brand study report bates ltd

7/27/2019 brand study report bates ltd.

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June2012


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A

REPORTON

AdvertisingDynamicsinHealth

InsuranceSector:

AnAnalysis

A report submitted in the partial fulfillment of

the requirements of MBA program of IBS,

Hyderabad.

By

Tushar Acharya

11BSPHH010908

BATES INDIA PVT. LTD.


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AUTHORIZATION LETTER

I hereby declare that the work carried out for this project

is true to my knowledge. The study has been carried out for

a period of 3 months i.e. from February 2011 to May 2011.

The project has been submitted for the partial fulfillment

of MBA degree at Icfai Business School, Hyderabad (Batch

2011-2013).

Yours Faithfully

Tushar Acharya

11BSPHH010908


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ACKNOWLEDGEMENT

In the earnest attempt to prepare this report, Dr. Surajit

Ghosh Dastidar has played a pivotal role and has provided

constant motivation as a guide. I am truly obliged and

indebted to him for the time and focus he provided.

Further, I would like to extend my acknowledgement to Mr.

Sandeep Handa, Account Management head and Vice

President of BATES, for providing the environment and

infrastructure needed to accomplish this task.

Above all I am also very thankful to Ms. Sugandha

Kharbandha (Brand Executive, Bates) and company guide; she

has thoroughly helped and counseled me at each step ofthis process. She also helped me in learning the practical

aspects of the Advertising Agency.


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TABLE OF CONTENTS

EXECUTIVE SUMMARY

1. INTRODUCTION 1 - 2

1.1.Background11.2.Objectives of the Study......11.3.Methodology of the Study.....21.4.Limitations of the Study........2

2. INDUSTRY PROFILE 3-152.1.India Media & Entertainment Sector....32.2.Advertising in India..52.3.Integrated Marketing Communication.62.4.SWOT Analysis of Advertising Industry.....72.5.Advertising Lifecycle...92.6.Health Insurance Sector in India.....10

2.6.1 Market Drivers............13

2.6.2 Market Restraints....13

2.7. Importance of Advertising.14

3. COMPANY ANALYSIS 16-303.1.WPP & Bates..163.2.Max Bupa.....173.3.Advertising Agencies...173.4.Objectives of an Advertising Agency..183.5.SWOT analysis of Bates..193.6.Critical Success Factor....203.7.PESTL Analysis of the health insurance sector......213.8.Competitive Analysis..243.8.1.1. Qualitative Approach...24

3.8.1.2. Quantitative Approach.........274. DYNAMICS OF THE ADVERTISING MEDIUM 31-67

4.1.Agency Departments...31


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4.2.Workflow Structure of an advertising agency ......................324.3.Various kinds of Advertising.364.4.Growth of various Advertising mediums...424.5.Promotional Practices....494.6.Key Trends 574.7.Changing Advertisement Trends...584.8.Future Outlook...65

5. RESEARCH..686. CONCLUSION.....767. FOCUS GROUP DISCUSSION..788. RECOMMENDATIONS.....799. LEARNING FROM SIP SIP.......8010.REFERENCES.....82

ANNEXURE

LIST OF ILLUSTRATIONS

1. Advertising Life Cycle.102. Total Revenue Forecast for Health Insurance..123. Growth Forecast for Health Insurance.134. Perceptual Map.255. Growth Rate of Health Insurance Companies..286. Market Share of Health Insurance Companies..297.

Graphs on advertising revenues for various mediums.44-48

8. Overall Industry size (Advertising)..669. Different mediums for advertising....6810.Factors that influence purchase decision..6911.Most preferred advertising medium.70


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Executive Summary

Student Information

Name: Tushar Acharya

Enrollment No.: 11BSPHH010908

E-mail: [email protected]

Contact No.: 09848321281

09560348625

Organization Description

Name of the organization: Bates India Pvt. Ltd.

Industry: Advertising

Address: 8A-Milap Niketan, Bahadurshah Zafar Marg,

New Delhi-110006

Title of the Project

Advertising Dynamics in Health Insurance Sector: An Analysis


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1) INTRODUCTION

1.1 BACKGROUND

The purpose of this report is to know about the advertising industry and its scope in India. We

are taking Max Bupa as the client to see how the organization is using advertisement as a tool to

promote its policies. As there are different advertising mediums like print, outdoor, radio, TV

etc., we are studying which medium is highly popular and which should be preferred for a health

insurance product/policy. The functioning of the different departments (creative, personnel,

account services, production). Different types of advertising like surrogate, broadcast, public

service, covert advertising and the changing trend of advertising in India.

1.2 OBJECTIVES OF THE STUDY

My research is based on Advertising Dynamics in Health Insurance Sector. Im doing my

internship in an advertising agency, BATES. My profile is Client Servicing, wherein my client

is Max Bupa Health Insurance. In this report, our focus is only on one aspect of IMC i.e.

advertising. We talk about how the advertising industry works and what advertising strategies are

adopted for a health insurance company like Max Bupa. The objectives of my study are:

To study about the advertisement industry in India.

To know about WPP group and all the companies associated with it focusing especially

on BATES.

To study about Indian Media & Entertainment Sector and the influences of demographic,

economic, liberalization and technology on it.

To study about how the advertising agencies functions with reference to its various

departments. To study the potential of various advertising mediums like OOH, Radio, Films, TVCs,

Print etc. for a health insurance product to be promoted.

To study the promotional practices of Max Bupa (posters, standees, backdrops,

brochures, sales kit, TVCs, etc.)


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To study about the factors that influence the target customers in buying a health insurance

policy so as to study which aspect should an advertising agency must focus upon.

To know more about the market drivers of the advertising industry. To do the PESTL analysis of the health insurance sector in India, so as to analyze which

factors affect this sector so that the advertising agency can tackle the competition.

To analyse the qualitative and quantitative aspect of the competitive industry.

1.3 METHODOLOGY OF THE STUDY

My research is based on Advertising Dynamics in Health Insurance Sector. The research is

based on primary data as well as secondary data. The methodology used was mainly Factoranalysis to determine the factors responsible to determine the best possible medium for a Health

Insurance Product. I also conducted a Focus Group Discussion among 5 people to find out the

recommendations for Max Bupa against Apollo Munich. For this, a questionnaire was made and

was floated online for the response.

Sample size 100

1.4 LIMITATIONS OF THE STUDY

The research is based on the results of online survey, so it might not reflect the

adequate response from the target respondents.

There is no method to control the extraneous variables.

The advertising industry is very dynamic in nature so the results of this study may

become obsolete in the near future.

In Focus Group discussion, we only did the comparison between Max Bupa & Apollo

Munich.


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2) INDUSTRY PROFILE

2.1 INDIAN MEDIA & ENTERTAINMENT SECTOR

Changing consumption patterns, rising aspiration levels and increase in the number of middle-

income and upper-income households has led to growth in non-discretionary sectors like retail,

telecom and hotel among other sectors. Media sector is no exception to the trend.

The Indian media and entertainment sector is one of the fastest growing sectors of the country

with a healthy growth rate of 12%. The latest report of FICCI-KPMG projects a 15% growth rate

for industry by 2016. It has seen many changes in terms of economic, demographic,

technological, liberalization and others in the past decade which has led to the higher changes of

growth to the industry.

The Economic Influence:

The Indian Entertainment and Media (E&M) industry has out-performed the Indian economy and

is one of the fastest growing sectors in India. The E&M industry generally tends to grow faster

when the economy is expanding. The Indian economy has been growing at a fast clip over the

few years, and the income levels too have been experiencing a high growth rate. The increasingrate of urbanization, the penetration of television and radio industry in the rural areas with the

help of the technology and the rising levels of incomes of the people in India has facilitated the

growth rate of Media and Entertainment Industry in India.

