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Excel Books2– 1 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Chapter2
Advertising Classification, Functions and Benefits
Excel Books2– 2 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
Types of Advertising Classified advertising
Non Classified advertising
Display Advertising
National Advertising
Retail (local) Advertising
Co-operative Advertising
End-Product Advertising
Direct-response Advertising
National Advertising (Brylcream)
Excel Books2– 3 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Retail (Local) advertising
Example of End-product Advertising
Excel Books2– 4 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
Advertising to Business and ProfessionTrade Advertising: Trade advertising is used to promote products to re-sellers,
encouraging them to stock the product. Unless the product is available with
retailers, consumers will not have the opportunity to purchase it.
Industrial Advertising (also called B2B Advertising): Industrial advertising is
directed at a specialised and relatively small-sized target audience. The buyers
are few and the purchases by each one are relatively large. The audience of
such ads is composed of experts in their fields and hence advertisements
contain details and specifications of products meant for a specific manufacturing
segment. This helps reduce personal selling costs, efforts, and speeds up sales
of industrial products.
Professional Advertising: Professional advertising is directed toward people
who are not the final consumers. Many professionals such as architects,
engineers, and medical consultants, etc.
Excel Books2– 5 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
Corporate or Institutional Advertising:
Corporate advertising is an extension of
public relations function and does not
promote any specific product or service.
Corporate advertising aims to build and
maintain the image of a company or
institution and usually focuses on company
policies. For example, sponsorship of various
major sports events by large organisations is
aimed at image-building of sponsors.
Advocacy advertising: refers to company's
views on issues that affect its business and to
protect its position in the market place.
Corporate or Institutional Advertising attempts to build company image
Excel Books2– 6 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
Corporate advertising is also a fairly controversial form of advertising. A number of reasons support this view:
1. Lack of consumers' interest in this type of advertising: The reason is that a significant percentage of consumers do not understand the objectives of such advertising.
2. It is believed to be a costly form of self-indulgence: Corporate image advertising is undertaken to satisfy top management's egos. The ad message is not as precise and specific as developed to position a brand, and top managers often dictate the ad content reflecting their ideas and images of the company.
3. It creates a perception that the company is in trouble: Some critics of corporate advertising point out that companies engage in corporate
advertising when the company is in financial trouble or the public opinion is building against the company and the advertising attempts to rectify this problem. The critics say that such a situation arises because the company has not been managed properly.
Excel Books2– 7 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
4. Corporate advertising is simply waste of resources: Critics say that
since such ads are not understood, do not appeal to anyone, and do not
promote anything in particular, this money could be better utilised in other
areas. Such ads simply present a position or try to create an intangible
image, and do not promote any product or service.
Excel Books2– 8 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
Non-Product Advertising
Idea Advertising: Advertising being a
powerful communication tool is often used to
influence special interest groups and sway
public opinion. Environmental issues,
population explosion, declining natural
resources, road safety measures, child
labour, human rights, dowry, equal status to
women, and many other issues are
examples for which mass media advertising
has increased in the recent years.
The Ad shows a bride's burnt face. An example of Social Cause Advertising
Excel Books2– 9 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
Service Advertising: Advertising fundamentals
in case of services remain the same as used in
product advertising, though the views of many
experts are different on this issue. Some basic
principles require careful attention.
The quality of service is largely dependent
on the quality of company's employees.
Their level of training and motivation can
have direct consequences.
Services cannot be seen as physical
products and hence should be personalised in
some way.
To emphasise quality in service, ads should
feature consistency and high level of
service.
Non-profit, Social Service Advertising
Excel Books2– 10 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
Political Advertising: Political advertising is a component of political campaigns and uses various media, including speeches. Mostly, such advertising is comparative and includes negative, one-sided attacks on rival candidates and political parties pointing their weaknesses, misdeeds, false promises, and how voters were deceived.
Some experts are of the opinion that advertising classification should be based on the consideration of strategy behind the advertising.
Primary-demand Advertising is used to stimulate demand for a product category. For example, most of us are familiar with those ads on TV that encourage the consumption of milk, or eggs.
Primary-demand advertising is sometimes used when a new type of product appears in the market.
Primary demand Advertising (promoting tea drinking)
Excel Books2– 11 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Selective-demand Advertising is used to increase the demand of a particular brand in a product category. For example, in the case of milk, Mother Dairy milk, or Saras brands are promoted. Two of the exhibits related to tea ads show primary and selective-demand advertising. The first ad promotes tea consumption because it is beneficial for health and the second promotes a particular brand of tea.
Surrogate Advertising: The dictionary meaning of 'surrogate' is a delegate; a substitute, a person appointed to act for another. In the advertising context, when the laws of a country do not permit advertising of a certain product category, the advertisers take the shelter of brand extension. For example, advertising of alcoholic drinks in India is not permitted. To bypass this, some manufacturers of whisky or similar products launched brands of soda under the same brand name as that of their popular whisky, such as Bagpiper Soda, or McDowell Soda.
