MBA Advertising Full Notes Unit 1-Kanwal-Apeejay

Notes of Advertising Management (MB-902)
MBA Semester 3rd (Marketing Specialization)
UNIT 1
Compiled by: Kanwal Khehra

Assistant Professor in Marketing
Apeejay Institute of Management Technical Campus-Jalandhar
For soft copy, Contact 98762-30542
S.No Topic Page No.

1 Advertising- Meaning 2
2 Advertising –Definition 3
3 Nature of Advertising 5
4 Scope of Advertising 7
5 Objectives of Advertising 8
6 Importance of Advertising 9
7 Classification of Advertising 11
8 Role of Advertising and its Importance 15
9 Key Players in Advertising 19
10 Surrogate Advertising 20
11 Puffery in Advertising 21
12 Role of Advertising in Marketing Mix 23
13 Integrated Marketing Communication 27
14 AIDA Model 29
15 Lavidge and Steiner Model (LS Model) 32
16 Setting Goals and Advertising Objectives 33
17 DAGMAR Approach 35
18 Role of Advertising in India’s Economic 38
Development
19 Ethics in Advertising 42
20 Social Aspect of Advertising 44
21 Economic Aspect of Advertising 48
22 Legal Aspect of Advertising 50
23 Advertising and Children 59
Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 1

Advertising - Meaning
Advertising forms one component of the promotion mix. It has become very
popular and useful and has reached the status of an independent discipline. It has
been derived from the latin word ‘Advertere’ which means to turn around, to
draw attention to any subject or purpose. It has grown at a very fast pace and has
become a special field of study.
Promotion Mix consists of:
(i) Advertising: It is a non-paid personal form of presentation and promotion of

ideas, goods services by an identified sponsor.
(ii) Personal selling: It is an oral presentation for the purpose of sale.
(iii) Sales promotion: It is an immediate inducement that adds extra value to the
product.
(iv) Publicity: It is the management of functions, that helps public to understand

the policies of the organization.

Advertising - Definition
The American Marketing Association (AMA) recommends the definition,

"Advertising is any paid form of non-personal presentation and promotion of
ideas, goods and services by an identified sponsor". The AMA points out that
advertising is a tool of marketing along with the product and its packaging, price,
distribution and personnel selling. Definitely advertising is openly and over the
overtly subsidized information and persuasion, and its task is to present and
promote for more than merchandise. According to this definition promotion is
'non-personal'. It is directed "to whom it may concern". If advertising is effective,
it is because the audience is receptive to it.
Paid form: When product or services are mentioned favorably in the

media,newspaper, magazines and radio or television- the item appears because it
is presumed to provide information or entertainment for the audience. But this is
publicity, and no payment is made by the benefited organization. Advertising on
the other hand, is published or broadcast because the advertiser has purchased
time or space to tell the story of a certain product or service.
Non-personal presentation: Personal selling takes place when a personal face-to-

face presentation is made. Although advertising complements or may submit for,
personal selling it is done in a non-personal manner through intermediaries - or
media.
Idea, goods and services: From this point advertising is concerned with much
more than the promotion of tangible goods. Most of the advertising is designed to
help sell goods and services. It is being used increasingly to further public interest
group.
An Identified Sponsor: Advertising discloses or identifies the sources of the

opinion and ideas. According to an identified sponsor, this point distinguishes
advertising from propaganda. Propaganda attempts to present opinions and ideas
in order to influence attitudes and actions. Advertising on the other hand, disclose
or identifies the source of the opinions and ideas it present.
Advertising is a powerful communication force and vital marketing tool helping to

sell goods, services, images, and ideas through channel of information and
persuasion. It is highly visible force in the society. Today all of us receive many

advertising messages daily. Now it is essential to the success of any type of
business and industry. Furthermore, advertising strategies are employed more
and more by non-business organization such as government, college and
universities, public service groups and characteristics. It is one of the parts of the
marketing and communication process. Advertising convince people to buy
products. All advertising contains both information and persuasion. Today we can
say advertising is a communication, marketing, public-relation, information and
persuasion process.

Nature of Advertising
Advertising is an important element of Promotion Mix and it is a process which

gives information to the masses about products/services. It is a paid publicity
sponsored by the advertiser. It is a persuasion which is controlled and influences
the target audience. Its nature includes:
Element of marketing Mix: It is also an important element of marketing Mix

which includes the 4 Ps—Price, Product, Promotion and Place.
Promotion Mix: The elements of promotion mix includes, Advertising, Sales,

Promotion, Personal Selling and Publicity. All these have been described in detail
in the ensuring text. Personal selling involves carrying of the messages of the
product to consumers by individual salesman and make them purchase the
product.
Sales promotion: It is the technique of motivating the customers to purchase the

product. The motivation is brought about by offering cash discount, tax
deduction, free items and other incentives. Sales promotion adds value to the
product “Buy two take one free” etc.
Publicity: It is not paid by the sponsor. Publicity comes automatically. It can be

positive or negative publicity on which the individual or the incident publicized
has no control.
Mass communication: It informs not one person but a group of persons who may
be the prospects of purchase. The mass communication media includes radio,
television, newspapers, magazine etc. Print media and audio and audio-visual
media is extensively used.
Message: These are carriers of advertisement which inspires customers to

purchase a product. Message writing or copy writing is an art and a lot of effort
and money is put into it. The colour, design, structure of the message is given
great importance.
Advertising agency: undertakes the writing of the message and charges for the
same. It helps the advertiser in all possible ways and integrates its effort with that

of the company or the advertiser. The advertising agencies and its function are
dealt with in a separate chapter
Sponsor: is a person who pays for the advertisement. He is identified and

discloses the ideas, message and information to be advertised.
Persuasion: The message is persuasive and informative. It is creative as well. The

message attracts the attention of the audience. It is an essential factor in
advertising.
Control: The time, place, message and direction of advertising is controlled to

make it effective and purposive. Advertisement can be controlled but publicity
cannot.
Identifiable: The message and presentation should be recognised by receivers

and customers.
Target Group: Advertising aims at a target group of audience, while framing an

advertisement target groups are considered. However, it can reach both target
and non-target groups.

Scope of Advertising
Advertising has a very wide scope in marketing and in the social system. The
scope of advertising is described on the basis of activities included under
advertising and their forms and systems, objectives and functions. These include
the Message—Media—Merchandise—It is the buying and selling of the product-
advertisement covers the attributes of the product to be sold. The outstanding
qualities of the product should be assessed and exposed with emphasis. New and
existing products are advertised to popularize them. A firm is considered as an
important source of advertising.
The Advertising covers all the following Advertising functions:
Advertising Functions: No product can be sold without some form of advertising.

• Advertising creates demand.
• Promotes marketing system.
• Helps middleman.
• Builds image for the organization.
• Makes customer aware of the price and attributes of the product leading to
greater sales.
• Brings awareness in the masses.
• Consumer demand can be assessed by marketing researchers and advertising
research.
• It helps in expanding the market.
• It helps the middleman to easily sell the product.
• It brings customers and sellers together.
• Advertisement is economical when targeted at the masses.

Objectives of Advertising
Advertising is the best way to communicate to the customers. Advertising helps

informs the customers about the brands available in the market and the variety
of products useful to them. Advertising is for everybody including kids, young and
old. It is done using various media types, with different techniques and methods
most suited.
Four main Objectives of advertising are:
i. Trial
ii. Continuity
iii. Brand switch
iv. Switching back
Let’s take a look on these various types of objectives.
1. Trial: the companies which are in their introduction stage generally work
for this objective. The trial objective is the one which involves convincing
the customers to buy the new product introduced in the market. Here, the
advertisers use flashy and attractive ads to make customers take a look on
the products and purchase for trials.
2. Continuity: this objective is concerned about keeping the existing
customers to stick on to the product. The advertisers here generally keep
on bringing something new in the product and the advertisement so that
the existing customers keep buying their products.
3. Brand switch: this objective is basically for those companies who want to
attract the customers of the competitors. Here, the advertisers try to
convince the customers to switch from the existing brand they are using to
their product.
4. Switching back: this objective is for the companies who want their previous
customers back, who have switched to their competitors. The advertisers
use different ways to attract the customers back like discount sale, new
advertise, some reworking done on packaging, etc.
Basically, advertising is a very artistic way of communicating with the customers.

The main characteristics one should have to get on their objectives are great
communication skills and very good convincing power.

Importance of Advertising
Advertising plays a very important role in today’s age of competition. Advertising
is one thing which has become a necessity for everybody in today’s day to day life,
be it the producer, the traders, or the customer. Advertising is an important part.
Lets have a look on how and where is advertising important:
1. Advertising is important for the customers
Just imagine television or a newspaper or a radio channel without an

advertisement! No, no one can any day imagine this. Advertising plays a very
important role in customers life. Customers are the people who buy the product
only after they are made aware of the products available in the market. If the
product is not advertised, no customer will come to know what products are
available and will not buy the product even if the product was for their benefit.
One more thing is that advertising helps people find the best products for
themselves, their kids, and their family. When they come to know about the
range of products, they are able to compare the products and buy so that they get
what they desire after spending their valuable money. Thus, advertising is
important for the customers.
2. Advertising is important for the seller and companies producing the

products
Yes, advertising plays very important role for the producers and the sellers of the
products, because
 Advertising helps increasing sales
 Advertising helps producers or the companies to know their competitors and
plan accordingly to meet up the level of competition.
 If any company wants to introduce or launch a new product in the market,
advertising will make a ground for the product. Advertising helps making people
aware of the new product so that the consumers come and try the product.
 Advertising helps creating goodwill for the company and gains customer
loyalty after reaching a mature age.
 The demand for the product keeps on coming with the help of advertising
and demand and supply become a never ending process.

3. Advertising is important for the society
Advertising helps educating people. There are some social issues also which
advertising deals with like child labour, liquor consumption, girl child killing,
smoking, family planning education, etc. thus, advertising plays a very important
role in society.

