CHAPTER INTRODUCTION TO ADVERTISING nents in our daily lives are quite as pervasive as advertising. Whatever we er we 49, we exe alenost certzin to encounter advertising in at least one i formes. Advertising is an important part of the brand building process rhe fh advertising in communicating brand values is not reserved for JMiretional companies like Pepsi and Coke. Marketers in organizations 2) industries recognize the need for and invest in advertising and t ve tools. While companies believe in and rely heavily on 4 promotion, these are not practices that the average person clearly lus, Most people have some significant misperceptions about the dvertising and whet it's supposed to do, what it can do, and what it can't. 2s everene peuple, we do know what we like and want, and advertising helps expe st trends thet mighh mec our wants, And remember that a brand that does nich meet cass wants of is not advertised properly will not succeed. hrwther truth in the world of advertising is that there is no shortage of opinions about + it is and whet it does, Many people think that advertising deceives others, but rarely themselves, Shorh think it's a semi-glamorous profession, but one in which people ase either morally bankrupt, con artists, or pathological liars. At worst, sin, is ween ws unfzir capitalistic manipulation, post modern voodoo, or wutrigpt deception. bibes, the average person sees advertising as amusing, informative, pehgheal, and occasionally hip, Advertising often helps consumers see possibilities and nearing in the things they buy and in the services they use. It can connect goods and services to the culture and liberate meanings that lie below the surface. It can turn mae products into swaningful brand icons and important possessions. © scanned with OKEN Scanner4 Advertising and Versemal Stliny Sereettinnes The truth about advertising lies somewhere between the two extreme: advertising is hard hitting and powerful; at other times, it’s boring, and ineffer ti. Advertising can be enormously creative and entertaining, and it can be simply annex One thing is for sure: advertising is anything but unimportant. Advertising, play pivotal role in world commerce, and in the way we experience and live our lives. It is part of our language, and our culture. It reflects the way we think about things, ar the way we see ourselves. It is both a complex communication process and a d: iyritric sie business process. Advertising is indeed a big line item in the profit staternent of companies. For financial year 2008, advertising and marketing, expenses amounted te Rs7,065 crore (for the top 200 Indian listed companies in terms of their net sales) These expenses are 12 per cent of their total selling and administrative expenses, which is no doubt a sizeable piece. For some sectors such as fast moving, consurner goods, media and financial institutions, this figure is as high as 60 per cent. The Viewpoint on Advertising Advertising means different things to different people. It's a business, an art, an institution, and a cultural phenomena. To the CEO of a multinational corporation, like Pepsi, advertising is an essential marketing tool that helps create brand awareness and loyalty and stimulates demand. To the owner of a small retail shop, advertising is a way to bring people into the store. To the art director in an advertising agency, advertising is the creative expression of a concept. To a media planner, advertising, is the way a firm uses the mass media to communicate to current and potential customers. To scholars and museum curators, advertising is an important cultural artifact, text, and historical record. Advertising means something different to all these people. In fact, sometimes determining just what it is and what is not advertising is a difficult task. Sidney R. Bernstein compares advertising to the job of salesperson. In essence he says it is “a substitute for the human salesman talking personally to an individual prospect or customer across a store counter or a desk or an open door. And as d substitute for the personal human salesman, advertising has pretty much the same furictions and attributes as the human salesman.” To John O Toole, advertising, is where the action is. “There are those of us who feel that the communication explosion is the central fact of the twentieth century, that we are involved in the most important aspect of the contemporary society. For people burning with a compulsion to communicate ideus, facts, feelings, and opinions-in print, in radio or television, on film, and on posters-there's no place else to be, but advertising.” Prominent public figures and business leaders have recognised the importance of © scanned with OKEN Scannera Introduction to Advertising advertising in society. According to Sir Winston Churchill “Adwertising nourishes the consumer power of man. It creates a better standard of I It sets up before the man the goal of a better home, better clothing, better food for himself and kis family.” And Franklin D. Roosevelt said, “If I were starting my life over again, I am inclined to think I would go into the advertising business in preference to almost any other.” According to Dunn and Barban, “Advertising is a paid, non-personal communication through various media by business firms, non-profit organisations, and individuals who are in some way identified in the advertising message and who hope to inform or persuade members of a particular audience.” This definition approaches primarily from the standpoint of advertisers, who presumably hav target audiences and determined the effect they hope to achieve through p yet truthful ads in the media. Inessence, advertising is a marketing communication tool used to convey information about products, services, or ideas to a targeted audience. Specific 2d executions vary widely, but regardless of message content, media vehicles, or the: objective of a campaign, it must be measured against communication goals. / is used by companies to reach customers on a global basis, or around the comer. Features of Advertising ‘According to American Marketing Association, “advertising is defined as any paid form of non-personal presentation and promotion of ideas goods or services by an identified sponsor.” As directand simple as this definition seems, itis loaded with distinctive features of advertising. Figure 1.1 Features of Advertising Features of Advertising No Immediate Feedback Cost Paid-Comm-] Mass | persuasion | Pervasive: | Amplified i -Effective | unication | Mediated ness —_|Expressiveness © scanned with OKEN Scannerer a Advertising and Personal Selliny First, advertising is a paid communication by a company or organization that wants its information disseminated, In advertising language, the company oF organization that pays for advertising is called the client or sponsor, If