Selective-demand Advertising (promoting Magna brand of green tea)
Excel Books2– 12 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
Functions of AdvertisingVirtually all business establishments, including large and small retailers, use advertising in some form or the other depending on their objectives and resources. A survey of the top 200 companies by A&M magazine reveals that these companies spent Rs. 3,941.7 crore in 1998-1999. These figures, taken as a pointer, suggest that with improved economic conditions in our country, the total expenditure on advertising by all the businesses would touch astronomical figures in the times to come. Consumer product companies are the leading advertisers in all developed and developing economies in the world. According to Business Week, the ad spend in India in 2005 was expected to be Rs. 167.8 billion.
The role of advertising varies in different industries and depends on how much importance is attributed to advertising relative to other promotional mix elements in a particular company's marketing programme. This would be determined by considering various factors, such as consumer behaviour, competitive situation, product category, and the economic conditions etc.
Excel Books2– 13 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
This helps in making certain important assumptions:
1. Most advertisements help in producing psychological effects and can help in
changing only the mental states of audiences and predispose them toward
purchase of advertised product or service.
2. Advertising is essentially a form of communication and its basic
responsibility is to deliver the desired information to the targeted audience.
Excel Books2– 14 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
A number of hierarchy models have been proposed. One version of hierarchy
model developed by Robert Lavidge and Gary Steiner Figure. The social
psychological theory and the model includes six stages. Awareness,
knowledge, liking, preference, conviction, and purchase.
Conative
Affective Purchase
Conviction
Preference
Cognitive Liking
Knowledge
Awareness
Lavidge and Steiner Hierarchy-of-effects model and equivalent attitude components
Excel Books2– 15 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
The next three stages, liking, preference and conviction represent the affective component (feeling) of attitude, and the last stage in the model, purchase, represents the conative or behavioural component of attitude. The distance between any two adjoining steps is not necessarily equal. Consumers can move up several steps in one go. The consumer's level of involvement in a particular product category influences her/his path through the steps. In case of high involvement situations, consumers take longer to go through the process. The research reveals that hierarchy models do not apply to low involvement purchases because the consumer's lack of interest in the product category may lead the consumer to becoming aware after paying attention and make purchase.Jagdish N. Sheth has suggested a broader framework for advertising functions. He has described four primary sequential functions:1. Precipitation2. Persuasion3. Reinforcement, and4. Reminder.
Excel Books2– 16 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Other Functions of Advertising Stimulates Demand
Builds Brand Image
Develops Brand Preference
Strengthens other Promotion-mix Elements
Cuts Costs
Lowers Prices
Competitive Weapon
The ad shown below encourages brand preference by suggesting that a wrong choice of sunglasses will harm looks.
Excel Books2– 17 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
Benefits of Advertising
Basically, advertising is an economic institution. It performs an important
economic function for the advertiser, affects the economic decisions of the
audience, and is an integral part of the entire national and international economic
system.
Information: One cannot debate the importance of information for consumers
about various products, services and organisations to make advantageous
economic decisions. The decisions made in the absence or with insufficient
information may produce negative and undesirable consequences.
Excel Books2– 18 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Cont….
(Rs. in crore) Rank in
1998-1999 Company name
Year ending Advertising
expenditure Sales
figures
1. Hindustan Lever Dec. 1998 668.95 10261.57
2. ITC Mar. 1999 201.24 7599.24
3. Colgate-Palmolive Mar. 1999 163.87 999.31
4. Dabur India Mar. 1999 114.12 918.27
5. Nestle India Dec. 1998 108.51 1606.05
6. Videocon International Mar. 1999 103.41 2422.44
7. McDowell & Co Mar. 1999 86.05 911.16
8. Tata Tea Mar. 1999 73.47 876.02
9. Maruti Udyog Mar. 1999 65.63 7892.18
10. Godfrey Phillips India Mar. 1999 65.05 1047.17
11. Bajaj Auto Mar. 1999 60.03 3604.73
12. Larsen & Toubro Mar. 1999 58.98 7350.09
13. Britannia Industries Mar. 1999 58.40 1030.14
14. BPL Mar. 1999 58.25 1939.72
15. Indexport Dec. 1998 43.58 220.74
Advertising
Expenditure
of top fifteen
companies
and the sales
figures
Excel Books2– 19 Advertising & Sales Promotion (3rd Edition) SHH Kazmi / Satish K. Batra
Part IAdvertising Classification, Functions and BenefitsC2
Copyright © 2008, Satish K Bhatra, S H H Kazmi
Section 1 Advertising
Brand Image Building: There is hardly any disagreement on this issue. Advertising plays an important role in building the brand image. Consumers develop mental images of brands that may appeal to different market segments. These images may have their roots in real or assumed features of the brand.
Innovation: Advertising encourages innovation and new product development, and reduces risk. Advertising may generate sufficient product demand to offset the cost of innovation and is the most economical way to reach large number of audience who become aware about the availability of any new or improved product. New and improved products encourage competition and offer more choices to consumers.
Growth of Media: The acceptance of advertising by different media enhances the potential for raising revenues. This may help in introducing more publications and cater to the needs of different and special interest groups. This would lead to expansion of media. It is no secret that advertising provides more than 60% of the cost of magazines, more than 70% of the cost of newspapers, and nearly 100% of the cost of TV and radio.