Over the past few years, India has registered the fastest growth among major democracies. It

represents the fourth largest economy in terms of purchasing power parity'. Thus, E&M

industry is also expected to significantly benefit from this fast economic growth

The Demographic Influence:

Over the years, spending power has steadily increased in India. Lifestyle changes brought about

by changes in economic activity are also spurring growth of the Indian E&M industry. In urban

areas of India, the consumer mindset is changing due to increased exposure to global influences

via media, and other interactions leading to higher aspirations. The Indian rural market with its


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vast size of nearly three times of urban India, also offers a huge opportunity that has remained

largely untapped due to reasons of accessibility and affordability.

Liberalizing Foreign Investment:

Today India has probably one of the most liberal investment regimes amongst the emerging

economies with a conducive FDI environment. The E&M industry has significantly benefited

from this liberal regime. In 2005, FDI was permitted in two important sectors - print media and

radio. Films, television and other segments are already open to foreign investment. In the print

media segment, 100% FDI is now allowed for non-news publications and 26% FDI is allowed

for news publications. Printings of facsimile editions of foreign journals are now also allowed in

India. This policy is helping foreign journals save on the cost of distribution while servicing the

Indian market audiences more effectively.

The Technological Influence:

India is witnessing a revolution in this sector with the emergence of new technologies. The IEM

has moved from the growth phase to the inflection phase. This growth is led by better

technologies, higher quality content, higher penetration and suitable regulations. Exciting new

developments in the technologies used in Media and Entertainment industry are taking place.

The change is already being witnessed from AM radio to FM radio, single screen theatres to

multiplexes, and basic cable analog to broadband internet.

Animations, multiplexes, new distribution channels, the use of Internet and personalized

communication with the help of the same, are redefining the media and entertainment industry.

All these factors will favor the growth of

Media and Entertainment industry in India. Many companies are taking initiatives to set up their

business all over with the help of such technology. One such company is city based Net Hot

Zone Media Pvt. Limited which has come up with first of its kind concept of personalized

communication with the customers providing them free internet service while offering part of

screen space on computer to the advertisers by setting up the kiosks at various places in the city.


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Thus given the high rate of economic growth and technological developments, Indian Media and

Entertainment industry is poised to register a tremendous growth in the coming years.

Low Media Penetration in Lower SECs:

Though media penetration is poor in lower socio-

economic classes, the absolute numbers are much higher for these classes. Hence, efforts to

increase the penetration even slightly in these lower socio-economic classes are likely to deliver

much higher results, simply due to the higher base.

2.2 ADVERTISING IN INDIA

The structure of the advertising industry in Asia Pacific has been affected by globalization and

international alignments creating a smaller number of very large agencies and the growth of

independent major media buying houses. Television, movie, video and radio jingles, newspaper

and magazine advertising and neon-lit billboards in the cities are fueling a revolution in

consumer products and spawning new styles of living - changing food habits, fashions and home

dcor. This new advertising is pleasing the growing middleclass, one of the largest target

populations in the world. Local retailers in apparel, food, watches and jewelry have all increased

their average ad spending by almost 50% in the past two years. The local firms are using all the

available advertising tools from electronic to print, outdoor advertising and even models. The

advertising and promotional spending by local brands is substantial during the festival season

and almost 70% of the spending is done between Septembers to January. The advertising

industry in India is growing at an average rate of 10-12% per annum. Over 80% of the business

is from Mumbai and Delhi followed by Bangalore and Chennai from the rest of the other major

cities in the country. A once-flagging advertising industry is booming in India. It has become

fiercely competitive and one of the country's fastest-growing economic sectors.

Health insurance is a field which has been experiencing alarming growth rates in recent years

nationwide, and which continues to be one of the most lucrative areas in which insurance agents

and brokers can work. With the universal need for health care, having a pitch to express to health


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insurance prospects isn't especially difficult, but agents and brokers working in this field will

likely readily acknowledge the fierce competition that exists as a result of the volume of health

insurance policies and packages being shopped for and sold. While selling health insurancethrough traditional advertising strategies that incorporate emotional triggers and excellent

placement are still important considerations within these fields, it is often the case that

outperforming competition is a major factor in successful health insurance campaigns. The

Health Insurance sector usually use Print media, Outdoor, TV, Digital media to carry-out their

campaigns.

Of course, rising over competition can be a tall order, especially when it comes to the insurance

world. One of the most important considerations when approaching health insurance advertising

is the honest assessment of potential reach; that is, how large and varied an audience a campaign

will address. Once this figure has been produced, agents and groups can work towards

identifying other health insurance advertising sources that present realistic competition.

2.3 INTEGRATED MARKETING COMMUNICATIONS

IMC is defined as customer centric, data driven method of communicating with the customers.

IMC is the coordination and integration of all marketing communication tools, avenues,

functions and sources within a company into a seamless program that maximizes the impact on

consumers and other end users at a minimal cost.This management concept is designed to make

all aspects of marketing communication such as advertising, sales promotion, public relations,

and direct marketing work together as a unified force, rather than permitting each to work in

isolation.

In this report, we are focusing on only one aspect of IMC i.e. advertising. Advertising is a form

of communication used to encourage or persuade an audience (viewers, readers or listeners) 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


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also common. The purpose of advertising may also be to reassure employees or shareholders that

a company is viable or successful. Advertising messages are usually paid for by sponsors and

viewed via various traditional media; including mass media suchas newspaper, magazines, television commercial, radio advertisement, outdoor

advertising or direct mail; or new media such as blogs and websites and text messages.

Commercial advertisers often seek to generate increased consumption of

their products or services through "branding," which involves the repetition of an image or

product name in an effort to associate certain qualities with the brand in the minds

of consumers. Non-commercial advertisers who spend money to advertise items other than a

consumer product or service include political parties, interest groups, religious organizations andgovernmental agencies. Nonprofit organizations may rely on free modes of persuasion, such as

a public service announcement (PSA).

Internationally, the largest ("big four") advertising conglomerates

are Interpublic, Omnicom, Publicis, and WPP.

This project focuses on WPP group which owns a number of advertising, public

relations and market research networks, including BATES, Burson-Marsteller, Hill &

Knowlton, JWT, Ogilvy Group, TNS and Young & Rubicam.

2.4 SWOT ANALYSIS OF THE ADVERTISING INDUSTRY

SWOT analyses evaluate the strengths, weaknesses, opportunities and threats of a business

operation. A SWOT analysis of the advertising industry would address these four criteria, and

provide management of advertising agencies a better understanding of their industry, both in

terms of shortcomings and areas of excellence. Although a SWOT analysis can be commissioned

for the advertising industry as a whole, a SWOT analysis could also be commissioned to evaluate

a single advertising agency, one marketing campaign or even a line of commercials within a

campaign.


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Strengths - The strengths component of the analysis should identify the advertising industrys

internal strengths, such as where the industry excels compared to other industries, and how it is

maximizing its physical resources and personnel. For any advertising agency its strength is the

satisfaction of its clients, This section lists low staff turnover, high staff morale, low overhead,

high profit margins, multiple revenue streams, product and service diversification and a

sustainable business model.

Weaknesses - The weaknesses component should identify the advertising industrys internal

weaknesses, such as where improvements need to be made and where physical and human

resources are not being maximized. For example, this section lists low client satisfaction, high

production costs, low return on investment (ROI) or an untrained or aging employee base. These

examples may not apply to all advertising agencies, but for a SWOT analysis of the industry,

these examples would be generalizations of the industry.

Opportunities - The opportunities component lists how the industry could grow or expand. The

items listed in this section tend to be environmental factors that can be leveraged by the

previously listed strengths. For example, opportunities may include rising marketing budgets,

large client bases, a growing economy, a larger number of media outlets, lower advertising rates

or new advertising mediums. The major opportunity for an advertising agency is to pitch new

clients.