a communication is not paid for, t's not advertising, For example, a form of promotion called publicity is not advertising because itis not paid for, Let’s say, the popular heroes or heroines appear on the reality shows to promote their newest movie. Is this advertising? No, because the producer on film studio did inot pay the reality show for airtime, In this example, the show gets an interesting and popular guest, the guest star gets exposure, and the film gets plugged in, Everyone is happy, but no advertising took place. But when the film studio produces and runs ads for the newest movie on television and in newspapers across the country, this communication is paid for by the studio, it is placed in media to reach consumers, and therefore it most definitely is advertising, Second, advertising is mass mediated, This means it is delivered through a communication medium designed to reach more than one person, typically a large number or mass-of people. Advertising is widely disseminated through familiar means-television, radio, newspapers, and magazines-and other media such as direct ‘mail, billboards, the Internet, and CD-ROMs. The mass-mediated nature of advertising, creates a communication environment where the message is not delivered in a face- to-face manner, This distinguishes advertising from personal selling as a form of communication. Third, all advertising includes an attempt to persuade, To put it bluntly, ads are communications designed to get someone to do something. Even an advertisement with a stated objective of being informational still has persuasion at its core. The ad 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. Fourth, advertising allows pervasiveness. That is, advertising permits the seller to repeat a message many times messages i about the seller's s It also allows the buyer to receive and compare the . Large-scale advertising, says something positive ize, power, and success, Fifth, it has amplified expressiveness. It provides opportunities for dramatizing the company and its products with the artful use of print, sound, and colour Sixth, advertising does not provide immediate feedback. The non personal nature of advertising results in no opportunity for immediate feedback from the message recipient (except in direct response adv i p F ng). Therefore, before’ the message is sent, the advertisers must consider how the audience will interpret and respond to it Seventh, advertising is considered as a very cost-effective method for © scanned with OKEN ScannerIntroduction to Advertising Me communicati i i ig cating with large audiences, One message, in the national network, prime- Hime television reaches across to crores of people. The fiature and Purpose of advertising differs from one industry to another and/or across situations. The targets of an organization’s advertising, efforts often vary, 26 do advertising’s role and function in the marketing program. One advertiser tay seek to generate immediate response or action from the customers; another a want to develop awareness or a positive image for its products or Gove Gre a longer period of time. : * Role of Advertising in Marketing Communication Businesses are more interested in marketing communication synergism than ever before. Marketers are continually looking for the proper mix of marketing communication techniques that will best reach their prime prospects. The determining factor that moves a company or a product category to a particular communication option is both diverse and complex. Advertising is only one of the many marketing communication tools available to a company. In fact, advertising planning starts by determining whether, and in what proportion, advertising can be used profitably. At this point, our marketing situations analysis will tell us if the marketing conditions are conductive to the use of advertising alone, or more likely in concert with other marketing communication tools. There are a number of factors, which determine the degree to which advertising is used. Among the most important ones are the following: ‘The faster a market is growing, the higher the advertising expenditure is as a share of the total market sales- Businesses in growing markets take advantage of these opportunities by spending significantly more on advertising than businesses in stagnant markets. Advertising expenditures as a share of sales tend to be higher when demand is low- During periods of high demand, the ratio of advertising to ales is lower than when there is low demand for a product category © The less frequently, a product is purchased, the higher the advertising to sales ratio is-Basically, high ticket, but infrequently bought, products such as automobiles and household appliances must keep their brands before consumers even though the purchase cycle is very long. Often, media advertising, is supplemented by direct response advertising to people, who owned a car for three or four years to try to estimate the purchase cycle. © The earlier a product is in its life cycle, the higher advertising to sales © scanned with OKEN Scannera Advertising and Personal Selling ratio is- Advertising tends to be much greater inthe introductory and growth stages of developmentas the process of building brand awareness, cultivating conviction and initiating purchase action on the part of the prospective customers. © The higher the perceived product quality of a brand in a product category, the higher the expenditure of advertising to sales- Product quality must be promoted continually through advertising to maintain brand equity. © Businesses with major new competitors have higher advertising expenditures- Established brands are forced to meet this competitive spending to protect their product franchise. ‘This lists not intended to be inclusive of all the factors that might determine the place of advertising in a specific marketing communication plan. However, it does demonstrate the many variables that must be considered when a business decides the role that advertising will play. Functions Performed by Advertising The basic function of advertising is to disseminate product information that allows consumer to know that products exist, give them information about competing brands, and, finally, permit consumers to make intelligent choices among product options. However, beyond these strictly utilitarian functions, advertising is both a persuasive agent and a communicator of social standards and mores. Advertising mirrors the society in which it functions and over the time probably contributes to subtle changes in the mores and behaviour of the public, who are exposed to it. Some of the commonly discussed functions of advertising are as under: © scanned with OKEN ScannerIntroduction to Advertising a Figure 1.2 Functions of Advertising Awareness Building Competitive Weapon Comprehension