IMC Module 1

MBA III International Marketing Communication (2830103)

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MODULE 1

Chapter 1: Fundamentals of Integrated Marketing communications and Role of IMC in

Marketing Communication.

Chapter 2:One Voice Communication v/s IMC

Chapter 3: Introduction to IMC tools

Case Study1: Vodafone Zoo Zoo

Case Study2: Barack Obama

Case study 3: Horlicks vs. Complan


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Chapter 4: Organizing for Advertising and Promotion: The Role of Ad Agency and Other

Marketing Communication Organization.

Compiled by Dr. TripatKaur

Director

Dr. D.Y. Patil Institute of Management and Research Centre

Bharuch

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Chapter -1

Integrated Marketing Communications

Objectives:

1. To introduce the concept of integrated marketing communications (IMC) and its evolution.

2. To examine reasons for the increasing importance of the IMC perspective in planning and

executing advertising and promotional programs.

3. To introduce a model of the IMC planning process and examine the steps in developing a

marketing communications program

4. To understand the marketing process and the role of advertising and promotion in an

organization's integrated marketing program.

5. To know the various decision areas under each element of the marketing mix and how they

influence and interact with advertising and promotional strategy.

Overview of Communication

Marketing communications is one of the four major elements of the company‟s marketing mix.

Marketers must know how to use advertising, sales promotion, direct marketing, public relations, and

personal selling to communicate the product‟s existence and value to the target customers.

The communication process itself consists of nine elements: sender, receiver, encoding, decoding,

message, media, response, feedback, and noise. Marketers must know how to get through to the target

audience in the face of the audience‟s tendencies toward selective attention, distortion, and recall.

Developing the promotion program involves eight steps. The communicator must first identify the

target audience and its characteristics, including the image it carries of the product. Next the

communicator has to define the communication objective, whether it is to create awareness,

knowledge, liking, preference, conviction, or purchase. A message must be designed containing an

effective content, structure, format, and source. Then communication channels both personal and

nonpersonal must be selected. Next, the total promotion budget must be established. Four common

methods are the affordable method, the percentage-of-sales method, the competitive-parity method,

and the objective-and-task method.


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The promotion budget should be divided among the main promotional tools, as affected by such

factors as push-versus-pull strategy, buyer readiness stage, product life-cyclestage and company

market rank. The marketer should then monitor to see how much of the market becomes aware of the

product, tries it, and is satisfied in the process. Finally, all of the communications effort must be

managed and coordinated for consistency, good timing, and cost effectiveness.

What is Integrated Marketing Communication?

With a rise in global competition, technological advancement, and more updated customers, it is

crucial for businesses to make a strong impact on target customers and markets. IMC is sucha step

directed towards an integrated approach to achieve efficiency by synergy. Many companies still rely

on one or two communication tools to achieve their communication aims. This practice still persists in

spite of the fragmenting of mass-markets into a multitude of minimarkets, each requiring its own

approach; the proliferation of new types of media; and growing sophistication of consumers.

Integrated Marketing Communication means different things to different people.Integrated

marketing communication helps businesses reach prospects from various angles in hope to capture

their attention and gain their loyalty.

The American Association of Advertising Agencies defines IMC as “a concept that recognises the

added value of a comprehensive plan that evaluates the strategic role of a variety of communication

disciplines, and combines these disciplines to provide clarity, consistency and maximum

communication impact”.

IMCis a management concept that is framed to make all aspects of marketing communication like

advertising, sales promotion, public relations, and direct marketing work together as a unified force,

instead of permitting each to work in isolation.

IMC is the coordination and integration of all marketing communication tools, avenues, functions and

sources within a company into a seamless program that increases the impact on consumers and other

end users at a least cost.

IMC is a process for managing customer bonding that build brand value primarily through

communication efforts. Such efforts always include cross-functional processes that create and nurture

profitable relationships with customers and other stakeholders by strategically controlling or

influencing all communications to these groups and motivating data-driven, purposeful dialog with

them. This integration influences all firms‟ business-to-business, marketing channel, customer-

focused, and internally directed communications.

IMC is defined by Marketing Guru Philip Kotler“the concept under which a company carefully

integrates and coordinates its many communication channel to deliver a clear, consistent message.‟‟

Integrated Marketing Communications ensures that all forms of communications and messages are

carefully connected with all together.

IMC Components:

The Foundation - corporate reputation and brand equity; buyer behaviour; promotions

opportunity analysis.


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Advertising Tools - advertising management, advertising design: conceptual frameworks and

types of appeals; advertising design: message strategies and executable frameworks; advertising

media selection. Advertising also reinforces brand and firm image.

Promotional Tools - trade promotions; consumer promotions; personal selling, database

marketing, and customer relations management; public relations and sponsorship programs.

Integration Tools - Internet Marketing; IMC for small business and entrepreneurial ventures;

evaluating and integrated marketing program.

The Evolution of IMC

During the 1980s many companies began taking a broader perspective of marketing communication

and seeing the need for a more strategic integration of their promotional tools. The decade was

characterized by the rapid development of areas such as sales promotion, direct marketing, and public

relations, which began challenging advertising‟s role as the dominant form of marketing

communication. These firms began moving toward the process of integrated

marketingcommunication (IMC), which involves coordinating the various promotional elements and

other marketing activities that communicate with a firm‟s customers. As marketers embraced the

concept of integrated marketing communications, they started asking their ad agencies to coordinate

the use of a variety of promotional tools rather than relying primarily on media advertising. A number

of companies also began to look beyond traditional advertising agencies and use other types of

promotional specialists to develop and implement various components of their promotional plans.

Importance of IMC

IMC is playing a vital role in today‟s organisation. IMC advocates describe it as a way of looking at

the whole marketing process instead of focussing on individual parts of it.

Several shifts in the advertising and media industry have caused IMC to develop into a primary

strategy for marketers:

1. From media advertising tovarious forms of communication.

2. From mass media to more specialized (niche) media, which are focused on particular target

audiences?

3. From a manufacturer-leaded market to a retailer-leaded, consumer-dominated market.

4. To data-based marketing from general-focus advertising andmarketing

5. From low agency accountability to greater agency accountability, specifically in advertising.

6. From old compensation system to performance-based compensation (maximized sales or

benefits to the company).

7. From limited Internet access to 24/7 Internet availability and access to goods and services.

Although Integrated Marketing Communications needs a lot of rejuvenation, it delivers many

benefits. It can create unique selling proposition, systematic growth in sales and profits, while saving

budget, time and workload.

IMC grips communications around customers and supports them move through the various stages of

the buying process. The organisation at the same timewraps its image, develops a dialogue and

nurtures it‟s bonding with customers.

This 'Relationship Marketing' builds a bond of trustworthiness with customers which can safeguard

them from the inevitable onslaught of competition. The ability to hold a customer for life time is an

enormous competitive advantage.


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IMC also maximises profitabilitywith the help of increased effectiveness. At its most fundamental

level, a centralized message has more impact than anindividual series of messages. In a busy world,

an accurate, consolidated and crystal clear message has a better chance over the 'noise' of more than

five hundred commercial messages which bombard customers each and every day.

On the other hand, initial research inclines that images shared in advertising and direct mail boost

both advertising awareness and responses. So, IMC can boost sales by stretching messages across

several communications tools to create more opportunities for customers to become aware, aroused,

and ultimately, to make a purchase.

Carefully linked messages also help buyers by giving timely reminders, updated information and

special offers which, when presented in a planned sequence, help them move comfortably through the

stages of their buying process... and this reduces their 'misery of choice' in a complex and busy world.

IMC also makes messages more consistent and therefore more credible. This reduces risk in the mind

of the buyer which, in turn, shortens the search process and helps to dictate the outcome of brand

comparisons.

Un-integrated communications send disjointed messages which dilute the impact of the message. This

may also confuse, frustrate and arouse anxiety in customers. On the other hand, integrated

communications present a reassuring sense of order.

Consistent images and relevant, useful, messages help nurture long term relationships with customers.

Here, customer databases can identify precisely which customers need what information, when and

throughout their whole buying life.

Finally, IMC saves money as it eliminates duplication in areas such as graphics and photography

since they can be shared and used in say, advertising, exhibitions and sales literature. Agency fees are

reduced by using a single agency for all communications and even if there are several agencies, time

is saved when meetings bring all the agencies together - for briefings, creative sessions, tactical or

strategic planning. This reduces workload and subsequent stress levels - one of the many benefits of

IMC.

Example - Marketing Spotlight—Mountain Dew Code Red

When Pepsi-Cola‟s total volume increased a mere tenth of a percent in 2000, the company quickly

sought to boost sales by launching the first line extension of its popular Mountain Dew drink because

Diet Mountain Dew debuted in 1988. A cross-functional team comprised of 35 people from seven

Pepsi departments worked on developing the new product. The team considered several possibilities:

Dew H20 bottled water; Dew Unplugged decaf Mountain Dew; a Mountain Dew sports drink; and a

new Dew flavour. The company settled on creating a new flavour, and within 10 months, instead of

the usual two years it takes Pepsi to develop a new product, launched a bright red cherry-flavored

beverage called Mountain Dew Code Red.

For the launch, Pepsi used radio and outdoor advertising, as well as sampling and in-store

merchandising. To build buzz for Code Red, the company sent free samples to 4,000 select

consumers, such as hip-hop producer Jermaine Dupri and radio DJ Funkmaster Flex. The drink was

heavily sampled at marquee sporting events such as the NCAA Final Four and ESPN‟s 2001 winter X

games. Pepsi also developed a special Website for the brand that featured an interactive game called

“Mission: Code Red 2.” Additionally, Pepsi marketed Code Red to urban consumers. When research

revealed that urban and ethnic focus groups preferred the name Code Red to Wild Cherry Mountain

Dew, Pepsi stuck with the former. The company also developed an ad campaign titled “Crack the

Code” that used graffiti-art design elements and an urban setting.


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Code Red attracted a rabid fanbase. According to A.C. Nielsen, Code Red tested in the top five

percent of all new product concepts ever tested among teens. The drink was also popular in the high-

tech community. Two programmers who discovered a computer virus named it “Code Red” after the

beverage they used to maintain late hours in front of their monitors. The virus eventually infected

more than 700,000 computers. Pepsi sent the pair five cases of Code Red in appreciation for the free

publicity.

Within two months of its May 2000 launch, Code Red was the fifth-best-selling soft drink sold at

convenience stores and gas stations (Mountain Dew is number one). This signalled tremendous

success, considering that the drink came in only two single-serve sizes and the muted marketing

campaign did not yet include television spots. Though the drink was launched midway through the

second quarter of 2000, Pepsi credited the Code Red launch with helping to boost net sales 20 percent

to $962 million that quarter. One bottler exclaimed “It‟s flown off the shelves for us.”

Sources: www.mountaindew.com

Mountain Dew

• Mountain Dew: #3 Selling Soft Drink in U.S.

• Primary Market: Teens, Secondary Market: 20-39 years.

• Challenge Grow Remain Hip

• Free Fun, Exhilaration, Energy

• Urban Market. Vans Loaded with 20 oz. Bottles of MD Toured Major Cities, Hip-Hop Music,

• Distribute Free Bottles at Schools, City Parks, and Basketball Courts etc.

• Truly Integrated Marketing Communications (IMC) Effort

Effective communications elements

The aim of choosing the elements of proposed integrated marketing communications is to create a

campaign that is effective and accurate across media platforms. Some marketers may wish only ads

with greatest breadth of appeal: the executions that, when consolidated, provide the highest number of

attention-getting, branded, and motivational moments. Others may only want ads with the greatest

depth of appeal: the ads with the greatest number of attention-getting, branded, and motivational

points within each.

Although integrated marketing communications is much more than just an advertising campaign, the

bulk of marketing budget is spent on the development and dissemination of advertisements.

Therefore, tremendous amount of the research budget is also spared for these elements of the

campaign. Once the key marketing pieces have been tested, the researched elements can then be

applied to other contact points: letterhead, packaging, logistics, customer service training, and more,

to complete the IMC cycle.

One usual form of integrated marketing communication is personal selling. Personal selling can be

defined as "face to face selling in which a seller attempts to persuade a buyer to make a purchase."

Establish communication objectives

Develop brand awareness

Inform about benefits

http://en.wikipedia.org/wiki/Customer_service_training


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Change customer belief or attitude

Persuade about values

Enhance purchase actions

Encourage repeat purchases

Build customer traffic

Enhance firm image

Increase market share

Increase sales

Reinforce purchase decisions


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Case Study - Aircel

This case is about the promotional strategies adopted by India-based mobile operator Aircel. Aircel

entered the highly competitive Indian telecom market in the year 1999. It adopted innovation as its

key branding strategy and communicated with customers through simple and thoughtful advertising

campaigns. The case discusses the various marketing strategies adopted by a relatively late entrant

into the Indian market and how it increased its subscriber base. Aircel was one of the first mobile

operators to introduce its advertising campaign on Facebook. The case explains how Aircel promoted

its services through several media like TV, print, out-of-home (OOH), and radio.

Our marketing strategy aims to bring to the forefront the multi-functionality of the phone."

- Rahul Saighal, Chief Marketing Officer, Aircel in 2009.

Not a Me – Too?

In 2009, India-based mobile operator Aircel Limited (Aircel) bagged the CMAI INFOCOM National

Telecom Award 2009 for 'Excellence in Marketing of New Telecom Service'. Launched in 1999,

Aircel was the fastest growing mobile operator in the country with a subscriber base of over 48

million as of 2010. It had its presence in 23 Telecom Circles and was the market leader in the Tamil

Nadu, Assam, North-East, and Chennai circles.

