Masters 2023-2024

EMA AM 312 : Advertising Agency Structure & Management :

OBJECTIVES:

To understand the structure of an advertising agency.

To learn about the various departments and their working To get to know about various

types of agency.

To understand agency revenue generation sources .

Unit- I : Introduction :

Structure of and ad agency, Types of advertising agencies, Internal structure and

functions.

Unit -II : Functions and role of various departments:

Client servicing, Media Planning, Art, Copy, Events, Legal, Accounts

Unit- III : Agency Finances:

Revenue models, Commission, Retainer ship fees

Unit -IV : Pitching process and Agency evaluation techniques:

The Pitch process, Referrals, Evaluation techniques, managing the work.

Unit- V : Setting up an Agency:

Setting up an agency, Managing the work and Building up the clientele.

Reference Books:

1. Purple Cow: Transform Your Business by Being Remarkable by Seth Godin.

2. Truth, Lies & Advertising: The Art of Account Planning by Jon Steel.

3. Positioning: The Battle For Your Mind by Al Ries and Jack Trout.

4. How to Write an Inspired Creative Brief by Howard Ibach.

5. A Technique for Producing Ideas by James Webb Young.

6. Lateral Thinking: Creativity Step by Step by Edward de Bono.

7. Caffeine for the Creative Mind by Stefan Mumaw and Wendy Lee Oldfield.
8. Zag – Marty Neumeier .

9. ReWork – Jason Fried and David H. Hansson.

10. My Life in Advertising and Scientific Advertising – Claude Hopkins .

11. The Tipping Point – Malcolm Gladwell.

12. The Brand Gap 13. Engage: The Complete Guide for Brands and Businesses to

Succeed – Brian Solis.

CHAPTER 1 - ADVERTISING AGENCY

Define Advertising Agency? Evolution of an agency.

What is the role of an advertising agency?

What are the functions of an ad agency?

What is the organization and importance of an ad agency?

What are the different types of agencies?

Definitions:

An advertising agency is an independent organization that provides one or more specialized

advertising and promotion related services to assist companies in developing, preparing and

executing their advertising and other promotional programmes. Some of the famous Worldwide

Agencies are Mccann Erickson, Ogilvy & Mather, Lowe Lintas etc.

“The work of a tailor is to collect the raw material, find matching threads, cut the cloth in desired

shape, finally stitch the cloth and deliver it to the customer.”

Advertising Agency is just like a tailor. It creates the ads, plans how, when and where it should be

delivered and hands it over to the client. Advertising agencies are mostly not dependent on any

organizations.

Agencies take all the efforts for selling the product, Building Brands, creating path breaking ideas
to make the product stand out in the market. All of this is possible through team effort. A group of

experts in their particular fields, thus helping the companies or organizations to reach their target

customer in an easy and simple way.

The association of advertising agencies of America (AAAA) defines advertising agency as "an

independent business organization composed of creative of business people, who

develop , prepare and place advertising for sellers seeking to find customers for their

goods and services."

"Advertising works better when it does not tell people what to think, but rather allows them to
make up their own minds about its meaning. Quote from Truth, Lies & Advertising Jon Steel.

STRUCTURE OF AN AD AGENCY

1. ACCOUNT SERVICE 2. CREATIVE 3. MEDIA 4. RESEARCH 5. PRODUCTION 6.

FINANCE
1. Account service department/Client Servicing: The account service, or the account
management department, is the link between the ad agency and its clients. This is the group
of people managing an 'account' meaning 'client'. Depending upon the size of the account
and its advertising budget one or two account executives serve as liaison to the client.

Role of an Account Executive

The account executive’s job requires high degree of diplomacy and tact as misunderstanding
may lead to loss of an account. The account executive is mainly responsible to gain
knowledge about the client’s business, profit goals, marketing problems and advertising
objectives. The account executive is responsible for getting approved the media schedules,
budgets and rough ads or story boards from the client. The next task is to make sure that the
agency personnel produce the advertising to the client’s satisfaction. The biggest role of the
account executive is keeping the agency ahead of the client through follow-up and
communications.

