Unit 13 Advertising

1. What is advertising?
- Advertising refers to promoting a product, service, or idea through various communication channels to
reach and persuade the target audience. It involves creating compelling messages and delivering them
through different media platforms, such as television, radio, print publications, digital channels, and
outdoor displays.
- Advertising simply means a way of communication that reaches all types of sector. It provides
information and creates awareness among people relating to a product etc.
- AIDA Principle:
 Attract Attention - Capture reader
 Create Interest - You keen to find out more
 Develop Desire - Feel a need to buy
 Promote Action - Information that you will need to buy
2. Purpose of Advertising
The purpose of advertising is multi-faceted and depends on a business’s specific goals and objectives.
Some everyday purposes of advertising include:
Increasing Sales: Advertising aims to drive sales and revenue growth by attracting new customers and
encouraging repeat purchases. By creating awareness, generating interest, and influencing consumer
behavior, advertising helps businesses achieve their sales targets and improve profitability.
Building Brand Equity: Advertising is crucial in building and strengthening brand equity. It helps
businesses establish a strong brand image, increase brand awareness, and foster positive associations with
the brand. Brand equity contributes to long-term success and customer loyalty.
Expanding Market Share: Advertising helps businesses gain a competitive advantage by increasing their
market share. By reaching a wider audience and positioning the brand as the preferred choice, advertising
contributes to market penetration and growth. It allows businesses to capture a larger market share and
outperform competitors.
Educating Consumers: Advertising is an educational tool providing important information about
products, services, features, and benefits. By addressing consumer needs and highlighting solutions,
advertising helps consumers make informed decisions and choose products or services that best meet their
requirements.
Creating Brand Differentiation: Advertising helps businesses differentiate themselves from competitors
in a crowded marketplace. By showcasing unique features, quality, and value propositions, advertising
communicates the distinctiveness of a brand. It helps businesses stand out and position themselves as the
preferred choice among consumers.
3. Types of advertising
Informative advertising: new product, new service, new features, re-launch
 Building a brand and company image
 Telling the market about a new product
 Explaining how the product works
 Suggesting new usage of a product informing
 Correcting false impression
Persuasive advertising: comparative ads
Reminder advertising: continuous ads • ex; coca cola

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  Maintaining customer relationship
 Reminding consumers that the product may be needed in the near future
 Reminding consumers where to buy the product
4. Functions of advertising
Advertising serves several functions, each contributing to the overall marketing strategy of a business.
Let’s explore these functions in detail:
Informing
One of the primary functions of advertising is to inform the target audience about a company’s products,
services, or ideas. It aims to provide relevant and accurate information to consumers, helping them
understand the features, benefits, and value of what is being advertised. Informative advertising often
focuses on new product launches, product updates, pricing, availability, and other essential details
consumers need.
Influencing
Another vital function of advertising is to influence consumer behavior and decision-making. Advertising
aims to shape consumer perceptions, attitudes, and preferences through persuasive messaging, emotional
appeals, and engaging visuals. By presenting products or services in a desirable light, advertising influences
consumers to consider them viable options.
Increasing Salience
Advertising helps increase brand salience, which refers to the degree of awareness and prominence of a
brand in the minds of consumers. Through consistent and repetitive exposure, advertising keeps a brand at
the forefront of consumers’ minds, making it more likely to be considered when a related need or desire
arises.
Adding Value
Advertising adds value to products and services by emphasizing their unique features, benefits, and
advantages over competitors. By showcasing the value proposition of offerings, advertising helps
consumers perceive them as more desirable, worth the price, and capable of satisfying their needs or
desires.
Building Brand Equity
Advertising develops brand equity by shaping consumer perceptions, associations, and preferences. It helps
establish an emotional connection between the brand and its target audience. Through consistent
messaging, advertising reinforces the brand image and values. It ensures that consumers constantly
perceive the brand and its offerings over time.
Reinforcing Brand Image
Advertising plays a crucial role in shaping and reinforcing the brand image. It helps create a positive and
desirable perception of a brand in the minds of consumers. By consistently communicating the brand’s
values, personality, and unique selling propositions, advertising builds a solid and differentiated brand
image.
Creating Demand
One essential function of advertising is generating demand for products or services. By stimulating
consumer interest, desire, and purchase intent, advertising creates a sense of urgency and prompts
consumers to take action. Effective advertising campaigns generate excitement, curiosity, and interest
among consumers, increasing sales and revenue.
5. Benefits of advertising
The benefits of advertising include:

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  Increased brand awareness and visibility.
 Improved customer acquisition and retention.
 Differentiation from competitors.
 Enhanced product or service value perception.
 Revenue growth and profitability.
 Efficient communication of information.
 Influencing consumer behavior and purchase decisions.
6. Type Of Advertising Media
 Outdoor Advertising (Billboard, Transport) Media Advertising (Television, Radio)
 Print Advertising (Newspaper, Magazine)
 Internet Advertising
 Celebrity Advertising
 Cinema Advertising
 Retailer/Local Advertising
 Brand Advertising
7. Players In Advertising
 Advertiser
 Advertising Agency
 Media
 Vendors
 Target Audience
8. Advertising agency
8.1 The four features of advertising agency
(1) Account planning
Account planning involves creating an accurate estimate of a client's requirements and preferences. Based
on client specifications, account planners research markets, establish achievable goals and review strategies
that have worked in similar cases. The planning phase of a campaign guides the work of individuals who
engage in creative services at a later stage.
(2) Creative services
Creative services involve the production of advertising materials such as visuals, text and videos for a range
of platforms. Advertisements may feature in newspapers and magazines or on billboards, hoardings, social
media or television. A team of content creators addresses workflow pertaining to ideation, conceptual
design and production. This involves writers, cameramen, creative directors and art directors. They
typically work with individuals on the client side to develop a comprehensive brief before they start
creating materials.
(3) Media planning and procurement
Media planning and procurement involve determining appropriate marketing channels through which
advertisers can disseminate marketing materials. Individuals responsible for media planning may liaise with
employees of media houses and publications to secure slots for airing or featuring advertisements. They
also negotiate the terms of remuneration for providing the rights to use different kinds of marketing
materials.
(4) Client services

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Client services primarily include liaising between the client side and creative contributors of an advertising
campaign. Individuals who address client services workflows act as communication channels between these
two teams and try to eliminate miscommunications that could affect the quality of advertisement materials.
They may also update individuals on the client side regarding project progress or schedule meetings
between involved parties for them to discuss changes to the initial brief or other campaign developments.
8.2 Functions of an advertising agency
The following are eight important functions of an advertising agency:
(1) Creating advertising plans
Individuals who work in advertising agencies start a project or campaign by creating a comprehensive
advertisement plan. This plan is a systematic, step-by-step breakdown of all the activities that contribute to
the development of the final campaign. Creating such a plan involves assigning specific responsibilities and
tasks to contributors and identifying dependencies in workflows. For example, a video editor may depend
on the output of cinematographers and sound designers, while a planner may schedule the tasks of these
contributors.
Before creating an advertisement plan, agency members may consult individuals on the client side to assess
requirements and perform initial research to evaluate the following:
 What is the offering's unique selling point?
 What are the offering's strengths and weaknesses?
 Who comprises the brand's target demographic?
 What is the brand's track record in the market in which it is selling its offerings?
 Who are the brand's competitors and what similar products do they sell?
 What are the brand's competitor's strengths and weaknesses?
After considering these aspects, advertising planners may identify what marketing materials to develop and
what channels to disseminate them through.

(2) Executing advertising plans and developing advertising materials

Once a client approves a particular advertising plan and a budget to facilitate each stage of the plan, the
agency executes the plan and creates advertising materials. It may develop contracts for all creative
contributors and supervisors who work on a client project if it works with independent contractors. If it
works with in-house staff, a project manager typically assigns roles and delegates responsibilities to
different team members who are part of the production effort. This stage involves creating visuals, sound
and text and compiling them into packages that correspond to different advertising materials.

(3) Coordinating workflows and activities

An advertising campaign typically involves the concerted efforts of various contributors over an extended
period of time. Supervisors in advertising agencies are usually responsible for coordinating the workflows
and activities of different teams of contributors to ensure that all work pertaining to a project progresses
according to schedule. Agency staff may also liaise with individuals on the client side and with the staff of
media and publication houses.
(4) Researching
Market research is an important aspect of advertising. Agencies may have dedicated teams who address
research workflows before contributors start developing advertising materials for a client. Research enables
advertisers to provide compelling proposals to their clients and secure contracts for advertising projects. It

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also ensures that the advertising materials that an agency creates resonate well with the target audience of a
brand. Adequate research allows marketers to develop a nuanced understanding of customer needs and pain
points and create materials that accurately address them.