Classification of Advertising
Advertising is the promotion of a company’s products and services though

different mediums to increase the sales of the product and services. It works by
making the customer aware of the product and by focusing on customer’s need
to buy the product. Globally, advertising has become an essential part of the
corporate world. Therefore, companies allot a huge part of their revenues to the
advertising budget. Advertising also serves to build a brand of the product which
goes a long way to make effective sales.
There are several branches or types of advertising which can be used by the
companies. Let us discuss them in detail.
Classification of Advertising
1. Print Advertising - The print media has been used for advertising since long.
The newspapers and magazines are quite popular modes of advertising for
different companies all over the world. Using the print media, the
companies can also promote their products through brochures and fliers.
The newspaper and magazines sell the advertising space and the cost
depends on several factors. The quantity of space, the page of the
publication, and the type of paper decide the cost of the advertisement. So
an ad on the front page would be costlier than on inside pages. Similarly an
ad in the glossy supplement of the paper would be more expensive than in
a mediocre quality paper.
2. Broadcast Advertising - This type of advertising is very popular all around
the world. It consists of television, radio, or Internet advertising. The ads on
the television have a large audience and are very popular. The cost of the
advertisement depends on the length of the ad and the time at which the
ad would be appearing. For example, the prime time ads would be more
costly than the regular ones. Radio advertising is not what it used to be
after the advent of television and Internet, but still there is specific

audience for the radio ads too. The radio jingles are quite popular in
sections of society and help to sell the products.
3. Outdoor Advertising - Outdoor advertising makes use of different tools to
gain customer’s attention. The billboards, kiosks, and events and
tradeshows are an effective way to convey the message of the company.
The billboards are present all around the city but the content should be
such that it attracts the attention of the customer. The kiosks are an easy
outlet of the products and serve as information outlets for the people too.
Organizing events such as trade fairs and exhibitions for promotion of the
product or service also in a way advertises the product. Therefore, outdoor
advertising is an effective advertising tool.
4. Covert Advertising - This is a unique way of advertising in which the product
or the message is subtly included in a movie or TV serial. There is no actual
ad, just the mention of the product in the movie. For example, Tom Cruise
used the Nokia phone in the movie Minority Report.
5. Public Service Advertising - As evident from the title itself, such advertising
is for the public causes. There are a host of important matters such as AIDS,
political integrity, energy conservation, illiteracy, poverty and so on all of
which need more awareness as far as general public is concerned. This type
of advertising has gained much importance in recent times and is an
effective tool to convey the message.
The Advertisements can also be classified into following categories:
The nature and purpose of the advertising differ from one industry to another or
across situations. Marketers advertise to the consumers market with national,
local and direct-response advertising which may involve stimulating primary or
selective demand. They use industrial, professional and trade advertising for
business and professional markets. To better understand the nature and purpose
of advertising it can be classified by the following criteria:
1. National Advertising: Advertising done by a company on a nationwide basis or

in most regions of the country and targeted to the ultimate consumer market is
known as national advertising. The companies that sponsor these ads are
generally referred to as national advertisers. Most of the advertisements for well-
known brands that we see on TV or in other major media are examples of
national advertising. It informs or reminds consumers of the brand and its
features, benefits, advantages and uses or reinforces its images.

2. Retail/Local Advertising: Another prevalent type of advertising directed at the
consumer market is classified as retail/local advertising. This type of advertising is
done by major retailers or smaller local merchants to encourage consumers to
shop at a specific store or use a local service such as local financial companies,
bank, hospitals, fitness club, restaurants, show rooms etc. While the national
advertisers sell their products at many locations, retail or local advertisers must
give the consumer a reason to patronize their establishment. Retail advertising
tends to emphasize specific customer benefits such as store house, credit policies,
services, atmosphere, merchandise assortment and other distinguish attributes.
3. Direct-Response Advertising: Direct-response advertising is a method of direct

marketing whereby a product is promoted through an advertisement that lets the
customer purchase directly from the manufacturer. Direct response advertising
has become very popular.In recent years owing primarily to changing life-styles.
The convenience of shopping through the mail or by telephone has led to the
tremendous increase in direct-response advertising.
4. Primary and Selective Demand Advertising: Another way of viewing

advertising to the ultimate customers is in terms of whether the message is
designed to stimulate either primary or selective demand. Primary Demand
Advertising is designed to stimulate demand for the general product class or
entire industry; Selective Demand Advertising focuses on creating demand for a
particular manufacturer's brands. Primary demand advertising is often used as
part of a promotional strategy to help a new product gain acceptance among
customers. Products in the introductory or growth stages of their life cycles often
have primary demand stimulation as a promotional objective because the
challenge is to sell customers on the product as much as it is to sell a particular
brand.
5. Business to Business Advertising: Some times the ultimate customer is not the
mass consumer market but rather another business, industry, or profession.
Business-to Business advertising is used by one business to advertise its products
or services to another.
It is categorized in three basic categories like industrial, professional, and trade

advertising.
a) Industrial Advertising: Advertising targeted at individuals who buy or influence

the purchase of industrial goods or other services is known as industrial

advertising. Industrial goods are those products that either become a physical
part of another product, or used in manufacturing other goods. Business service,
such as insurance, financial services, and health care, are also included in this
category. Industrial advertising is usually found in general business publications or
in trade publications targeted to the particular industry.
b) Professional Advertising: Advertising that is targeted to professional groups-

such as doctors, lawyers, dentists, or engineers-to encourage to use the
advertiser's product or specify it for other's use is known as professional
advertising. Professional groups are important because they constitute a market
for products and services they use in their businesses. Also, their
recommendations influences, many consumer purchase decisions.
c) Trade Advertising: Advertising with in a trade to attract the wholesalers and

retailers and motivate them to purchase its products for resale is termed as trade
advertising. Company sales representatives call on resellers to explain the
product, discuss the firm's plans for building demand among ultimate consumers,
and describe special programs being offered to the trade, such as introductory
discounts, promotional allowances. Trade advertise usually appears in
publications that serve the particular industry.

Role of Advertising and its Importance
A peculiarity of the mass communication system is that advertising pays most of

the bills. All advertising contains both information and persuasion. It influence in
the mass media market place. The classified advertisements in the daily
newspaper are almost pure information. Their primary intention is to advise the
readers of the availability of a product-telling where, when, and for how much.
The audience either wants it or they don't. Actually advertising is omnipresent
and is basically persuasive in nature. It pays most of the bills. It accounts for
around two thirds of the revenue of the print-media and nearly all the revenue
for electronic media (Television and Radio). It has both marketing and
communication. Advertising is a message industry that plays a major role in
shaping the content and operation of the mass media. It plays an important role
in our popular culture because it shapes and reflects our life styles. It is one step
ahead of other elements in our culture and is usually the first to reflect social
trends. Now the scenario is that the average adult is exposed to uncounted
number of advertisements each day. It plays two following broad roles in the
socio-economic landscape of a country.
1. Economic roles
2. Social roles
1. Advertising is basically an economic institution. It performs an economic

function for an advertiser affect economic decision of the audience and is an
integral part of the whole economic system. Thus an economic evaluation show
accompanies other types of appraisal of advertising.
Here are some of the economic role and benefits of advertising:

1. Advertising encourages economic growth.
2. Providing information utility.
3. Advertising and Brand name.
4. Media support.
5. Distribution costs
6. Effects on business cycles.
7. Providing product utility.
8. Advertising and monopoly.
9. Encouraging new product.
10. Maintain Competition
(a) Market concentration
(b) Concentration and prices

(i) Advertising and prices
(ii) Advertising and profitability
(iii) Advertising and Brand stability.
At all economic level, advertising stimulates demand, educate consumer about

new product, policies, programmes services and organizations, increase
competition and improve standard of life-style by helping to bring new product to
the consumer. No doubt, it is a fuel that boosts the economy by helping to
introduce new products faster and more effectively to consumer by supporting to
achieve the economies of scale faster and by helping to remove the monopoly of
the product.
2. At social level advertising plays upon, derives from and contributes to the social
texture of a country. Advertising reflects society and society reflects advertising.
Various social changes are brought about or helped by advertising. It makes role
models who can create societal change. Adult education, family planning and
pulse polio campaign also used to sell the concept of social advertising. It is a
positive force in our society. It makes to the nation's social welfare.
There are five roles of advertising to social welfare:
� Efficient source of information for both consumers and industrial buyers for
product quality, new material or merchandise, new technology and cost.
� Reduces distribution costs through personal selling.
� Encourage competition. It increases product quality through solid brand

identity.
� It creates publicity for material and cultural incentives of a liberal enterprise

society.
� It makes able media all mass media to maintain independence from

government, political parties and other special interest groups. Advertisers have
the raw power to manipulate consumers. Many companies have the capacity to
obtain large numbers of advertisement exposures. But, there are several
following issues which are discussed with the negative role of advertising in the
society.

Taste: Some critics feel that advertising is objectionable because the creative
effort behind it is not in good taste. It is too omnipresent or intrusive and too
long, too repetitions or involved unpleased voices, music or people. Advertising is
criticized friskily, unreal, boring or depressing nature. Nearly one fourth of the
offensive advertisements were considered inappropriate for children. Clearly,
there is a strong product class effect with respect to irritation with television
advertising.
Appeal: Fear appeals is advertising have also been criticized. The extent of fear
appeal is to create anxiety that can supposedly be alleviated by an available
product (insurance against a fire or toothpaste for the prevention of germs). Such
appeals may create emotional disturbances or a long run anxiety condition in
some audience members. The cumulative effects of such advertising may be
highly undesirable to some, although it can also be urged that they quickly cease
to have any significant degree of emotional impact, and the audience soon
becomes immune to the messages.
Intrusiveness: An advertisement campaign moves with repetition from a period

of effectiveness and presumably audience acceptance, to a period of irritation.
The number of exposures between the start of a campaign and the stage of
growing irritation is obviously a key variable. An important factor, of course is the
intensity of the campaign itself. Bursls of advertising that generate many
exposures over a short time period will be undoubtedly run a high risk of
irritation.
Effects on values and life-style:
By nature advertising receives wide exposure. Furthermore, it presumably has an

effects on what people buy and thus on their activities. It is a persuasive vehicle
which has an impact on the values and life-style of society and that this impact
has its negative as well as positive side. Various appeals of advertising have
criticized in different ways such as appeals to mass markets tended to promote
conformity, appeals to status promote envy, pride and social competitiveness,
appeals to fears promote anxiety, appeals to newness promote disrespect for
tradition, durability experience or history, appeals to youth promote reduce
family authority, appeals to sexuality promote promiscuity and so forth.
There are three main issues that have attracted particular attention on the
negative role of advertising in the society they are:

a) The relationship of advertising to materialism. Materialism is defined as the
tendency to give undue importance to material interests People buy Air Condition
(A.C.), Music system and automobiles for social status. So advertising create or
foster materialism or merely reflects values and attitudes that are created by
more significant sociological forces.
(b) The role that advertising has played in creating harmful stereotypes of women
and ethnic minorities.
(c) The possible contribution of advertising in promoting harmful products. The

basic argument is that alcohol and cigarettes is a 'harmful' product. Alcohol is
unhealthy for the individual and is indirectly responsible for injuries and deaths
resulting for drunk drivers. Why encourage people to use alcohol through
advertising. The use of celebrities suggestions that alcohol is not only harmless
but it is associated with fun loving, healthy people. As Deer advertising has
increased fastly in the media while that is a national concern with the problems of
alcohol and cigarettes. Information and broadcasting Minister Smt. Sushma
Swaraj has declared a ban on wine and beer advertising on Doordarshan. Similar
banned against tobacco by Allahabad high court was implemented in U. P. but
due to the appeals in Supreme Court the decision changed and now ban has been
removed. In the conclusion we can say that there are three categories of issues
concerning advertising role. Two of them represent the aggregate effects of
advertising on society's values and life styles and on society's economic well
being. The third focuses on the nature and content of advertising. It involves
issues of ethics, manipulation, taste, and advertising to children. It is clear that
advertising ethics and other social and economic issues of advertising are heavily
intertwined.
Some advertising is criticized on the basis of taste. It is urged that advertising has
a negative impact on values and life-styles of society. The key issues are what
values and life styles are to be avoided and what relative impact or influence does
advertising have on them. What is materialism and is it bad or is it merely a
means to various goals? What role does and should advertising have in promoting
or combating stereotypes?

