Advertising and sales promotion management

Key roles of advertising

Q 1: Explain the key roles of advertising as a business process.

Ans: The communication objectives of advertising can be grouped in to the following

1) Creating awareness (spreading information):

firstly, the advertising aims to make the audience know that the product or service is available in the
market and explain exactly what it is.

Vodafone’s ad campaign “Hutch is Now Vodafone” was informative in nature.

Tata Tea’s Jaago Re, Times of India’s Lead India and Idea Cellular’s My Idea campaigns are the
ones that have been the most recalled. However, Jaago Re is the winner, with the majority of the
respondents voting for the tea brand’s election campaign.

2) Creating favorable attitudes (persuasion). Secondly, the advertisement does brainwashing of the
consumers to create the favorable attitude towards the brand which will result in adaptation of the
product by the consumers.The Coca Cola’s Ad Campaign Thanda Matlab Coca Cola” is such
advertisement penned by Prasoon Joshi.

3) 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.

4) Supporting sales force

5) Support to intermediaries

6) To achieve profit

7) To lower the cost of sales

8) product positioning

1. Launch of New Products and Services: The introduction of new products and brands under
line extension, product diversification or category diversification and getting advertised
effectively can give the seller a great opportunity for increasing his sales revenue.
In the case of innovation, 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?”

“How the customers would find it useful?”

In addition, the advertisement also carries information about the availability of the product and
facilities for demonstration.

Similarly new brands of existing product categories are also promoted quite aggressively.

Two examples are the launching of “Pepsi Blue” soft drinks during previous the world cup and
launch of “Mountain Dew” in subsequent period.

2. Market Expansion: Advertising is also used to tap a new segment of the market like advertisers
are directing 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.

3. Announcement of a Product Modification or improvement: 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,

4) Announcement of a Special Offer: Because of competition, slack season, declining sales, etc,
promotional advertising is used to make a special offer.

For example, BoroPlus run an advertisement campaign “Buy One Get One Free” to increase
sales.

5. Announcement of Location of Stockiest and Dealers: To support dealers, to stimulate selling of

stocks and to urge action on the part of audience, space may be taken to list the names and
addresses of stockiest and dealers.

6. Customer Education: Advertisement of this type is “informative” rather than persuasive. It can also
be used to educate the people about an improved product.

Vodafone’s ad campaign “Hutch is Now Vodafone” was informative in nature.

Social service advertising like Lead India is used to educate people on the usefulness voting power
of the citizens. For example, Campaigns against unsafe sex and Aids are sponsored by government
and voluntary agencies.
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 for the same brand again.

The campaigns of Pepsi’s “Dil Maange More” and Coca Cola’s “Jab Aap Gaenge To Bulbule
Gungunaenge” are reminder advertisements aired during commercial breaks of cricket matches is to
have a top of mind recall.

8. Seeking Dealer Cooperation and Motivation: Dealer support has always been crucial, especially
for those who have limited shelf space. Advertisers send displays, shelves and materials to dealers
for their shops, apart from helping the retailer with local advertising.

9. Creating Brand Preference: the advertising does two things to a brand:

Firstly, it creates a brand image or personality

Secondly, it tells the target audience

why brand “X” is better than brand “Y”. Hence promotes brand preference.

10. Other advertising objectives are: Advertising also helps to boost the morale and support of sales
people, It pleases sales people to see large advertisements of their company and its products, and
they often boast about it.
Q 2: Do you think the increasing independence and control consumers gain through new
technologies like Tivo, The internet, digital music players

, and cell phones will make advertising and product branding less important?
Ans: About TiVo Inc.

The new features build on the history of innovative advertising solutions developed by TiVo and
integrate client feedback received over the past three years . These features include:

• Enabling advertisers to insert a customized call to action or branded "tag" in their

commercial, replacing the generic ad tags previously used by TiVo's advertising clients;
• Ensuring advertisers' traditional TV spots will be more visible in TiVo homes, whether viewed
in normal play or fast forward mode;
• Enhance the TiVo customer's experience by allowing them to select the tag and "telescope"
from the traditional 30-second ad while pausing their program to view long-form content,
requests for information, or recording opportunities which will enhance the viewing experience;
• Providing advertisers with the ability to receive leads directly from their TV spots, with the
viewer's consent, so advertisers can track leads to conversion and ensure a qualified return on
investment;
• Additional data for advertisers to gain a better understanding of the effectiveness of TiVo's
proprietary tagging feature, the strength of their creative executions, and the efficacy of their
television media buying strategy.

