Nilanchal Sahu

Roll No: 510922671

Advertising Management & Sales Promotion

Code No: - ML0007
MBA Semester 4
Assignment Set- 1

1. What is the difference between media planning and media buying? Briefly describe the various
tasks of media planners and buyers
Ans: Media planning is generally the task of a Media Agency and entails finding the most appropriate
media products for a clients brand or product. , it determines how to use time and space to achieve
advertising objectives. One of those objectives is always to place the advertising message before a target
audience. The job of Media Planning involves several areas of expertise that the Media Planner uses to
determine what the best combination of media is to achieve the given marketing campaign objectives. ).
Media planning is systematic and complex. But in fact, a media plan may be quite simple and somewhat
haphazard.
In the process of planning the Media planner needs to answer questions such as:
How many of the audience can I reach through different media? On which media (and ad vehicles)
should I place ads? Which frequency should I select? How much money should be spent in each
medium?

In answering these questions the Media Planner then comes to an optimum Media Plan that enables
him/her to deliver on the client’s objectives

Media Planners help ad agencies choose the best outlet or medium to reach the customer they want. They
plan; schedule, book and purchase space in the print media (newspapers, magazines) or outdoors
(billboards, kiosks and bus panels) and time (TV & radio, internet). The media planning exercise may
also involve conducting some targeted brand or need-specific research to assess recall and viewer
ship/readership of a campaign. 

Media Buying is a sub function of Advertising management. Media Buying is the procurement of the
best possible placement and price of a piece of media real-estate within any given media. The main task
of Media Buying lies within the negotiation of price and placement to ensure the best possible value can
be secured... Media Buyers are individuals responsible for purchasing time and advertising space for the
purpose of advertising here. When planning what to buy, they must evaluate factors based on but not
limited to station formats, pricing rates, demographics, geographic, and psychographics relating to the
advertisers particular product or service objectives. The Media Buyer needs to optimize what is bought
and that is dependent on budget, type of medium (radio, internet, TV, print), quality of the medium
(target audience, time of day for broadcast, etc.), and how much time and space is wanted. Media Buyers
can purchase spot, regionally, or nationally.

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Roll No: 510922671

One of the most important media planner jobs is that of media buyer, also referred to as a media planner.
This job requires an individual to work with a client to determine the needs and goals of a campaign.
Additionally, this person must work with the advertising department to create copy, scripts or entire
commercials for the client. Finally, this person often must negotiate with media outlets such as television
stations, newspapers and websites to get the finished product out to the public.

The job of media planner is different because of its management responsibilities. Media planner softens
handle complex and high-dollar clients, but they mostly focus their attention on running the media
department. This job requires getting updates from the media planners on various projects, monitoring the
budget and helping to develop the company's strategy with other management team members.

2. Compare the different approaches to setting advertising budgets, in terms of their relative
advantages and disadvantages. (10 marks)

Ans: 1. Percentage of Sales Method: Due to its simplicity, this method is most commonly used by
small businesses. When using this method, an advertiser takes a percentage of either past or anticipated
sales and allocates that percentage of the overall budget to advertising. Critics of this method, however,
charge that using past sales for figuring the advertising budget is too conservative and that it can stunt
growth. However, it might be safer for a small business to use this method if the ownership feels that
future returns cannot be safely anticipated. On the other hand, an established business, with well-
established profit trends, will tend to use anticipated sales when figuring advertising expenditures. This
method can be especially effective if the business compares its sales with those of the competition (if
available) when figuring its budget.

2. Objective and Task Method: Because of the importance of objectives in business, this method is
considered by many to make the most sense, and is therefore used by most large businesses. The
benefit of this method is that it allows the advertiser to correlate advertising expenditures to overall
marketing objectives. This correlation is important because it keeps spending focused on primary
business goals.

With this method, a business needs to first establish concrete marketing objectives, which are often
articulated in the ‘selling proposal’ and then develop complimentary advertising objectives, which are
articulated in the ‘positioning statement.’ After these objectives have been established, the advertiser
determines how much it will cost to meet them. Of course, fiscal realities need to be figured into this
methodology as well. Some objectives (expansion of area market share by 15 percent within a year, for
instance) may only be reachable through advertising expenditures that are beyond the capacity of a small
business. In such cases, small business owners must scale down their objectives so that they reflect the
financial situation under which they are operating.