Key Players in Advertising
 The Advertiser is the individual or organization that usually initiates the
advertising process.
 The Advertising Agency plans and implements part or all of the advertising
efforts. May use an outside agency, or their own advertising department or
in-house agency.
 The Media are the channels of communication that carry the messages
from the advertiser to the audience, i.e. television, magazines, radio, etc.
 The Vendors are a group of service organizations that assist advertisers,
advertising agencies, and the media, i.e. freelance copywriters, graphic
artists, photographers, etc.
 The Target Audience may be the purchaser or the consumer of the
product, or both. May need to design different ads for each group.

Surrogate Advertising
• 'Surrogate Advertising' is a form of advertising which is used to promote
banned products like cigarettes and alcohol, in the disguise of another
product.
• This type of advertising uses a product of a fairly close category ex- club
soda, or mineral water in case of alcohol, or products of a completely
different category ex- music CD's, playing cards etc to hammer the brand
name into the heads of consumers.
• The banned product (alcohol or cigarettes) may not be projected directly to
consumers but rather masked under another product under the same
brand name, so that whenever there is mention of that brand, people start
associating it with its main product(the alcohol or cigarette)
• In India there are tons of companies doing that, from Bacardi Blast music
CD's , Bagpiper Club Soda to Officers Choice playing cards.The masking
product i.e the music CD's, or mineral water might not even be marketed in
real,it is just a strategy used to generate top of the mind recall.
Some commonly seen brands and their ads:
• Bagpiper : Club soda
• Imperial Blue : Music CD's 'Men will be men'
• Royal Stag : Music CD's , Mega cricket, with the theme 'Make it Large'
• McDowells No.1 : Soda and Indian cricket with the tagline 'The No.1 Spirit
of Leadership'
• Haywards 5000 : Soda and packaged drinking water
• Royal Challenge : Golf accessories, music CD's and mineral water.

Puffery in Advertising
• Advertisers try to persuade people to buy a product or service through
various methods. A company may deliver an entertaining message about its
product, compare the product to a similar item, list facts about the product,
or make vague claims about the product which cannot be proved or
disproved. This last method is known as "puffery" — the advertiser "puffs
up" the product to seem like more than it is. Puffery is not illegal and is a
common method used in advertising.
Proof and Puffery
• The claims made by puffery may be false, but they are not really lies
because no one can disprove them. No one can prove them either. A
company may claim that its hamburger is the best hamburger in the world.
No one can prove the hamburger is really the best, but no one can prove it
is not. However, if the advertiser says that its hamburger contains
ingredients that help to prevent cancer, that is something science could
prove or disprove. Trying to persuade someone that hamburgers prevent
cancer would be a false claim.
Hyperbole
• Puffery is characterized by exaggeration and hyperbole. "The best
hamburger in the world" is so beyond belief that a reasonable person
would not take the claim seriously. Advertisers use exaggeration and
hyperbole to get people's attention and make their message memorable.
Because the claims in puffery are obviously exaggerated, and because
exaggeration works to get people's attention, puffery is an accepted
advertising technique.
Subjective vs. Objective
• Puffery claims are subjective and are a matter of opinion. A hair salon may
say it offers "the best" service, but "best" is a matter of opinion. But if the
salon claims that is has won more awards than any other salon in the city,
this is something that can be measured -- it is an objective claim and not
puffery. Puffery often uses superlatives such as "best," "fastest," "tastiest"
and "freshest," for instance.
Deception

• Puffery does not intend to deceive. Advertising that deliberately misleads
or makes false claims is illegal, while puffery is legal. Comparing your
product to that of a competitor without scientific studies to substantiate
your claims could lead to charges of deception. Saying you make a better
pizza is puffery. Saying two out of three people prefer your pizza when you
have no studies to substantiate the claim crosses the line to deception.

Role of Advertising in Marketing Mix
For years marketers have identified the components of the marketing mix as the
four Ps: price (of the brand), product (including service, packaging, brand-name
and design), place (distribution) and promotion (including advertising, public
relations, personal selling, gifts, exhibitions, conferences and sales promotion).
The terms and conditions of the market are set by the costs, nature of
competition, product category, regulations, time and space. The firm tries to
make elements of the marketing mix work together to support the brand.
The Marketing Mix Strategies:
Product:
 The product is both the object of the advertising and the reason for
marketing
The product includes the brand-name and design, the after-sales service,
customer relations and packaging. Packaging and pack design has become
increasingly important in the FMCG sector. Branded goods have to impress even
more to compete with own-label products. The packaging of goods such as coffee
in jars, lager in bottles, washing-up liquid in squeezy bottles and toothpaste in
dispensers is as significant as the substances they contain. Packaging indicates the
type of product, and can be used to differentiate the brand. Boxed chocolates are
set on plastic trays, liqueurs and spirits are in specially designed bottles. Tea bags
are made round instead of square to differentiate them from the others. Sanitary
towels have wings and are supposedly specially shaped to fit more snugly. These
elements all influence the branding of the product. One technique of advertisers
is to get us to buy something that needs something else, for instance sauces.
Whereas before we may have bought goods ready packaged, now it is in the
manufacturer’s interest to get us to buy the parts separately. Apple Macintosh
and other computer companies do this with software, as do the games
manufacturers: once you have bought the base (the hardware), you have to buy
more in order to run the computer. You have to keep coming back for more. Toy
marketers are adept at this: they sell separately collectable items such as the
Batman characters. Kids need a complete set, but they wouldn’t sell it that way.
They also enlarge pack sizes to make consumers believe that they are getting
more for the price increase. This, known as “packaging to price”, is done by many
grocery and pharmaceutical producers.

Place:
 The channels used in moving the product from manufacturer to buyer
The distribution environment is also an extremely important promotional
medium. In some markets where marketers believe impulsive buying decisions
are made, the retail environment is significant: “Beer is cheap, ill-differentiated
product. Accordingly, purchasing is largely impulsive as opposed to considered.
Good packaging and the bar countermount are therefore important in prompting
purchase. Advertising is also important in providing a point of difference”
Advertisers also need to secure prominent positions on shop shelves. Availability
and a constant presence on retail shelves helps to guarantee brands such as Coca-
Cola and Pepsi continued success.
Price:
 Based on the cost of making and marketing the product and on expected
profit
Price includes the costs of production and a margin for retailers, and is most
often set in terms of the brand’s relationship to other brands in the product
category. Price can be used as a promotional tool. The price of a product can
be discounted to increase sales, or it can be kept artificially high to suggest to
consumers that the product is high-quality. Marketers use this perception to
make pricing central to their promotional strategy. They have a policy of
premium pricing. The best market for this is the perfume market. Consumers
expect perfumes to be expensive, so manufacturers play up the exclusive and
“highquality” aspects of the brand to justify the expense. Premium pricing
goes on in most markets. Stella Artois’s promotional strategy is heavily reliant
upon its pricing strategy. When Tesco tried to cut the price of Stella lager in
their supermarkets in 1993 a dispute erupted: this move had undermined the
whole premium pricing strategy of the brand.
Promotion:
Advertisers have always used advertising as part of the complete marketing and
distribution package of the firm. With the growth of mass media, advertising
became divided into two broad camps: above-the-line, which means all those
media for which an agency gained commission and below-the-line, all those areas
for which an agency received a fee. Above-the-line media include TV, cinema,
radio, newspapers and magazines, and posters. Below-the-line include direct mail,
sponsorship, public relations, sales promotions or merchandising. Sponsorship
also works with advertising and sales promotion activity. The value of the
sponsored event or body is supposed to add value to the brand through

association. Public relations includes publicity such as in-store leaflets, press
releases, engaging the company in political and moral affairs lobbying for
legalisation on behalf of companies, promoting the financial affairs of the
company, and promoting the company or organisation as a brand to investors and
the public. PR also involves supplying “experts” to journalists to comment on
stories. Sales promotions, including free samples, money-off coupons,
competitions and give-aways, are some of the most popular sales promotion
techniques. Money-off coupons are best for inducing trial and are often part of an
advertising campaign. Advertisers often integrate most or all of these elements
into a promotional campaign. Advertising’s role in the marketing mix is often to
support the other marketing activities such as distribution, sales promotions,
money-off coupons, reduced prices, competitions, give-aways, etc.
The Role of Advertisement can be understood as follows:

 Advertising is often used to try to increase sales of a product or the use of a
service. However, this is not always the most important objective of a firm: it may
conflict with long-term profit goals.
• It stimulates demand. This stimulation is because of the availability of the
product, discounts offered if any and the expectation of the fulfilment of latent
and aroused needs.
• It supports other promotion mix elements. It does preselling and helps the sales
promotion and personal selling activities.
• It counters competitive moves. By combining with other promotion elements it
acts as a competetive weapon. It differentiates the company’s offer from other
products and builds a brand personality and image of its own.
• It develops brand preference. When the products deliver the desired quality,
service and value it creates a satisfied customer. With consistent advertising, the
brand preference gets reinforced. The satisfied customers spread a favourable
word of mouth and are an asset to the company.
• It cuts cost—by increasing sales, more units are produced and the cost of
production comes down (economies of scale). Even the selling costs is decreased
because there are a less number of wasted calls by the salesman. With lower
prices offered by the company there is more penetration markets and more
demand for the product.
• It builds brand images—Images are built in the minds of the consumer. There
are positive images and are for different segments. A brand is a promise of a
certain level of consistency, quality, service and other benefits like waranty etc.
Manufacturers are proud of their brands and want to have a greater brand equity
for them.

• Innovation—It encourages innovation and new product development and
reduces the risk of the product becoming obsolete. With more innovation there is
more sales which offsets the cost of innovation. Innovation leads to more sales
and the business expands.

