Subject: Advertising and Brand Management

Unit 1: Introduction to Advertising (20%)

Definition

Advertising is a means of communication with the users of a product or service.

Advertisements are messages paid for by those who send them and are intended to inform or
influence people who receive them.

Advertising is the business of drawing people’s attention to a good or service. It is a public

promotion of a product, service, cause, or a movement. The promotion is done through an
advertisement (advert or ad) via the media – TV, Internet, newspapers, radio, trade journals,
movie theaters, or billboards.

According to the American Marketing Association, advertising is...

“The placement of announcements and persuasive messages in time or space purchased in any of
the mass media by business firms, non-profit organizations, government agencies, and
individuals who seek to inform and/ or persuade members of a particular target market or
audience about their products, services, organizations, or ideas.”

According to William J. Stanton, "Advertising consists of all the activities involved in

presenting to an audience a non-personal, sponsor-identified, paid-for message about a product
or organization."

According to American Marketing Association "advertising is any paid form of non-personal

presentation and promotion of ideas, goods and services by an identified sponsor.

Purpose of advertising

1) Introduce New Product: Advertisements are used for presenting a new product in the
market. New product needs introduction as potential customers do not have any
awareness about it. Mass media is used for promoting the product so that its knowledge
reaches wide markets.
2) Creation of Demand: The aim of informing people about the product is to create
demand for it. Advertisements often try to match the product qualities with the
customer’s requirements so that they realize the need of the product. Advertisement
creates a favorable climate for maintaining or improving sales. Customers are constantly
reminded about the product and the brand to build up brand recognition.

3) To Face the Competition: In modern days advertising is undertaken not only to inform
the people about a product, but also to maintain and increase the demand of the product
by weaning people away from rival products in the market. Under competitive
conditions, advertisement helps to build up brand image and brand loyalty. Loyal
customers are the best safeguard the company can have during times of cut-throat
competition.

4) Creation of Goodwill: Large scale advertising is often undertaken with the objective of
creating or enhancing the goodwill of the advertising company. This increases the market
receptiveness of the company’s product and strengthens its market position.

5) Communicate with the Customers: Advertising is a means to communicate to the

customer details like changes in prices, improvement in quality, introduction of a new
product line, sales promotion schemes, etc. Regular advertising is necessary to remind the
customer about the brand and ensure that the brand name remains fresh on his mind.

6) Discourage New Entrants: A flourishing market is always inviting for new entrants. But
if a company adopts a policy of extensive advertising through a variety of media, it would
be better equipped to face new competition. Advertising builds up a bigger market share
for the company which the new entrants would find difficult to penetrate.

7) Supporting Salesmen: It is easier for the salesmen to sell the product that are well
advertised. People respond favorably to the call of salesman in case the brand is popular.
Advertising also makes the audience understand the product and its uses. Therefore, it
becomes easy for the salesmen to convince the people to buy product. So, advertising
renders great support to salesman.
Functions of Advertising

The particular functions that advertising can play are many and varied, although they fall within
three broad areas:
• To inform
• To persuade
• To sell

A. To inform
1) Advertising simply seeks to provide the public with specific pieces of information. In
many cases, this has a neutral content, such as public announcements.
2) In other instances, manufacturers may use advertising to inform previous consumers of
some deficiency in their product. This is apparent in the case of product recalls, where
the manufacturer uses advertising to communicate the particular problem to the widest
possible audience in order to ensure a speedy dissemination of information and an
equally rapid response on the part of the owners of such products.
3) In the case of a manufacturer introducing a new product, there is a need to inform
potential consumers about the new product. This may take the form of a simple
announcement, or may provide details about the product, its functions and some form of
comparison or claim about the product in the context of existing product offerings.
4) In order to extend the appeal of an existing product, manufacturers may attempt to use
advertising to suggest new uses for a product. Sometimes it will be necessary to provide
some form of explanation of how a product works. For Example When Eureka Forbes
introduced its revolutionary new vacuum cleaner, it needed to explain to potential
purchasers the operating of vacuum cleaner. Service companies may need to provide
information concerning the range of available services to the consumer. This is
clearly seen in the context of banking services, where a company may offer the ability to
maintain a current account with a cheque book, credit card facilities, domestic and
foreign services, such as the ability to withdraw funds whilst on holiday abroad, together
with deposit accounts, investment programmes and so on.
5) If the manufacturer identifies a dissonance between the product performance and
consumer perceptions, it may be necessary to use advertising to correct false
impressions. Similarly, when a product deficiency has been identified, it may be
necessary to reduce consumer fears. Example: Following the withdrawal of the Perrier
 brand, the brand owners used advertising extensively to inform customers of the steps
that they had taken to remedy the problem and to reassure them that the new product was
safe and reliable.
B. To persuade
1) Advertising attempts to persuade consumers to alter their attitudes towards a particular
issue. Example: Political parties utilize this form of advertising, especially during the
run-up to an election, to persuade the audience that their policies are the most appropriate
and to motivate them to vote for a particular party.
2) Government departments sometimes use this form of advertising to bring about a change
in attitudes towards issues of general concern. Over many years, for example, the
Department of Transport has used advertising messages to influence attitudes towards
drink driving or child road safety.
3) In some market sectors, advertising may be used as a precursor (influence/to lead other)
to other activities. It may, for example, attempt to provide specific information to the
target audience in order to persuade potential customers to take a sales call.

