Module-1 ASP.ppt

ADVERTISING AND SALES PROMOTION

Evolution of advertising The first documented advertising agency in the US was the N. W. Ayer Agency, established in 1877 (Gilson, 1980). Prior to this time, advertising agents were space brokersagents who solicited ads from businesses and then sold them to newspapers that had difficulty getting out-of-town advertising.

1870-Early 1900 1914 The Federal Trade Commision Act designed to make unfair trade practices unlawful. 1922 FTC vs. Winstead Hosiery Co. case emphasised the need for ethical practices in advertising.

1920s Early 1950s 1934 Wheeler Lea amendment to FTC Act passed to protect consumers from deceptive advertising in the food, drug, therapeutic device and cosmetic industries. 1936 The Robinson-Patman Act prevented manufacturers from providing promotional incentives unless competition also did the same.

1950s 1990sProliferation of TV sets in 1950s gave ad agencies a new platform. COPYWRITER ruled this era. Launch of youth targeted ads. More ad agencies created. 1960-1970 product parity forced creative advertising. 2 minute ads were replaced with 30 sec slots due to cost constraints. Research data from customers were collected. Consolidation of ad agencies. 1980s-1990s moved from traditional radio and TV advertising to sales promotion techniques (such as rebates, coupons, sweepstakes).

Newspaper and Radio still important. Widespread use of cable TV and satellite transmission fragmented TV to niche markets. Globalisation Create ads for products in global markets. Internet emerged as a powerful tool. COPA Childrens Online Protection Act, 1998.

1991 to present

Now As of 2000, Ad councils acts as an ad agency that addresses social evils such as drunken driving, racial intolerance and domestic violence. While 15% commision on gross sales continues, it is now common to offer incentives such as box seats at sporting events and music concerts.

Ad Spends 2009 Total ad spend-Rs.20000 Crore Print & TV Ads- Rs.16000 Crore up by 6-8%. Outdoor, internet and radioRs.4000 Crore down by 15-20% Up Sectors-Auto, Telecom, FMCG & Financial Services. Low Sectors-Real estate, Stock market related businesses, Capital goods, textiles and cement. 2010 Ad spends in main media-TV, newspaper and magazine up by 32%. Highest growth in Asia pacific region. Newspaper 30% TV 26% Magazine Ads 7% Radio, outdoor, cinema 28% Highest ad spends sectors were telecom and insurance. Media spends on social issues increased. Other than government campaign, even the social communication of corporates were included.

Global ad spend in Q1 2011 has increased 8.8% resulting in $118 billion advertisement spend.

Careers in advertising Account managers Art Directors Creative Directors Copywriters Designers Artists Public relations consultants Researchers Media analysts Product testers Account Director Account planner Media planner Event management Image management Internet marketing Brand managers Product managers Client service Key account managers Photographers Visualisers Media buyer Scriptwriters Content analysts Freelancers.

MODULE 1 - CONTENTS Marketing Communications Integrated marketing communications Introduction Components Need and importance Legal and regulatory aspects Advantages and Disadvantages to

Producer, Consumer, Ad agencies and Society

IntroductionMarketing has a marketing mix that is made of price, place, promotion, product (know as the four P's) that includes people, processes and physical evidence, when marketing services (known as the seven P's). Marketing communications is a subset of the overall subject area known as marketing. Marketing communication is a collective term for all the various types of planned messages used to build a brand-advertising, public relations, sales promotion, direct marketing, personal selling, packaging, events and sponsorships and customer service.

Key functional areas of MarcomAdvertising Direct Marketing Public Relations (and publicity) Sales Promotion Personal Selling Packaging Events and sponsorships-Trade Fairs and Exhibitions Customer service.

Marketing communications have little value without media, the vehicles through which marketing communication messages are carried to (and from) target audiences. The media that is used frequently include TV Newspaper Outdoor boards Mail Radio Magazines Internet Telephone

Building brands is the overall objective of all marketing communication as well as all marketing activities.

