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ACKNOWLEDGEMENT
I Srishti Saxena, a student of Bcom (H) was been given a
project work on Advertising. As if I am not so experienced
I have been working under the guidance of Mrs. Ruchika
Ramakrishnan, our Lecturer.

I want to pay a vote of thanks from my side to all those

who helped me to complete my project. Firstly I would like
to thank faculty members for his/her support who acted
as a promoter to complete this project. I also like to thank
to the faculty of Shyamlal College for their co-operation.

Srishti Saxena
BCOM (H) 3rd year
Shyamlal College( Day )

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ADVERTISING
Every day when we watch TV or read the newspaper, we come across advertisements.
Advertising persuades people to buy a certain product. It brings goods to the attention of
consumers.
People who are concerned with marketing deal with:

1. Market research

2. Product development

3. Promotion

1. MARKET RESEARCH
The main idea of market research is, to find out whether
a product is needed, whether people would buy it and what kind of people that are.
These people are called TARGET GROUP.

Market research is often carried out by specialist organizations, they make market
surveys and customer tests to find out preferences in design, quality, color and taste.
This information is used to decide whether to produce a product, how much it should
cost and how it should be promoted.

2. PRODUCT DEVELOPMENT
There are two ways of product development. On the one
hand the product-oriented companies and on the other hand the market-oriented
companies.

Product-oriented companies invest a lot of money and time in finding new or improved
goods to sell them on the market. This is a very risky form of product development,
because companies might not sell the new goods. So they lost a lot of money.

Market-oriented companies want to find out what is needed and then they try to develop
new ways of production or new goods.

3. PROMOTION
Promotion is very important because however good a product is, it
will not find any buyers, if no one knows about it.

If you want to sell a specialized product, all you have to do is to write to people or
companies, which are known to be interested or place an advertisement in a trade
magazine. If you are not able to do this yourself, you can instruct an advertising agency.

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They have the experts who can make a successful campaign. They know how, when
and where the message should be transmitted to reach most people of the target group.

At the beginning of production, advertising will inform you what a product is like where
you can get it and how much it costs. Later, it is necessary to persuade the people to
keep on buying or attract new customers to buy. Modern advertising uses language,
pictures, sound and colors to sell the products as well as possible.

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Advertising industry

Advertising industry is a rapidly growing industry and determines to a considerable

extent the GDP or the gross domestic product of any country. The advertising industry
besides functioning as an intermediate between the manufacturers and the customers
plays an important role in the economy of the country. This industry necessitates
investment for funding different resources. One cannot measure the degree of
development by interpretation of inputs in the economy which yields some production. In
the event when consumption levels far exceed than what is reckoned, this is not a
means of triggering or bringing about transformation in the culture, society or
development in human resources or economy. What the time demands is optimum and
efficient execution of advertising projects by involving appropriate technology along
scientific lines.

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The Advantages and Disadvantages of

Advertising
Advertising is the name given to the process of commercial promotion of goods and
services in order to increase its sales. Advertising can be done by means of a number of
mediums like television, newspapers, wall paintings, billboards, magazines, Internet, by
the word-of-mouth and in many other ways. Advertising informs the buyers about the
availability of a certain product or service in the market and encourages them to buy it.

The main objectives of advertising are:

* Increasing the usage of a certain product and hence acquiring
more orders.
* Creating new customers and increasing brand recognition.
* To obtain feedback from customers regarding a certain
product.
* To indicate introduction of new products or replacement of
old ones.

Advertising has a number of uses. Apart from promoting commercial goods, advertising
can also be used to educate and motivate the public about non-commercial issues such
as AIDS, deforestation, family planning, etc. It is a powerful media which is capable of
reaching to the far out masses. Now days we find many ads on the internet also. These
ads in most cases have been successfully in connecting the user with the information he
requires. To prevent complete commercialization of electronic media, some countries
have made it mandatory for broadcasters to air some advertisements related to
consumer interest. These public advertisements educate people of that country on a
number of social and moral issues.

