ADVERTISING

MBA IIIRD SEM BY A.VENKATESAN ,ASST PROF ,MBA.

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ANY PAID FORM OF NON PERSONAL PRESENTATIONS AND PROMOTION OF IDEAS ,GOODS,AND SERVICES BY AN IDENTIFIED SPONSOR BY PHILIP KOTLER

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CONCEPTS OF ADVERTISING
PROFESSIONALS
FOR DEVELOPMENT

*ADVERTISING
RESPONSIBLE

ARE
AND

IMPLEMENTATION OF CREATIVE STRATEGY.

*RICH CONCEPTS SERVE AS A FOUNDATION FOR ADVERTISING.

*CONCEPTS

INCLUDE

CREATIVE

IDEA

,CREATIVE EXECUTION,AND MEDIA USE.

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4 ELEMENTS OF ADVERTISING ARE: 1.ADVERTISING STRATEGY:

*LOGIC PLANNING GIVES DIRECTION AND FOCUS. *EVERY EFFECTIVE AD IMPLEMENTS A SOUND STRATEGY. *ADVERTISERS DEVELOP A CREATIVE AD TO REACH THE SPECIFIC SET OF AUDIENCE AND RUNS IT IN AVAILABLE OR SELECTED MEDIA .

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2.CREATIVE IDEA: *CREATIVE IS THE CRITICAL WORD THAT DRIVES ENTIRE FIELD OF ADVERTSING. *BUYING AND PLACING OF ADS REQUIRES CREATIVE THINKING.

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3.EFFECTIVE EXECUTIONS:
*EFFECTIVE ADS ARE WELL EXECUTED. *PHOTOGRAPHY ,PRINTING ,WRITING STYLE,EXPLAINING THE PRODUCT WILL ALL DETERMINE THE VALUE OF INDUSTRY STANDARDS.
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4.CREATIVE MEDIA USE: *EVERY MESSAGE HAS TO BE REACHED SOMEHOW. *ADVERTISERS USE COMMUNICATION MEDIA SUCH AS TV/RADIO/PRINT MEDIA /MAGAZINES TO REACH THE TARGET AUDIENCE.

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Strategy Effective advertising

Creative Idea
Creative Execution Media
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Role of Advertising:
1.MARKETING ROLE:
-TO SELL THE PRODUCT.

2.ECONOMIC ROLE:
-CREATING DEMAND FOR THE PRODUCT.

3.COMMUNICATION ROLE:
-REACHING AND EDUCATING CUSTOMERS ABOUT THE PRODUCT.

4.SOCIETAL ROLE:
-EDUCATIONAL ROLE ON REGULAR BASIS.
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FUNCTIONS OF ADVERTISING:

1.BUILDING AWARNESS OF THE PRODUCT AND BRAND. 2.CREATES BRAND IMAGE. 3.PROVIDES PRODCUT AND BRAND INFORMATION. 4.PERSUADES PEOPLE. 5.PROVIDES INCENTIVES TO ACTION. 6.PROVIDES BRAND INFORMATION. 7.REINFORCES PAST PURCHASES AND EXPERIENCES.

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UNDERSTANDING MARKET PLACE AND CUSTOMER NEEDS AND WANTS

DESIGN A CUSTOMER DRIVEN MARKETING STRATEGY CONSTRUCT AN INTEGRATED MARKETING PROGRAM. THAT DELIVERS SUPERIOR VALUE. BUILD A PROFITABLE CUSTOMER RELATIONSHIP.

CAPTURE VALUE FROM CUSTOMERS TO CREATE PROFITS AND CUSTOMER EQUITY.

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EFFECT OF ADVERTISING: 1.Economic issues

a)Effect on Value of the product and prices:

*Create value of the product in consumers minds. *Image created in advertising may implify quality

by adding value to the product.

*Educating consumers about the new usage of the product. *Gives opportunity to the customer to satisfy their needs and wants

through products and services they use.

*It encourages competition.

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B)Effect on Prices:

*Advertising adds value to the product as well as cost to the product. *Advertising may actually help to reduce the overall cost of the product and keep the prices lower because of economic of scale in production. *Advertising tends to focus on product features ,benefits or images in an attempt to convince customer that the product is better ,in these instances ,advertising support higher prices.

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C)Effect on consumer demand and choice:

*Advertising forces like technological ,education,

increase in population ,income exert a powerful influence on aggregate consumption, because of favorable market condition. *Advertising by itself could not have produced any significant effects in the absence of favorable conditions. *Advertising can stimulate demand for new products by giving relevant facts and information. *Marketers compete for share of the market and fight for each share when its get matured.
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*Marketers differentiate their product in terms of product,
price,features,benefits,psychological factors as a result of this consumer has the option of choosing different size ,models ,colours ,features,etc *Advertising offers the consumer the right to choose.
*Consumers become dominant to the product that deliver satisfaction.

