ADVERTISING MANAGEMENT

Part 1

Eastern Institute of Management2nd Year 1st Semester

The raw material of Advertising, is life….

• It’s the business of inspiring people. Yet, we’re most uninspired.

• Its’ the business of knowing everything about everything.Yet, we know little about just a few things.

• We believe we’re in a borderless world. Yet, we barricade our curiosity.

• We’re in the sensorama business. Yet, we don’t use most of our senses.

• You don’t need wings to fly. Just an open mind. And don’t give me excuses like “Where’s the time?”

• Do you discover one new thing in your life each day?• Enrich By One: Live your life that way…

A step ahead

• We were in the information age. We are now in the knowledge domain.

• The only way you win with colleagues and clients is when you knowas much if not more about their business.

• If you work on real estate, do you know about what is happening inthe Ropponji Hills district in Japan or for that matter Canary Wharfin London or the 50 Gramercy Park project in New York?

• Knowledge is the next battlefront. The soldier on that is the generalof tomorrow.

• Ahead By One: Live your life that way...

Course Content

1. Advertising’s Role in the Marketing Process2. Legal/Ethical/Social Aspects of Advertising3. Process of Communication – Wilbur Schramm Model4. Theory of Cognitive Dissonance/Advertising Strategy5. DAGMAR approach 6. Stimulation of Primary/Selective Demand – Positioning7. Campaign Planning/Brand Management

Copy/Logo/Illustration/Appeal/Layout8. Media Planning, Budgeting and Evaluation Press/TVC

Course Content…Contd

9. Rationale of Testing Opinion and Aptitude Test

10. Recognition/Recall11. Advertising Agency :

Selection/Compensation/Appraisal12. Advertising vs Consumer Behaviour13. Sales Promotions/Tactical vs Thematic/Retail14.

National/Co-operative/Political/International/Public Service Advertising

Expectations from you…ReadSee

ExperienceApply

…as the raw material of advertising is life

Advertising’s Role in the Marketing Process

What is Marketing ?

The American Marketing Association, defines ‘Marketing’ as

• the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods (products ~brands) and services to create exchanges that satisfy individual and organizational objectives’

Marketing Communication Mix

Marketing Objectives & Strategy

Marketing Plans

ProductionDistribution (Place) Promotion

Pricing Planning

The Promotion Mix

Advertising

DirectMarketing

Interactive/InternetMarketing

Publicity/Public Relations

PersonalSelling

Target Audience

SalesPromotion

Advertising

• originates from the Latin Word ‘ad vertere’ which means ‘to turn the mind towards’

• Advertising is the use of media to inform consumers about something and/or to persuade them to do something in effect. It brings products/brands and consumers together and then modulates the relationship between them

Question ?

• If Advertising is a part of Marketing, then is it all about Communicating ?

Example..When I say…

• A Cola• A Photocopier• A Photographic Film

Material• A Microprocessor• An Expensive Swiss Watch• Cartridge Blades for

Shaving• Main Frame Computers• Operating Software

What comes to your mind ?

• Coca Cola• Xerox• Kodak• Intel• Rolex• Gillette• IBM• Microsoft

What do these communicate to you?

The Law of Advertising

• Advertising, today, is all about ‘Building’ brands and ‘Positioning’ brands in the mind of the consumer and not just communicating about it.

What is a Brand ?

• A Brand is not a product : it is the product’s

source and it defines its identity in time.

• The value of a brand lies in its capacity to

generate cash flows.

• A brand is a landmark…it is enduring.

In Effect….

• A Brand is an Identity(like all famous personalities has its distinctiveness)

From a long term point of view,We need to win ‘share of mind’ rather than ‘share of space’

Some quick examples & an exercise…

Brand Positioning Exercise : Category Soap

• Lifebuoy• Liril• Lux• Santoor• Dove• Ayush• Dettol• Hamam• Aramusk

• Hygiene• Freshness• Beauty• Goodness-Sandalwood• Moisturizer• Herbal• Antiseptic• Family• Masculinity

Corporate Advertising

Types of Corporate Advertising

Image AdvertisingEvent sponsorshipAdvocacy advertisingCause-related advertising

Advertising done to promote the interests of the firm by enhancing its

image, assuming a position on a particular issue or promoting a

certain cause

Objectives of Corporate Advertising

Create a positive image for the firmCommunicate the organization’s viewpoint on

various issuesBoost employee moraleSmooth labor relationsHelp newly deregulated industriesHelp diversified companies establish an

identity

Chevron Engages in Image Advertising

Event Sponsorship

Events used for sponsorship:• Sporting events• Music/entertainment• Festivals• Arts/cultural events• Causes

Event Sponsorship is a form of marketing communications whereby an organization

becomes involved with a particular event by developing sponsorship relations.

Advocacy Advertising

Advocacy advertising is the propagation of ideas and elucidation of controversial social issues of public importance in a manner that supports the interests of

the sponsor

The San Diego Zoological Society

Cause Related Marketing

Cause related marketing is a form of marketing whereby companies link with charities or nonprofit organizations as

contributing sponsors

KitchenAid uses cause-related marketing

Try Reading This

Olny srmat poelpe can raed tihs.

cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdanieg. The

phaonmneal pweor of the hmuan mnid, aoccdrnig to a rscheearch at Cmabrigde Uinervtisy,

it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the frist and lsat ltteer be in the rghit pclae. The rset can be a taotl mses and you can sitll raed it wouthit a porbelm.

Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. Amzanig huh? yaeh and I awlyas tghuhot slpeling was ipmorantt!

Direct Marketing

• When organizations communicate directly with target consumers to generate a response and/or a transaction.

• It’s not just direct mail but a host of activities such as database management, direct selling, telemarketing, multi level marketing, and direct response ads, catalogue selling etc.,

• Eg : L L Bean, Dell, Tupperware, Amway

Interactive/Internet Marketing

• Using the internet and the world wide web as the medium for exchange of information and transactions

• Eg : Amazon.com, ebay.com• Eg : Nike ‘Whatever’ campaingn

Sales Promotion

• Are those activities that provide extra value or incentives to the sales force, the distributors/retailers or the ultimate end consumers and can stimulate immediate sales.

• Consumer Oriented Sales Promotions : Coupining, sampling, Premium, Rebates, Contests, and Point of Purchase Materials

• Trade Oriented Sales Promotions : Merchandising Allowance, Price Deals, Sales Incentives, Trade Shows, Dealer Meets,

Public Relations and Publicity

GeneralPublic

Employees

Suppliers Stockholders

Customers

CLIENT

Public RelationsTo manage relationships with the Public

Public Relations Management Process

Determination and evaluation of public attitudes

Identification of policies and procedures of an organization

Development and execution of the program

Marketing Public Relations (MPR) Functions

Building marketplace excitement before media advertising breaks

Creating advertising news where there is no product news

Introducing a product with little or no advertising

Providing a value-added customer service Building brand-to-customer bonds Influencing the influentials/opinion leaders Defending products at risk and giving

customers a reason to buy

Public Relations Audiences

Employees of the firmStockholders and investorsCommunity membersSuppliers and customersThe mediaEducatorsCivic and business organizationsGovernmentsFinancial groups

Public Relations Tools

Press releases

Press conferences

Exclusives

Interviews

Community involvement

The internet

Example of a Press Release

Reebok Used a Press Conference to Announce the

Sponsorship of Shakira

PR Publications

Inserts Enclosures Annual reports Posters Bulletin boards Exhibits Audiovisuals Position papers Speeches

News releases Media kits Booklets Leaflets Pamphlets Brochures Manuals Books Letters

Advantages of Public Relations

Credibility

Cost

Avoidance of clutter

Lead generation

Selectivity

Image building

Criteria for Measuring PR Effectiveness

Total number of impressions . . . Over time On the target audience On specific target audiences

Percentage of . . . Positive articles over time Negative articles over time

Ratio of positive to negative articlesPercentage of positive and negative

articles by . . Subject Publication Reporter Target audience

Publicity

Key points regarding publicity:

Publicity is generally short-term focused Publicity is not always under the control of

the firm Publicity can be negative as well as

positive

Publicity involves the generation of news about a company, product, service, brand or person in various media. It is a subset of the

public relations effort.

The Power of Publicity

Perceived as more credible

Often perceived as endorsed by the medium in which it appears

Often has high news value

Often generates high frequency of exposure

Responding to Negative Publicity

Using Positive Publicity

Advertising Publicity

Tentative

Low

Unspecified/Low

Undetermined

Advertising Versus Publicity

Great

Lower

Achievable

Schedulable

Specific/High

High

Specifiable

Undetermined

Higher

Little

Factor

Control

Credibility

Reach

Frequency

Cost

Flexibility

Timing

Personal Selling

• A form of person to person communication where a seller attempts to assist and/or persuade prospective buyers to purchase a company’s product or service or to act on an idea.

• Eg. Real Estate/Insurance, NGO cause, PUBLIC

Selection Criteria of the Promotion Mix

0

2

4

6

8

10

12

Awareness Curiosity Trial Purchase Post Purc.

Purchase Decision Sequence

Effec

tiven

ess

Advertising PR DM Prsnl Slng Sales Promo

Advertising RegulationLegal, Moral and Ethical Aspects of Advertising

Federal Trade Commission (US)

• Promotional practices of the Tobacco and Alcohol Industry

• Health Claims in the food Industry• Children’s Advertising : Toy Industry – “Dial A

Santa”• Advertising to the Elderly : Health Safety,

Financial Security• Environment

50 cases in nearly 100 million in judgement

What is Deception ?