On receiving the award, Gurdeep Singh (Singh) COO, Aircel, said, "This award means a lot to us as

this acknowledges our pan-India presence and further encourages us to become a Mass Iconic Brand

that truly believes in earning for itself a satisfied customer base, proud employees, & competition

that respects us”.

Aircel, a late entrant into the competitive Indian telecom sector, adopted innovation as its key

branding strategy. The service provider focused on the multi-functionality of the product. Aircel

offered fresh networks, simplified tariff plans, and good Value Added Services (VAS) to subscribers.

The core values of the Aircel brand were Simplicity, Creativity, and Trustworthiness. In the year

2009, the most innovative advertising and marketing campaigns came from Aircel. The brand

communicated with customers through simple, thoughtful ads. It positioned itself around the tagline,

'Explore Your World of Possibilities', and targeted youth across multiple segments.

The mobile operator tried to increase its market share by offering competitive tariff plans and VAS

offerings like location-based services & phone banking to attract subscribers in metros. Aircel was

also associated with the Indian Premier league (IPL), as the official sponsor of the Chennai Super

Kings team. It had initially roped in Indian Cricket Captain M.S. Dhoni for advertisements and

branding.

The telecom sector in India was regulated by Telecom Authority of India (TRAI). The main players in

the telecom industry were state-owned mobile operators, private Indian-owned companies, and

foreign investment companies. Launched in 1999, the Aircel Group was a joint venture between

Maxis Communications Berhad (Maxis) of Malaysia and Apollo Hospital Enterprise Ltd (Apollo) of

India, with Maxis holding a majority stake of 74%.

Promotional Strategy


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Aircel came out with innovative marketing techniques to attract customers. It focused on its core

values - Simplicity, Creativity, and Trustworthiness - and positioned itself around the tagline, 'Explore

Your World of Possibilities'.

Aircel, which had confined itself to the southern states until 2005, needed an ingenious marketing

campaign when it entered the North. Hence, the company used OOH (Out of Home Advertising)

extensively which it thought to be effective and different.

On January 30, 2010, Aircel in association with WWF-India launched a social campaign called "Save

our Tigers" to raise awareness about the dwindling population of tigers in India and across the globe.

During the launch of Aircel, integration routes were worked out on leading General Entertainment

Channels such as Star Plus. On the day of the launch, Aircel flooded all the channels with its

advertisements and the brand was launched during prime time by the leading protagonists of the top

five shows on Star Plus.

To achieve mass reach, Aircel chose mass portals like- Yahoo.com, MSN.com, Rediff.com, Sify.com,

and Indiatimes.com. Cashing in on the passion for cricket in India, it took high impact cricket

properties on Cricinfo.com, rediff scorecard, and the MSN cricket & sports section.

According to some analysts, Aircel had come a long way from being a Chennai-based telecom

operator to a pan-Indian mobile operator with a subscriber base of over 50 million at the end of 2010.

According to some industry experts, Aircel was a relatively small player in the Indian mobile services

market and over 57% of its subscribers were based in just one state i.e. Tamil Nadu. As of March

2010, Aircel was at the fifth place among GSM operators in India, with a market share of 8.38% after

Airtel, Vodafone, Idea, and BSNL.

Courtesy: www.iup.india


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Case Study - Titan

Titan Industries Limited (TIL) is a dominant player in the Indian branded watch industry. The

company has a presence in most segments of the watch market. The case discusses the various

brands/sub-brands of TIL's watch division and talks in detail about the marketing and communication

strategies followed by the company.

The case throws light on the company's decision to use celebrities to market its products. It gives an

account of the evolving market dynamics in the branded watch market in India and TIL's efforts to

sustain its market share. The case also discusses the challenges that the company may face in the

future.TIL, a joint venture between the Tata Group and the Tamil Nadu Industrial Development

Corporation, commenced operations in 1987 under the name Titan Watches Limited (TWL). With the

diversification of TWL into jewellery in 1994, the company changed its name to TIL.

In June 2004, the company diversified into other lifestyle products like eyewear by extending its

watch sub-brand Fastrack and perfumery with a new brand Evolve, launched in early 2005. The main

manufacturing plants of the company were situated at Hosur in Tamil Nadu.

Though the decision had been made to use Aamir, the company was apprehensive that the actor might

dominate the brand (Titan) or the message (multiple ownership)

The marketing team at Titan wanted to keep the focus on the brand and the message. A TVC created

by O&M was launched in October 2004.

In October 2004, Titan Industries Ltd. (TIL), leading manufacturer and marketer of watches,

jewellery, eye wear, and other lifestyle products, appointed Aamir Khan (amir) as the brand

ambassador for its Titan range of watches.

Bijou Kurien (Kurien), Chief Operating Officer (Watches), TIL, said, "There is a perfect fit between

Aamir and Titan -- their stature, timelessness, and the love and trust they both share with the people,

both nationally and internationally, makes this an ideal partnership. Moreover, Aamir has a universal

appeal that extends to everyone, across age groups, just as our watches do."

With the celebrity endorsement, TIL hoped to promote the latest trends in the industry. The idea was

to make watches that would be seen as style and fashion accessories rather than just utilitarian

devices. The company decided to use Aamir in brand and product communication on television and in

the print and outdoor media.

It introduced several collections/ranges under each of its sub-brands. Moreover, it participated in the

retail boom that the country was experiencing. It opened several outlets in the huge malls and

hypermarkets that were mushrooming in the big cities. It also paid attention to its communication

strategies. And its attempts seemed to have paid off -- the company posted good annual profits and its

image was rejuvenated.

To a large extent, TIL was successful in enhancing the presence and acceptance of most of its sub-

brands. As an IIM-B professor said, "The varied offerings to diverse segments with a clear cut

positioning strategy have been instrumental in sustaining the market share of the (Titan) brand.


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Factors contributing to IMC’s growing popularity

Several significant and pervasive changes in the marketing and communications environment have

contributed to its growing prominence:

Fragmentation of the media: A huge number of media options are available to marketers.

Broadcasting media now offer „narrow casting‟ so specific that advertisers can reach

consumers at precise locations, such as airports and supermarket checkout counters. The print

media has proliferated dramatically as well.

Better audience assessment through database technology: The ability of firms to generate,

collate and manage databases has created diverse communications opportunities beyond mass

media. Databases can be used to create customer and non-customer profiles. This information

is important to identify target markets.

Consumer empowerment: Today‟s consumers are more powerful and sophisticated.

Empowered consumers are more sceptical of commercial messages and demand information

tailored to their needs.

Increased advertising clutter: The proliferation of advertising stimuli has diluted the

effectives of any single message.

Desire for greater accountability: In an attempt to achieve greater accountability for

promotional spending, firms have reallocated marketing resources from advertising to more

short-term and more easily measurable methods, such as direct marketing and sales

promotions.

Communication Modes/Tools:

Key Functional areas of Marketing Communication

• Advertising

• Direct Marketing

• Publicity (a form of Public Relations)

• Sales Promotion

• Personal Selling

• Packaging

• Events and Sponsorships

• Customer Service

• E-Communication

The Emerging Tools of IMC

Road shows

Sponsorships

Events

Point Of purchase

Globally Integrated Marketing Communication

The same trend that exists among advertising agencies in the United States also occurs in the

international arena. Instead of being called “IMC,” however it is known as GIMC, or a globally

integrated marketing communications program. The goal is still the same to coordinate marketing

efforts. The challenges are greater due to larger national and cultural differences in target markets.

In the past, marketers could employ two different strategies for global companies. The first approach

was called standardisation, in which the idea was to standardize the product and message across

countries. The goal of this approach was generating economies of scale in production while creating a

global product using the same pro-motional theme. The language would be different, but the basic

marketing message would be the same.


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Role of IMC in Marketing Process

FIG 1.1Marketing and Promotions Process Model

Marketing Strategy Target Marketing Marketing Planning Target Market and Analysis Process Program Development

Promotion to

final buyer

Promotion to

Trade

Purchase

Opportunity

analysis

Competitive Analysis

Target Marketing

Identifying Markets

Market Segmentation

Selecting a target Market

Positioning through

Marketing

Strategies

Product Decisions

Pricing Decisions

Channel of Distribution

Decisions

Promotional decisions

•Advertising

•Direct marketing

•internet/Interactive

Marketing

•Sales promotion

•Publicity and public Relations

•Personal selling Resellers

Ultimate custome

r •Consu

mers •Busines

ses


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As figure 1.1 shows that development of a marketing program requires an in- depth analysis of the

market. This analysis may make extensive use of marketing research as an input into the planning

process. This input, in turn, provides the basis for the development of marketing strategies in regard to

product, pricing, distribution, & promotion decisions. Each of these steps requires a detailed analysis,

since this plan serves as the road map to follow in achieving marketing goals. Once the detailed

marketing analysis has been completed and marketing objectives have been established, each element

in the marketing mix must contribute to comprehensive Integrated Marketing Communication.

The steps involved in role of IMC in the Marketing Process-

Four major components are discussed below:

1. Marketing Strategy and Analysis- Any organization that wants to exchange its products or

services in the marketing place successfully should have a strategic marketing plan to guide the

allocation of its resources. A strategic marketing plan usually evolves from an organization‟s over all

corporate strategy and serves as a guide for specific marketing programs and policies.

Steps of marketing strategy:

Opportunity Analysis.

Competitive Analysis.

Target Marketing.

2. The Target Marketing Process: After evaluating the opportunities presented by various market

segments, including a detailed competitive analysis, the company may select one, or more, as a target

market. The process by which marketers do this is referred to as target marketing and involves four

basis steps:

1.Identifying Markets:

2.Market Segmentation

Five-Steps Segmentation Process

Finding ways to group consumers according to their needs.

Finding ways to group marketing actions, usually the products offered, available to the

organization.

Developing a market/product grid to relate the market segments to the firm‟s products and

actions.

Selecting the product segments toward which the firm directs its marketing actions.

Taking marketing actions to reach target segments.

1. Basis for Segmentation


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Geographic Segmentation

State - region - country - climate

Demographic Segmentation

Age, sex, income, education, occupation, social class

Psychographic Segmentation

AIOs, (Activities, Interests, Opinions)

VALS (Values and Lifestyles)

Personality traits

Behaviouristic Segmentation

Usage, loyalties, occasions.

Benefit Segmentation

Types of specific needs or wants to be satisfied.

Selecting a Target Market

2. Determining How Many Segments to Enter

Undifferentiated Marketing – offering one product or service to the entire market

Differentiated marketing – competing in a number of segments with separate marketing

strategies for each

Concentrated Marketing – focusing on one market segment

3. Determining Which Market Segments Offer the Most Potential

Determine sales potential of the segment

Determine opportunities for growth of the market segment

Analyze the competition in the segment

Analyze the company‟s ability to compete in the market segment

Decide how to compete in the market segment

4. Segmentation Decision Check List

Can the size of the market segment be measured?

Is the market segment large and profitable enough to serve?

Is the segment identified accessible? Can it be reached effectively and efficiently?

Can effective marketing programs be developed to attract and serve the segment

identified?

3.Selecting the target market

4. Positioning through marketing strategy.

\


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FIG 1.2The Target Marketing Process

Identify markets with unfulfilled needs

Determining market segmentation

Selecting market to target

Positioning through marketing strategies positioning through

marketing strategy


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The Positioning Process

Positioning Concept The desired perception or

association management wants

target customers to have for a

firm and/or its products

Positioning Effectiveness Positioning Strategy The extent to which management’s The combination of marketing positioning objectives are achieved actions used to portray the in the market target positioning concept to targeted buyers

Positioning of the brand The positioning of the brand by the buyers in the market target

FIG 1.3 The Positioning process

Market

Target


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FIG. 1.4 Positioning Strategy Development Process

3.Marketing Planning Program Development

Product decisions

Pricing Decisions

Channel of distribution decisions

Promo decisions: Advertising, DM, Sales promo, PR, Personal Selling

Identify the competitors

Assess perceptions of them

Determine their position

Analyze consumer preferences

Monitor the position

Make the positioning decision


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Promotional strategies: push or pull?

Most of us are aware of advertising and other forms of promotion directed towards ultimate

consumers or business customers. We see these ads in the media and are often part of the

target audience for the promotions. In addition to developing a consumer marketing mix, a

company must have a program to motivate the channel members. Programs designed to

persuade the trade to stock, merchandise, and promote a manufacturer‟s products are part of a

promotional push strategy. A push strategy tries to convince resellers so they can make a

profit on a manufacturer‟s product and getencouragement in order to merchandise and push it

through to their customers. Sometimes manufacturer face resistance from channel members

who do not want to take on an additional product line or brand. In these cases, companies may

turn to a promotional pull strategy, spending money on advertising and sales promotion

efforts directed towards the ultimate consumer.

4. Target market: the outcome of segmentation analysis reveals the target market. Once the

target market is selected, marketing program decisions are made for contributing to overall image

of the product or brand. This target market becomes the focus of the firm‟s marketing effort, and

goals and objectives are set according to where the company wants to be and what it hopes to

accomplish in this market.To this point we have discussed the various elements of the marketing

plan that serves as the basis for the IMC program. The development and implementation of an

IMC program is based on a strong foundation that includes market analysis, target marketing and

positioning, and coordination of the various marketing- mix elements.

References:

George E Belch, Micheal A Belch &keyoorpurani, “ Advertising and promotion- An Integrated

Marketing communications perspective” Tata McGraw Hill education pvt. Ltd. N.D. 7th.ed. 37 to

42

Diane Brady, “Making Marketing Measure Up” Business Week 2004

Debbie Howell, “Today‟s Consumers More Open to Try New Brands” “DSN Retailing Today

“2004

Kenneth E. Clow& Donald Baack, “Integrated Advertising, Promotion, and Marketing

Communications.” Pearson 2009 3rd

ed

Sawyer, Alan G “The Effects of Repetition of Reputational and Supportive Advertising Appeals”,

Journal of Marketing Research 10 (February 1973), pp 23-37;

Szybillo G J, and Heslin Richard, “Resistance to Persuasion: Inoculation Theory in a Marketing

Context,” Journal of Marketing Research 10 (November 1973), pp 396-403.