C. To sell
1) Most advertising seeks to promote the sale of particular goods or services. To achieve
this objective, the advertising provides the potential or existing customer base with
information about the product or service.
2) In the majority of instances, advertising seeks to reinforce existing attitudes by
explaining how the product is appropriate to the potential users’ existing needs or
lifestyle. Some advertising particularly that of a promotional nature, will attempt to
persuade the customer to make a purchase now, rather than delay it until some later time.
The advertising will convey a sense of urgency, often by placing some form of time
constraint on the offer being made. This is particularly the case with ‘sale’ advertising.
Potential customers are notified of the sale dates and reminded that they can only obtain
the benefit during particular time.
3) A key role of advertising is to bring about the building of brand preferences and to
encourage brand switching. This is the form of most advertising campaigns, and the
advertiser will stress aspects of brand superiority and will sometimes make direct
comparisons with competitive products. Often, it will not be sufficient merely to inform
consumers of the existence of the brand. It will be important to direct them to those
outlets which stock the product and to remind them where to buy it.
 4) Some products have a distinctly seasonal appeal. Advertising may be used to remind
consumers that the product may be needed in the future and to ensure that the brand is
kept in mind during the off-season. Finally, even dominant brands have to ensure the
maintenance of ‘front of mind’ awareness. The consumer has a comparatively short
memory and, even with familiar brands, needs to be reminded of the benefits and
advantages they provide.

Classification of Advertising or Advertisement

In advertising management, there are different types of classification of

advertising or advertisement. It includes 5 major points for explaining the classification and
it’s classified as:-

1. On the Basis of Geographical Spread-

(i) National Advertising-

When the advertisement is broadcasted across the country it is
called national advertising. This advertisement is for peoples who are residents in that
country because any company who runs an advertisement of its product, its main
responsibility remains to target our local customers and also increase the sales of our
product. For Example– Patanjali Ayurvedic Products. Through this advertisement, the
company can build the brand image in our country and as well as increase the growth of a
particular business.

(ii) International Advertising-

These types of advertisements are broadcasted throughout the world and it is the process
of providing information about persuading the customers and reminding the customers
about the brands which are available at the global level. So, International advertising is
also known as global advertising.
In the international advertising, cultural differences are also the barriers of global
advertising. For Example– Advertisements of Mcdonalds, KFC, Pizza Hut, Apple (i
phone), and Walmart, etc.

(iii) Local Advertising-

When the advertisements of a particular product are broadcasted within a local area, these
advertisements must be according to local tastes and preferences. For Example –
Advertisements of F.M., Local Newspapers, and so on
2. On the Basis of Target Audience or Market-

(i) Consumers-
This advertising is based on promoting products because it defines the consumer’s
personal consumption. In these advertisements, the company focuses on the daily use of
products which are used by the customers. For Example– FMCG Products like shampoo,
soaps, and so on.
(ii) Industrial Advertising-
This advertisement is focused on to promote industrial products such as raw materials
capital items, and operating supplies. However, the industrial products are totally focused
on the business to business activity.

3. On the Basis of Media-

(i) Print Media-

Print Media is an advertising media that has been running for a long time. There are two
main things are used to complete this advertisement, first is a newspaper and second is a
magazine. This media includes various channels or things to promote their products like
brochures, yellow papers, fliers, and journals.
(ii) Electronic Media-
Electronic Media is very popular advertising all over around the world because this
advertisement targets many audiences at once and is published in every country. It
includes televisions and radios, but television advertising is very costly than radio
advertising.