Integrated Marketing Communication
 Integrated Marketing Communication is a step towards an integrated
approach in achieving efficiency by synergy. The phrase ‘Integrated
Marketing Communications’ reflects managerial interest in co-ordinating
different media channels to optimize the effectiveness of marketing
communications programmes.
 By definition, It involves the merging of distinct communication functions in
a way that allows an organization to speak with “one voice, one look”.
Marketing communication represents the “voice” of the company and its
brands and is the means by which it can establish a dialogue and build
relationship with customers.
 By integrated marketing communication consumers learn who makes the
product, for what purpose or benefit it stands and links the brand to
people, place, events, experiences, feelings, etc. Integrated Marketing
Communication enhances companies’ ability to reach the right customer
with right message at the right time and in the right place. Integrated
Marketing Communication is the planning and execution of all types of
marketing communication needed for a product, brand, idea, company or
place in order to satisfy a common set of objectives and support the
positioning of promotion. The concept of integrated marketing
communication has evolved over four fundamental stages, starting from
tactical coordination of promotional elements, redefinition of the scope of
marketing communication and application of information and
communication technology to the financial and strategic integration.
 Integrated Marketing Communication is the boost for promotional mix
elements, whether it is advertising; direct marketing, interactive/internet
marketing, sales promotion, publicity/public relations or personal selling,
combining these disciplines to provide consistently and clearly a maximum
communication impact. Promotion has been defined as the coordination of
all seller-initiated efforts to set up channels of information and persuasion
to sell goods and services or promote an idea. Promotion is the systematic
attempt to move forward step by step prospects from a state of
unawareness to awareness then to knowledge and liking, then to
preference and conviction and finally to action (purchase) or a positive
behavioral response. The communication accomplishes its objectives in a
series of mental stages as the receiver or audience moves from
unawareness to actual deal.
The purpose of integrated marketing communication should be to maximize
customer delivered value. Integrated marketing communication plays a very
important role in the ability and capacity of firm to innovate and success fully
delivers competitive response through value added offerings to their customers.
The various steps commonly followed in an integrated marketing
communication process are:
• Identify the audience to be targeted.
• Determine objectives of your communication.
• Design the message of communication.
• Select your media channel.
• Decide the budget.
•Decide the marketing communication mix.
• Measuring your results.
• Managing and coordinating IMC.
So a centralized strategic planning is the very heart of integrated marketing
communication. The use of various options should be centrally planned and
coordinated utilizing a systematic strategic planning. Strategy lays down the
broad principles by which a company hopes to secure an advantage over the
competitors, exhibit attractiveness to buyers and lead to efficient utilization of
resources and promote company image.

AIDA model
The AIDA Model identifies cognitive stages an individual goes through during the
buying process for a product or service. It's a purchasing funnel where buyers go
to and fro at each stage, to support them in making the final purchase. AIDA is an
acronym that is used by marketers and advertisers to develop a marketing
communication strategy and explains a four stage process for the sale to happen.
AIDA is an acronym for Attention, Interest, Desire and Action that describes what
happens when a consumer engages with an advertisement. In marketing,
grabbing the attention of potential customers or clients is imperative to gaining
interest in the product. Once that interest is established, a business must make
potential customers or clients desire the product enough to take action, generally
by purchasing the product. There's a particular way consumers react to a
marketing message. Marketers can gain the attention of consumers by product
samples, large visual signs and other sensory techniques. Once the marketer has
the attention of the consumer, they must craft their interest through product
demonstrations, information and ads. Companies must then build desire by
focusing on creating a want for their specific brand, and lastly, consumer action
through promotions, discounts and calling out of features or benefits.
What does AIDA stand for?
Attention
The attention portion of the marketing message occurs at the beginning and is
designed to give the prospects a reason to take notice. Presenting a shocking fact
or statistic that identifies a problem which can be solved by the product or service
is one common method of gaining attention. Other methods can include asking a
thought-provoking question or using the element of surprise. The purpose is to
give the prospects a reason for wanting to learn more.
You achieve Attention with your ad commercial that has an appeal required for
the brand to be promoted. There's no point in starting your ad with your logo and
your name as no one cares. So your ad should immediately catch your viewer s
attention and offer a clear benefit for seeing the rest of the ad. Many brands
make use of highly popular celebrities in their ad commercial. In developing an
advertising program, marketing managers should always start by identifying the
targeted audience and its reasons to purchase a specific product or service.

Interest
Once you've gained the prospects' attention, the next step is to maintain interest
in your product or service to keep the recipients engaged. Explain to the
recipients how the problem you've identified in the attention step is adversely
affecting their lives. A demonstration or illustration can help the recipients to
further identify with the problem and want to actively seek possible solutions. By
personalizing the problem, you're making it hit closer to home.
Your interest section should also use emotions to address the fact that this
purchase is a good bargain, the right step, a sound decision, etc. But in addition to
that, we need to let the customer know what will happen if he/she doesn’t buy
our product or service. To create an interest Fanta designed an animated TVC
which starts with the scene of a room where a girl is seen looking bored, idling her
time. A boy enters with a bottle of "Fanta" in his hand. As they take sips from the
bottle, the mood changes and they start jumping with joy. The camera zooms out
of the window to another house where another girl and a boy are seen sharing
Fanta and jumping around. The camera then zooms out further and pans around
showing the entire city having fun. Everything is seen pulsating and jumping in
sync as drops of Fanta spill and bounce around.
Desire
There's huge difference between being interested in something and desiring it.
You need to convert your viewer's interest into a strong desire for what you're
offering. A television ad must create a strong motivation and generate a need for
buying the product even if need is not there. This can happen only if the ad has
used the correct appeal in the advertisement. In the desire stage, your objective is
to show the prospects how your product or service can solve their problem.
Explain the features of the product or service and the related benefits and
demonstrate how the benefits fulfill the need. A common advertising process is
the "before and after" technique, such as when a cleaning product makes a soiled
item look brand new. If done effectively, the prospects should now have the
desire to make a purchase.
Action
Now that you've created the desire to make a purchase, the final step is to
persuade the prospects to take immediate action. When a brand promotes its
image through an ad advertisers should ensure they are able to convince their
customers to make a final buy or be inquisitive to know more about the
product/brand. How so ever attractive and customer focused an ad be,if there is

no strong positioning in the minds of the customer your brand will be lost among
the lot and lot of efforts are then required to tell your audience how beneficial
the product is for its target market. An ad will be an able to create a strong impact
only if it is able to highlight the benefits its target market will get with using the
product only then action towards a purchase will take place as people will always
buy your product when they see the benefits attached with using it. A very good
example that Cleary demonstrates product usage benefit is that of Moov which is
Backache Specialist and is Ideal for consumers with hectic lifestyles and are prone
to recurring backaches. The specialized Ayurvedic ‘Fast Pain Relief Formula’
penetrates deep inside, produces warmth and helps you recover fast. Techniques
creating sense of urgency by extending an offer for a limited time or including a
bonus of special gift to those who act within a specific time frame should be used.
Without a specific call to action, the prospect may simply forget about your offer
and move on.
An example of the AIDA model
Hairdressing company, Francesco Group used the AIDA model to launch their new
salon.
 1. Awareness: Ran a PR campaign four months prior to launch, promoting

award, stylists, qualifications etc. and was reinforced through a DM
campaign to targeted customer groups.
 2. Interest: Executed a direct mail campaign to offer a free consultation or
hair cut and finish. They used research to support that this would work, as
females are loyal if the offer is compelling.
 3. Desire: Close to the opening of the new salon, they ran exclusive local
launch events which was advertised through local press and social media.
This created a local buzz for 'people wanting an invite' and excited to see
the new salon.
 4. Action: Clear Ads were positioned on the Facebook site (call to reserve),
the website (call to book) and local advertising (call in to receive discount or
the offer).

Lavidge and Steiner Model (L-S Model)
In 1961 ,Robert J.Lavidge and Gary A. Steiner proposed a new model for
marketing communications,which ysed hierarchy of effects but included
persuasion as an important factor in the model.This model considered the long-
term effectsof advertising too.According to the Lavidge and Steiner Model*,a
customer who is totally unaware of the product goes through the following six
steps before making a purchase:
1) AWARENESS: In this step,the customer becomes aware of the existence of the

product.
2) KNOWLEDGE: The customer comes to know about the features and uses of the
product.
3) LIKING: The customer develops a favourable attitude towards the product.
4) PREFERENCE: Here,the customer develops preference for the said brand over
other competitive products or substitutes.
5) CONVICTION: This step involves a desire to buy the product.The customer is

convinced of a good purchase.
6) PURCHASE: The customer makes the actual purchase.
EXAMPLE: Hyundai Motors Limited used the model successfully while launching
its small car, Santro, in India.
AIDA LS Model
Cognitive Stage Attention Awareness - Knowledge
Affective Stage Interest-Desire Liking-Preference-Conviction
Behavioral Stage Action Purchase

Setting Goals and Advertising Objectives
Advertising objectives are essential because it helps the marketer/advertiser to

know in advance what they want to achieve and can plan accordingly. As it is the
first step in decision making it guides the other steps in planning the advertising
programme. It guides and controls each area at every stage of the advertising
campaign. Since advertising incurs heavy cost to the company. It must bear fruits
or give positive results. Previously advertisement was done with outpaying much
attention to management tasks or for attaining the objectives by proper controls
and decision making. As of now the advertisers want tangible results and evaluate
the results compared to the costs incurred by them.
There are different objectives vehicle may be achieved by informative advertising,

persuasive Adv., Reminder Adv. etc. There are two schools of thought:
(a) Advertising should improve sales.
(b) Advertising is communication task and must have only common goals. It
should bring awareness and shape attitudes of the consumers in the favour of the
products advertised.
Advertising objectives are drawn from 5 sets of themes or constructs:
(i) Behavioural construct e.g., trial purchase and store visits as an advertising
objectives. This is done when a new product is being offered or changes are
incorporated in the existing product. It supplements the sales task. It is done
through Direct mail,Reminder and Retail advertising.
(ii) Attitude change and measurement: Attitudinal changes are brought about so
that the customer changes his attitude favourably towards the companies
product.
(iii) Creating of awareness: Through awareness advertising when the product is
new or less known.
(iv) Image creation and positioning: Advertising is done to build an image to

position the product. For institutions image building and image reinforcements
are very important activities. Advertising therefore can be used to serve a variety
of purposes.