Kruti Shah and Alan Dsouza, IMC: An integrated Marketing Communication McGraw Hill,

20091st edition, Pg 341.

George E Belch & Michel E Belch &KeyoorPurani, Advertising and Promotion: “An Integrated

Marketing Communication Perspective” McGraw Hill, 2010 7th edition, pp25 to 35


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www .mountaindew.com; Hillary Chura. "Pepsi-Cola‟s Code Red is White Hot." Advertising

Age, August 27, 2001, p. 1

Chapter 2

One –Voice Communication vs. IMC

Objectives:

1.To know the real challenges of IMC to make sure those tools are consistently executed.

2.To identify obstacles to implementing IMC.

One –Voice Communication

Typically, when people refer to an integrated communication strategy, they are referring to integrated

advertising. Integrated advertising is the one look, one voice concept, where all of the advertising

material and messages have a common look, feel and message. This is certainly one aspect of

integrated marketing communication (IMC), but IMC goes much further to permeate every planned

and unplanned communication at every contact point where the customer or prospect may receive an

impression of the company.

As consumers increasingly being to be addressed by the same marketer in variety of different ways

(through 5 tools of promotion)-there is a need to ensure a consistency of positioning of message, and

tone across these different media. These different communications must reach consumers with one

voice. All of these communications tool work better if they work together in harmony rather than in

isolation, Their sum is greater than their parts- provided they speak consistently with one voice all the

time, every time.

During its early development, IMC purpose was to coordinate marketing communications, using one-

voice, one-look strategies to ensure consistency among the various marketing communication

function.

Today, the increasing use of database and relational information, as well as the development of

Internet and use of websites have made it possible to know customers better and approach the ideal of

one-to-one, interactive communication.IMCrequires maintaining a consistent and clear images as well

as controlling marketing position, message and theme by guiding them into the same direction via

different marketing communication tools.

IMC is a process, not an event. It is an all-encompassing strategic and tactical approach to every facet

of your marketing communication including mass media advertising, niche market advertising,

interactive marketing, direct response and direct mail, events, promotions, PR, in store displays,

packaging, distribution methods, pricing strategy, store locations, employee uniforms and dress codes,

sales approach, database marketing, contact management, follow-up systems, corporate


20

communication, corporate mission statement, cause related or mission marketing and relationship

marketing.

Based on the several definitions of Integrated Marketing Communications discussed above, there are

unsurprisingly several factors to keep in mind while implementing IMC. Restating, the goals of IMC

are (i) creating and presenting a unified "Marketing Personality" through whom you communicate

with your customers and (ii) coordinating various sales and marketing activities for maximum impact.

Integrated Marketing Communications is a simple concept. It ensures that all forms of

communications and messages are carefully linked together. Though consumers are addressed by the

same marketer in a variety of different ways through advertising, public relations, direct marketing,

sales promotion, point –of –purchase etc, there is need of ensuring a consistency of positioning,

message and tone across these different media. The mission of all of these communications tools is

they work better if they work together in harmony rather than in isolation. Their sum is greater than

their parts - providing they speak consistently with one voice all the time, every time.

This is enhanced when integration goes beyond just the basic communications tools. There are other

levels of integration such as Horizontal, Vertical, Internal, External and Data integration. Here is how

they help to strengthen Integrated Communications.

Horizontal Integration

Sales and marketing is not the only prerogative of just the Sales and Marketing departments. Every

department within a company should be arranged around building value and creating customers.

Horizontal Integration occurs across the marketing mix and across business functions. for example,

production, finance, distribution and communications should work together and be conscious that

their decisions and actions send messages to customers.

While different departments such as sales, direct mail and advertising can help each other through

Data Integration. This requires a marketing information system which collects and shares relevant

data across different departments.

Vertical Integration means marketing and communication objective must support higher level

objectives and mission. Ideally, CEO, VPs, Directors, Managers and frontline employees should all

be enabled to postulate your message and connect it to the various needs and benefits of peers

within the customer organization as well as corporate objectives.

Internal Integration requires internal marketing - keeping all staff informed and motivated about

any new developments from new advertisements, to new corporate identities, new service

standards, new strategic partners and so on. Within the Marketing Department itself it is vital to

make everybody harmonized. Product Marketing, Field Marketing, Corporate Marketing, Event

Marketing and other marketing disciplines should not work in same direction but rather in a

coordinated way that fosters the exchange of ideas and creates new synergies.

External Integrationrequires external partners such as advertising and PR agencies to work

closely together to deliver a single seamless solution - a cohesive message - an integrated message.

Data IntegrationWorking upon earlier point, a major facet of IMC in any shape or form is making

sure that all players have access to the same customer and marketing data. As newer customer data is

collected and as the marketing message and new initiatives are refined and developed, employees

and partners should have access to the latest data via your CRM or other centralized data system.


21

Benefits of IMC

-It starts with customer or prospect.

-Brand managers and their agencies should be amenable using various marketing communication

tools. Example, brand manager of P&G placed TIDE detergent logo on napkin dispensers in a pizza

shop.

-IMC also increases profits through increased effectiveness. At its most basic level, a unified message

has more impact than a disjointed myriad of messages. In a busy world, a consistent, consolidated and

crystal clear message has a better chance of cutting through the 'noise' of over five hundred

commercial messages which bombard customers each and every day.

References

Geroge Belch, MichaelBelch, and KeyoorPurani, “Advertising &Promotion – an Integrated Marketing

Communications Perspective” Tata McGraw Hill pvt. Ltd 7th ed. 2010

Kruti Shah & Alan DSouza, “Advertising and Promotions”Tata McGraw Hills Delhi ed. 2009.

Donath, Bob, "Putting the Customer into New Products," ISBM Insights, 5 (May), (The Smeal

College of Business Administration, Penn State) 1995

Duncan, Tom and Sandra E. Moriarty, "A Communication-Based Marketing Model for Managing

Relationships." Journal of Marketing, 1998

Kenneth E. Clow& Donald Baack, “Integrated Advertising, Promotion& Marketing communications”

Pearson 3rd

ed.2009.

Hoyer, Wayne D., J. Jeffrey Inman and leigh McAlister "Promotion Signal: Proxy for Price Cuts?"

Journal of Consumer Research, (1990),

Kaatz, Ron, “Advertising & Marketing Checklists”. Lincolnwood: NTC Business Books. 1995


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Chapter –3

I NTEGRATED MARKETING TOOLS

Objectives:

1. List and describe each elements of the promotional mix.

2. Characterize the various forms of sales promotion.

3. Describe the purpose of public relations.

4. Characterize the tools used to implement PR objectives.

5. Discuss how personal selling can be used effectively in the promotion mix.

IMC TOOLS:-

(IMC) is to synergize and start integrating all the communication modes in order to be more

competitive in the market place. The important tools of Integrated Marketing Communications are:

1. Advertising

Advertising is the most glamorous and elaborate of all marketing tools. Advertising is big

business.Wordwide companies spend $500 billion is spent annually on advertising over the world and

that‟s just for media time and space! If we add in all, the costs of producing the advertisements and

the salaries of people working in the industry, the amount of advertising is well over $1 trillion a year.

Advertising means different things to different people. It‟s a business, an art, an institution and a

cultural phenomenon. To a CEO of a multinational corporation, advertising is an essential marketing

tool that helps create a brand awareness and loyalty and stimulates demand. To a local restaurant

owner, advertising is a way to communicate to the neighbourhood. To an art director in an ad agency

advertising is the creative expression of a concept. To a media planner, advertising is a way marketer

uses the mass media to communicate to current and potential customers.

Advertising includes an attempt to persuade. To put it bluntly, advertisements are communication

designed to get someone to do something. Even an advertisement with the stated objective of being

purely informational has persuasion at its core. The advertisements informs the consumer for some

purpose, and that purpose is to get the consumer to like the brand and because of that liking to

eventually buy the brand. In the absence of this persuasive intent, a communication might be news,

but it would not be advertising.

A company like Procter and Gamble which makes Tide detergents, Pampers diapers and hundreds of

other products spent $ 3.5 annually on U.S television, magazines, newspaper and online advertising.


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Features of Advertising

American Marketing Association has defined advertising as “any paid form of non-personal

presentation and promotion of ideas goods and services of an identified sponsor”. This definition

reveals the following features of advertising:

1. It is a paid form of communication. Advertisements appear in newspapers, magazines,

television or cinema screens because the advertiser has purchased some space or time to

communicate information to the prospective customers.

2. It is non-personal presentation of message. There is no face-to-face direct contact with the

customers. That is why; it is described as non-personal salesmanship. It; is a non-personal

form of presenting products and promoting ideas and is complementary to personal selling. It

simplifies the task of sales-force by creating awareness in the minds of potential customers

3. The purpose of advertising is to promote idea about the products and service, of a business.

It is directed towards increasing the sale of the products and services of a business unit.

Advertisement is issued by an identified sponsor.Non disclosure of the name of the sponsor in

propaganda may lead to distortion, deception and manipulation. Advertisement should disclose or

identify the sources of opinions and ideas it presents.

Objectives of Advertising

The fundamental purpose of advertising is to sell something – a product, a service or an idea. In

addition to this general objective, advertising is also used by the modern business enterprises for

certain specific objectives which are listed below:

1. To introduce a new product by creating interest for it among the prospective customers.

2. To support personal selling programme. Advertising maybe used to open customers‟ doors for

salesman.

3. To reach people those areinaccessible to salesman.

4. To enter a new market or attract a new group of customers.

5. To bring competition in the market and to increase the sales as seen in the fierce competition

between Coke and Pepsi.

6. To enhance the goodwill of the enterprise by promising better quality products and services.

7. To improve dealer relations. Advertising supports the dealers in selling he product. Dealers

are attracted towards a product which is advertised effectively.

8. To warn the public against imitation of an enterprise‟s products.

Functions of Advertising

Advertising has become an essential marketing activity in the modern era of large scale production

and serve competition in the market. It performs the following functions:

Promotion of Sales. It promotes the sale of goods and services by informing and persuading

the people to buy them. A good advertising campaign helps in winning new customers both in

the national as well as in the international markets.

Introduction of New Product. It helps the introduction of new products in the market. A

business enterprise can introduce itself and its product to the public through advertising. A


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new enterprise can‟t make an impact on the prospective customers without the help of

advertising. Advertising enables quick publicity in the market.

Creation of Good Public Image. It builds up the reputation of the advertiser. Advertising

enables a business firm to communicate its achievements in an effort to satisfy the customers‟

needs. This increases the goodwill and reputation of the firm which is necessary to fight

against competition in the market.

Mass Production. Advertising facilitates large-scale production. Advertising encourages

production of goods in large-scale because the business firm knows that it will be able to sell

on large-scale with the help of advertising. Mass production reduces the cost of production

per unit by the economical use of various factors of production.

Research. Advertising stimulates research and development activities. Advertising has

become a competitive marketing activity. Every firm tries to differentiate its product from the

substitutes available in the market through advertising. This compels every business firm to

do more and more research to find new products and their new uses. If a firm does not engage

in research and development activities, it will be out of the market in the near future.

Education of People. Advertising educate the people about new products and their uses.

Advertising message about the utility of a product enables the people to widen their

knowledge. It is advertising which has helped people in adopting new ways of life and giving-

up old habits. It has contributed a lot towards the betterment of the standard of living of the

society.

4. Support to Press. Advertising provides an important source of revenue to the publishers and

magazines. It enables to increase the circulation of their publication by selling them at lower

rates. People are also benefited because they get publications at cheaper rates. Advertising is

also a source of revenue for TV network. For instance, Doordarshan and ZeeTV insert ads

before, in between and after various programmes and earn millions of rupees through ads.

Such income could be used for increasing the quality of programmes and extending coverage.

Various Advertising Mediums and its Selection Criteria

A manufacturer or a trader can make use of the following advertising media to spread his message to

the people : (i) Press advertising, (ii) Outdoor advertising, (iii) Film advertising, (iv) Radio

advertising, (v) Television advertising, (vi) Direct mail advertising, (vii) Display advertising, and

(viii) Specialty advertising: The merits and demerits of these media are discussed below.


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Courtsey to www.google.com

1. Press Advertising or Print Media

Press advertising, i.e. advertising through newspapers, magazines, journals, etc. is commonly used by

modern businessmen- It may be noted that advertising is an important source of finance for the press

or print media. Because of advertisements, the subscribers get newspapers and periodicals at

subsidized rates.

Newspaper Advertising. Newspaper reading is a common habit among most of the educated people.

Besides daily newspapers, there are bi-weekly and weekly newspapers also Newspapers reach almost

every place and are read by all kinds of people. Therefore, newspaper can be used as a medium of

advertisement with great advantage. While selecting a newspaper for this purpose, an advertiser has to

take into consideration the strength of circulation, the class of readers it serves, the geographical

region over which it is popular, and the cost of space.

Advertising through newspapers has the following merits:

A newspaper has large circulation and a single advertisement in a newspaper can reach a large

number of people-

Continuous advertisement is possible because newspaper is published daily. Art advertiser

can repeat his advertisement either daily or weekly,

Newspapers provide flexibility in advertising in the sense that advertisement campaign can be

initiated and stopped quickly One day‟s notice is sufficient for this purpose- Similarly,

advertising message can be changed promptly whenever needed.