(5) Pursuing mechanical production

Mechanical production pertains to the creation of physical advertising materials such as banners, posters
and prints. Some agencies may use printing and production facilities in-house, while some may rely on
external vendors. In many cases where advertising agencies collaborate with publication houses as part of
an advertising campaign, the agency typically utilises the resources of the publication house while paying
them a predetermined fee for the service.

(6) Optimising traffic

In advertising, traffic relates to creating schedules and controlling production activities. After completing
the production of a particular advertising material, agency staff may liaise with external vendors to
determine how frequently the material features in a particular marketing channel. Frequency applies to both
physical advertisements and digital advertisements. For example, advertisers and media agencies may
determine that it is ideal to feature a one-minute advertisement six times between 9 AM and 12 PM.
Regarding physical billboards, agency staff may identify three possible locations that are spread across a
highway connecting two major cities.

(7) Accounting
In an advertising agency, the function of accounting involves multiple aspects, some of which lie outside of
finance. Some agency staff members may verify how many times an advertisement appears in a particular
media channel. They may also inform management staff on both the agency's side and the channel's side in
case of a discrepancy. Other accounting responsibilities in an agency include bookkeeping, invoicing,
billing, collecting funds from clients and disbursing funds to media and publication houses.

(8) Maintaining public relations

In the context of advertising, maintaining public relations may involve developing professional working
relationships with regular and potential clients, large customer bases and government and regulatory
bodies. Public relations also extends to the employees of corporate firms and enterprises that an agency
represents or works with. Since advertisement involves communicating with different segments of
consumers and the general public, maintaining strong public relations is important to an advertising firm's
success.
9. The product life cycle
https://www.investopedia.com/terms/p/product-life-cycle.asp
9.1 Definition
- Philip Kotler “"The Product life cycle is an attempt to recognize the distinct stages in the sales history of
the product."
- William J. Stanton: “The Product life cycle concept is the explanation of the product from its birth to
death as a product exists in different stages & in different competitive environments"
In general:

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  A product life cycle is the amount of time a product goes from being introduced into the market
until it's taken off the shelves.
 There are four stages in a product's life cycle—introduction, growth, maturity, and decline.
 A company often incurs higher marketing costs when introducing a product to the market but
experiences higher sales as product adoption grows.
 Sales stabilize and peak when the product's adoption matures, though competition and obsolescence
may cause its decline.
 The concept of product life cycle helps inform business decision-making, from pricing and
promotion to expansion or cost-cutting.
9.2 The four stages

(1) Introduction stase

- It is the 1st stage, wherein the product is launched in the market with full scale production & marketing
programme.
- The product is a new one. It means " a product that opens up an entirely new market, replaces an existing
product or significantly broadens the market for an existing product.
- In this stage sales grow at a very lower rate because it is not an effective demand
Characteristics
Low & slow sales.
High product price.
Heavy promotional expenses.
Lack of knowledge.
Low profits.
Narrow product lines.
(2) Growth stage
Once the market has accepted the product, sales begin to rise & product enter its 2nd stage.
The product achieves considerable & widespread approval in the market. The sales & profits increases at an
accelerated rate.
In this effective distribution, advertising & sales promotion are considered as the key factors.
Rapid increase in sales.

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Product improvements.
increase in competition.
Increase in profits.
Reduction in price.
Strengthening the distribution channel.
(2) Maturity stage
Market becomes saturated because the household demand is satisfied & distribution channels are full. The
product has to face keen competition which brings pressure on prices. Though the sales of the product rises
but at a lower rate. Profit margin however decline due to keen competition.
Sales increases at decreasing rate.
Normal promotional expenses.
Uniform & lower prices.
Product modifications.
Dealer's support.
Profit margin decreases
(3) Decline stage
This is the finial stage, sooner or later actual sales begin to fall under the impact of new product
competition & changing consumer behavior. The sales & profits fall down sharply & the promotional
expenditure has to be cut down drastically.
Characteristics:
Rapid decrease in sales.
Further decrease in prices
No promotional expenses.
Suspension of production work.
3. Features of a product lifecycle
Every product has the life cycle as every human being has.
It denotes that the product passes from different stages at different speed in course of completing the whole
cycle.
The profit of business firm grow rapidly in the stage of growth & starts declining due to competitive
conditions at the stage of maturity. However the sales volume go on increasing.
No two products have identical life cycle.
The duration of each stage is different for different products. It depends upon factors(nature of products,
technological advancement, competition pressure, etc)
It is not necessary that all products go through ail stages, some fail at the initial stage , other may reach
maturity stage after a long time.
It provides a useful framework for developing effective marketing strategies in different stages of the
product life cycle.
4. Examples
4.1 Product life cycle for stylish products