Tools of Marketing Communication MixPersonal Selling

Direct Marketing

TOOLS OF MARCOM MIX

Public Relations

Sales Promotion

Advertising

Marketing communicationan audience perspectivePlanned marketing communication Audience Experience Product experience based communication Unplanned marketing communications Service experience based communication

An audience centred perspective of MarcomTools Media

Audience Experience

People & Processes

Messages

Tasks of MarcomMarketing communication is used to influence audiences in 4 main ways: Differentiate Reinforcing Informing Persuading To position brand To remind/reassure To educate/aware To take action

Role of Marketing communicationCreating brand values THINKING & FEELING Provoking behavior DOING

Generate audience engagement

Introduction to IMC Integrated marketing communication is used where all methods are simultaneously used to convey the same message. An integrated marketing communication plan is focused so that all the messages convey the same meaning. IMC is a process of planning, executing and monitoring the brand messages that create customer relationships. IMC is about synergy and creativity, integration and communication. IMC focuses on customer relationships which will result in more sales and profit than focusing only on generating sales transactions.

The Core of IMCCustomer Focus

Brand resonance

Customer empowerment

Emotional bonding

Impressive marketing

Communicated thru Advertising, sales promotion, Direct response, Packaging, sponsorships, customer service, etc. Evaluating and planning Customers brand experience

Brand messages

One-and-two-way mediaRadio, newspaper, TV, Outdoor boards, Events, mail, Phone, internet, packaging,etc.

Strong brand relationships Increased sales and profits, enhancing brand equity

Weak brand relationships Loss of customers, low sales, Loss of brand equity

IMC Process Model

IMC aims at achieving integration and synergy, this however, requires more than making brand messages look and sound alike, what maybe called: One voice, one look Integration must happen at every point where a customer comes in contact with the brand-if not, the messages will not produce the cumulative effect.

It is a fundamental shift in the role and purpose of marketing from manipulation of the customer to genuine customer involvement: from telling and selling to communication and sharing of knowledge: -Regis McKenna, relationship marketing expert.

Benefits of IMC Greater Brand Differentiation Accountability Cuts through message clutter in marketplace. Enhances customer and stakeholder trust. Improves sales and profits-result of customer relationships. Fosters internal coordination and focus

IMC The Golden Triangle

Companies

Customers and other stakeholders Agencies Media

IMC Agency Services Full service advertising agencies An agency that provides all or most services needed in the area of MC--Account management, Creative services, Media services, Research, Account planning,etc. Creative boutiques and freelancers. Media buying services (Product placements) Agencies that specialize In house agencies Other MC agencies and suppliers-Direct marketing, Event marketing, IMC, Packaging, Relationship marketing, sales promotion, brand strategy and design, Call centers, design studios, Fulfillment houses, Internet companies, production houses and research companies.

Nestle, IBM, Sprint, Microsoft, Apple computers, Nike and many other companies have adopted the IMC approach.

Compensation Commisions Retainers Fees Markups. Performance based compensation. Others.

Several reasons have caused IMC to develop into a primary strategy for marketers in India. Few of them are given below1. Market is now having a rural-urban mix shape 2. Occupational diversity (Agriculture to other skills) 3. Awareness is spreading fast 4. Indian consumer is being more smart 5. Heterogeneous Demographic Traits 6. Diversity in economic conditions 7. Media advertising is shifting to multiple forms of communication focusing at target centered niche media. 8. Market is shaping from a manufacturer-dominated market to a retailer-dominated, consumer controlled market. 9. Technology is getting updated rapidly 10. Huge opportunities are available to develop with market 11. Manpower is getting performance-based compensation from traditional compensation, sales and profit margins are increasing.

IMC IN INDIA

Not 4Ps 4 CsCustomer Product Cost Price Convenience Place Communication Promotion This is the new mantra in the age of IMC

AdvertisingAdvertising is any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. Advertising is a business activity, employing creative techniques to design persuasive communication in mass media that promote ideas, goods and services in a manner consistent with the achievement of the advertisers objectives, the delivery of consumer satisfaction and the development of social and economic welfare. According to Subroto sengupta, Advertising is the discovery and communication of a persuasive difference for a brand to the target prospect. The positioning of the brand has to happen in the minds of the consumer.

