Presentation1 Advertising.pptx

Concept of Advertising
 The word Advertising term originates from the
Latin word- “Adverto” which means turn
around.
 Advertising donates the meaning to draw
attention to any object or purpose.
 In the words of American Marketing
Association (AMA)Advertising has been
defined as “an paid form of non-personal
presentation and promotion of ideas, goods &
services of identified sponsor.”

Characteristics of Advertising:
 Advertising is an paid form of
communication
 It is an non-personal presentation
 It is a promotion of ideas, goods &
services
 It promotes the ideas, goods & services
of identified sponsor.

Ex-Del Monte
 The Objective – Increase awareness of the
smaller-size cans with pull-top lid.
 Target Audience – senior citizens, especially
those that live alone and suffer from arthritis.
 Message Theme – The new cans not only
contain a smaller portion but are easier to
open.
 Support – 30 cent introductory coupon to
encourage usage.

Objectives of Advertising:
 To inform &influence the buyers to buy the
product and thereby increase the sales
 To introduce an new product to potential
consumers
 To influence the middlemen to promote, store and
handle the product
 To build up brand image and brand loyalty of the
products
 To meet Competitors’ advertising
 To increase sales in off-seasons
 To increase market shares

Functions of advertising:
Increasing the number of customers
 Widening the market
 Developing brand loyalty
 Improving the quality of products
Increasing the consumption rate of present
customers
 Explaining the multiple uses of the product
 Reminding the customers about the products
 Educating the public about the advantages of the
products

Ex-Playtex
 tThe target market for this ad is females, 13-30,
who enjoy sports and have an active life style.
rg market for this ad is females, 13-30, who enjoy
sports and have an active life style.

Decision areas in Advertising:
 Identifying the target audience
 Deciding the advertising objectives
 Deciding the advertising budget
 Deciding the advertising copy(message)
 Deciding the advertising media
 Evaluating the effectiveness of
advertisement

Advantages of Advertising:
To the marketers:
 It creates sales volume
 It increases net profit
 It helps in opening the new markets
 It maintains the existing markets
 It creates reputation

To the customers:
 It educate/inform the customers about
the products
 It help the customer to get the product at
fair price
 It ensures the better quality of products
 It helps in easy purchasing
 It saves the time
 It create link between customer and
marketer

To the community:
 It creates the employment opportunities
 It raises the standard of living of
customers
 It helps the media to increase their
revenue

 “The scope of Advertising is increasing everyday”
Advertising has a very wide scope in marketing and in the
social system.
 The scope of advertising is described on the basis of
activities included under advertising and their forms and
systems, objectives and functions.
 These include :
(i)Message These are carriers of advertisement which
inspires customers to purchase a product. Message writing
or copy writing is an art and a lot of effort and money is put
into it. The colour, design, structure of the message is
given great importance.
(ii)Media: Communication channels through which news,
entertainment, education, data, or promotional
messages are disseminated. Media includes
every broadcasting and narrowcasting medium such
as newspapers, magazines, TV, radio, billboards, direct
mail, telephone, fax, and internet.

(iii)Target Group Advertising aims at a target
group of audience, while framing an
advertisement target groups are considered.
However, it can reach both target and non-target
groups.
(iv)Advertising agency undertakes the writing of
the message and charges for the same. It helps
the advertiser in all possible ways and integrates
its effort with that of the company or the
advertiser.

(V)Advertiser is the most important person as he is
the customer and spends money on it. He gives
employment to a lot of people and supports the
advertising agencies. The advertiser also has a
great social responsibility to create a sound social
and economic system.
(Vi)Advertising Objectives :The advertising
objectives are many in number . However, we
shall mention a few:
 To increase sales.
 To create awareness and interest.
 To establish and sustain the product.
 To help middleman.
 To persuade, to remain the masses.

(Vii)Advertising Functions: No product can be
sold without some form of advertising.
 Advertising creates demand.
 Builds image for the organization.
 Makes customer aware of the price and attributes
of the product leading to greater sales.
 It helps the middleman to easily sell the product.
 It brings customers and sellers together.
 Promotes marketing system.
 Advertisement is economical when targeted at
the masses.

(Viii)Control The time, place, message contents,
message size, and direction of advertising is
controlled to make it effective and purposive.

