ADVERTISING & SALES PROMOTION
A PROJECT REPORT Under the guidance Of
Ms. Tanu Malik Submitted by JATIN BEDI in partial fulfillment o f the requirement for the award of the degree
Of
MBA IN
[Retail Operations]
March 2012
Acknowledgment
I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I would also like to express my special gratitude and thanks to industry persons for giving me such attention and time. My thanks and appreciations also go to my colleague in developing the project and people who have willingly helped me out with their abilities.
BONAFIDE CERTIFICATE Certified that this project report titled ADVERTISING MANAGEMENT & SALES PROMOTION is the bonafide work of JATIN BEDI who carried out the project work under my supervision.
SIGNATURE
ADVERTISING MANAGEMENT & SALES PROMOTION
ADVERTISING MANAGEMENT
Advertising-meaning Advertising is one of the four methods of promotion, via, sales promotion, personal selling, public relations and advertising. Advertising is a non personal communication of a sales message. It is also known as mass selling. It is not an effective as personal selling but it does facilitate communication with a large no. Of potential buyers at a time. It consists of non personal forms of communication conducted through paid under clear sponsorship . Definition “advertising is paid, non personal communication through various media by business firms.” According to american marketing association “as any paid form of non- personal presentation and promotion of ideas, goods and services by an identified sponsor.” Evolution of advertising Age of print: 1441 – johannes gutenberg creates movable type Mid 1400 s printed hand bills 1472 – first ad in english “ pyes of salisburg” 1600’s -- news papers 1622 – 1st ad in london’s weekly relations news. 1655 – first use of the term advertising 1704 – 1st us newspapers to carry ads 1841 – volacy planner becomes first ad sales agent (boston) Industrial revolution and emergence of consumer society: 1850’s – first branded items 1864 – j. Walter thompson forms agency. 1872 – 1st ward’s illustrated mail order catalog. 1879 – proctor & gamble introduces ivory soap. 1880 – john powers pioneers copywriting focuses on news. 1888 – george eastman creates 1st kodak camera.
1890’s – loud and thomas agency forms. Modern advertising era: 1904 – 1940’s ---- albert lasker pioneers “ reason – why ” copy. 1905 – john e. Kennedy describes advertising as “salesmanship in print” 1905 – 1930’s -- claude hopkins develops scientific mail- under copy testing. 1906 – pure food and drug act. 1908 – beginners of celebrity endorsements – pepsi uses ad famed race car driver barney old field. 1912 – “truth in advertising” movement 1914 – ftc act passed Age of agencies: 1917 – american association of advertising agencies formed. 1918 – stanley & helen person develop account services, brand names and status appeals. 1923 – young &
\ \\\ agency formed
1930’s – radio advertising surpasses magazines as leading ad medium. 1932 – john caples applies scientific methods to mail – order copy and head lines 1940 – clyde bedell develops “ selling stratagems” The creative era: 1950 – tv become important ad medium. 1950’s – posssee peevers develops “unique selling proposition” 1960’s leo bursnett creates brand icons and inherent drama. Accountability era: 1960’s – bill bernbach focuses on the art of persuasion. 1980’s – 1990’s – mergers & globalization 1990’s – 200’s imc, niche marketing, growth of interactive technology, relationship marketing, mass customization. 2001 – ad takes on new responsibilities Nature of advertising Element of marketing mix: - price, product, promotion and physical distribution. Promotion mix: - personal selling, sales promotion, publicity and advertising. Mass communication: - radio, television, news papers, bill boards and magazines etc, Messages: - it motivates the customers. Paid: - charges for the ad agency.
Persuasive: - information passing. Sponsor: - ad is sponsored by some identifies advertiser, disclosing ideas, messages and information.
Scope of advertising Messages- message of the product. Media- large no of media with those advantages and disadvantages cost and benefits. Merchandise - demonstration of the attributes of the product. Advertising functions- demand, promotion, image of the organization. Advertiser-he helps the peoples to understand the product. Objectives-increase sales, awareness, interest. The 5 players of advertising The advertiser- person of organization - song writers The ad agency - printers The media – channels of communication - market merchants Vendors: direct- mail production houses Free lance copy writers - telemarketers Graphic artists - public relation consultant
The target audience
- photographers
Classification and types of advertising Product – related advertising Pioneering advertising Competitive advertising Retentive advertising
Public service advertising Functional classificaiton Advertising based on demand influence level. Primary demand (stimulation) Selective demand (stimulation) Institutional advertising Product advertising Informative product advertising Persuasive product advertising Reminder-oriented product advertising Advertising based on product life cycle Consumer advertising Industrial advertising Trade advertising Retail advertising Wholesale advertising Advertising based on area of operation National advertising Local advertising Regional advertising Advertising according to medium utilized 1. Product – related advertising It is concerned with conveying information about and selling a product or service. Product advertising is of three types, viz, A. Pioneering advertising B. Competitive advertising C. Retentive advertising Pioneering advertising: This type of advertising is used in the introductory stages in the life cycle of a product. It is concerned with developing a “primary” demand. It conveys information about, and selling a product category rather than a specific brand. For example, the initial advertisement for black – and – white television and colour television. Such advertisements appeal to the consumer’s emotions and rational motives. Ii. Competitive advertising: It is useful when the product has reached the market-growth and especially the marketmaturity stage. It stimulates “selective” demand. It seeks to sell aspecific brand rather than a
general product category. It is of two types: direct type: it seeks to stimulate immediate buying action. Indirect type: it attempts to pinpoint the virtues of the product in the expectation that the consumer’s action will be affected by it when he is ready to buy. Example: airline advertising. Air india attempts to bid for the consumer’s patronage either immediately - direct action-in which case, it provides prices, time tables and phone numbers onwhich the customer may call for reservations; or eventually – indirect action – when it suggests that you mention air india’s name when talking to your travel agent. Iii. Retentive advertising: This may be useful when the product has achieved a favourable status in the market – that is, maturity or declining stage. Generally in such times, the advertiser wants to keep his product’s name before the public. A much softer selling approach is used, or only the name may be mentioned in “reminder” type advertising. 2. Public service advertising This is directed at the social welfare of a community or a nation. The effectiveness of product service advertisements may be measured in terms of the goodwill they generate in favour of the sponsoring organization. Advertisements on not mixing drinking and driving are a good example of public service advertising. In this type of advertising, the objective is to put across a message intended to change attitudes or behaviour and benefit the public at large. 3. Functional classification Advertising may be classified according to the functions which it is intended to fulfill. (i) advertising may be used to stimulate either the primary demand or the selective demand. (ii) it may promote either the brand or the firm selling that brand. (iii) it may try to cause indirect action or direct action. I. Advertising based on demand influence level. A. Primary demand stimulation Primary demand is demand for the product or service rather than for a particular brand. It is intended to affect the demand for a type of product, and not the brand of that product. Some advertise to stimulate primary demand. When a product is new, primary demand stimulation is appropriate. At this time, the marketer must inform consumers of the existence of the new item and convince them of the benefits flowing from its use. When primary demand has been Stimulated and competitors have entered the market, the advertising strategy may be to stimulate the selective demand. B. Selective demand stimulation
This demand is for a particular brand such as charminar cigarettes, surf detergent powder, or vimal fabrics. To establish a differential advantage and to acquire an acceptable sort of market, selective demand advertising is attempted. It is not to stimulate the demand for the product or service. The advertiser attempts to differentiate his brand and to increase the total amount of consumption of that product. Competitive advertising stimulates selective demand. It may be of either the direct or the indirect type. Ii. Institutional advertising Institutional advertising may be formative, persuasive or reminder oriented In character. Institutional advertising is used extensively during periods of product Shortages in order to keep the name of the company before the public. It aims at Building for a firm a positive public image in the eyes of shareholders, employees, Suppliers, legislators, or the general public. This sells only the name and prestige of The company. This type of advertising is used frequently by large companies whose Products are well known. Hmt or dcm, for example, does considerable Institutional advertising of its name, emphasizing the quality and research behind its Products. Institutional advertisements are at consumers or focus them upon other groups, such as voters, government officials, suppliers, financial institutions, etc. If it is effective, the target groups will respond with goodwill towards, and confidence in the sponsor. It is also a useful method or introducing sales persons and new product to consumers. It does not attempt to sell a particular product; it benefits the organization as a whole. It notifies the consumers that the company is a responsible business entity and is patriotic; that its management takes ecologically responsible action, is an affair- motive-action employer, supports the socialistic pattern of society or provides employment opportunities in the community. When indian oil advertisements describe the company’s general activities, such as public service work, this may be referred to as institutional advertising because it is intended to build an overall favorable attitude towards the company and its family of products. Hmt once told the story of the small-scale industries supplying it with component parts, thus indicating how it aided the development of ancillary industries. Iii. Product advertising Most advertising is product advertising, designed to promote the sale or reputation of a particular product or service that the organization sells. Indane’s cooking gas is a case in point. The marketer may use such promotion to generate exposure attention, comprehension, attitude change or action for an offering. It deals with the non-personal selling of a particular good or service. It is of three types as follows:-
A. Informative product advertising B. Persuasive product advertising C. Reminder-oriented product advertising A. Informative product advertising: This form of advertising tends to characterize the promotion of any new type of product to develop an initial demand. It is usually done in the introductory stages of the product life cycle. It was the original approach to advertising. B. Persuasive product advertising: Persuasive product advertising is to develop demand for a particular product or brand. It is a type of promotion used in the growth period and, to some extent, in the maturity period of the product life cycle. C. Reminder-oriented product advertising: The goal of this type of advertising is to reinforce previous promotional activity by keeping the brand name in front of the public. It is used in the maturity period as well as throughout the declining phase of the product life cycle.
4. Advertising based on product life cycle A. Consumer advertising B. Industrial advertising A. Consumer advertising Most of the consumer goods producers engage in consumer product advertising. Marketers of pharmaceuticals, cosmetics, scooters, detergents and soaps, cigarettes and alcoholic beverages are examples. Baring a few, all these products are all package goods that the consumer will often buy during the year. There is a heavy competition among the advertisers to establish an advantage for their particular brand. B. Industrial advertising Industrial executives have little confidence in advertising. They rely on this form of promotion merely out of fear that their competitors may benefit if they stop their advertising efforts. The task of the industrial advertiser is complicated by the multiple buying influence characteristics like, the derived demand, etc. The objectives vary according to the firm and the situation. They are: to inform, to bring in orders,
to induce inquiries, to get the advertiser’s name on the buyer’s list of sources, to provide support for the salesman, to reduce selling costs, to help get items in the news column of a publication, to establish recognition for the firm or its product, to motivate distributors, to recognition for the firm or its products, to motivate distributors, to create or change a company’s image, to create or change a buyer’s attitude, and The basic appeals tend to increase the rupee profits of the buyer or help in achieving his nonmonetary objectives. Trade journals are the media most generally used followed by catalogues, direct mail communication, exhibits, and general management publications. Advertising agencies are much less useful in industrial advertising. 5. Trade advertising A. Retail advertising B. Wholesale advertising A. Retail advertising This may be defined as “covering all advertising by the stores that sell goods directly to the consuming public. It includes, also advertising by establishments that sell services to the public, such as beauty shops, petrol pumps and banks.” Advertising agencies are rarely used. The store personnel are usually given this responsibility as an added task to be performed, together with their normal functions. The result is that advertising is often relegated to a secondary position in a retail store. One aspect of retail advertising is co-operative advertising. It refers to advertising costs between retailers and manufacturers. From the retailer’s point of view, co-operative advertising permits a store to secure additional advertising that would not otherwise have been available. B.wholesale advertising Wholesalers are, generally, not advertising minded, either for themselves or for their suppliers. They would benefit from adopting some of the image-making techniques used by retailers – the need for developing an overall promotional strategy. They also need to make a greater use of supplier promotion materials and programmes in a way advantageous to them. 6. Advertising based on area of operation
It is classified as follow: A. National advertising B. Regional advertising C. Local advertising A. National advertising It is practiced by many firms in our country. It encourages the consumer to buy their product wherever they are sold. Most national advertisements concentrate on the overall image and desirability of the product. The famous national advertisers are: Hindustan levers, dcm, itc, jay engineering, tisco B. Regional advertising It is geographical alternative for organizations. For example, amrit vanaspati based in rajpura claims to be the leading hydrogenated oil producer in the punjab. But, until recently, it mainly confined itself to one of the vegetable oil brands distribution to malihabad district (in u.p. Near lucknow). C. Local advertising It is generally done by retailers rather than manufacturers. These advertisements save the customer time and money by passing along specific information about products, prices, location, and so on. Retailer advertisements usually provide specific goods sales during weekends in various sectors. 7. Advertising according to medium The most common classification of advertising is by the medium used. For example: tv, radio, magazine, outdoor, business periodical, newspaper and direct mail advertising. This classification is so common in use that it is mentioned here only for the sake of completeness.
