Advertising and Promotion

Advertising and Advertising and PromotionPromotion

What is Marketing ?What is Marketing ?

‘‘Marketing is the activity, set of Marketing is the activity, set of institutions, and processes for institutions, and processes for creating, communicating, delivering creating, communicating, delivering and exchanging offerings that have and exchanging offerings that have value for customers, clients partners, value for customers, clients partners, and society at large’and society at large’

-AMA, 2007-AMA, 2007

Marketing Mix (the 4 Ps)Marketing Mix (the 4 Ps)

Product:Product: Product variety, quality, Product variety, quality,

design, features, brand design, features, brand name, packaging, sizes, name, packaging, sizes, services, warranties.services, warranties.

PricePrice List price, Discounts, List price, Discounts,

Allowances, Payment Allowances, Payment period, Credit termsperiod, Credit terms

PlacePlace Channels, Locations, Channels, Locations,

TransportTransport PromotionPromotion

Advertising, sales Advertising, sales promotion, public promotion, public relations, personal selling, relations, personal selling, direct marketing.direct marketing.

Definition of AdvertisingDefinition of Advertising

"Advertising is any paid form of non-"Advertising is any paid form of non-personal presentation and promotion personal presentation and promotion of ideas, goods and services through of ideas, goods and services through mass media such as newspapers, mass media such as newspapers, magazines, television or radio by an magazines, television or radio by an identified sponsor".identified sponsor".

-Kotler and Armstrong-Kotler and Armstrong

"The means of providing the most "The means of providing the most persuasive possible selling message persuasive possible selling message to the right prospects at the lowest to the right prospects at the lowest possible cost".possible cost".

-The Institute of Practitioners in -The Institute of Practitioners in Advertising (IPA), a body representing Advertising (IPA), a body representing advertising agenciesadvertising agencies

Why and What Should a Why and What Should a Business Advertise?Business Advertise?

Before starting an advertising campaign, Before starting an advertising campaign,

marketers should answer two key marketers should answer two key

questions:questions:

(1) Why are we advertising?(1) Why are we advertising?

(2) What are we advertising?(2) What are we advertising?

Why Advertise?Why Advertise?

To launch a new product To launch a new product To create awareness, customer interest or To create awareness, customer interest or

desire desire To boost sales (moving the demand curve To boost sales (moving the demand curve

to the right)to the right) To build brand loyalty (or to maintain it at To build brand loyalty (or to maintain it at

the existing level)the existing level) To build the company or brand imageTo build the company or brand image To support the activities of the distribution To support the activities of the distribution

channel (e.g. supporting a “pull” strategy)channel (e.g. supporting a “pull” strategy)

Why Advertise? Cont’d..Why Advertise? Cont’d..

To change customer attitudes – to dismiss To change customer attitudes – to dismiss some bad or wrong perceptions about the some bad or wrong perceptions about the productproduct

To remind and reassure customersTo remind and reassure customers To offset or respond to competitor advertising To offset or respond to competitor advertising To support the sales force – advertising can To support the sales force – advertising can

make the job of the sales force easier and make the job of the sales force easier and more effective by attracting leads from more effective by attracting leads from potential customers and perhaps motivate potential customers and perhaps motivate them by boosting the profile of the businessthem by boosting the profile of the business

To boost public standing: CSRTo boost public standing: CSR

What to Advertise?What to Advertise?

In order to determine what to advertise In order to determine what to advertise there are two questions that needs to be there are two questions that needs to be answered:answered:

Does the business/product have a Does the business/product have a Unique Unique Selling Proposition (“USP”)Selling Proposition (“USP”)??(A unique selling proposition is a customer benefit that no (A unique selling proposition is a customer benefit that no other product can claim)other product can claim)

Does the thing that is being advertised “add Does the thing that is being advertised “add value” and if so, how? value” and if so, how?