Building of Advertising Lead Legitimization | Generation Awareness building - Introducing the company and its products to the target audience. * Comprehension building - Explaining the new product features and various utilities performed by them through advertising. © Efficient reminding - Consumers need constant reminders to keep the brand alive. «Lead generation - Advertisements introduce the new products in the market and help in generating leads for sales representatives. © Legitimization - Generally advertisements are considered more authentic and legitimate as they carry message to masses. People believe in what is told to them through advertisements. Sales representatives use copies of ads to legitimize their company and products. ¢ Reassurance - Advertising can remind customers as to how to use the product and reassure them about their purchase decision. © Competitive weapon - Advertising is the most effective competitive weapon © scanned with OKEN Scannery 10 Advertising and Personal Selling to fight the cut throat competition existing in the market places these days. «Supportive ~ Advertising is the most supportive as it gives strength to other promotional tools. Importance of Advertising Advertising’s role as an institution has been studied for most of this century by both critics and proponents. These perspectives about the roles of advertising generally fall into one of the four categories: Figure 1.3, Importance of Advertising : Boasts Employee Morale ‘Supplements Salesmanship Building Goodwill Better Utization of Resources Increased Sales s 3| 8 Steady Demand ely Q 2/3 g Ble 2/2/5) 3/2) 2] |s : =. LE eee z\3 alg e|2 3 ale a For Business o = 9 2 al’ 2 g) 2] 2] 2) 8) Fle R/Q(B |e] 1s =) 2) Z1€) 8] 2/6] 2] 5) 3 Importance zi/o|# |2|8\¢ 5/2) 2)-g] 81212) 2) 2] 8 of Advertising EIS lalolzZleF E) 8] 5) 2] 8]-2) 2) 8] s/o Ele |F|2/2/8 sla a el: 4 ee & 3 | fl 3) (2) 2| S15| 2/4] 5] E : eyeys | | £1F 3/4] =|=) 2}-3] § | For Society / Blgis 2 Sa 2 Zs a Biy|e £3 & 63/3 > Economy at large z 2 |e ra Increased Employment Ble Sle a Encouragement to Art Higher Standard of living Helps fight monopolistic Competition Create Vs Stimulate the Demand ‘Adds Place and Possession Utilit Better Utilization of Resources Helps Fight Price Competition Helps Manage Business Cycles i © scanned with OKEN ScannerIntroduction to Advertising 11 What Advertising Does for Business? Ina society of surplus, where overall supply is greater then demand, businesses must use marketing communication techniques to efficiently meet competition. Without advertising, businesses would not be able to bring new products to the attention of enough consumers to make the enormous cost ofcreating, developing, manufacturing, and distributing these products practical, Advertising is important for launching new products, increasing the sale of existing brands, and maintaining the sale of mature brands. Markets are not static. According to Ephron Erwin, “Brands have been characterized as leaky buckets, They lose customers all the time. Mass advertising helps to keep the buckets full. It fixes leaks by reminding existing buyers, and it tops off the bucket by attracting new ones. It also builds brand awareness among those that aren’t in the bucket yet.” Some of the important benefits reaped by businesses through advertisements these days are listed as under: 1) Awareness generation ~ Manufacturers are able to disseminate information regarding the products to the consumers through advertising. x2 Steady demand ~ Advertising is able to ensure a steady demand for all the goods and services throughout the year. 3) Increased sales - Advertising persuades consumers to purchase the goods as a result of which the sales of the companies increase. = Quick turnover and smaller inventories - Advertising ensures a smooth demand, resulting in the quicker turnover of the goods and smaller inventories. 5) Better utilization of resources - Because of the increasing demand, the manufacturers are able to utilize their production capacities to the full, resulting in the better utilization of their resources. 6) Lower costs - When goods are produced in bulk, the cost per unit comes out to be less. 7) Building goodwill - Successful advertisements, always add to the goodwill or prestige of the company. 8) Supplements salesmanship - Effective ads facilitate the job of the salesperson in finally convincing the consumer to purchase the product. 9) Boasts employee morale - A company's product advertising is a means of instilling pride and loyalty in its employees, as they would always like to be associated with a company whose image or goodwill is better in the society. This helps to bring the employee's rate of turnover to the lowest level possible. © scanned with OKEN Scanner4 Advertising and Personal Selling, What Advertising Does for Middleman? Middleman plays a very important role in launching the product in the market, In the face of the growing competition, where markets are flooded with hundreds of brands, itis very important for the middleman to play a significant role in increasing the sale of a company’s product or service, Middlemen generally prefer dealing in thowe brands, which are heavily advertised, because advertising contributes to their success in various ways, as has been listed under; . 1) Mode of communication - Advertisements play a very important role in informing the consumers about the various features of a product or service. It facilitates the job of the middleman and saves them the botheration of spending. time, energy and effort with each and every consumer, in order to convince them about the product attributes. Quick turnover - Successful advertisements result in a steady and increasing demand of the goods which facilitates the middleman in the form of quick turnover of the goods and their quicker margins. f 7 3) Low cost of doing business ~ The goods which are advertised heavily and have quicker turnover, do not occupy much of the shelf space, and do not remain in the godowns of the retailers for a long time. As a result of which the retailers do not have to spend much on their maintenance resulting in low-cost of doing business. 4) Greater goodwill and prestige - Middleman will always prefer to deal in the brands of a company, which enjoys prestige amongst the target audience because that prestige gets passed on to their retail outlet as well. 5) Least efforts - Quick turnover, high prestige, low cost of doing business, and quicker margins always result in least effort for the middleman. What Advertising Does for Consumers? Effective selling must start with a customer orientation. It moves fi duct development that meets consumer demand to advertising and promotion th tah - how a product fulfills a need better than other alternatives, distributi i ze that make the product conveniently available, and a price that offs i Secs perceived value for their money. Effective advertising planning must ask a ae “Does my product help people solve a problem better than competin, brands?” Advertising should address the way a product relates to consumer ee Over the period of time advertising has resulted in the following benefits to the consumers: aaivis © scanned with OKEN ScannerIntroduction to Advertising 13 : Laat of purchasing ~ Advertising has added place utility to the consumers by Providing them information about the various ‘goods available in the nearby markets. 