Advantages
1. You know what the goods is for, and how to use it
2. You can compare products with different companies
3. You have choices to choose
4. Increases exposure for new or smaller companies, or for larger companies with new
or unestablished product lines.
5. It alerts consumers to products that may fill just the niche they need (which is why all
good advertising is targeted to a specific audience).

Disadvantages
1. You might be fooled
2. Might make the customers get more needs
3. Advertising is expensive and can therefore be a crapshoot if a company doesn't do
its research beforehand.
4. It can be intrusive or invasive (think telemarketers and poll-takers) and its
effectiveness can be diluted if the arena becomes saturated (think race cars; you see
a lot of stickers, but how many do you really NOTICE?).

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Choosing the Right Advertising Medium

If you are ready to get the word out about your business, one of the steps that you need
to do is to select the right media where you will advertise and promote your business.

For a small business, every dollar is precious. Small businesses do not advertise for the
sake of advertising. Instead, they want to get the most return for their investment. Your
advertising campaign should translate to greater sales, more profits and healthier bottom
line.

While there are a number of venues where you can promote your business, you need to
ask three important questions:

 Where are my target buyers?

 What is the best medium to reach them?

 Can I afford to launch an effective campaign using this medium?

An important step to developing your sales and marketing plan is to select the right
media to send out your message. There are no hard-and-fast rules as to which media is
better. The right media for one business may be wrong for another.

Below are the relative advantages and disadvantages of the advertising media most
frequently used by small businesses?

Newspapers. Newspapers are one of the traditional mediums used by businesses, both
big and small alike, to advertise their businesses.

Advantages

• Allows you to reach a huge number of people in a given geographic area

• You have the flexibility in deciding the ad size and placement within the
newspaper
• Your ad can be as large as necessary to communicate as much of a story as you
care to tell
• Exposure to your ad is not limited; readers can go back to your message again
and again if so desired.
• Free help in creating and producing ad copy is usually available
• Quick turn-around helps your ad reflect the changing market conditions. The ad
you decide to run today can be in your customers' hands in one to two days.

Disadvantages
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• Ad space can be expensive

• Your ad has to compete against the clutter of other advertisers, including the
giants ads run by supermarkets and department stores as well as the ads of your
competitors
• Poor photo reproduction limits creativity
• Newspapers are a price-oriented medium; most ads are for sales
• Expect your ad to have a short shelf life, as newspapers are usually read once
and then discarded.
• You may be paying to send your message to a lot of people who will probably
never be in the market to buy from you.
• Newspapers are a highly visible medium, so your competitors can quickly react to
your prices
• With the increasing popularity of the Internet, newspapers face declining
readership and market penetration. A growing number of readers now skip the
print version of the newspaper (and hence the print ads) and instead read the
online version of the publication.

Magazines. Magazines are a more focused, albeit more expensive, alternative to

newspaper advertising. This medium allows you to reach highly targeted audiences.

Advantages

• Allows for better targeting of audience, as you can choose magazine publications
that cater to your specific audience or whose editorial content specializes in topics
of interest to your audience.
• High reader involvement means that more attention will be paid to your
advertisement
• Better quality paper permits better color reproduction and full-color ads
• The smaller page (generally 8 ½ by 11 inches) permits even small ads to stand
out

Disadvantages

• Long lead times mean that you have to make plans weeks or months in advance
• The slower lead time heightens the risk of your ad getting overtaken by events
• There is limited flexibility in terms of ad placement and format.
• Space and ad layout costs are higher

Yellow Pages. There are several forms of Yellow Pages that you can use to promote
and advertise your business. Aside from the traditional Yellow Pages supplied by phone
companies, you can also check out specialized directories targeted to specific markets
(e.g. Hispanic Yellow Pages, Blacks, etc.); interactive or consumer search databases;
Audiotex or talking yellow pages; Internet directories containing national, local and
regional listings; and other services classified as Yellow Pages.