 Advertising is a communications tool which is used to
convince viewers, listeners, or readers to do
something about a product, an idea, or a service. It is
designed to positively influence people to patronize a
product or service.
 It is usually a paid announcement or promotion to
entice people to notice and patronize a company’s
product through the use of various media such as
radio, television, newspapers, magazines, through
fliers, and the Internet.
 Publicity, on the other hand, is the promotion and
management of the public’s impression towards a
subject. It is the process of creating news through
sponsorship, exhibitions, staging a debate, organizing
a tour of the business, and inventing and presenting
an award. Through involvement in these activities, the
individual or company’s name will be extensively
mentioned in the media and attract the attention of
people to the individual or for consumers to a

1.An advertising is a paid form of promotion
while publicity is free; an individual or company
only has to spend funds on the materials needed.
2.An advertising is a communications tool which
is used to make people patronize a product while
publicity is a communications tool which manages
people’s impressions about a brand and
organization.
3.In an advertising, the company can dictate how
the information about the brand it is presented
including the content of the advertising, time ,
place , while in publicity, the company has no
control over how it is shown if at all.
4.Since it comes from a third party i.e. Advertising
agencies , publicity is viewed as more credible
which comes directly from the company.

Different Dimensions of
Advertising

(a) Social dimension of advertising:
 It informs the society of various products avail-
able, their technology, uses and how the society
can benefit from new innovations, like credit
cards, debit cards, golden cards, global cards,
mobile phones, travel offers etc.
 Advertising also educates the people and the
society against hazards of life. Cancer,
“Smoking is injurious to health”, hazardous
driving, “Better late than never”. Similarly, we
have drive against pollution, against population
explosion etc. Advertising should not deceive
the society.
 It should not Manipulate the consumers against
their will. They can get exploited by sex appeal.

(b) Economic dimensions:
 A lot of money is spent on advertising specially when
expensive Media like T.V. is used to spread the
message. There are various media which can be
used.
 A lot of employment is generated as people get
involved in copy writing mission, Message, Media,
Money, Measurement of advertising effectiveness etc.
are coordinated.
 The most important thing to consider is how much
money is to be spent on various campaigns.
Advertising makes the consumer aware of products
and services and provides information for making
right decisions.
 It can encourage consumption and foster economic
growth. Advertising makes entry possible for products
and brands into the market. With larger demand it
leads to economies of scale in production, marketing

(c) Psychological aspects:
 One aspect of psychological advertising is that
drinking of Alcohol, Beer, Wine should not be targeted
on the children or those below the age of 21.
 Women in society are also critical about obscene ads
and promoting sexual permissiveness in the
advertisement i.e., Calvin Klein. There is a lot of
criticism on advertising against sexual appeals And
nudity.
 They demean women as being sex objects. Such ads
can be for cosmetics Lingerie and other products
used by women. When a consumer tries to buy a
product. He has a lot of choices before him. He gets
guided by the family, by friends, by advertisements,
by salesperson and the consumer gets confused and
often feels that he has made a wrong choice. He
undergoes both pre and post purchase dissonance
and the marketer tries to remove his anxiety by
reinforcing his choice.

(d) Communication task: Advertising
communicates and captures the attention of the
buyer. It communicates through stories, through
episodes, through tables and charts. The
communication must be interpreted in the same
manner that it is intended. It also brings attitudinal
changes and changes the faiths and beliefs of the
consumer.
(e) Triangle of communication: The triangle
shows that the advertiser has resources which
helps him to create messages. These messages
reach the audience with the help of a media. The
audience is exposed to the message to a certain
extent and also gets distracted by many factors
like noise and other work. The audience then
responds to the message and the feed back goes
to the advertiser. This leads to researches by the

Advertising and the Marketing
Mix

 Marketing mix consist of four important variables
of marketing, i.e.4Ps-Product,Price,Promotion
and Place . A part from the traditional 4Ps,there
are also other variables, i.e. Packaging,
Positioning , and Pace.
 Advertising is an element of promotion . However
, it not only assists in promoting the product, but
also affects the other variables of marketing mix .

 1. Advertising and Product : A product is
normally a set of physical elements , such as
quality ,shape ,size , color and other features
.The product may be of very high quality. At
times , the product is so designed that it
requires careful handling and operations
.Buyers must be informed and educated on
the various aspects of the product. This can
be effectively done through advertising. Thus ,
advertising plays the role of information and
education.

 2.Advertising and Price : The price is the exchange
value of the product .A marketer may bring out a very
high quality product with additional features as
compared to competitors .In such a case, price would
be definitely high. But buyers may not be willing to
pay a high price would be definitely high . Here comes
advertising. Advertising can convince buyers
regarding the superiority of the brand and thus its
value for money. This can be done by associating
the product with prestigious people , situations, or
events .Alternatively when a firm offers a low price
products the job of advertising needs to stress the
price advantage by using hard hitting copy .It is not
just enough to convince , but it is desirable to
persuade the buyer. Thus advertising plays the role of
conviction and persuasion.

 3.Advertising and Place: Place refers to
physical distribution and the stores where
the goods are available. Marketer should
see to it that the goods are available at the
convenient place and that too at the right
time when the buyers need it. To facilitate
effective distribution and expansion of
market , advertising is of great significance.
Thus advertising do help in effective
distribution and market expansion.

