Advertising Management

By

Dr. G.MURUGANANTHAM.(MBA, M.Phil, UGC-NET, Ph.D)

Assistant professorDepartment of Management Studies

National Institute of Technology (NIT) - Tiruchirappalli.

MB 840 - Advertising Management

Objectives

To provide an understanding of the basic principles of campaign planning and execution.

To develop a managerial perspective and an informed decision-marking ability to handle promotional situations.

Advertising Management

Unit 1 Introduction

Concept and definition of advertisement - Importance - Objectives - Communication mix - Advertising and Publicity - Classification of advertising - Social and Economic Implications of Advertisements - Benefits of advertising.

 

Unit 2 Campaign Planning

Perspectives on Consumer Behaviour - Formation and Modification of Consumer Attitudes - Consumer memory - Creative strategy - Advertising Design - Appeals - Advertisement copy - visual elements, layout, story boarding - Message design - Celebrity Endorsement.

Unit 3 Media Planning

Advertising Media mix - Media strategy - Media planning and selection - Factors influencing selection –Scheduling - Word of Mouth Communication.

Advertising ManagementUnit 4 Advertising Budget

Advertising budget - process and methods - Evaluation of advertising Effectiveness - Pre and Post Testing - Advertisement Liking.

Unit 5 Advertising Agency

Ad agency - Functions and structure - Client Agency Relationship - Cultural and Ethical Concerns in Advertising - Integrated marketing communications -Recent Trends and Relevant case studies.

Text Books:S. A. Chunawalla and K. C. Sethia, Foundations of Advertising Theory and Practice, Himalaya Publishing, New Delhi.

Jaishri Jethwaney and Shruti Jain, Advertising Management, Oxford University Press, New Delhi.

Belch E. George and Belch A. Michael, Advertising and Promotion, Tata Mc Graw Hill, New Delhi.

S.H.H.Kazmi, Satish K Batra, Advertising and Sales Promotion, Excel Books, New Delhi, 2001.

Rajeev Batra, John G. Myers and David A Aaker, Advertising Management, Prentice Hall, New Delhi.

 

Marketing

“Process of finding customer needs and serving those needs profitably”

Marketing Mix

• Product• Price• Place• Promotion

Communication / Promotional Mix Elements

• Advertising

• Personal selling -Industrial Market, High Perceived risk of purchase, customer knowledge level is low.

• Sales Promotion - Incentive to consumer or trade to stimulate purchase.

Communication Mix

• Public Relations and Publicity - Establishing goodwill and mutual understanding between org and its publics.

Publicity - communication about a product or organization in the media, without paying for time and space directly.

(Conduct publicity campaigns - around some topic of current importance to the public, like environmental issues, health, social welfare etc or by sponsoring some newsworthy events).

•  PR is basically management of reputation.

• Direct Marketing - accurate data base – use of various modes like Direct Mails, Telemarketing, etc - without intermediaries.

Advertising

• Padamsee, the ex-CEO of Lintas says: “When a man wears trouser-shirt ensemble instead of a dhoti, he is advertising he is westernised.

• Even a women wears a lipstick; she is advertising that she wants to look beautiful. When a neta delivers a speech, he is advertising that he wants to be noticed. Ads are parts of human nature to be noticed. Colours of Flowers.

• Advertising has evolved since the industrial revolution as a toll of marketing communication. It is an art as well as science. It is a career for many. It is rapidly getting professionalised.

• Advertising is only one element of the promotion mix-but it often takes special prominence in the overall marketing mix.

Advertising - defined

Advertising originates from a Latin word - Advertire - “ to turn to”

= Announce Publicly

John Kennedy (1905) Copywriter- “Salesmanship in Print”

Sidney Bernstein (1990) - Advertising as a substitute for the human salesman.

Advertising Age – July 1932…..

“The dissemination of information concerning an idea, service or product to compel action in accordance with the intent of the advertiser”

AMA-1963, Proposed the following definition….

“Any paid form of non-personal presentation by an identified sponsor”.

(It may be a sign, a symbol, an illustration an ad message in a magazine or newspaper, commercial on the radio or on television, a circular despatched through the mail or a pamphlet handed out at a street corner; a sketch or a message on a billboard or a poster).

Advertising…Historical Review

Pre industrial Age

Signs often used as symbols.

1440s Johannes Gutenberg invented printing press in Germany.