Threats - The threats listed on a SWOT analysis lists the external elements of the advertising

industry where the industry could potentially be harmed. The features listed here are areas of the

industry where outside forces could possibly harm current growth or even harm the status quo.

For example, threats listed could include a shrinking economy, less demand for marketing

services, higher health care costs or a change in tax legislation.


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2.5ADVERTISING LIFE CYCLE

It is important to consider what point of the cycle the product is in.

Initially, a new product enters a pioneering stage, which is an introductory stage. During this stage the intent is to

introduce ideas and educate the consumer as to the new product/service. There is heavy advertising and promotional

expenses required during this stage to create awareness. Usually the product is not usually profitable during this stage as

the research and development costs still need to be off-set.

It is during the competitive stage that the product reaches usefulness but not until the benefits over other brands must be

established. Most advertising for the product occurs during this stage.

The final stage, the retentive stage, attempts to retain patronage merely on the strength of reputation. Little, or reminder,

advertising is used. Many products stay in this stage for years (i.e., Mortons Salt, Rumford Baking Powder).

At the end of the retentive stage a product may have passed its market life and die or may lose market share but still

remain profitable or enter a newer pioneering stage and expand the market. This may be done by product modification

or by simply using new advertising. Think of how Bayer aspirin entered a new pioneering stage when the advertising

stressed the value of the aspirin in preventing heart attacks and strokes. The product was not changed but the message

was. Hence it is not necessary to change a product to enter a new pioneering stage.

A newer competitive stage focuses on purchasing intent and a newer retentive stage relies on existing prestige to keep

customers. The stage that the product is in does not have to do with time but rather what the consumer attitude and

perception is at that point in time. Creating brand awareness is a popular advertising objective as it is an indicator of

consumer knowledge about the existence of the brand.

If the product is introduced, then advertising efforts generally focus on bringing awareness of the product to customers,

while products in the growth stage are performing advertising efforts that sets its product apart from the competition.

Products in the mature stage use advertising as reminders to buy the product by offering coupons or special sales to

existing customers. Companies with products in the decline stage generally cut back spending on advertising.


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Illustration No. 1 : Advertising Life Cycle

2.6 HEALTH INSURANCE SECTOR IN INDIA

Health and health care need to be distinguished from each other for no better reason than that the

former is often incorrectly seen as a direct function of the latter. Heath is clearly not the mere

absence of disease. Good Health confers on a person or groups freedom from illness - and the

ability to realize one's potential. Health is therefore best understood as the indispensable basis for

defining a person's sense of well being. The health of populations is a distinct key issue in public

policy discourse in every mature society often determining the deployment of huge society. They

include its cultural understanding of ill health and well-being, extent of socio-economic

disparities, reach of health services and quality and costs of care and current bio-medical

understanding about health and illness.

Health care covers not merely medical care but also all aspects pro preventive care too. Nor can

it be limited to care rendered by or financed out of public expenditure- within the government

sector alone but must include incentives and disincentives for self care and care paid for by

private citizens to get over ill health. Where, as in India, private out-of-pocket expenditure


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dominates the cost financing health care, the effects are bound t be regressive. Heath care at its

essential core is widely recognized to be a public good. Its demand and supply cannot therefore,

be left to be regulated solely by the invisible had of the market. Nor can it be established onconsiderations of utility maximizing conduct alone.

What makes for a just health care system even as an ideal? Four criteria could be suggested- First

universal access, and access to an adequate level, and access without excessive burden. Second

fair distribution of financial costs for access and fair distribution of burden in rationing care and

capacity and a constant search for improvement to a more just system. Third training providers

for competence empathy and accountability, pursuit of quality care and cost effective use of the

results of relevant research.

Since independence, the health care system in India has been expanded and modernized

considerably, with dramatic improvements in life expectancy and the availability of modern

health care facilities and better training of medical personnel. At the same time, however, much

remains to be done. The growing evidence also suggests that more than three-quarters of this

spending includes private 'out-of-pocket expenses'. Despite such a high share of expenditure by

individuals, the provision of health care, that is adequate in terms of quality and access, is

becoming more and more problematic. Particularly, public delivery of health care is poor in

quality, presumably for reasons of inadequate financing. This highlights the need for alternative

finances, including provision for medical insurance at a much wider level.

Excessive financial burdens on households arise for a variety of reasons. At one level, they can

be blamed on Indias public health care system, which is underfunded and suffers from quality

and access problems, forcing consumers to visit the private and relatively more expensive

treatments. However, as will be discussed below, recent household-level studies on

utilization of health care indicate that even public care is not all that free after all: there are

many incidental expenses that consumers have to bear on their own. If all the quality and access

differentials between public and private health care were to be wiped out, there would still be

some very heavy financial burdens on the consumers.


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In 1980 most of the hospitals were government owned and treatment was free of cost. With the

advent of private medical care the need for Health Insurance and various Insurance companies

introduced Mediclaim Insurance as a product.

Illustration No. 2: Total Revenue Forecast for Health Insurance

According to recent news report Health Insurance sector continues the fastest growing segment

with annual growth rate of 42.3%. As per an estimate this segment has the potential to become

an Rs.60000 crore industry by 2015. Government has also started taking initiatives by investing

huge sums of money in RSBY (Rashtriya Bima Swasth Yojna). The main factors of growth are

increased awareness. According to World Bank Report, 99% of Indians face financial crunch in

case of any critical illness. Hence, there is a need for health insurance.

5000 600010000

14000

20000

28000

42000

60000

0

10000

20000

30000

40000

50000

60000

70000

2008 2009 2010 2011 2012 2013 2014 2015

Premiumi

nINR(Crores)

Year


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Illustration No. 3 Growth Forecast for Health Insurance

2.6.1 Market Drivers

Increasing awareness of Health Insurance.

Rising healthcare costs have increased need for health insurance.

Supporting Demographic Profiles (Prospering Middle Class, increasing disease state,

population)

Detariffing of the general insurance industry (which has increased emphasis and efforts

by insurance companies towards health insurance and other personal lines of business).

Rationalization of premium rates (e.g. trend of upward revision in respect of Group

Health policies)

2.6.2 Market Restraints

Inadequate healthcare infrastructure

Limited reach

37%

38%

39%

40%

41%

42%

43%

44%

45%

46%

1 2 3 4 5 6 7 8

GrowthRate

Years


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Significant underwriting losses for Health Insurance business in India

Lack of standardization and Accreditation norms in healthcare industry in India

Insufficient data on Indian consumers & disease patterns resulting in difficulty in product

development and pricing

Post 2001 there were few players in the health Insurance sector of which most of them were

govt. owned business. However in 2001 many foreign players started to come in India and made

joint ventures with the Indian companies for eg. ICICI alliance with Prudential, Max health care

with BUPA international, Apollo health care with Munich etc. This was the time when

competition started building in between these companies and need for proper marketing and

advertising was felt both by the Govt. players and the new private ones.

Health Insurance in India is unique and has a strong growth potential than other insurance

markets.

2.7 IMPORTANCE OF ADVERTISING

Advertising plays a very important role in todays age of competition. Advertising is one thing

which has become a necessity for everybody in todays day to day life, be it the producer, the

traders, or the customer. Advertising is an important part. Lets have a look on how and where is

advertising important:

1. Advertising is important for the customers

Just imagine television or a newspaper or a radio channel without an advertisement! No, no one

can any day imagine this. Advertising plays a very important role in customers life. Customers

are the people who buy the product only after they are made aware of the products available in

the market. If the product is not advertised, no customer will come to know what products are

available and will not buy the product even if the product was for their benefit. One more thing is

that advertising helps people find the best products for themselves, their kids, and their family.