Whatever is advertised, it is Whatever is advertised, it is important that the message is:important that the message is:

SeenSeen ReadRead BelievedBelieved RememberedRemembered Action upon by target customersAction upon by target customers

Integrated Marketing Integrated Marketing Communications (IMC)Communications (IMC)

Point ofpurchase

Publicity

Publicrelations

Directmarketing

Interactivemarketing

Specialevents

Packaging

Salespromotion

Directresponse

Traditional Approach to Marketing Traditional Approach to Marketing CommunicationsCommunications

MediaAdver-tising

Contemporary IMC ApproachContemporary IMC Approach

Point ofpurchase

Publicity

Interactivemarketing

Publicrelations

Directmarketing

Specialevents

PackagingSales

promotionDirect

response

MediaAdver-tising

IMC DefinitionIMC Definition

IMC is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs with consumers, customers, prospects employees and other relevant external and internal audiences.

IMC is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs with consumers, customers, prospects employees and other relevant external and internal audiences.

The goal of IMC is to generate short-term financial returns and build long-term brand value.

The goal of IMC is to generate short-term financial returns and build long-term brand value.

A Contemporary Perspective of A Contemporary Perspective of IMCIMC

Demand for accountabilityDemand for accountability

Recognized as a business processRecognized as a business process

Importance of relevant audienceImportance of relevant audienceIMCIMC

Reasons for the Growing Reasons for the Growing Importance of IMCImportance of IMC

Traditional compensationTraditional compensation

Performance-based compensation

Performance-based compensation

Media advertisingMedia advertising Multiple forms of communicationMultiple forms of communication

Mass mediaMass media Specialized mediaSpecialized media

Manufacturer dominanceManufacturer dominance Retailer dominanceRetailer dominance

General focusGeneral focus Data-based marketingData-based marketing

Low agency accountabilityLow agency accountability Greater agency accountabilityGreater agency accountability

Limited Internet availabilityLimited Internet availability

Widespread Internet availabilityWidespread Internet availability

From Toward

The Role of IMC in BrandingThe Role of IMC in Branding

Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind.

Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind.

IMC plays a major role in the process of developing and sustaining brand identity and equity.

IMC plays a major role in the process of developing and sustaining brand identity and equity.

Promotional MixPromotional MixPromotion is the coordination of all seller initiated efforts to set up channels of information and persuasion in order to sell goods and services or promote an idea.

Promotion is the coordination of all seller initiated efforts to set up channels of information and persuasion in order to sell goods and services or promote an idea.

The basic tools used to accomplish and organization’s communication objectives are often referred to as the Promotional Mix

The basic tools used to accomplish and organization’s communication objectives are often referred to as the Promotional Mix

Elements of Promotional MixElements of Promotional Mix

AdvertisingAdvertising

Sales PromotionSales Promotion

Publicity/PublicRelations

Publicity/PublicRelations

Personal SellingPersonal Selling

Direct MarketingDirect Marketing

Interactive/

Internet MarketingInteractive/

Internet Marketing

AdvertisingAdvertising

Advertising- Advertising- Any paid form of Any paid form of non-personal non-personal presentation and promotion of ideas, products, presentation and promotion of ideas, products, or services by an identified sponsor.or services by an identified sponsor.

Non-personalNon-personal means- it involves mass media means- it involves mass media like TV, Newspapers, Radio, Magazines etc. and like TV, Newspapers, Radio, Magazines etc. and there is no immediate feedback on the there is no immediate feedback on the message from the consumer.message from the consumer.

It is the best-known and most widely discussed It is the best-known and most widely discussed from of promotion because of its popularity.from of promotion because of its popularity.

It is also a very important promotional tool, It is also a very important promotional tool, specially for companies whose products and specially for companies whose products and services are targeted to mass market such as services are targeted to mass market such as FMCG, Banks, automobile companies etc.FMCG, Banks, automobile companies etc.

Advertising (Cont’d)Advertising (Cont’d)

It is a great tool to build brand equity as it It is a great tool to build brand equity as it can powerfully change consumer can powerfully change consumer perceptions.perceptions.