Founded in 1997, TiVo (NASDAQ: TIVO) pioneered a brand new category of products with the
development of the first commercially available digital video recorder (DVR). Sold through leading
consumer electronic retailers, TiVo has developed a brand which resonates boldly with consumers
as providing a superior television experience. Through agreements with leading satellite and cable
providers, TiVo also integrates its full set of DVR service features into the set-top boxes of mass
distributors. TiVo's DVR functionality and ease of use, with such features as Season Pass™
recordings and WishList searches, has elevated its popularity among consumers and has created a
whole new way for viewers to watch television. With a continued investment in its patented
technologies, TiVo is revolutionizing the way consumers watch and access home entertainment.
Rapidly becoming the focal point of the digital living room, TiVo's DVR is at the center of
experiencing new forms of content on the TV, such as broadband delivered video, music and
photos. With innovative features such as, TiVo To Go and online scheduling, TiVo is expanding the
notion of consumers experiencing "TiVo, TV your way." The TiVo service is also at the forefront of
providing innovative marketing solutions for the television industry, including a unique platform for
advertisers and audience measurement research
Q 3: What creative trends in advertising have emerged in the new era of globalization?

Ans: Creativity, as generally understood, is only one, even if a very important component of
advertising. What is more, at the very beginning i must point out that all the talent that creative young
aspirants for jobs in advertising talk of are not sufficient for an entry into this highly demanding
profession. On the other hand the opportunities that the profession offers are more varied and
creativity more challenging in a wider sense of the term. In this context, it is necessary to be clear
about what creativity really means. 'To create' according to the Oxford dictionary means "Bring into
existence, give rise to; originate."The word creation means" All created things products of human
intelligence, especially of imaginative thought;" 'creative' means: "Creating; able to create; inventive;
imaginative; showing imagination as well as routine skill"

Global advertising
Advertising has gone through five major stages of development: domestic, export, international,
multi-national, and global. For global advertisers, there are four, potentially competing, business
objectives that must be balanced when developing worldwide advertising: building a brand while
speaking with one voice, developing economies of scale in the creative process, maximising local
effectiveness of ads, and increasing the company’s speed of implementation. Born from the
evolutionary stages of global marketing

are the three primary and fundamentally different approaches to the development of global
advertising executions: exporting executions, producing local executions, and importing ideas that
travel.[106]
Advertising Trends

With the dawn of the Internet came many new advertising opportunities. Popup,Flash, banner,
Popunder, advergaming, and email advertisements (the last often being a form of spam) are now
commonplace.

The ability to record shows on digital video recorders (such as TiVo) allow users to record the
programs for later viewing, enabling them to fast forward through commercials.

Particularly since the rise of "entertaining" advertising, some people may like an advertisement
enough to wish to watch it later or show a friend. In general, the advertising community has not yet
made this easy, although some have used the Internet to widely distribute their ads to anyone willing
to see or hear them.

Another significant trend regarding future of advertising is the growing importance of the niche
market using niche or targeted ads. Also brought about by the Internet and the theory of The Long
Tail, advertisers will have an increasing ability to reach specific audiences. In the past, the most
efficient way to deliver a message was to blanket the largest mass market audience possible..
Among others, Comcast Spotlight is one such advertiser employing this method in theirvideo on
demand menus. These advertisements are targeted to a specific group and can be viewed by
anyone wishing to find out more about a particular business or practice at any time, right from their
home. This causes the viewer to become proactive and actually choose what advertisements they
want to view.

In freelance advertising, companies hold public competitions to create ads for their product, the best
one of which is chosen for widespread distribution with a prize given to the winner(s).

During the 2007 Super Bowl, PepsiCo held such a contest for the creation of a 30-second television
ad for the Doritos brand of chips, offering a cash prize to the winner.

Chevrolet held a similar competition for their Tahoe line of SUVs. This type of advertising, however,
is still in its infancy. It may ultimately decrease the importance of advertising agencies by creating a
niche for independent freelancers
Q 4: Advertising has been the focal point of criticism for many decades. In your opinion, what
are some of the key factors that make advertising controversial?

Ans: In the past, distrust of advertising has been widespread, but unfocused. So many people have
criticized ads for so many different reasons that this confusing babble sometimes gives more
attention to trivial concerns and minor problems than to serious issues and major problems.