When they come to know about the range of products, they are able to compare the products and

buy so that they get what they desire after spending their valuable money. Thus, advertising is

important for the customers.


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2. Advertising is important for the seller and companies producing the products

Yes, advertising plays a very important role for the producers and the sellers of the products,

because

Advertising helps increasing sales

Advertising helps producers or the companies to know their competitors and plan

accordingly to meet up the level of competition.

If any company wants to introduce or launch a new product in the market,

advertising will make a ground for the product. Advertising helps making people

aware of the new product so that the consumers come and try the product.

Advertising helps creating goodwill for the company and gains customer loyalty

after reaching a mature age.

The demand for the product keeps on coming with the help of advertising and

demand and supply become a never ending process.

3. Advertising is important for the society

Advertising helps educating people. There are some social issues also which advertising deals

with like child labor, liquor consumption, girl child killing, smoking, family planning education,

etc. thus, advertising plays a very important role in society.


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3) COMPANY ANALYSIS

3.1 WPP & Bates

Wire and Plastic Products plc was founded in 1971 as a manufacturer of wire shopping

baskets. In 1985 Martin Sorrell, searching for a listed company through which to build a

worldwide marketing services company, bought a controlling stake of just under 30% at a cost of

$676,000. Sorrell had been the financial director for the advertising agency Saatchi &

Saatchi from 1977 to 1985, managing its takeovers of companies in the US and the UK. The

holding company was renamed WPP Group and in 1987 Sorrell became its chief executive.

In 1987 the company acquired various other companies including J. Walter Thompson(JWT), Hill & Knowlton and MRB Group. The company was first listed on NASDAQ in 1988.

In 1989 it acquired Ogilvy Group and in 1998 formed an alliance with Asatsu-DK Inc. of

Japan. In 2007 WPP Digital was created to develop the Group's digital capabilities.

In 2003, BatesAsia 141 is born; WPP buys Bates Worldwide and immediately merges Bates

Worldwide offices into its other advertising groups. In 2011, the agency formerly known

as Bates 141 was rebranded as Bates.

Its previous positioning, "the change agency", was refined and changed to "the changeage

people", this was the rebranding practice by Bates to re-establish it. Currently they are based in

only Asia-Pacific region.

Many good campaigns and advertisements have been produced by the agency for different

clients such as Max Bupa Health Insurance, ONGC, DEN Digital, Virgin Mobile, Hitachi air

conditioner, Zen Mobile, etc. As the agency is in a growing phase, it is also a great opportunity

to work with them as there is lot to learn and grow personally as well as professionally.

The current clients of BATES include:

Max Bupa Health Insurance

Radico Khaitan

Hitachi


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Delhi Police

DEN Digital

ONGC

3.2 MAX BUPA

Max Bupa Health Insurance Company Ltd. (Max Bupa) is a joint venture between Max India

Limited and the UK based healthcare services expert, Bupa.

Max India Limited is a multi-business corporate, driven by the spirit of enterprise and focused on

people and service-oriented businesses. The Companys vision is to be one of Indias most

admired corporates for Service Excellence.

Max Bupa is Batess client since 2009 and Bates has performed its creative duties by creating

various claim forms, banners, stickers, standees, backdrops, IVR, TVCs, coasters, pen stands &

coffee mugs with max bupa logo on it, posters, teasers, prospectus, sales kit, etc.

Health insurance advertising may seem like a daunting field at first glance, and indeed, with the

sheer amount of people selling, shopping for, and buying health insurance both on and offline,

individual efforts can feel lost in a sea of similar attempts. But through taking the time to make

honest assessments about competition and audience, and applying this information to advertising

campaigns, health insurance agents can achieve successful advertising campaigns capable of

vastly improving sales ratios, career, development, and professional satisfaction.

3.3 ADVERTISING AGENCIES

The decision whether or not to use an advertising agency depends both on a company's

advertising strategy and its financial resources. An agency has professionals who can organize,

create, and place advertising so that it will meet established objectives better than most small

businesses can do on their own, but of course the expense associated with soliciting such talent is

often prohibitive for smaller companies. Still, some small- and mid-sized businesses have found

that agencies can be helpful in shaping and monitoring advertising strategies.


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Some of the WPP Advertising Companies in India are:

1. Bates India Pvt. Ltd.

2. Crayons Advertising & Marketing Pvt. Ltd.

3. Euro RSCG Advertising Pvt. Ltd.

4. Madison Advertising Pvt. Ltd.

5. Ogilvy & Mather

6. DDB Mudra

7. Lowe-Lintas India

8. McCann-Erickson India Ltd

9. Leo Burnett India Pvt. Ltd

10.J.Walter Thompson (JWT)

Because of their resources and expertise, agencies are useful when a business is planning a broad

advertising campaign that will require a large amount of resources. An advertising agency can

also help track and analyze the effectiveness of the advertising. Some criteria to consider when

choosing an agency include size of the agency, size of their clients, length of time that the

principals have been with the agency, and the agency's general advertising philosophy.

3.4 OBJECTIVES OF AN ADVERTISING AGENCY

Four main objectives of advertising are :

i. Trial

ii. Continuity

iii. Brand switch

iv. Switching back

Trial: The companies which are in their introduction stage generally work for this

objective. The trial objective is the one which involves convincing the customers to buy

the new product introduced in the market. When a new organization enters the market for

ex. Max Bupa, the advertising agency use flashy and attractive ads to make customers


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take a look on the products and purchase the policies for trials. Bates has created many

TVCs focusing on the different features of the different policies like heart attack, pension

plus, child benefit plan etc. Continuity: This objective is concerned about keeping the existing customers to stick on

to the product. At this stage, Max Bupa has brought in something new in the product and

the advertisement so that the existing customers keep buying their products.

Brand switch: This objective is basically for those companies who want to attract the

customers of the competitors. Here, the advertisers try to convince the customers to

switch from the existing brand they are using to their product. The advertising agency

does its research and finds some differentiated factors in the policies of Max Bupa like

portability for which the digital medium/website was used. Different Banners, billboards,

kiosks etc are used to differentiate from the competitors.

Switching back: This objective is for the companies who want their previous customers

back, who have switched to their competitors. Bates created some franchises and posters

for Max Bupa employees to motivate them to bring back the customers. Bates created

pen stands (with max bupa logo on it), e-mailer posters, calendar, summit reports, teasers,

etc. to serve this purpose. The advertisers also use different ways to attract the customers

back like discount sale, new advertise, some reworking done on packaging, etc.

Basically, advertising is a very artistic way of communicating with the customers. The main

characteristics one should have to get on their objectives are great communication skills and very

good convincing power.

3.5 SWOT ANALYSIS OF BATES

Strengths

High satisfaction of its clients

There are many brands which are associated with Bates for a long time

High staff morale


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Low overhead

Multiple revenue streams

Sustainable business model.

Weaknesses

High production costs

Low return on investment (ROI)

Opportunities

Rising marketing budgets

Tapping rural markets

Large client base

Growing economy

Large number of media outlets

Lower advertising rates

New advertising mediums

Threats

Changing trend of advertising

Competition from other advertising agencies

3.6 CRITICAL SUCCESS FACTORS

Success factors are the essentials that a company must do in order to be successful in the

industry. Success in the advertising industry requires perfection in different parameters. India

still has a lot of potential for the advertising industry as there is still untapped market. Clients


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expect proactiveness, creativity and technologically advanced from the agency. Some of the

success factors include:

Proactive

With the highly competitive scenario in the advertising industry, its proactive activities

distinguish it from others. The agency should be capable to have a futuristic vision of the

products. For ex: DEN digital came up with the ad stating Get DTH Quality at the price

of cable, this distinguished DEN from other digital networks because of the agencies

proactive thinking.