2. Media department: The responsibility of the agency’s media department is to develop a

media plan to reach the target audience effectively in a cost effective manner. The media
department has acquired increasing importance in an agency’s business as large advertisers
seem to be more inclined to consolidate media buying with one or few agencies thereby
saving money and improving media efficiency.

Role of a Media Planner / Buyer

The planner systematically analyses, selects and then finalises or buys the media time or
space that will be used to deliver the ad message. This is one of the most important decisions
since a significantly large part of the client’s money is spent on the media time and/or space.
She/He must efficiently analyse, plan and then finalise the choices with of course the
approval of the client and the account executive.
After the discussion and approvals over media selection and media cost with client, media
dept. moves ahead with buys slot/space/ spot on the selected media. the objective is to save
maximum cost for the client and invest the saved amount in more activity.
once the buying is over , It is time fore the campaign to be initiated in media. The department
has to make sure if the ad has been properly published and campign is running as per the
 schedule.

3. Creative department: To a large extent, the success of an ad agency depends upon the
creative department responsible for the creation and execution of the advertisements. This
Department has the Copy writer and the Art Director. The art and the copy are usually called
partners, as they work in sync to create some amazing campaigns. They together brainstorm,
conceive ideas and then go back to their respective expertises

Role of a Copy writer

After the ideas are conceived, copy writers are the ones who write the headlines, make the
storyline of the storyboard, write subheads and the body copy. They are also involved in
deciding the basic theme of the advertising campaign.
Prasoon joshi, Piyush pandey started their careers as copy writers.

Role of a Art Director

In advertising, art directors ensure that their clients' desired message and image is conveyed
to consumers visually. They are responsible for the overall visual aspects of an advertising or
media campaign and may coordinate the work of other artistic or design staff, such as graphic
designers.
A common confusion between a film art director and advertising art director is seen, although
the two are very different, Art director in advertising is not just responsible for a set design in
an television commercial, infact that is not his/her job at all, designing the look and feel of the
ad, selecting the right model/brand ambassador, overall looking at styling , color palette, color
schemes. Designing a Logo Symbol to designing the whole Ad campaign is what is the role
of an Art director.

4. Production department: After the completion and approval of the copy and the
illustrations the ad is sent to the production department. Generally agencies do not actually
produce the finished ads; instead they hire printers, photographers, engravers, typographers
and others to complete the finished ad. If it is a bigger agency this department then comprises
of DTP OPERATORS , finishing artists, photographers, editors, post production etc.

5. Research Department
some Big sized agencies have individual research department. This deals with market
research in regards of consumer behaviour, changing market conditions, emerging trends in
media. the research through observations and surveys is used to evaluate consumers
response and finds out strengths and weaknesses of the clients marketing moves.

6. Finance and accounting department: An advertising agency is in the business of

providing
services and must be managed that way. Thus, it has to perform various functions such as
accounting, finance, human resources etc. it must also attempt to generate new business.
Also this department is important since bulk of the agency’s income approx. 65% goes as
salary and benefits to the employees.

Types of advertising agencies:

There are basically seven types of ad agencies. They are

In-house agencies
Creative boutiques
Media buying agencies
Full service agencies
Virtual Agencies
 Satellite Agencies or Subsidiaries of Large Agencies or Second Agency.
Specialized Agencies

In- house agencies: Some companies, in an effort to reduce costs and maintain greater
control over agency activities, have set up their own advertising agencies internally. An in-
house agency is an ad agency set up, owned and operated by the advertiser. Many
companies use in-house agencies exclusively; others combine in-house efforts with those of
outside agencies.
A major reason for using in-house agency is to reduce advertising and promotional
costs. Companies with very large advertising budgets pay a substantial amount to outside
agencies in the form of media commissions. With an internal structure, these commissions go
to the in-house ad agency. An in-house ad agency can also provide related work such as
sales presentations and sales force material, package design, and public relations at a lower
cost than the outside agencies.
Saving money is not the only reason companies use in-house ad agencies. Time
savings, bad experience with outside agencies, and the increased knowledge and
understanding of the market that come from working advertising and promotion for the
product or service day by day are also reasons. Companies can also maintain a tighter
control over the process and more easily coordinate promotions with the firm’s overall
marketing programmes.
Opponents of the in-house agencies say that they can give the advertiser neither the
experience nor the objectivity of the outside agency and nor the range of services. They
argue that the outside agencies have a more specialized staff and attract the best creative
staff. Also flexibility is higher since if the company is not satisfied with the agency it can be
dismissed, whereas changes in an in-house agency could be slower and more disruptive.