(v) Specific Requirements: Some common areas for setting advertising objectives
are given below.
• Introduction of New Product
• Supporting other promotional activities
• Expansion of Market
• Stimulating impulse buying
• Countering Competition
• Reminding Consumers Objectives vary form to form and
• Removing Dissonance from market to market
• Building Brand Image

DAGMAR Approach
Russell Colley (1961) developed a model for setting advertising objectives and
measuring the results. This model was entitled “Defining Advertising Goals for
Measured Advertising Results”- DAGMAR.
DAGMAR model suggests that the ultimate objective of advertising must carry a
consumer through four levels of understanding: from unawareness to
Awareness—the consumer must first be aware of a brand or company.
Comprehension—he or she must have a comprehension of what the product is
and its benefits; Conviction—he or she must arrive at the mental disposition or
conviction to buys the brand; Action—finally, he or she actually buy that product.
According to DAGMAR Model the ultimate objective of advertising involves a

communication task, intended to create awareness, impart information, develop
attitude and induce action.
Advertising objective is to carry a consumer through four levels of understanding -

1. From unawareness to awareness - consumer must be aware of
product or company,
2. Comprehension - what the product is and its benefits,
3. Conviction - mental conviction to buy the product, and
4. Action - finally buy the product.
Communication Process in DAGMAR Approach

1. Awareness
Before the purchase behaviour is expected from target audience it is necessary to
make the audience aware with the product or company.The initial communication
task of the advertising activity is to increase the consumer awareness of the
product or offer. Awareness of the existence of a product or organization is
necessary before the purchase behavior can be expected. Once the awareness
has been created in the target audience, it should not be neglected. If there is
neglect, the audience may become distracted by competing messages and the
level of awareness of focus product or organization will decline. Awareness needs
to be created, developed, refined or sustained, according to the characteristics of
the market and the particular situation facing an organization at any one point of
time.
2. Comprehension
Only Awareness is not be sufficient to stimulate a purchase, sufficient knowledge
and information about product or organisation is necessary. This step involves the
target audience to learn something about product, organisation, or offer. Here
communication task of advertising activity is to make consumer learn about
product - product characteristics, benefits, or uses.
3. Conviction
The next step is to establish a sense of conviction. By creating interest and
preference, buyers are moved to a position where they are convinced that a
particular product in the class should be tried at the next opportunity. To do this,
audience‘s beliefs about the product have to be moulded and this is often done
through messages that demonstrate the product‘s superiority over a rival or by
talking about the rewards as a result of using the product. Many ads like Thumbs
Up featured the reward of social acceptance as „grown up‟. It almost hinted that
those who preferred other drinks were kids. At this step communication task of
advertising activity is to mould the audience’s beliefs about the product and this is
often done through messages that demonstrate the product’s superiority over a
rival or by talking about the rewards as a result of using the product.
4. Action
Communication must finally encourage buyers to engage in purchase activity.
Advertising can be directive and guide the buyers into certain behavioural
outcomes, Use of toll free numbers, direct mail activities and reply cards and
coupons. Tupperware, Aqua Guard, are famous in Indian cities as a result of its
personal selling efforts. For high involvement decisions, the most effective tool in
the communication mix at this stage in the hierarchy is personal selling. Through
the use of interpersonal skills, buyers are more likely to want to buy a product
than if personal prompting is absent.
Characteristics of DAGMAR Objectives:
A major contribution of DAGMAR was Colley‘s specification of what constitutes a

good objective. Four requirements or characteristics of good objectives were
noted
Concrete and measurable—the communications task or objective should be a
precise statement of what appeal or message the advertiser wants to
communicate to the target audience. Furthermore the specification should
include a description of the measurement procedure
Target audience –a key tenet to DAGMAR is that the target audience be well
defined. For example –if the goal was to increase awareness, it is essential to
know the target audience precisely. The benchmark measure cannot be
developed without a specification of the target segment
Benchmark and degree of change sought—another important part of setting
objectives is having benchmark measures to determine where the target audience
stands at the beginning of the campaign with respect to various communication
response variables such as awareness, knowledge, attitudes, image, etc. The
objectives should also specify how much change or movement is being sought
such as increase in awareness levels, creation of favorable attitudes or number of
consumers intending to purchase the brand, etc. a benchmark is also a
prerequisite to the ultimate measurement of results, an essential part of any
planning program and DAGMAR in particular.
Specified time period—a final characteristic of good objectives is the specification
of the time period during which the objective is to be accomplished, e.g.
6months, 1 year etc. With a time period specified a survey to generate a set if
measures can be planned and anticipated.
Written Goal – finally goals should be committed to paper. When the goals are
clearly written, basic shortcomings and misunderstandings become exposed and
it becomes easy to determine whether the goal contains the crucial aspects of the
DAGMAR approach.

Role of Advertising in India’s Economic Development
 Advertising is the tool that creates demand in the economy and the whole
economy surrounds around customer demands and preferences.
Consumers get to know about varieties of product available in the market
and also show its preferences and required change to help the producer to
make product user friendly. The production of goods is largely depends on
consumers because if there is no need, there no worth meaning of
production.
 With more than 600 television channels, 100 million pay-TV households,
70,000 newspapers and 1,000 fi lms produced annually, India’s Advertising
Industry provides attractive growth opportunities for global corporations.
Enticed by economic liberalization and high volumes of consumption, many
of the world’s media giants have been present in the Indian market for
more than two decades. However, in recent years, with near double-digit
annual growth and a fast-growing middle class, there has been a renewed
surge in investments into the country by global companies.
 The Indian economy is on a path of robust growth, with annual growth in
GDP over the last three years averaging 8.6%.1 India’s GDP stood at
US$1.54 trillion in 2010.2 The country remains the second fastest growing
major economy in the world after China and the fourth-largest economy in
terms of purchasing power parity (PPP). The country is headed for a
demographic sweet spot. Besides having the second-largest population in
the world (1.21 billion in 2011),3 it is a young nation with a median age of
26.2 years. The country has the second-largest English-speaking population
in the world5 and also has a large regional market, with 2 of its 22 offi cial
languages ranking among the top 10 spoken across the world (Hindi with
490 million and Bengali with 215 million).A growing middle class, rising per
capita income7 and a rise in the working population are expected to fuel
growth and demand for goods and services in the future.
Advertisement compels consumers in very cognitive way and motivates them to

buy the offered goods and services. The economic activity start when people start
expensing money in the market to get the benefit offered. It also helps in
expending market out of national boundaries and informs other countries about
features of the goods and services that may have satisfactory nature towards
their demand. No dought advertisement has its great impact on national income
because it initiates production process by providing production objective and

production itself creates income or money mobilization. Focusing some economic
factors which are affected by advertisement:
EFFECT ON VALUE OF PRODUCTS: (ADVERTISING IS VALUE CREATION PROCESS)

It is not right that advertisement is always ethical because various information are
hidden or not shown in the ads to create the value of product in the market. They
show the positive image of the product and services and peoples get motivated to
have it. Advertising demonstrate the goods in a manner as to enhance the value
and demand of it. For example benefit of using mobile phone has changed now,
as earlier it was only confined to communication purposes but its uses has now
changed as there are immense features are available to the user convenience and
companies are advertising it as like.
ADVERTISING EFFECT ON PRICES AND MONOPOLY CONDITION: A competitive

advertising expenses leads to increase the price of the product and ultimately
consumers have to pay it. Advertising cost increases with time because of
increasing competition day by day. Companies are making a highly persuasive &
interactive ad copies and in this process they incur a huge cost that ultimately act
as the burden on consumer pocket. The advertising cost also increases, if new
product is entered into the market where old product is already firmly
established, if there is cut throat competition into the market or may be when
expending a new market of large customer base. In theory, the more money a
business spends on developing effective advertising campaigns, the more
products consumers will buy. So it’s possible, for example, for the mobile
manufacturer to use the beneficial effects of advertising to counteract the
negative effects of a price increase. In other words, increasing consumer demand
through advertising can cancel out a decrease in consumer demand due to a price
increase. Such a price rise is generally seen in the short run, whereas in the long
run it goes down because of advertising cost diminishes with time and developing
brand loyalty to the customer. Also increased economies of scale further reduces
or constant the price of the product. Sometime advertisement creates monopoly
condition in the economy by publicizing a specified product in a very imperative
way. Price rise creates an inflationary condition in the economy, and advertising
may be a big factor behind it. But some products do not advertise much, but even
their prices are high and they are still the leaders in market as they have their
brand name. e.g., Luxury goods
ADVERTISING EFFECT ON CONSUMER DEMAND AND CHOICES: Advertising

creates, maintain and extend demand for the goods through brand image and

with this regular psychological brand imaging process, customers develop brand
loyalty, which stick the customer to the same brand irrespective to the other
competitor’s product. A persuasive advertisement has tendency to create
demand in the market and educating consumers about differences and quality
leads to increase market opportunity for the consumers. The consumers are now
demanding the difference that further initiate and promote the industrial
production process. Due to this, competitors will try to break this situation and so
price may keep on increasing due to ad expense or may be decreasing when any
firm adopts price down strategy or the new small industry will try to grasp this
opportunity, and this industrial process will lead to national development
ADVERTISING AND BUSINESS CYCLE: Advertising no doubt helps in encouraging

more buyers i.e. increasing more consumer demand that requires stock of
workforce to cater the demand which leads to employing more number of
people. It enhances the incentives of workforce operating in this field because of
there is increase in revenues for company and which they use for betterment of
goods and after sale services. But, there is bad side of advertising is also there. As
consumer sometime get better quality foreign product in comparison to domestic
product. Consumer starts demanding them and so it cause adverse effect on
national income.
ADVERTISING AND NATIONAL INCOME: Advertising has favorable effect on

national income and because it promotes the sale & creates the demand, which
further increase the production and this industrialization leads to contribute the
national income.
Advertising is required in National Economic Development:
 It stimulates production and brings in more employment.

 It helps in establishing prices and brings contentment to the public.
 It leads to wider distribution and makes goods available at the right time
and at the right place.
 It is essential to marketing system and is its integral part.
 It promotes social and economic growth. It disseminates technology and
creates favourable conditions for the acceptance of innovative approaches.
 It leads to greater sales growth for the firms spending more on advertising.
 It can help in lowering prices by reducing the cost of production and
distribution and expanding the market.

 It encourages mass consumptions and leads to increase in production
thereby lowering the prices.
 It encourages competition so that the customer is benefited. The firms
which are forced to undertake consumer research come out with better
products for the consumer.
 It improves product quality through competition and induces firms to
maintain quality as promised. It promotes the brands with the
improvement in the quality so that the customer is satisfied.
 It makes people adopt new products and plays a greater role in diffusion of
the message so that the product gets a boost and starts selling.
 Advertising leads to aggressive selling and makes people work harder
which improves their living standards.
So, economic implication of advertising is very clear, that it largely affects the
firms internal economic activities like pricing, demand creation, choice formation,
market extension etc. and externally by contributing to the national income and
national development. Though advertising is very productive, it requires proper
invigilation because it directly makes impact on peoples mind and persuades
them towards a direction, which should always be ethical.