• Conceptually Deception exists when as Advertisement is introduced into the perceptual process of some audiences and the output of that perceptual process – Differs from reality of the situation– Affects buying behaviour to the detriment

of the customerThe ad may not be false but the perception

may be

More meaning to Deception

• There is a misinterpretation, omission or practice that is likely to mislead

• The consumer is acting responsibly (or reasonably) in the circumstances

• The practice is material and consumer injury is possible because consumers are likely to have chosen differently if there was no deception

Misrepresentation or Omission5 of the 13 causes

• When an Ad suggests a small difference is important : eg Tar level in cigarettes

• Artificial product demonstrations : • Using an ambiguous or easily confused phrase :

eg “government supported’ meaning ‘government approved’ attorneys claiming to be specialist/certified

• Implying that a benefit that does not fully or partially exist : eg Efficen no Aspirin effect

• Implying that a product benefit is unique to a brand : eg Wonder Bread built bodies

Puffery

• A subjective statement of opinion about a products quality : great/best/ can’t get any closer/better deal etc.,

Neither have been proved true neither false

• Poetic License or allowable exaggeration– BMW : The Ultimate Driving Machine, Bayer

Aspirin – The Wonder Drug• Is an exaggeration extended to the point of

outright spoof that is obviously not true : Snapple – Made from the best stuff on earth

Legal, Ethical, Social Aspects of Advertising

You Judge

The deeper meaning

• Legal: pertaining to, or according to law

• Ethical : moral principles and values that given the actions and decisions of an individual or a group - relating to morales, principles

• Social : pertaining to society, organized community

The Implications

• Conceptually, deception exists when an advertising’s input to the perceptual process of the TG and the output of that process a) differs from the reality of the situation b) affects buying behaviour to the detriment of the consumer

• According to the Ferderal Trade Commission Act (FTC) passed in the US in 1914, deception will be found if there is a misrepresentation or omission that is likely to mislead the consumer to acting responsibly

The Implications

• Misrepresentation or omission can occur when an ad contains the incorrect implication that : a) test conducted scientifically b) a benefit exists c) claim is substantiated

• Puffing, the subjective statement concerning a products quality using terms such as ‘best’ is permissible

• The AAI and the Consumer Forum• Trademark protection/Self Regulations• Social Implications/Ethical Issues• Health and Environment Issues• Politically being correct : Gender/Sexual

Preferences

Legal Issues in Advertising

IPR

• Trade Mark Signs (Word, Colour, Picture etc.,)

• Patents Inventions (Products or Processes)• Designs• Copyright• Trade Secrets• Patents

Ethical Issues in Advertising

Starbucks Case Study

Advertising • Definition : Advertising is a public notice

meant to convey information and invite patronage or some other response.

Advertising Controversy• Information represents a distorted image of

reality• Response is negative

Public relations strategies• Mitigating harm• Responding to stakeholders needs• Repairing image

Ethical principles that apply in handling Advertising controversies

The Starbucks Case

• To some this was clearly offensive after 9/11

• To others this image is innocuous

New York Post, June 18th 2002:

“Starbucks Yanks Ad Mocking 9/11”

"As a New Yorker who watched the whole [Sept. 11] incident outside my window…seeing the poster in Starbucks directly across from Ground Zero adds some resonance that perhaps the people in Seattle did not grasp," fumed customer Gregory Moore, who first complained to the Post.

Starbucks response

"We deeply regret if this ad was in any way misinterpreted to be insensitive or offensive, as this was never our intent. The poster, promoting Tazo Citrus and Tazoberry beverages, was designed to create a magical place using bright colors and whimsical elements such as palm trees and dragonflies."

Starbucks Press Release 6/16/2002

Why Recognizing the Ethical Dilemma Matters

• These are immediate decisions which will forever affect the public's opinion of the company and the value of the world wide brand.

• If the company does not identify or recognize ethical aspects of crisis, it’s too late.

Schemas and Scripts: When Are You in An Ethical

Dilemma?• Starbucks Collapse into Cool:

– Action: Recognize post-9/11 environment & immediately pull the ads

– Result: stakeholders protected

Social Aspects of Advertising

The advertising philosophy of United Colors of Benetton is based on Luciano Benetton's belief that 'communication should not be commissioned from outside the company, but conceived from within its heart.'

“All the colors of the world” was one of the first slogans to appear in Benetton ads, and was later altered to “United Colors of Benetton.” The concept of united colors was such a strong one that for the first time in its history, the company adopted the slogan as its actual logo. Creative Head : Oliviero Toscani

Benetton’s long journey toward its destiny as a subverter of stereotypes began with its cooperation with Oliviero Toscani and the images of the 1986 campaign. Happy groups of multiracial kids were replaced by “couples” representing an all-new interpretation of difference. In this cycle, the word “different” became a close cousin of “controversial.” Benetton learned that dealing with the issue of difference within the process of advertising is not an easy task. Often, an attempt to bring different individuals together can lead to conflict instead of happiness and euphoria.

After equality and the exaltation of differences, Benetton turned to the reality of what is common to all and shared by humankind. The dialogue that Benetton had begun with its “consumers” (whom it had always viewed, above all, as men and women) gained depth.In 1991, during the Gulf War, this image was created, a photo of a war cemetery: To opposition against the irruption of “death” as an advertising subject, Benetton answered with a birth, the famous image of a newborn baby still attached to the umbilical cord.

At this point, the language of Benetton communication changed radically. With the February ’92 campaign came the scandal of planetary proportions. These ads showed news photos of real, high-drama situations: a man dying of AIDS, a soldier gripping a human thigh bone, a man assassinated by the Mafia, a car on fire, a ship being

stormed by emigrants.