Examples of in-house agencies in India are:

Levers - Lintas (previously)
Videocon – Confidence
Reliance - Mudra (previously)
Congress during election campaign had an O&M office in the Congress house.

Creative boutiques: Creative boutique is an agency that provides only creative

services. These specialized companies have developed in response to some client’s desires
to use only the creative talent of an outside provider while maintaining the other functions
internally.
The client may seek outside creative talent for two reasons:
Because he wants an extra creative effort
May be because its own employees of the in-house agency or the agency that he has
appointed do not have sufficient skills in this regard.
The full-service agencies also sub-contract work creative boutiques when they are very
busy or want to avoid adding full time employees to their pay roll. Creative boutiques are
usually found by members of the creative departments of full service agencies who leave the
firm and take with them clients who want to retain their creative talents. These boutiques
generally perform creative function on a fee basis.

Examples of creative boutiques are:

RMG David
Vyas Gianetti Creatives
Chlorophyll

3. Media buying agencies: Media buying agencies are independent companies that specialize in
the buying of media, particularly radio and television. The task of purchasing advertising
media has grown more complex as specialized media proliferate, so media buying services
have found a niche by specializing in the analysis and purchase of the advertising time and
space. Agencies and clients generally develop their own media plans and then hire the
buying services to execute them.
 Some media buying agencies do help advertisers plan their media strategies. Because
media buying agencies purchase such large amounts of time and space, they receive large
discounts and can save the small agency’s or client’s money on media buying. Media buying
agencies are paid a fee or commission for their work.

Examples of media buying agencies are:

Mindshare
Initiative Media (LOWE)
Zenith Media (Bates, Saatchi & Saatchi)
Optimedia (Publicis)
Starcom (Leo Burnett)
Fulcrum (HTA)

Full – service agency: The function of an advertising agency is to see to it that its client’s
advertising leads to greater profits in the long run than could be achieved without the ad
agency. Most such agencies are large in size and offer their clients a full range of services in
the area of marketing, communications and promotions. These include planning, creating and
producing the advertisement, media selection and research. Other services offered include
strategic marketing planning, sales training, package design, sales promotion, event
management, trade shows, publicity and public relations.
The full service agency is composed of various departments; each is responsible to provide
required inputs to perform various functions to serve the client.

5. Virtual Agencies
A recent phenomenon is the cogency that operates like a group of freelancers. This type of
agency abandons conventional office space. Chairlady pioneered an approach called “team
workroom” or a virtual office. In a virtual agency like Cheat Day, staff members do not have fixed
offices; they work at home, in their cars, or at their clients’ offices.

6. Satellite Agencies or Subsidiaries of Large Agencies or Second Agency.

Bigger agencies these days form smaller subsidiary agencies called satellite agencies.
Tony Miller calls them a “delicious irony.” It is a sensible way for a big agency to offer nimbleness
and personal service of a small shop.

Lowe has set up Karishma as its subsidiary. The connection with the parent agency helps the
subsidiaries in terms of a few initial accounts and talents to create good copies. Subsidiaries can
have fresh, creative approach and can cater to smaller accounts. Subsidiaries can also take up a
competing firm’s account.

Subsidiaries consolidate business and improve market share. Here is a break-away thinking in a
subsidiary. But it can also draw on the parent agency, say, by taking advantage of its clout as a
media buyer. Forming subsidiary does not mean partitioning a little office space and putting a new
sign-board. It must be totally independent resource--wise.

7. Specialized Agencies
Some agencies develop a reputation for working only in certain areas and therefore they are
called specialists. They either specialize in certain functions (creative or media buying),
audiences (minority, youth), or industries healthcare, computers, agriculture, or business-to
business communication).