Newspaper advertising has the following limitations:

The life of newspaper advertisement is very short. Moreover, people devote only insignificant

part of their day‟s time in reading the newspaper. Thus, advertisement: are likely to draw the

reader‟s attention only casually or marginally.

Newspaper advertisement is successful only when the people to be communicated the

message is literate.

Newspaper is scarcely used for coloured advertisement. The advertisements are generally

printed in black and white. This makes the identification of products more difficult.

Magazine Advertising. Magazine or periodicals are an excellent medium of advertisement when a

high quality of printing in colour is desired. Magazine advertisements can be directed towards a

particular class of people. . Thus, marketers can avoid wasteful expenditure on advertising.

Magazine advertising is considered to be superior to newspaper advertising because of the following

merits:

Magazines are read more carefully and at greater leisure. Advertising through magazines is

more effective.

The life of the magazine advertisements is longer. Magazines are preserved for a long period

of time and are read time and again.

2. Outdoor Advertising

Outdoor advertising has gained wide popularity these days. Its purpose is to attract the attention of the

people at busy roads and markets. It includes the use of poster displays, bill board displays and

electric or electronic displays.


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1. Poster Displays. Posters are fixed on walls of buildings, bridges, and other public places. It is

also quite common to write slogans and other message about the products in bold letters on

the walls to arrange the attention of the people even from a long distance. That is why, it is

also known as `Mural Advertising‟ . Mural advertising is frequently used to advertise fans,

fertilizers, tonics, beauty aids and other consumer items

2. Bill Board Displays. Painted or bill board displays involve the advertisements directly

painted on the boards meant for this purpose. They are quite big in size and are fixed at

outstanding locations like busy markets and crossings. They are also erected on tops of

bridges and important buildings.

3. Electrical Displays. Electrical display involves the use of electric electronic lights or neon

tubes to attract the attention of people, particularly during night. Generally, a short message is

illuminated in tubes of different colours so that it is conspicuous and attractive. Electrical

displays are fixed at heavy traffic consumer centres.

Vehicular Displays. It has become a fashion these days to use modes of public transport for

advertising.

Outdoor advertising has the following merits,

Outdoor advertising is highly flexible and is a low cost medium.

It is very useful for advertising consumer products because posters, etc. can be displayed at

various crowded centres.

Outdoor advertisement attracts quick attention and requires very less time and effort on the

part of the readers. A complete picture of the product can be shown through outdoor displays.

Outdoor adverting is criticized on the following grounds:

It can‟t carry long messages as posters, hoardings, etc. are read bv the people at a glance,

It has a low retention value because people don‟t devote special time to read the message

It distracts the attention of the passers-by and may even c accidents on busy roads.

3. Film Advertising

Films are an important medium of advertisement. Business concerns usually get a short motion

picture prepared and distribute it to different cinema houses for displaying it before the

commencement of the regular shows or during the periods of intermission. Such films are

accompanied by running commentary to explain the features, uses and superiority of the product But

film advertisement, can be adopted only by the well-established firms. Since it involves high cost,

small business firms can get cinema slides prepared for display in the cinema halls.

The merits of film advertising are as under:

Film advertisement is very effective since it combines spoken words and visual presentation

of picture.

It helps in selective advertisement. A trader can advertise his products in the areas from where

he wants to attract the customers.

The demerits of film advertising are as under:

It is usually ignored by people when they are busy in talking.

Its effectiveness is limited as only a few people are present in the hall before the start of the

feature film and during the interval.


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4. Radio Advertising

Radio advertisements are gaining greater popularity these days. Advertisements are broadcast from

the transmitting stations of the commercial service of All India Radio and FM Radio and picked-up by

the receiving sets owned by the public. Radio advertisements are normally broadcast along with

popular programmes of music. Even the sponsored programmes of music, interviews and plays can be

broadcast over the radio.

Radio advertising has the following merits:

Radio advertisements carry an effective appeal and cover numerous listeners of different

tastes.

Radio advertisements reach the illiterate people who cannot read the newspapers and

magazines.

Radio provides selectivity (i.e. market segmentation) to some ex-tent because advertisements

can be included in different programmes meant for different types of people.

Radio advertisements are very much suitable for the promotion of mass-scale consumer

goods.

The demerits of radio advertising are as under:

Detailed message can‟t be announced over the radio, people may not remember the message.

It is non-visual. Thus, the usual impact of illustrating the products not possible.

Sometimes, the message is not understood properly by the listeners. Many people switch off

their radio sets when it is the time for commercials or advertisements.

5. Television Advertising

Television is the fast growing medium of advertisement because of huge expansion of electronic

media and cable network. It makes its appeal through both the eye and the ear. Products can be

demonstrated as well as explained as in film advertisement. Advertising may take the form of short

commercials and sponsored programmes.

T.V. advertising has all the merits of film advertising. It has greater effectiveness as the message is

conveyed at their homes to the people. Selectivity of message can also be achieved. Commercials may

be given during that time period when the prospective buyers are supposed to watch television

programmes.

T.V advertising has got all the demerits of film advertising. Television is a very costly medium of

advertisement and can be made use of by the well established companies only. Another limitation of

television advertisement is that once it is presented, its back reference is not possible.

6. Direct Mail Advertising

Direct mail is probably the most selective of all the advertising media. It is used to send the message

directly to the customer. For this purpose, the advertiser has to maintain a mall list which can be

expanded or contracted by adding or removing names from the list. But a severe limitation is posed by

the difficulty of getting and maintaining a good mailing list.

Advertisements that are sent by direct mail maybe in the form of circular letters, leaflet folders,

calendars, booklets and catalogues. Circular letters are sent to the prospective customers to inform

them about the merits of the product and to create their interest in the product. Booklets and

catalogues contain the information about the products advertised. Information about the terms of sale


28

and prices of different varieties of the product is given to the prospective customers through

catalogues.

Merits of direct mail advertising are as under:

Mail advertising has a personal appeal since it is addressed to a particular person.

It maintains secrecy in advertising. The competitors do not get the information about the

advertised material.

It gives flexibility in advertising. The message can be changed whenever the need arises. The

mailing list can also be revised whenever the need arises.

It gives an opportunity to the advertiser to provide detailed and illustrated information about

the product to the prospects.

It is the most selective medium of advertisement. The advertiser saves money also by

directing his advertisement to the selected people.

Demerits of direct mail advertising are given below:

The coverage of direct mail advertisement is limited.

It is not possible to get the names and addresses of all the prospects when the advertisement

material should be sent by mail.

Its effectiveness is doubtful as it does net create a mass appeal.

7. Window Display

Window display is an on sight method of advertising. Goods can be exhibited in artistically laid out.

windows at the shop fronts or at important busy centres like railway stations and bus stops. Large

show rooms are organized by big manufacturers and wholesalers in the main markets to advertise

their product; and attend to the queries of the prospective customers. The retailers also organize

attractive display of goods in the windows of their shops. Window displays are very popular with the

retailers since it helps in informing the customer about the types of goods available with them.

The main objective of window display is to draw the attention of the public and arouse their interest in

the products displayed. Almost all the manufacturers insist that their products should be displayed at

the retail shops. If a product is displayed properly at the point-of-purchase (FOP) by the customers, it

can attract many customers. Many people having no preference for a particular brand may discover a

particular brand quite appealing and attractive and may purchase it. Thus, window display creates the

demand for the product. Window display acts as silent salesman. In order to achieve the purpose of

window display, cleanliness and a well-furnished appearance for the window are essential. Articles

should be arranged in a systematic way and if possible price tags should also be attached with the

articles. It is better if window displays are changed regularly to make the customers look at the

displays every time they visit the shop.

8. Speciality Advertising

Many business firms (like Raymonds, Vimal, etc.) offer speciality articles to the present and

prospective customers. These articles may be diaries, pen holders, desk trays, key chains, purses,

paper weights, cigarette cases and calendars. The name and address of the advertiser is printed in or

inscribed on the speciality items. They also bear the brand name of the firm. Since these articles are of

daily use, they have greater capacity to remind their users about the brand name of the firm offering

such articles


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Publicity and Public Relations

2. Public Relations (PR)

Another component of organisations promotional mix is publicity/public relations. As a part of being

a good corporate and community citizen, a firm will use public relations (PR) as a way to create a

good image and reputation. Public relations is defined as a management function which identifies,

establishes, and maintains mutually beneficial relationships between an organization and the public‟s

upon which its success or failure depends. Whereas advertising is a one-way communication from

sender (the marketer) to the receiver (the consumer or the retail trade), public relations considers

multiple audiences (consumers, employees, suppliers, vendors, etc.) and uses two-way

communication to monitor feedback and adjust both its message and the organization's actions for

maximum benefit. A primary tool used by public relations practitioners is publicity. Publicity

capitalizes on the news value of a product, service, idea, person or event so that the information can

be disseminated through the news media. This third party "endorsement" by the news media provides

a vital boost to the marketing communication message: credibility. Articles in the media are perceived

as being more objective than advertisements, and their messages are more likely to be absorbed and

believed. For example, after the CBS newsmagazine 60 Minutes reported in the early 1990s that

drinking moderate amounts of red wine could prevent heart attacks by lowering cholesterol; red wine

sales in the United States increased 50 percent. Another benefit publicity offers is that it is free, not

considering the great amount of effort it can require to get out-bound publicity noticed and picked up

by media sources.

Public relation means communication that can foster goodwill between a firm and its many

constituent groups. These constituent groups include customers, stockholders, suppliers, employees,

government, entities citizen‟s actions groups and the general public.PR is used to highlight positive

events in an organization, such as quarterly sales and profits or noteworthy community service

programmes carried out by the firm. Conversely it is used strategically for damage control when

adversity strikes an organization. PR uses techniques like press releases, newsletters and community

events to reach the target audiences. PR is emerging as a more prominent tool in the promotional mix

of many firms. As mass media becomes cluttered with ads and as consumers retain a healthy sceptism

of advertising, public relations and communication are being viewed as an important addition to the

mix.

Objectives of PR:


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Within the broad guidelines of image building and establishing relationships with constituents, it is

possible to identify six primary objectives:

Promoting goodwill

Promoting a product or service

Preparing internal communications

Counteracting negative publicity

Lobbying

Giving advice and counsel.

Achieving goal.

public relations is an important marketing function in the present-day business environment. The total

process of building goodwill and securing a bright public image of the company called public

relations. It creates a favorable atmosphere for conducting business. There are four groups of public:

(I) customer, (2) shareholders (3) employees (4) the community. The marketers should have the best

possible relations with these groups. Public relation, complement advertising by creating product and

service credibility. Effective marketing communication is not without establishing and maintaining

mutual understanding between the company and its customers. The lubricant making the wheel of

marketing run smoothly is public relations. Bright image is created and maintained only by public

relations. That is why; modern business houses attach great significance to the public relations

activities.

Difference between Advertising and Publicity

Advertising differs from publicity in regard to the following points:

1. Paid/non-paid form: Advertisement is a paid form of communication. Its cost is borne by the

advertiser but publicity is any non-paid mention of an organization or its ideas or products in

the news Media. Publicity cannot be purchased in the usual sense of the term. Any institution

can come to the attention of the public by being newsworthy. It has not to pay anything for

the publicity, but has to supply the necessary information to the news media.

2. Identification of sponsored: Advertisement is issued by an identified sponsor. Publicity does

not need an identified sponsor

3. Control over message: In advertising, the advertiser exercises control over the type, size,

duration, and frequency of the message But in case of publicity, the control lies with the

publicity media.

Difference between Advertisement and Personal Selling

The points of distinction between advertisement and salesmanship are listed below;

1. Personal/Non-personal form: Advertising is a non-personal form of communication. There

is no contact between the advertiser and the buyer. But salesmanship means personal selling.

The salesman has face-to-face contact with the buyer.

2. Mass vs. Individual communication: Advertising is mass communication. It is addressed to

a large number of people. But salesmanship is individual communication. The impact of

salesmanship is visible on the buyer who comes into contact with the salesman.

Purpose: Advertisement may aim at enhancing the goodwill of the advertiser. It may have no

immediate purpose to sell the goods or services. But salesmanship always aims at effecting sales.


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3. Personal Selling (PS)

Personal selling is the presentation of information about a firm‟s product or services by one person to

another person or to a small group of people. Personal selling can be distinguished from all forms of

promotion in that it is the only one to one communication that can deliver a completely customized

message based on feedback from the receiver of the message. In other words, if you are in the

electronics shop considering the purchase of a DVD player, the salesperson can tell you about the

different brands and focus the message content on the features of each brand based on questions you

ask or information you request. No other form of promotion- not even the Internet can customize

messages in this way.

Personal selling is the dominant variable in the promotional mix of any corporate marketers. Complex

products and services, high purchase prices, and negotiated contracts warrant the customized

communication of personal selling. In business to business markets there are many instances where

advertising sales promotion and other promotional mix variables simply do not achieve the needed

communication effect. But this is not always the case in business to business sales.

Types of Personal Selling:

Order taking: This involves accepting orders for merchandise or scheduling services either in

written form or over the telephone. Order takers deal with existing customers who are lucrative to

the firm due to low cost f generating revenue this group. Order takers can also deal with new

customers which means that they need to be trained well enough to answer any new question a

new customer might have about product or services.

Creative Selling: This is the type of selling where customers rely heavily on the salesperson for

technical information, advice and service.

Team Selling: In this, a group of people from different functional areas within the organization is

assembled as a team to call on a particular customer. Sales teams are prevalent in the areas of

communication equipment, computer installations and manufacturing equipments.

Seminar Selling: This is designed to reach a group of customers, rather than an individual

customer, with information about the firm‟s products or services.