Economic implications of advertisements Effect on the value of products or services: advertising sets off a chain reaction of economic events. In a free-market system, consumers have the option of choosing the desired value in the products or services they buy. If price is more important to consumers, they have options of buying less expensive alternatives. Others looking for luxury and status may choose more fancy and expensive alternatives. Advertising contributes to the selfinterest of both consumers and advertisers by adding value to products and services in a freemarket system. Further it encourages competition, which adds to serve the consumer’s selfinterest.
Effect on prices: advertising also adds cost and affects prices. This means that if companies stop this expensive advertising, products would cost less and be available at lower prices. This is a major area of continuing debate among economists, advertisers consumer advocates and policy makers. However, this view is not totally correct. While some advertised products do cost more than the unadvertised products, and the costs are at least partly borne by consumers, the opposite is true. Advertising may actually help lower the overall cost of a product and keep down the prices because of economies of scale in production. Effect on consumer demand and consumer choice: it is generally agreed that the effect of advertising and other promotions is an increase in aggregate consumption but to what extent it effects consumption, is a highly debatable issue. Besides advertising, there are other important forces such as technological advances, level of education, increases in population, level of income, changing lifestyles etc. That exert a powerful influence on aggregate consumption. Advertising can help stimulate demand of new products by communicating relevant information and facts. Advertising restricts the choice of alternatives to a few heavily advertised brands. Effects of competition: economists are critical of advertising because it creates a ‘barrier to entry’ of smaller firms, which have fewer resources, and cannot match the power of large firms with huge advertising budgets. High costs may inhibit their entry and brands of large firms probably benefit greatly from the barrier. There is a possible that adverting may discourage competition.
Social implications of advertisements It is generally agreed that advertising exerts a powerful social influence and is criticized for encouraging materialism in society. Advertising is blamed for manipulating consumers to buy things for which they have no real need, depicting stereotypes and controlling the media. Materialism is the tendency to accord undue importance to material interests and this tendency perhaps, lessens the importance of freedom, love and intellectual pursuits of society, which are non-material.
People from many countries and cultures believe that materialism tends to be negatively related to happiness and hence is considered undesirable. Advertisements should not attempt to persuade consumers by playing on their emotions, anxieties and psychological needs, such as self-esteem, status, being attractive, etc, thus fostering discontent and exploiting them to purchase products and services that they do not need. Stereotyping in advertising: stereotyping ignores differences among individuals and presents a group in an unvarying pattern. Critics often point out that advertising perpetuates stereotyping of women. The charge is that advertising has failed to portray the changing role of women in society. Visuals and copies of ads present stereotypical images of indian women in settings such as family illness, children, cooking, neighbours etc. Or they are shown as dependent on men, subservient, less intelligent etc. They are also shown as decorative objects or sexually provocative figures. There is perceptible improvement in this regard as advertisers have started to recognize the role of working women in family affairs and decision making.
Ethical implications of advertisements Ethics are moral principles and values that govern the actions and decisions of an individual or group. Many laws and regulations are put into force that determines what is permissible in advertising. Cigarette smoking, for example, has been shown to be associated with high levels of lung cancer and other respiratory tract diseases and many people would consider cigarette advertising as unethical. Sex appeal and / or nudity used simply to gain consumers’ attention and not even appropriate to the product or service being advertised is in poor taste. The primary criticism of advertising is that it is misleading and deceives consumers.
“puffery” is advertising that praises the product or service to be sold with subjective opinions, exaggerations or superlatives without stating any facts and, for this, advertisers have a right. This further complicates the issue of deception. In india, advertising standards council of india (asci) enforces the ethical code for advertisers. The council is a non-profit organization set up by 43 founder members and has developed a regulating code. It proposes to adjudicate on whether an advertisement is offensive or not. The council’s decisions are binding on its members and in case of any disputes; it proposes to deal with the government. Asci guidelines are as follows: To ensure the truthfulness and honesty of representation and claims made by the advertisements and to safeguard against misleading advertising. To ensure that advertisements are not offensive to generally accepted standards of public decency. To safeguard against indiscriminate use of advertising for promotion of products, which are regarded as hazardous to society or to individuals to a degree or of a type, which is unacceptable to society at large. To ensure that advertisements observe fairness in competition so that the consumers’ need to be informed on choices in the market-place and the canons of generally accepted competitive behaviour in business are both served.
Advertising principles of american advertising federation Truth – advertising shall reveal the truth, and shall reveal significant facts, the omission of which would mislead. Substantiation – advertising claims shall be substantiated by evidence in possession of the advertiser and the advertising agency prior to making such claims. Comparisons – advertising shall refrain from making false, misleading, or unsubstantiated statements or claims about a competitor or his products or services.
Bail advertising – advertising shall not offer products or services for sale unless such offer constitutes a bona fide effort to sell the advertised products or services and is not a device to switch consumers to other goods or service, usually higher priced. Guarantees and warranties – advertising of guarantees and warranties shall be explicit, with sufficient information to apprise consumers of their principal terms and limitations or, when space or time restrictions preclude such disclosure, the advertisement shall clearly reveal where the full text of the guarantee or warranty can be examined before purchase. Price claims – advertising shall avoid price claims that are false or misleading, or savings claims that do not offer provable savings. Testimonials – advertising containing testimonials shall be limited to those of competent witnesses who are reflecting a real and honest opinion or experience. Taste and decency – advertising shall be free of statements, illustrations, or implications that are offensive to good taste or public decency.
Ad agency Ad agency is an independent organization that provides one or more specialized advertising and promotion related services to assist companies in developing, preparing, and executing their advertising and other promotion programmes. Large and medium size agencies used ad agencies. Definition “an ad agency is a service organization that specializes in planning and executing advertising programs for its clients” Types of ad agency Full service agency: it offers a full range of marketing, communication, and promotion services, including planning; creating and producing the ads performing research. Various departments in full service agency. Account services Marketing services Creative services
Management and finance – organization and structure In house agencies: It is an ad agency that is setup, owned and operated by the advertisers. Creative boutiques: It is an agency that provides only creative services. Media buying services: Media buying services are independent companies that specializes in the buying of media, particularly radio and television time. Agency compensation Commission from media 15% Fee, cost and incentive based system. Fee arrangement Fixed fee method Fee commission combination Cost plus agreement-cost + profit Incentive based compensation sales on market store. Percentage charges Why agencies lose clients Poor performance on service Poor communication Unrealistic demand by the client Personality conflicts Personnel charges Changes in the size of the client on agency Conflicts of interests Changes in the clients corporate on marketing strategy declining sales Conflicting compensation philosophies. Changes in policies. How agencies gain clients
Referrals Solicitations Presentations Public relations Image and reputation ADVANTAGE OF USING AGENCIES
1. The marketer gains a number of benefits by employing agencies. An agency Generally has an invaluable experience in dealing with various advertising and Marketing issues. 2. The lessons which agency learned in working with other clients are useful inputs For the marketer. 3. An agency may employ specialists in the various areas of preparation and Implementation of advertising plans and strategies. 4. The personnel are not members of the marketer’s management team. They bring Objective and unbiased viewpoints to the solution of advertising and other Marketing problems. 5. The discounts that the media offer to agencies are also available to advertisers. This is a strong stimulus to them to use an agency, for the media cost is not much Affected thereby. 6. The company normally does not have as many types of specialists as a large or Medium-sized advertising agency has because an agency can spread the costs or its Staff over many clients. It can do more for the same amount of money. 7. The company can also get an objective, outside viewpoint from an agency, Assuming that the agency representatives are not acting as “yes man” in order to Keep the advertiser’s account. 8. A related point is that the company can benefit from the agency’s experience With many other products and clients. 9. Another advantage is that agency feels a greater pressure than the company’s Own department to produce effective results. The relations between an agency and a Client are very easy to terminate; but it is difficult to get rid of an ineffective Advertising department. 10. The manner in which agencies are compensated, the use of an agency may not
SELECTING AN AGENCY
While selecting an advertising agency, the importance of compatibility should be borne in mind. An agency takes a long time to grasp the problems and accumulate the facts that are necessary for the smooth functioning of a client. Though this investment period is long, it pays rich dividends. Therefore, an agency Should not be frequently changed. Here are some points that can help the advertiser to: (i) choose an agency ; and (ii) get the best out of an agency. (i) choosing an agency The agency should be able to think independently on various problems, and not solve them by preconceived notions which it is unwilling to change. The agency should have experience in selling goods and ideas. It should be able to bring in more results than anticipated. The company should be financially sound and should be able to cover both local and national advertising campaigns. The size of the agency should not be seriously taken into account. A big agency is not necessarily a better than a small agency. The agency should not be one that hesitates to correct the advertiser if it feels that he is wrong. The agency should be able to use both research and brains to solve problems. An agency that plans to make a profit on an account should be chosen, rather than one that maintains that it will work on a no-profit-no-loss basis.
Advertising campaign management “managing an advertising campaign is the process of preparing and integrating a specific advertising program in conjunction with the overall imc message” “an ad campaign includes a series of ads placed in various media, that are designed to meet objectives and are based on an analysis of marketing and communication situations”
Steps / process involved in ad campaign
SETTING ADVERTISING OBJECTIVES Advertising is a method of communication with a specified objective. The Objectives of advertising as explained before are grouped as sales objectives (measured in terms of increase in sales, increase in market share and return on investment) and communication objectives.
Sales as an Advertising Objective
Sales are a convenient and really attractive advertising objective for many managers.
In case of sales as the advertising objectives, it would be quite simple to evaluate the results of the ad campaign.
Many experts recognize that advertising creates delayed or ‘carryover effect’ and no matter how much money is spent on advertising, it may not necessarily have an immediate impact on sales.
Sales, as an advertising objective, offer little guidance to creative and media people working on the account.