The reaction to these real-life photos was sometimes violent. Many publications in several countries refused to print the campaign. By eliminating the product from its ads, violating the taboo of disagreeable themes, associating its name with the representation of conflict and pain and, above all, abandoning the false, comfortable world of advertising stereotypes, Benetton cracked the foundation that held up the culture, language and specificity of the classic advertising message.

King James I counterblaste

• ...a custom lothesome to the eye, hateful to the nose, harmful to the brain, dangerous to the lungs, and in the black and stinking fume thereof, nearest resembling the horrible stygian smoke of the pit that is bottomless (1604)

Tobacco in Society

• Unique consumer product– Kills 1 in 2 – Addictive– Almost unregulated

• Pervasive drug use – Nicotine self-administration– Dirtiest possible delivery system– 10 million dependent on nicotine

Who smokes?• 13m smokers

– 28% men– 26% women– 15% professional– 39% manual unskilled

• 82% start as teenagers• 70% want to quit

– 4m try in any year– c. 300,000 succeed – 10m ex-smokers

Health impacts• Harm to smokers

– 120,000 UK premature deaths per year– over 50 health impacts– addiction c.10m dependent in the UK

• Harm to others– lung cancer, heart disease, asthma– pregnancy complications and cot death – 17,000 hospital cases per year in under-5s– welfare

Some Impacts

• Cancer• Heart & Circulation• Respiratory• 20 fatal illnesses• 50 non-fatal illnesses • Widespread addiction• Cost burden• Productivity

• Deforestation• Indoor air pollution• Waste & Litter• Ozone depletes

Pesticides• Labour exploitation• Fires• Criminal activity

Teenage Smoking

Politics: Two Views

• A legal adult consumer product that people are free to choose if they want to enjoy the pleasure of smoking, knowing and accepting the widely publicised and usually overstated risks.

• A lethal product with over 50 known health impacts - including harm to non-smokers - sold by a predatory industry which nurtures teenage smoking until nicotine addiction takes over.

How it works - part 1

Younger adult smokers are the only source of replacement smokers... If younger adults turn away from smoking, the industry must decline, just as a population which does not give birth will eventually dwindle.

(RJ Reynolds, 1984)

How it works - part 2

A cigarette for the beginner is a symbolic act. I am no longer my mother's child, I'm tough, I am an adventurer, I'm not square …

As the force from the psychological symbolism subsides, the pharmacological effect takes over to sustain the habit.

(Philip Morris,1969)

Responses

• Informed choice v. disinformation• Tobacco promotion• Taxation• Smoking in public and workplaces• Smoking cessation support• Reduce harmfulness of the product

Warning...

“The tobacco industry has succeeded where many health education programs have failed because they capitalize on the deep social needs that most compel adolescents: to fit in, to exert independence from parental control, and to demonstrate physical agility and sexual allure.”

Smoking in public places

Process of Communication Wilbur Schramm Model

Linear Model of Communication

Realms ofUnderstanding

Realms ofUnderstanding

Source Encoding Decoding Receiver

MESSAGE

Noise NoiseFEEDBACK

SENDER RECEIVER

CHANNEL

Linear Model

Wilbur Schramm (1955) – Basic Model of Communication

1. Source : Individual/Organization sending the message

2. Encoding : transferring intended message to symbolic style that can be transmitted

3. Signal : transmission through particular media4. Decoding : understanding and interpreting the

symbolic style5. Receiver : Individual/org receiving the message6. Feedback : Receivers Communication Back to source7. Noise : distortion of the communication message

Realms of Understanding

The concept ‘realms of understanding’ is an important element in the concept of communication process because it recognizes that successful communications are more likely to be achieved if the source and the receiver understand each other. This understanding concerns attitudes, perceptions, behaviour, and experience.

The Other Forms/Role Players

• One Step• Two Step• Multi Step• Word of Mouth• Opinion Leaders• Opinion Formers• Opinion Followers

Process of Adoption

New Product Adoption Theory

• ADOPTION PROCESS - The consumer decision stages that lead to

innovation acceptance/rejection - A micro process process that focuses on

internal forces of the consumer* Intra Personal (Psych) Influences* Inter Personal (Social) Influences* Product Selection Criteria

Process of Adoption

Knowledge ConfirmationImplementationDecisionPersuasion

Communication Channels

Prior ConditionsNeeds/Problems

SocioeconomicPersonalityCommunication

Relative AdvantageCompatibilityTriability

Adoption

Rejection

Contd. AdoptionLater Adoption

Discontinuance

Continued Rejection

Rogers 1983

Example

• Knowledge – Rahul cleans his teeth, begins to notice sensitivity

• Persuasion – Notices that ‘Special Paste’ claim they reduce sensitivity. Friend also confirms

• Decision – Prepared to believe. Given free sample ( or special price deal)

• Implementation – Buys and tests it• Confirmation – Improves. Reads article that

whets it. Continues to buy it

An Example

Reliance India Mobile

Category Need : Knowledge/Persuasion

Awareness

Brand Awareness : Decision

Implementation

Brand Facilitation/Purchase Intention

Web Worlds501 SchemeFree Talk

Process of Diffusion

New Product Diffusion Theory

- the spread of an innovation from its source to the ultimate consumer.