System Selling: This type of selling entails selling a set of inters related components that fulfill all

or a majority of a customer‟s need in a product or service area.

4. Sales Promotion (SP)

Sales Promotion is of four types:

Consumer sales promotion: Here the efforts are directed towards the customer. For example: price

discounts, freebies

Trade Promotion: These are basically done for distributors in order to push sales through margins

and discounts.

Business to business promotion: Here promotions are between two companies; one company may

offer bulk discounts on the purchase of raw materials in large supplies etc.

Sales person‟s promotions: Here the promotions are targeted to motivate the sale people working

for an organization. On achieving their targets, the sales person will win a free holiday or he‟ll

receive a non- monetary benefits, etc.

Sales promotion is the use of the incentive techniques that create a perception of greater brand value

among consumers, the trade and business buyers. The intent is to create a short term increase in sales


32

by motivating trail use and encouraging larger or repeat purchases. Free samples, coupons, premiums,

sweepstakes and contests, rebates and price discounts are some of the primary methods of sales

promotion in the consumer market.

Sales promotion may not seem as stylish and sophistication as mass media advertising, but

expenditures on this tool are impressive. It is important to realize that full advertising agencies

specializing in advertising planning, creative planning and media placement typically do not prepare

sales promotion materials for clients. These activities are normally assigned to sales promotion

agencies that specialize in couponing, vent management, premiums or other forms of sales promotion

that require specific skills and creative preparation. The rise in the use of sale promotion and the

enormous amount of money being spent on various programmes make it one of the most prominent

forms of marketing activity.

5. Direct Marketing (DM)

Direct marketing is an interactive system of marketing that uses one or more advertising media to

affect a measurable response and or transaction at any location. This definition distinguishes direct

marketing from other primary promotional tools in three ways:

Direct Marketing uses a combination of media: Any media can be used in a direct marketing, and a

combination of media is often used to increase effectiveness.

Direct Marketing is often used to elicit a direct response: An example of this would be getting the

message receiver to phone or mail in an order .Other forms of promotion like traditional advertising,

public relations or an event sponsorship are not designed to elicit immediate action.

The buyer‟s home, by mail or literally any place where the consumer can communicate with the

marketer.

Today the primary methods of direct marketing are direct mail, telemarketing, telephone sales

solicitation and direct response advertising in magazines, newspapers, and on television and radio.

Online ordering via the internet is another form of direct marketing and has come to known as „e-

commerce‟ because of the totally electronic communication between and buyers and sellers. E-

commerce is business conducted between buyers and sellers using electronic exchange media. E-

commerce is quickly emerging as a significant form of direct marketing. In addition, trade markets are

emerging where buyers in specific industries are creating e-market places to enhance the efficiency of

the exchange process.

References:

1)Kruti Shah & Alan D‟Souza “Advertising & Promotions – An IMC perspective” Tata McGraw

Hill education Pvt. Ltd., New Delhi. 2nd ed.

2) George E Belch, Michael A Blech&KeyoorPurani “An Integrated Marketing Communications

Perspective” 7th Edition, McGraw hill education pvt. Ltd., New Delhi. 2009 ed.


33

Case Study 1.

Vodafone Zoo Zoo 3G Campaign - Integrated Marketing Communication campaign

Private players in telecom industry entered in India in the early 1990s.Vadafone india,on acquiring

Hutch in mid-2007, aiming to become the largest mobile operatorinindia.Vodafone is on a roll. They

have been the highest gainer in terms of the people who have decided to port out of their existing

operator and switch to Vodafone. But as predicted earlier, MNP has not been a game changer. Less

than 1% of the total subscribers have decided to switch their operator. But this post is not about MNP,

it‟s about the 3G campaign featuring Vodafone India's brand ambassadors "The Zoo Zoo community"

and their hero "Zoo 3G". If the tales of Zoo Zoo weren't enough on television you will still not miss

the Zoo Zoo 3G avatar. If you fare high on the geek meter (a nerd like me), you'll catch him on

YouTube, Journal websites, Google ads and news portals. If you toil through the streets like a bus

driver or a rickshaw puller, you'll catch him on almost every second billboard. If you are a frequent

flier, you'll not miss on the airport. If you happen to be at the Delhi airport around this time, you'll see

a Zoo zoo city out there. Every aesthetically sound corner for advertising has a Zoozoo banner. And if

that's not enough, the community kids are spreading the most popular form i.e. Word-of-Mouth. The

important thing to note is that the whole campaign is "Integrated". The term IMC (Integrated

Marketing Communications) is literally engraved in all books and research papers on promotional

strategy, but sadly very few practitioners adopt it. Vodafone's 3G -ZooZoo campaign is an

immaculate example of an integrated marketing communication (IMC) campaign. If Coca-Cola gave

shape to the Santa, the future generations will remember Vodafone for ZooZoo.

About ZooZoos Campaign

In early 2009, Vodafone assigned the creation of an altogether new ad campaign to Ogilvy and

Mather India, which created Hutch commercials.O&M‟S executive creative director of south Asia,

Rajiv Rao was appointed to create unusual kind of Ad campaign for Vodafone inspired by the

animated characters for each value-added service of Vodafone. These ads were created by Ogilvy &

Mather, the agency handling Vodafone advertisements. They were shot by Nirvana Films in Cape

Town, South Africa. The egg headed white creatures with big ballooned bodies are characters

promoted by Vodafone since the second season of Indian Premier League (IPL).Ogilvy & Mather was

asked to create a series of 30 advertisements which could be aired each day during the IPL Season 2.

They are used to promote various value added services of Vodafone. Although they look animated,

they are actually humans in wearing "ZooZoo" costumes. The Idea was conceived by Rajiv Rao, the

national creative director at Ogilvy India. The characters were named ZooZoo because Rajiv and his

team "wanted something that sounded cute, lovable and a bit mad like the characters”. Rajiv also

"wanted to make real people look as animated as possible".

The character


34

The ZooZoos are thin small-bodied women covered in layers of fabric. Each facial expression of the

character is made of rubber and pasted on the actors to reduce the time and cost for shoot. The effect

was achieved by a variety of methods including reducing the footage frame-rates, using the right

material for the body suits to ensure a wrinkle free outer layer when the characters moved, and

keeping backgrounds simple in terms of detailing colour (grey). The sets were made larger than life to

make the characters look smaller. The whole of first series was shot in a record time of 10 days.

ZooZoo ad campaign also won the PETA (People for Ethical Treatment of Animals) glitter box award

for replacing the pug (remembers Hutch) with ZooZoo (considered to be a more humane alternative).

The toughest task was designing the costume and artwork that would create an illusion of animation

in every part of the Ad, including movements, gestures, speech and emotions. It nearly took three

weeks of pre-production to finalise the costumes of ZooZoos and the design that facilitated all

movements was selected. Therefore the costume was made of fabric and form. The total cost on

making the Zoo Zoo ads was rs 2.5 billion.

The Zoo Zoo impact

The response by Indian audience was phenomenal. Although experts claim that the ads did not

achieve the target of increasing VAS usage. ZooZoos have become a brand in themselves with Zoo

Zoo T-shirts and other accessories being sold at retail chains apart from thousands of visits to their

YouTube advertisements and over 2 million fans on Facebook pages.As expected by Vodafone the

Zoo Zoo campaign stood as a successful endeavour making the company establish maximum brand

Presence.

Zoo Zoos popularity increased by each day due to its much closeness to the human world. They

looked Alien, but the commercial featuring them showed that they live in a world similar to that of

humans --feel emotions, laugh aloud, feel pain-thus placing them in between the reality and animated

world.

As the IPL season was crowd –puller, it was seen as a ground for a dog –fight among the deep pocket

advertisers. And VAS spaceThese ads were created by Ogilvy & Mather, the agency handling

Vodafone advertisements. They were shot by Nirvana Films in Cape Town, South Africa.was main

potential cash cow for Indian mobile operators.

Exercise

Q 1 What was the Objective of Vodafone in this Campaign?

Q 2 Whether the objective achieved?

Q 3 Whether Vodafone Integrated the Communication Campaign? If Yes How? If No Why?

https://lh3.googleusercontent.com/--80U6ThgetQ/TYfvLlJNtZI/AAAAAAAABPM/T0M3A7PJ6V4/s1600/zoozoo+3g+marketing+communication.gif


35

Q 4 Compare Vodafone‟s Campaign with IMC.

Courtesy ; www.iupindia.com

CASE STUDY-2

BARACK OBAMA

Barack Obama, the 44th President of the US, used integrated marketing communications (IMC) to

win the 2008 US Presidential elections. For the first time in the history of the US Presidential

Elections, the Internet was used widely and effectively for both campaigning and fund raising

purposes. Obama also used the traditional methods of marketing which accounted for 50% of his fund

rising. The case shows how Obama carefully tailored his campaign by targeting people of different

age groups, communities, and professionals systematically to achieve success in the elections. Obama

tapped the growing community of people who preferred the Internet and mobile phones to television.

Other G7 countries had in the past tried to use the Internet as a tool for campaigning but it was not

used as effectively and consistently in the past, according to experts

Introduction

Every country follows its own procedure to elect its head of state. Under the US Constitution, the

Presidential Election is an indirect one. Voters cast ballots for an electoral college, which in turn

elects the President and the Vice-President. The two parties involved in the election are the

Democratic Party and the Republican Party. The US presidential election of 2000 was the first time

that the Internet had been used as a campaign tool for online fundraising with e-mail and websites

being used to reach out to voters. And it was John McCain, the senator from Arizona, who first raised

a large sum of money through the Internet while contesting for the Republican presidential

nomination.The main contestants from the two parties in the 2008 election were Obama, a senator

from Illinois, Hillary Rodham Clinton (Hillary), a senator from New York (and wife of former

President, Bill Clinton), and John Edwards (Edwards) of the Democratic Party and John McCain

(McCain), a senator from Arizona, Mike Huckabee (Huckabee), and Mitt Romney (Romney) for the

Republican Party. Edwards, Huckabee, and Romney later withdrew from the contest

Barack Obama

Obama was elected to the U.S. Senate on November 2, 2004, after serving 7 years as an Illinois state

senator. He's the author of two best-selling books. Obama was named by Time magazine in 2005,

2007 and 2008 as one of the 100 most influential people in the world.Barack Obama is an

independent-minded leader with an even-keel temperament, charismatic speaking skills and a knack

for consensus-building. He's also a talented, introspective writer. His values are strongly shaped by

his expertise as a Constitutional law professor and civil rights attorney, and by Christianity. While

private by nature, Obama mingles easily with others, but is most comfortable addressing large crowds.

Obama is known for being unafraid to speak and hear hard truths when necessary. Although armed

with shrewd political sensibilities, he's sometimes slow to recognize viable threats to his agenda.


36

Internet & technology for campaign

On Tuesday, November 4, 2008, Democratic Senator, Barack Hussein Obama (Obama), was elected

as the first African-American President of the United States of America. The opening lines of his

victory speech at Grand Park, Chicago, Illinois, were, "If there is anyone out there who still doubts

that America is a place where all things are possible, who still wonders if the dream of our founders is

alive in our time, who still questions the power of our democracy, tonight is your answer."

4 Analysts believed that 2008 had been a historical election for two reasons: 1) Obama was the first

African American to be elected President of the country and 2) The Internet had been used

extensively as a campaigning tool. Never in the history of the presidential elections of the US

Experts felt that Obama had revolutionized election campaigning by using this unconventional and

economic method of marketing. He tapped social media both for raising funds and for campaigning.

He made his supporters campaign for him by allowing them to sign up in his website and get phone

numbers of people whom they could call and talk to. In this way, he changed the task of supporters

and made them campaigners on the web.

The consistency with which he publicized his personal information uniformly on all his websites and

also targeted specific information at individual websites, depending on the age groups of the people,

the communities they belonged to, and also what religious backgrounds or professional backgrounds

they belonged to, caught the imagination of analysts. The information contained in each of the

websites was different and that lent a personal touch to them and also added to his credibility.

He managed to get the attention of the younger generation, a segment that was ignored by other

candidates as a group of people who could not contribute funds. This group of people, who also were

the main users of the Internet, got involved in the elections, campaigned for Obama, and also

surprised analysts by turning up in large numbers to vote.

They also contributed small sums which added up to a substantial amount for the campaign, thanks to

the sheer number of contributors. Obama also had a dedicated website called "FighttheSmears" with

the sole aim of addressing and combating any false accusations about himself as and when they

appeared. The entire campaign was well structured to project a consistent image of Obama and every

action taken by the campaigners was well thought out. Experts believed that Obama used the Internet

with skill, efficiency, and care and his labour had borne fruit in the form of his victory. David Plouffe,

Obama's campaign manager, was the one who maintained all campaign communications and kept a

tab on information releases.

In his acceptance speech, Obama said, "To my campaign manager David Plouffe, my chief strategist

David Axelrod, and the best campaign team ever assembled in the history of politics - you made this

happen, and I am forever grateful for what you've sacrificed to get it done."

Obama ended his victory speech with the following words: "This is our time, to put our people back

to work, and open doors of opportunity for our kids; to restore prosperity and promote the cause of

peace; to reclaim the American dream and reaffirm that fundamental truth, that, out of many, we are

one; that while we breathe, we hope. And where we are met with cynicism and doubts and those who

tell us that we can't, we will respond with that timeless creed that sums up the spirit of a people: Yes,

we can. Thank you. God bless you. And may God bless the United States of America".Analysts felt

that Obama's innovative campaign had not only helped overcome some potentially debilitating

barriers on his way to the White House, but also firmly established him as a strong brand.

Results


37

Finally The Democrats won the November 4 election with Obama as the President elect and Biden as

his vice-president elect. Obama, the 44th President of the US, made history when he was elected the

first African American President of the country. Experts felt that along the way, he had caught the

collective imagination of the nation as well as earned respect in the global arena.