It helps improve brand image.It helps improve brand image. It is still the most cost effective way to reach It is still the most cost effective way to reach

large audiences.large audiences. It helps those brands that are hard to sell It helps those brands that are hard to sell

because of less USPs.because of less USPs. Nature and purpose of advertising is different Nature and purpose of advertising is different

from one industry to another and/or across from one industry to another and/or across situation e.g. B2C is different from B2B.situation e.g. B2C is different from B2B.

Sales PromotionSales Promotion

Promotion and Sale Promotion (SP) are two Promotion and Sale Promotion (SP) are two different terms. different terms.

Promotion is an element of marketing by Promotion is an element of marketing by which firms communicate with their which firms communicate with their customers; it includes all promotional mix customers; it includes all promotional mix elements.elements.

Sales Promotion- Sales Promotion- those marketing activities those marketing activities that provide extra value or incentives to the that provide extra value or incentives to the sales force, distributors, or the end consumer sales force, distributors, or the end consumer and stimulate immediate sales.and stimulate immediate sales.

Type of SPs: Consumer Oriented & Trade Type of SPs: Consumer Oriented & Trade Oriented.Oriented.

Sales Promotion (Cont’d)Sales Promotion (Cont’d)

SP is often 60 to 70 percent of SP is often 60 to 70 percent of promotional budget. promotional budget.

Why?- Why?- Due to declining brand loyalty and Due to declining brand loyalty and

increased consumer sensitivity to increased consumer sensitivity to promotional deals.promotional deals.

Retailers have become larger and more Retailers have become larger and more powerful and thus demand trade powerful and thus demand trade promotional support from companies.promotional support from companies.

Sales Promotion (Cont’d)Sales Promotion (Cont’d)

• Consumer-oriented

• [For end-users]

• Trade-oriented

• [For resellers]

EventsEvents

Loyalty ProgramsLoyalty ProgramsBonus Packs Bonus Packs

Refunds/Rebates Refunds/Rebates

Contests/SweepstakesContests/Sweepstakes

PremiumsPremiumsSamplesSamplesCouponsCoupons

CoopAdvertising

CoopAdvertising

TradeShowsTradeShows

TrainingProgramsTraining

Programs

POP DisplaysPOP Displays

TradeAllowances

Sales Promotion (Cont’d)Sales Promotion (Cont’d)

ManufacturerManufacturer

ConsumerConsumer

wholesalerwholesaler

RetailerRetailer

Push Strategy

Flow of promotion; mainly personal selling & sales promotion directed to intermediaries

ManufacturerManufacturer

ConsumerConsumer

wholesalerwholesaler

RetailerRetailer

Pull Strategy

Flow of promotion; advertising mainly directed to consumers

Publicity/ Public RelationsPublicity/ Public Relations

Publicity-Publicity- Refers to non-personal communications Refers to non-personal communications regarding an organization, product, service, or idea regarding an organization, product, service, or idea not directly paid for or run under identified not directly paid for or run under identified sponsorship.sponsorship.

It usually comes in the form of a news story, editorial, It usually comes in the form of a news story, editorial, or announcement about an organization and/or its or announcement about an organization and/or its products and services.products and services.

Similar to advertising, it involves non-personal Similar to advertising, it involves non-personal communication to a mass audience.communication to a mass audience.

BUT unlike advertising it is not directly paid for by the BUT unlike advertising it is not directly paid for by the company.company.

The company tries to get the media cover their event The company tries to get the media cover their event or story and write favorably about its products or or story and write favorably about its products or services.services.

Publicity has advantage over other forms Publicity has advantage over other forms of promotions due to its credibility.of promotions due to its credibility.

Consumers generally tend to be less Consumers generally tend to be less skeptical toward favorable information skeptical toward favorable information about a product or service when it comes about a product or service when it comes from a source they perceive as unbiased.from a source they perceive as unbiased.

However, publicity is not always under the However, publicity is not always under the control of an organization and is control of an organization and is sometimes unfavorable.sometimes unfavorable.

Negative stories about a company and/or Negative stories about a company and/or its products can be very damaging.its products can be very damaging.