(iii) Online Media-

Online media is a very popular advertising and we also know it as internet advertising.
This advertisement helps to promote the products in social media tools. It includes various
media like- direct marketing, email marketing, search engine optimization, and banner
advertising.
(iv) Mural Advertising-
Mural Advertising is that advertising which is placed directly on a wall and another
permanent surface. This advertising work as friendly with their target audience because
they placed around them.

4. On the Basis of Purpose-

(i) To inform-
When any advertising is advertised in any place, its main motive is to give full
information about the product to our target customers. Through that advertisement, tell
the customer about the features, uses, and durability of the product so that the customer
buys your product and became the potential buyer also.
 (ii) To remind-
Advertising is such a thing that we or any company advertise our products and services
and make also our potential buyers. But the advertisement for anything is not done once,
because if we quit the broadcasting of advertisement, then our customers will forget the
products. That’s why any company repeated their advertisement so that the customers
remember their products and services. Slogans and Jingles are a great help here because
they help to provide a particular singing slogan and a particular sentence.
(iii) To persuade-
Advertising is a form of non-personal communication used to persuade or enhance to take
a new action. It also helps to define the category of customers about suitability of the
product.

5. On the Basis of Action-

(i) Immediate Response-

These kinds of advertisement provide immediate response in the form of
purchase of the product. For Example– An advertisement for the offer can result in
more sale of a product.
(ii) Indirect Response-
These kinds of advertisement are work for building the brand image in the minds of the
customers so that they can purchase the products over a period of time. For Example–
An advertisement related to banks, insurance policy, and so on.
6. Other types of Advertising

(i) Covert Advertising-

This is a unique way of advertising in which the product or the message is subtly
included in a movie or TV serial. There is no actual ad, just the mention of the product
in the movie. For example, Tom Cruise used the Nokia phone in the movie Minority
Report.
(ii) Surrogate Advertising- Advertising Indirectly-
Surrogate Advertising is prominently seen in cases where advertising a particular
product is banned by law. Advertisements for products like cigarettes or alcohol which
are injurious to health are prohibited by law in several countries and hence these
companies have to come up with several other products that might have the same brand
name which indirectly remind people of the cigarettes or beer bottles of the same brand.
(iii) Public Service Advertising- Advertising for social causes-
Public Service Advertising is a technique that makes use of advertising as an effective
communication medium to convey socially relevant message about important matters
and social welfare causes like AIDS, energy conservation, political integrity,
deforestation, illiteracy, poverty and so on. David Oglivy who is considered to be one of
the pioneers of advertising and marketing concepts had reportedly encouraged the use of
advertising field for a social cause. Today public Service Advertising has been
 increasingly used in a non-commercial fashion in several countries across the world in
order to promote various social causes.
(iv) Celebrity advertising-
Using celebrities for advertising involves signing up celebrities for advertising
campaigns, which consists of all sorts of advertising including, television and print
advertisements. Though the audiences are getting smarter and smarter and the modern
day consumers are getting immune to the exaggerated claims made in a majority of
advertisements, there still exist a section of advertisers who still bank upon celebrities
and their popularity for advertising their products.

Role of Advertising in Marketing

Advertising has been a major communication tool, is highly pervasive and reaches to people
through various mass media vehicles. Advertising influences everyone.

1) Information and Persuasion: This is a fundamental role played by advertising in the

marketing and it relates most directly to managing the brand. Consumers learn about the
brand’s features and benefits through the communications transmitted primarily by
advertising and other promotional tools. No other variable in the marketing is designed to
accomplish this communication.

2) Introduction of new brand and brand extensions: Advertising is necessary when

companies introduce a new brand or extensions of existing brands. When new brands or
brand extensions are brought to the market, advertising is primarily responsible for
attracting attention to the new market offering. It is also the role of advertising, to
communicate to the prospective consumers, the values of a new brand or the features a
brand extension has to offer, typically through advertising.

3) Building and maintaining brand loyalty among consumers: Loyalty to a brand is one
of the most important assets a firm can have. Brand loyalty is the consumer’s conscious
or unconscious decision expressed through intention or behavior to repurchase a brand
continually. It occurs because consumer perceives that a brand offers the right product
features, image, quality or relationship at the right price. While the product itself is the
most important influence on building and maintaining brand loyalty, advertising plays a
key role in the process as well. Advertising reminds consumers of the values-tangible and
intangible-of the brand and thus tries to reinforce brand loyalty and maintain market
share. When a firm is able to create and maintains positive associations with the brand in
 the mind of the consumers with the help of advertising , the firm has increased brand
loyalty and developed brand equity.

