Advertising—the use of paid media by a seller to inform, persuade,
and remind about its products or organization—is a strong promotion
Advertising decision-making is a five-step process consisting of
decisions about the objectives, the budget, the message, the media, and,
finally, the evaluation of results. Advertisers should set clear
objectives as to whether the advertising is supposed to inform,
persuade, or remind buyers. The advertising budget can be based on what
is affordable, on a percentage of sales, on competitors' spending, or on
the objectives and tasks. The message decision calls for designing
messages, evaluating them, and executing them effectively. The media
decision calls for defining reach, frequency, and impact goals; choosing
major media types; selecting media vehicles; and scheduling the media.
Message and media decisions must be closely
coordinated for maximum campaign effectiveness. Finally, evaluation
calls for evaluating the communication and sales effect of advertising
before, during, and after the advertising is placed.
Any paid form of non-personal presentation and promotion of ideas,
goods, or services by an identified sponsor is termed as advertising.
B. The Five M’s of Advertising
The five M’s are basically the different important decisions that are
to be taken while designing the advertising campaign. The five M’s of
(1) Mission (that is the basic objective or goal that
company wants to attain by its advertising campaign),
(how much money should be spent by the company to achieve the
objective of advertising and the basic factors that should be considered
while deciding about the budget of the advertising)
(3) Message (what
specific information company wants to communicate through its
advertising, what should be the contents of the message etc)
(communication of the message to people requires some
media that can be print electronic its selection requires certain
decisions like selection of type of
media, scheduling of media etc) the last M is
(5) Measurement (it is
something related to evaluation
of the advertising campaign that can be done either by considering its
impact on sales or profits of
C. Advertising decisions
Marketing management must take five important decisions when
developing an advertising
a. Setting advertising objectives.
b. Setting advertising budgets.
c. Developing advertising strategy.
o a). Message decisions.
o b). Media decisions.
d. Evaluating advertising campaigns.
a. Setting Advertising Objectives
Setting advertising objectives is the first step in developing an
advertising program. These
objectives should be based on past decisions about the target market,
marketing mix, which define the job that advertising must do in the
total marketing program. An
advertising objective is a specific communication task to be
accomplished with a specific
target audience during a specific period of time. Advertising objectives
can be classified by
primary purpose as:
1). Informative advertising, which is used to inform
consumers about a new product or
feature or to build primary demand.
2). Persuasive advertising which is used to build
selective demand for a brand by
persuading consumers that it offers the best quality for their money.
3). Comparison advertising which is advertising that
compares one brand directly or
indirectly to one or more other brands.
4). Reminder advertising, which is used to keep
consumers thinking about a product. This
form of advertising is more important for mature products.
b. Setting the Advertising Budget
After determining its advertising objectives, the marketer must set
the advertising budget for each product and market. Four commonly used
methods for setting promotion budgets were discussed in last Lesson. No
matter what method is used, setting the advertising budget is no easy
task. How does a company know if it is spending the right amount? Some
critics charge that large consumer packagedgoods firms tend to spend too
much on advertising and business-to-business marketers generally under
spend on advertising. They claim that, on the one hand, the large
consumer companies use lots of image advertising without really knowing
its effects. They overspend as a form of "insurance" against not
spending enough. On the other hand, business advertisers tend to rely
too heavily on their sales forces to bring in orders. They underestimate
the power of company and
product image in pre-selling to industrial customers. Thus, they do not
spend enough on advertising to build customer awareness and knowledge.
Some specific factors that should be considered when setting the
advertising budget are:
1). Stage in the product life cycle. New products typically need large
2). Market share. High-market share brands usually need more
3). Competition and clutter. More advertising is usually required in a
market with many
more competitors and their advertising clutter.
4). Product differentiation. When a brand closely resembles other brands
in its product
class, more advertising (and therefore budget) is needed.
The primary questions to be answered during the budget process are how
much to spend
and what impact is expected or acceptable. This process is difficult
techniques of effectiveness rarely give precise answers.
c. Developing Advertising Strategy
Advertising strategy consists of two major elements:
a) Creating advertising messages
b) Selecting advertising media.
In the past, companies often viewed media planning as secondary to
the message-creation process.
The creative department first created good advertisements, and then the
selected the best media for carrying these advertisements to desired
target audiences. This often
caused friction between creatives and media planners.