 4.Advertising and Promotion :Promotion
consists of advertising, publicity , personal
selling and sales promotion technique.
Businessmen today have to face a lot of
competition . Every seller needs effective
promotion to survive and succeed in this
competitive business world. Advertising can
play a significant role to put forward the claim
of seller, and to counter the claims of
competitor. Through effective advertising,
sellers can face competition and also help to
develop brand image and brand loyalty.


 5.Advertising and Packaging : The main
purpose of packaging is protection of the
product during transit , and preservation of
quality and quantity. Now a days, marketers
take lot of efforts to develop and design
attractive packages as they carry advertising
value . A creatively design package attract the
attention of the customers. It also carries an
assurance of quality and creates confidence
in the minds of customers to buy the product.

 6.Advertising and Positioning :
Product positioning aims at creating and
maintaining a distinct image of the
brands in the minds of the customers
.Through advertising, the marketer can
convey the positioning of the brand and
accordingly can influence the buying
decision of the target audience.

 7.Advertising and Pace :Pace refers to
the speed in marketing decisions and
actions . It involves among other things
the launch of new products or brand
variations at greater speed than before .
As and when new brands are launched,
advertising plays an important role of
informing, educating and persuading the
customers to buy the product.

Target Market Strategies and
Advertising

A Market consists of all possible
consumers for a good or service.
 A target market strategy
consists of analyzing
consumer demand,
targeting the market, and
developing an appropriate
marketing strategy.
 Market segmentation
divides the market into
distinct subsets of customers.

The Steps in Planning a Target
Market Strategy
Analyze
Consumer
Demand
1. Determine demand patterns
2. Establish possible bases of segmentation
3. Identify potential market segments
Target the
Market
4. Choose a target market approach
5. Select the target market
Develop the
Marketing
Strategy
6. Position the company’s offering in
relation to competition
7. Outline the appropriate marketing mix(es)

Target Market Approach
Undifferentiated Marketing (Mass Marketing)—One product, one plan to one
basic market.
Concentrated Marketing—One product/plan to one group of consumers.
Differentiated Marketing (Multiple Segmentation)—Appeals to two or more
market segments with a different plan for each.

Contrasting Target Market Approaches
Undifferentiated Marketing (Mass Marketing)
The firm tries to reach a wide range of consumers
with one basic marketing plan. These consumers are
assumed to have a desire for similar goods and
service attributes. One product for everybody. Ex-
Coca-cola, Bull energy drink, Kinley, Bisleri ,
packaged fruit juice
Concentrated Marketing The firm concentrates
on one group of consumers with a distinct set of needs
and uses a tailor-made marketing plan to attract this
single group. One product to one market niche. Ex-
Harley Davidson, Mercedes Benz
Differentiated Marketing (Multiple
Segmentation) The firm aims at two or more different
market segments, each of which has a distinct set of
needs, and offers a tailor-made marketing plan for
each segment. Two or more products to two or
more groups. Ex-Unilever-Skincare : Fair

Fair & Lovely
A poor woman using Fair &
Lovely “has a choice and
feels empowered because of
an affordable consumer
product formulated for her
needs.”
Hammond and Prahalad (2004)

‘Fair & Lovely’ Advertisement
A young, dark-skinned girl’s father laments he has no
son to provide for him, as his daughter’s salary was
not high enough – the suggestion being that she could
not get a better job or get married because of her dark
skin.
The girl then uses the cream, becomes fairer, and gets
a better-paid job as an air hostess – and makes her
father happy.

Growth Strategies- An organization substantially
broadens the scope of one or more of its business in
terms of their respective customer group, customer
functions and alternative technologies to improve its
overall performance.
Types of Growth Strategies
 Internal
 External
Definitions

Intensive/Internal
Growth
Expansion
Modernisation
Diversification
External/Integrative
Growth
Marger &
Acquisition
Joint Venture
Strategic
Alliance

Internal growth strategies relate to the
following actions:-
Expansion :
 Expanding existing product lines and
service offerings
 Reaching out for new markets
 Expansion into foreign markets
Modernization:
 Designing and developing new
products/services
 Building on existing products/services for
new opportunities

 A company often nurtures a number of
brands in the same category. There are
various motives for doing this.
 The main rationale behind this strategy is to
capture as much of the market share as
possible by trying to cover as many
segments as possible, as it is not possible
for one brand to cater to the entire market.
 This also enables the company to lock up
more distributer shelf space.
 Example : Hindustan Lever . It has Dove in
the ultra premium segment, Lifebuoy for
the economy segment and brands like
1.Multibrand
Strategy