In addition, there are specialized agencies in all marketing communication areas, such as direct
marketing, sales promotion, public relations, events and sports marketing, and packaging and
point of sale. Furthermore, there are one-client agencies.
Specializing in financial advertising: in India we have agencies specializing in financial
advertising e.g. DAVP (Directorate of Advertising Visual Publicity) which publicizes government’s
policies and programmes. eg. Ogilvy Financial

Strategic planning: Ad agencies are extending strategic planning functions to complement client
companies' marketing functions. While the focus has always been on the consumer in order to
add value to the client's brands and strategy, Rediffusion DY & R took a big leap forward recently
to offer a brand new service in the area of strategic market planning to its existing clients. Looking
at a new stream of communication, Rediff DY&R is expected to help its existing clients in evolving
categories such as telecom to help define and identify new consumers.

Brand Consultancies: There are brand consultancies being floated by agencies such as FCB
Ulka's Cogito Consulting and Contract's Core Consulting, which have been trying to add value to
the marketing and branding functions of clients. Client pressure to reduce agency compensation
has seen a rapid decline of several `think' departments in many agency networks.

The Six top agencies in India are:

JWT (James Walter Thomas)

Head: Tarun Rai (Chief Executive Officer)

The advertising agency has a special portfolio which includes creativity, innovation, clients, case
studies, awards, well-thought out leadership and talent. Clients perceive the agency as a
resource of ideas which tell the brand’s story to the customer, dealing with market research. In
this process, the agency includes innovative ideas.
CLIENTS : PEPSI, KELLOGGS, NIKE, TATA , NESTLE

O&M (Ogilvy and Mather Limited)

Ogilvy India has announced a change in leadership with currently Group President V.R. Rajesh
moving up as CEO. This comes into effect from January 1, 2024. The most local of the
internationals, The most international of the locals are words written to describe the identity of
Ogilvy. Basically, what this means is that the advertising agency follows the local market,
understands the customer's needs and then networks worldwide with MNC and other relevant
clients.In all its years of business, Ogilvy has struggled to build brands and has proved its ability
to build brands. The agency does its best to enhance the customer-brand relation. For this, it
undergoes the process of scrutiny of the tools and techniques which work well to build a long and
lasting association with a brand.
CLIENTS : FEVICOL, Cadbury Dairy Milk, Tata Tanishq, Centre Fresh

3. Rediffusion Y&R
Chairman & Director Rediffusion DY&R Pvt Ltd:- Diwan Arun Nanda.
This advertising agency places its people first. It believes that the strength of a brand lies in the
efforts the people of the organization make. Rediffusion DY&R follows system-driven ‘thinking’ in
its culture. The agency attracts right minds because it thinks of a perfect balance between
creativity and strategy.

ClIENTS : Mood Condoms, Berger Paints, Hero Motocorp, Amway

4. Grey Worldwide
Grey worldwide (India) Pvt Ltd:-Anusha
The agency handles above the line advertising for the Grey group. It has launched Dominos in
India. It has had Ambuja cement, Thums Up, Arrow, Lee and many more brands in its portfolio.
The mission of the agency is to remain the largest global integrated agency to leading brand
ideas.
Clients : Britannia, Dell, Pantene, Cadbury Silk

5. Leo Burnett
Leo Burnett:- Sinha works with Rajdeepak Das who is co-CEO of Leo Burnett India
The advertising agency is totally idea-centric. It generates big brand ideas. It regards the pencil
as its engine no matter the size - it is the means through which it can generate plenty of creative
ideas. The agency is never too satisfied with its endless efforts in building up a brand. It believes
that the brands can become and remain leaders by building better ideas. It's no wonder that the
founder of the advertising agency, Leo Burnett, regards the pencil as a metaphor for the kind of
ideas he was coming up with for his clients.

Clients : HDFC, Mc Donalds, Bajaj, Thumbsup

6. McCann-Ericsson India Ltd:- Prasoon Joshi (Executive Chairman for McCann Regional
Creative Director Asia Pacific)

This advertising agency is a leading global agency and has the power and passion to achieve its
mission .McCann-Ericsson is known as a world class advertising agency and has found
outstanding talent in its employees.