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3. Competitive Parity Method: While keeping one’s own objectives in mind, it is often useful for a
business to compare its advertising spending with that of its competitors. The theory here is that if a
business is aware of how much its competitors are spending to inform, persuade, and remind (the three
general aims of advertising) the consumer of their products and services, While it is important for small
businesses to maintain an awareness of the competition’s health and guiding philosophies, it is not always
advisable to follow a competitor’s course.

4. Market Share Method: Similar to Competitive Parity Method, this method bases its budgeting
strategy on external market trends. With this method, a business equates its market share with its
advertising expenditures. Critics of this method contend that companies that use market share numbers to
arrive at an advertising budget are ultimately predicating their advertising on an arbitrary guideline that
does not adequately reflect future goals.

5. Unit Sales Method: This method takes the cost of advertising an individual item and multiplies it by
the number of units the advertiser wishes to sell.

6. All Available Funds Method: This aggressive method involves the allocation of all available profits
to advertising purposes. This can be risky for a business of any size; for it means that no money is being
used to help the business grow in other ways (purchasing new technologies, expanding the work force,
etc.). Yet this aggressive approach is sometimes useful when a start-up business is trying to increase
consumer awareness of its products or services. However, a business using this approach needs to make
sure that its advertising strategy is an effective one, and that funds which could help the business expand
are not being wasted.

7. Affordable Method: With this method, advertisers base their budgets on what they can afford. Of
course, arriving at a conclusion about what a small business can afford in the realm of advertising is often
a difficult task, one that needs to incorporate overall objectives and goals, competition, presence in the
market, unit sales, sales trends, operating costs and other factors.

3. What are the differences between advertising objectives and sales promotion objectives? Give
five examples of consumer sales promotion techniques, with a specific example of each. (10 marks)

Ans: Advertising Objectives: Each advertisement is a specific communication that must be effective,
not just for one customer, but for many target buyers. This means that specific objectives should be set
for each particular advertisement campaign. Advertising is a form of promotion and like a promotion; the
objectives of advertising should be specific. This requires that the target consumers should be specifically
identified and that the effect which advertising is intended to have upon the consumer should be clearly
indicated.

The objectives of advertising were traditionally stated in terms of direct sales. Now, it is to view
advertising as having communication objectives that seek to inform persuade and remind potential
customers of the worth of the product. Advertising seeks to condition the consumer so that he/she may
have a favourable reaction to the promotional message. Advertising objectives serve as guidelines for the
planning and implementation of the entire advertising programme.

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Roll No: 510922671

Objectives of Sales Promotion the basic objectives of sales promotion are:

 I) to introduce new products, to induce buyers to purchase a new product, free samples may be
distributed or money and merchandise allowance may be offered to business to stock and sell the product.
 ii) To attract new customers. New customers may be attracted through issue of free samples, premiums,
contests and similar devices.
iii) To induce present customers to buy more
Present customers may be induced to buy more by knowing more about a product, its ingredients and
uses.
iv) To help firm remain competitive. Sales promotions may be undertaken to meet competition from a
firm.
 v) To increase sales in off season. Buyers may be encouraged to use the product in off seasons by
showing them the variety of uses of the product.
 vi) To increase the inventories of business buyer, Retailers may be induced to keep in stock more units
of a product so that more sales can be affected.
Consumer sales promotion techniques and examples:
Price discounts or price-off deals: A price deal for a customer means a reduction in the price of the
promoted product and the consumer saves money on purchase.

Example: Colgate fresh energy ice blue gel (Colgate India) 50 gm pack, Rs. 5.50 off on normal price,
now available at Rs. 12.50 only. 