In spite of problems that sales objectives pose, there are certain situations when sales objectives can be appropriate.
Some direct-action advertising attempts to induce a quick response from the members of target audience such as ads offering some kind of incentive, or ads announcing contests, or encouraging prospects to place orders by phone or through the Internet.
Communications Objectives
Advertising communications objective can be put in a pyramid form.
First the lower level objectives, such as awareness, knowledge or comprehension are accomplished.
Subsequent objectives may focus on moving the prospects to higher levels in the pyramid to elicit desired behavioural responses such as associating feelings with the brand, trial, or regular use etc.
It is easier to accomplish ad objectives located at the base of the pyramid than the ones towards the top.
Irrespective of the fact whether the brand is new or established, the pyramid can be used to determine appropriate advertising objectives.
Communication-effect Pyramid
5% Repurchase/
10% Trial 20% Preference
40% Liking 60% Knowledge / Comprehension 80% Awareness
The communication objectives of advertising can be grouped in to the following: • Building awareness (informing): The first task of any advertising is to make the audience appreciate that the product or service exists and to explain exactly what it is. • Creating favorable attitudes (persuasion). The next stage and the one that preoccupies most advertisers, is to crate the favorable attitude to the brand, which will eventually lead the consumers to switch their purchasing pattern. • Maintenance of loyalty (reinforcement) One of the tasks which is often forgotten is that of maintaining loyalty of existing customers who will almost always represent the main source of future sales.
There are general objectives of advertising that covers goals like encouraging increased consumption of a product by current users, generating more sales leads, increasing brand awareness, increasing repeat purchases and supporting the personal selling efforts. Some of the broad advertising goals are explained as per the following:
1. Launch of New Products and Services: In a saturated market, the introduction of new products and brands can give the seller a tremendous opportunity for increasing his sales. In
the case of innovative products (totally new to the market) such as Laptop Computers, a great deal of advertising has to be done over an extended period of time to make people aware of “What the product is” and What it does” and “How the customers would find it useful”. In addition, the advertisement also carries information about the availability of the product and facilities for demonstration/trial etc. Similarly new brands of existing product categories are also promoted quite aggressively. Two recent examples are the launching of “Pepsi Blue” soft drinks during the world cup and launch of “Mountain Dew” in subsequent period. 2. Expansion of the Market to Include the New Users: Advertising can be used to tap a new segment of the market, hitherto left unexplored. For example TV and Video Camera manufacturers who have been concentrating on domestic users and professionals can direct their advertising to the government institutions and large organization for closed circuit TV networks, security systems and educational purposes. Another way of expanding the consumer base is to promote new uses of the product. For example, Johnson’s baby oil and baby cream were originally targeted to mothers. The same products have now been directed towards the adult market for their personal use. Similarly, Milkmaid was originally promoted as a substitute for milk. It is now being advertised as an ingredient for making sweet dishes and also as a sandwich spread for children. 3. Announcement of a Product Modification: For such advertising, generally, the terms “new”, “improved”, “Excel” etc. Is used as prefixes to the brand name. For example, “Surf Excel” gives the impression of an advanced detergent powder, although there may be no tangible difference between the earlier brand and the new one. Sometimes the customer as a modified product e.g. “a new refill pack for might perceive a minor packaging change Nescafe”
4. Announcement of a Special Offer: Because of competition, slack season, declining Sales, etc, advertising is used to make a special offer. For example, Colgate Dental Cream campaign about 20% extra was to increase volumes through a sales promotion campaign. Hotels offer special rates during off- season. Similarly many products like room heaters, fans, air-conditioners, etc, offer off-seasons discounts to promote sales.
5. To Announce Location of Stockiest and Dealers: To support dealers, to encourage selling of stocks and to urge action on the part of readers, space may be taken to list the names and addresses of stockiest and dealers. 6. To Educate Customers: Advertisement of this type is “informative” rather than persuasive”. This technique can be used to show new users for a well-established product. It can also be used to educate the people about an improved product e.g. Pearl Pad odor free jars and bottles. Sometimes societal advertising is used to educate people on the usefulness or harmful effects of certain products. For example, Campaigns against unsafe sex and aids are sponsored by government and voluntary agencies. Similarly, advertisements discourage the consumption of liquor and drugs. 7. Reminder Campaigns: This type of advertising is useful for products, which have a high rate of repeat purchase, or those products, which are bought frequently e.g. Blades, cigarettes, soft drinks, etc. The advertisement is aimed at remaining the customer to ask X for the same brand again. The campaign of “Dil Maange More” during television breaks of cricket matches is to have a top of mind recall. 8. To Sought Dealer Cooperation and Motivation: A successful retail trader depends upon quick turnover so that his capital can be reused as many times as possible. Dealer support is critical, particularly for those who have limited shelf space for a wide variety of products. Advertisers send “display” material to dealers for their shops, apart from helping the retailer with local advertising. 9. To Create Brand Preference: This type of advertising does two things: (I) it creates a brand image or personality (ii) It tells the target audience why Brand X is better than Brand Y. In this type of advertisement, the product or brand acquires a ‘personality’ associated with the user, which gives the brand a distinctive ‘image’. The second type of advertising also known as ‘comparative advertising’, takes the form of comparison between two brands and proves why one brand is superior. 10. Few other objectives: Advertising also helps to boost the morale of sales people in the company. It pleases sales people to see large advertisements of their company and its products, and they often boast about it. Other uses of advertising could include recruiting
staff and attracting investors through “Public Issue” advertisements announcing the allotment of shares etc. You must understand that an Advertising Objective is a Communication Objective "An Advertising goal is a specific communication task, to be accomplished among a defined audience to a given degree in a given period of time". AD. CAMPAIGNS •
According to Dunn and Barban “ An advertising campaign includes a series of ads, placed in various media, that are designed to meet objectives and are based on an analysis of marketing and communication situations.”
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The ad campaign is guided by the promotion and advertising plans which evolve from marketing objectives and strategy.
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An advertising campaign includes seven essential steps: o Appraisal of advertising opportunity o Market analysis o Setting advertising objectives o Setting budget and necessary control systems o Determining media and creative strategy o Create ads, pretest and release ads o Evaluate final results (post-testing)
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The steps are not necessarily sequential and are individual activities; in practice, advertises undertake two or more of them simultaneously.
Planning an Advertising Campaign 1.
Appraisal of Advertising Opportunity – the marketer must determine whether advertising is suitable in his particular marketing situation. a. Presence of position primary demand b. Good chances of product differentiation c. Products have hidden or not readily noticeable qualities.
d. Presence of powerful emotional buying motives e. Availability sufficient funds 2.
Analyzing and defining the target market – good advertising starts with a clear understanding of marketing goals based on a thorough market analysis. a. Who buys the product b. What do they really buy c. When do they buy d. How do they use the product
3.
Setting Advertising Objectives – set objectives for an advertising campaign and also for each ad in each medium used.
4.
Determining the Advertising Budget – the budget controls all proposed expenditures by fixing a limit. The advertising budget is basically a plan to allocate financial resources to advertising for future operations.
5.
Deciding Media and Creative Strategy – involves decisions about media and creation of advertisements.
Media plan is developed simultaneously with creative plan.
Creative strategy concerns what message to deliver to the audience for accomplishing the objectives. Deciding the central theme, idea, image, or position is a critical part of the creative process which becomes the cornerstone of all individual ads that constitute the campaign. 6.
Creating Ads, pre-test and Release Ads – pretesting advertising strategy and execution, various techniques such as market tests, focus groups, surveys, compute simulation tests, etc. Used before the ads are placed in the media.
7.
Evaluating the final Results (post-testing) – is done to evaluate the final results of the ad campaign. These results are concerned with measuring the campaigns effectiveness.
Three Phases of Campaign Creation There are three phases involved in the creation of any campaign.
(i)
Strategy Development Phase,
(ii)
The Briefing Phase and
(iii)
The Creative Phase
.I. Strategy Development Phase
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This phase decides the objectives and contents of communication. It analyses the
research data and decides positioning of a brand. The strategy formulation is in modern day's agencies a team effort. The creative persons form a part of this team not as creative persons but as a mind. There are brain- storming sessions. The team throws up the ideas. These ideas ultimately make up the strategy. The brilliant in the team pick up one or two ideas from the total ideas generated and develop them. Our strategy should give us a competitive edge.
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The strategy formulation leads to an advertising brief. If you want to catch fish,
you have to think like a fish. If you want to catch a consumer, you have to think like a consumer. That's the first principle. What most companies do is they think like themselves. They spend all their time with themselves' (AI Ries and jacktrout). II. Advertising Brief to the Creative
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As a matter of fact, the client has to brief the agency about the strategy.
However, most of the time this does not happen. The agency is supposed to brief itself. The strategy formulated is communicated to the creative people. They are briefed about how to create the advertising the product needs. The strategy should be communicated with clarity. The strategist should be a good motivator for the creative team.
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Proper briefing is going halfway as far as creativity is concerned. Bad brief to
the creative team results into bad work. Good brief ensures good work. Within the creative team, the copywriter and visualiser work together and it is difficult to attribute the final product to either of them. Creative campaigns are creative due to a good brief. Great briefs inspire great work. Briefs should have clarity and single-minded objective. They should aim at a target person. The idea is to have the desired response. All briefs must suggest a benefit or a product plus.
III. The Creative Phase
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Here the lateral thinkers come on the scene. They leap from a single
unidirectional idea of the strategist to an advertising idea that will add value to the product/brand. The creative persons are supposed to be right-brained - lateral thinkers, irrational thinkers as against the accounts director who is left brained, i.e., logical. They make connections that had not existed before. They rearrange the order of things. They create abruptions in the consumer mind. There should be a beautiful marriage between the strategy and the lateral thinking by the creative people.
•
The creative director's post has become a more responsible one. He does not
remain content with a clever copy or stimulating visuals. He is required to understand the product and its market completely. He is now an overall ad man, an all-rounder. He participates in research and has active role in positioning. Advertising planning framework Plans are nothing, planning is everything. - dwight d. Eisenhower The advertising management is mainly concerned with planning and Decision making. The advertising manager will be involved in the development, implementation, and overall management of an advertising plan. The development of an advertising plan essentially requires the generation and specification of Alternatives. Decision making involves choosing from among the alternatives. The alternatives can be various levels of expenditure, different kinds of objectives or strategy possibilities, and kinds of options with copy creation and media choices. Thus, the essence of planning is to find out the feasible alternatives and reduce them To decisions. An advertising plan reflects the planning and decision – making process and the decisions that have been arrived at in a particular product and market situation. Planning framework Advertising planning and decision making depends on internal and external factors. Internal factors are situation analysis, the marketing program, and the advertising plan. The three legs of advertising planning concern are the objective setting and target market identification, message strategy and tactics, and media strategy and tactics.