Theories of Advertising The stimulus response theory The Starch model and AIDA Theory of cognitive dissonance. The DAGMAR model Russell Colley Aware, Comprehension, Arrive, Action (Wilmshurst 1999)

Advertisements are important for: standardized products products aimed at large markets products that have easily communicated features products low in price products sold through independent channel members and/or are new.

Sales PromotionSales promotion techniques aimed at traders: Trade Deals Co-operative advertising tie-ups Participation in trade fairs/ trade shows Direct stimulation by the traders sales team POP Display Push money Dealer loader Industry tie-ups

Sales Promotion aimed at end-usersContests and Sweepstakes the instant win game or offers an experience as the prize Money Offs and Rebates Discounted prices or rebates to the customer to encourage trial or purchase Loyalty Programs a. This is done because if 80% of sales are from 20% of your customers, you want to treat that 20% better b. An increase in loyalty can amount to much larger profits Samples The offering of a product free or at a greatly reduced price Point of Purchase (POP) or Product Placement Located at high traffic areas near the cash register or the end of an aisle. Coupons Sales promotions that usually offer a discounted price to the consumer to encourage trial or purchase

Latest consumer promotionThe Go Recycleprogramme will be promoted to consumers through in-store displays, leaflets and mailers. The programme aims to drive consumer participation through a consumer incentive scheme. Consumers who bring empty plastic bottles and pouches of any brands in five FMCG categories (tea pouches, detergent powder pouches, shampoo & conditioner bottles, tooth paste tubes and ketchup pouches & pet packs) will be awarded discount coupons at the easy day and easy day Market stores in NCR. The coupons can be redeemed at these stores to buy any products of the five leading Hindustan Unilever brands, namely Surf, Kissan, Dove, Red Label and Closeup.

Sales Promotion Programs designed to build interest in or encourage purchase of a product during a specified time period. This gets buyers to buy NOW and is done by giving them short-term incentives. Sales promotion, also termed as below the line activity aoims at achieving the sales target. What are the 4 main objectives to create immediate sales?1.Build awareness of the promoted product. 2.Provide info about the product. 3.Present an economic incentive to buyer to purchase product. 4.Create an invitation to buy now.

Arnold M Barban, talks about the seven steps in advertising that may lead to a purchase. The prospective customer may Be unaware of the product/service. 1. Be closer to purchasing, far away from cash purchase. 2. Know what the product has to offer. 3. Like the product 4. Develop a point of preference over other possibilities. 5. Couple preference with a desire to buy and the conviction that the purchase would be wise 6. Translate this attitude to actual purchase. The three components of advertising which divides behavior into: 1. Cognitive component 2. Affective component 3. Motivational component

Temporary price reductions increase sales substantially; a much greaterresponse than advertising because it creates a sense of urgency and consumers get immediate benefits through sales, but not from advertisement.

What are the 4 main points of Research on Sales Promotion?

High market share brands do less sales promotion because it is difficult to increase their market share even further (Market Saturation). Heavily promoted products lose brand equity because the lowered price damages the brand image. Promotions cannibalize sales in competing brands while stimulating sales for complimentary brands (ex: a sale on art materials might increase the sale of art paper).

Differences between advertising and sales promotion Lies mainly in the method and appeal, and the value they add to a product or service. 1. Advertising informs and builds awareness about a product while sales promotion aims to close the deal with an urgency for purchase. 2. Advertising is aimed at creating an urge to buy, while sales promotion is aimed at increased sales. 3. Advertising is done by professional agencies mostly outsource while most sales promotion activities is carried out by the in-house sales promotion team. 4. Since advertising uses media to transmit messages, the reach is tremendous, while sales promotion happens at the point of customer contact. 5. Advertising use one to many communication (mass communication), while sales promotion uses one to one communication (persuasive communication).