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C)Effects on competition:

*Advertising acts as barrier for entry of smaller firms. *Higher cost inhibit their entry of smaller firms and brands of larger firms usually overcome it.

*Larger firms have and edge because of certain competitive

advantage. * Larger firms tend to dominate in industry because of their

quality of management, competitive strategies,R&D,quality

of products&services,and not because of they spend more money on advertising.
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2)Social Issues:
*Advertising influences social values, lifestyle and society taste. *Advertising is blamed for manipulating consumers to buy things for which they have no need . *Advertising encourages materialism. *Advertising is often accused of creating and perpetuating stereotypes through portrayal of women ,ethnic minorities and other groups.

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3)Ethical Issues:

*Ethics are moral principle that govern the actions and decisions
of an individual or group. *Many laws and regulations are put into force that determine what is permissible in advertising. *There is a considerable overlap between what may consider to ethical issue in advertising and the issue of manipulation ,taste and effect of advertising on values and lifestyles. *Advertising is a highly visible business activity and any lapse in ethical standards can be often risky for the company.

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*ASCI-Advertising standard council for India enforces

the ethical code for advertisers. It proposes an adjucate

whether the advertisement is offensive or not. It gives the consumer a chance to register his/her complaint if the consumers consider the advertisement is misleading.

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AD AGENCIES

CLIENTS KEY PARTICIPANT IN THE ADVERTISING PROCESS. THEY ARE THE ONE WHO COMMUNICATE WITH THE TARGET AUDIENCE. PROVIDE NECESSARY FUNDS FOR CREATING AND BUYING THE ADVERTISEMENT. MAJOR RESPONSIBILITIES IN DEVELOPING MARKETING PROGRAMME AND MAKING FINAL DECISIONS REGARDING PROMOTIONAL PROGRAMME.
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DEFNITION

ADVERTISING AGENCY IS AN INDEPENDENT BUSINESS COMPOSED OF BUSINESS PEOPLE WHO DEVELOP ,PREPARE ,AND PLACE ADVERTISING IN ADVERTISING MEDIA FOR SELLERS SEEKING TO FIND CUSTOMERS FOR THEIR GOODS AND SERVICES
BY AMERICAN ASSOCIATION OF ADVERTISING AGENCIES

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ADVERTISING OR CLIENT ORGANISATION

ADVERTISING AGENCIES

MEDIA ORGANISATION

VARIOUS SERVICES,SPECIALIST AND COLLATERAL SERVICES: 1.DIRECT RESPONSE SERVICES2.SALES PROMORION3.RESEARCH PACKAGE DESIGN4.PHOTOGRAPHERS AND PRINTERS
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ADVERTISING-AD AGENCIES

MEDIA ORGANISATION: *PERFORMA VITAL FUNCTION IN ADVERTISING AND COMMUNICATION PROCESS. *MEDIA POSSES ATTRIBUTES THAT ATTRACT AUDIENCES. *AD AGENCIES SHOULD BUY SPACE AND TIME FOR PLACING THEIR AD IN TIMELY MANNER.

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ADVERTISING-AD AGENCIES

COLLATERAL SERVICES INCLUDES DIRECT RESPONSE AGENCIES SALES PROMOTION AGENCIES,

MARKETING RESEARCH , PACKAGE DESIGN SPECIALIST, VIDEO PRODUCTION,

PRINTER PHOTOGRAPH

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CLIENT OR ADVERTISER ROLE IN ADVERTISING: ORGANISING PROMOTIONAL PROGRAMME DEPENDS UPON SEVERAL FACTORS-

1.COMPANY SIZE 2.NUMBER OF PRODUCTS. 3.ROLE OF ADVERTISING IN PROMOTION MIX. 4.BUDGET. 5.STRUCTURE OF THE ORGANISATION.

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ORGANIZING FOR ADVERTISING AND PROMOTION IN THE FIRM:

CENTRALISED SYSTEM:

PRODUCTIO N

FINANCE

MARKETING

R&D

HR

MARKETIN G RESEARCH

ADVERTISING

SALES

PRODUCT PLANNING

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ADVERTISING-AD AGENCIES

ADVERTSING MANAGER CONTROLS ENTIRE PROMOTION ,INCLUDINGBUDGETING,COORDINATING ,CREATION AND PRODUCTION OF ADS,PLANNING MEDIA SCHEDULES,MONITORING AND ADMININSTRING THE SALES PROMOTION PROGRAMS FOR ALL THE COMPANYS PRODUCTS OR SERVICES. ADVERTISING MANAGER NOT RESPONSIBLE FOR SALES.