Today, however, media fragmentation, soaring media costs, and more
focused target marketing
strategies have promoted the importance of the media-planning function.
In some cases, an
advertising campaign might start with a great message idea, followed by
the choice of appropriate
media. In other cases, however, a campaign might begin with a good media
by advertisements designed to take advantage of that opportunity.
Increasingly, companies are
realizing the benefits of planning these two important elements jointly.
Thus, more and more advertisers are orchestrating a closer harmony
between their messages and
the media that deliver them. Media planning is no longer an
after-the-fact complement to a new ad
campaign. Media planners are now working more closely than ever with
creative to allow media
selection to help shape the creative process, often before a single ad
is written. In some cases,
media people are even initiating ideas for new campaigns.
a) Creating the Advertising Message
No matter how big the budget, advertising can succeed only if
commercials gain attention and
communicate well. Good advertising messages are especially important in
today's costly and
cluttered advertising environment. If all this advertising clutter
bothers some consumers, it also
causes big problems for advertisers. Until recently, television viewers
were pretty much a captive
audience for advertisers. Viewers had only a few channels from which to
choose. But with the
growth in cable and satellite TV, VCRs, and remote-control units,
today's viewers have many more
options. They can avoid ads by watching commercial-free cable channels.
They can "zap"
commercials by pushing the fast-forward button during taped programs.
With remote control, they
can instantly turn off the sound during a commercial or "zip" around the
channels to see what else
is on. In fact, a recent study found that half of all television viewers
now switch channels when the
commercial break starts.
Thus, just to gain and hold attention, today's advertising messages must
be better planned, more
imaginative, more entertaining, and more rewarding to consumers. Some
advertisers even create
intentionally controversial ads to break through the clutter and gain
attention for their products.
i. Message Strategy
The first step in creating effective advertising messages is to
decide what general message will be
communicated to consumers—to plan a message strategy. The purpose of
advertising is to get
consumers to think about or react to the product or company in a certain
way. People will react
only if they believe that they will benefit from doing so. Thus,
developing an effective message
strategy begins with identifying customer benefits that can be used as
advertising appeals. Ideally,
advertising message strategy will follow directly from the company's
broader positioning strategy.
Message strategy statements tend to be plain, straightforward outlines
of benefits and positioning
points that the advertiser wants to stress. The advertiser must next
develop a compelling creative
concept—or "big idea"—that will bring the message strategy to life in a
distinctive and memorable
way. At this stage, simple message ideas become great ad campaigns.
Usually, a copywriter and art
director will team up to generate many creative concepts, hoping that
one of these concepts will
turn out to be the big idea. The creative concept may emerge as
visualization, a phrase, or a
combination of the two.
The creative concept will guide the choice of specific appeals to be
used in an advertising
campaign. Advertising appeals should have three characteristics: First,
they should be meaningful,
pointing out benefits that make the product more desirable or
interesting to consumers. Second,
appeals must be believable—consumers must believe that the product or
service will deliver the
promised benefits. However, the most meaningful and believable benefits
may not be the best
ones to feature. Appeals should also be distinctive—they should tell how
the product is better than
the competing brands.
ii. Message Execution
The advertiser now has to turn the big idea into an actual ad
execution that will capture the target
market's attention and interest. The creative people must find the best
style, tone, words, and
format for executing the message. Any message can be presented in
different execution styles, such
as the following:
• Slice of life: This style shows one or more "typical" people using the
product in a normal
• Lifestyle: This style shows how a product fits in with a particular
• Fantasy: This style creates a fantasy around the product or its use.
• Mood or image: This style builds a mood or image around the product,
such as beauty,
love, or serenity. No claim is made about the product except through
• Musical: This style shows one or more people or cartoon characters
singing about the
• Technical expertise: This style shows the company's expertise in
making the product.
• Scientific evidence: This style presents survey or scientific evidence
that the brand is better
or better liked than one or more other brands.
• Testimonial evidence or endorsement: This style features a highly
believable or likable
source endorsing the product.
b) Selecting advertising media.
The major steps in media selection are:
i. Deciding on reach, frequency, and impact;
ii. Choosing among major media types;
iii. Selecting specific media vehicles;
iv. Deciding on media timing.