 Refers to the introduction of different
combinations of products at different prices,
to cover as many market segments as
possible.
 It is basically offering the same product in
different sizes and price combinations to
tap diverse market opportunities.
 The idea behind this concept is to flank the
core product by offering different variations
of size and price so that the consumer finds
some brand to choose from.
 Example: Vicks the cough and cold
relieving medicine is now available in small
containers and also as inhalers, cough
2.Product Flanking

 Companies make brand extensions in the hope that the
extensions will be able to ride on the equity of
successful brands, and that the new brand will stand in
its own right in the course of time.
 A well respected brand name gives the new product
instant recognition and easier acceptance.
 It enables the company to enter new product categories
more easily.
 Example: Amul. With the success of its first product,
Amul milk powder, the company came out with Amul
ghee, Amul butter, Amul cheese, Cheese spread, and
3.Brand Extensions

 Some companies add related new product
lines to give the consumer all the products
he/she would like to buy under one umbrella.
 Example: Britannia has adopted a similar
strategy. It has introduced different kinds of
biscuits and backed foods in the past few
years. By adding a number of flavours in each
product line the company grew in the industry.
4.Building Product Lines

 A company can add new products through the
acquisition of other companies or by devoting
one’s own efforts on new product development.
 With the help of new products a company can
enter a growing market for the first time, and
supplement its existing product lines.
 Example: Dove by HLL is an example of
creating an entirely new premium segment. For
the first time in India, a soap with One-fourth
moisturiser was offered to the consumer.
 It has been positioned for the super premium
segment as a skin care product not as a soap.
5.New Product Development

 Diversification Strategy is the development
of new products in the unknown or new
market. Diversification strategy is adopted
by the company if the current market is
saturated due to which revenues and profits
are lower.
 Virgin Media moved from music producing
to travels and mobile phones
 Walt Disney moved from producing
animated movies to theme parks and
vacation properties
 Canon diversified from a camera-making
company into producing whole new range
Diversification

External Growth Strategies:
What Does Merger Mean?
The combining of two or more companies. In merger two
companies agree to move ahead and exist as a single
new company. Merger can be
merger of equals : both companies are of equal sizes.
merger of unequal's : large company merge with
smaller one
Example: Glaxo Wellcome + SmithKline Beecham =
GlaxoSmithKline

Top Acquisitions
Rank Year Purchaser Purchased
Transaction
value (in mil.
USD)
1 2000
America Online
Inc. (AOL)
Time Warner 164,747
2 2004
Royal Dutch
Petroleum Co.
Shell Transport &
Trading Co
74,559
3 2006 AT&T Inc.
BellSouth
Corporation
72,671
4 2001
Comcast
Corporation
AT&T Broadband
& Internet Svcs
72,041
5 2004
Sanofi-Synthelabo
SA
Aventis SA 60,243
6 2000
Spin-off: Nortel
Networks
Corporation
59,974
7 2002 Pfizer Inc.
Pharmacia
Corporation
59,515
8 2004
JP Morgan Chase
& Co
Bank One Corp 58,761

 Joint Ventures
A joint venture is an entity created
when two or more firms pool a portion
of their resources to create a separate,
jointly owned organization. All involved
will have an equity stake in the new
venture
It is a legal partnership between two(or
more) companies where in they both
make a new (third) entity for
competitive advantage
Unlike mergers and acquisitions, in
Joint Ventures

A joint venture may be formed to:
run production
facilities in another
country
establish a
marketing and
distribution
presence
use complementary
technologies held by each
participant.
Why Joint Venture?

 Tata Motors has formed a 51:49 joint venture in bus
body building with Marcopolo of Brazil.
 The joint venture will absorb technology and expertise
in chassis and aggregates from Tata Motors, and
Marcopolo will provide know-how in processes and
systems for bodybuilding and bus body design. Tata
and Marcopolo have launched a low-floor city bus
which is widely used by Chennai, Chandigarh, Delhi,
Mumbai, Lucknow and Bengaluru transport
corporations.
 Tata Motors also formed a joint venture with Fiat and
gained access to Fiat’s diesel engine technology. Tata
Motors sells Fiat cars in India through a 50/50 joint
venture Fiat Automobiles India Limited, and is looking
Tata with Marcopolo and Fiat

 A Strategic Alliance is a formal relationship between
two or more parties to pursue a set of agreed upon
goals or to meet a critical business need while
remaining independent organizations.
 It is a kind of partnership between two entities in
which they take advantage of each other’s core
strengths like proprietary processes, intellectual
capital, research, market penetration, manufacturing
and/or distribution capabilities etc.
 they simply would want to work with the other
organizations on a contractual basis, and not as a
legal partnership.
 Partners may provide the strategic alliance with
resources such as products, distribution channels,
manufacturing capability, project funding, capital
equipment, knowledge, expertise, or intellectual
property.
Strategic Alliance

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