People need to identify their own opinions and feelings, to sort out these perceived "harms" by kind
(direct or indirect, immediate or delayed, possible or probable) and degree (from minor annoyances
to major danger), to recognize overlaps and omissions, and borderline cases. Critics of advertising
are basically concerned with the harmful consequences, the disadvantages, the unwanted "side-
effects."

In the future, advertising -- and its problems and its critics -- will still be with us. Sorting out some of
these criticisms may help everyone avoid the extremes: on one hand, of blaming or scapegoating
advertisers; on the other hand, of ignoring genuine, serious problems which need attention and
reasonable response. Diagnosis of "what's wrong" may help a prognosis of "what to do." Advertising
has so many critics, for so many different reasons, and the arguments get so complicated, that it
helps if we first sort out and identify the obvious most common complaints :

Intrusion

People complain about advertising's annoying intrusion into "their time" because ads keep
interrupting their television programs: "too much, too often, too many ads."

Deception

Many people believe, or have strong feelings, that a great deal of advertising is misleading, false,
untrue, dishonest, or deceptive.

Nutrition

For years, food companies have responded to criticism about the nutritional quality of their products
by maintaining that all food can fit into a balanced diet. There are no bad foods, they argue, just bad
diets.

Offensive

Some people are offended by ads (or products) which violate their moral sense of how "things
should be." Many ads, simply for attention-getting purposes, use tactics which deliberately violate
the social customs which parents, school, and church seek to develop
Personal Psychological Problems

Some critics of the indirect "hidden harms" of advertising have focused on the psychological
problems of the individual and the family: debt cycle, child labor, crime, family stress, disposable
income, and the issues of OPM ("Other Peoples' Money") as related to dependent children, and poor
self-image

Materialism

Religious critics find fault with advertising for neglecting the life of the spirit.

Secular critics find fault with advertising for neglecting the life of the mind.

Social Justice

"The needs of the poor must take priority over the desires of the rich, the rights of the workers over
the maximization of profits, the preservation of the environment over uncontrolled industrial
expansion, production to meet social needs over production for military purposes."
Advertising make you a better or worse consumer?

Q 5: You have probably been exposed to hundreds of thousands of advertisements in your

lifetime. In what ways does exposure to advertising make you a better or worse consumer?

Ans: Advantages of advertising are:

Specific reasons for advertising:

1. To announce a new product

2. To expand the market to new buyers
3. To announce a modification
4. To announce a price change
5. To announce a new pack
6. To make a special offer
7. To invite enquiries
8. To sell direct
9. To test a medium
10. To announce the location of stockiest
11. To educate customer
12. To maintain sales
13. To challenge competition
14. To remind
15. To get back lost sales
16. To recruit staff.
17. To attract investors

In the future, advertising -- and its problems and its critics -- will still be with us. Sorting out some of
these criticisms may help everyone avoid the extremes: on one hand, of blaming or scapegoating
advertisers; on the other hand, of ignoring genuine, serious problems which need attention and
reasonable response. Diagnosis of "what's wrong" may help a prognosis of "what to do." Advertising
has so many critics, for so many different reasons, and the arguments get so complicated, that it
helps if we first sort out and identify the obvious most common complaints :

Intrusion people complain about advertising's annoying intrusion into "their time" because ads keep
interrupting their television programs: "too much, too often, too many ads."

Deception

Many people believe, or have strong feelings, that a great deal of advertising is misleading, false,
untrue, dishonest, or deceptive.

Nutrition
For years, food companies have responded to criticism about the nutritional quality of their products
by maintaining that all food can fit into a balanced diet. There are no bad foods, they argue, just bad
diets.

Offensive

Some people are offended by ads (or products) which violate their moral sense of how "things
should be." Many ads, simply for attention-getting purposes, use tactics which deliberately violate
the social customs which parents, school, and church seek to develop

Personal Psychological Problems

Some critics of the indirect "hidden harms" of advertising have focused on the psychological
problems of the individual and the family: debt cycle, child labor, crime, family stress, disposable
income, and the issues of OPM ("Other Peoples' Money") as related to dependent children, and poor
self-image

Materialism

Religious critics find fault with advertising for neglecting the life of the spirit.

Secular critics find fault with advertising for neglecting the life of the mind.