I. Deciding on Reach, Frequency, and Impact
To select media, the advertiser must decide what reach and frequency
are needed to achieve
advertising objectives. Reach is a measure of the
percentage of people in the target market who are
exposed to the ad campaign during a given period of time. For example,
the advertiser might try to
reach 70 percent of the target market during the first three months of
the campaign. Frequency is a
measure of how many times the average person in the target
market is exposed to the message. For
example, the advertiser might want an average exposure frequency of
three. The advertiser also
must decide on the desired media impact—the qualitative
value of a message exposure through a given
medium. For example, for products that need to be demonstrated, messages
on television may
have more impact than messages on radio because television uses sight
and sound. The same
message in one magazine may be more believable than in another. In
general, the more reach,
frequency, and impact the advertiser seeks, the higher the advertising
budget will have to be.
II. Choosing Among Major Media Types
The media planner has to know the reach, frequency, and impact of
each of the major media types.
The major media types are newspapers, television, direct mail, radio,
magazines, outdoor, and the
Internet. Each medium has advantages and limitations.
Media planners consider many factors when making their media choices.
The media habits of target
consumers will affect media choice—advertisers look for media
that reach target consumers
effectively. So will the nature of the product—for example,
fashions are best advertised in color
magazines, and automobile performance is best demonstrated on
television. Different types of
messages may require different media. A message announcing a
major sale tomorrow will require
radio or newspapers; a message with a lot of technical data might
require magazines, direct
mailings, or an online ad and Web site. Cost is another major
factor in media choice. For example,
network television is very expensive, whereas newspaper or radio
advertising costs much less but
also reaches fewer consumers. The media planner looks both at the total
cost of using a medium
and at the cost per thousand exposures—the cost of reaching 1,000 people
using the medium.
Media impact and cost must be reexamined regularly. For a long time,
television and magazines
have dominated in the media mixes of national advertisers, with other
media often neglected.
Recently, however, the costs and clutter of these media have gone up,
audiences have declined, and
marketers are adopting strategies beamed at narrower segments. As a
result, advertisers are
increasingly turning to alternative media—ranging from cable TV and
outdoor advertising to
parking meters and shopping carts—that cost less and target more
III. Selecting Specific Media Vehicles
The media planner now must choose the best media vehicles—specific
media within each general
media type. Media planners must compute the cost per thousand persons
reached by a vehicle. The
media planner ranks each magazine by cost per thousand and favors those
magazines with the
lower cost per thousand for reaching target consumers.
The media planner must also consider the costs of producing ads for
different media. Whereas
newspaper ads may cost very little to produce, flashy television ads may
cost millions. In selecting
media vehicles, the media planner must balance media cost measures
against several media impact
factors. First, the planner should balance costs against the media
vehicle's audience quality.
IV. Deciding on Media Timing
The advertiser must also decide how to schedule the advertising over
the course of a year. Suppose
sales of a product peak in December and drop in March. The firm can vary
its advertising to
follow the seasonal pattern, to oppose the seasonal pattern, or to be
the same all year. Most firms
do some seasonal advertising. Some do only seasonal
advertising. Finally, the advertiser has to
choose the pattern of the ads. Continuity means scheduling ads
evenly within a given period. Pulsing
means scheduling ads unevenly over a given time period.. The idea is to
advertise heavily for a
short period to build awareness that carries over to the next
advertising period. Those who favor
pulsing feel that it can be used to achieve the same impact as a steady
schedule but at a much lower
cost. However, some media planners believe that although pulsing
achieves minimal awareness, it
sacrifices depth of advertising communications.
Recent advances in technology have had a substantial impact on the media
planning and buying
a. Evaluating Advertising
The fourth step in the advertising campaign is evaluation of the
campaign. The advertising
program should evaluate both the communication effects and the sales
effects of advertising
regularly. Measuring the communication effects of an ad—copy
testing—tells whether the ad is
communicating well. Copy testing can be done before or after an ad is
printed or broadcast. Before
the ad is placed, the advertiser can show it to consumers, ask how they
like it, and measure recall or
attitude changes resulting from it. After the ad is run, the advertiser
can measure how the ad
affected consumer recall or product awareness, knowledge, and
But what sales are caused by an ad that increases brand
awareness by 20 percent and brand
preference by 10 percent? The sales effects of advertising are
often harder to measure than the
communication effects. Sales are affected by many factors besides
advertising—such as product
features, price, and availability.
b. Ways to Handle Advertising
Different companies organize in different ways to handle advertising.