The advertising plan should be developed in response to a situation analysis, based on research. Once developed, the advertising plan has to be implemented as an advertising campaign, in the context of social and legal constraints and with the involvement of various facilitating agencies. Let us discuss these factors one after another. 1. Situation analysis It involves an analysis of all important factors operating in a particular situation. This means that new research studies will be undertaken on company history and experience. At&t, for example, developed a new strategy for its long-distance telephone services – based on five year of research. The research encompassed market segmentation studies, concept testing, and a field experiment. The field experiment increased on testing a new advertising campaign called “cost of visit”. An existing “reach out” campaign although successful, did not appear to get through to a large group of people who had reasons to call but were limiting their calls because of cost. Research based on annual surveys of 3,000 residential Telephone users showed that most did not know the cost of a long-distance call or that it was possible to make less expensive calls in off-peak periods. Five copy alternatives were subsequently developed and tested, from which “cost of visit” was chosen. This campaign was credited with persuading customers to call during times that were both cheaper for them and more profitable for at&t And, overall, was more effective that the “reach out” campaign. One estimate was that by switching 530 million in advertising from “reach out” to “cost of visit”, an incremental gain in revenue of $22 million would result in the first year and would top $100 million over five years. This example highlights that a complete situation analysis will cover all marketing components and involve finding answers to many questions about the nature and extent of demand, competition, environmental factors, product, costs, distribution, and the skills and financial resources of the from. 2. Consumer and market analysis. Situation analysis begins by looking at the aggregate market for the product service, or cause being advertised, the size of the market, its growth rate, seasonality, geographical distribution. Whereas consumer and market analysis is concerned with the following factors: * nature of demand - how do buyers (consumer and industrial) currently go about buying existing products or services? - can the market be meaningfully segmented or broken into several homogeneous Groups with in respect to “what they want” and “how they buy”? * extent of demand - what is the size of the market (units and dollars) now, and what will the future hold? - what are the current market shares, and what are the selective demand trends?
- is it best to analyze the market on an aggregate or on a segmented basis? * name of competition - what is the present and future structure of competition? - what are the current marketing programs of established competitors? - why are they successful of unsuccessful? - is there is opportunity for another competitor? Why? - what are the anticipated retaliatory moves of competitors? - can they neutralize different marketing programs we might develop? * environmental climate - what are the relevant social, political, economic, and technological trends? - how do you evaluate these trends? Do they represent opportunities or problem? * stage of product life cycle - in what stage of the life cycle is the product category? - what market characteristics support your stage-of –life-cycle evaluation? * cost structure of the industry - what is the amount and composition of the marginal or additional cost of supplying increased output? Skills of the firm - do we have the skills and experience to perform the functions necessary to be in the business? - how do our skills compare with those of competitors? * financial resources of the firm - do we have the funds to support an effective marketing program? - where are the funds coming from, and when will they be available? 3. Competitive analysis: Advertising planning and decision making are affected by competition and the competitive situation facing the advertiser. Competition is such a pervasive factor that it will occur as a consideration in all phases of the advertising planning and decision making process. It should include an analysis of what current share the brand now has, what shares its competitors have, what share of a market is possible, from which competitors the increased share of a market is possible? The planner also has to be aware of the relative strengths and weaknesses of the different competing companies and their objectives in the product category. It is important to look at competition as a precursor to the planning process.
DAGMAR APPROACH
Russel H Colley (1961) prepared a report for the Association of National Advertisers titled “Defining Advertising Goals for Measured Advertising Results” DAGMAR.
He developed a model for setting advertising objectives and measuring the results of an ad campaign.
According to this model, communications effects are the logical basis for setting advertising objectives and goals against which results should be measured.
According to the DAGMAR approach, advertising objectives involve a communications task that is specific and measurable.
Colley proposed that communications objectives be based on a hierarchial model with four stages: o Awareness: involves making target audience aware of the existence of brand or company. o Comprehension:
develop an understanding among audience of what the
product is and what it would do for them. o Conviction: create a mental disposition among target audience members to buy the product. o Action: to motivate the target audience to purchase the product or service.
One important contribution of dagmar was its ability to clarify what consititutes a good objective.
According to colley, the advertising objectives should have the following features: o Stated in terms of concrete and measurable communication tasks. o Specify a target audience. o Indicate a benchmark or standard starting point and the degree of change sought, and o Specify a time period for accomplishing the objective or objectives.
ADVERTISING INDUSTRY
THE ADVERTISING INDUSTRY CONSISTS OF THREE PRINCIPAL GROUPS:
(A) SPONSORS;
(B) MEDIA ; AND
(C) ADVERTISING AGENCIES OR ADVERTISING DEPARTMENTS.
ADVERTISING AGENCIES ARE OF TWO BASIC TYPES, VIZ., INDEPENDENT; AND HOUSE.
AN INDEPENDENT AGENCY IS A BUSINESS THAT IS FREE TO COMPETE FOR AND SELECT ITS CLIENTS.
A HOUSE AGENCY IS OWNED BY ITS MAJOR CLIENT. A HOUSE AGENCY IS NOT COMPLETELY FREE TO SERVE OTHER CLIENTS.
THE ADVERTISING DEPARTMENT AN INTEGRAL PART OF THE ORGANIZATION IT SERVES.
THE ADVERTISING AGENCY PROVIDES FOR THE CLIENT A MINIMUM OF:
UNIT – II Media Planning “Media Planning is the series of decisions involved in delivering the promotional message to the prospective purchasers and or on users of the product or brand” “Media planning is a process, which means a number of decisions are made, each of which may be altered on abandoned as the plan develops”. Medium: The Medium is the general category of available delivery systems, which includes broadcast media (like TV and Radio). Print media (like Newspapers and magazines), direct mail, outdoor advertising, and other support media. Media Vehicle Media vehicle is the specific carriers within a medium category. The Media Plan / Activities The media plan determines the best way to get the advertiser’s message to the market. In a basic source, the goal of the media plan is to find that combination of media that enables the marketer to communicate the message in the most effective manner to the largest no. Of potential customer at the lowest cost.
Marketing strategy plan
Situation Analysis
Creative strategy plan
Setting media objectives
Determine media strategy
Selecting broad media class
Selecting media within class
Broad cast
Print
Problems in Media Planning 1. In sufficient information 2. In sufficient terminology 3. Time pressure 4. Difficulty measuring effectiveness Steps / Process / Stages involved in Developing the Media Plan
Other media
Media analysis
Establishment of media objectives
Media strategy development and implementation
Evaluation and follow up 1. Market Analysis & Target market identification. •
To whom shall we advertise?
Index = Percentage of users in a demographic segment / Percentage of population in the same segment *100 •
What internal and external factors are operating?
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Where to promote-Using Indexes to determine where to promote.
a) The Survey of buying index. b) Brand development index (BDI). It helps Marketers factor the rate of product usage by geographic area in to the decision process. BDI = % of brand to total country sales in the market / % of total country population in the market *100 c) The Category Development Index (CDI) CDI = % of product category total sales in the market / % of total country population in market *100
2) Establishing Media Objectives Just as the situation analysis leads establishment of marketing and communication objectives, the media situation analysis should lead to determination of specific media objectives. Setting Media Objectives 1. Finding target audience 2. Sales geography 3. Timing 4. Duration: How long to advertise?
3) Developing and Implementing Media Strategies Criteria / Factors to be considered in the development of media plans: a) The Media Mix: The wide variety of media vehicles are available to advertisers, while it is possible that only one medium and /vehicle might be employed, it is much more likely that no of alternatives will be used. b) Target Market Coverage: •
Full market coverage
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Partial market coverage
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Coverage exceeding target market.
C) Geographic coverage D) Scheduling: The primary objective of scheduling is to time promotional effects so that they will coincide with the highest potential buying times. Types of scheduling
E) Reach Vs. Frequency: Since advertise have a variety of objectives and face budget constraints, they usually must trade off reach and frequency. They must decide whether to have the message be seen /heard by more people (reach) / by fewer people more often (frequency). Reach is the percentage of the target population exposed at least once to the advertiser’s message during a specific time frame. Equally as important as the percentage of people exposed (reach) is the number of times they are exposed. This rate of exposure is called frequency. Average Frequency – the average number of times the reached audience is exposed to the media vehicle during a specified period of time. •
How much reach is necessary?
Determinants of reach 1. More prospective customers are reached by a media schedule using multiple media rather than a single medium 2. Another influencing factor is the number and diversity of media vehicles used 2. Reach can be increased by diversifying the day parts used to advertise •
What frequency level is needed?
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Media Class – refers to the general category of delivery systems available to carry advertising messages to a selected audience such as print media, broadcast media, outdoor media, etc.
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Media Vehicle – is the specific message carrier within a medium, such as computer at home and Business today magazines are vehicles in print media.
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Broadcast, press, outdoor, posters and cinema are often referred as ‘above-the-line media’.
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Direct mail, sales promotion, exhibitions, merchandising, sales literature, etc. Are referred to as ‘below-the-line-media’
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‘Media Planning’ refers to a series of decisions that need to taken in delivering the ad message to the largest number of the target audience in the most effective manner at the lowest cost. The plan specifies ‘media objectives’ and ‘media strategies’ to accomplish the objectives.
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‘Reach’ is a measure o the number of different audience members exposed at least once to a media vehicle in a given period of time.
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‘Coverage’ refers to the potential audience that might get exposed to the ad message through a media vehicle.
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‘Frequency’ refers to the number of times the audience is exposed to a media vehicle in a given period of time.
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Gross Rating Points (grps) – refers to the total weight of a media effort, quantatively, it is equal to reach multiplied by average frequency.
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Continuity – refers to message deliveries over a period of time or a season. It refers to the timing of the media insertion.
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The basic goal of a media plan is to formulate a particular combination of media that would enable the advertiser to communicate the message successfully and effectively to the maximum number of potential and existing customers in the target market at the lowest cost.
Steps in the Development of Media Plan
Market Analysis
(i)
Set the Media Media Objectives
Media Strategy development and implementation
Evaluation and follow-up
Market Analysis and Identifying the Target Market - The key questions at this stage: (1) who is the target audience for advertising, (2) what internal and external factors may influence the media plan? (3) where and when to focus the advertising effort? The market analysis may reveal more than a few target markets. To decide which specific groups need to be addressed, the media planner works with the client, account executives, marketing department and the creative directors. At this stage, the media planner may need some secondary or primary data regarding the audience size, composition and exposure figures, etc.
(ii)
Establishing Media Objectives – media objectives are formulated to help accomplish the advertising communications task and marketing objectives. Media objectives are translated into specific goals for the media programme and are limited to those that can be achieved through media strategies. For examples, the media objectives can be stated as, a. Use print media to provide coverage of 80% of the target market over a sixmonth period, staring May. b. Reach 60% of the target audience at least three times over the same six-month period. c. Concentrate heaviest advertising between October and December, with lighter emphasis in earlier months.