Advantages

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• Wide availability, as mostly everyone uses the Yellow Pages

• Non-intrusive
• Action-oriented, as the audience is actually looking for the ads
• Ads are reasonably inexpensive
• Responses are easily tracked and measured
• Frequency

Disadvantages

• Pages can look cluttered, and your ad can easily get lost in the clutter
• Your ad is placed together with all your competitors
• Limited creativity in the ads, given the need to follow a pre-determined format
• Ads slow to reflect market changes

Radio

Advantages

• Radio is a universal medium enjoyed by people at one time or another during the
day, at home, at work, and even in the car.
• The vast array of radio program formats offers to efficiently target your advertising
dollars to narrowly defined segments of consumers most likely to respond to your
offer.
• Gives your business personality through the creation of campaigns using sounds
and voices
• Free creative help is often available
• Rates can generally be negotiated
• During the past ten years, radio rates have seen less inflation than those for other
media

Disadvantages

• Because radio listeners are spread over many stations, you may have to
advertise simultaneously on several stations to reach your target audience
• Listeners cannot go back to your ads to go over important points
• Ads are an interruption in the entertainment. Because of this, a radio ad may
require multiple exposure to break through the listener's "tune-out" factor and
ensure message retention
• Radio is a background medium. Most listeners are doing something else while
listening, which means that your ad has to work hard to get their attention

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Television

Advantages

• Television permits you to reach large numbers of people on a national or regional

level in a short period of time
• Independent stations and cable offer new opportunities to pinpoint local
audiences
• Television being an image-building and visual medium, it offers the ability to
convey your message with sight, sound and motion

Disadvantages

• Message is temporary, and may require multiple exposure for the ad to rise above
the clutter
• Ads on network affiliates are concentrated in local news broadcasts and station
breaks
• Preferred ad times are often sold out far in advance
• Limited length of exposure, as most ads are only thirty seconds long or less,
which limits the amount of information you can communicate
• Relatively expensive in terms of creative, production and airtime costs

Telemarketing. Telephone sales, or telemarketing, is an effective system for introducing

a company to a prospect and setting up appointments.

Advantages

• Provides a venue where you can easily interact with the prospect, answering any
questions or concerns they may have about your product or service.
• It's easy to prospect and find the right person to talk to.
• It's cost-effective compared to direct sales.
• Results are highly measurable.
• You can get a lot of information across if your script is properly structured.
• If outsourcing, set-up cost is minimal
• Increased efficiency since you can reach many more prospects by phone than
you can with in-person sales calls.
• Great tool to improve relationship and maintain contact with existing customers,
as well as to introduce new products to them
• Makes it easy to expand sales territory as the phone allows you to call local,
national and even global prospects.

Disadvantages

• An increasing number of people have become averse to telemarketing.

• More people are using technology to screen out unwanted callers, particularly
telemarketers
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• Government is implementing tougher measures to curb unscrupulous

telemarketers
• Lots of businesses use telemarketing.
• If hiring an outside firm to do telemarketing, there is lesser control in the process
given that the people doing the calls are not your employees
• May need to hire a professional to prepare a well-crafted and effective script
• It can be extremely expensive, particularly if the telemarketing is outsourced to an
outside firm
• It is most appropriate for high-ticket retail items or professional services.

Specialty Advertising. This kind of advertising entails the use of imprinted, useful, or
decorative products called advertising specialties, such as key chains, computer mouse,
mugs, etc. These articles are distributed for free; recipients need not purchase or make
a contribution to receive these items.

Advantages

• Flexibility of use
• High selectivity factor as these items can be distributed only to the target market.
• If done well, target audience may decide to keep the items, hence promoting long
retention and constant exposure
• Availability of wide range of inexpensive items that can be purchased at a low
price.
• They can create instant awareness.
• They can generate goodwill in receiver
• The items can be used to supplement other promotional efforts and media (e.g.
distributed during trade shows).