Ethics in Advertising
Advertising must follow certain moral principles certain rules and should not
degrade or adversely comment on the other products and brands. It should
highlight the positive points of its own products and be of good standard. It
should not be offensive and in bad taste. It should not predict the sex of an
unborn child and keep away from the unwanted practices adopted by the
advertisers. Advertising should not be untruthful, deceptive and should not
misguide the consumers. Some companies advertising about their two wheelers
and four wheelers vehicle advertise that they will cover X amount of kms per litre
when in practice the kms. covered are much less. These advertisement deceive
the customer; sometimes advertisers have made false claims or failed to award
prizes promised in sweepstakes or contests. The problem of untruthful
advertising and promotion exists at the local level and in specific areas such as
mail order, telemarketing and other forms of direct marketing. Ethics in
advertising must be given its place. Ethics cover various aspects. These range
from the truthfulness of validity of claims to the mode of presentation of the
advertisement. The advertising of products like cigarettes, alcohol and other
injurious materials have to be dealt carefully. The authorities as well as the
advertisers and the agencies should make a set of rules and regulations. It should
adhere to certain values and give satisfaction to the consumers. Another issue is
the advertising directed on children. The children are exposed to adult
advertisements and those advertisements that are not made for children. The
adult advertisement may be showing a lot of indecency and sex, which may not
be good for children.
Therefore, Advertising should:

(i) Be truthful, should reveal the truth and significant facts.
(ii) Be substantiative should substantiate with proofs e.g., Kapil Dev professes that
“Boost is the secret of my energy”.
(iii) Be non-comparative.
(iv) Give real and true guarantees.
(v) Avoid false claims.
(vi) Adhere to taste and decency. Should keep away from offensive and untrue
publicity.

Ethical Advertising
Advertising communicates the message some of which may not be acceptable to

the society. These immoral and unethical values are controlled by self-control,
control of consumers and by the government. Some say that some Ads degrades
the ethical values of the society. For instance some advertisers project their
medicine as giving immediate relief like magic is not acceptable. There are a
number of unrealistic situation. The fairness of presentation is essential for any
Ad. Value system is also getting eroded. Obscence and nudity are example of
these. Gambling and lotteries should not be promoted. The names of celebrities
should be used without their permission. The advertisements should be in line
with the traditions and customs of the society. The media should also play an
important role and should be able to reject advertisements which are misleading
and incorrect. This should be the case with Newspaper, Magazines, Radio and T.V.
Media. Consumers should also boycott the advertisements and products
advertised which are not ethical this can be done through consumer groups and
opinion leaders. The government can also play a vital role in curbing the unethical
advertisement by making appropriate rules and regulation.

Social, Economic and Legal aspects of Advertising
Social Aspect of Advertising
Apart from advertising being a business process it is a social organization as it

represents social life and way of living. The American Marketing Association has
firstly defined social nature of advertising as "The advertising designed to educate
or motivate target audience to undertake socially desirable actions”. Advertising
is all about drawing people attention to the social matter apart from giving exact
solution. The social role of advertising is very evident from it practices that, it
perform for the society whether it is good or bad, uneconomic, anti- social or for
prevailing social problem. ‘As it is good educator, informer and entertainer at a
same time it can be an influencing way of cheating peoples also’. So, the whole
sole motive of social advertising is to aware the peoples about various social
problems and help them to know the prevailing situation of society.
ADVERTISING IMPROVES LIVING STANDARD: Advertising effect on consumer’s

knowledge, standard of living, and feeling of happiness and well-being, and its
potential positive effects on the mass media. An advertisement increase the
knowledge of the consumers about the product like its price, features, benefits
and durability and induce them to buy the same that leads to increase the
demand of the product in the market. For example promoting Android based
mobile and its features and benefit. Nokia was initially very easiest in operating
and generally uneducated peoples can even operate it, likewise Google’s Android
OS is now very easiest in operation and include a wide variety of functions
through its Apps and a little educated person can easily operate it. Apart from
calling function peoples are now directly connected with the global market that
enhances their knowledge base and way of living. ITC promoting education
through donating Rs 1 on every classmate copy on behalf of consumer purchase.
CONSUMER WELFARE AND PROTECTION: It is something which is concerned with

the good of consumers and their interests. The Oxford Dictionary’s (2001) defines
welfare as well-being, happiness; health and prosperity (of person, community
etc.) Consumer welfare and protection actually lies in safely fulfillment of their
expectations and the aspirations as to goods and services that they need. For
example Advertisement warned the peoples using tobacco that leads to cancer,
using saccharin in place of sugar reveling all relevant information publically about
financial investments in shares or any investment policy of any company like ad

highlighting “ Mutual funds are subject to market risk please read all terms and
condition before invest”.
ADS AFFECT CULTURAL VALUE OF SOCIETY: In the words of Philip Kotler culture
covers attitudes and the value of the whole society having bearing on what we
do, what we see, what we use, what we judge. Habits, customs, attitudes, beliefs,
value, and taboos are the part of culture. Every people or a group of people
possess different habits, values and way of living. So ads should be made
accordingly and also to cater with the social norms and principles. For example,
Nudity in ads in India is rarely practiced, Mc Donald promotes in India as they not
use beef in their products. Now, several global fast food giants are turning
vegetarian in the city by overhauling their menu to include vegetarian cuisine in
the vegetarian heartland of Gujarat. In Gujarat, global restaurant chains like
Subway, KFC and McDonalds are also expanding their menu for their vegetarian
customer segment. In a first, American restaurant franchise Subway has opened a
Jain counter at its first all-veg outlet in Ahmedabad at a location with a high
density of Jain population. "They carried out a survey in Gujarat and sent a
proposal to the US HQ to open an all-veg outlet with a pure Jain counter in
Ahmedabad as Gujrat is the only state that contributes 60% of the total sales from
vegetarian food". When KFC entered Gujarat in November 2011 with its first
restaurant, it changed its menu to include vegetarian cuisine as well. KFC plans to
add five more stores in the state this year with increased vegetarian options. Pizza
Hut made its Gujarat foray with its first only vegetarian restaurant in the world in
Ahmedabad, offering Jain food. Pizza outlet Domino's Pizza also has four
restaurants in Gujarat, which offer completely vegetarian menu.
ADVERTISING AND SOCIAL AWARENESS: Advertising broadly helps in conveying

the message of alert and cure of various social problems prevailing in society like
environment, health, safety etc. It aware the society and let them up to date
about recent sensitive issues and make themselves ready to face the
complications of it. For example, if peoples know about the exact symptom and
cure of any disease, they can save the lives. In old times there were lack of
information dissemination and so lots of villages seriously affected by epidemic
diseases. In recent time like ads focusing on sexual harassment of women and
letting them aware that what to do in this situation and promoting women safety
and protection. The Times of India – Tum chalo toh Hindustan chaley! Ad
motivates peoples to take initiatives in social work/ social development. Tata Tea
JaagoRe is a cause marketing initiative launched in India by Tata Tea which aim of
raising awareness for specific causes around Indian general elections in 2008 it

also aware peoples about their duties towards their country and to take stand to
reduce corruption the another examples like Akshya Patra a working NGO which
operates for children welfare, Satyamev Jayate a famous television program doing
intensive research on social issues and discussing them at large with solutions and
various pros and cons associated with it, Idea’s ad of saving paper by using
mobile, Amul’s every day comment on hot topics etc.
Deception Advertising
Many people find the advertisements not credible enough or untruthful which
deceives the consumer. The advertiser must have available data to support their
claims. Mis-representation or ambiguous statements are considered as deception.
Harmful Effects
It may have adverse effects on culture and social values. Nudity and sex has bad
influence on people and they want sex in real life. They run after things that they
should not have. Thus, advertising may create “bad taste”. The woman in fashion
shows are stunning, glamorous exposed in many parts, sizzling high voltage
glamour is shown which may lead to bad taste.
Appeal
Appeal to sex and drugs, appeal to obscenity, nudity etc. have been criticised by
people. The cumulative affect of these appeals are very dangerous and can
change the behaviour of human beings towards indulgence in these things.
Sometimes, audience is repelled rather than be attracted by repetitive
advertisements, sometimes it irritates the audience, creates a clutter, and also
information overload that confuse the audience. It also has an adverse effect on
children. Children are vulnerable to sex, nudity and violence Ads. It leads them to
adopt different kinds of behaviour and they became disinterested in other
activities like studies, sports and presuming their career. They dream of the sexual
objects day and night may spoil their lives. Many people specially women’s
organisations have objected to sexy advertisement and too much exposure of
women in the Ads. Advertising has encouraged the proliferation of brands
although there are no significant differences in the products. Symbolic differences
are created by advertisers. This confess the customer. Then there is the desire to
buy products which their neighbour or relatives have bought. This leads to envy
and the advertiser exploits these desires. Advertising also tries to create a “status
symbol”. It tries to create desire to satisfy their ego.

Economic Aspect of Advertising
Advertising is the tool that creates demand in the economy and the whole
economy surrounds around customer demands and preferences. Consumers get
to know about varieties of product available in the market and also show its
preferences and required change to help the producer to make product user
friendly. The production of goods is largely depends on consumers because if
there is no need, there no worth meaning of production. With more than 600
television channels, 100 million pay-TV households, 70,000 newspapers and 1,000
fi lms produced annually, India’s Advertising Industry provides attractive growth
opportunities for global corporations. Enticed by economic liberalization and high
volumes of consumption, many of the world’s media giants have been present in
the Indian market for more than two decades. However, in recent years, with
near double-digit annual growth and a fast-growing middle class, there has been a
renewed surge in investments into the country by global companies.
Advertisement compels consumers in very cognitive way and motivates them to
buy the offered goods and services. The economic activity start when people start
expensing money in the market to get the benefit offered. It also helps in
expending market out of national boundaries and informs other countries about
features of the goods and services that may have satisfactory nature towards
their demand. No dought advertisement has its great impact on national income
because it initiates production process by providing production objective and
production itself creates income or money mobilization. Focusing some economic
factors which are affected by advertisement:
EFFECT ON VALUE OF PRODUCTS: (ADVERTISING IS VALUE CREATION PROCESS)