(iii)
Develop and Implementing Media Strategies a. Media Mix and Target Market Coverage – once media objectives are established, planners develop suitable media strategies to accomplish these objectives. The product characteristics, objectives, size of the media budget, and individual preferences are some of the factors that may influence choice of media combination. To effectively cover the target market, the media planner determines the segments that should get the maximum media emphasis.
b. Geographic Coverage – geography is an important consideration in the media planning process. The demand for certain types of products depends on the geographic locations of the markets. There may be regional differences in consumption and accordingly media planners select secondary localized media to supplement their national media schedule. c. Scheduling – media schedule is the calendar of advertising plan. Scheduling is concerned with timing the insertion of advertisements in the selected media. There are three approaches to scheduling: i. Continuity – refers to a continuous pattern of advertising, which can mean every day, every week,or every month. ii. Flighting – refers to a less regular schedule of advertising messages and is quite popular. There are intermittent periods of advertising and no advertising. iii. Pulsing – is a combination of continuity and flighting. The continuity is maintained as a base throughout but, during certain periods, the level of advertising stepped up. d. Media Reach and Frequency – media planners face the essential task of ensuring optimal use of media budget while deciding about the reach, frequency and the number of advertising cycles affordable for the year. Media planners make compromises and strike a balance between reach, frequency and the number of advertising cycles in the planning period. i. “programme rating” is a measure of potential reach of broadcast media and is expressed as a percentage. ii. “gross rating points (GRP)” is a numerical figure indicating how many potential audience members are likely to be exposed to a series of commercials. GRP = Reach x Frequency iii. “Target Rating Points (trps)” refer to the number of times and the number of individuals in the primary target audience that the media will reach. iv. “Impact” is the instrusiveness of the ad message which means whether the ad message was actually perceived by the audience. e. Qualitative Aspects of Media Vehicle Source – this concept refers to the qualitative value of the media vehicle and there is general agreement that vehicle
source effect exists. There are at least six attributes that should be considered while choosing a media vehicle: i. Expertise – degree of expertise associated with its area of interest is important. ii. Prestige – for some products the prestige of a media vehicle is considered to be important. iii. Editorial “fit” – in a media vehicle, when the editorial matter discusses some attribute, it is likely that even an ambiguous ad close by will be interpreted being in mind, as the editorial matter makes discussed attribute readily accessible in the memory. iv. Mood created – media vehicles can enhance the creativity of a message by creating a mood that affects the impact of a commercial communication. v. Involvement – the involvement of target audience members in a media vehicle should generate more impact of an ad message as compared to another vehicle that is less interesting to audience. vi. Unbiased approach – it is also important that advertiser do not attempt to influence the media objectivity. Determining the relative cost of media:
Cost per thousand: Magazine space is sold primarily on the basis of pages or some increment of a page. It has been used by the magazine industry as a standard method to provide cost break downs on the basis of cost per page per thousand circulation.
Cost per rating points: This is used to compare cost figures of same medium broadcast vehicles and is also referred as cost per point. One rating point means 1% of a broadcast station’s coverage area.
Milline rate:
Media buyers use the milline rate to compare the costs of space in newspapers. A milline rate is the cost in rupees per line of standard dimensions to reach a newspaper circulation of one million. FREQUENCY The term frequency refers to the number of advertisements of the same size appearing in an individual medium for a given period such as per day, per week, per month, or per campaign. There is no formula to determine the ideal frequency. The two factors are the size of the advertising fund and the size of the advertisement to be run. If these are known, frequency can be derived. The two other factors are the Number of media and the advertising period. As the number of media increases, there is pressure for a lower frequency, or to shorten the advertising period. The other possibilities are to enlarge the fund, or to reduce the size of the advertisement. Manufacturers cannot ignore the fact that what the competitors are doing in respect Of frequency. The more often a message is repeated, the greater the proportion of it the consumer remembers.
Message Design and Positioning Message design identifies the consumer’s perceptions about the products.
The following
questions give a good insight: (i)
What is the nature of the product: its generic category.
(ii)
For whom it is meant: the segment.
(iii)
What are the special characteristics of the product? How is the consumer going to be benefited?
(iv)
Who are the competitors? What is their promise?
(v)
Is the product different from the other available products?
How? Is it a
technological breakthrough? (vi)
On which occasions will the product be used? How often?
(vii)
What would you like your consumer to perceive this brands as? What position it would take?
The answer to these questions is given by marketing research and by the advertiser and his agency. The creativity of the agency matters more here. Message Presentation •
Message are to be structured keeping the objective of the communication and the audience in view.
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Messages are presented either centrally or peripherally.
o A central message takes a direct route to persuasion. It is a well documented ad.
It compares advantages and disadvantages of a product.
This central
presentation provokes active cognitive information processing. o Peripheral presentation provides pleasant association, scenic background, and favorable inferences about the product.
These are distinct, rational and
emotional appeal ads. Advertising Message Structure The important aspects of message structure are: •
Drawing conclusions: The question often raised is whether definite conclusions should be drawn for the audience in the ad for quick understanding or should they be left to them. In many instances, it is best to let the receivers of the promotion message draw their own conclusions.
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Repetition: repeating an ad message is often beneficial, for it develops a continuity of impression in the minds of the target audience, and may increase the predisposition to think and act favorably towards the products advertised. A repeated message increases awareness and knowledge on the part of the prospect.
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One-versus-two-sided arguments: This raises question whether the advertiser should only praise the product of should also mention some of its shortcomings. The most common approach in sales and advertising is a one-sided approach.
Two-sided
arguments go well when audiences have an unfavorable opinion about the communicator’s position. •
Comparative Advantage: here a product is directly or indirectly compared with a competitive product to show the advertised product to advantage. This trend has been seen more and more in some recent campaigns.
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Order of Presentation: Whether to put the strongest argument first or las in the advertiser’s presentation is equally important. Sometimes this is considered a part of copywriting strategy.
Message Format Message format an important step in message development.
By format, we mean the
organization, plan, style or type of ad message. The message format is the scheme by which the
message content and structure strategy are implemented. It is characterized by the type of media vehicle in which the message is delivered. MESSAGE DEVELOPMENT There are so many media that carry the ad messages. There are so many products which are advertised in these media. A number of companies advertise their products. We have therefore a lot of communication in all directions—direct, indirect, zigzag and all-sided. Perhaps there is over-communication. This leads us to the concept of clutter, and how to overcome it. 2.1 MEANING Layout is the logical arrangement of components of an advertisement in the copy. It refers to the overall structure, the position assigned to the various elements of the copy and illustrations. It is deciding on the placement of headlines, copy, Illustrations, marketer’s name, logo and the amount of free space in an advertisement copy. Thus, the physical arrangement of all the elements of advertisement is called layout. It is concerned with placing all the elements of the advertisement more attractively within the allotted space and time. The pattern of layout varies according to the medium to be used. DEFINITION According to sandage and fryburger, “the plan of an advertisement, Detailing the arrangement of various parts and relative spatial importance of each is referred to as layout”.
INGREDIENTS OF A GOOD LAYOUT The following are the ingredients of a good layout. •
Background: Could have picture, tiles, blocks, and graphics but should not overshadow the foreground.
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Border: Is the frame of the advertisement. Could be, o · Heavy o · Light o · Obvious o · Unobtrusive o · Plain o · Fanciful o · Useful
o · Useless The practice you must know is the elimination of border in today’s context. Except when you have to present a key point, or a sales pitch then it could be used. •
Heading: This is the title of the ad. Should be short, but could be four, five or even six decked. Words in the heading should be short and verbs should be used to attract attention.
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Illustration: It is the dominating picture in the ad. It could be the product itself or a model. Large pictures are preferred than small ones but it is not a hard and fast rule. Small pictures are to make the copy comfortable. The main picture tries to position the picture. It can attract the right target audience by showing the right picture. People showing the product could be a better picture than the product itself. The illustration should show the benefit offered by the product.
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Caption: Used to describe the sub-title. It tells the story quickly, clearly and decisively. Sometimes difficult to locate. But it is an important part of the layout.
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Coupon: This is a part of the advertisement that enables a consumer to get in touch with the advertiser. The name and postal address is an integral part of any coupon. The offer or the request must follow in close heal. The obligation of the customer is given by their signature space. No hard and fast rule is there regarding the position of the coupon in the layout. Although in most of the advertisements it normally lies at the end. Both rectangular and triangular ones are in popular use. It is normally on the right hand side keeping in mind that most people are right handed.
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Decoration: Greater interest for the applicability of decoration is in the fact that it should supplement or emphasize the message of the advertisement as a whole. Heavy or light would be at the discretion of the layout person.
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Mascot: It is also known as the ‘Trade Character’ or ‘Trade Figure’. It may be defined as an illustration of either real or an imaginary figure or personality introduced into the
advertisement to personalize the sales message or the name of the product or service. Maharaja of the Air India is a suitable example. •
Logo or Name Plate: This is the signature of the advertisement. The inclusion of the company’s name and address is not always important hence the logo or a specially designed image of the brand or the company can replace that. The popular logos of Tata, Mercedes Benz, Toyota, Star TV network, etc are a good example. The logo goes on to make the Corporate Identity i.e. What does the company or the brand stands for?