Price pack deals: Price pack deals are also called value packs. They can take any of the two forms:       
 
1. Bonus pack and 2.Banded pack.

Bonus pack: In case of a bonus pack, an additional quantity of the same product is offered free when the
standard pack size of the product is purchased at the regular price.
Examples: Godrej Colour Gloss triple action shampoo, offers 20% extra free. 100ml +20ml.

Sun silk shampoo (HLL) 400ml bottle gives 33% more free.

Dettol shaving cream gets 40% extra free.

Banded pack: The Banded pack is when the marketer develops special packs of the product containing
more quantity but the price is proportionately low. This technique is often used to introduce a new large
size of the product or to encourage continued usage and also to increase consumption. Another variation
of this technique is “buy 1 get 1 free” or some similar offer, it could be “same for less” or “more for the
same.”
Example: air & lovely face cream – buy 3 get 1 free,

2. Refunds and Rebates:

Refund is the repayment of total money paid for purchase, while the rebate represents repayment of only
part of the money paid for the purchase. Refund offers seem to work very well in guaranteeing the trial of

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Roll No: 510922671

a product or service since there is no risk involved for the customer because of the promise of total refund
of the purchase amount.

Refunds and Rebates play an important role in the consumer durable segment because the product price is
reduced to a great extent because of the rebate offer.
Example:“TajMahal Tea” guaranteed its taste by openly telling the public of its offer that “ if donot like
at any point return full money”
After having launched it new product Whisper Ultra Thin, confident about the product quality and
confident about offering the promised product, to increase its trail and usage, had started
themoneybackoffer.
3. Coupon: A coupon entitles a buyer to a designated reduction in price for a product or service.
Coupons are the oldest and most widely used form of sales promotions. Coupons bear an expiry date and
cannot be redeemed after the cut off date.
ThemainAdvantagesofcouponsare:
1.Encouragebrandswitching
2.Stimulatetrialforaproduct
3.Takeofftheattentionfromprice
Fair and Lovely dark circle removal cream to create more product trials has coupons in the newspapers
and magazines which avail you of Rs.10/- off on a 40 gm pack.
4. Contests and Sweepstakes: Contests and sweepstakes can draw attention to a brand like no other sales
promotions technique. A contest has consumers compete for prizes based on skill or ability. Winners in a
contest are determined by a panel of judges or based on which contestant comes closest to a
predetermined criterion for the contest. Contests were very often used earlier where people have to write
slogans, poems, stories etc. generally “I like the product because …” and the best ones won prizes. But
off lately, contests are becoming less and sweepstakes increasing. People are more willing to play on luck
rather than participate by showing their abilities.
A sweepstake is a promotion in which winners are determined purely by chance.
Consumers need only to enter their names in the sweepstakes as a criterion for winning. Some popular
types of sweepstakes also use “scratch-off cards”.Contests and sweepstakes often create excitement and
generate interest for a brand, but the problems of administering these promotions are substantial. One
problem is that the game itself may become the consumer’s primary focus, while the brand becomes
secondary. The technique thus fails to build long-term affinity for the brand.

Example: Britannia khao world cup jao campaign has taken the market by a swing.

Under the offer you collect points available on Britannia biscuit packets and exchange 100 points for a
scratch card, which has various gifts and the 100 world cup tickets. The offer was actually introduced
during the last world cup and had shown phenomenal results. Sale increased tremendously; there was an
increase in the sales by 25%, claims the company.  So it is being done this year too. This year too the
contest is showing good results.   

5. Sampling: Getting consumers to simply try a brand can have a powerful effect on future decision-
making. Sampling is a sales promotion technique designed to provide a consumer with an opportunity to
use a brand on a trial basis with little or no risk. Saying that sampling is a popular technique is an
understatement. Sampling is particularly useful for new products, but should not be reserved for new

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Roll No: 510922671

products alone. It can be used successfully for established brands with weak market share in specific
geographic areas.
Examples: Lakme has in-store trail products. Since it in the cosmetics market it is very essential to
provide samples, many stores in Mumbai from time to time have Lakme sampling offers. Where they
allow you to try the product and then buy it.

Scents and certain deodorants give the prospective customers sample spray for sales promotions.

Shampoo sachets with Magazines etc.