Disadvantages

• Targeting your market is difficult.

• This can be an inappropriate medium for some businesses.
• It is difficult to find items that are appropriate for certain businesses
• Longer lead time in developing the message and promotional product
• Possibility of saturation in some items and audiences
• Wrong choice of product or poor creative may cheapen the image of advertiser

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Objectives of Advertising
This is very first step in planning an advertising campaign is to define
the objectives which advertising is intended to achieve. According to
S. Majaro (“Advertising by objectives” Management Today, January
1970), ‘Advertising by objectives’ as the following advantages:
• It helps integrate the advertising efforts with other marketing mix
elements leading to a consistent, logical marketing plan.
• It helps the advertising agency prepare and evaluate relevant plans
and also recommend appropriate media.
• It assists in determining advertising budgets.
• It aids the appraisal of advertising plans and enables controls over
activities to be maintained by top management.
• It permits meaningful management of advertising effectiveness.
• It ensures that management is aware of the purpose and contents of
advertising.

Communication Objectives:
 To create awareness
 To develop comprehension
 To create conviction
 To create desire
 To secure action

Marketing Objectives:
 To increase sales
 To develop brand equity
 To increase market share
 To enter new markets
 To build goodwill
 To introduce new products

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Criticism of Advertising
Is Advertising a Social Waste

Several objectives have been raised against advertising and some people criticize advertising as a
social waste.
The main points of criticism are as follows:
♠ Higher Prices:
It argued the large amounts spent on advertising increase the cost of distribution
which is transferred to customers in the form of higher prices. This objection may be true in case
of inelastic demand when advertising merely transfers demand from one producer to another. But
effective advertising often creates demand and increase the scale of production. Large scale
operations result in lower costs and lower prices.
♠ Wasteful Consumption:
Advertising multiplies the needs of people and encouraged unhealthy
consumption. By exploiting human sentiments, it persuades people to buy products which they do
not need or cannot afford. Advertising promotes artificial; living and extravagance and create
demand for trivial goods.
♠ Misleads the consumer:
It is said that advertising is often deceptive and misrepresents facts to the
consumer. Exaggerated or tall claims and flowery language are used to dupe unwary consumers.
They are induced or defrauded through bogus testimonials and false comparisons to buy goods of
doubtful values. Advertising by its nature is not objective or neutral and lack of accuracy causes
much concern.
♠ Creates Monopoly:
Advertising creates brand loyalty and restricts free competition by creating barriers
to entry. Large firms which can afford huge amount of money on advertising eliminate small
firms by creating brand monopoly. Advertising thus encourage the survival of the mightiest rather
than the best. But advertising creates only a temporary brand monopoly as often some time other
brands offer competition.

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♠ Wastage of National Resources:

“Advertising diverts resources from the production of economic goods and
services to the production of intangible, if not false value, with the result that the consumer
receives no benefit in the form of added volume, better quality or lower prices.” In order to make
use of advertising, producers create trivial differences in their products. Valuable resources that
can be used to create new industries are wasted in the production of needless verities and designs.
♠ Undermines Social Values:
Modern advertising exerts such a corrupting influence on culture and social life
that it is not only wasteful but immoral. It degrades ethical and aesthetic values through nude
photographs and indecent language. Many advertisements are highly objectionable and socially
undesirable as they encourage social evils like drinking and smoking. To some extent advertising
spoils the landscape and diverts attention of drivers. Some advertisements may really be in poor
taste but majority of them help to improve social standards.

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ADVERTISING MEDIA
The best times for commercials are the times at which people wait for something special
like the news or sports. At these times advertising can be very successful, but it is also
very expensive.

• TV-COMMERCIALS
TV is one of the most powerful advertising medium, because you
can get very detailed information about a product. Depending on your target group you
have to decide the time, when your spot shall be shown. It is not useful broadcasting an
ad about cars in the children’s programmes because this is not your target group, they
cannot buy a car.