Clients : Nescafe, L'Oreal, Nerolac Paints

_____________________________________________________________________________
____________________________________________________________________________

Functions and role of various departments:

Client servicing, Media Planning, Art, Copy, Events, Legal, Accounts

Client Servicing Department:

1. Client Communication: Acts as a bridge between clients and the agency, understanding client
needs, and communicating them effectively within the agency.
2. Project Management: Oversees the execution of client projects, ensuring they align with client
expectations and are completed on time and within budget.
3. Client Relationship Management: Builds and maintains strong relationships with clients,
addressing concerns, and ensuring client satisfaction.
4. Understanding Client Objectives: Gathers client briefs and translates them into actionable
plans for other departments.

Media Planning Department:

1. Market Research: Conducts research to understand the target audience, market trends, and
media consumption habits.
2. Media Strategy Development: Develops strategies for the placement of advertisements,
determining the best media channels to reach the target audience effectively.
3. Budget Allocation: Allocates budgets across various media channels to maximize reach and
effectiveness of advertising campaigns.
4. Negotiation and Buying: Negotiates with media outlets and buys advertising space or time
based on the media plan.
“A planner representing consumer opinions in the absence of an insightful client and talented
creative people is unlikely to make any advertising any better.”
― Jon Steel, Truth, Lies, and Advertising: The Art of Account Planning

Creative:
ART:
1. Visual Conceptualization: Creates visual concepts and designs for advertisements, ensuring
they align with the brand and campaign objectives.
2. Graphic Design: Develops the visual elements of advertisements, including layouts, logos,
typography, and imagery.
3. Art Direction: Guides the overall visual style and direction of advertising campaigns to maintain
consistency and appeal.

COPY
1. Content Creation: Generates written content for advertisements, including headlines, body
copy, scripts, and slogans.
2. Tone and Messaging: Crafts messaging that resonates with the target audience while adhering
to brand guidelines.
3. Collaboration with Art: Works closely with the art department to ensure synergy between visual
and written elements of ads.

Events Department:
(Not always present in every agency , this can be outsourced)
1. Event Planning: Plans and executes events or promotional activities as part of marketing
campaigns.
2. Logistics Management: Handles logistics, venue selection, scheduling, and coordination for
successful event execution.
3. Sponsorship Activation: Manages brand activations and sponsorships at events to increase
brand visibility and engagement.

Legal Department:
(Not always present in every agency , this can be outsourced)
1. Contract Drafting and Review: Drafts and reviews contracts with clients, vendors, and partners
to ensure legal compliance and protect the agency's interests.
2. Intellectual Property Protection: Handles trademark, copyright, and other intellectual property
matters related to campaigns and creative work.

Accounts Department:
1. Financial Management: Manages the agency's finances, including invoicing, budget tracking,
and financial reporting.
2. Client Billing: Handles client invoicing, payments, and ensures timely receipt of funds.
3. Vendor Payments: Manages payments to vendors, suppliers, and subcontractors for services
or goods provided to the agency.
Agency Finances/ Compensations
Sources of income
Expenditure heads of an agency
Modern systems of financial planning followed by leading agency

Sources of income: or Agency Compensation:

The source of an advertising agency’s income:

A manufacturer who operates out of a small and unpretentious office is often impressed
(sometimes unfavourably!) by the obviously furnishings in the offices of some advertising
agencies. Paying for part of the agency’s overhead, rent, payroll, etc. is naturally going to use up
some of the money he spends for advertising. Should he spend his money through an agency, or
should he spend that money direct and thus save the cost of the agency’s services?

Questions like these are good questions, but the answer to them is often not as clear or simple as
it seems. In order to answer them, attention must be focused not on the total costs of advertising
agency service but on the additional costs, if any which the use of an advertising agency will
involve as against the expenditure of the same number of advertising dollars on a direct basis
without agency participation in the expenditure. The difference is a vital one, because of the
nature of historically established advertising agency compensation methods.

Following are the various sources of income for the advertising Agency
1. Commissions from Media:
The traditional method of compensating agencies is through a commission system, where the
agency receives a specified commission (usually 15 percent) from the media on any advertising
time or space it purchase for its clients.