Social Justice "The needs of the poor must take priority over the desires of the rich, the rights of the
workers over the maximization of profits, the preservation of the environment over uncontrolled
industrial expansion, production to meet social needs over production for military purposes."
Q 6: “Copy writing, illustrating, and layout are different activities associated with creative
stage of advertising development and are usually done by different people who specialize in
one or the other” Explain all three in detail.

Ans: : Copywriting is the act of developing script from the main brief, argument and appeals to be
used in advertising media.

Copywriting is the use of words to communicate about a product, concept a person, business,
opinion or idea.

The word copy is usually applied to a content intended to mint (as in the body of a newspaper article
or book).

The term copywriter is generally limited to such promotional context, irrespective of media (print,
television, radio or other media).

The objective of marketing copy, or promotional text, is to persuade the reader, listener or viewer to
act as desired — for example, to purchase or repurchase a product or service.

Illustrations

The artwork

Sometimes, it is the message

Illustrations should:

(a) tie into self interest of target audience

(b) be relevant to copy theme and product

(c) accurate and plausible

(d) include at least part of the product

Guidelines for better Illustrations.

1. Photographs work better than other art forms

2. Color works betters than black & white

3. Action illustrations enhance readership

4. Size & arrangement of illustrations important

A headline is text at the top of a newspaper article, indicating the nature of the article below it.
Types of headlines:

DIRECT HEADLINES

1. News

• Direct, straight selling

• No gimmicks
• Pertinent and timely

2. Product Claim

• Appeals to reader’s self interest

3. Advice

• Aims to solve reader’s problem

• Usually accompanied by promise of results

4. Prospect Selection

• Selects out target market

5. Product or Brand Name

• Name sells

INDIRECT HEADLINES

6. Curiosity

• Appeals to the unusual

• How? Use questions, provocations, how-to statements
• Need good visuals to motivate audience to read further

Check list for good headlines development

• Specific & to the point, not general & applicable to any product or situation
• Co-ordinated with other elements in the ad
• Understandable at a glance
• Have words or cues to help select prospects
• Have some promise of reward
• Action-impelling
• Don’t use trick typography
•
Q 7: What is the percentage sales budgeting approach? Why is it so widely used? Under
what circumstances might it be inappropriate? Why?

Ans: Percentage-of-sales Approach. Determination of the advertising budget as a percentage of

past or expected sales is a method that was dominating in the past and is still widely used.

The method has several variants:

1. a fixed percentage of a percentage that varies with condition;

2. it can be based either on historical or on projected sales;

and it can be stated either in dollars or in physical volume This general approach to the problem is
hard to support analytically.

The purpose of advertising is to increase demand for the company's products above what it would
otherwise be. A stable or declining demand is not evidence that advertising is ineffective, for without
it sales might have been even lower.

It must be remembered that advertising is a cause, not a result, of sales. The amount to be spent in
shifting the demand schedule should depend on how much the shift is worth. The volume of sales
the company already has tells nothing about the cost or the worth of getting more. It would appear
even less rational to base the budget on the volume of sales that the company expects to get.

Sales will be the result in part of the level of national income and the accumulated effects of past
advertising, not only of the advertising that is currently being decided on. To the extent, that sales
are determined by forces other than current advertising, the criterion of expected sales is irrelevant.

. There is an element of safety in limiting advertising outlays in this manner, since expenditures are
timed to come when the company has the gross revenue to afford them and when their tax effect
may be favorable. But this element of safety could be better found, as in the marginal approach, by
making advertising a function of expected profit, which normally fluctuates cyclically more violently
than expected sales. If this method rests upon the belief that the added sales per dollar of
advertising are higher when national income is high, it would be more logical to make advertising
outlay vary directly with national income. Another possible explanation for the popularity of this
method stems from competitive relationships. If all, or most, members of an industry used this
method and employed the same percentage of sales, competitors' advertising outlays would be
roughly proportional to their market shares. This condition would have a restraining effect on
competitive warfare in advertising, and would ease ulcers in peace-loving firms. Much advertising is
essentially defensive anyhow. Thus, although the percentage-of-sales approach appears on its
surface to have no logical justification, it has features that make it attractive: It provides a formula
answer with an illusion of control; it permits the cyclical timing of outlay to fluctuate roughly with
ability to pay; and it may tend toward competitive stabilization. But inertia and the lack of a more
logical and equally definitive standard are probably the most important explanations for the
popularity of this essentially mechanistic method.