In the afternoon there are many films on TV, which are interrupted regularly. At that time
advertising can be very expensive. In fact, TV-adverts have a strange impact. You might
have noticed how well you can remember slogans long after the spot is over.

• PRINTED ADVERTISING
The prices for full-page-adverts in national newspapers are roughly the same as for TV
spots, but you can also place smaller adverts in the print media. In local newspapers you
only pay a few pounds.

The problem of adverts in newspapers and magazines is that they can attract the
reader’s eyes only.

This problem can be solved by considering several factors:

♠ Only use right-hand pages for newspaper adverts, because you first look at the
right side.
♠ The color is an important fact. Red signals mean danger and colors of the dusk
make us feel comfortable and save.
♠ The layout and the text are also very important parts of newspaper adverts.
The layout may take the readers look at the main information, and the text is
just to inform interested people.

DIRECT MAILING
Direct mailing is another form of advertising. The companies get a list of names and
address a send leaflets to those people who might be interested in their products. Some
people find this direct mailing irritating, wasteful and unsightly, so the leaflets land in the
rubbish bin.

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Types of Advertising

Advertising

Geographi Subjec
Target Impac
cal t
Group t
Coverage Matter

Product Primary
Consum Demand
Local
er

Region Secondary
Industri Demand
al Service
al

Trad Nation Direct

e al Action

Professiona Globa Idea Indirect

l l Action

Institution
al

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 Consumer Advertising

Consumer advertising is direct towards both consumers who

buy for their own household use. Such advertising is also known as end product advertising.
Customers are the people who buy the products and consumers are the people who finally use the
product. Consumer advertising aims at promoting sales by appealing directly to consumers and
consumers. Most of the advertisings are of this type because both products and consumers are
large in numbers. Advertising for cosmetics, ready-made garments, detergents, washing machine,
TV sets are a few examples of consumer advertising.

 Industrial Advertising

Industrial Advertising is that advertising which manufacturers

or distributors of industrial goods make to simulate demand among the industrial buyers of such
goods. Industrial advertising is directed at business firms and other organizations which purchase
and use industrial products such as raw materials, plant and machinery, machine tools, etc. for
example, an advertising for electric motors, and ball bearings may be directed at manufacturer of
washing machines and refrigerators. As compared to consumer industrial buyers are few in
number. Therefore, technical and trade journals are the main media used in industrial advertising.
The advertising appeal has to be rational and factual rather than emotional.

 Trade Advertising

Trade advertising is directed at wholesalers and retailers. The

basic purposed of such advertising is to secure distribution for the product. It also emphasizes in
high turnover and profits that will accuse to the traders by stocking and selling the product. Direct
mail and specialized trade journals are the main media used for trade advertising. It is also called
business-to-business advertising.

 Professional Advertising

It is directed towards doctors, engineers, architectures, chartered

accountants, solicitors and other professionals. Such advertising is intended to persuade them to
buy and recommend the advertised products. For example, pharma companies advertise
medicines and medical equipments to doctors who use and prescribe these products to their
patients. Professional journals are the main media used for such advertisements.

 Institutional Advertising
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It is done by business houses and institutions to build their

image. Such advertising does not attempt to sell anything directly. It informs the public about
what the institution is doing for the society and the country in areas like employment generation,
environmental protection, literacy, health etc. institutional advertising is also known as corporate
advertising. It is integrated with the public relation function of the organization.

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 Local Advertising

Retailers, cinema theaters and other small firms generally undertake local
advertising. For examples, shoppers’ stop invites customers to feel the shopping experience. The
advertisement is targeted at people in particular city or town. Newspapers, hoarding, radio and
TV are the main media used for local advertising. It is also called retail advertising.