2. Elimination of unnecessary middlemen - Advertising has also facilitated direct marketing, thereby eliminating unnecessary middleman. 3. Education of consumers - It provides consumers with information utility by informing them about the new product developments and highlighting the various features of the products. 4. Wider variety to choose from - Consumers get to know about the availability of the various brands in the market with their unique features. This provides them with a wider variety to choose from. o . Improvement in quality ~In an effort toimpress upon the consumers regarding the better quality and unique features of the brand in comparison to the competitor's brand, advertising is indirectly resulting in better quality products. 6. Reduced prices ~ Advertising has also resulted in increasing competition, thereby providing consumers with better quality goods at lower prices. 7. Offers sales promotion incentives - Information with regard to the new sales promotion schemes introduced by the company is provided to the consumer through advertising only. 8. Product improvements ~ Because of the increasing competition and the continuous search of the advertisers for unique selling prepositions (USP) to be advertised in the ads, all this has resulted in better quality goods to consumers. 9. Entertaining - Some of the ads are master pieces. They provide lots of colour, entertainment, music and thrill to people. Advertisements add life to an otherwise dull medium. What Advertising Does for Society/Economy? Besides benefiting manufacturers, consumers and middleman advertising has also benefited our society at large. It has also made a significant contributions in the growth and development of our economy. Indian economy which was once considered an underdeveloped economy is now moving fast on the path of development. Advertising has contributed a lot in this direction through the following ways: 1) Increased employment - For an economy like India where underemployment has always been one of the major problems. The contribution of advertising in the field of employment generation has been tremendous. Advertising has © scanned with OKEN Scannerkb Advertising and Personal Selling not only created more job opportunities in the field of advertising but it has also helped in generating more jobs in the production, marketing, finance and research and development fields. 2) Sustaining the press - Advertisements are bearing the increasing cost of the various mediums. It is only because of the advertisements that we are able to have practically a free access to television, and radio. Even the newspapers are available to us at such low prices, because of the advertisements. 3) Encouragement to art and artists ~ The increasing number of ad agencies are giving employment to the various kinds of arts and artists. 4) Higher standard of living - It is only because of advertising, that we are made aware of the availability of the various kinds of goods or services, which can add comfort to our lifestyle. People do not hesitate in buying all types of luxurious goods, as a result of which the overall standard of living in our economy is increasing. 5) Advertising and monopolistic competition - As the number of brands in every product category is increasing advertising helps the marketers in fighting the monopolistic competition, successfully. 6) Create vs. stimulate the demand - Advertising helps in creating as well as stimulating the demand for various products and services by informing them to the target audience. Earlier people used to save money, and the marginal propensity to save was very high in our economy, as people did not know the better utilization of money. Today, because of advertising, they get to know about the availability of so many products in the market that they tend to purchase them more often, as a result of which the marginal propensity to consume is on the increase, which is better for the economy at large. 7) Advertising adds place utility, possession utility - As advertising spreads information about the availability of various products, right next door. It facilitates their purchase and consumption and 8ives satisfaction to the consumer. 8) Better utilization of resources - As advertising ensures a regular and increasing demand for the products throughout the year, companies are able to operate their plants at full capacity. Bulk purchases of raw materials and labour always results in the overall low cost of production due to economies of scale. 9) Advertising and price competition - Advertising also helps the marketers to fight the price competition by justifying to the consumers the value for money: It informs the consumer about the superiority of the product in comparison © scanned with OKEN ScannerIntroduction to Advertisiy vertising 15 to that of the competitors’ product. 10) Advertising and business cycle - Advertisin : ig might be used in counteracting recession and thus certainly has merit 11) Advertising and social awareness Advertising has proved to be a very effective medium for spreading social awareness and educating people about their social and cultural values. Exhibit 1.1 gives an example of a social ad educating people about their right to vote. Criticisms of Advertising The role of advertising in society has been debated for centuries. Advertising is c'aimed by its practitioners to be largely responsible for the good things in life, and is criticized by its opponents as the cause of much of what is bad. Follow.ug is ¢ succinct yet elegant account of why advertising is so fiercely criticized: As the voice of technology, (advertising) is associated with many dissatisfactions of the industrial state, As the voice of mass culture it invites intellectuals’ attack. And as the most visible form of capitalism it has served as nothing less than a lightening-rod for social criticism. A variety of technical criticisms have been leveled against advertising. Because the issues are complex, it is impossible to treat each criticism in great detail. The purpose of this discussion is merely to introduce the basic issues. The following criticisms are illustrative rather than.exhaustive. Figure 14 Criticisms of Advertising Criticism of Advertising Perpetuates Sterotypes Creates Fear and Insecurities Untruthful and Deceptive Superfluous Expenditures © scanned with OKEN Scanner= 16 Advertising and Personal sty, Exhibit 1.1 - An example of the social ad educating people about their ri © scanned with OKEN ScannerIntroduction to Advertising V7 + Advertising is untruthful an that adv. 