Influence was so much that lawyers in the White House were mulling copyrighting 'Brand Obama' to

curb misuse of the brand to promote goods, etc., considering the global fascination for the US's first

African American President. According to marketing expert John Quelch, the campaign was nothing

short of a "case study in marketing excellence".8 At the same time, analysts were keeping a close

watch to see to what extent (and in what ways) Obama would fulfil his pre-election promise of

remaining in touch with the people.

Questions:

1. What efforts were made by Barack Obama to reach the mass people?

2. Analyze the strategies adopted by Barack Obama for elections?

3. Analyze how Barack Obama used the new media effectively in his election campaign

4. How integrated marketing communications can be used effectively

Courtsey : www.europeanbusinessreview.com

http://www.icmrindia.org/casestudies/catalogue/marketing/Barack%20Obama%20Strategy.htm#8a


38

3. Case Study – Horlicks vs. Complan

Abstract This case is about the advertising war between two popular health drink brands Horlicks

and Complan in India. The war for supremacy between these two brands started as early as in 1960s

and had continued ever since. Over the years, the brands were involved in aggressive comparative

advertising in print and television over attributes such as ingredients, protein content, growth, and

flavors. However, in late 2008, the makers of Horlicks, GlaxoSmithKline Consumer Healthcare

(GSK), and the makers of Complan, Heinz India (Heinz), came out with advertisements that directly

compared the brands using the competitor brand's trademarks. Industry observers felt that in their bid

to outdo each other, the two companies had ended up denigrating the competitor brand.

Usually issues related to disparaging ads by rival companies were resolved by the Advertising

Standards Council of India (ASCI). But with constant mudslinging at each other, the two companies

decided to solve the issue in courts. In September 2008, Heinz moved the Bombay High Court

objecting to the Horlicks ad, while in December 2008, GSK approached the Delhi High Court against

the Complan ad.

Keywords

Marketing communication, Advertising, Comparative advertising, Ethics, Legal, Health drinks

market, Horlicks, Complan , GlaxoSmithKline, Heinz

Background Note

Horlicks was invented by William Horlick (William) and his brother James Horlick (James) (1844-

1921) in 1873. The brothers belonged to Gloucestershire, England. James was a chemist and worked

for a company which made dried baby food. Complan, owned by the Heinz Company, was one of the

most popular health drinks in India. The name Complan was coined from the words "COMPLETE"

and "PLANNEEd". Complan was introduced by Glaxo Laboratories (Glaxo) in the UK during World

War II (1939-1945), as an essential nutritional supplement for soldiers at the frontlines.

According to analysts, until the 1990s, Horlicks was the more aggressive player in the health drink

market compared to Complan. While Horlicks introduced a series of variants aimed at the family

segment and promoted its products well, Complan lay low on the promotional front, with its ads just

focusing on the "extra growth" attribute.

The Fight for the Indian Health Drink Market Turns Ugly

In late 2008, a legal battle broke out between GlaxoSmithKline Consumer Healthcare (GSK) and

Heinz India (Heinz) over the advertisements of their respective health drinks Horlicks and Complan.

The advertisements talked about how their respective brand was better than the other and showed the

competitor's product in bad light when compared to the company's products. In September 2008,

Heinz moved the Bombay High Court objecting to advertisements of Horlicks which highlighted the

nutritional content and price gap between the two brands, and showed Horlicks as a better and more

inexpensive health drink than Complain.

The advertisement showed the competitor brand clearly while making the comparison. Heinz later

followed up with its own ad comparing Horlicks unfavorably with Complan. This prompted GSK to

file a case in the Delhi High Court in December 2008 claiming that the ad released by Heinz

disparaged its brand by calling it low priced, and thereby damaging its reputation.


39

Horlicks and Complan were popular health drinks in Indian households. The estimated Rs. 18 billion

health drinks market in India was growing at an annual rate of 20% as per AC Nielsen data. As of

2008, GSK was the market leader in the health drink category in India with a share of 55%, while

Complan's market share was about 14%.

Experts felt that the latest tiff between GSK and Heinz had brought to the fore the issues and

challenges involved in comparative advertising and the legal/ethical issues involved in such kind of

advertising.

Questions:

1.Analyze the advertising strategies adopted by Complan and Horlicks over the years?

2.What issues and challenges are faced by companies while using comparative advertising?

3.Examine the efficacy of comparative advertising in enhancing brand image and sales?

4.Study the implications of the advertising war between Complan and Horlicks?

5.Discuss and debate the legal/ethical issues involved in the case?

Courtsey :http://www.icmrindia.org/casestudies/icmr_case_studies.htm


40

Compiled by Prof.Tushar M Bhavsar

B.E(Chemical),MBA(Marketing),PhD(Pursuing)

Summer Institute of Management

MBA College,

Himatnagar

Chapter 4-Organizing for Advertising and Promotion: The Role of Ad Agency and Other

Marketing Communication Organizations

Objectives:

1. To explain the role and functions of specialized marketing communications organizations.

2. To examine various perspectives on the use of integrated services and responsibilitiesof

advertisers versus agencies.

3. To understand how companies organize for advertising and other aspects of integrate marketing

communications.

4. To examine methods for selecting, compensating and evaluating advertising agencies.

Introduction:

To be able to do this effectively requires the co-ordination of various specialized disciplines, such as

packaging communications, direct marketing, sales promotion, event marketing, interactive marketing

etc. While we shall discuss each of these specialized areas separately, at this point it is important to

recognize that coordination of all these activities is extremely important in a communications

campaign.

These activities, often termed "below the line" activities, as opposed to advertising which is

considered to be above the line", are often termed as integrated marketing services.

The evolution of modern advertising as we know it, began somewhere around the mid nineteenth

century. Volney Palmer in the USA is credited to being the first advertising agent, who set up the first

advertising agency ever. He merely acted as commission agent, collecting ads from the advertising

agent, and releasing them in the print media. Over the Years the advertising agency evolved to include

functions that would improve the look and feel of the ad, bring in appropriate expertise to decide on

the right choice of media and letter develop better communication strategies through the development

of better consumer insights.


41

Today, The Standard Advertising agency Format has seen several changes and most large agencies

today attempt to develop capabilities in the area of integrated marketing services, in the found belief

that advertisers would prefer multiple services under one umbrella.

This chapter examines the various organizations that participate in the IMC process, their roles and

responsibilities, and their relationship to one another. We discuss how companies organize internally

for advertising and promotion. For most companies, advertising is planned and executed by an outside

ad agency. Many large agencies offer a variety of other IMC capabilities, including public relations,

Internet/interactive, sales promotion, and direct marketing. Thus, we will devote particular attention to

the ad agency's role and the overall relationship between company and agency.

Other Participants in the promotional process (such as direct-marketing, sales promotion, and

interactive agencies and public relations firms) are becoming increasingly important as more

companies take an integrated marketing communications approach to promotion. We examine the role

of these specialized marketing communications organizations in the promotional process as well. The

chapter concludes with discussion of whether marketers are best served by using the integrated

services of one large agency or the separate services of a variety of communications specialists.

(1) Participants in the Integrated Marketing Communications Process

The advertisers, or clients, are the key participants in the process. They have the products, services,

or causes to be marketed, and they provide the funds that pay for advertising and promotions. The

advertisers also assume major responsibility for developing the marketing program and marking the

final decisions regarding the advertising and promotional program to be employed. The organization

may perform most of these efforts itself, either through its own advertising department or by setting

up an in-house agency.

Advertiser

(client)

Advertising

agency

Media

organizations

Collateral

Services

Marketing

Communication

specialist organizations

direct-marketing

agencies Sales promotion

agencies Interactive

agencies Public relations

firms


42

However, many organizations use advertising agency, an outside firm that specializes in the creation,

production, and/or placement of the communications message and that may provide other services to

facilitate the marketing and promotions process. Many large advertisers retain the services or a

number or agencies, particularly when they market a number of products. For example, Kraft Foods

uses as many as eight advertising agencies for its various brands, while Procter & Gamble uses five

primary ad agencies and two major media buying services companies. Many large companies often

use additional agencies specialize in creating ads for specific ethnic markets. For example, in addition

to its primary agency of record, Toyota Motor Corporation uses three additional agencies in the

UnitedState to create ads for the African-American, Hispanic, and Asian-American markets. More

and more, ad agencies are acting as partners with advertisers and assuming more responsibility for

developing marketing and promotional programs.

Media organizations are another major participant in the advertising and promotions process. The

Primary function of most media is to provide information or entertainment to their subscribers,

viewer, or readers. But from the perspective of the promotional planner, the purpose of media is to

provide an environment for the firm's marketing communications message. The media must have

editorial or program content that attracts consumers so that advertisers and their agencies will want to

buy time or space with them. While media perform many other functions that help advertisers

understand their markets and their consumers, a medium's primary objective is to sell itself as a way

for companies to reach their target markets with their messages effectively.

The next groups of participants are organizations that provide specialized marketing

communications services. They include direct-marketing agencies, sales promotion agencies,

interactive agencies, and public relations firms. These organizations provide service in their areas of

expertise. A direct response agency develops and implements direct-marketing programs, while sales

promotion agencies develop promotional programs such as contests and sweepstakes, premium offers,

or sampling programs. Interactive agencies are being retained to develop websites for the Internet and

help marketers as they move deeper into the realm of interactive media. Public relations firms are

used to generate and manage publicity for a company and its products and services as well as to focus

on its relationships and communications with its relevant publics.

The final participants are those that provide collateral services, the wide range of support functions

used by advertisers, agencies, media organizations, and specialized marketing communications firms.

These individuals and companies perform specialized functions the other participants use in planning

and executing advertising and other promotional function

.


43

(2) Organizing for Advertising And Promotion In The Firm:

(2.A) The Centralized System

In many organizations, marketing activities are divided along functional lines, with advertising placed

alongside other marketing functions such as sales, marketing research, and product planning, as

shown in below figure. The Advertising manager is responsible for all promotions activities except

sales (in

The Advertising Department under a Centralized System.

President

Some companies this individual has the title of Marketing Communications Manager). In the most

common example of a centralized system, the advertising manager controls the entire promotions

operation including budgeting, coordinating creation and production of ads, planning media

schedules, and monitoring and administering the sales promotions program for all the company's

products or services.

Basic functions the manager and staff perform include the following:

Planning and Budgeting The advertising department is responsible for developing advertising and

promotions plans that will be approved by management and recommending a promotions program

based on the overall marketing plan, objectives, and budget.

Administration and Execution The manager must organize the advertising department and supervise

and control its activities. The manager also supervises the execution of the plan by subordinates

and/or the advertising agency. This requires working with such departments as production. media, art,

copy and sales promotion. If an outside agency is used. the advertising department is relieved of much

of the executional responsibility; however, it must review and approve the agency's plans.

Production

Finance Marketing Research

and

developme

nt

Human

resources

Marketing

research

Advertising Sales Product

planning


44

Coordination with other Departments The manager must coordinate the advertising department's

activities with other departments, particularly those involving other marketing functions. For example,

the advertising department must communicate with marketing research and/or sales to determine

which product features are important to customers and should be emphasized in the company's

communications.

Coordination with Outside Agencies and Services Many companies have an advertising department

in house but still use many outside services. For example, companies may develop their advertising

programs in-house while employing media buying services to place their ads and/or use collateral

services agencies to develop brochures, point-of-purchase materials, and so on. The department serves

as liaison between the company and any outside service providers and also determines which ones to

use. Once outside services are retained, the manager will work with other marketing managers to

coordinate their efforts and evaluate their performances.

(2.B) The Decentralized System

In large corporations with multiple divisions and many different products, it is very difficult to

manage all the advertising, promotional, and other functions through centralized department. These

types of companies generally have a decentralized system, with separate manufacturing, research and

development, sales and marketing departments for various divisions, product lines, or business. Many

companies that use a decentralized system, such as Procter & Gamble, Unilever, and Nestle, assign

each product or brand to a brand manager who is responsible for the total management of the brand,

including planning, budgeting, sales, and profit performance. (The term product manager is also used

to describe this position.) The brand manager, who may have one or more assistant brand managers,

is also responsible for the planning, implementation, and control of the marketing program.

As shown in below Figure, the advertising department is part of marketing services and provides

support for the brand managers. The role of marketing services is to assist the brand managers in

planning and coordinating the integrated marketing communications program. In some companies, the

marketing services group may include sales promotion. The brand managers may work with sales

promotion people to develop budgets, define strategies, and implement tactical executions for both

trade and consumer promotions. Marketing Services may also provide other types of support services,

such as package design and merchandising.


45

Sales Promotion

Package design

Merchandising

An advantage of the decentralized system that each brand receives concentrated managerial attention,

resulting in faster response to both problems and opportunities. The brand managers have full

responsibility for the marketing program, including the identification of target markets as well as the

development of integrated marketing communications programs that will differentiate the brand. The

brand manager system is also more flexible and makes it easier to adjust various aspects of the

advertising and promotional program, such as creative platforms and media and sales promotion

schedules.

There are some drawbacks to the decentralized approach. Brand managers often lack training and

experience. The promotional strategy for a brand may be developed by a brand manager who does not

Production

Finance Marketing Research and

development

Human

resources

Sales Product

Management

Marketing

services

Advertising

department

Marketing

research

Brand managar

Brand manager

Brand managar

Corporate

Ad agency

Ad agency

Ad agency


46

really understand what advertising or sales promotion can and cannot do and how each should be used

Brand managers may focus too much on short run planning and administrative tasks, neglecting the

development of long- term programs.