 Regional Advertising

This type of advertising is restricted to a particular region. For example, to

begin with “Dainik Bhaskar” was advertised mainly in Madhya Pradesh. Generally, state level
print media and regional TV channels are used for regional advertising.

 National Advertising

Business firms having all India business do national advertising. Such

advertising seeks to sell branded products in different parts of the country. Large and well-
established firms such as Hindustan Unilever, Procter and Gamble, Dabur, Maruti Udyog, etc. use
national advertising to promote their products. Mass media like national newspapers (e.g., The
Hindustan Times, The Times of India) and TV channels are used to spread the message across the
country.

 International Advertising

This means advertising designed to promote the same product in a number of

countries. Multinational firms treat the whole world as their target market. Therefore, they
advertise their products at the global level. For example, coco cola, and Pepsi do international
advertising.

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 Product Advertising

Such advertising is done to promote the sale of a tangible product, e.g., Ball
pen, lipstick, washing machine, jeans, car, etc.

 Service Advertising

This type of advertising attempts to promote the sale of services which are
intangible, inseparable, and perishable. Advertisements by banks, hotels, airlines, beauty parlors.
Slimming centers, etc. fall in this category. Service advertising has expanded considerably with
the rapid growth of the service sector on our country. Financial advertising is done by companies
to sell their shares and debentures and by mutual funds is a part of service advertising. Personal
advertisements relating to matrimony, greetings, obituary, etc. can also be included in service
adverting.

 Idea Advertising

Both business firms and non-profit organizations use advertising to

promote some idea. Advertising relating to non-drinking, non-smoking, AIDS, anti-dowry,
environmental protection, energy conservation, etc. belong to this category. Mass media is used
for idea advertising.

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 Primary Demand Advertising

Primary demand means the demand for a class of products and not demand
for a particular brand. Primary demand advertising is done to inculcate the habit for a particular
class of product. Generally, the sponsors of such advertising are either the firm which first of all
introduces the product or a trade association. For example, Brooke Bond and Lipton advertised to
inculcate tea and coffee drinking in India.

 Secondary Demand Advertising

This type of advertising aims to simulate the demand for a particular brad
of the product. While primary demand advertising tries to convert the non-users into users,
selective demand advertising attempts to convert the users of brand ‘A’ into the users of brand
‘B’. In such advertising, the advertisers highlight some unique features and benefits of his brand.
For example, ABN Amro bank highlights in its advertisement that ABN Amro is the only credit
card which pays immediate cash back.

 Direct Action Advertising

Such advertising stresses and persuades immediate buying of the

advertised product/service. Advertisements for consumers’ items request immediate action from
consumers. For example, Citibank asks those who interested in buying credit cards to dial a toll-
free number any time if the day throughout the year. Generally, time bound offers and couples are
given in the advertisement to create immediate response.

 Indirect Action Advertising

Such advertising attempts to create favorable attitude toward the advertiser

and his products/services. The main purpose of indirect action advertising is to build up image or
reputation of the brand. Its effect on sales occurs in the long run.

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Organizations involved in advertising

Top Advertising Companies of India:

Ogilvy and Mather:

This is one of the leading advertising companies in India. This organization believes that
devotion to the brand defines the profile of their company. This company has offices
across the globe. The objective of the company is to build brands. I t is a subsidiary of
WPP Group plc. The headquarter of the company is in New York.

J Walter Thompson India:

One of the most popular companies in the advertising industry is J Walter Thompson
India. Their objective is to make advertising a part of the life of the consumers. This is
also world's best advertising brand with about 200 offices in 90 countries. This company
is the first one to introduce pioneer careers in ad for women, sex-appeal ads and also
produced the first ever sponsored -TV program.

Mudra Communication Pvt. Ltd:

This is one of the renowned advertising companies of India. This advertising
organization was founded in the year 1980 at Mumbai. Recently the Ad Company
declared the addition of public relations, rural marketing, events etc. The head office of
the company is in Bombay Area.