Creativity

Creativity is the primary focus of any advertising agency. It can bomb the campaign or

make it a success. For ex: Vodafones Zoo Zoo campaign became a highly popular and

successful because of its new and creative idea, and no other advertising agency could

compete to it during that campaign.

Client Servicing

For any advertising agency, its very important to meet their clients needs and

understand their mindset for how they want their product to be positioned in the minds ofits targeted customers.

3.7 PESTL Analysis of The Health Insurance Sector

Political Legal Environment: This Environment consists of Laws, Government agencies, and

pressure groups that influence and limit various organizations, individuals and industries on a

larger scale. Sometimes these laws also create new opportunities for business. Political factorsare how and to what degree a government intervenes in the economy. Specifically, political

factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs,

and political stability. Political factors may also include goods and services which the

government wants to provide or be provided (merit goods) and those that the government does


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not want to be provided (demerit goods). Furthermore, governments have great influence on

the health, education, and infrastructure of a nation

Political Factors affecting the Health Insurance Sector

The Insurance Sector in India is governed by IRDA (Insurance Regulatory Development

Authority of India) which keeps a check on the working of these companies and also frames

different rules and regulations for its smooth functioning. Whenever a need is felt to repair the

whole system or a part of it or to regulate it more strictly, rules are formed. For e.g. Seeing that

the free look period (7 day) which is given by these companies to the customers to look that the

policy sold to them is what they have demanded; many agents and third parties were taking

advantage of it by sending it after 7 days so that the policy cannot be cancelled and the customer

has to pay the premium on what is sold to them, IRDA came up with a regulation to send the

policy directly from the insuring company to the customer.

However many of the companies feel that many times IRDA regulations are very strict to follow

and they are unreasonable. The reason is because IRDA makes the rules in accordance with the

customers and not according to these companies.

Then comes the role of government in regulating the Health Insurance sector. Government has

taken many initiatives in the betterment of this sector for e.g. launching the RSBY (Rashtriya

Swasth Bima Yojna) scheme however efforts seems to be very less as compared to the potential

of the sector.

Economic Environment: Economic factors include economic growth, interest rates, exchange

rates and the inflation rate. These factors have major impacts on how businesses operate and

make decisions. For example, interest rates affect a firm's cost of capital and therefore to what

extent a business grows and expands. Exchange rates affect the costs of exporting goods and the

supply and price of imported goods in an economy. These factors affect the purchasing power of

the potential customers and Firms cost of capital.


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Economic Factors affecting Health Insurance in India

The condition of economy plays a very important role in this sector. Many people take Health

Insurance as an investment which means that if the economy is performing well then only they

will buy Health Insurance. The main reason why people see health Insurance as an investment is

because it gives Tax Exemption. Since the economy of India is performing well it is not very

hard for them to attract to customers.

Social Environment: Social factors include the cultural aspects and include health

consciousness, population growth rate, age distribution, career attitudes and emphasis on safety.

Trends in social factors affect the demand for a company's products and how that company

operates. For example, an aging population may imply a smaller and less-willing workforce (thus

increasing the cost of labor). Furthermore, companies may change various management

strategies to adapt to these social trends (such as recruiting older workers). It shapes the beliefs,

values and norms that largely define consumer tastes and preferences.

Social Factors affecting Health Insurance in India

Social Factors play a very important role while deciding on the target population. In India people

do not think of health Insurance as a necessary need mainly because they think that nothing can

happen to them. The priority is given to other aspects of life such as paying EMI for the house,

higher education of children or purchasing a car. This mindset is very hard to change and is the

main barrier for the Health Insurance companies.

A major proportion of population of India is mainly under the category of 25-35. At this age

people do not think of Health Insurance as a necessity because they are involved in building their

careers and looking up for future prospects in life.

Another social factor is the vast rural India which is totally different from its urban counterpart.

The mentality of the customer in this part is totally different. They do not have enough money

when it comes to get proper Health care. Moreover there is huge potential in this segment which

is not tapped by the Health Insurance companies. Innovation and customizing their products

according to their needs can be possible way of establishing in this segment.


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Technological Environment: Technological factors include technological aspects such

as R&D activity, automation, technology incentives and the rate of technological change. They

can determine barriers to entry, minimum efficient production level and

influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and

lead to innovation.

Technological Factors affecting Health Insurance in India

Looking at the different kinds of customer, many of them are those who are more tech-savvy and

like to base their purchasing decision on the same. Now-a-days Insurance products are being sold

through Internet which again demands technological advancements. There is huge potential for

online marketing in this segment.

3.8 COMPETITIVE ANALYSIS

This analysis is divided into quantitative and the qualitative approach.

3.8.1 QUALITATIVE APPROACH

The quantitative analysis is done on the basis of the Ad campaigns undertaken by the companies.

It is explained as follows:

This is the qualitative approach to get the insight to the closest competitors of Max Bupa in the

health Insurance sector. Here, the competitors can be differentiated by their advertising strategies

on the scale of Life-space, Functional, Generalist and Specialist.

The life-space here means that the companys main objective is to give their customers such

policies which could actually fulfill their requirements. On the other hand, the functional scale

represents that company which focuses on just the selling aspect. These companies just care for

their revenue and dont actually think of the customers requirements. Generalist scale represents

the general insurance companies and specialist sells only the health insurance companies.


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Illustraion No. 4: Perceptual Map

From the perceptual map above

closest competitors although Sta

oriented organization. We can

quadrant, which means that mos

conditions of their policy. On t

advertise for their customers.

Perceptual Map

, we have observed that Max Bupa and Apoll

r health is also close but it uses the approach o

see that most companies falls in the Gen

t insurance companies are pushing the policies

he other hand, companies like Max Bupa an

25 | P a g e

Munich are the

f being a selling-

ralist-Functional

and the terms &

Apollo Munich


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For ex: Apollo Munich

Insight: People are afraid of falling ill second time as they are not sure about getting theinsurance covers again

Proposition: Even if you use the the entire insurance amount in the middle of the year,

Apollo Munich will restore the entire amount.

Resolution: No fear of feeling helpless of falling ill twice

Positioning: Unbelievable

URL: http://www.youtube.com/watch?feature=player_embedded&v=e0bXZ6SBavA

For ex: Max Bupa

Insight: Family members are worried for their loved ones.

Proposition: We care for you and your family

Resolution: Dont worry about your family, we will take care of them

Positioning: Your health first

URL: http://www.youtube.com/watch?v=zoBzGhGkI5M

For ex: BHARTI AXA

Insight: Not all critical illness policies are considerate

Proposition: Dont get limited with critical illness when Bharti Axa provides complete

critical illness.

Resolution: Dont worry about any critical illness

Positioning: Suraksha ka naya nazariya

URL: http://www.youtube.com/watch?v=PdZ3Xtf055k&feature=related


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3.8.2 QUANTITATIVE APPROACH

The quantitative analysis is done on the basis of the market share and the growth rate of the

various insurance companies.

MARKET SHARE OF HEALTH INSURANCE COMPANIES

S.No. Company Growth % Market Share %

PRIVATE

1. TATA-AIG 24.00 1.04

2. Bajaj Allianz 28.00 3.28

3. Bharti AXA 173.00 1.084. Cholamandalam 59.00 1.78

5. Future Generali 24.00 0.99

6. HDFC ERGO 25.00 3.12

7. ICICI Lombard 12.00 11.36

8. Reliance -11.00 1.71

9. Royal Sundaram 41.00 1.67

10. IFFCO Tokio -9.00 1.22

PUBLIC

11. United India 31.00 16.71

12. National 26.00 15.07

13. New India 17.00 17.73

14. Oriental -2.00 10.04

SPECIALIZED

15. Star Health & Allied Insurance -8.00 8.48

16. Apollo Munich 69.00 3.48

17. Max Bupa 357.00 0.89

We can see that ICICI Lombard, New India, National and United India are the most dominant

market players with highest market penetration in India. Earlier only the government players

used to have the dominance but now we see that the private players are starting to come up as

their growth rates are increasing like ICICI Lombard. Max Bupa has the highest and an


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impeccable growth rate beating all the other market players. This is a healthy sign to say that

new companies are penetrating the market in a good way. Although, Max Bupa is far behind in

this race and needs to target a wide market share now.