Most important – history of Ad.

1472 - First print ad in English tacked on London church doors to promote Bible.

1729 - Benjamin Franklin - Father of advertising art made ads more readable by using large headlines and considerable white space.

Advertising…Historical Review…Cont…

The Industrial age:

1841- Palmer becomes advertising agent – charge commission on ads

1869-Francis w. Ayer founds ad agency bearing his father name

N.W.Ayer & Sons - First full service agency - to charge commission – net cost space.

1839-Photography introduced-credibility and new world of creativity.

1888- Printers ink is the first U.S Publication for ad profession

1900 – psychologist study the attention getting and persuasive qualities of ad

- Northwestern University – course in ad discipline.

1914- ABC (Audit Bureau of Circulation) by group of advertisers, agencies and publishers – which conducts its own audits and issues its own report of circulation.

1922 – first radio ad

Advertising…Historical Review Cont…

Advertising in world war Used as an instrument of direct social action. Agencies sold patriotic sentiments. After the war, to promote peace time projects.

1940s introduction of TV becomes a new medium.

1950s due to creative revolution ads focused on product features.

Leo Burnett, David Ogilvy started their agencies.

Rosser Reeves of the Ted Bates Agency – USP (Unique Selling Proposition)

Ad must point out the USP - features that differentiate it from competitors

(Q, Variety, Convenience, Effectiveness, etc)

Advertising…Historical Review Cont…

Market segmentation – Unique group of people.

Agencies emphasis shifted from product features to brand image or personality

1970S Jack Trout and Al Ries…Brand Positioning.

How to consumer perceive the brand, how they rank it with competitor brands.

Becomes more effective way to use product differentiation and market segmentation.

1973s Demarketing – Oil Shortage.

1990s marketers shifted their focus ad to sales promotion.

1994 IMC

2000 Internet becomes the new ad medium

You tube, social media, blogs, SMS,,,,etc.

Importance of advertising

LPG - Era, Competition,

Competition, growing marketing expenses, product failures, emergence of new electronic media has given an impetus to advertising activity.

Advertising is important for the customers.Advertising is important for the seller and companies producing the products.Advertising is important for the society.

Advertising is telling and selling. Though advertising is but one of the several functions of marketing, it has almost reached the status of an independent discipline.Popularisation of a product is the basic aim of the advertising activity.

Most advertised brand… Perception.

What makes Advertising Unique

• First and Foremost - communication - consumers.

• For creating Brand awareness, Familiarity and image. For reinforcing Prior purchase Decisions.

To business, Non business Enterprise.

 

Characteristics of Good advertising

1. Should be of interest to the audience.

2. The audience should interpret the message in the intended manner.

3. Should also influence the audience.

Keep Message Simple and Short- Jack Trout

• People resist what is confusing. They cherish what is simple.

• The best way to enter minds that hate complexity and confusion is to oversimplify your message.

• Some of the most powerful marketing communications focus on a single word (Crest: Cavities; Volvo: Safety, )

An Award Winning Ad copy

Here is the ad released by Kerala tourism commemorating -The Hindu’s 125th Anniversary.

 

“We congratulate THE HINDU for being

a Christian, a Muslim, a Parsi, a Sikh, a Buddhist and a Jain for the last 125 years”

 

• This award won a finalist certificate in the ‘best copywriting’ category at the New York Festivals’ Design, print and outdoor Awards 2005.

• “The thought was very simple, the message became powerful. The advertiser wanted the emphasis to be on communal harmony, and the ad served the purpose.

Objectives of Advertising

(To the firm, Channel and consumer)

• To stimulate demand or sales amongst present formers and future customers.

• To develop and protect an image.

• To retain the loyalty of present and former consumers( reassure the buyers that they have made the best purchase)

• To build dealers and consumer confidence.

• Enjoyable entertainment and educational aspects of contemporary life.

• Advertising - role it has to play in value building and value delivery, which is the central task in marketing.

Relationship between advertising Objectives and PLC

To Inform• -Telling the market about a new product • -suggesting new uses for a product• -informing the market of a price change• -explaining how the product works• -Describing available services• -Correcting false impressions• -Reducing buyers fears• -building a company imageTo persuade• -Building brand preference • -encouraging switching of the brand• -Changing buyer’s perception of the product attributes• -Persuading buyers to purchase now• -persuading buyers to receive a sales callTo Remind• -reminding buyer that the product may be needed in the near future• -reminding buyers where to buy it• -keeping it in buyers minds during off seasons• -Maintaining its top-of-mind awareness.

