


full-service advertising agency, you would find the
four basic functions mentioned earlier: account
management, creative services, marketing services
and agency management. People in smaller agencies
may share the work of two or even three of these
functions, and when staff members don’t have the
time or expertise to tackle a specific function, an
agency may contract with outside suppliers or
temporarily hire free-lancers.

Some agencies prefer to formalize the group system


by using group assignments as the basis for all or
part of the agency’s official structure. Such an
agency defines its structure as a series of formal,
relatively self-contained groups.
What various agencies offer?
Full Service Agencies:
A full-service advertising agency is
capable of providing all the services
necessary to develop, create, and
execute advertising for its clients.
Full-service agencies may develop
particular specialties, but their main
focus is on advertisers that want to
sell to consumers.
Limited-Service Agencies:

A limited-service advertising agency concentrates on


selected advertising services. This lets an advertiser
buy the services it needs on an “a’ la carte” basis,
mixing and matching the services of several
agencies.

Specialized Agencies:

Business-to-business, medical, and ethnic agencies


are examples of specialized advertising agencies,
firms that focus on specific markets. Specialized
agencies know their markets needs and jargon, so
they can create appropriate messages and select the
right media for their clients. These agencies
generally perform all the functions of a full-service
agency, but only in their specialized field.
Revenue of Advertising
Agencies
How agencies are paid:

Advertising agencies made money in


one simple, straightforward way: by
selling space for the media. Today,
much of the agency’s billings, or total
revenues, still come from media
commissions, but agencies also
receive revenues from their clients in
the form of fees, markups, and
incentive-based compensation.
Media commissions
A commission is a payment from a media firm
(such as a newspaper or radio station) to an
agency that purchases advertising space or
time for its clients. At the turn of the
century, the commission ranged from 10 to
25 percent of the price paid for the
advertising space.

Most media still offer 15 percent, but when


agencies sell ads for outdoor media (such as
billboards) and transit media (such as
buses), these media sometimes offer 162/3
percent
Markups
As they prepare an ad, agencies often
buy services from outside suppliers
such as photographers and video
product houses. These suppliers don’t
normally offer an agency commission;
instead, the agency adds a markup,
an additional percentage, to the
supplier’s bill when it’s presented to
the client. The typical markup is 17.65
percent, a figure that sounds odd until
you look at what it does.
Fees
Two types of arrangements are
common: a fee-commission
combination and a retainer system.
This involves charging a separate fee
for service such as developing
advertising strategy or for services
not directly related to commissionable
media, such as public relations. The
fee may be based on the hourly rate
of the agency specialist providing the
service.
Incentive-Based Compensation
It is also known as performance-
based compensation, which
rewards an agency according to
the results its advertising
achieves for the client. The
theory behind incentive-based
compensation is simple: if the
advertising is effective, the
agency will receive more money
THE CLIENTELE SYSTEM OF
ADVERTISING AGENCY
If your agency wants to expand its business
and profits, you will work hard to keep
current clients happy and to increase the
amount of business they do with you, but
you will also pursue new clients. Direct mail,
telephone contact, and advertising are other
ways you can solicit new business. You may
also get leads for new clients as a result of
referrals from your current clients.
Surprisingly, few agencies use advertising to
attract clients and other seek new business
by periodically advertising in major
newspapers and business magazines to
attract the attention of prospective clients.
INTEGRATED MARKETING
COMMUNICATION
THE ROLE OF ADVERTISEMENT WITH IN THE MARKETING
PROGRAM:-
1. PRODUCT OR SERVICES.

2. A DISTRIBUTION NETWORK.

3. PRICING STRATEGIES. Types, skimming, penetration,


statico, associate adv. With prestige person.
4. Marketing plan should be based on specific problem or
opportunity uncovered.
5. Prestige product, adv. Reinforce the identity of high quality
and prestige.
6. Associating the product with prestigious people.

7. Low priced products, the job of advertising may be to


stress the price differentials.
8. If door-to-door selling is employed.

9. Advertising may be used only to introduce the sale person.

10. Push or pull strategies.


THE ROLE OF ADVERTISING
WITH IN THE COMMUNICATION
MIX
 Advertising as part of
communication mix.
 Advertising is a much cheaper
way to reach target consumer.
 Advertising can use complex
visuals and emotional devices.
 Advertising creates awareness of
brands.
DEVELOPING MEDIA
OBJECTIVES
Whether you are launching a new
product, introducing a product in a
new market, repositioning a product,
or fending off new competitors,
specific measurable objectives guide
your media decision, provide a focus
for coordinating your advertising
activities, and offer a clear standard
for measuring performance after the
ad campaign has run.
REACHING THE TARGET
AUDIENCE
 The starting point is a look at your
marketing and advertising plans, which
always include a description of your target
market. Target audience profile are
generally developed using demographic,
psychographic, and product-usage
descriptions, including age, education,
income, occupation, lifestyle, and brand
preference.

Media planners use research to uncover


those media vehicles that reach their target
audiences.
DISTRIBUTING THE MESSAGE
Next step is to set objectives for
where, when, and how often you
want to distribute your message
to that audience.
REACH VERSUS FREQUENCY
Reach is a measure of how many
different members or percentage
of the target audience are
exposed at least once in a given
period to a particular media
vehicle.
FREQUENCY
 It measures the number of times people in
the target audience are exposed to a media
vehicle during a given period.

The effective frequency, the number of
times a target audience must be exposed to
a particular ad in a given medium to
communicate the message and simulate
action.

The effective reach, the number or
percentage of the members in the target
audience exposed to your ad some minimum
number of times.
MESSAGE WEIGHT
Message weight is the size of the combined target
audiences reached by the media vehicles in a single
media plan.

Gross impressions are the sum of all possible target


audience exposures to the vehicles in a media plan.

GROSS RATING POINTS (GRPs), which are the sum of


the ratings of all programs in the television schedule;
in the context of one media plan. GRPs measure the
total target audience exposed to all the vehicles in
the plan. One percent of the target audience is
equivalent to one rating point.
DEVELOPING MEDIA STRATEGY
Media strategy describes the course of
action you plant to follow to achieve your
media objectives, including the media and
the individual vehicles you will use to
deliver your messages. The decisions you
make as you develop media strategy
revolve around four broad areas:
1. Determining geographic scope.
2. Scheduling the message.
3. Selecting the media.
4. Calculating cost efficiency.
DETERMINING GEOGRAPHIC
SCOPE
Where should you advertise? Your
marketing and advertising plans can
help you choose which areas are most
important, one consideration is
product availability because a product
that sells well in one market may not
sell as well in another, be sure to
analyze the product’s relative sales
strength in various geographic areas.
By comparing each market under
consideration, you can pinpoint the
markets that offer an opportunity for
higher return.
BRAND DEVELOPMENT INDEX
The brand development index
(BDI) is a ratio that measures
the relative sales strength of a
given brand in a specific area.
The formula for calculating the
BDI is
BDI= Percentage of brand’s total sales in the market x 100
Percentage of total population in the market
CATEGORY DEVELOPMENT
INDEX
The category development index
(CDI) expresses the sales
potential of a particular product
category in a specific market.

CDI=Percentage of product category total sales in the market X 100


Percentage of total population in the market

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