FCB-Ulka Advertising Ltd:

One of the best companies in India in the advertising arena is FCB-Ulka Advertising Ltd.
In US, this advertising company ranks third and tenth in the world having about 188
offices in 102 countries. Their aim is to reflect the needs of the brand and not the
personality of the brand. It has about 500 professionals and no prima donnas.

Rediffusion-DY&R:
This Advertising Company of India has made a benchmark in the field of creativity.
India's 5th largest advertising company is Rediffusion. This advertising agency offers a
wide array of integrated pr services for external and internal communications. The
primary strength of the company lies in the media relations.

McCann-Erickson India Ltd:

The prominent name among the best advertising companies of India is McCann-
Erickson India Ltd. They define work in relation to the impact that advertising has on the

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lives of masses. The testimony of the company in which it firmly believes is the
campaign of Coca -cola-'Thanda Matlab Coca Cola'.

RK Swamy/BBDO Advertising Ltd:

It maintained the record of remaining consistently among the top ten advertising
agencies in India. Established in 1973, this advertising reached great heights. This is
also India's No.1 research company in the market sector and is fully run by Indians.
Brand Equity is an integral part of the company.

Grey Worldwide (I) Pvt. Ltd:

A significant name in India in the world of advertising agencies is Grey Worldwide (I) Pvt
Ltd. The company is primarily based in Mumbai and has offices in Kolkata, Ahmedabad,
Bangalore and New Delhi. It is a subsidiary of Grey Worldwide. The company
specializes in advertising and marketing services.

Leo Burnett India Pvt. Ltd :

It has a significant presence in about 96 offices in 10 countries. This advertising agency
was awarded the 'Worldwide Agency of the Year' in 2004.They are proficient in
explaining how a single image is worth thousand words and can break the barriers of
language but not at the cost of the ad's emotional power.

Contract Advertising India Ltd:

This advertising company of India is one of the leading advertising agencies in India. It is
one-to-one customer lifecycle management advertising agency. It was founded in 1992
and is situated in Mumbai. It offers a wide range of services like online marketing and
strategy and many others.

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Leading Advertising Companies

India's leading advertisers in 2007 by media spend

Hindustan Lever Bharti Airtel

Tata Group Paras Pharmaceuticals

Procter & Gamble Honda

Reckitt Benckiser Nokia

PepsiCo L'Oreal India

Source: Advertising Age/Nielsen

India's leading advertisers on TV in 2007 by media spend were:

Hindustan Lever Bharti Airtel

Reckitt Benckiser Colgate Palmolive

Paras Pharmaceuticals Procter & Gamble

Coca Cola India L'Oreal India

PepsiCo Smithkline Beecham

Source: Adex India

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Other Leading Local Advertisers covered by Adbrands.net

Dabur India

India's "Most Admired" agencies in 2005

Ogilvy & Mather RK Swamy BBDO

McCann Erickson India Saatchi & Saatchi

Lowe Lintas iB&W Communications

JWT India Euro RSCG

Leo Burnett India Bates Enterprise

Mudra Communications (DDB) Ambience Publicis

Grey India SSC & B Lintas (Lowe)

FCB Ulka Everest Brand Solutions

Contract Advertising (JWT) Dentsu

Rediffusion DY&R Interface

Source: Economic Times Brand Equity Ad Agency Reckoner

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Managing the Advertising

Campaign
The Following points are used to manage any advertising campaign:

 Setting the Advertising Objective

 Setting the Advertising Budget
 Selecting Media for Message Delivery
 Selecting Media: Creative Options
 Selecting Media: Creative Costs
 Selecting Media: Market Reach of Media
 Selecting Media: Message Placement Cost
 Selecting Media: Length of Exposure
 Selecting Media: Advertising Clutter
 Selecting Media: Response Tracking
 Creating an Advertising Message
 General Message Creation Factors
 Advertising Message Structure
 Advertising Message Testing
 Evaluating Advertising Campaign Results

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Advertising Budget
Definition:

Money set aside by the advertiser to pay for advertising. There are a
variety of methods for determining the most desirable size of an advertising
budget.