'd deceptive - The majority of consumers think ‘vertising often is untruthful. Some advertising is deceptive as they contain false information Tegarding the products and make consumers believe that the false representation is tue. It would be naive, however, to assume that most advertising is deceptive. The advertising industry is not much different from other institutions in a pluralistic society. Lying, cheating, and outright fraud are universal, occurring at the highest levels of government, and in the most basic human relationships. Advertising is not without sin, but neither does it hold a monopoly on it. + Advertising is manipulative - The criticism of manipulation asserts that advertising has the power to influence people to behave atypically, or do things they would not do if they were not exposed to advertising. Take to the extreme; this suggests that advertising is capable of moving people against their own free wills. Undeniably, advertising does attempt to persuade consumers to purchase particular products and brands. But persuasion and manipulation are not the same thing. Persuasion is a legitimate form of human interaction that all individuals and institutions in society perform. + Advertising is offensive and in bad taste - Advertising critics contend that many advertisements are insulting to human intelligence, vulgar, and generally offensive to the tastes of many consumers. Several grounds exist for this criticism: (1) sexual explicitness in various forms of advertisements; (2) television commercials that advertise unpleasant products; (3) inappropriate use of women and children in the advertisements. Undeniably, much advertising is disgusting and offensive. Yet, the same can be said for all forms of mass media presentations. For example, many network television programs verge on the idiotic, and theatre movies are often filled with inordinate amounts of sex and violence. This certainly is not to excuse advertising for alll its excesses, but a balanced view demands that critical evaluations of advertising be conducted in a broader context of popular culture and other forms of mass media presentations. Advertising creates and perpetuates stereotypes - The contention at the root of this criticism is that advertising tends to portray certain groups in very narrow and predictable fashion. Women are stereotyped as homemakers or sex objects; and senior citizens are frequently characterized as forgetful people. ‘Advertising is guilty of perpetuating stereotypes. However, it would be unfair to blame advertising on creating these stereotypes, which, in fact, are perpetuated by all elements in society. Spreading the blame does not make © scanned with OKEN Scanner18 Advertising and Personal Selling advertising any better, but it does show that advertising is probably not any worse than the rest of the society. + People buy things they do not really need ~ A frequently cited criticism suggests that advertising causes people to buy things or services that they do not need. This criticism is a value-laden judgment. Advertising most assuredly influences consumer tastes and encourages people to undertake purchases they may not otherwise make, but is this unethical? «Advertising plays upon people’s fears and insecurities - Some advertisements appeal to the negative consequences of not buying a product- rejection by members of the opposite sex, bad breath, failure to have provided for the family if one should die without proper insurance coverage, and so on. Some advertisers must certainly plead guilty to this charge. However, once again, advertising possesses no monopoly on this transgression. «= Excessive Materialism - Increasing advertising lays emphasis on owning material possessions. People tend to judge others by what they own rather than by what they are, So advertising is blamed for laying lots of emphasis on material accumulation which strictly goes against Indian culture. In sum, the institution of advertising is certainly not free of criticism. What should be clear, however, is that advertising reflects the rest of society, and any indictment of advertising probably applies to society at large. Responsible advertising practitioners, knowing that their practice is particularly susceptible to criticism, have a vested interest in producing legitimate advertisements. It is doubtful that advertisers and other marketing practitioners are any less ethical in their practices than are other elements of society. Types of Advertising In order to understand advertising, it is important not only to know what it is and what its functions are in our economy but also to know something about the way advertising is classified. Advertising can be classified in many different ways according to audiences, types of advertisers, media, functions etc. ‘hy © scanned with OKEN ScannerIntroduction to Advertising Figure 15 ‘Types of Advertising ‘Onthe Basis of The Types of Advertisers Types of Advertising apps upzefen andedsmon mpoyy uo posea, Classification on the Basis of the Types of Advertisers National, Regional and Local Advertising ‘Advertising reaches people through various media's. On the basis of their coverage and reach, media are classified as national, regional or local. National advertising is used to designate the type of advertising which is done by a © scanned with OKEN Scannerth Advertising and Personal Selling manufacturer on a nation-wide scale to stimulate the demand for his product among ultimate consumers. Itis also defined as the advertising by a marketer of a trademarked product or service sold through different outlets, whenever they may be. It is advertising done by the manufacturer in contrast to that done by a retailer, National advertisement exists when a trademarked product that has the potentiality of being sold throughout the nation is in fact advertised. The advertisement for automobiles, soft drinks, food product appearing in such magazines as Life and Readers digest and national newspapers such as The Times of India, Hindustan Times etc. , the advertisement of cosmetics, soaps etc, appearing on the nationwide television networks is national advertisement. When a new manufacturing firm appears on the business scene it usually does not seek immediate national distribution because generally during the initial stages, funds are limited, production capacity is low, personnel are few and distribution know how is limited. It is only for well-established national big companies who are able to push the product at all the retail outlets throughout the