Illustration No. 5: Growth Rate of Health Insurance Companies

-50.00

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

Growth Rate


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Key Observations

The total Health Insurance premiums reached Rs.13, 195 Cr up from Rs.11,148 Cr in Apr10 to

Mar11, registering 18% growth in the period Apr11 to Mar12

The largest shifts in market share during Apr11 to Mar12 period compared to Apr10 to

Mar11 towards Health Insurance were seen at Bharti Axa (1.08% from 0.47%), Apollo Munich

(3.48% from 2.43%), Cholamandalam MS (1.78% from 1.33%) and United India (16.71% from

15.08%)

Max Bupa market share has also gone up from 0.23% to 0.89%

Although Max Bupa market share is less than 1% in overall business, it has contributed 4% of

theRs.2046crgrowth of health insurance GWP. This is comparable to the contribution of largerprivate insurers like HDFC Ergo, Bharti Axa & Cholamandalam.

Bharti Axa growth has come through their focus on Critical Illness Product & Group Health

Insurance portfolio

ICICI Lombard has taken over Oriental in terms of market share, and is the market leader

among Pvt. insurers

Reliance General Insurance & Iffco Tokio health insurance GWP has declined by 11% and 9%

respectively in Apr11 to Mar12 period compared to Apr10 to Mar11

Reliance GWP has de-grown due to the sharp increase (average of 30%) in its premium rates.

The Total Market share of 4 PSUs is maintained @ 59% in Apr11 to Mar12. This is the 5th

consecutive Year wherein PSUs together are holding around 58-60% market share

Standalone Health Insurance companies have contributed to 12% of the health insurance sector.

Apollo Munich & Max Bupa, have grown by 93%


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Illustration No. 6: Marke

18

10%

2%

2%

9%

1%

17%

t Share of Health Insurance Companies

3%3%

1%2%

1%

3%

11%

1%

1%

15%

Market Share

Apollo Mu

Bajaj Allian

Bharti AXA

Cholaman

Future Ge

HDFC ERG

ICICI Lomb

IFFCO Toki

Max Bupa

National

New India

Oriental

Reliance

Royal Sund

Star HealtTATA-AIG

United Ind

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ich

z

alam

erali

ard

o

aram

& Allied Insurance

ia


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4) DYNAMICS OF THE ADVERTISING MEDIUMS

4.1 AGENCY DEPARTMENTS

Creative department

The people who create the actual ads form the core of an advertising agency. Modern advertising

agencies usually form their copywriters and art directors into creative teams. The art director and

copywriter report to a creative director. Although copywriters have the word "write" in their job

title, and art directors have the word "art", one does not necessarily write the words and the other

draw the pictures; they both generate creative ideas to represent the proposition (the

advertisement or campaign's key message). Once they receive the creative brief from their

account team, the creative teams will concept ideas to take to their creative director for feedback.

This can often be a back and forth process, occurring several times before several ads are set to

present to the client. Creative departments frequently work with outside design or production

studios to develop and implement their ideas. The creative process forms the most crucial part of

the advertising process.

Account services

Agencies appoint account executive to liaise with the clients. The account executives need to be

sufficiently aware of the client's needs and desires that can be instructed to the agency's

personnel and should get approval from the clients on the agency's recommendations to the

clients. They work closely with the specialists in each field. The account manager will develop a

creative brief, usually about a page that gives direction to the creative team. The creative brief

often includes information about the target audience and their attitudes and behaviors.

Media services

The media services department may not be so well known, but its employees are the people who

have contacts with the suppliers of various creative media. For example, they will be able to

advise upon and negotiate with printers if an agency is producing flyers for a client. However,

when dealing with the major media (broadcast media, outdoor, and the press), this work is


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usually outsourced to a media agency which can advise on media planning and is normally large

enough to negotiate prices down further than a single agency or client can. They can often be

restrained by the client's budget, in which, the media strategy will inform the creative team whatmedia platform they'll be developing the ad for.

Modern agencies might also have a media planning department integrated, which does all the

spot's planning and placements

Production

Without the production department, the ads created by the copywriter and art director would be

nothing more than words and pictures on paper. The production department, in essence, ensuresthe TV commercial or print ad, etc., gets produced. They are responsible for contracting external

vendors (directors and production companies in the case of TV commercials; photographers and

design studios in the case of the print advertising or direct mailers). Producers are involved in

every aspect of a project, from the initial creative briefing through execution and delivery. In

some agencies, senior producers are known as "executive producers" or "content architects".

Other departments and personnel

In small agencies, employees may do both creative and account service work. Larger agencies

attract people who specialize in one or the other, and indeed include a number of people in

specialized positions: production work, Internet advertising, planning, or research, etc.

4.2 WORKFLOW STRUCTURE OF AN ADVERTISING AGENCY

Today, most advertising strategies focus on achieving three general goals:

i.

promote awareness of a business and its product or services;ii. stimulate sales directly and "attract competitors' customers"; and

iii. establish or modify a business' image.


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In other words, advertising seeks to inform, persuade, and remind the consumer. With these aims

in mind, most businesses follow a general process which ties advertising into the other

promotional efforts and overall marketing objectives of the business.

With these concrete objectives, the following elements of the advertising strategy need to be

considered: target audience, product concept, communication media, and advertising message.

These elements are at the core of an advertising strategy, and are often referred to as the "creative

mix." Again, what most advertisers stress from the beginning is clear planning and flexibility.

And key to these aims is creativity, and the ability to adapt to new market trends. A rigid

advertising strategy often leads to a loss of market share. Therefore, the core elements of the

advertising strategy need to mix in a way that allows the message to envelope the targetconsumer, providing ample opportunity for this consumer to become acquainted with the

advertising message.

The following are the steps which an advertising agency undertakes for a new client:

1) TARGET CONSUMER- First of all, the planning department carries out a research by

which they find out who are the target people for the product/service to be promoted. The

target consumer is a complex combination of persons. It includes the person who

ultimately buys the product, as well as those who decide what product will be bought (but

don't physically buy it), and those who influence product purchases, such as children,

spouse, and friends. In order to identify the target consumer, and the forces acting upon

any purchasing decision, it is important to define three general criteria in relation to that

consumer:

i. Demographics, gender, job, income, ethnicity, and hobbies.

ii. Behavior- Considering the consumers' behavior an advertiser needs to examine the

consumers' awareness of the business and its competition, the type of vendors and

services the consumer currently uses, and the types of appeals that are likely to convince

the consumer to give the advertiser's product or service a chance.


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iii. Needs and Desires- An advertiser must determine the consumer needs in practical terms

and in terms of self-image, etc. and the kind of pitch/message that will convince the

consumer that the advertiser's services or products can fulfill those needs.

2) PRODUCT CONCEPT- The next step after the consumers are targeted is the concept of

the product. Product concept grows out of the guidelines established in the "positioning

statement". How the product is positioned within the market will dictate the kind of

values the product represents, and thus how the target consumer will receive that product.

3) COMMUNICATION MEDIA- The communication media is the means by which the

advertising message is transmitted to the consumer. The client, brand executive and the

creative department decides upon the best communication media to be executed for acertain product. In addition to marketing objectives and budgetary restraints, the

characteristics of the target consumer also needs to be considered as an advertiser decides

what media to use. The types of media categories from which advertisers can choose

include the following:

Newspapers (both weekly and daily) and magazines.