Direct Marketing Direct marketing is a method where by the middlemen are eliminated and the manufacturer directly contacts the consumer. It is used mostly as a strategic measure of the organization. The nature of the product also largely determines the strategy of marketing communication. Eg : Dell, Tupperware, Oriflame, Amway, Encyclopedia Brittanica, etc. Hindustan lever has its direct selling arm called HULN (Hindustan Unilever Network) which sells Health products, beauty products, home products and male grooming products through specified brands for each niche.

Publicity Involves sending a message to someone because it is newsworthy and is published and broadcast without charge to the sender. Publicity mainly uses journalists who might pick up the message if it catches their attention, however, the assessment and judgment on the product is purely the view of the journalist. Hence, publicity is referred as an uncontrolled media unlike advertising which is a controlled media. Product publicity uses road shows and events to build brand images. Public Relations Though often confused with publicity, PR is broader in scopes. PR often uses journalists to say what they themselves want to say. In PR, they use paid media to send out controlled messages. PR aims at building brand equity, while advertising aims at building brands. PR caters to all stake holders, including employees, investors, media, government, special interest groups, etc. MPR (Marketing public relation) is an offshoot of PR.

MPR (Marketing public relation) is an offshoot of PR. Tom Harris describes MPR as the process of planning, executing and evaluating programs that encourage purchases and consumer satisfaction through credible communication of information and impressions that identify companies and their product with the needs wants, concerns and interests of consumers. Other Tools Personal Selling Packaging Events and sponsorships-Trade Fairs and Exhibitions Customer service.

Dr. Rex F Harlow defines Public Relations as: PR is a distinctive management discipline which helps establish and maintain mutual lines of communication, understanding, acceptance and co-operation between an organization and its public; involves the management of problems or issues; helps management keep abreast of and efectively utilize change, serving as an early warning system to help anticipate trends; and uses research and sound ethical communication techniques as its principal tools. In another way, PR defines a point of view, an opinion, a movement when none exists; it helps lead a movement, an argument, or a point of view; it aims at diffusing or changing a negative environment or stimulus. It is used to promote goodwill and brand launches and promotion.

Public Relations

Media Relations News Releases Press Conferences Media Related events Sponsorships Lobbying Advocacy Management counseling and employee motivation Commemorative occasions

Public Relations Tools

Role of PR in the marketing mix Perception management Institutional advertising Building corporate image and corporate identity Customer relations management (CRM) Media Handling

Situation analysis (PR Audit) Definition of objectives Identification of publics Selection of media Budget

Development of program components

Implementation of PR Program

Assessment of results

Public relations planning model

PublicityInvolves sending a message to someone because it is newsworthy and is published and broadcast without charge to the sender. Publicity mainly uses journalists who might pick up the message if it catches their attention, however, the assessment and judgment on the product is purely the view of the journalist. Hence, Publicity is referred as an uncontrolled media unlike advertising which is a controlled media. Product publicity uses road shows and events to build brand images.

Legal aspects of Advertising Public morals and public policySec 292 & 293 of the Indian Penal Code, 1860, the Indian Post office Act, 1898, The customs Act, 1962. Prohibits the dissemination, transmission and import of any obscene matter

The Young Persons (Harmful Publications) Act 1956Prohibits publication of any mater deemed to be harmful to persons less than 20 years.

The Indecent Representation of Women (Prohibition) Act, 1986Covers all mass media (Films, TV programs, videos and advertising) depiction of women in derogatory manner.

The Emblems and Names (Prevention of improper use) Act, 1950Forbids the use by any private party of certain names, emblems, etc.

The Prevention of Insults to national honour Act, 1971.Forbids the use by any private party of certain names, emblems, etc.

The Indian Penal Code, 1860Prohibits the publication of matters connected to unauthorized lotteries. Prohibits the publication of appeals using national symbols for furthering the prospects of any candidate at an election.

The Drugs and magic remedies (Objectionable Advertisements) Act, 1954Prohibits advertisements for products and services claiming to cure certain medical conditions.

The Prize competitions Act, 1955 &Prize chits and money Circulation schemes (Banning) Act, 1978Prohibits the publication of matter with unauthorized prize competitions, while the prize chits SURROGATE ADVERTISING

Any Questions ???