Publicity/ Public Relations Publicity/ Public Relations (Cont’d)(Cont’d)

InterviewsInterviews

FeatureArticlesFeatureArticles

SpecialEventsSpecialEvents

PressConferences

PressConferences

NewsReleases

NewsReleases Publicity

VehiclesPublicityVehicles

Publicity/ Public Relations Publicity/ Public Relations (Cont’d)(Cont’d)

Public Relations- Public Relations- the management function the management function which evaluates public attitudes, identifies the which evaluates public attitudes, identifies the policies and procedures of an individual or policies and procedures of an individual or organization with the public interest, and organization with the public interest, and executes a program of action to earn public executes a program of action to earn public understanding and acceptance.understanding and acceptance.

Its purpose is to establish and maintain a positive Its purpose is to establish and maintain a positive image of the company among its various publics.image of the company among its various publics.

Publicity is part of Public Relations.Publicity is part of Public Relations. It used to be treated as a support to other It used to be treated as a support to other

marketing activities but now it is an integral part marketing activities but now it is an integral part of the promotional strategies.of the promotional strategies.

Publicity/ Public Relations Publicity/ Public Relations (Cont’d)(Cont’d)

Publicity/ Public Relations Publicity/ Public Relations (Cont’d)(Cont’d)

Corporate Advertising

Cause-related Marketing

PublicityVehicles

CommunityActivities

Public AffairsActivities

SpecialPublications

Special EventSponsorship

Personal SellingPersonal Selling

Personal Selling- Personal Selling- a form of a form of person-to-person person-to-person communication in which a seller attempts to assist and/or communication in which a seller attempts to assist and/or persuade prospective buyers to purchase the company’s persuade prospective buyers to purchase the company’s product or service or to act on an idea.product or service or to act on an idea.

Unlike advertising which is non-personal in nature, personal Unlike advertising which is non-personal in nature, personal selling involves direct contact between buyer and seller, selling involves direct contact between buyer and seller, either face-to-face or through some form of either face-to-face or through some form of tlecommunications such as telephone sales.tlecommunications such as telephone sales.

Through PS the seller can understand the consumer Through PS the seller can understand the consumer behavior in a much better way.behavior in a much better way.

PS has the flexibility of modifying the communication PS has the flexibility of modifying the communication message based on buyer’s reaction or feedback.message based on buyer’s reaction or feedback.

Message can be tailor made considering the target market.Message can be tailor made considering the target market.

Direct MarketingDirect Marketing

Direct Marketing-Direct Marketing- Is a type of marketing in which organizations Is a type of marketing in which organizations communicate directly with the end consumers to generate a response communicate directly with the end consumers to generate a response and/or transactions.and/or transactions.

This form of marketing is different from other marketing approaches, This form of marketing is different from other marketing approaches, primarily because there are no intermediaries such as retailers between primarily because there are no intermediaries such as retailers between the buyer and seller, and therefore the buyer must contact the seller the buyer and seller, and therefore the buyer must contact the seller directly to purchase products or services.directly to purchase products or services.

Traditionally it was not considered an itegral part of the promotional mix.Traditionally it was not considered an itegral part of the promotional mix. Nowadays many organizations involve separate objectives, budgets and Nowadays many organizations involve separate objectives, budgets and

strategies.strategies. One of the most important tool of DM is Direct-response advertising.One of the most important tool of DM is Direct-response advertising. Direct-response marketing is delivered through a wide variety of media, Direct-response marketing is delivered through a wide variety of media,

including DRTV, radio, mail, print advertising, telemarketing, catalogues, including DRTV, radio, mail, print advertising, telemarketing, catalogues, and the Internet.and the Internet.

Direct-response ads like infomercials can be contrasted with normal Direct-response ads like infomercials can be contrasted with normal television commercials because traditional commercials normally do not television commercials because traditional commercials normally do not solicit a direct immediate response from the viewer, but instead try to solicit a direct immediate response from the viewer, but instead try to brand their product in the market place.brand their product in the market place.