Radio.

Promotional videos, infomercials.

World Wide Web.

Direct mail.

Outdoor advertising billboards, advertisements on public transportation (cabs, buses).

After deciding on the medium that is:

i. financially in reach, and

ii. most likely to reach the target audience, an advertiser needs to schedule the broadcasting

of that advertising. The media schedule, as defined by Hills, is "the combination of

specific times (for example, by day, week, month) when advertisements are inserted into

media vehicles and delivered to target audiences."


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4) ADVERTISING MESSAGE- An advertising message is guided by the "advertising or

copy platform," which is a combination of the marketing objectives, copy, art, and

production values. This combination is best realized after the target consumer has beenanalyzed, the product concept has been established, and the media and vehicles have been

chosen. For ex: Max Bupas message is that health insurance is necessary and important

for everyone. At this point, the advertising message can be directed at a very concrete

audience to achieve very specific goals. The three major areas that an advertiser should

consider when endeavoring to develop an effective "advertising platform":

What are the product's unique features?

How do consumers evaluate the product? What is likely to persuade them to purchase theproduct?

How do competitors rank in the eyes of the consumer? Are there any weaknesses in theirpositions? What are their strengths?

Most business consultants recommend employing an advertising agency to create the art

work and write the copy. However, many small businesses don't have the up-front capital

to hire such an agency, and therefore need to create their own advertising pieces.

5) COPY- When composing advertising copy it is crucial to remember that the primary aimis to communicate information about the business and its products and services. The

"selling proposal" can act as a blueprint here, ensuring that the advertising fits the overall

marketing objectives. Many companies utilize a theme or a slogan as the centerpiece of

such efforts, emphasizing major attributes of the business's products or services in the

process. This idea/message which is to be presented to the target audience is rephrased in

a confined message. For Max Bupa, Its time to put your health first is the final quote

which is displayed on its posters, banners etc. This is the work of a copywriter.

When writing the copy, direct language (saying exactly what you mean in a positive,

rather than negative manner) has been shown to be the most effective. The theory here is

that the less the audience has to interpret, or unravel the message, the easier the message

will be to read, understand, and act upon. The copy content needs to be clearly written,

following conventional grammatical guidelines. Of course, effective headings allow the


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reader to get a sense of the advertisement's central theme without having to read much of

the copy.

6) ART WORK AND LAYOUT- An artwork is the final printable form of the layout.When the client approves the copy by the agency, then an artwork is created after which

the copy is finally printed for display. For ex: For Max Bupa, Bates had created various

claim forms, sales brochures etc. for which the content was checked by the copywriter

and only after the client was fully satisfied with the copy of the brochure, its colors, fonts,

creative images etc., he approved the layout and the artwork was taken out and was

printed.

7) ADVERTISING BUDGET- The advertising budget can be written before or after a

business owner has developed the advertising strategy. When to make a budget decision

depends on the importance of advertising and the resources available to the business. If,

for instance, a business knows that they only have a certain amount of money for

advertising then the budget will tend to dictate what advertising is developed and what

the overall marketing objectives will be. On the other hand, if a business has the

resources available, the advertising strategy can be developed to meet predetermined

marketing objectives. For small businesses, it is usually best to put together an

advertising budget early in the advertising process.

4.3 VARIOUS KINDS OFADVERTISING

Advertising is the promotion of a companys products and services carried out primarily to drive

sales of the products and services but also to build a brand identity and communicate changes or

new product/services to the customers. Advertising has become an essential element of the

corporate world and hence the companies allot a considerable amount of revenues as

their advertising budget. There are several reasons for advertising some of which are as follows:

Increasing the sales of the product/service

Creating and maintaining a brand identity or brand image.

Communicating a change in the existing product line.

Introduction of a new product or service.

Increasing the buzz-value of the brand or the company.


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Thus, several reasons for advertising and similarly there exist various media which can be

effectively used for advertising. Based on these criteria there can be several branches

of advertising. Mentioned below are the various categories or types of advertising:

4.3.1 Print Advertising Newspapers, Magazines, Brochures, Fliers

The print media have always been a popular advertising medium. Advertising products via

newspapers or magazines is a common practice. In addition to this, the print media also offers

options like promotional brochures and fliers for advertising purposes. Often the newspapers and

the magazines sell the advertising space according to the area occupied by the advertisement, the

position of the advertisement (front page/middle page), as well as the readership of the

publications. For instance an advertisement in a relatively new and less popular newspaper

would cost far less than placing an advertisement in a popular newspaper with a high readership.

The price of print ads also depend on the supplement in which they appear, for example anadvertisement in the glossy supplement costs way higher than that in the newspaper supplement

which uses a mediocre quality paper.


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4.3.2 Outdoor Advertising Billboards, Kiosks, Tradeshows and Events

Outdoor advertising is also a very popular form of advertising, which makes use of several tools

and techniques to attract the customers outdoors. The most common examples of outdooradvertising are billboards, kiosks, and also several events and tradeshows organized by the

company. The billboard advertising is very popular however has to be really terse and catchy in

order to grab the attention of the passersby. The kiosks not only provide an easy outlet for the

company products but also make for an effective advertising tool to promote the companys

products. Organizing several events or sponsoring them makes for an excellent advertising

opportunity. The company can organize trade fairs, or even exhibitions for advertising their

products. If not this, the company can organize several events that are closely associated with

their field. For instance a company that manufactures sports utilities can sponsor a sports

tournament to advertise its products.

4.3.3 Broadcast advertising Television, Radio and the Internet

Broadcast advertising is a very popular advertising medium that constitutes of several branches

like television, radio or the Internet. Television advertisements have been very popular ever since

they have been introduced. The cost of television advertising often depends on the duration of


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the advertisement, the time of broadcast (prime time/peak time), and of course the popularity of

the television channel on which the advertisement is going to be broadcasted. The radio might

have lost its charm owing to the new age media however the radio remains to be the choice of

small-scale advertisers. The radio jingles have been very popular advertising media and have alarge impact on the audience, which is evident in the fact that many people still remember and

enjoy the popular radio jingles.

4.3.4 Covert Advertising Advertising in Movies

Covert advertising is a unique kind of advertising in which a product or a particular brand

is incorporated in some entertainment and media channels like movies, television shows or even

sports. There is no commercial in the entertainment but the brand or the product is subtly ( or


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sometimes evidently) showcased in the entertainment show. Some of the famous examples for

this sort of advertising have to be the appearance of brand

Nokia which is displayed on Tom Cruises phone in the movieMinority Report Cadillac cars in the movieMatrix Reloaded

4.3.5 Surrogate Advertising Advertising Indirectly

Surrogate advertising is prominently seen in cases where advertising a particular product is

banned by law. Advertisement for products like cigarettes or alcohol which are injurious to heath

are prohibited by law in several countries and hence these companies have to come up with

several other products that might have the same brand name and indirectly remind people of the

cigarettes or beer bottles of the same brand. Common examples include Fosters and Kingfisher

beer brands, which are often seen to promote their brand with the help of surrogate advertising.

4.3.6 Public Service Advertising Advertising for Social Causes

Public service advertising is a technique that makes use of advertising as an effective

communication medium to convey socially relevant messages about important matters and social

welfare causes like AIDS, energy conservation, political integrity,

deforestation, illiteracy, poverty and so on. Ogilvy once said,


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"Advertising justifies its existence when used in the public interest - it is much too powerful a

tool to use solely for commercial purposes."

Today public service advertising has been increasingly used in a non-commercial fashion inseveral countries across the world in order to promote various social causes. Priyanka Chopra is

riding high these days with back-to-back successes and endorsements and inaugurations and

everything else under the sun. However, the actress makes it a point to keep her feet grounded

and do her bit for the society. She participated in SAVE CHILDREN campaign.