Advertising objectives

Advertising objectives can be set around four broad themes:

1. Awareness – creating awareness of new products/ brands and new ideas

2. Attitude – attitude change and attitude measurement

3. The behavioural constructs- generating trail purchase and store visits

4. Product positioning and brand building.

AIDA ModelA - GetI - HoldD - ArouseA - Obtain

DAGMAR• DAGMAR was put forward by Russell H. Colley in his book titled, Defining

Advertising Goals for Measured Advertising Results. The DAGMAR corresponds to the abbreviation of the title.

• According to DAGMAR, advertising has to perform a specific communication task; the task has to be accomplished among a well-defined audience, within a specified time period. The most important feature of DAGMAR is that it looked at advertising as performing a communication task rather than a sales task.

• To establish an explicit link between ad goals and ad results.

• Colley distinguished 52 advertising goals that might be used with respect to a single advertisement, a year’s campaign for a product or a company’s entire advertising philosophy. These goals may pertain to sales, image, attitude and awareness.

• Make the brand identity known and easily recognizable. Provide information about the brand

• According to DAGMR approach, the communication task of the brand is to gain

a. Awareness b. Comprehension c. Conviction d. image and e. action.

• DAGMAR is a planning and control tool. It may guide the creation of advertising.

Role of Advertising

• Common sense is about ‘reading the lines’ then insight is about ‘reading between the lines’.

• Among all the marketing mix elements, advertising is probably the most critical link between the marketer and the consumer in the today’s world.

• Its ability to transform products into brands in consumer minds is vital for creating and sustaining a relationship with them.

• Effective advertising is therefore almost a necessary condition for any marketing effort to succeed in today’s competitive world.

• The ultimate driving force behind the need to advertise, whether it is the natural world or the commercial world, is the universal law of survival of the fittest.

• Social implication:

• Educating the consumer.• Reflection cultural -values. • Social cause ad- discontinunace of smoking, family planning.• Advertising and standard of living (an index of the products used by

people in their day-to-day life).• Advertising stimulates the desire for better things in life.

Economic Implications:

• Economic Prosperity -Demand.• Overall economy of the country will increase.• Ad expenditure increases the cost of the product.• Advertising cost is a cost of competition.

Benefits of Advertising

– Ads establishes a link between the manufacturer and the consumer.

– Ads makes it possible for the manufacturer to introduce new ideas and new

products.

– Ads keeps the consumers well informed about the products & services.

– It keeps the consumers conversant with the use of the products.

– It expands markets, builds up volumes, gives a market share & profitability.

– It makes adoption process smooth.

– It builds up corporate identity.

– Ads became one of the essential ingredient of business.

– Ads guides the consumers in his product choices.

– Ads at times describes a product, at times narrates a story or an experience, at times

educates a consumer.

– It is a time saver for the consumer.

– Ads contributes to consumer welfare.

Consumer Behavior Reflects:

The totality of about the of an offering by decision making over time

decisions consumption unitsWhether

WhatWhy

HowWhenWhere

How much/How often/How Long

Acquisition

Usage

Disposition

Products

Services

Time

Ideas

Information gatherer

Influencer

Decider

Purchaser

User

Hours

Days

Weeks

Months

Years

Marketing strategies and Tactics

Consumer Behaviuor is influenced by

Four factors

1. Personal- Age, occupation, Economic, lifestyle, personality, self concept- (How one views about himself)

2. Psychological (Motivation, learning, belief, attitudes) Learning-change in individual behaviour arising from experience Belief-Descriptive thought that a person holds about something Attitude- persons favourable or unfavourable evaluation or feeling towards

some object or idea.

3. Cultural Factors

4. Social factors ( Family, reference group, social roles, status)

• In general there are three ways of analysing consumer buying decisions. They are:

• Economic models - These models are based on the assumptions of rationality-The consumer is seen to maximize their utility.

• Psychological models - These models concentrate on psychological and cognitive processes such as motivation and need recognition - build on sociological factors like cultural influences and family influences.

• Consumer behaviour models - These are practical models used by marketers. They typically blend both economic and psychological models.

http://en.wikipedia.org/wiki/Buyer_decision_processes

Black box model

The black box model shows the interaction of stimuli, consumer characteristics, decision process and consumer responses.