(2.C) In-House Agencies

Some Companies, in an effort to reduce costs and maintain greater control over agency activities,

have set up their own advertising agencies internally. An in-house agency is an advertising agency

that is set up, owned, and operated by the advertiser. Some in-house agencies are little more than

advertising departments, but in other companies they are given a separate identity and are responsible

for the expenditure of large sums of advertising dollars. Large advertisers that use in-house agencies

include Calvin Kenin, Avon, Revlon, and Benetton. Many companies use in-house agencies

exclusively; others combine in-house efforts with those of outside agencies. For example, retail giant

Target has internal creative department that handles the design of its weekly circulars, direct-mail

pieces, in-store displays, promotions, and other marketing materials. However, the retailer uses

outside agencies to develop most of its branding and image-oriented ads and for specific TV and print

assignments.

A major reason for using an in-house agency is to reduce advertising and promotion costs. Companies

with very large advertising budgets pay a substantial amount to outside agencies in the form of media

commissions. With an internal structure, these commissions go to the in-house agency. An in-house

agency can also provide related work such as sales presentations and sales force materials, package

design, and public relations at a lower cost than outside agencies.

Saving money is not the only reason companies use in-house agencies. Time savings, bad experiences

with outside agencies, and the increased knowledge and understanding of the market that come from

working on advertising and promotion for the product or service day by day are also reasons.

Companies can also maintain tighter control over the process and more easily coordinate promotions

with the firm's overall marketing program. Some companies use an in-house agency simply because

they believe it can do a better job than an outside an agency could.

Opponents of in-house agencies say they can give the advertiser neither the experience and objectivity

of an outside agency nor the range of services. They argue that outside agencies have more highly

skilled specialists and attract the best creative talent and that using an external firm gives a company a

more varied perspective on its advertising problems and greater flexibility. Outside agencies also can

provide greater strategic planning capabilities, outside perspectives on customers, and ore creative

experience with certain media such as television. In-house personnel may become narrow or grow

stale while working on the same product line, but outside agencies may have different people with a

variety of backgrounds and ideas working on the account. Flexibility is greater because an outside


47

agency can be dismissed if the company is not satisfied, whereas changes in an in-house agency could

be slower and more disruptive.

Comparison of Advertising Organization Systems

Organizational

System

Advantages Disadvantages

Centralized Facilitated Communications

Fewer personnel required

continuity in staff

Allows for more top management

involvement

Less involvement with

and Understanding of

overall marketing goals

Longer response time

Inability to handle

multiple product lines

Decentralized Concentrated Managerial attention

Rapid response to problems and

opportunities

Increased flexibility

Internal conflicts

Misallocation of funds

Lack of authority

In-house agencies Cost Savings

More control

Increased Coordination

Less experience

Less objectivity

Less flexibility

(3) ADVERTISING AGENCIES

More than 13,000 U.S. and international agencies are listed in the Standard Directory of

Advertising Agencies (the "Red Book")' However, most are individually owned small business

employing fewer than five people. The U.S. ad agency business is highly concentrated. Nearly two-

thirds of the domestic billings (the amount of client money agencies spend on media purchase and

other equivalent activities) are handled by the top 500 agencies. In fact, just 10 U.S. agencies handle

nearly 30 percent of the total volume of business done by the top 500 agencies in the united States.

In India, Indian Newspaper Society- Which is an accreditation body for the advertising agencies has

listed close to 800 advertising agencies in its 2006-07 handbook. However, like the US, in India too,

the industry is highly concentrated and top 10 agencies handle nearly 30% of the total volume of

business. The top 12 agencies in India have been listed in below Figure

Top Twelve Ad Agencies-India, 2007


48

Rank Agency

1 Ogilvy & Mather

2 Mudra Communications

3 McCann Erickson

4 JWT

5 Lowe Lintas

6 Rediffusion DY&R

7 Leo Burnett

8 Grey Worldwide

9 FCB-Ulka

10 Satchi&Satchi

11 RK Swamy BBDO

12 Contract Advertising

(4) Type of Ad Agencies

Since ad agencies can range in size from a one-or two-person operation to large organizations with

over 1,000 employees, the services offered and functions performed will vary. This selection

examines the different types of agencies, the services they perform for their clients, and how they are

organized.

Full-Service Agencies Many companies employ what is known as a full-service agency, which

offers its clients a full range of marketing, communications, and promotions services, including

planning, creating, and producing the advertising; performing research; and selecting media. A full-

service agency may also offer nonadvertising services such as strategic market planning, sales

promotions, direct marketing, and interactive capabilities; package design; and public relations and

publicity.

The full-service agency is made up departments that provide the activities needed to perform the

various advertising functions and serve the client, as shown in below figure.


49

Full-Service Agency Organizational Chart

Account Service: - Account services, or account management, are the link between the ad agency and

its clients. Depending on the size of the client and its advertising budget, one or more account

executives serve as liaison. The account executive responsible for understanding the advertiser's

marketing and promotions needs and interpreting them to agency personnel. He or she coordinates

agency efforts in planning, creating, and producing ads, The account executive also presents agency

recommendations and obtains client approval.

Vice president

creative service

Vice president

account service

Vice president

marketing

services

Vice president

management

and finance

PrintProduc

tion

Account

Supervision TV

Production

Account

executive

Board of Director

President

Media Sales

promotion

Research

Traffic

Office

manageme

nt

Finance

Accounting

Personnel

Writers

Art

Directors


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Marketing Services: - Over the past two decades, use of marketing services has increased

dramatically. One service gaining increased attention is research, as agencies realize that to

communicate effectively with their clients customers; they must have a good understanding of the

target audience.

Most full-service agencies maintain a research department whose function is to gather, analyze, and

interpret information that will be useful in developing advertising for their clients. This can be done

through primary research-where a study is designed, executed, and interpreted by the research

department-or through the use of secondary (previously published) sources of information.

The research department may also design and conduct research to pre-test the effectiveness of

advertising the agency is considering. For example, copy testing is often conducted to determine how

massages developed by the creative specialists are likely to be interpreted by receiving audience.

The marketing services department may include account planner who are individuals that gather

information that is relevant to the client's product or service and can be used in the development of the

creative strategy as well as other as aspects of the IMC campaign. Account planers work with the

client as well as other agency personnel including the account executives, creative team members,

media specialists, and research department personnel to gather information about the target audience.

They organize all of the information and make recommendations regarding advertising and promotion

strategy that can be used by the creative department as well as by others in the agency.

The media department of an agency analyzes, selects and contracts for space or time in the media that

will be used to deliver the client's advertising message. The media department is expected to develop

a media plan that will reach the target market and effectively communicate the message. Since most

of the client's ad budget is spent on media time and/or space, this department must develop a plan that

both communicates with the right audience and is cost effective.

Creative Services: The Creative team in the agency is responsible for the creative output. This could

be in the form of a print ad, a radio jingle or television commercial.

This team normally consists of someone who is responsible for the written matter called the

copywriter and another who is responsible for the visual element, called the art person. These two

individuals normally work as team on the campaign as the written and art elements of the ad have to

be in sync with each other for maximum impact. This teamwork also helps in the process of ideation.

The designations that commonly figure in the creative department are as follows

At the lower end of the copy stream is the copywriter and at the art stream is the art director. As they

progress in life, they can hope to become creative directors. At the top end, the copy and art functions


51

coalesce. At this level the CD's as they are known are expected to be able to guide both the copy and

art streams and even to be able to single handedly write and visualize ad campaigns.

Management and Finance: - Like any other business, an advertising agency must be managed and

perform basic operating and administrative functions such accounting. Finance, and human resources.

It must also attempt to generate new business. Large agencies employ administrative, managerial, and

clerical people to perform these functions. The bulk of an agency's income (approximately 64 percent)

goes to salary and benefits for its employees. Thus, an agency must manage its personnel carefully

and get maximum productivity from them.

Agency Organization and Structure: - Full-function advertising agencies must develop an

organizational structure that will meet their clients‟ needs and serve their own internal requirements

most medium-size and large agencies are structured under either a departmental or a group system.

Under the departmental system, each of the agency functions shown in above figure is set up as

separate department and is called on as needed to perform its specialty and serve all of the agency's

clients. Ad layout writing, and production are done by the creative department, marketing services is

responsible for any research or media selection and purchases, and the account services department

handles client contact. Some agencies prefer to departmental system because it gives employees the

opportunity to develop expertise in servicing a variety of accounts.

Many large agencies use the group system, in which individuals from each department work together

in groups to service particular accounts. Each group is headed by an account executive or supervisor

and has one or more media people, including media planners and buyers; a creative team, which

includes copywriters, art directors, artists, and production personnel; and one or more account

executives.

Other types of Agencies and Services

Not every agency is a large full-service agency. Many smaller agencies expect their employees to

handle a variety of jobs. For example, account executives may do their own research, work out their

own media schedule, and coordinate the production of ads written and designed by the creative

department. Many advertisers, including some large companies, are not interested in paying for the

services of a full-service agency but are interested in some of the specific services agencies have to

offer. Over the past few decades, several alternatives to full-service agencies have evolved, including

creative boutiques and media buying services.

Creative Boutiques: - Creative boutiques are small ad agencies that provide only creative services

and have long been an important part of the advertising industry. These specialized agencies have

creative personnel such as writers and artists on staff but do not have media, research or account


52

planning capabilities. Creative boutiques have developed response to some company‟s desires to use

only the creative services of an outside agency while maintaining control of other marketing

communication functions internally. While most creative boutiques work directly for companies, full-

service agencies often subcontract work to them when they are very busy or want to avoid adding full

time employees to their payrolls. They are usually compensated on a project or hourly fee basis.

An example of a successful creative boutique in India is VyasGianneti Creative, which is a Mumbai

based agency whose clients include Aditya Birla Group, Godfery Philips, BBC World, TATA Group,

Taj Hotels, and The Indian Cricket League among others.

Media Companies (Planning and Buying)

The media department in an ad agency is responsible for deciding how much money should the client

spend on a campaign and across what media.

The media planner is expected to prepare the media plan using the client's brief and all the media data

at his command. In this he works closely with the media buyer, who is usually a tough negotiator and

is able to get good rates from the media. With the media options increasing by the day, the media

planner has to depend heavily on the media buyer, with the result that very often the media plan is

driven by the rates one can get.

Today, there is a plethora of media data that is available to the media planner this data is now

available in digitized format. So it is possible to develop optimum media plans faster, as opposed to

the days of old when things had to be manually calculated.

The designations that commonly figure in the media department are

At the bottom end are the media planners/media buyers. At the top end are the media directors of VP

media.

Today, this function has become a part of independent media houses and hived off from the mainline

agency function. Larger agencies however continue to retain this function within their fold.

Some of the prominent media houses in the country are Group M. Madison Media, Carat, Starcom

and Optimum Media Solutions.

(5) AGENCY COMPENSATION

As you have seen, the type and amount of services an agency performs vary from one client to

another. As a result, agencies use variety of methods to get paid for their services. Agencies are


53

typically compensated in three ways: commissions, some type of fee arrangement, of percentage

charges.

(5.A) Commissions from Media

The traditional method of compensating agencies is through commission system, where the agency

receives a specified commission (usually 15 percent) from the media on any advertising time or space

it purchases for its client. (For outdoor advertising. the commission is 16 1/2 percent.

(5.B) Fee, cost, andIncentive-Based Systems

Since many believe the commission system is not equitable to all parties many agencies and their

clients have developed some type of fee arrangement or cost-plus agreement for agency

compensation. Some are using incentive-based compensation, which is a combination of a

commission and a fee system.

Fee Arrangement: - There are two basic types of fee arrangement systems. In the straight or fixed-

fee method, the agency charges a basic monthly fee for all of its services and credits to the client any

media commissions earned. Agency and client agree on the specific work to be done and the amount

the agency will be paid for it. Sometimes agencies are compensated through a fee-commission

combination, in which the media commissions received by the agency are credited against the fee. If

the commissions are less than the agreed-on fee, the client must make up the difference. If the agency

does much work for the client in noncommissionable media, the fee may be charged over and above

the commissions received.

Cost-Plus Agreement :- Under a cost-plus system the client agrees to pay the agency a fee based on

the costs of its work plus some agreed-on profit margin (often a percentage of total costs). This

system requires that the agency keep detailed records of the costs it incurs in working on the client's

account. Direct costs (personnel time and out-of-pocket expenses) plus an allocation for overhead and

a mark-up for profits determine the amount the agency bills the clients.

Incentive-Based Compensation: - Many clients these days are demanding more accountability from

their agencies and tying agency compensation to performance through some type of incentive-based

system. While there are many variations, the basic idea is that the agency's ultimate compensation

level will depend on how well it meets predetermined performance goals. These goals often include

objective measures such as sales or market share as well as more subjective measures such as

evaluations of the quality of the agency's creative work. Companies using incentive' based system

determine agency compensation through media commissions, fees, bonuses, or some combination of

these methods.


54

Recognizing the movement toward incentive-based system, most agencies have agreed to tie their

compensation to performance, Agency executives note that pay for performance works best when the

agency has complete control over a campaign. Thus, if a campaign fails to help sell a product or

service, the agency is willing to assume complete responsibility and take a reduction in compensation.

On the other hand, if sales increase, the agency can receive greater compensation for its work.

(5.C) Percentage Charges

Another way to compensate an agency is by adding a markup of percentage charges to various

services the agency purchases from outside providers. These may include market research, artwork,

printing, photography, and other services or materials. Markups usually range from 17.65 to 20

percent and are added to the client's overall bill.

(6)EVALUATING AGENCIES

The agency evaluation process usually involves two types of assessments, one financial and

operational and the other more qualitative. The financial audit focuses on how the agency conducts its

business. It is designed to verify costs and expenses, the number of personnel hours charged to an

account, and payments to media and outside suppliers. The qualitative audit focuses on the agency's

efforts in planning, developing, and implementing the client's advertising programs and considers the

result achieved.