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  A style is the manner in which a product is presented and certain styles come and go.
 AcctoKotler: " A style is a basic & distinctive mode of expression.". E.g., Furniture, automobile,
clothing, shoes.
 The current style for mobile phone is touch screen and this style will last until a new technology
style appears.
 So the shape of a style life cycle is like a wave, as one style fades out, another appears.
4.2 Product life cycle for fashion products

A fashion refer to a currently accepted style in a specific field. It is a current trend which can have a long or
short life cycle.
Fashion tends to grow slowly, remain popular for a while, then decline slowly
The demand for the product increases at a faster rate, reaches to its top & with the change in fashion the
product life enter to decline stage.
E.g., readymade garments, purses, bangles, shoes etc
4.3 Product life cycle for fad products

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Fads are fashions that enter quickly with great zeal, peak early & decline very quickly.
A fad is a product that is around for a short period.
E.g,, garments, caps, hair style, music albums, films & other fashion products.
Every product cycle start from an introduction of the product in the market & it is ceased after passing
through the market growth & market stages.

4. Factors affecting the product life cycle

Rate of technological change.
Rate of market acceptance.
Competitor's entry.
Economic & managerial forces
Risk bearing capacity
Government policy
Product modification
Entry in the new market.
Promoting frequent use.
Developing different usage.
Finding new uses.
Use of modern advertising & sales promotion techniques.
5. Importance of product life cycle
Helpful in sales forecasting.
Helpful as a predictive tool.
Helpful as a planning tool.
Helpful as a control tool.
Helpful in framing marketing programme.
Helpful in price determination.
Development of new product.
Comparison of different products.
6. Marketing strategies during plc
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Every marketeer tries that his product should stay in the market for the longest period, thus he has to take
up various strategies at the different stages of product life cycle.
Introduction stage
Growth stage
Maturity stage
Declining stage
6.1 Introduction stage
The introduction stage start with the launching of a new product by the marketeer. The product is new one,
so sales level is low & profits are negative.
It is very crucial stage for the marketeer because the success or failure of the product is very much
determine in this stage.
Strategies:
Make proper advertising before the product is launched in the market.
Shorten the period of introduction as far as possible.
Heavy advertising & promotional expenses( attractive gifts).
Selective distribution & attractive discount to dealers.
If product is technical then adopt skimming pricing policy & if product is simple then adopt penetration
pricing policy.
6.2 Growth stage
If the new product satisfy the market, it will enter a growth stage in which sales increases at a faster rate.
The high profits attract the competitors to enter the market with improved substitute products. Price
remains the same or slightly decreased.
Strategies:
Improve the product quality.
Add new product features & improve the product style.
Enter into new market areas
Reduce the price to attract more number of buyers.
Increase in promotional activities.
Strengthen the distribution channels by increasing the number of retailers.
New version/models, in different sizes & price range are introduced to cater the requirements of different
types of buyers.
Create brand image of the product through promotional activities.
Emphasis on customer satisfaction.
6.3 Maturity stage
It has a longer duration than the other stages. In this sales increase at a very low rate. The product has to
face keen competition. Competitors lower down the price, increase their advertising, sales promotion. It
increases the profit.
Strategies
Improve the quality of the product & introduce some new models.
Give proper attention to increase the usage among the current customers & also pursue some new uses of
the product.
Try to convert non-users into users of the product.
Introduce new packaging & wrapper change policy.

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Lowering the price to attract more consumer.
Middlemen's margin is increased, to create the interest.
Give proper emphasis on advertising & promotional programmes.
Change in the style & design of the product.
A firm can improve his sales by changing one or more elements of marketing mix. It can reduce the price to
attract new users & competitor's.
6.4 Declining stage
In this final stage, sales begin to fall & the product is gradually replaced by new innovation. This is because
of technical advancement, change in consumer preference, increased competition. For marketeer this stage
is very crucial.
Strategies:
Improve the product ¡n a functional sense.
Review the marketing & production programs.
Emphasis on cost control techniques to generate profits means cut all costs to minimum level.
Economy packs or models may be introduced to revive the market.
Adopt selective promotion of the product to reduce distribution costs.
Packaging may be made more attractive & reusable packages.
R&D efforts are increased to innovate the new product.
Sales incentive schemes are introduced to get dealer's support.

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