- a macro process that focuses on external forces on the consumer (change agents, channels of information, types of information)

- occurs in a social system (a target audience, community, etc.)

Some Examples for Discussion

Process of Diffusion

Time

2.5% 13.5% 34% 34% 16% 2.5% 13.5% 34% 34% 16%

Innovators

Laggards

Late Majority

Early Majority

Early Adopters

Process of Diffusion

• Innovators : Like new ideas have large disposable incomes

• Early Adopters : Large opinion leaders, important in speeding diffusion, younger and educated. Consult people. Imp to Mktg Comms. As they speed process.

• Early Majority : Usually opinion followers, average age, education, social status and income.

• Late Majority : Skeptical of new ideas, adopt because of social and economic factors

• Laggards : Suspicious of all new ideas. Lowest on rung.

is influenced by…

* Competitive Intensity * Good Supplier Reputation * Standardization of Technology * Vertical Channel Coordination * Resource Commitments

Speed of Diffusion

Categories

• INNOVATORS - are first to buy and typically described as venturesome, younger, well educated, financially stable, and willing to take risks.

• EARLY ADOPTERS - are local opinion leaders

who read magazines and who are integrate into the social system more than the average consumer.

• EARLY MAJORITY - solid, middle-class consumers who are more deliberate and cautious

• LATE MAJORITY - described as older, more conservative, traditional, and skeptical of new products

Categories

• Laggards– Resist change– Conservative– Like tradition– Often older & lower in

socioeconomic status

• Nonadopters– Refuse to change

OK, we will

buy X.If I have to buy it I will.

No way!

Diffusion Process,Adopter Categories

Life-Style Characteristics of Innovators & Non innovators

Characteristics Innovators Non innovators• Product Interest MORE LESS• Opinion Leadership MORE LESS• Personality: Dogmatism OPEN-MINDED CLOSE-MINDED Social Character INNER-DIRECT OTHER-DIRECT Category Width BROAD NARROW• Venturesome ness MORE LESS• Perceived Risk LESS MORE

Life-Style Characteristics of Innovators & Non-innovators

Characteristics Innovators Noninnovators• Purchase and Consumption Traits: Brand Loyalty LESS MORE Deal Proneness MORE LESS Usage MORE LESS• Media Habits:

Magazine Exposure MORE LESS Television LESS MORE Specialized Magazine MORE LESS

Life-Style Characteristics of Innovators and Non-innovators

Characteristics Innovators Non innovators• Demographic Characteristics: Age YOUNGER OLDER

Income MORE LESS Education MORE LESS Occupational Status MORE LESS

• Social Characteristics: Social Integration MORE LESS Group Members MORE LESS

RELATIVE ADVANTAGE - is an enhanced bundle of benefits or clear-cut advantages over existing offerings

COMPATIBILITY – is acceptance with existing habits, values and consumption behavior, similar usage as existing productsTRIAL ABILITY is the experience or see the newnessEasily tested, Low risk, Inexpensive, No special equipmentFree samples or coupons

Some Terminology

OBSERVABILITY - is the opportunity for buyers to see the newness

COMPLEXITY - is a disadvantage for new products which slows diffusion and may be offset by simplifying usage or through extensive education

Why Some New Products Fail and Others Succeed

• Failure to Meet Customer Needs• Poor Timing• Market Conditions• Ineffective or Inconsistent Branding• Technical or Design Problems• Overestimation of Market Size• Poor Promotion• Insufficient Distribution

80 to 90% Fail. Why?

Theory of Cognitive Dissonance

Cognitive Theory

• Mainstream psychology has moved from behaviourist to cognitive orientation.

• Cognitive theory is based upon :– Information processing– Problem solving– Reasoning approach to human behaviour

Individuals use info generated by external sources (advtg) and internal sources (memory). This process is thought, processed, transferred into meanings or patterns and then combined to form judgments about behaviour.

What do these pics tell you ?

Cognitive Theory

• Determinants that are important to understand cognitive orientation – contribute to the way individuals process information.– Personality– Perception– Learning– Attitudes– Environmental Influences

Personality

• Beamish Irish Ale : Is a traditional Irish Ale.• Campaign launched in 1997 presented two

sides of life, the red and the black.• Intended to reflect the two sides of Irish

personality• Beamish Ale available in both red and black

drink allows drinkers to satisfy complementary attitudes, tastes and ocassions.

Perception

• Volvo : regarded as a safe, reliable and environmentally friendly car . For the family.

• New ad ‘The Porche will be along in a couple of seconds’ showed a Volvo 850 estate car outpacing a Ferrari.

• Appeal to new markets, new segments..’boxy and boring’ to ‘safe but sexy’

• Aim was to attract pre family and older post family buyers.

Learning

• Kellogs All Brand a shredded fibre breakfast cereal began to lose market share in the late 1980’s.

• Research revealed that buyers understood the importance of fibre in their diet but assumed that fresh fruit, whole meal bread and vegetables were easier alternatives souces of fibre.