In small companies,
advertising might be handled by someone in the sales department. Large
companies set up
advertising departments whose job it is to set the advertising budget,
work with the ad agency, and
handle other advertising not done by the agency. Most large companies
use outside advertising
agencies because they offer several advantages.
How does an advertising agency work? Advertising agencies were started
in the mid-to-late 1800s
by salespeople and brokers who worked for the media and received a
commission for selling
advertising space to companies. As time passed, the salespeople began to
help customers prepare
their ads. Eventually, they formed agencies and grew closer to the
advertisers than to the media.
Today's agencies employ specialists who can often perform advertising
tasks better than the
company's own staff. Agencies also bring an outside point of view to
solving the company's
problems, along with lots of experience from working with different
clients and situations. Thus,
today, even companies with strong advertising departments of their own
use advertising agencies.
Most large advertising agencies have the staff and resources to handle
all phases of an advertising
campaign for their clients, from creating a marketing plan to developing
ad campaigns and
preparing, placing, and evaluating ads. Agencies usually have four
departments: creative, which
develops and produces ads; media, which selects media and
places ads; research, which studies
audience characteristics and wants; and business, which handles
the agency's business activities.
Each account is supervised by an account executive, and people in each
department are usually
assigned to work on one or more accounts.
However, both advertisers and agencies have become more and more unhappy
commission system. Larger advertisers complain that they pay more for
the same services received
by smaller ones simply because they place more advertising. Advertisers
also believe that the
commission system drives agencies away from low-cost media and short
Another factor is vast changes in how ad agencies reach consumers that
go way beyond network
TV or magazine advertising. Another trend is affecting the advertising
agency business: Many
agencies have sought growth by diversifying into related marketing
services. These new diversified
agencies offer a complete list of integrated marketing and promotion
services under one roof,
including advertising, sales promotion, marketing research, public
relations, and direct and online
marketing. Some have even added marketing consulting, television
production, and sales training
units in an effort to become full "marketing partners" to their clients.
However, agencies are finding that most advertisers don't want much more
from them than
traditional media advertising services plus direct marketing, sales
promotion, and sometimes public
relations. Thus, many agencies have recently limited their
diversification efforts in order to focus
more on traditional services. Some have even started their own "creative
boutiques," smaller and
more independent agencies that can develop creative campaigns for
clients free of large-agency
A. Sales Promotion
Sales promotion consists of short-term incentives to encourage the
purchase or sale of a product
or service. Whereas advertising and personal selling offer reasons to
buy a product or service, sales
promotion offers reasons to buy now.
Several factors have contributed to the rapid growth of sales promotion,
particularly in consumer
markets. First, inside the company, product managers face greater
pressures to increase their
current sales, and promotion is viewed as an effective short-run sales
tool. Second, externally, the
company faces more competition and competing brands are less
competitors are using sales promotion to help differentiate their
offers. Third, advertising
efficiency has declined because of rising costs, media clutter, and
legal restraints. Finally,
consumers have become more deal oriented and ever-larger retailers are
demanding more deals
The growing use of sales promotion has resulted in promotion
clutter, similar to advertising clutter.
Consumers are increasingly tuning out promotions, weakening their
ability to trigger immediate
purchase. Manufacturers are now searching for ways to rise above the
clutter, such as offering
larger coupon values or creating more dramatic point-of-purchase
a. Sales Promotion Objectives
Sales promotion objectives vary widely. Sellers may use consumer
promotions to increase shortterm
sales or to help build long-term market share. Objectives for trade
promotions include getting
retailers to carry new items and more inventories, getting them to
advertise the product and give it
more shelf space, and getting them to buy ahead. For the sales force,
objectives include getting
more sales force support for current or new products or getting
salespeople to sign up new
accounts. Sales promotions are usually used together with advertising or
Consumer promotions must usually be advertised and can add excitement
and pulling power to
ads. Trade and sales force promotions support the firm's personal
In general, sales promotions should be consumer relationship
building. Rather than creating only shortterm
sales or temporary brand switching, they should help to reinforce the
product's position and
build long-term relationships with consumers. Increasingly, marketers
are avoiding "quick fix,"
price-only promotions in favor of promotions designed to build brand
b. Major Sales Promotion Tools
Many tools can be used to accomplish sales promotion objectives.