Eg:Assume an agency prepares a full-page magazine ad and arranges to place the ad on the
back cover of a magazine at a cost of Rs 100,000.The agency places the order for the space and
delivers the ad to the magazine. Once the ad is run, the magazine will bill the agency for Rs
100,000,less the 15 percent (Rs 15,000) commission. The media will also offer a 2 percent cash
discount for early payment, which the agency may pass along to the client. The agency will bill
the client Rs 100, 000, less 2 % cash discount on the net amount, or a total of Rs 98,300.The Rs
15,000 commission represents the agency’s commission for its services.
The commission system had many advantage, including:
1. Traditional and well understood.
2. Simple and easy to operate.
3. Inspite of its conceptual imperfections it worked well in most cases.

The commission system was thought to have the following disadvantage:

1. The efforts required by the Agency may bear no relationship to the 15 percent commission.
2. Big account subsidies smaller account.
3. Profitable accounts subsidies less profitable accounts.
4. The need to operate within 15 percent commission may result in work.
5. Agencies are encouraged to pad the work load in order to appear to be earning their keep.
6. There is temptation for an Agency to recommend an increase in advertising budget in order to
boost Agency income.
7. The commission system leads to a lack of objectivity in Agency media recommendations and to
discriminate against recommending below the-line activity.
8. Agencies on the 15 percent commission tend to expand their services as their revenue
increases whether or not their clients want extra services, the final result being that many clients
are paying for services they do not want.

2. Fee Arrangement:
Under the fee structure, the client and the ad agency negotiate a flat sum to be paid to the
agency for all work done. The agency estimates the cost (including out of pocket expenses) of
servicing the client who either accepts or negotiates for a lesser amount. Negotiations continue
until an agreement is reached.

There are two basic types of fee arrangement systems. In the straight or fixed-fee method, the
agency charges a basic monthly for all of its services and credits to the client any media
commissions earned. Agency and client agree on the specific work to be done and the amount
the agency will paid for it.

The arguments against the fee system were listed as:

1. The fee system is basically a cost-plus system which breeds inefficiencies; the commission
system is a discipline on the Agency to keep down costs.
2. The fee system could lead to a price war between agencies and thus of a skimping of services
to clients; it could also lead to a deterioration in the standards of advertising .
3. The fee system is complicated to administer and needs to be constantly reviewed .
4. The settling of fees can lead to friction between agencies and their clients
5. With a fees system media cutbacks are no longer all savings – the agencies fee still has to be
paid .
6. With a fees system the client can be tempted into undue haste in agencies dealings because
actual time spent becomes more directly built into fee.
7. The commission system is an incentive to the agencies to increase the client’s business and
thereby to increase billings
8. With the commission system agencies are obliged to complete business on the basis of quality
rather than of price.

Commission or fee-which works best

The fee-based system no doubt ensures a fair compensation to cover an agency's direct salary,
overheads and profit margins, but agency also want to earn an incentive if its campaign works
well and delivers the desired impact in the market.

When its clients profit, it want them to share it with them in a small way. The commission-based
system also pays back to the agency in terms of royalty for the intellectual value that it sells its
client in the form of a successful campaign, but the fee-based system has no mechanisms for this
element of compensation.

The agencies feel advertisers want to switch to the fee-based system mostly to cut costs, but in
the long run are compromising with the passion and equity an agency shares with a brand.

On the other hand, there is a segment which feels that the fee-based system is a much more
professional and efficient way of doing business. Agency get paid for the services it provide, not
based purely on the amount spent in media. It's a more open and clear way of paying the
agencies. It's still in its infancy, but should settle down to being the most common method of
remuneration.

By and large most Indian companies prefer a commission system, whereas the big spenders
among multinationals prefer a fee system which is either mandated by their global headquarters
or want to follow what is practiced at their headquarters. Indian companies prefer a commission
system as they believe paying their agency in proportion to their spends (which in some way is
equated to the work the agency does) is fair."

This debate is relevant only to a few top advertisers of the total of about 3,500-4,000 advertisers
in the country. Therefore, the Advertising Agencies Association of India also believes that the
relevant system for the country is the 15 per cent agency commission system. So do the Indian
Newspaper Society and the Indian Broadcasting Foundation. It is simple, direct, easy to compute
and does not lead to discussion, negotiation, dispute or misunderstanding."