FUNCTIONS OF AN ADVERTISING LAYOUT
An advertisement layout is a blueprint. The main functions of layout are:(i) assembling different parts – the main function of layout is to Assemble and arrange the different parts or elements of an advertisement illustration, headline sub headlines, slogans, body text and the identification mark etc. And boarder and other graphic materials – into a unified presentation of the sales message. In all the layouts present these elements in the same size, form, shape, position and proportion as desired by the advertiser in the final ad, proof , thus layout gives both creative personals (copywriter and artists ) and the advertiser who pays for it a good idea of how the finished ad will finally appear. (Ii) opportunity of modification - the layout offers an opportunity to the creative teams, agency management and the advertiser to suggest modification before its final approval and actual construction and production begins. (iii) specification for costs – the layout provides specification for Estimating costs and it is a guide for engravers typographers and other craft workers to follow in producing the advertisement. Principles of design and layout It is not necessary that all elements of advertisement copy must form part of the copy. They appear in today’s ads with varying degree of frequency. The components of the copy must be decorated or positioned on the basis of certain basic principals regardless of the number of elements in an add. The following five principles of good composition are important to anyone who creates or evaluates The advertisement - (1) balance ; (2) proportion (3) contrast and emphasis, (4) eye –movement , and (5) unity. (1) balance – a layout may be called balanced if equal weight or forces are equidistant from a reference point or a light weight is placed at a greater distance from the reference point than a heavy
weight. Balance is the law of nature. The reference point or fulcrum is the optical centre of the advertisement. The artists with a given area or space, are to place all the elements with in this space. Optical centre of fulcrum of the ad is often a point approximately two – thirds of the distance forms the bottom. It is the reference of the layout. (2) proportion- proportion is closely related to balance since it refers to the division of space among layout elements for a pleasing optical effect. Good proportion in an advertisement requires a desired emphasis on each element in terms of size and position. If the major appeal in an advertisement is product’s price. The price should be displayed in proportionate space position. (3) contrast and emphasis – contrast means variety. It gives life to The whole composition and adds emphasis to selected important elements. An advertiser always looks to advertisements from completion point of view and desires the policy of the most important elements to attract the attention of the people. An advertisement with good contrast may attract the attention of customers contrast maybe visible in a number of ways. It may be witnessed through sizes, shapes and colours. Different colours sizes and shapes of elements in an advertisement add contrast. The varying directions, of design elements (vertical trees, horizontal pavements arched rainbows) add contrast; too there must be sales Communication purpose behind every layout decision made. (4) eye movement – eye movement is the design principle which helps Move the eyes of the readers from element to element in the order given in the hierarchy of effects model for effective communication of the message in advertising. An effective ad uses movement to lead its reading audience from initial message awareness through product knowledge and brand preference, to ultimate action (intent to purchase). Direction and sequence are two terms for the same element and artists may perform it in many ways. Mechanical eye direction may be created by devices such as pointing fingers lines arrows or even a bouncing ball that moves from unit to unit. Planned eye movement should follow the established reading patterns too, such as the tendency to start to top left corner of a page and read through to the lower right corner. The eyes also moves naturally from large items to small from dark to light and from colours to not – colours. (5) unity or harmony – unity or harmony is another important design Principle. Although each element should be considered as a separate unit in striving for balance, proportion, contrast and eye movement. The complete layout or design should appear as a unified composition. Common methods of securing unity in layouts are (i) use of consistent typographical design. (ii) repetition of the same Shapes and motifs, (iii) the overlapping of elements (iv) use of a boarder to hold elements together and (v) avoidance of too much which space between various element. Although unity and contrast
seem conflicting but they function quite smoothly together if they operate at cross purposes – if the artists strive for balance Here too as well as in the layout overall. Unity contributes orderliness to elements – a state of coherence. And if they are properly placed. Contrasting size shapes colours and directions can flow together beautifully. 2.1.5 elements of a layout An advertising copy is the means by which the advertiser’s ideas are Given expression to in a message to readers. Regardless of its length and brevity copy refers to all the reading matters of an advertisement, including the headline, sub- headlines, text or body, and the name of the firm or the standard initials of the advertiser. As we have seen that advertising has so many immediate purposes but Its ultimate goal is to stimulate sales. As a reader turns the pages of a magazine or newspaper, he notices so many advertisements but a great variation in copy. Some copy may be so sticking that the reader takes immediate action and rush to the nearest dealer to purchase it while there may be some other copy or copies that he does not like or it does not click to his mind. The first copy conforms to the requisites of a good copy. A copywriter must take pains in making up a sound Advertisement copy containing its various components i.e. Headlines, subhead lines, illustrations etc. The following are the main components of an advertisement copy 1. Background 9. Name plate 2. Border 10. Price 3. Caption 11. Product 4. Coupon 12. Slogan 5. Decoration 13. Space 6. Heading 14. Sub-heading 7. Illustration 15. Text 8. Mascot 16. Trademark16. Trademark 1. Background The background for the advertisements should be somewhat catchy and colourful. The arrangement of background differs from medium to medium and advertisement to advertisement. In short, background should be suitable for the contents of the advertisement. 2. Border It is defined as the frame of the advertisement. Border is employed to impart the reading atmosphere. The border may be light or heavy, obvious, plain or fanciful. The border may also contain a logo. 3. Caption
It refers to the subtitle. But in most of the advertisement it is converted into heading or sub-heading. 4. Coupon Coupon is that part of the advertisement which is intended for the Convenience of the prospective customer in communicating with the advertiser. The coupon must contain the name and full postal address of the firm followed by the offer. The offer should be brief and clear. There should be space for name and address of the prospective customer. The usual shape of the coupon is triangular or rectangular. 5. Decoration Advertisement decoration is the ornament of the advertisement. This is done to emphasis the advertisement message. 6. Heading the heading or headline is defined as the title of the advertisement. The words in the heading should be short. 7. Illustration Illustrations are the part of layout that pictures the basic theme of the advertisement. It has the power to capture the attention of the reader. The advertisements become richer by the use of illustrations. 8.mascot It is known as the trade character or trade figure. It is an illustration of either a real or an imaginary figure or personality given in the advertisement. 9. Name plate (logo) The name plate or name block is the signature of the advertiser. It represents the personality of the company and its product. 10. Price It is another part of layout. The price of the product should be featured clearly. The price is usually taken in the concluding lines of the copy. 11. Product It refers to the representation of the product offered for sale. A very popular practice is to show the product in use with illustrations. 12. Slogan Slogan is a sales argument. The arrangement of slogan in the layout is determined by the importance of its relation to the advertising message. 13. Space Space refers to the entire space left in the space hired by the advertiser. This depends on the design of the copy. 14. Subheading
It is a secondary heading. It is given to support the heading or to pick out the various selling points given in the text. 15. Text Text or body of the advertisement refers to the general reading matter. It is the subject matter of the copy. It should be neither too wide nor too narrow. 16. Trade mark It is a word or design by which a product is defined. If the trade, marks are registered it can be included in the layout. Importance of measuring the effectiveness of advertising (1) it acts as a safety measure Testing effectiveness of advertising helps in finding out ineffective Advertisement and advertising campaigns. It facilitates timely adjustments in advertising to make advertising consumer oriented and result oriented. Thus waste of money in faulty advertising can be avoided. (2) provides feed back for remedial measures Testing effectiveness of advertising provides useful information to the advertisers to take remedial steps against ineffective advertisements. (3) avoids possible failure Advertisers are not sure of results of advertising from a particular Advertising campaign. Evaluating advertising effectives helps in estimating the results in order to avoid complete loss. (4) to justify the investment in advertising The expenditure on advertisement is considered to be an investment. The investment in advertising is a marketing investment and its objectives should be spelt out clearly indicating the results expected from the campaign. The rate and size of return should be determined in advance. If the expected rate of return is Achieved in terms of additional profits, the advertisement can be considered as effective one. (5) to know the communication effect The effectiveness of the advertisement can be measured in terms of their communication effects on the target consumers or audience. The main purpose of advertising is communicated the general public, and existing and prospective consumers, various information about the product and the company. It is therefore desirable to seek post measurements of advertising in order to determine whether advertisement have been seen or heard or in other words whether they have communicated the theme, message or appeal of the advertising. (6) compare two markets
Under this procedure, advertising is published in test markets and results are contrasted with other. Markets – so called control markets – which have had the regular advertising programme. The measurements made to determine results may be measurements of change in sales, change in consumer attitudes, changes in dealer display. And so on depending upon the objectives sought by the advertiser.
AD APPEAL Appeals and Advertising Message
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The message content refers to what the advertiser has to say to the target audience that will produce the desired response. It may be an appeal, a time, an idea or a unique selling proposition.
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In fact, the message content ultimately formulates some kind of benefit, motive or reason why the audience should respond to, or do, something.
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Appeals are broadly classified as rational, emotional and moral appeals.
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Rational appeals are those directed at the thinking process of the audience. They involve some sort of a deliberate reasoning process, which a person believes would be acceptable to other members of his social group. They attempt to show that the product would yield the expected functional benefit.
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Rationality has come to be equated with substance. A rational ad becomes believable and effective. Although there may be some disagreement regarding which motives are rational and which are emotional.
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The following are some buying motives, which are normally, considered rational under ordinary circumstances:
(i)
High Quality : People buy television, stereophonic music systems, furniture, refrigerators, electric gadgets; kitchenware and a host of consumer durables for their high quality. Many consumer goods, too, are bought for their quality, such as
clothing, beverages, food items, etc., and not merely because of their taste or fashion, or style. (ii)
Low Price : Many people buy low-priced locally made air conditioners for their homes because they believe that these products will show a product performance similar to, or slightly inferior to, that of nationally reputed brands at higher price. Whether this is true or not, a person, as long he believes this to be true, thinks his reason will be accepted as a “good” one by his social group. In this case, he is exhibiting a rational motive.
(iii)
Long Life, as of a car tyre that will give 30,000 kms, before its utility has been exhausted.
(iv)
Performance, as of a ballpoint pen that won’t release excessive ink or skip under any circumstances.
(v)
Ease of use, as of a screwdriver with a magnetized tip which clings to the metal head of the screw, or a timer in the kitchen mixer which switches off automatically after a predetermined time period.
(vi)
Re-sale Value, as of a two-wheeler scooter. “Bajaj” has a better re-sale value than any other make.
(vii)
Economy, in the operating expenses of some brands of refrigerator is greater because they consume less electricity. Many two-wheeler vehicles claim a better mileage per litre consumption of fuel than similar other vehicles.
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Consumer durables of high value ‘are also often bought on the basis of rational appeals.
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People are ready and willing to give rational motives if asked why they have made a particular [purchase.
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Emotional appeals are those appeals, which are not preceded by careful analysis of the pros and cons of making a buying.
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Emotions are those mental agitations or excited states of feeling which prompt us to make a purchase.
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Emotional motives may be below the level of consciousness, and may not be recognized by a person; or even if he is fully aware that such a motive is operating, he is unwilling
to admit it to others because he feels that it would be unacceptable as a “proper” reason for buying among his associates and colleagues. •
Emotional appeals are designed to stir up some negative or positive emotions that will motivate product interest or purchase.
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Different emotional appeals, which are particularly important from the advertising point of view, are listed below.
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Following several motivation research studies, it has been found that negative emotional appeals are more effective than positive ones.
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We shall also, therefore, name the negative appeals first.
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Negative Emotional Appeals: An advertiser may try to induce a particular behavioral change by emphasizing either positive or negative appeals, or a combination of both.
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For example, an advertising campaign to get the target audience to buy fire insurance may stress the positive aspect -low cost relative to other investment, the services the insurance company provides, early settlement of claims, and so on; or it may stress the negative aspect of not getting insurance - the danger of losing one’s possessions or the ravages of fire. Positive appeals use the strategy of “reducing” a person’s anxiety about “buying and using” a product, while negative appeals use the strategy of “increasing” a person’s anxiety about “not using” a product or service.
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In general, a positive appeal stresses the positive gains to a person from complying with the persuasive message; the negative appeal stresses his loss if he fails to comply. We give here the different dimensions of emotional appeals.
Precautions While using the Emotional Route (i)
The advertising should have relevance. If the product needs attribute-based rational advertising, emotional appeals should be avoided.
(ii)
There should be a natural flow of feelings.
(iii)
Execution should not be exaggerated. The level of emotionality should not exceed that experienced by the consumer.
(iv)
There is a difference between a consumer’s emotions associated with the product / brand and a consumer’s emotional reaction to the ad copy itself. Preferably, these two should be compatible.
Fear Appeals
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The fear appeal is most important among emotional appeals, and also the most effective. It is said that the message’s effectiveness increases with the level of fear it generates. The use of fear appeal in getting people to start doing things they should is very common.
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Many ad messages of toothpaste employ this appeal. They present the fear of tooth decay or unhealthy gums or bad breath, and then suggest the use of a specific brand of toothpaste to get rid of such fears.
Positive Emotional Appeals •
Positive appeals highlight product benefits and attributes capable of influencing consumer behavior. They are love, humor, pride, prestige and joy.
Most baby food products have a mother’s love appeal. Love for family is perfectly employed in an ad of Dettol soap that has been called “The Love & Care Soap.” In the closing sentence, the ad appeals by saying: “Give your family the Loving Care of Dettol Soap.” Mother’s love for the baby has been appealed to in ad of Johnson’s baby soap. It says: “Gentle as a kiss on your baby’s tender skin.” It further, goes on to say: ‘’Johnson’s Baby Soap. Because Johnson & Johnson care for your baby almost as I much as you do.” Other emotional motives are illustrated in the following list: (i)
Desire to be different, as illustrated by people who build an ultra modem home in an area of traditional homes.
(ii)
Desire to confirm, as in the case of teenage boy and girls who want to be “in jeans” because all their friends wear jeans.
(iii)
Desire to attract the opposite sex, as shown by a teenage girl who buys a new cosmetic in order to make her skin more beautiful.
(iv)
Desire for prestige, as shown by a person who buys the most expensive automobile (Mercedes, Toyota, etc.) He can afford in order to impress his friends.
Sex Appeals in Advertising
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Sex appeal is being increasingly used in Indian advertising to overcome the culture in the print as well as broadcast media and to grab attention.
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Sex appeals in contraceptive ads have become explicit, and are more visual than verbal.
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Does sex really sell? Or is it a negative influence on consumer?