country. Traditionally, national advertising has been the most general in terms of product information. Items such as price, retail availability, and even service and installation are often omitted from national advertising or mentioned in general terms. However, the need to communicate more closely with targeted consumers has significantly changed the messages of national advertising during the last decade. In coming years, growth of Internet advertising as well as consumer research at the retail level, will allow the national advertisers to offer specifically tailored messages to consumers based on individual lifestyle and product usage characteristics. Regional Advertising: If advertising is confined to one region of the country only. Regional advertising may be done by the manufacturer, the wholesalers, or the retailer. Local Advertising: Local advertising is confined to one trading area or city and usually is considered to be synonymous with the term “retail advertising”, Retail is the workhorse of the advertising world. It usually combines aspects of hard sell messages with institutional advertising. The advertising may in fact be promoting the sale of nationally advertised brands of merchandize, but the stress is on the brand in the advertisers store rather than in some competitive store. On the one hand," retailers must compete in an extremely competitive business environment to move large volumes of merchandise. At the same time, their advertising must enhance the image of the retailer, Retail advertising often includes price information, service and return policies, store locations, and hours of operation-information that national advertisers usually cannot provide. Exhibit 1.2 provides an example of retail or local advertising. d © scanned with OKEN ScannerIntroduction to Advertising 21 Se Ta ei ea ae eR a puavanyrestrieecipe ent cosmb Tn Mola att sro! Exhibit 1.2 - An excellent example of Retail or Local Advertising where IDBI a National Bank is promoting its local branches (Source: O&M) © scanned with OKEN Scanner2 Advertising and Personal Sethn., For example, in national advertisement, the message says in effect “Buy a Brand Maruti Company gives a national ad saying “Buy Maruti’s Alto.” The manufactur: cares very little where the product is purchased from. While the retail advertiser’, message says “Buy X brand at our store” or the retail ad in case of Maruti Car wil! say “Buy Maruti’s Alto from Competent Motors.” where the consumer makes the purchase is more important to the retailer than the brand purchased. Difference between National Advertising and Local /Retail Advertising National advertising is different than local or retail advertising in various ways. Some of the important differences noticed between the two are listed as under: Territory covered ~ Retailer works in a more restricted geographic market than does the national advertiser. Customer relationship - Proximity to the marketing means that the retailer's message can be closer to the likes, preferences, prejudices and buying habits of the intended audience, while in national advertising most of the time the expression used is very general in nature. Expected response - The retail advertiser strives for an immediate response to most of his advertising while national advertiser is usually more interested in establishing long-range favorable attitudes, * Use of price - Retailer frequently stresses on price in retail copy, while the national advertiser may play down or j ignore this inducement as prices may vary from region to region, © Types of advertisers - National advertisin, while local or retail advertising ex and the retailers. g is done only by the manufacturers ‘penditure can be shared by the manufacturer Classification Based on Audience to which Message is Directed From the standpoint of the audience, to which the message is directed the advertisements can be classified into the following four categories: 1) Consumer Advertising: Is that type of advertising whether done by the manufacturer ora dealer handling the product which is directed at the ultimate consumers- the individual who buys the product for himself or for use in his household. Majority of the advertisements coming in various media's fall into the category of consumer advertising, © scanned with OKEN ScannerIntroduction to Advertising 5 2) Industrial Advertising: Is that advertising which is done by the manufacturer oF distributors of industrial goods, designed to stimulate demand among the industrial buyers of such goods. The industrial goods may be raw materials, machinery, equipment, suppliers or fabricated materials. Companies selling to manufacturers most often address their advertising to them in appropriate industry publications, direct mail, telemarketing, and personal selling, Industrial Specialized and relatively small audience. ificantly more important in the distribution of advertising is used to speed the sales of Industrial products, to reduce the costs of personal sales efforts, and to improve sales effectiveness. are stressed. 3) Trade Advertising: Is done by the manufacturer to stimulate wholesalers and retailers to stock and sell the goods of the manufacturer. These are. designed to obtain the aggressive promotion and sale of the manufacturers’ line of Products by the dealers who are logical outlets for such products. Many trade advertisements also offer a schedule of future consumer promotions and show retailers that manufacturers are supporting brands with their advertising, Direct mail and specialized business publications are the principle media employed in trade advertising. 4) Professional Advertising: Is done by producers and distributors of products who are dependent on professional people to recommend, specify or prescribe their products to the ultimate buyers or users. Manufactures of pharmaceutical products and building materials advertise to doctors and architects with the expectation that they will prescribe, recommend or specify them to those individuals or builders who will buy the products on the basis of professional recommendations. Classification Based on the Generation of Demand Primary Demand Advertising: Primary demand advertising is designed to increase demand for generic products or services, those that carry a brand as well as those that are unbranded. It is usually done by trade associations or other ae industry groups. Here the goal is to increase the consumption ott he product Tegardless of brand choice- promotion of colour television sets, fully automatic Washing machine etc. © scanned with OKEN Scanneru Advertising and Personal Selling Selective Demand Advertising: In contrast, selective demand advertising is designed to stimulate the demand for a particular brand of a product, Such as Videocon washing machine, or BPL colour television, ete. This type of