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DECETRALISED SYSTEM:

CORPORATE
PROD FIN MARKG R&D MKTG SERVICE MKTG RESEARC H HR

SALES

PRODUCT MANAGEMENT
BRAND MANAGER BRAND MANAGER BRAND MANAGER

ADSP DEPT

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ADVERTISING-AD AGENCIES

DECENTRALISED SYSTEM:
BRAND MANAGER RESPONSIBLE FOR TOTAL MANAGEMENT OF THE BRAND. INCLUDES PLANNING ,BUDGETING,SALES,PROFIT PERFORMANCE.

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CATEGORY SYSTEM:
INCLUDES CATOGORY MANAGER AS WELL AS BRAND AND ADVERTISING MANAGERS . FOCUSES ON STRATEGIC ROLE OF VARIOUS BRANDS IN ORDER BUILD PROFIT AND MARKET SHARE.

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ADVERTISING-AD AGENCIES
VP PACKAGED SOAP DIVISION DISH WASIH POWDER CATEGORY MANAGER LAUNDRY PRODUCTS CGM SPECIALITY PRODUCTS CGM

ADVERTISING MANAGERS

ASSOCIATE ADV MANAGERS

BRAND MANAGERS

ASSISTANT BRAND MANAGERS

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TYPES OF AGENCIES:

1.MEDIA BUYING SERVICES: SPECIALIZING IN MEDIA BUYING SERVIES. 2.CREATIVE BOUTIQUE SERVICES 3.SALES PROMOTION SERVICES. 4.EVENT MANAGEMENT SERVICES. 5.PUBLIC RELATION SERVICES. 6.DESIGN STUDIOS.-GRAPHICAL DESIGN. 7.WEBSITE DESIGN. 8.PRODUCTION HOUSE. 9.RESEARCH COMPANIES.

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ADVERTISING-AD AGENCIES
AGENCIES COMPENSATION: 1.COMMISSION SYSTEM:

TRADITIONAL METHOD FOR COMPENSATING AGENCIES. AGENCY RECEIVES COMMISSION FROM THE MEDIA ON ANY ADVERTSING TIME OR SPACE IT PURCHASES FOR ITS CLIENT.

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2.FEES ,COST AND INCENTIVE BASED SYSTEMS:

FEE BASED 1.FIXED FEE AGENCIES CHARGES A BASIC MONTHY FEE FOR ALL OF IT SERVICES AND CREDITS TO THE CLIENT. 2.FEE COMMISSION COMBINATION-MEDIA COMMISSION RECEIVED BY THE AGENCIES ARE CREDITED AGAINST THE FEES. IF THE COMBINATION ARE LESS THAN THE AGREED ON FEE THE CLIENT MUST MAKE UP THE DIFFERENCE.

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ADVERTISING-AD AGENCIES
3.COST PLUS SYSTEM:

CLIENT AGREES TO PAY THE AGENCY TO PAY A FEE BASED ON COST OF THE WORK PLUS SOME AGREED PROFIT MARGIN.

THIS SYSTEM REQUIRES THAT THE AGENCIES SHOULD KEEP THE DETAILED RECORDS OF THE SERVICES IT OFFERS TO THE CLIENT.

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4.INCENTIVE BASED COMPENSATIONTHE BASIC IDEA LIE WITH THE COMPENSATION OF THE AGENCIES WILL BE BASED ON THE PERFORMANCE.

BASED ON MEETING THE OBJECTIVE AND QUALITY LEVEL OF THE AGENCIES.

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3.INCENTIVE BASED SYSTEMADDING A MARKUP OF PERCENTAGE CHARGES TO VARIOUS SERVICES THE AGENCIES PURCHASES FROM THE OUTSIDE SERVICE PROVIDER.
INCLUDES MARKET RESEARCH ,ARTWORK,PRINTING,PHOTOGRAPHY,AND OTHER SERVICES OR MATERIALS.

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Advantages and disadvantages 1.CENTRALISED : FACILITATES COMMUNICATIONS.

FEWER PERSONNEL REQUIRED CONTINUITY IN STAFF

ALLOWS FOR MORE TOP MANAGEMENT

INVOLVEMENT.

DISADVANTAGES: LESS INVLOVEMENT OF THE WORKERS LONGER REPONSE TIME INABILITY TO HANDLE MULTIPLE PRODUCT LINES.

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2.DECENTRALIZED:

ADVANATAGES: CONCENTRATE MANGERIAL ATTENTION RAPID RESPONE TO PROBLEMS AND OPPORTUNITIES.. INCREASED FLEXIBILITY DISADVANTAGES: INEFFECTIVE DECISION MAKING INTERNAL CONFLICTS MISALLOCATION FUNDS LACK OF AUTHORITY

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3.INHOUSE AGENCIES:

ADVANTAGES:

COST SAVING MORE CONTROL INCREASED COORDINATION

DISADVANTAGES: LESS EXPERIENCE LESS OBJECTIVITY LESS FLEXIBILITY

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