The black box model is related to the black box theory of behaviourism, where the focus is not set on the processes inside a consumer, but the relation between the stimuli and the response of the consumer.

The marketing stimuli are planned and processed by the companies, whereas the environmental stimuli are given by social factors, based on the economical, political and cultural circumstances of a society.

The buyers black box contains the buyer characteristics and the decision process, which determines the buyers response.

ENVIRONMENTAL FACTORS BUYER'S BLACK BOXBUYER'S

RESPONSEMarketing Stimuli

Environmental Stimuli

Buyer Characteristics

Decision Process

ProductPricePlacePromotion

EconomicTechnologicalPoliticalCulturalDemographicNatural

AttitudesMotivationPerceptionsPersonalityLifestyleKnowledge

Problem recognitionInformation searchAlternative evaluationPurchase decisionPost-purchase behaviour

Product choiceBrand choiceDealer choicePurchase timingPurchase amount

The black box model considers the buyers response as a result of a conscious, rational decision process, in which it is assumed that the buyer has recognized the problem. However, in reality many decisions are not made in awareness of a determined problem by the consumer.

Consumers mind and thought process is treated like a black box which can’t be opened to find out its working.

Characteristics of the Indian Consumer Behavior

Dressing styles, eating habits, festivals, religious rites and rituals are different in different Indian states

The Indian consumers are noted for the high degree of value orientation and family orientation.

Festivals buying behaviour. Want to enjoy shopping. Affinity towards foreign Labels/Brands. Movies, Cricket. Children are precious. Chinese products – Price. Gold Jewellery – Covering. Duplicate Products. Bargaining. Diabetic Product category. Apart from psychology and economics, the role of history and tradition in shaping the

Indian consumer behavior is quite unique. Perhaps, only in India, one sees traditional products along side modern products. For example, hair oils and tooth powder existing with shampoos and toothpaste.

25: 7

Methods of Understanding the Customer Questionnaire – Level of satisfaction survey In-depth Interview Salesperson input Association test-An individual is asked to respond with the first thing that comes

to mind when she or he is presented with a stimulus( a word, picture, ad) Items in retails space. Observation. Retailer input. Modern retail outlets – CCTV. Consultant.

• Focus group.

People meter and laser meter……for TRP Calculation Circulation in the case of Newspaper and Magazine

TV Viewershi

p

• Psychoanalytic Theory pioneered by Sigmund Freud (work dealt with the structure and development of personality).

• He also studied underlying motivations for human behavior. - Deeply rooted motives that may underlie purchase decisions.

• Purchase decisions are the result of a long, detailed process that may include an extensive information search, brand comparisons and evaluations and other activities.

• Purchase behaviour - Well planned, Routine, Impulse.

Attitude According to Gordon Allport’s classic definition, ‘attitudes are learned

predispositions to respond to an object.

Attitudes are an expression of inner feelings that reflect whether a person is favourable or unfavourable predisposition to some object.

A mental predisposition – favourable or unfavourable, positive or negative towards a person, concept, product, brand, service or an idea.

People have attitude towards almost everything- Religion, Politics, Brands, clothes, companies, music, food, celebrities, product categories or even advertisements.

Importance of attitude• They guide our thoughts (the cognitive function)• Influence our feelings (the affective function)• Affect our behaviour (the connative function)

Attitude formation (1/2)

 Product, Brand, Packaging, Quality, Price, Retail Show room,

Source:

• Credible source

• Attractive source

• Likeable source

• Celebrity source

Message:

• Pleasant pictures

• Music

• Humour

• Appeals. Etc.,

How attitudes are formed? (2/2)

Learned Positive reinforcement (satisfaction from a brand) and hence

repetitive usage of the brand can lead to a favourable attitude formation.

Cognitive learning which is oriented towards problem-solving can also result in positive attitudes -(Surf excel is shown to remove fabric stains).

WoM, The opinion of family and friends can influence.

• Consumer researchers and marketing practioners have been using multi-attribute attitude models to study consumer attitudes.

• M A M – number of attributes that provide the basis on which consumers form their attitudes.

Attitude change strategies

1. Increasing or changing the strength or belief rating of a brand on an important attribute. Ex: The ultimate driving machine-BMW.