advertisement is also known as competitive advertising which points out a brand’s uses, features and advantages that benefit consumers and may not be available in competing brands Selective advertising is used by firms, usually to stimulate demand for a particular brand after primary demand has been established, It may be used to maintain the brand position after primary demand stabilizes. Classification Based on the Generation of Action Direct Action Advert Advertising designed to obtain some immediate response from the readers or listener is called direct-action advertising. It uses all types of media: direct mail, TV, magazines, newspapers, radio etc, which induces consumers to order the merchandise immediately, An advertising that attempts to get the reader to send in a coupon for a sample of the merchandise would be an example of direct action advertising. The future holds great promise for various forms of interactive media that will provide even more innovative ways of communicating with prospects. One of the reasons for the growing use of direct response is its flexibility. It can be used to solicit a direct order through a catalog or direct-mail piece; through tele-shopping ads; through various sites provided by Internet. Indirect Action Advertising: This is designed to influence the reader to have a favorable opinion or image of a brand so that when he does decide to buy that product he will buy the advertiser’ brand rather than a competing one. Majority of the advertisements coming on television, radio etc, fall in this category. Classification Based on Non Product Advertising Idea Advertising: It is not surprising that the same marketing techniques, so successful in selling products would be used to promote ideas. It is used when advertising is required to influence special interest groups and sway public opinion. Environmental issues, pollution control, animal issues, road safety measures etc. are only a few of the topics that have used by mass advertising in recent years. Idea advertising is often controversial. Apart from the emotionalism of many of the topics being exposed, there are those critiques, who think that advertising messages are too short and uperficial to fully debate many of these issues. Proponents counter that advertising is the only practical way to get their messages before a mass audience. © scanned with OKEN Scannerduction to Advertising Introd 8 5 ‘YOUR SUPPORT THE KEY TO GHT CORRUPTIO Tene ac Tee (3™ November to 7" November, 2008) Regarding Railway relted corrupt practices, Write of Call to : Chief Vigilance Officer Northern Rallway, Headquarters Office, Baroda House, New Detht Tele tax : 011-23387349, 23389980 ‘www.ntindianrall.govin NORTHERN RAILWAY i } ‘Always al your service Serving Customers With A Smile Exhibit 1.3- An example of Social Advertising educating people to fight against corruption © scanned with OKEN ScannerAdvertising and Person Sen g Suruyeyo; (W80 !021n05) weyseley Jo UoH Pue Ajoaty 1nzanojo> aya £q yst1n0} }eayAw 0} SULAH st ISEMOL wey: © scanned with OKEN ScannerIntroduction to Advertising > Social or Public Service Advertising: Quite similar to idea advertising. Here advertising is used for the presentation and Propagation of social values and norms, and various public welfare activities, Success of “pulse polio campaign” is a live example of public service advertising. Exiibit 13 P, a s 5 is an example ial advertisin; educating people to fight against corruption, Ole ee Service Advertising: It is done to facilitate and health care services, educational service: tourism, transportation services, repair and maintenance services, etc. Service advertising is more difficult than Product advertising, because what the service provider is trying to sell is basically the expertise in somefield. Services are intangible and inseparable, and thete is no transfer of ownership: Often service companies keep the same slogan, theme, or identifying mark over long marketing of services, such as, medical S, childcare services, hospitality services, mpanies have a particularly tity. Exhibit 1.4 projects nicely an example of service advertising, Classification Based on Medium Advertising is classified on the basis of the medium used- magazine advertising, Lawspaper advertising, outdoor advertising, radio advertising, television advertising, transit or transportation advertising, direct- mail advertising etc. Classification Based on Types of Appeals Used Emotional Advertising: In this type of advertising, marketers make use of positive or negative emotions to ensure a purchase response on the part of the target audience. Use of positive emotions, such as, love, pride, respect, belongingness, beauty, humour, looking good to opposite sex are made by advertisers to promote their products or Services. Most of the soaps, deodorants, perfumes and household goods use Positive emotional appeals. In some of the situations, advertiser’ s make use of negative emotions, Such as, fear, guilt, shame, loss of life and property, etc. to shake the consumer &motionally and purchase their product. Ads for insurance policies, fire safety measures, health equipments etc. successfully use negative emotions. Rational Advertising: In this type of advertising, marketers try to ao justify © purchase of the product to the consumers. They try and highlig te unique features of their products which make them better than their See ay Prove the Superiority of their brand by highlighting either price, utility, durability, > © scanned with OKEN Scannera 28 Advertising and Personal Selling , effectiveness, etc, Miscellaneous Classification Institutional Advertising: Some of the advertising done by the firms is not designed to promote specifically a certain product or brand of the manufacturer. Instead it is designed to establish favorable attitudes towards the company as a whole on the part of present and potential consumers, the general public, or a specific group of people. It remains a long-term image-building technique. It does not attempt to seek immediate action but attempts to build up the reputation of the firm (by stressing the age and accomplishments of the firm, the skill of its employees, the extensive research carried on by the firm, the final policies of the firm etc.) so that the consumers will trade with them rather than the competitors in future. Frequently cited objectives of corporate advertising are: to establish a public identity; to overcome negative attitudes towards the company; to explain a company’s diverse missions; to boost corporate identity and image; to overcome a negative image; to gain awareness with target audiences for later sales; and to associate a company with some worthwhile project. The competitive environment of recent years has brought about dramatic changes in corporate advertising. Some of it is also Public Service