Direct Marketing (Cont’d)Direct Marketing (Cont’d)

Customers &

Prospects

Customers &

Prospects

TelemarketingTelemarketing

Kiosk Marketing

Kiosk Marketing Direct-mail

Marketing

Direct-mail Marketing

Catalog Marketing

Catalog Marketing

Direct-Response TV

Marketing

Direct-Response TV

Marketing

Face-to-Face Selling

Face-to-Face Selling

Online Marketing

Online Marketing

Interactive/Internet Interactive/Internet MarketingMarketing

Interactive media allow for a back-and-forth flow of Interactive media allow for a back-and-forth flow of information whereby uses can participate in and modify the information whereby uses can participate in and modify the form and content of the information they receive in real form and content of the information they receive in real time.time.

It is different from the conventional advertising which is one It is different from the conventional advertising which is one way in nature.way in nature.

It allows the user to perform a variety of functions such as It allows the user to perform a variety of functions such as receive and alter information and images, make inquiries, receive and alter information and images, make inquiries, respond to questions, and make purchases.respond to questions, and make purchases.

In addition to internet, other forms of interactive media In addition to internet, other forms of interactive media includes CD-ROMs, kiosks, interactive television, and digital includes CD-ROMs, kiosks, interactive television, and digital cell phones.cell phones.

Organizations have developed websites to promote their Organizations have developed websites to promote their products and services, by providing current and potential products and services, by providing current and potential customers with information as well as entertain and interact customers with information as well as entertain and interact with them.with them.

IMC Involves Audience IMC Involves Audience ContactsContacts

Target AudienceTarget Audience

Broadcast media

(TV/radio)

Broadcast media

(TV/radio)

Print media (newspapers, magazines)

Print media (newspapers, magazines)

Public Relations/publicity

Public Relations/publicity

Internet/interactiveInternet/

interactive

Directmarketing

Directmarketing

Sales Promotion

Sales Promotion

Product placements

(TV and movies)

Product placements

(TV and movies)

Events and sponsorshipEvents and sponsorship

Word-of-mouth

Word-of-mouth

POP (displays,

packaging)

POP (displays,

packaging)

Personal selling

Personal selling

Out-of-home media

Out-of-home media

The IMC Planning ProcessThe IMC Planning Process

Promotional program situation analysis

Analysis of the communications process

Budget determination

Develop integrated marketing communications programs

Review of marketing plan

AdvertisingSales

promotionPR/

publicityPersonalselling

Directmarketing

Advertisingobjectives

Salespromotionobjectives

PR/publicity

objectives

Personalselling

objectives

Directmarketingobjectives

Messagestrategy

Salespromotionstrategy

PR/publicitystrategy

Personalselling

strategy

Directmarketingstrategy

Integrate and implement marketing communications strategies

Monitor, evaluate and control IMC Program

Internet/interactive

Internet/interactiveobjectives

Internet/interactivestrategy

Organizing for Advertising and Organizing for Advertising and Promotion: The Role of Ad Promotion: The Role of Ad

Agencies and Other Marketing Agencies and Other Marketing Communication OrganizationsCommunication Organizations

Chapter 3

Participants in the IMC Participants in the IMC ProcessProcess

AdvertiserAdvertiser Advertising Agency

Advertising Agency

Media Organizations

Media Organizations

Marketing Communication

specialist Organizations:

Direct-Marketing agencies,

Sales promotion agencies,

Interactive agencies, Public relation firms

Marketing Communication

specialist Organizations:

Direct-Marketing agencies,

Sales promotion agencies,

Interactive agencies, Public relation firms

Collateral Services

Collateral Services

Full Service Agency Org. Full Service Agency Org. ChartChart

Creative Director

Creative Director Account DirectorAccount Director Media DirectorMedia Director Finance DirectorFinance Director

MDMD

Writers/Art Dir.Writers/Art Dir.

TV ProductionTV Production

Print ProductionPrint Production

Traffic ControlTraffic Control

Acc. Management

Acc. Management

Account ExecutiveAccount Executive

Media PlanningMedia Planning

Media BuyingMedia Buying

Finance Depart.Finance Depart.

AccountsAccounts

Admin./PersonnelAdmin./

Personnel