2. Changing consumers perceptions of the importance or value of an attribute. Changing the relative importance of a particular attribute.

3. Adding a new attribute to the attitude formation process. Add or emphasize a new attribute that consumers can use in evaluating a brand.

4. Changing perceptions of belief rating for a competing brand. Comparative ad - where marketers compare their brands to competitors on specific product attributes.

Source: Belch and Belch

Human Brain and Marketing

Human Brain• The adult human brain weighs on average about 3 lbs. (1.5 kg).

• It is a hugely complex organ (most complex living structure known in the universe) with an estimated 100 billion neurons passing signals to each other via as many as 1,000 trillion synaptic connections.

• Understanding the relationship between the brain and the mind is a great challenge. It is very difficult to imagine how mental entities such as thoughts and emotions could be implemented by physical entities such as neurons and synapses.

Functions of Brain

• It continuously receives and analyzes sensory information, responding by controlling all bodily actions and functions.

• It is also the centre of higher-order thinking, learning and memory, and gives us the power to think, plan, speak, imagine, dream, reason and experience emotions.

• It controls our muscle movements, the secretions of our glands, and even our breathing and internal temperature.

• Every creative thought, feeling, and plan is developed by our brain. The brain’s neurons record the memory of every event in our lives.

• http://www.innerbody.com/image/nerv02.html• http://www.human-memory.net/brain.html

Memory• Cerebrum - The largest region of the human brain - controls higher

brain functions such as language, logic, reasoning, and creativity.• The brain receives information about the body’s condition and surroundings

from all of the sensory receptors in the body.

• Information in the brain is stored in a few different ways depending on its source and how long it is needed. Brain maintains short-term memory to keep track of the tasks in which the brain is currently engaged.

• Short-term memory is believed to consist of a group of neurons that stimulate each other in a loop to keep data in the brain’s memory. New information replaces the old information in short-term memory within a few seconds or minutes, unless the information gets moved to long-term memory.

• Long-term memory is stored in the brain by the hippocampus. The hippocampus transfers information from short-term memory to memory-storage regions of the brain, particularly in the cerebral cortex of the temporal lobes.

Types of Memory

• Sensory memory holds sensory information for a few seconds or less after an item is perceived. The ability to look at an item, and remember what it looked like with just a second of observation, or memorisation, is an example of sensory memory. It is out of cognitive control and is an automatic response.

• Short-term memory allows recall for a period of several seconds to a minute without rehearsal. Its capacity is also very limited: memory capacity can be increased through a process called chunking. For example, in recalling a ten-digit telephone number, a person could chunk the digits into three groups: (98 651 751 35).

• Long-term memory can store much larger quantities of information for potentially unlimited duration (sometimes a whole life span). Its capacity is immeasurably large.

• For example, given a random seven-digit number we may remember it for only a few seconds before forgetting, suggesting it was stored in our short-term memory. On the other hand, we can remember telephone numbers for many years through repetition; this information is said to be stored in long-term memory.

Memory• But your memory doesn't exist in the way a part of your body exists -- it's not a

"thing" you can touch. It's a concept that refers to the process of remembering.

• It seems that our memory is located not in one particular place in the brain, but is instead a brain-wide process in which several different areas of the brain act in conjunction with one another. 

• Memory is really made up of a group of systems that each play a different role in creating, storing, and recalling memories. When the brain processes information normally, all of these different systems work together perfectly to provide cohesive thought.

• The search for how the brain organizes memories and where those memories are acquired and stored has been a never-ending quest among brain researchers for decades. Dream ???

What is the Maximum Memory Capacity of the Human Brain?

• Paul Reber, professor of psychology at Northwestern University, responded to this question submitted to Scientific American:

• The human brain consists of about one billion neurons. Each neuron forms about 1,000 connections to other neurons, amounting to more than a trillion connections. If each neuron could only help store a single memory, running out of space would be a problem. You might have only a few gigabytes of storage space, similar to the space in an iPod or a USB flash drive.

• Yet neurons combine so that each one helps with many memories at a time, exponentially increasing the brain’s memory storage capacity to something closer to around 2.5 petabytes (or a million gigabytes).

• For comparison, if your brain worked like a digital video recorder in a television, 2.5 petabytes would be enough to hold three million hours of TV shows. You would have to leave the TV running continuously for more than 300 years to use up all that storage.