• In 1990 Kellogs launched a campaign that compared the fibre content of All Bran with other natural foods

• Buyers were encouraged to make a judgement about their current diet and the alternative that was being presented as patently superior.

Attitudes

• Skoda the East European car manufacturer has long suffered an inferior reputation in Western Europe

• VW bought shares in 1991• Launched Felicia in ’94 and Octavia in ’96• Unprompted awareness of Skoda was 100%, need to

communicate the change in ownership.• ‘We have changed the car, can you change your mind?’• Challenge to buyers to revisit their attitudes towards

Skoda• ‘Who’s behind the changes at Skoda’ – Oct 1995• ‘Judge for yourself’ – January 1997• VW’s efforts to change attitudes

Environmental Influences

Culture Social ClassSituationalInfluences

Groups CommunicationSituations

Cognitive Dissonance

• Is a state where after any decision has been made a buyer might feel tension about his/her past decision because the product fails to reach expectations or the consumer becomes aware of a superior alternative

• Eg : Car Manufacturers : keep re-emphasizing positive features on and on.

Four Main Paradigms Leon Festinger 1957

• The Free Choice Paradigm – dissonance occurs as the result of the choice being made

• The Belief Disconfirmation Paradigm – dissonance comes from exposure to info inconsistent with one’s belief

• The Effort – Justification Paradigm – dissonace occurs when a person engages in an unpleasant activity with intentions to gain a desirable result

• The Induced – Compliance Paradigm – dissonance is aroused when one does or says something that is contrary to an existing belief or attitude

WHY THIS STRESS ON BRANDING ?

Book Value, 95%

N T, 5%

Book Value, 25%

Non-Tangible,

75%

0%

20%

40%

60%

80%

100%

1980s 1999

Market Capitalisation

THE STAKEHOLDER’S VIEW

Arthur Anderson’s report on Fortune 500 companies:

THE STAKEHOLDER’S VIEW

The VALUE of a Company is increasingly being determined by its

NON-TANGIBLE ASSETSLike “BRAND VALUE”

Arthur Anderson’s report on Fortune 500 companies:

“I would ratherown a MARKETthan a MILL.”

Why?

How?

THE ORGANISATION’S VIEW

WHY DO WE WANT TO OWN A MARKET ?

To influence consumption.

In the future, power will flowonly to those Companies

who can influence consumption,and not to the owners of assets.

WHY DO WE WANT TO INFLUENCE

CONSUMPTION?

than a Mill

I’d rather own a

Market

HOW DO WE INFLUENCE CONSUMPTION?

1. Own or Influence the Environment

2. Own or Influence the Consumerby owning or influencing his MIND his HEART

INFLUENCING THE CONSUMERCompanies that make

and

will inevitably make gains in

Market share and Profitability.

Mind Share

Heart Share

steady gains in

This is the role of

BRANDING

This is the

POWER

MIND SHARE is achieved by

“Burning” the brand into the mind of the consumer through

RepetitiveRelevantMemorable andConsistent Communication of aCredible Promise.

HEART SHARE is achieved by

Delighting the customer!

THE BRAND ICEBERG

THE PRODUCT BRANDING ICEBERG

WHAT YOU CAN SEE

WHAT YOU CANNOT SEE!

Symbol

Brand name Price

Presentation

Advertising

Efficient production

Strong R&D

Strong supply chain

Low cost Effective

sellingHigh quality

High service levels

Source: Even More Aggressive Marketing

Strong HR

BRAND MANAGEMENT - AN AGENCY PERSPECTIVE

WHAT IS A BRAND ?• A Brand is not a product : it is the

product’s source and it defines its

identity in time.

• The value of a brand lies in its capacity

to generate cash flows.

• A brand is a landmark…it is enduring.

WHY IS BRAND MANAGEMENT IMPORTANT ?

• Today, the primary capital of any businesses is their brand.

• For decades, the value of a company was measured in terms of real estate, then tangible assets, plants and equipment's.

• However…. it has been recognized that a company’s real value lies outside the business itself, in the minds of its consumers.

IN EFFECT….

• A Brand is an Identity(like all famous personalities has its distinctiveness)

BRAND IDENTITY VS IMAGE

• Image is on the receivers (consumers) side.

while• Identity is on the senders

(manufacturer/agency) side

FROM AN AGENCY POINT OF VIEW….

• It is important how we build Brand Identity

BRAND POSITIONING

• It has become common to analyze Brands according to their positioning. The term applies to a process of emphasizing the brand’s distinctive and motivating attributes in light of competition.

BRAND POSITIONING

Why ? For Whom ?

When ? Against Whom ?

WHY ?

• What is the specific consumer benefit do we bring to the consumer ?

Sony brings innovationNokia connects peopleIntel brings swiftness,fast

processesPhilips makes things better

FOR WHOM ?

• This indicates the Target Audience

Omega - for those who’ve made it in lifeComplan - for mother’s of growing children

WHEN ?

• This indicates the occasion to use the brandSurf Excel - when you have a front loading washing machineSociety Tea - Anytime

AGAINST WHOM ?