It is not right that advertisement is always ethical because various information are
hidden or not shown in the ads to create the value of product in the market. They
show the positive image of the product and services and peoples get motivated to
have it. Advertising demonstrate the goods in a manner as to enhance the value
and demand of it. For example benefit of using mobile phone has changed now,
as earlier it was only confined to communication purposes but its uses has now
changed as there are immense features are available to the user convenience and
companies are advertising it as like.
ADVERTISING EFFECT ON PRICES AND MONOPOLY CONDITION: A competitive

advertising expenses leads to increase the price of the product and ultimately
consumers have to pay it. Advertising cost increases with time because of

increasing competition day by day. Companies are making a highly persuasive &
interactive ad copies and in this process they incur a huge cost that ultimately act
as the burden on consumer pocket. The advertising cost also increases, if new
product is entered into the market where old product is already firmly
established, if there is cut throat competition into the market or may be when
expending a new market of large customer base. In theory, the more money a
business spends on developing effective advertising campaigns, the more
products consumers will buy. So it’s possible, for example, for the mobile
manufacturer to use the beneficial effects of advertising to counteract the
negative effects of a price increase. In other words, increasing consumer demand
through advertising can cancel out a decrease in consumer demand due to a price
increase. Such a price rise is generally seen in the short run, whereas in the long
run it goes down because of advertising cost diminishes with time and developing
brand loyalty to the customer. Also increased economies of scale further reduces
or constant the price of the product. Sometime advertisement creates monopoly
condition in the economy by publicizing a specified product in a very imperative
way. Price rise creates an inflationary condition in the economy, and advertising
may be a big factor behind it. But some products do not advertise much, but even
their prices are high and they are still the leaders in market as they have their
brand name. e.g., Luxury goods
ADVERTISING EFFECT ON CONSUMER DEMAND AND CHOICES: Advertising

creates, maintain and extend demand for the goods through brand image and
with this regular psychological brand imaging process, customers develop brand
loyalty, which stick the customer to the same brand irrespective to the other
competitor’s product. A persuasive advertisement has tendency to create
demand in the market and educating consumers about differences and quality
leads to increase market opportunity for the consumers. The consumers are now
demanding the difference that further initiate and promote the industrial
production process. Due to this, competitors will try to break this situation and so
price may keep on increasing due to ad expense or may be decreasing when any
firm adopts price down strategy or the new small industry will try to grasp this
opportunity, and this industrial process will lead to national development
ADVERTISING AND BUSINESS CYCLE: Advertising no doubt helps in encouraging
more buyers i.e. increasing more consumer demand that requires stock of
workforce to cater the demand which leads to employing more number of
people. It enhances the incentives of workforce operating in this field because of
there is increase in revenues for company and which they use for betterment of
goods and after sale services. But, there is bad side of advertising is also there. As

consumer sometime get better quality foreign product in comparison to domestic
product. Consumer starts demanding them and so it cause adverse effect on
national income.
ADVERTISING AND NATIONAL INCOME: Advertising has favorable effect on

national income and because it promotes the sale & creates the demand, which
further increase the production and this industrialization leads to contribute the
national income.

Legal Aspects of Advertising
Unfortunately despite several laws meant to protect consumers against such

unfair trade practices, false and misleading advertisements continue to exploit
the consumer. A number of institutions are involved in regulating advertising.
These are:
1. Self regulation by the industry
2. Regulation by the Government
In India the government assumes the role of regulating the business activity by
bringing a number of laws, regulations and codes. The following laws have been
enacted by the government, which contain provisions that regulate advertising in
India.
These laws can be divided into two categories.
Laws having horizontal application on advertising
I. The Consumer Protection Act, 1986.
II. The Emblems and Names (Prevention of Improper Use) Act, 1950
III. Trade and Merchandise Marks Act, 1958.
IV. Cable Television Networks (Regulation) Act, 1995
V. Indecent Representation of Women (Prohibition) Act, 1986.
VI. Monopolies and Restrictive Trade Practices Act, 1969.
VII. Motor Vehicles Act, 1988
Laws having vertical application on advertising
I. Section 58 Companies Act, 1956
II. Drugs and Cosmetics Act, 1940.
III. Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954.

IV. Pre-natal Diagnostic Techniques (Regulation and Prevention of Misuse) Act,
1994.
V. Prevention of Food Adulteration Act, 1954/ Food Safety and Standards Act,
2005.
VI. Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
VII. Prize Competition Act, 1955
VIII. The Infant Milk Substitute, Feeding Bottles and Infant Foods (Regulation of
Production, Supply and Distribution) Act, 1992 and Amendment Act, 2002.
IX. Transplantation of Human Organs Act, 1994
X. The Young Persons (Harmful Publications) Act, 1956
XI. The following Regulatory authorities have power to regulate advertising in

their respective domain.
 Insurance Regulatory Development Authority
 Telecom Regulatory Authority of India
 Securities and Exchange Board of India
 Reserve Bank of India
 Medical Council of India
Some of the important features of various laws concerning advertising are:
1. The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954

prohibits advertisements for products and services claiming to cure certain
medical conditions. As per the law, no advertisement should promise magical
cure for any ailments or disease and the rules specify the diseases and ailments
that cannot be advertised promising cure or remedies. However, the enforcement
of the Act by the state authorities is poor because one finds a number of
advertisements in the print media. The Act also does not cover advertisements
that appear in various media pertaining to health gadgets of unproven efficacy,

like tummy trimmers, bands for blood pressure control, and gadgets to increase
height. This Act does not provide for issuing corrective advertisements.
2. The Monopolies and Restrictive Trade Practice act, 1969: It had been the most
effective Act in the eighties and nineties to regulate undesirable advertising. In
the year 1984, the government brought, through an amendment, "unfair trade
practices" under the purview of the MRTP Commission and the Office of the
Director General (Investigation and Registration). However, this Act is being
replaced by the Competition Act, 2002 but the cases pending under the MRTP
Commission are still being heard. Moreover, a Competition Commission has been
set up under the Competition Act to deal with monopolies and restrictive trade
practices. The complaints pertaining to unfair trade practices are still being
handled by the MRTP Commission or the consumer courts. The MRTP Act has
been very effective in hauling a number of advertisers to stop advertisements
which are prejudicial to consumer interest through its 'cease and desist orders'.
3. The Consumer Protection Act, 1986: The Consumer Protection Act, 1986,
applies to advertisements for all products in the market place. A consumer may
file a complaint related to false and misleading advertisements, which are
included under the definition of unfair trade practice (Section 2 (r) The law
mentions seven classes of unfair trade practices in six subsections of this section
of the law. The consumer courts can however, take the following actions under
section 14 of the Consumer Protection Act, 1986:
" Issue interim orders stopping such advertisements pending disposal”
" To pass cease and desist orders”
" Award compensation for loss or suffering, punitive damages and cost of
litigation to the affected party.”
" Direct the advertiser to issue corrective advertisement”
4. Cable Television Networks (Regulation) Act, 1995: This law lays down the
procedure for registration of a cable television network and also regulates the
programmes and advertisements transmitted on cable network in India. The

registering authority is the Head Post Master of a Head Post Office of the area
within whose territorial jurisdiction the office of the cable operator is situated.
5. Drugs and Cosmetics Act, 1940: This law regulates the production,
manufacture and sale of all drugs and cosmetics in the country. The Act prescribes
a fine of up to Rs. 500 for any person using any report or extract of report of a
test or analysis made by the Central Drugs Laboratory or a government analyst for
advertising of a drug or cosmetic.
6. Section 292 and Section 293 of the Indian Penal Code, 1860, prohibits the
dissemination of any obscene matter. The Indian Post Office Act, 1898, imposes a
similar prohibition on the transmission of obscene matter through the post. The
Customs Act, 1962, allows the detention and seizure of any obscene matter
sought to be imported into the country.
7. The Children's Act, 1960, prohibits the disclosure of names and address and
other particulars of any child involved in any proceedings.
8. The Indecent Representation of Women (Prohibition) Act, 1986 forbids the

depiction of women in an indecent or derogatory manner in the mass media. No
person shall publish, or cause to be published, or arrange or take part in the
publication or exhibition of, any advertisement which contains indecent
representation of women in any form.
9. The Emblems and Names (Prevention of Improper Use) Act, 1950, prohibits the
use by any private party of certain names, emblems, etc.
10. Motor Vehicles Act, 1988: This law affects outdoor advertisements, like bill
boards, posters, neon signs, etc. The Act, grants powers to remove such
advertisements which may distract drivers and have the potential of causing road
accidents.

A number of regulatory agencies have also formulated advertising codes to
ensure that advertisers do not mislead consumers. With the increasing criticism of
advertising, advertisers have devised self regulation to ensure true and accurate
messages. Moreover, with the advent of new communication and information
technologies, the national policy makers have also become less willing and less
able to intervene. Since print and audio-visual media exercise the essential
freedom of speech and they are financed by advertising revenues, media has
always resisted curbs thereby constraining the capacity of national governments
to influence media. Further, the business also realizes that the long term
profitability of the organisation depends upon acting responsibly.
Agencies involved in self regulation:
 Advertising Standards Council of India (ASCI)
 Advertising Association of India (AAAI)
 Press Council of India
 Prasar Bharti
 Individual media and media groups
 Code for commercial advertising on Doordarshan
 All India Radio Code for commercial advertising
ASCI's code of Self Regulation says: "Advertisements should be truthful and fair
to consumers and competitors within the bounds of generally accepted standards
of public decency and propriety. Not used indiscriminately for the promotion of
products, hazardous or harmful to society or to individuals particularly minors, to
a degree unacceptable to society at large".Unfortunately despite several laws
meant to protect consumers against such unfair trade practices, false and
misleading advertisements continue to exploit the consumer. Outdated laws,
poor enforcement of them are some of the lacunas in order to control
advertising. The need of the hour is better laws in keeping with the times, better
enforcement, corrective advertisements, better self-regulation by industry
independent regulator to regulate health and children -related advertisements.

When is advertising deceptive ?
The Constitution of India guarantees freedom of speech. Special restraint is

needed in commercial speech including advertising. An advertisement is called
deceptive when it misleads people, alters the reality and affects buying
behaviour. According to Federal Trade Commission (USA) deception occurs when:
1. There is misrepresentation, omission, or a practice that is likely to mislead.
2. The consumer is acting responsibly in given circumstances
3. The practice is material and consumer injury is possible because consumers are
likely to have chosen differently if there is no deception.
Deception exists when an advertisement is introduced into the perceptual

process of the audience in such a way that the output of that perceptual process
differs from the reality of the situation. It includes a misrepresentation, omission
or a practice that is likely to mislead. These may include the following:
1. Violates Consumers' Right to Information: Use of untrue paid testimonials to

convince buyers, quoting misleading prices, disparaging a rival product in a
misleading manner are some examples of misleading. Advertisers of anti- aging
creams, complexion improving creams, weight loss programs, anti-dandruff
shampoos, and manufacturers of vitamins or dietary supplements are usually
guilty of making exaggerated product claims. Some of the examples of
advertisements in this category are:
" A fairness cream is advertised with the claim that its user will get a fair
complexion within a month”
“Parle G Original Gluco Biscuits puts a tall claim of being 'the World's largest
selling biscuits' on its package on the basis of the results of a survey done in the
Year 2003 by A. C. Nielsen”
" Advertisements by some financial companies such as doubling money in a given

time without base to justify claim are deceptive in nature”
2. Violates Consumers' Right to Safety When an advertisement for cooking oil