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The answer is not either affirmative or negative for these questions, and depends upon a number of factors.
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Functional sex appeals have highest recall and so also symbolism. Inappropriate sex appeals have lowest recall.
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Fantasies are also used as sex appeals. Appeal that are consistent with the product, lead to a higher recall.
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There might be gender-related responses to sex appeal.
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Females may find the sexual ad offensive and so its use for a female targeted product runs a risk.
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The sexual appeals are justified in case of products like personal products, panties, bras, undergarments, and swimsuits. They may not go well with industrial products.
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The relevance of the appeal to the product is very important. The manner of sex portrayal, the sex of the models and the target segment also affect the effectiveness of the ad.
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Blatant references to sex are suddenly the in-thing in American advertising. Marketers promoting perfumes, jeans, alcohols, gloves, watches and cars are resorting to this route.
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Media clutter may be one reason that leads to the explosion of sexual imagery in advertising.
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Ads of perfumes have traditionally focused on the sensuous. For Calvin Klein, sex has always been a favorite selling point. Sex appeals are interpreted differently from time to time, region to region, person to person, country to country, and society to society. Even the same person reacts to them differently at different stages of his life cycle.
Direct and Indirect Appeals Another way of classifying ad appeals, comes about whether we they are linked directly or indirectly with consumer needs. Direct Appeals •
Direct appeals are those that clearly communicate with the consumers about a given need, followed by a message that extols the advertised brand as a product that satisfies that need.
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In Industrial advertising, some ads may have a direct appeal, satisfying the customer’s technical need; but, in consumer advertising, the direct appeal plays a very limited role.
Indirect Appeals •
Indirect appeals are those that do not emphasize a human need, but allude to a need. Because advertisers understand the influence of needs upon selective perception, they leave some ambiguity in the message so that the consumers may be free to interpret it and the need to which the advertiser is appealing.
Product-Oriented Indirect Appeals: They are Grouped into three Classifications I. Feature-oriented Appeals: The basic message is about product features, characteristics and attributes. Examples: Instant Shine, Cherry shoe polish, ‘’Promise,’’ the unique toothpaste with the time-tested clove oil. Ii. Use-oriented Appeals: The basic message emphasizes specific in-operation and/or postoperation advantages of the brand advertised. Examples: Anne French hair remover ad: “How much cruelty can a woman’s skin bear?” The headline is a searching question. The- ad message discards other methods of hair removing - they are shaving, waxing, and threading. Then it goes on to inform you how gently hair is removed with Anne French. Iii. Product Comparison Appeals: “The basic message emphasizes the differences between the advertised brand and the competing brands. The advertised brand, of course, has a net advantage over those with which it is compared; otherwise the whole exercise becomes futile. Consumer-Oriented Indirect Appeals: They are Further Divided as Follows (i)
Attitude-oriented Appeals: The basic message is one that is in line with the consumer’s attitude - his value – belief structure. Example: The ad series by Shriram group, namely: “Indian Corporate Evolution. The Shriram Experience.” In one of the ads, it says: “we are Indians. We must remember our roots.” Then it goes on to
state the group’s belief in Indian traditions and the advantages it shares with the country. This message refers indirectly to Maslow’s esteem need. (ii)
Significant Group-oriented Appeals: The basic message emphasizes the kind of group that uses or approves of the advertised brand. The group may be a reference group, a social group, or a peer group, or any other group that is significant for the consumer target. The ad says: “Some possessions define a character. Some distinguish it. A cigarette so distinguished, it’s by appointment to your Majesty.”
(iii)
Life Style-oriented Appeals: The basic message emphasizes an identifiable life style relevant to a defined target market. Example: An ad of Charminar cigarette making an appeal with its strong taste. For some hard smokers, a “strong” cigarette can only give relaxation, particularly after a day’s hard work. One needs a Charminar.
(iv)
Sub-conscious-oriented Appeals: The basic message is distinguished and is directed at the consumer’s subconscious or unconscious) need. These messages are aimed at the buyer’s dream world, but are veiled in some manner by messages appealing to the buyer’s conscious mind. Example: ‘Petals’ brassieres of VIP are advertised with a dreamy message: “As you flower into a woman, you discover the epitome of international fashion. Discover Petals.”
(v)
Image-oriented Appeals: Although all advertising appeals create a brand image in the minds of consumers, the image oriented approach is distinct in the sense that here the advertiser, consciously and purposefully, makes an effort to mould a brand image. There is an intention to create a specific brand image. One strategy is to create a brand image that “fits” either the self-image or self-ideal image of the target market.
Essentials of an Advertisement Appeal I. It must be thematically sound. Ii. It must be communicative. Iii. It must be interesting. Iv. It must have credibility. V. It must have finality and be complete. Vi. It must contain truthful” information. Selling Points and Appeals
Selling points are those product attributes that are listed in the advertisement copy to impress upon the consumer the significance of a product to him. They could be specifications, quality statements, composition statements, descriptive or narrative or performance statements. Some selling points are primary selling points and the rest are subsidiary selling points. Selling points in order to be effective must have the force to appeal to a particular buying motive. So selling points successfully touch upon the buying motives.
SALES PROMOTION TECHNIQUES /TOOLS
CONSUMER-ORIENTED SALES PROMOTIONS •
Consumer sales promotions are steered toward the ultimate product users—typically individual shoppers in the local market—but the same techniques can be used to promote products sold by one business to another, such as computer systems, cleaning supplies, and machinery. In contrast, trade sales promotions target resellers— wholesalers and retailers—who carry the marketer's product.
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Following are some of the key techniques used in consumer-oriented sales promotions.
PRICE DEALS
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A consumer price deal saves the buyer money when a product is purchased. The main types of price deals include discounts, bonus pack deals, refunds or rebates, and coupons.
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Price deals are usually intended to encourage trial use of a new product or line extension, to recruit new buyers for a mature product, or to convince existing customers to increase their purchases, accelerate their use, or purchase multiple units. Price deals work most effectively when price is the consumer's foremost criterion or when brand loyalty is low.
•
Price Discounts: Buyers may learn about price discounts either at the point of sale or through advertising. At the point of sale, price reductions may be posted on the package, on signs near the product, or in storefront windows. Many types of advertisements can be used to notify consumers of upcoming discounts, including fliers and newspaper and television ads. Price discounts are especially common in the food industry, where local
supermarkets run weekly specials. Price discounts may be initiated by the manufacturer, the retailer, or the distributor. For instance, a manufacturer may "pre-price" a product and then convince the retailer to participate in this short-term discount through extra incentives. For price reduction strategies to be effective, they must have the support of all distributors in the channel. Existing customers perceive discounts as rewards and often respond by buying in larger quantities. Price discounts alone, however, usually do not induce first time buyers. •
Bonus Pack or Banded Pack: Another type of price deal is the bonus pack or banded pack. When a bonus pack is offered, an extra amount of the product is free when a standard size of the product is bought at the regular price. This technique is routinely used in the marketing of cleaning products, food, and health and beauty aids to introduce a new or larger size. A bonus pack rewards present users but may have little appeal to users of competitive brands. A banded pack offer is when two or more units of a product are sold at a reduction of the regular single-unit price. Sometimes the products are physically banded together, such as in toothbrush and toothpaste offers.
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Refund or Rebate: A refund or rebate promotion is an offer by a marketer to return a certain amount of money when the product is purchased alone or in combination with other products. Refunds aim to increase the quantity or frequency of purchase, to encourage customers to "load up" on the product. This strategy dampens competition by temporarily taking consumers out of the market, stimulates the purchase of postponable goods such as major appliances, and creates on-shelf excitement by encouraging special displays. Refunds and rebates are generally viewed as a reward for purchase, and they appear to build brand loyalty rather than diminish it.
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Coupons: Coupons are legal certificates offered by manufacturers and retailers. They grant specified savings on selected products when presented for redemption at the point of purchase. Manufacturers sustain the cost of advertising and distributing their coupons, redeeming their face values, and paying retailers a handling fee. Retailers who offer double or triple the amount of the coupon shoulder the extra cost. Retailers who offer their own coupons incur the total cost, including paying the face value. In this way, retail coupons are equivalent to a cents-off deal. Manufacturers disseminate coupons in many ways. They may be delivered directly by mail, dropped door to door, or distributed through a central location such as a shopping mall. Coupons may also be distributed through the media—magazines, newspapers, Sunday supplements, or freestanding inserts (FSI) in newspapers. Coupons can be inserted into, attached to, or
printed on a package, or they may be distributed by a retailer who uses them to generate store traffic or to tie in with a manufacturer's promotional tactic. Retailer-sponsored coupons are typically distributed through print advertising or at the point of sale. Sometimes, though, specialty retailers or newly opened retailers will distribute coupons door to door or through direct mail. CONTESTS/SWEEPSTAKES
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The main difference between contests and sweepstakes is that contests require entrants to perform a task or demonstrate a skill that is judged in order to be deemed a winner, while sweepstakes involve a random drawing or chance contest that may or may not have an entry requirement.
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At one time, contests were more commonly used as sales promotions, mostly due to legal restrictions on gambling that many marketers feared might apply to sweepstakes.
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Furthermore, participation in contests is very low compared to sweepstakes, since they require some sort of skill or ability.
SPECIAL EVENTS
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According to the consulting firm International Events Group (IEG), businesses spend over $2 billion annually to link their products with everything from jazz festivals to golf tournaments to stock car races. In fact, large companies like RJR Nabisco and Anheuser-Busch have special divisions that handle nothing but special events.
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Special events marketing offer a number of advantages. First, events tend to attract a homogeneous audience that is very appreciative of the sponsors. Therefore, if a product fits well with the event and its audience, the impact of the sales promotion will be high. Second, event sponsorship often builds support among employees—who may receive acknowledgment for their participation—and within the trade.
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Finally, compared to producing a series of ads, event management is relatively simple. Many elements of event sponsorship are prepackaged and reusable, such as booths, displays, and ads. Special events’ marketing is available to small businesses, as well, through sponsorship of events on the community level.
PREMIUMS
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A premium is tangible compensation that is given as incentive for performing a particular act—usually buying a product.
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The premium may be given for free, or may be offered to consumers for a significantly reduced price. Some examples of premiums include receiving a prize in a cereal box or a free garden tool for visiting the grand opening of a hardware store.
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Incentives that are given for free at the time of purchase are called direct premiums. These offers provide instant gratification, plus there is no confusion about returning coupons or box tops, or saving bar codes or proofs of purchase.
Other types of direct premiums include traffic builders, door openers, and referral premiums. The garden tool is an example of a traffic-builder premium—an incentive to lure a prospective buyer to a store. A door-opener premium is directed to customers at home or to business people in their offices. For example, a homeowner may receive a free clock radio for allowing an insurance agent to enter their home and listening to his sales pitch. Similarly, an electronics manufacturer might offer free software to an office manager who agrees to an on-site demonstration. The final category of direct premiums, referral premiums, rewards the purchaser for referring the seller to other possible customers. Mail premiums, unlike direct premiums, require the customer to perform some act in order to obtain a premium through return mail. An example might be a limited edition toy car offered by a marketer in exchange for one or more proofs-of-purchase and a payment covering the cost of the item plus handling. The premium is still valuable to the consumer because they cannot readily buy the item for the same amount. CONTINUITY PROGRAMS
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Continuity programs retain brand users over a long time period by offering ongoing motivation or incentives.