• Points to the main competition

Kissan Vs MaggiColgate Vs PepsodentClinic Vs Head & Shoulders

BRAND POSITIONING

• Positioning is important as it reminds us that it is meaningless unless positioned in the consumers mind versus competitionBut Positioning is more a reflection of a product, and does not exploit its full potentialities

Thus the need for A Brand Identity

BRAND IDENTITY

• To become a power brand & remain so, a brand has a duty to be faithful to its identity.

Brand Image is a volatile and changing notion - it is concerned too much with the appearance of the brand and not enough with its very being.

THE BASIC DIFFERENCE

BRAND IMAGE Vs BRAND IDENTITY

• Idealism Durability• Fickleness

Coherence• Opportunism Realism

THE BRAND IDENTITY PRISM (TOOL)

Physique Personality

Relationship

Self ImageReflection

Culture

IBM - PRISM

All data processingsystems Confident Square

Security, Assurance Big Biz, Ivy LEast C, Wall St.

‘I am a pro’Those who take biz seriously

APPLE - PRISMMicrocomputers

Easy Acess, all purpose Creative, Cool

Liberated, Friendly New Humanism, West C, Change

Self EnhancementYoung Minded, Autonomous

SOURCES OF IDENTITY• The Products (Benetton - colour)

• Power of Name (Apple - Computers)

• Brand Characters & Symbols (Gattu, Amul

Girl)

• Trademark and Logos (Mercedes Emblem)

• Geographical/Historical Roots (Swissair)

• Advertising : Content & Form (Marlboro

Man)

India Kings An Example

THE BRAND IDENTITY PRISM (TOOL)

Physique Personality

Relationship

Self ImageReflection

Culture

THE COMMUNICATION PROCESS

• Communication Effects

• Strategic Planning

• Consumer Insight

• Discriminator/Ad Idea/Executional Idea

• Brand Experience

THE 5 COMMUNICATION EFFECTS

• Category Need• Brand Awareness• Brand Attitude• Brand Purchase Intention• Purchase FacilitationAll Consumers experience these effects before any buying decision

CATEGORY NEED

• Consumers perception of requiring something (a product or service) to remove or satisfy a perceived discrepancy between the current motivational state

and the desired motivational state

BRAND AWARENESS

• Consumers ability to identify (recognize or recall) the brand within the category in sufficient detail to make a purchase

BRAND AWARENESS

• At the product category level, a person won’t buy unless he or she has the need. At the brand level, a person cannot buy unless he or she is made aware of the brand. Thus Brand Awareness always takes precedence over other Brand level communication effects in particular, Brand Attitude

BRAND AWARENESS RECOGNITION VS

RECALL• Brand Recognition

Brand is encountered 1st Buyer then checks need

‘That’s Cherry Blossom’ ‘Do I need to polish’

• Brand Recall

CN encountered Buyer Recalls Brand

‘I need to polish my shoes ‘Cherry Blossom’

BRAND AWARENESS

Brand Identification Communication Obj..At Point of Purchase Brand RecognitionPrior to Purchase Brand Recall

You don’t have to be motivated to be aware of the brand, but you have to be motivated to buy it.

BRAND ATTITUDE

• Consumers overall evaluation of the brand with respect to its perceived ability to meet a currently relevant motivation.

• Brand Attitude consists of an emotional or affective component which energizes the brand and a logical or cognitive belief that directs choice towards a particular brand

BRAND ATTITUDE

• If motivation changes, the evaluation might change, therefore it is important that we identify the motivation that the brand is perceived to meet

• BA = Emotional + Logical

• Emotional - Energizes, Logical - Guides

• If motivation exists then consumer will buy, need to make the best fit

BRAND ATTITUDE

Consumers prior AttitudeCommunication Obj..

No Brand Attitude Create Attitude

Moderately favourable Reinforce or Reposition

Maximally favourable Maintain

Negative Attitude Change

BRAND PURCHASE INTENTION

• Consumers self instruction to purchase the brand or to take purchase related action

BRAND PURCHASE INTENTION

• It is a conscious plan to complete the consumer response sequence

• Low BPI - till the time of purchase• High BPI - at the purchase point initiate Purchase Facilitation

PURCHASE FACILITATION

• Consumers perception of other marketing factors (4P’s) that can hinder or stimulate purchase

PURCHASE FACILITATION

‘You can run a brilliant advertising campaign, and sales go down. Why ?’ -Rosser Reeves

Your Product may not be right Your price may not be right Your distribution may not be right Your sales force may be bad Your competitor may be spending 5:1 Your competitors promotion may be

bleeding you

PURCHASE FACILITATION

Buyer/stateCommunication Obj..

No problems with 4P’s Omit

Perceived Problems Incorporate

ATTRIBUTE VS BENEFIT VS MOTIVATION

• Attributes - what the Brand has

• Benefits - what the consumers want

• Motivation - is what consumers want the benefit for

M is perfect when B match A

AN EXAMPLE

Category : ToothpasteAttribute - AstringentBenefit - Mouth FreshnessMotivation - I like the feeling (sensory gratification), I have a date (social approval), remove a bad taste (problem removal)

ADVERTISING FAILS BECAUSE

A) It’s more execution than idea

B) It’s more idea than execution

Which is the right answer ?