Evaluation of an agency is very important in selecting an agency as well as in retaining as agency.

The starting point clearly is asking oneself the question: Why are we hiring an agency for?

Depending upon the answer to this question, it is possible to fix up the evaluation parameters for

selecting and retaining the agency.

The core competence of an advertising agency is primarily the ability to meet the requirements of the

client in terms of answering three fundamental questions:

What to say?

How to say it?

When and Where to say it?


55

The first refers to advertising strategy, the second to creative strategy and the third to media strategy.

Assuming that the agency provides all these functions under one roof, in an integrated way, evaluation

parameters can be defined for each.

The advertising strategy essentially revolves around how well the brand's positioning platform is

arrived at positioning essentially means identifying the vacant slots in the consumers mind and then

determining the kind of slot we would want our brand to occupy. This involves the use of

sophisticated research tools such as factor analysis and multi dimensional scaling. The successful

measure of the advertising strategy would be to identify through tracking studies, the perceptual maps

of various brands and their effect on purchase behaviour.

The creative strategy essentially involves arriving at a creative work in the form of a print, TV, radio,

internet or even an outdoor campaign, which appeals to the target segment and created awareness,

interest, and desire and ultimately purchase of the brand. A good measure of creative strategy could

be internally designed research tools, which can be qualitative of quantitative in nature. The research

would measure recall, likeability of the ad, content analysis etc. Outside bodies, such the various

advertising club also have independent panels that judge the creativity of the ads and give away

awards, these also help evaluate agencies on the basis of their creativity. Advertising effectiveness

awards have also now been instituted, which not only evaluate the creativity of the ads but their

relevance, originality and impact on market share results.

The media strategy essentially involves arriving at an optimum media plan, which delivers the best

reach and frequency for the campaign. It means getting the maximum mileage for the advertising

rupee. In today's context is also involves getting the best media rates for the client.

In advertising agency evaluation, it is extremely important the advertising objectives are clearly

outlined. There should be clear to the ad agency as well as the client, so that expectations are clearly

laid out right from the beginning. This could prevent heartburn after the conclusion of the campaign.

Many clients believe that since the agency business is people driven, it is important get the best

people work on their brands. Hence in many cases, clients actually go through an intensive search of

the agencies, to find out the men behind the good campaigns, and very often insist on getting the best

relent within the agency to work on their brands.

An Advertising agency therefore would be typically evaluated by clients on the following criteria.

1. How good are they in their understanding of the product category?

2. Do they have any experience in handling the product category?

3. What is reputation of the team that is going to handle the business?

4. What is the overall reputation of the agency?


56

5. How sound is the agency financially?

6. What are the kinds of financial terms do they operate on?

(7)SPECIALISED SERVICES

We have seen earlier that the typical advertising agency has had to morph itself to providing multiple

specialized skills to meet the demands of integrated marketing communications. The promotion of a

product may require sometimes, not only advertising, but also direct response marketing, sales

promotion, public relations, event marketing, internet marketing etc. Some agencies have set up

separate divisions within the agency to cater to these needs. However there also exist in the market,

separate agencies, each with specialized skills. Some clients prefer to deal with agencies that provide

all the specialized skills under one umbrella, whereas others prefer to deal with stand-alone

specialized agencies separately. Let us now understand what specialized skills each of these

specialized services, need bring to the table.

(7.1) Direct Response Agencies

As Opposed to advertising which involves mass communication, and where consumers are identified

in terms of broad groups, sharing common demographic profiles, direct response involves

communicating and getting a response from individuals who can be identified by name, address and

purchase behaviour.

Direct response communication differs from advertising in many ways. Here the attempt is to get the

consumer decide on purchase of the product as soon as he sees the communication. One good from

of direct response is direct mail. This is effectively used by organisations such as Readers Digest,

that attempt to get the potential consumers buy the product either through a discount or some other

attractive offer. Since the response has to be immediate, the communication of a direct response

usually provides a response coupon or a toll free number, so that the consumer can immediately

contact the seller the avail of the benefit.

In Direct response, consumers feel a high degree of risk since the product bought unseen. On the other

hand in the case of advertising, the role of the communication is to bring the consumer to the retail

outlet, where he has that opportunity to see the product. Hence direct response marketers have to be

extremely trustworthy as the consumer has very little recourse to change his mind, should he not like

the product on seeing it. Companies have however now begun to offer to take back the product in

such cases with no loss to the consumer.

Direct response communication also differs from advertising, in that in DR, the medium is the

marketplace. In advertising the retail outlet is the marketplace.


57

Direct response advertising calls for specialized skills which is able to evoke a desirable consumer

response immediately. In DR ads one will see that there is usually a definite offer, all information

required to make a decision is available in the ad and the ad has response devise.

As can be seen from above direct response advertising call for very specialised skills because of the

context and nature of the communication. Hence many ad agencies have developed divisions within

the agency to cater to these needs. Good examples are Rapp Collins (part of the Mudra Group), Lintas

Personal, Saatchi and Saatchi Direct etc. However some agencies notably DIREM and Wunderman

India Pvt. Ltd., have pioneered this activity in the country in a standalone way.

Since direct response entails one-to-one communication, maintaining a database of consumers is very

important. This is often very difficult to get, and, more importantly, to keep updated. Agencies that

are able to do so well make for good direct response agencies. (More on this in chapter)

(7.2) Sales Promotion Agencies.

Sales promotion comprises a wide variety of tactical promotion tools of short term nature, designed to

stimulate an earlier or a stronger market response. Sales promotions are designed for consumer‟s

trade, institutions and even the company's sales force.

Consumer promotions are designed essentially to temp the consumer to purchase immediately and are

for a short period. They could be in the form of sampling, gif t, coupons, prices off, contests etc.

Trade promotions are designed to get the trade to stock up more of the company's product and thus

preempt competitors. They could be in the form of free goods, dealer contest, extended credit etc.

Sales promotion agencies should be capable of designing effective campaigns and implementing them

at the grass root level. Some advertising agencies have developed separate divisions to cater to this

requirement. Others such as Kidstuff have built organizations form scratch and over a period of time

have become competent in this area. (More on this in chapter 14)

(7.3) Public Relations Firms

Public relations or PR as it is often called confused to mean only press relations. this really

undermines the role of a PR firm and its importance in the development of an Integrated marketing

communications campaign for a client. Public relations actually extend the entire of the gamut of the

business chain. It includes employees, suppliers, shareholders, regulatory bodies, the retail and the

firm' consumers.


58

Good PR essentially involves getting good coverage for the company and its brands across the media

Hence many companies employ PR managers within the firm to look after the PR requirements of the

company.

The role of the PR Manager in the company is:

a. To monitor the internal and external communication of the firm.

b. To liaise with the PR agency and the media.

c. To develop PR strategies for the company and execute them.

d. To evaluate the company's PR Programmes and provide feedback to the PR firm and top

management.

Public relations agencies ' core competence is ensuring good media coverage for the company and its

brands. The PR Agency therefore must have good relations with the media. This involves cultivating

the correspondents over time so that they are amenable to publishing articles in a positive way for the

company.

Public relations agencies need to employ people with good writing skills, not only in the English

language but also in the national language and the vernacular. In a vast a diverse country like India

with its manifold diversities in terms of religions, language, and culture etc., the importance of such a

capability within the agency cannot be underestimated. This capability helps in drafting of good press

releases which accurately project and highlight the company's point of view.

Arranging for press conferences is another function of the PR firm. This involves contacting the

reporters of the various media, primarily the press and the TV channels and ensuring their attendance,

organizing the venue and all the logistics involved thereof, giving proper guidelines to the client in

terms of what to say and what not to say etc., ensuring proper coverage and finally monitoring the

coverage received and providing this to the client in the form of a dossier.

Since the company's PR effort has to be in sync with the company's total communications programme,

advertising agencies are best suited for the job, if they can provide the above mentioned competencies

in house. Accordingly several ad agencies have set up PR divisions to cater to the clients requirement.

Notable among them are Ogilvy PR, Rediffusion PR, Madison PR, Clea PR etc. However other

standalone PR agencies that have made their mark in India include Good Relations India Pvt. Ltd.,

Genesis Burson Mar stellar and Hanmer and Partners.

(7.4) Event Marketing Agencies


59

Event Marketing is increasingly becoming an important marketing tool in the hands of many

companies In India cricket and films attract the maximum audiences. Accordingly most companies try

to have their brand presence at events featuring cricketers or film stars.

Events can broadly be categorized into the following kinds:

a. Sports Events

b. Film Star Events

c. Industrial Exhibitions

d. conferences

a. Sports Events: The most popular sport in the country being cricket, sponsorship of such

events has become big business today big companies bid for the sponsorship right and/ or

television right for such events and then market the same to clients. Similarly cricketers too

employ professionals to negotiate on their behalf for the endorsement of various brands.

Agencies such as Nimbus and Madison are Players in this domain.

b. Film Star Events: Film stars are another big attraction in India. Accordingly film star award

functions are big events and many companies vie with each other to sponsor such events.

Beauty contests for another genre of glamorous events which attract good sponsors. Agencies

such as Wiz craft International are in the forefront of organizing and managing such events.

c. Industrial Exhibitions: Also sometimes termed as trade fairs, these are organized to get the

trade under one umbrella. Such exhibitions also attract customers. Goods examples in the

country are the India International Trade Fair organized in Delhi and the Inside-Outside trade

fair organized in different Part of the Country.

d. Conferences: are becoming more and more popular particularly among the intelligentsia of

the country. Many publication groups such as the India Today Group, The Times of India

Group and the DainikJagran Group have developed capabilities in organizing such events.

These conferences typically attract speakers of repute from all across the world and include

businessmen, management gurus, religious godmen, politicians etc.

While sponsorship of the event delivers to the sponsor a limited audience at the event itself,

major mileage is obtained through the telecasting of that event. Event management agencies

therefore have to have the capabilities of not only being able to manage to event, but also the

advertising and publicity that follows. It is for this reason that many event mnagement firms

have developed PR capablities and many PR firms, event management capabilities.

Event management is a very labour intensive job. It involves managing the artistes, the

logistics of stage management and preparation of sets, lighting, sound, traffic control etc.


60

Event Managers often experience Murphy's law in action, and things begin to go wrong, when

they least expect it.

(7.5) Interactive Agencies

The Internet is increasingly becoming an important media today and is growing in leaps and bounds

while advertising agencies are extremely comfortable with dealing with the offline media, most do not

still understand this new medium. Therefore many agencies are addressing the issue of not still

understand this new medium. Therefore many agencies are addressing the issue of understanding this

medium and developing capabilities of communicating through this medium.

Hitherto, most agencies were happy with developing websites for clients. These were more in the

nature of brochure ware on the Net. However, recognizing that the Internet offers capabilities in terms

of one to one communication and therefore immense possibilities for branding, more and more

agencies are employing specialists such as site architects, content developers, art directors and

visualizes and software Programmers to enhance and deliver value and customers through this

medium.

One of the biggest advantages of interactive agencies, is the ability to target focus communication as

well as track customers. Tribal DDB an international agency that is tied up in India with Mudra

Communications has been a pioneer in India in this domain. Almost all the leading agencies today

have interactive agencies in their fold.

(7.6) Collateral Services

Many advertising agencies outsource some of their work, giving rise to the formation of collateral

services. These are photographers, Stock Picture banks, model coordinators, and film production

houses.

Some agencies have in-house capabilities for photography. However many outsource this to freelance

photographers. The choice of the photographer depends on the nature of photograph required. Some

photographers specialize in food photography, others in fashion photography, yet other in outdoor.

The rates depend on the reputation of the photographer. Typically it consists of a daily rate plus

expenses.

Many Clients and agencies prefer to buy the pictures they require though various photo banks. Some

suppliers are Dinodia and Indiapictures.com.


61

Models are very often required by agencies for various campaigns. There are many freelance

coordinators in the market who maintain a database of models which they make available a fee.

Most agencies prefer to work with film production houses to produce their commercials. The agencies

develop the creative product up to a point and then engage a film production house to produce the

commercial. These film production houses have their own film directors, set developer, cameraman,

studio coordinators, film editors etc. They charge depending upon the kind of input that will be

required to produce a given commercial.

(7.7) Market Research Companies

Market research is an important component of communication activity.

As indicated earlier, any advertising agency performs three critical functions:

Developing the Advertising Strategy

Developing the Creative Strategy

Developing the Media Strategy

In order to able to perform these functions effectively, there is need for data various kinds this

function is performed by the market research firms.

The developing of advertising strategy involves an understanding of the consumer and their

perceptions. This helps the Ad agency to develop the positioning strategy. Research in positioning

strategy. Research in this area is conducted by the market research firm.

Through specialized techniques, market research firms help in gauging whether the ad is

communicating the intended massage through the print medium or the TV Medium.

Also there is need to understand manner in which various media get consumed by various segments of

consumers. This helps media Planners do Their Job Better. Once again there are specialized market

research firms that do this.

Some of the Will know market research firms in India are AC Nielson ORG Marg., IMRB, TAM

Media,Hansa Research, Synovate India, Pathfinders, Indica Research etc.

References:

1. Geroge Belch, MichaelBelch, and KeyoorPurani, “Advertising &Promotion – an Integrated

Marketing Communications Perspective” Tata McGraw Hill pvt. Ltd 7th ed. 2009

2. Kruti Shah & Alan DSouza, “Advertising and Promotions”TataMcgraw Hills pvtltd,Delhi

IMC Module 1

Documents

indian premier league

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kruti shah

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