4.3.7 Celebrity Advertising

Although the audience is getting smarter and smarter and the modern day consumer getting

immune to the exaggerated claims made in a majority of advertisements, there exist a section of

advertisers that still bank upon celebrities and their popularity for advertising their products.

Using celebrities for advertising involves signing up celebrities for advertising campaigns, whichconsist of all sorts of advertising including, television ads or even print advertisements.


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4.4 GROWTH OF VARIOUS ADVERTISING MEDIUMS

The Indian Entertainment and Media Industry have recorded a growth of 17 per cent in 2007,

over 2006. In the last four years (2004 -07), the industry recorded a cumulative growth of 18%

on an overall basis. However though Indian Entertainment and Media (IEM) is one of the fastest

growing sectors in the economy, it is just 0.7% of the global US$ 1.4 trillion media industry.

The IEM is divided into different segment like Television, print, films, radio, music and internet.

Out of home advertising (OOH) and live entertainment are too gaining importance.


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As per PwC, India will be one of the key drivers in pushing the global entertainment and media

industry. As mentioned above, its growth was at a CAGR of 18% till 2011 to touch Rs 1 trillion

from Rs 436 b in 2006.

Given below is the breakup of the revenues among the various segments and the growth rate till

2011. Television and print would continue to remain the largest segments. Internet, radio and

OOH would also witness high growth rates. However, Internet penetration would take time to

mature.

TELEVISION

Television continues to dominate the media domain in terms of growth and penetration alongwith print as well as the proportionate share in the total advertising pie. It continues to remain the

largest medium for media delivery in India in terms of revenue. It represents around 45% of the

total media industry. Experts believe that the Rs 329 billion TV industry will grow significantly

as its penetration is still around 60% in India. While penetration, number of C&S homes and

number of channels (623) has significantly gone up, the advertisement rates have declined,

possibly due to global slowdown. Mandatory digitization of cable networks in India could prove

to be a major game changer of the business.

IllustrationNo. 7: Advertising Revenues for Various Mediums

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2009 2010 2011 2012

Advertising Revenue (INR Billion)

TV


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PRINT

The Rs 209 billion Indian Print media industry grew by a promising 8.4%, slightly lower than the

projected 8.5% growth. Despite a large number of players entering every year, Print strongly

dominates the key Indian markets. The industry saw a 22% increase in the number of advertisers

last year. Moreover, education, automobile, FMCG and Real Estate continue to remain the

largest spenders on the print media. The good news, however, is that despite negative

speculations, India is the only market where the print medium continues to grow at a slow, but

steady rate in India.


FILMS

The film industry was arguably the most benefited sector as against the dominant print, TV and

outdoor mediums in 2011. In terms of revenue generation, films are expected to grow at 10.1%

CAGR from Rs 93 billion in 2010 to Rs150 billion in 2016 coupled by the music industry whichregistered a 5% growth over the previous year and touched Rs 9 billion in 2011. Big film and

music launches like Ra One, Rockstar and Kolaveri Di contributed significantly to the sector.

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2009 2010 2011 2012


Print


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OUTDOOR

The report reflects that the outdoor media sector was hit worst by the economic slowdown and

registered a growth of 7.6% in 2011 over 2010. The industry saw a reduction in spends by

telecom players who have been the biggest spenders on the medium in the last five years.

Though OOH continues to be used by various brands, there are still 4-5 industries which

dominate its usage. Airport and other transit media have been growing most consistently.

Advertisers are also spending heavily on malls.

DIGITAL

Digital is clearly the next destination of advertisers. The report reveals that the growth trajectory

of the medium continues. Advertising on the medium grew by over 40% and surprisingly, digital

ad spends reached a new high; approximately 5% of the total spends of Indian advertisers.

Increase in 3G penetration, growth in Smartphone usage and mobile Internet impacted Internet

and average time spend on Internet significantly. What could be the next big thing on Internet is

an adverse impact on traditional methods of print and advertising as many youth-oriented

advertisers used innovative and interactive means to advertise online. Print and outdoor media


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were less preferred for a few launches during the IPL and Cricket World Cup, where a huge

chunk of the ad pie was spent.


RADIO

The radio industry, fuelled by the positive FM-II Radio Policy, is projected to grow with a high

CAGR till the year 2012. In 2005, the government opened up the sector to foreign investment

along with migration to a revenue-share scheme. These factors along with privatization of a large

number of frequencies as part of the FM II Radio Policy will drive growth. New concepts like

satellite radio, visual radio and community radio have also begun to hit the market.

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Digital


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OUT OF HOME

Globally, outdoor advertising is very popular as corporations abroad have recognized the outdoor

media as a very popular medium of advertising. But in India in spite of OOH being very

effective and very economical in comparison to newspapers and television it has not gained

momentum as compared to other segments.


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2009 2010 2011 2012


Radio

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OOH


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MUSIC

While physical sales in the music industry continue to be hampered by piracy and falling prices,

digital music has witnessed a surge that will propel this industry in the next five years. The

total music industry is currently estimated to be worth around Rs 740 crore and is expected to

grow at a CAGR of 4% in the next five years.

LIVE ENTERTAINMENT

Live entertainment is a huge source of revenue for the global Media and

Entertainment industry. Live entertainment - sometimes also called event management- is

growing at a fast and steady rate. The number of corporate awards, television, films, and sportsevents are increasing rapidly, helping the sector grow at a fast rate. The current live

entertainment segment of the Media and Entertainment industry comprises a small number of

large event management companies and a large number of smaller companies.

INTERNET

Internet advertising spending is set to grow several folds, especially in Indias

entertainment sector. It is growing by 4% in year 2010. Until such time, the projected yearly

growth rate of the ad industry is to stabilize at 11%.The growth of online ad industry is estimated

to shoot up to 43% by the year 2012. However, even though India is ranked eighth in the world

in terms of number of internet users, the country is not ranked amongst the top 10countries in

terms of average monthly hours online per unique visitor which may hamper the growth of

internet advertising as compared to others media types.

OTHERS

Amongst the other segments, the animation and gaming industry is expected to show the

maximum growth, albeit from a small base. The animation and gaming industry is projected to

grow from the present size of Rs 11 b to Rs 29b by 2012, implying a 22% cumulative annual

growth over the next five years.


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4.5 PROMOTIONAL PRACTICES

(By bates for Max Bupa)

LOGO


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STANDEES


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POSTERS


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BANNERS


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BACKDROPS


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OTHERS


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Pen Drive Layout

Coster


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Post it

Streamer

Discount Coupons


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4.6 KEY TRENDS

Growth in digital content consumption across media

Digital technology continues to revolutionize media distribution be it the rapid growth of DTH

and the promise of digital cable, or increased digitization of film exhibition - and has enabled

wider and cost effective reach across diverse and regional markets, and the development of

targeted media content. There has been increased proliferation and consumption of digital media

content be it newspapers and magazines, digital film prints, and online video and music or

entirely new categories such as social media. Accordingly, online advertising spends have seen a

spurt in growth viz-a-viz spends on traditional media.

Rise of new age user devices

Smart phones, tablets, PCs, gaming devices, etc. all form the foundation of a new wave in media

usage. This is gradually impacting the way content is being created and distributed as well.

Multiple media including TV, films, news, radio, music etc are being impacted with this change.

New age consumers adapting themselves to the newer technologies

As Indian consumers evolve, there is a heightened need to engage them across platforms and

experiences. There is a greater need for integration and innovation across traditional and new

media, with changing media consumption habits and preferences for niche content. Media

companies today have no choice but to provide more touch points to engage

brand study report bates ltd

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