A great Agency delivers both but behind every successful execution lies a

BIG IDEAExamples ??

The importance of Strategic Planing

WHY STRATEGIC PLANNING ?

• Client wants Creativity– Creativity that sells, adds value to their

brand and even more to their bottom line

• Consumers are Experts– Not empty vessels, knowledgeable,

know when they are patronized, bored or uninvolved

– Reject advertising that does not appeal

ADVERTISING STATISTICS

500 messages per day

76 get noticed

12 remembered

9 remembered and liked (1.8%)

ADVERTISING MUST MAKE THE CONSUMER...

S : SimpleM : MemorableI : InterestingL : Linked to the BrandE : Emotionally Involving

e.g. : Fevicol/Kelvinator/Centre

Shock/Pepsi/Cadbury

WHAT DOES STRATEGIC PLANNING DO ?

• It helps discover the Big Idea

WHAT MAKES AN IDEA A BIG ONE ?

• It’s always fresh, involving or surprising

• It is insightful and pertinent to the audience

• It may change the way the consumer sees

the Brand, or even the category it comes

from

• It often triggers a positive response ‘Ah !’

SOME OBSERVATIONS

• Great Brands have brand ideas (discriminators) before they have creative ideas (Advertising/ execution ideas)

• Great Creative ideas are based on great consumer insights

• No one gets big ideas thinking in a straight line

• An idea can come from anyone

WHAT IS A BRAND IDEA ?

• Simple idea of our brand that people

have in their minds

• Who the brand is for ?

• Idea that is both motivating and

differentiating

• Combination of need, benefit and

personality

BRAND IDEAS

• Olivio - Longer lives

• British Automobile Association - 4th

emergency service

• Haagen Daz - ultimate sensual pleasure

• Coca Cola - Alternative to Water

BRAND IDEAS ARE ALWAYS FOR SOMEONE

• Burger King is for Burger lovers

• BMW is for people who love to drive

• Pepsodent is for family that knows no

pain

• Surf Excelmatic - for the house with the front

loader

• Liril is for those who want freshness

THE BIRTH OF BIG IDEAS

• Behind every big idea is a very big Consumer Insight

WHAT IS A CONSUMER INSIGHT ?

• A simple universal human truth that will connect your consumer to your brand

• It resonates with people, touches a nerve, cuts through

OUR BELIEFS ABOUT INSIGHT

• The insight sets the brand apart by focussing on a desirable difference which forms a closer relationship with the consumer

• Consumer Insight inspires great creative ideas which deeply connect with the consumer

SOME EXAMPLES

• Axe - Every man dreams of a woman making the first move

• Cup-a-soup - By 4 o’clock you are tired of tea and coffee

• Rolo - when you have something delicious to share, you have to think hard what to do with the last one

CAVEAT

• There is no right or wrong insight• There can be many insights• One should use the best insight that is

relevant to the brand and offers greatest competitive advantage

INSIGHTS PROVIDE NEEDS

Insights NeedIf you do not let your children Clean clothes

get dirty and play they won’t Dirt & stains be well roundedremoved

Every man dreams of a woman To successfullymaking the first move seduce

girls

GREAT CONSUMER INSIGHTS

• Solves Business Issues• Builds Brands• Inspires Creative Ideas• Involves Consumers• Delivers Competitive Advantage• CREATES GROWTH How do we find them ?

THE INSIGHT MINE

People do not give you insights, they have to

be discoveredStart in the right placeFrom knowledge & understanding comes inspirationAsk smart questionsLook outside the box

VOLKSWAGEN PASSAT

• On a trip to Germany it was discovered that engineers were such perfectionists that they were obsessed. One even said that when he was on holiday he made ‘sand cars and not sand castles’ with his kids.

‘Perfection is born out of obsession’

ROLO

• Rolo can be shared. But when when you

have something delicious to share, you

have to think hard what to do with the

last one

‘You better think twice’

OLYMPUS

• In many categories, people do not know which brand is the best to buy. They look at someone they can trust. When the camera market exploded, new brands hit the market Olympus endorsed theirs with David Bailey.

‘You’d trust a famous photographer what camera to buy’

PEPSODENT

• All mothers want their children to have

strong and healthy teeth. There is

nothing more painful for a mother than

to see her child in pain.

‘Pepsodent families know no pain’

WHAT IS A DISCRIMINATOR ?

The single most compelling reason for a consumer to buy your brand

DISCRIMINATORS

Can be based in Benefit Reason to believe Emotional Value

Must be important & credible

AXE

• Insight : Woman making the first move

• Discriminator : Irresistibility to women with an irreverent attitude

• Advertising Idea : Seduction : Women can’t control their passion when a man’s wearing Axe (whoever it is)

• Executional Idea : Lift TVC

BRAND EXPERIENCE

Make the consumer experience your brand

EXAMPLES...

• Washing Liquid - South America

• Deodorant - Overhead Handle Bars in

Trains/Buses

• Detergents - Stain Ambulance

• Pril – Washing Train Windows