The Importance Of An Advertising Budget

One of the most important considerations you should have when advertising your
product or service is your budget. Your advertising budget can literally make or break
your business, so it is extremely important to get the most out of your advertising
dollars. Here are some tips.

Advertising your business usually costs money, however, you don’t have to break the
bank. There are plenty of ways to reach your market that is beneficial to your budget
and will help expand your bottom line.

It is important to note a big budget used carelessly could be just as bad as having too
small a budget. In order to effectively research different types of advertisings, you will
need to experiment and research which types of advertising are best for your business.
Make sure you have enough money to try out a few advertising venues.

Many entrepreneurs try to shock and awe their market, by spending as much as they
can in a short period of time, this tactic rarely works. Your business needs to be in the
public eye generally for a long period of time for it to pick up steam. Building your
advertising campaign is similar to building your business, tweaking and analyzing it over
many months or years to make sure you are going in the right direction. If you are
planning on advertising your small business, keep in mind the importance of an
advertising budget.

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Deciding on Advertising Budget

Advertising has a carryover effect that lasts beyond the current period.
Although advertising is treated as a current expense, part of it is really an investment
that builds up an intangible asset called brand equity.

This treatment of advertising reduces the company’s reported profit and therefore limits
the number of new product launches a company can undertake in any one year.

The following are the five factors that are considered while setting the advertising
budget:

• Stage in the product life cycle: new products typically receive large advertising
budgets to build awareness and to gain consumers trial.

• Market share and consumer base: the brands having a high market share
usually require less advertising expenditure whereas for products whose brand
needs to be built, requires larger advertising expenditure.

• Competition and clutter: In today’s competitive market, where there are a large
number of competitors, a brand must advertise heavily to be heard.

• Advertising frequency: the number of repetitions that need to be made to put

across the brand message to consumers has an important impact on the
advertising budget.

• Product substitutability: brands in the commodity class require heavy

advertising to establish a different image. For example, cigarettes, beer, soft
drinks. Also advertising is important when the brand can offer unique physical
benefits or features.

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Setting the Advertising Budget

Setting an advertising objective is easy, but achieving the objective requires a well-
thought out strategy. One key factor affecting the strategy used to achieve advertising
objectives is how much money an organization has to spend. The funds designated for
advertising make up the advertising budget and it reflects the amount an organization is
willing (i.e., approved by high-level management) to commit to achieve its advertising
objectives.

Organizations use several methods for determining advertising budgets including:

• Percentage of Sales – Under this approach advertising spending is set based on

either a percentage of previous sales or a percentage of forecasted sales. For
example, an organization may set next year’s advertising budget at 10% of this
year’s sales level. One problem with this approach is that the budget is based on
what has already happened and not what is expected to occur. If the overall
market grows rapidly in the following year, the 10% level from the previous year
may be well below what is necessary for the company to maintain or increase its
market share. Alternatively, companies may consider allocating advertising funds
based on a percentage of forecasted sales. In this way advertising is viewed as a
driver of future sales and spending on advertising is linked directly to meeting
future sales forecasts. However, since future sales are not guaranteed, the actual
percentage spent may be considerably higher than expected if the sales forecast is
greater than what actually occurs.

• What is Affordable – Many smaller companies find spending of any kind to be

constraining. In this situation, advertising may be just one of several tightly
allocated spending areas and, thus, the level spent on advertising may vary over
time. For these companies, advertising may only occur when extra funds are
available.

• Best Guess – Companies entering new markets often lack knowledge of how
much advertising is needed to achieve their objectives. In cases where the market
is not well understood, marketers may rely on their best judgment (i.e.,
executive’s experience) of what the advertising budget should be.

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Some Advertisements

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