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Continuity programs demand that consumers keep buying the product in order to get the premium in the future.
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Trading stamps, popularized in the 1950s and 1960s, are prime examples. Consumers usually received one stamp for every dime spent at a participating store. The stamp company provided redemption centers where the stamps were traded for merchandise.
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A catalog listing the quantity of stamps required for each item was available at the participating stores.
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Today, airlines' frequent-flyer clubs, hotels' frequent-traveler plans, retailers' frequentshopper programs, and bonus-paying credit cards are common continuity programs.
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When competing brands have reached parity in terms of price and service, continuity programs sometimes prove a deciding factor among those competitors.
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By rewarding long-standing customers for their loyalty, continuity programs also reduce the threat of new competitors entering a market.
SAMPLING
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A sign of a successful marketer is getting the product into the hands of the consumer.
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Sometimes, particularly when a product is new or is not a market leader, an effective strategy is giving a sample product to the consumer, either free or for a small fee. But in order for sampling to change people's future purchase decisions, the product must have benefits or features that will be obvious during the trial.
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There are several means of disseminating samples to consumers. The most popular has been through the mail, but increases in postage costs and packaging requirements have made this method less attractive.
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An alternative is door-to-door distribution, particularly when the items are bulky and when reputable distribution organizations exist. This method permits selective sampling of neighborhoods, dwellings, or even people.
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Another method is distributing samples in conjunction with advertising. An ad may include a coupon that the consumer can mail in for the product, or it may include an address or phone number for ordering.
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Direct sampling can be achieved through prime media using scratch-and-sniff cards and slim foil pouches, or through retailers using special displays or a person hired to hand out samples to passing customers.
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Though this last technique may build goodwill for the retailer, some retailers resent the inconvenience and require high payments for their cooperation.
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A final form of sample distribution deals with specialty types of sampling. For instance, some companies specialize in packing samples together for delivery to homogeneous consumer groups, such as newlyweds, new parents, students, or tourists. Such packages may be delivered at hospitals, hotels, or dormitories and include a number of different types of products.
TRADE-ORIENTED SALES PROMOTIONS •
A trade sales promotion is targeted at resellers—wholesalers and retailers—who distribute manufacturers' products to the ultimate consumers.
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The objectives of sales promotions aimed at the trade are different from those directed at consumers.
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In general, trade sales promotions hope to accomplish four goals: o Develop in-store merchandising support, as strong support at the retail store level is the key to closing the loop between the customer and the sale. o Control inventory by increasing or depleting inventory levels, thus helping to eliminate seasonal peaks and valleys. o Expand or improve distribution by opening up new sales areas (trade promotions are also sometimes used to distribute a new size of the product). o Generate excitement about the product among those responsible for selling it. Some of the most common forms of trade promotions—profiled below—include point-of-purchase displays, trade shows, sales meetings, sales contests, push money, deal loaders, and promotional allowances.
POINT-OF-PURCHASE (POP) DISPLAYS
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Manufacturers provide point-of-purchase (POP) display units free to retailers in order to promote a particular brand or group of products.
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The forms of POP displays include special racks, display cartons, banners, signs, price cards, and mechanical product dispensers.
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Probably the most effective way to ensure that a reseller will use a POP display is to design it so that it will generate sales for the retailer. High product visibility is the basic goal of POP displays.
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In industries such as the grocery field where a shopper spends about three-tenths of a second viewing a product, anything increasing product visibility is valuable.
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POP displays also provide or remind consumers about important decision information, such as the product's name, appearance, and sizes.
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The theme of the POP display should coordinate with the theme used in ads and by salespeople.
TRADE SHOWS
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Thousands of manufacturers display their wares and take orders at trade shows. In fact, companies spend over $9 billion yearly on these shows.
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Trade shows provide a major opportunity to write orders for products. They also provide a chance to demonstrate products, disseminate information, answer questions, and be compared directly to competitors.
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Related to trade shows, but on a smaller scale, are sales meetings sponsored by manufacturers or wholesalers. Whereas trade shows are open to all potential customers, sales meetings are targeted toward the company's sales force and/or independent sales agents. These meetings are usually conducted regionally and directed by sales managers. The meetings may be used to motivate sales agents, to explain the product or the promotional campaign, or simply to answer questions.
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For resellers and salespeople, sales contests can also be an effective motivation. Typically, a prize is awarded to the organization or person who exceeds a quota by the largest percentage.
PUSH MONEY
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Similarly, push money (PM)—also known as spiffs—is an extra payment given to salespeople for meeting a specified sales goal.
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For example, a manufacturer of refrigerators might pay a $30 bonus for each unit of model A, and a $20 bonus for each unit of model B, sold between March 1 and September 1.
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At the end of that period, the salesperson would send evidence of these sales to the manufacturer and receive a check in return.
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Although some people see push money as akin to bribery, many manufacturers offer it.
DEAL LOADERS
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A deal loader is a premium given by a manufacturer to a retailer for ordering a certain quantity of product. Two types of deal loaders are most typical.
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The first is a buying loader, which is a gift given for making a specified order size.
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The second is a display loader, which means the display is given to the retailer after the campaign.
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For instance, General Electric may have a display containing appliances as part of a special program. When the program is over, the retailer receives all the appliances on the display if a specified order size was achieved.
TRADE DEALS
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Trade deals are special price concessions superseding, for a limited time, the normal purchasing discounts given to the trade.
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Trade deals include a group of tactics having a common theme—to encourage sellers to specially promote a product.
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The marketer might receive special displays, larger-than-usual orders, superior in-store locations, or greater advertising effort. In exchange, the retailer might receive special allowances, discounts, goods, or money. In many industries, trade deals are the primary expectation for retail support, and the marketing funds spent in this area are considerable.
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There are two main types of trade deals: buying allowances and advertising/display allowances. o BUYING ALLOWANCES A buying allowance is a bonus paid by a manufacturer to a reseller when a certain amount of product is purchased during a specific time period. For example, a reseller who purchases at least 15 cases of product might receive a buying allowance of $6.00 off per case, while a purchase of at least 20 cases would result in $7.00 off per case, and so forth. The payment may take the form of a check or a reduction in the face value of an invoice. In order to take advantage of a buying allowance, some retailers engage in "forward buying." In essence, they order more merchandise than is needed during the deal period, then store the extra merchandise to sell later at regular prices. This assumes that the savings gained through the buying allowance is greater than the cost of warehousing and transporting the extra merchandise. Some marketers try to discourage forward buying, since it reduces profit margins and tends to create cyclical peaks and troughs in demand for the product. The slotting allowance is a controversial form of buying allowance. Slotting allowances are fees retailers charge manufacturers for each space or slot on the shelf or in the warehouse that new products will occupy. The controversy stems from the fact that in many instances this allowance amounts to little more than paying a bribe to the retailer
to convince them to carry your company's products. But many marketers are willing to pay extra to bring their products to the attention of consumers who are pressed for time in the store. Slotting allowances sometimes buy marketers prime spaces on retail shelves, at eye level or near the end of aisles. The final type of buying allowance is a free goods allowance. In this case, the manufacturer offers a certain amount of product to wholesalers or retailers at no cost if they purchase a stated amount of the same or a different product. The allowance takes the form of free merchandise rather than money. ADVERTISING ALLOWANCES
An advertising allowance is a dividend paid by a marketer to a
reseller for advertising their product. The money can only be used to purchase advertising—for example, to print flyers or run ads in a local newspaper. But some resellers take advantage of the system, so many manufacturers require verification. A display allowance is the final form of trade promotional allowance. Some manufacturers pay retailers extra to highlight their display from the many available every week. The payment can take the form of cash or goods. Retailers must furnish written certification of compliance with the terms of the contract before they are paid. Retailers are most likely to select displays tha CHARACTERISTICS OF SUCCESSFUL SALES PROMOTION Some aspects that are important to consider in marking sales promotions successful are as follows: 1. Maximum effect at minimum cost: when the nature of promotion objective is such that is can best be achieved by sales promotion, rather than advertising alone, and the objective is achieved at minimum cost. 2. Motivates consumers to buy now: successful sales promotions induce a sense of urgency to buy now and avoid postponing purchases. 3. Offers what the consumers want: sales promotion must not attempt to push any offer that is not regarded as desirable by target consumers. 4. The promotion should be clear and uncomplicated: simple and clear language must be used in communicating with the consumers. 5. Promotion should be highly visible: the offer must draw attention of target consumers. Effective promotions draw attention from high visibility and from creative qualities. 6. Promotion should benefit all concerned: usually promotions involve cooperation of sales force and channel members. They need to be motivated to make the efforts successful.
7. Promotion must be believable and honest: it makes reasonable and believable claims, tells the truth, there are no exaggerations, and it respects public’s intelligence. 8. Promotion must be legal: the marketers must check the legality of promotion before announcing it. 9. Promotion must be implemented efficiently: proper arrangements must be made with handling houses and premium suppliers to avoid any complications. SALES PROMOTION EVALUATION Measurements of results, in any are of business activity, is related to the objects that are set. The sales promotion can be evaluated at three different stages: 1. Pre-testing: how sales promotion is to be communicated and what would be communicated to the target groups is important and can be pre-tested. Pre-testing consists of experimenting certain markets or individual stores in a market. The simplest way is to visit several important retailers and wholesalers and discuss the programme and seek their opinion and suggestions. 2. Concurrent Testing: this testing is done when the sales promotion is in progress. Concurrent testing is conducted in terms of sales data, which can be obtained on weekly or monthly basis. 3. Post-testing: post-testing done after the promotion period is over. To asses the change in consumer awareness and attitude, telephone calls, questionnaire mailed to consumers, and personal interviews can be used. To measure the sales effect, sales figures before the promotion period can be compared with figures at the end of promotion, and one month after the promotion ends. DESIGN AN INTEGRATED SALES PROMOTION PROGRAM Design an integrated Sales Promotion Program for the following channel of distribution: Manufacturer-to-Independent Sales Rep-to-Retailer-to-Consumer
A new product in a mature category, such as LIME COKE
Background Information
The cola market is a mature market with lots of variety. Consumers are trying new and innovative products. There’s strong growth in bottled water, juices, sports drinks and energy drinks. Consumers are conscious cola drinkers; they are calorie conscious especially in their 20s and 30s. The Lime Coke is a new product in the market. Sprite, Coca-Cola’s ‘solid’ performer continues to be a great success as a strong competitor to this new product.
The nature of product is revolutionary; it should create emotional connection with the consumers. The Lemon Cola drinkers, driven by youthful liberation, relate to life’s more lighthearted and fun experiences. It is a drink of choice for people who are younger and more exciting.
Objectives New distribution of Lime Coke products through the channel distribution by motivating top 20% of the Manufacturer’s independent salespeople to move more Lime Coke products to Retailers in order to generate an ultimate 40 to 50% sales during the Christmas season by attracting consumers.
Channel Distribution Strategy
The distribution system has only two divisions (Independent Sales Rep and Retailer) before it reach the consumer.
The product is new in a matured market, needs additional explanation and education for the sales reps to have that carried over to the retailer to gain maximum consumer exposure in this dominant market position.
There is a competitor product such as Sprite, certainly, there is a competition for distributor resources in order to get attention. The channel function will only be selling, inventory support, physical distribution and post sales services.