4) Advertising and pricing decisions: Consumers look beyond the product and its features
in making their product choices. They balance the price of the brands against those
features. Advertising affects at the consumer level by offering an image that is
commensurate with the price of the product. For example, if the product is of the high
price the advertising may project an image of high quality, high reliability and associate
the brand with those people who want exclusive products. In a similar way, advertising
may associate low price with economy and affordability.

5) Advertising and distribution: The effect of advertising on the distribution variable of

the marketing mix has mainly to do with securing distribution at the trade level. In this
context, a company may use trade advertising to creates enthusiasm among wholesalers
and retailers and motivate them to purchase its products for resale to their customers.

6) Targeting, segmenting, and positioning: Another important market strategy that is

affected by advertising activities has to do with some of the most basic brand strategies
are market segmentation, product differentiation, and positioning. Advertising plays an
important role in helping a firm effectively execute these marketing strategies.
Advertising can be used to help differentiate a brand from competition by highlighting a
distinctive brand feature in the minds of the consumers. The creation of this
differentiation can be done through effective advertising.

Role of Advertising Agency

Meaning
Many Major companies use an advertising agency to assist them in developing, preparing and
executing their promotional program. An Advertising agency is a service organization that
specializes in planning and executing advertising programs for its client.

The first Advertising Agency was William Taylor in 1786 followed by James “Jem” White in
1800 in London and Reynell & Son in 1812.
1) Attracts Clients: Advertising agencies aims at attracting more and more clients i.e.
advertisers for earning revenue. Without the presence of their clients, these agencies
cannot survive as these are the source of profit for them. They grab attention of
advertisers by providing them wide range of quick services at cheap price. Advertising
agencies focuses on strengthening their relations with clients by providing them full
satisfaction that leads to build up customer loyalty.

2) Researcher Role: Advertisement agency conducts a detailed research related to

advertiser product for gathering all required information. This research is carried out for
knowing about features, qualities and limitations of product, market competition rate,
methods of distribution, preferences of buyers, present and future market possibilities.

3) Advertising Planning: Advertising planning is a primary role performed by ads

agencies. It involves making a proper blueprint of whole advertisement campaign to be
performed. This function is performed after doing research about the client products, its
competitors, target audience, market area etc. Once this plan gets approval by clients, it is
executed to derive better results.

4) Prepares Advertising Budget: Ad agencies prepare an advertising budget for its

advertisers. Preparation of right budget enables in carrying out all advertisement activities
economically with the best possible use of all resources. In absence of advertising budget,
client funds may get wasted and incurs heavy losses. Client may lose trust in agency and
will not bring new business to an ad agency.

5) Brings Coordination: Advertisement agency brings coordination in between all people

associated with marketing campaigns such as clients, itself, media, sales force and
distributors. Proper coordination ensures long-term success of advertising campaigns and
avoid any disputes. It is an important role performed by agency as it would lead to
enhance the sales of product.

6) Media Selection: It perform a crucial role for choosing an appropriate media(platform)

for its advertisers. Media selection is a highly specialized function where decision
regarding choosing media for communicating the content is made. Right media has more
potential for giving best results at lower cost. Ads agency must maintain good relations
with the media once they are finally selected.
7) Creative Role: This role involves putting advertising plans into action as is termed as a
key function. Creating function involves making a proper design, layout and illustrations
of ads messages. A team of experts like designers, copywriters and artists perform this
function to make advertisement more appealing. Agency must use creative and innovate
ideas for creating ads that would increases the sales of products.

8) Non-Advertising Role: These agencies also provide a wide range of non-advertisement

services to their clients. Advertisement agency assist its client in designing the product,
fixing its price, determining the discount amount, designing the labels, trade mark,
packaging etc. All this enables in raising the sales of product.

9) Monitoring Feedback: By monitoring consumer feedback, a decision on whether to

revise the message, the medium, the target audience or all of them can be made. Ad
agencies are developing to reach the target audience. As information is the backbone of
all advertising, to prepare ads, one requires information about the product, its
competitors, the market situation and trends, information about the audiences (their likes
and dislikes and media habits) also need to be collected. Some of the most effective
advertising includes advertisement written in their native language. All of these
specialized campaigns are creating new demands on agencies and are requiring new
talents for people who work in advertising.