says that using the said oil frees the user from heart problems, then such an

advertisement is misrepresenting the facts. Companies advertise products
highlighting health cures and drugs of questionable efficacy and health gadgets of
unknown values. Tempted by an advertisement, claiming to increase a person's
height, Nadiya,a Class VIII student having a height of 135 cms got admitted to
Fathima Hospital for surgery, on 24-7-1996, for increasing her height. The surgery
was conducted and a ring fixator was fixed on the legs which had to be adjusted
every six hours. To her dismay Nadiya found her left leg shorter by ½ inches, and
therefore she could not walk. By September 1996, the pain had increased and the
complainant was bed-ridden till March, 1998. the Commission held the hospital
and the doctors negligent and deficient in their service and directed them to pay
Rs. 5,00,000 with costs amounting to Rs. 2,000 to the complainant.
Many of the juice, sharbat, wafer manufacturing companies do not mention the
ingredients used in it. For example,Haldiram offers many types of sharbats which
are artificially flavoured but the front side of the package has big and attractive
pictures of the fruit itself, creating misunderstanding amongst the consumers.
3. Violates Consumers' Right to Choice: When material facts which are likely to
influence buying decisions are not disclosed the advertisement becomes
deceptive. In several advertisements it is stated that 'conditions apply' but these
conditions are not stated. Not disclosing material facts amounts to deception. For
example, the recent print ad for Videocon mentions a 1-ton split-AC available for
Rs. 15,990/, a very attractive offer. But there is a small asterisk which mentions
three things in small font. They are:
" Conditions apply”
" Prices valid in Delhi and NCR under exchange only”
" Actual products may differ from those displayed in the offer”
Such ads not only mislead consumers by concealing important information from
them. Advertisements for general medicines available over the counter, never
talk of the side effects that may result from their frequent use.
4. Advertisements directed at children : Children in India constitute 18.7 per cent

of the World kids population and one-third of our country's population is under

the age of 15 years. Thus in India, children form a massive 30per cent of the total
population and this segment is growing at a rate of 4 per cent per annum. This
means a huge target market of 300 million is available to advertisers and they are
already focusing on the kid channels.
A survey by A C Nielsen UTV's research partner showed that an average child

watches TV for about three hours on week days and 3.7 hours on weekends, the
time spent on television goes up with age, and the preferred language of viewing
is Hindi across all age groups. Apart from the programmes children also view a lot
of the advertisements.
In India the advertising expenditure per year on products meant for children but
purchased by parents, like health drinks, is 12 to 15 per cent of the total Rs.
38,000 million. Ad expenditure per year on products meant for children and also
bought by them such as chocolates is seven to eight per cent. The advertisers rely
on the children's pester power on their parents. The ethical issues involved are
advertisers try to exploit Young children by advertising products that are not
conducive to their health.
" Children are naïve and gullible and are vulnerable to advertiser's enticements.”
" They lack independent judgment and experience.”
" The line between the children's shows and commercials is fading”
" Is the strategy of selling to parents by convincing the children a fair one? Most
parents would think it is unfair”
5. Puffery: It means the use of harmless superlatives. The advertisers use them to
boast of the merits of their products (best, finest, number one, etc.). Even law
permits trade puffing or exaggeration. But subjective statements of opinion about
a product's quality are so untrue that it becomes an outright spoof and which is
not true. In 1997 MRTP Commission asked Hindustan Lever company to stop its
campaign that its Pepsodent toothpaste was 102 per cent better than the Colgate
toothpaste. Hindustan Lever was restrained from "referring to any Colgate
Toothpaste in any manner, either directly or indirectly, by means of any allusion
or hint in its TV commercials or newspaper advertisements or hoardings, by

comparison of its New Pepsodent with any product of Colgate in general, and
Colgate Dental cream in particular .
6. Use of sex appeals :Sex appeal is used explicitly to sell all kinds of things. It is
used to gain consumer attention. It is used where it is not even appropriate to the
product or service being advertised. Women are shown as decorative objects or
as sexually provocative figures for advertisements for products and services
where women are not required. The corporate sector should be encouraged to
eliminate the violation of women's rights online and the internet service providers
to undertake efforts to minimize pornography, trafficking and all forms of gender
based violence.
7. Bait advertising : It means taking advantage of consumer psychology and

depriving consumers of a choice. For example, a consumer is lured into a retail
outlet by an advertisement for a low cost item and then is sold a higher priced
version or to be defective. Once the consumer enters the store, he or she is
pressured to purchase another more expensive item. On visiting such stores, one
finds a handful of outdated products on the discount announced and other better
products as 'fresh stock'.
8. Advertising of harmful products: Advertising is not restricted to products that

are good for people. According to law in India advertisements for cigarettes,
liquor, paan masala, products that are harmful to the public continue to find a
place despite the ban imposed by the government in private channels, cable, and
through the use of surrogates. Examples include Mc Dowell's Soda, and Wills
lifestyle stores which are seen as surrogate advertising for Mc Dowell's Whiskey
and Wills cigarettes respectively. The issues involved are: Whether such products
should be advertised or not? If they should be advertised, and they will need to
be advertised so long as their production is not banned, in what media should
they be advertised? The role of in-film advertising and surrogate advertising in
promoting the sale of these products also needs to be examined more closely.
Advertisers pay film producers to place their products in certain film scenes by
integrating the products in the film scripts and screen plays.

Advertising and Children
One of the most controversial topics advertisers must deal with is the issue of
advertising to children. TV is a vehicle through which advertisers can reach
children easily. Children between the ages of 2 and 11 watch an average of 21.5
hours of TV a week and may see between 22,000 and 25,000 commercials a
year. Studies show that television is an important source of information for
children about products. Concern has also been expressed about marketers’ use
of other promotional vehicles and techniques such as radio ads, point-of-purchase
displays, premiums in packages, and the use of commercial characters as the basis
for TV shows. Critics argue that children, particularly young ones, are especially
vulnerable to advertising because they lack the experience and knowledge to
understand and evaluate critically the purpose of persuasive advertising appeals.
Research has shown that preschool children cannot differentiate between
commercials and programs, do not perceive the selling intent of commercials, and
cannot distinguish between reality and fantasy. Research has also shown that
children need more than a skeptical attitude toward advertising; they must
understand how advertising works in order to use their cognitive defenses against
it effectively.Because of children’s limited ability to interpret the selling intent of a
message or identify a commercial, critics charge that advertising to them is
inherently unfair and deceptive and should be banned or severely restricted.
At the other extreme are those who argue that advertising is a part of life and
children must learn to deal with it in the consumer socialization process of
acquiring the skills needed to function in the marketplace. They say existing
restrictions are adequate for controlling children’s advertising. Arecent study by
Tamara Mangleburg and Terry Bristol provided support for the socialization
argument. They found that adolescents developed skeptical attitudes toward
advertising that were learned through interactions with socialization agents such
as parents, peers, and television. They also found that marketplace knowledge
plays an important role in adolescents’ skepticism toward advertising. Greater
knowledge of the marketplace appears to give teens a basis by which to evaluate
ads and makes them more likely to recognize the persuasion techniques used by
advertisers.
Five basic principles underlie these guidelines for advertising directed to

children:
1. Advertisers should always take into account the level of knowledge,

sophistication, and maturity of the audience to which their message is primarily
directed. Younger children have a limited capability for evaluating the credibility

of what they watch. Advertisers, therefore, have a special responsibility to protect
children from their own susceptibilities.
2. Realizing that children are imaginative and that make-believe play constitutes
an important part of the growing-up process, advertisers should exercise care not
to exploit that imaginative quality of children. Unreasonable expectations of
product quality or performance should not be stimulated either directly or
indirectly by advertising.
3. Recognizing that advertising may play an important part in educating the child,
information should be communicated in a truthful and accurate manner with full
recognition by the advertiser that the child may learn practices from advertising
that can affect his or her health and well-being.
4. Advertisers are urged to capitalize on the potential of advertising to influence

social behavior by developing advertising that, wherever possible, addresses itself
to social standards generally regarded as positive and beneficial, such as
friendship, kindness, honesty, justice, generosity, and respect for others.
5. Although many influences affect a child’s personal and social development, it

remains the prime responsibility of the parents to provide guidance for children.
Advertisers should contribute to this parent-child relationship in a constructive
manner.
----------------------- End of UNIT 1 ----------------------

MBA Advertising Full Notes Unit 1-Kanwal-Apeejay

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Notes of Advertising Management (MB-902)

MBA Semester 3rd (Marketing Specialization)

Compiled by: Kanwal Khehra

S.No Topic Page No.

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 1

Promotion Mix consists of:

(i) Advertising: It is a non-paid personal form of presentation and promotion of

(ii) Personal selling: It is an oral presentation for the purpose of sale.

(iv) Publicity: It is the management of functions, that helps public to understand

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 2

The American Marketing Association (AMA) recommends the definition,

Paid form: When product or services are mentioned favorably in the

Non-personal presentation: Personal selling takes place when a personal face-to-

An Identified Sponsor: Advertising discloses or identifies the sources of the

Advertising is a powerful communication force and vital marketing tool helping to

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 3

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 4

Advertising is an important element of Promotion Mix and it is a process which

Element of marketing Mix: It is also an important element of marketing Mix

Promotion Mix: The elements of promotion mix includes, Advertising, Sales,

Sales promotion: It is the technique of motivating the customers to purchase the

Publicity: It is not paid by the sponsor. Publicity comes automatically. It can be

Message: These are carriers of advertisement which inspires customers to

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 5

Sponsor: is a person who pays for the advertisement. He is identified and

Persuasion: The message is persuasive and informative. It is creative as well. The

Control: The time, place, message and direction of advertising is controlled to

Identifiable: The message and presentation should be recognised by receivers

Target Group: Advertising aims at a target group of audience, while framing an

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 6

The Advertising covers all the following Advertising functions:

Advertising Functions: No product can be sold without some form of advertising.

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 7

Advertising is the best way to communicate to the customers. Advertising helps

Let’s take a look on these various types of objectives.

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

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 8

1. Advertising is important for the customers

Just imagine television or a newspaper or a radio channel without an

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

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 9

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 10

Advertising is the promotion of a company’s products and services though

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 11

The Advertisements can also be classified into following categories:

1. National Advertising: Advertising done by a company on a nationwide basis or

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 12

3. Direct-Response Advertising: Direct-response advertising is a method of direct

4. Primary and Selective Demand Advertising: Another way of viewing

It is categorized in three basic categories like industrial, professional, and trade

a) Industrial Advertising: Advertising targeted at individuals who buy or influence

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 13

b) Professional Advertising: Advertising that is targeted to professional groups-

c) Trade Advertising: Advertising with in a trade to attract the wholesalers and

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 14

A peculiarity of the mass communication system is that advertising pays most of

1. Advertising is basically an economic institution. It performs an economic

Here are some of the economic role and benefits of advertising:

Kanwal Khehra, Apeejay Institute of Management Technical Campus-Jalandhar Page 15

At all economic level, advertising stimulates demand, educate consumer about

There are five roles of advertising to social welfare:

� Reduces distribution costs through personal selling.

� Encourage competition. It increases product quality through solid brand

� It creates publicity for material and cultural incentives of a liberal enterprise