Descriptions of the main
consumer, trade, and business promotion tools follow.
Consumer Promotion Tools
The main consumer promotion tools include samples, coupons, cash
refunds, price packs,
premiums, advertising specialties, patronage rewards, point-of-purchase
demonstrations, and contests, sweepstakes, and games.
• Samples are offers of a trial amount of a product.
Sampling is the most effective—but most expensive—way to introduce a new
product. Some samples are free; for others, the company charges a small
amount to offset its cost. The sample might be delivered door-todoor,
sent by mail, handed out in a store, attached to another product, or
featured in an ad. Sometimes, samples are combined into sample packs,
which can then be used to promote other products and services.
• Coupons are certificates that give buyers a saving
when they purchase specified products.
Most consumers love coupons: Coupons can stimulate sales of a mature
brand or promote
early trial of a new brand. However, as a result of coupon clutter,
redemption rates have
been declining in recent years. Thus, most major consumer goods
companies are issuing
fewer coupons and targeting them more carefully.
• Cash refund offers (or rebates) are like coupons
except that the price reduction occurs
after the purchase rather than at the retail outlet. The consumer sends
a "proof of
purchase" to the manufacturer, who then refunds part of the purchase
price by mail.
• Price packs (also called cents-off deals) offer
consumers savings off the regular price of
a product. The reduced prices are marked by the producer directly on the
label or package.
Price packs can be single packages sold at a reduced price (such as two
for the price of
one), or two related products banded together (such as a toothbrush and
packs are very effective—even more so than coupons—in stimulating
• Premiums are goods offered either free or at low cost
as an incentive to buy a product,
ranging from toys included with kids' products to phone cards, compact
computer CD-ROMs. A premium may come inside the package (in-pack),
package (on-pack), or through the mail.
• Advertising specialties are useful articles imprinted
with an advertiser's name given as
gifts to consumers. Typical items include pens, calendars, key rings,
bags, T-shirts, caps, nail files, and coffee mugs. Such items can be
very effective. In a
recent study, 63 percent of all consumers surveyed were either carrying
or wearing an ad
specialty item. More than three-quarters of those who had an item could
advertiser's name or message before showing the item to the interviewer.
• Patronage rewards are cash or other awards offered
for the regular use of a certain
company's products or services. For example, airlines offer frequent
flier plans, awarding
points for miles traveled that can be turned in for free airline trips.
• Point-of-purchase (POP) promotions include displays
and demonstrations that take
place at the point of purchase or sale. Unfortunately, many retailers do
not like to handle
the hundreds of displays, signs, and posters they receive from
manufacturers each year.
Manufacturers have responded by offering better POP materials, tying
them in with
television or print messages, and offering to set them up.
• Contests, sweepstakes, and games give consumers
the chance to win something, such
as cash, trips, or goods, by luck or through extra effort. A contest
calls for consumers to
submit an entry—a jingle, guess, suggestion—to be judged by a panel that
will select the
best entries. A sweepstakes calls for consumers to submit their
names for a drawing. A game
presents consumers with something—bingo numbers, missing letters—every
buy, which may or may not help them win a prize. A sales contest urges
dealers or the sales
force to increase their efforts, with prizes going to the top performers
i. Trade Promotion Tools
Trade promotion can persuade resellers to carry a brand, give it
shelf space, promote it in
advertising, and push it to consumers. Shelf space is so scarce these
days that manufacturers oftenbr>
have to offer price-offs, allowances, buy-back guarantees, or free goods
to retailers and wholesalers
to get products on the shelf and, once there, to stay on it.
Manufacturers use several trade promotion tools. Many of the tools used
promotions—contests, premiums, displays—can also be
used as trade promotions. Or the
manufacturer may offer a straight discount off the list
price on each case purchased during a
stated period of time (also called a price-off, off-invoice, or
off-list). The offer encourages dealers to buy
in quantity or to carry a new item. Dealers can use the discount for
immediate profit, for
advertising, or for price reductions to their customers.