Institutional Advertising: Which involves sponsoring such public welfare activities as the prevention of forest fires, safe driving, raising funds for various charitable programs, family planning, conservation of national resources etc. Cooperative Advertising: Some manufacturers have a special interest in the advertising efforts of their dealers, particularly in the case of specialty goods. The most fruitful means of identifying the retail outlet selling the manufacturer's product is to advertise the dealer’s name. Cooperative advertising appeals to the general public to buy the nationally advertised brands at the local retail stores. The media costs are often shared. Export Advertising: Is that which appears in media that circulate in a foreign country. It is designed to stimulate demand among consumers abroad (cither ultimate Individual or industrial consumers) for the manufacture’s product. Comparative Advertising: It compares two or more specifically identified brands in the same product category and proves the superiority of one brand over another. A recent example of this is an open war going on between the Complain and Horlicks brands,the health drinks in the market. © scanned with OKEN ScannerIntroduction to Advertising % re Defensive Advertising: Is done when marketers advertise to offset or lesson the ts of a competitor's pr ee any’ sale ora a motional program. Such advertising may not increase the company’ e or market share but it May preventa loss in sales or market share. The example of Coke and Pepsi advertisin, = i a problem is called defensive advertising, 16 aggressively to overcome the pesticide os : Is done to remind consumers that an established brand is still around and is the best till date. New improved Bournvita, extra calcium, extra iron-the Bournvita ad is an example of reminder advertising, which is trying to hold onto ts target audience in the presence ofthe stiff competition given by Boast, Horlicks and Complain. Reinforcement Advertising: Tries to assure current users that they have made the right choice by buying their product and tells them how to get the utmost satisfaction from the product. Surrogate Advertising: In advertising context when the laws of a. country do not permit advertisements of a certain product category, the advertisers take the shelter of brand extension. For example, advertisements of alcoholic drinks are not permitted in India on mass media. To bypass this, some manufacturers of whisky or similar products launch and advertise their brand of soda under the same brand name, as that of their popular whisky. Examples are Bagpiper Soda and McDowell Soda ad. These classifications are not mutually exclusive and much overlapping is involved. Since many different bases are used for the purposes of classification. The advertising of a manufacturer conducting a campaign for a new automobile via nation wide television networks might well be classified as national, consumer, selective, indirect action, product and television advertising all at the same time. Summary Most people have strong, widely varying, and sometimes erroneous views about advertising. Some people treat advertising as an art, for some it is a science, while others treat it as profession. It is always a paid, nonpersonal instrument of isi .d, and ever-changing. The er icati ‘oles of advertising are many, varied, hanging aes ver been greater, and the costs of error is significantly Options open to advertisers have ne\ : 5 magnified compared to only a few years ago. Advertising cannot be effective unless Some form af eouconiieation takes place between the advertiser and the audience. But advertising is about mass communication. Advertising has been Performing a Number of ae for marketers: information building, awareness generation, © scanned with OKEN Scanneroe ‘* Advertising and Personal s elling reminder function, ete. Advertising is gaining more and more significance over the years. It is rendering lot, of advantages to manufacturers, middleman, consumers, and the society at large. At the same time advertising suffers from various ethical and social constraints also, Sometimes it is found untruthful and deceptive, manipulative, offensive and in bad taste, but responsible advertising practitioners, knowing that their practice is Particularly susceptible to criticism, have a vested interest in producing legitimate advertisements. Advertising can be thought of both as a means of communication, and as a function of marketing. Also, it can be categorized as retail or national, product or institutional, direct-action or indirect-action, primary or selective, comparative or reminder, etc. The search for advertising theory has been only partially successful but we would like to know much about how it works in the next chapters. Its total scope can best be visualized in terms of the volume of billing advertising places in media or in the numbers of persons employed. ; Questions for Review 1. Why is advertising so difficult to define? Give some definitions of advertising as it exists today. ay 2. How are advertising and marketing alike? How do they differ? 3. Name and explain the various functions performed by advertising. 4. “Advertising is an indispensable tool for marketers”, do you agree with the statement. Explain, giving the arguments in favour of advertising from the marketers, middleman and consumers point of view. 5. “Advertising has helped the Indian economy to a large extent in growing ata faster rate”, give your perspective about the statement. 6. Advertising is often accused of various ethical violations. The criticisms of advertising mentioned in the chapter include claims that advertising is defective, manipulative, offensive, and plays on people's insecurities and fears. Provide evidence from your own personal experience to support any of these claims, 7. In your opinion, should a firm be required to have substantiating evidence (test results or other data) for an advertising claim prior to making the claim? Why or why not? © scanned with OKEN ScannerIntroduction to Advertising 31 8 be classified on the basis i is of target audience, types of and types of appeals used? : 7 9. Differentiate between: advertisers, (@ National Advertising and Local Advertising (i) Primary Demand Advertising and Selective Demand Advertising Gi) Consumer Advertising and Trade Advertising iv) Emotional Advertising and Rational Advertising () Direct-Action Advertising and Indirect-Action Advertising (vi) Reminder Advertising and Reinforcement Advertising 10. Write short notes on: @ Surrogate Advertising (@) Public Service Advertising (iii) Institutional Advertising (iv) Professional Advertising (¥) Comparative Advertising 11. Collect from correct periodicals examples of the best advertisements, Why do you consider these good advertisements? © scanned with OKEN Scanner