Manufacturers also may offer an allowance (usually so
much off per case) in return for the
retailer's agreement to feature the manufacturer's products in some way.
allowance compensates retailers for advertising the
product. A display allowance compensates
them for using special displays.
Manufacturers may offer free goods, which are extra cases of
merchandise, to resellers who buy a
certain quantity or who feature a certain flavor or size. They may offer
push money—cash or gifts
to dealers or their sales forces to "push" the manufacturer's goods.
Manufacturers may give
retailers free specialty advertising items that carry the
company's name, such as pens, pencils, calendars,
ppaperweights, matchbooks, memo pads, and yardsticks.
ii. Business Promotion Tools
Companies spend billions of dollars each year on promotion to
industrial customers. These
business promotions are used to generate business leads, stimulate
purchases, reward customers,br>
and motivate salespeople. Business promotion includes many of the same
tools used for consumer
or trade promotions. Here, we focus on two additional major business
conventions and trade shows, and sales contests.
Many companies and trade associations organize conventions and trade
shows to promote their
products. Firms selling to the industry show their products at the trade
show. Trade shows also
help companies reach many prospects not reached through their sales
forces. About 90 percent of
a trade show's visitors see a company's salespeople for the first time
at the show. A sales contest is a
contest for salespeople or dealers to motivate them to increase their
sales performance over a given
period. Sales contests motivate and recognize good company performers,
who may receive trips,
cash prizes, or other gifts. Some companies award points for
performance, which the receiver can
turn in for any of a variety of prizes. Sales contests work best when
they are tied to measurable and
achievable sales objectives (such as finding new accounts, reviving old
accounts, or increasing
c. Developing the Sales Promotion Program
The marketer must make several other decisions in order to define the
full sales promotion
program. First, the marketer must decide on the strong>size of the
incentive. A certain minimum
incentive is necessary if the promotion is to succeed; a larger
incentive will produce more sales
response. The marketer also must set conditions for
participation. Incentives might be offered
to everyone or only to select groups.
The marketer must decide how to promote and distribute the
promotion program itself. A 50-
cents-off coupon could be given out in a package, at the store, by mail,
or in an advertisement.
Each distribution method involves a different level of reach and cost.
Increasingly, marketers are
blending several media into a total campaign concept. The length
of the promotion is also important. If the sales promotion
period is too short, many prospects (who may not be buying during that
time) will miss it. If the promotion runs too long, the deal will lose
some of its "act now" force.
Evaluation is also very important. Yet many companies
fail to evaluate
their sales promotion programs, and others evaluate them only
superficially. Manufacturers can use one of many evaluation methods.
The most common method is to compare sales before, during, and
after a promotion. Suppose a company has a 6 percent market share before
the promotion, which jumps to 10 percent during the promotion, falls to
5 percent right after, and rises to 7 percent later on. The promotion
seems to have attracted new triers and more buying from current
customers. After the promotion, sales
fell as consumers used up their inventories. The long-run rise to 7
percent means that the company
gained some new users. If the brand's share had returned to the old
level, then the promotion
would have changed only the timing of demand rather than the
Consumer research would also show the kinds of people who responded to
the promotion and
what they did after it ended. Surveys can provide information
on how many consumers recall the
promotion, what they thought of it, how many took advantage of it, and
how it affected their
buying. Sales promotions also can be evaluated through experiments
that vary factors such as
incentive value, length, and distribution method.
Clearly, sales promotion plays an important role in the total promotion
mix. To use it well, the
marketer must define the sales promotion objectives, select the best
tools, design the sales
promotion program, implement the program, and evaluate the results.
Moreover, sales promotion
must be coordinated carefully with other promotion mix elements within
the integrated marketing
d. Sales Promotion Uses and Limitations of Sales Promotion
Sales promotion tools are effective for the organizations in
different aspects like they can be used
to Introduce new products, making existing customers to buy more,
Attract new customers,br>
Combat competition, Maintain sales in off season, Increase retail
inventories, Tie in advertising and
personal selling, Enhance personal selling efforts. Beside these
advantages, sales promotions have
certain limitations as well like Cannot Reverse Declining Sales Trend,
Cannot Overcome, inferior Product, May Encourage Competitive
Retaliation, May Hurt Profit