3. Fee-commission combination:
Some times agencies are compensated through a Fee-commission combination, in which the
media commissions received by the agency are credited against the fee. If the commissions are
less than the agreed-on-fee, the client must make up the difference. If the agency does much
work for the client in noncommissionable media, the fee may be charged over and above the
commission received.

Both types of fee arrangements require that the agency carefully assess its costs of serving the
client for the specified period, or for the project, plus its desired profit margin. To avoid any later
disagreement, a fee arrangement should specify exactly what services the agency is expected to
perform for the client.

The ‘commission system’ and the ‘fee system’ developed side by side. Some people have always
argued that the fee system was the most rational and fair commission system.

4. Cost plus agreement:

The cost-plus system is generally used when the media billings are relatively low and a great deal
of agency service is required by the client. This happens most often with industrial products, new
product introductions etc. that require disproportionate amount of agency help in preparing
brochures, catalogues and other non- commissionable marketing activities.

Under a cost-plus system, the client agrees to pay the agency a fee based on the costs of its
work plus some agreed-on profit margin (Often a percentage of total costs a percentage of total
costs ).This system requires that the agency keep detailed records of the costs it incurs in
working on the clients account . Direct costs (personnel time and out-of-pocket expenses) plus
an allocation for overhead and a markup for profits determine the amount the agency bills.

5. Incentive-Based Compensation:
Many clients these days are demanding more accountability from their agencies and tying agency
compensation to performance through some type of incentive-based system. While there are
many variations, the basic idea is that the agency’s ultimate compensation level will depend on
how well it meets predetermined performance goals.

These goals often include objective measures such as sales or market share as well as more
subjective measures such as evaluations of the quality of the agency’s creative work. Companies
using incentive-based systems determine agency compensation through media commissions,
fees, bonuses, or some combination of these methods.

6. Percentage charges:
Another way to compensate an agency is by adding a markup of percentage charges to various
services the agency purchases from outside providers. These may include market research,
artwork, printing, photography, and other services or material. Markups usually range from 17.65
to 20 percent and are added to the clients overall bill. Since suppliers of these services do not
allow the agency a commission, percentage charges cover administrative costs while allowing a
reasonable profit for the agency’s efforts.

_______________________________________________________________________

Pitching process and Agency evaluation techniques: PITCHING

“Look at the world around you. It may seem like an immovable, implacable place. It is not, With
the slightest push — in just the right place — it can be tipped.” —The key to this statement is “the
right place.” The Tipping Point – Malcolm Gladwell.

In an advertising agency, the pitching process and agency evaluation techniques are critical

aspects of acquiring new clients and assessing potential partnerships.

**Pitching Process:**

1. **Understanding Client Needs:** It begins with understanding the client's objectives, target

audience, challenges, and expectations. This insight helps tailor the pitch to address specific

client needs.

2. **Research and Strategy:** Conducting in-depth research on the client's industry, competitors,

and market trends. Crafting a strategic plan that outlines how the agency can address the client's

needs effectively.

3. **Creative Concept Development:** Creating a compelling and innovative presentation that

showcases the agency's capabilities, expertise, and proposed solutions. This may include mock-

ups, campaign ideas, or case studies.

4. **Pitch Presentation:** Presenting the pitch to the client, often involving key decision-makers.

This presentation aims to demonstrate the agency's unique value proposition and how it aligns

with the client's goals.

5. **Q&A and Follow-Up:** Addressing any queries or concerns the client may have during or

after the pitch. Following up with additional information or clarifications as needed to strengthen

the proposal.

**Agency Evaluation Techniques:**

1. **Portfolio and Case Studies:** Reviewing the agency's portfolio and previous case studies to

assess their expertise, creativity, and successful campaign executions within the relevant

industry.

2. **Capabilities and Expertise:** Evaluating the agency's capabilities, including their team's skill

set, technological proficiency, and experience in handling similar projects or clients.

3. **Client References and Testimonials:** Seeking feedback from the agency's current or

previous clients to understand their experiences, satisfaction levels, and the agency's ability to

meet expectations.

4. **Creativity and Innovation:** Assessing the agency's creative approach, originality in

campaign concepts, and their ability to deliver fresh and impactful ideas.

5. **Strategic Thinking and Planning:** Understanding the agency's strategic thinking process,

how they develop marketing strategies aligned with client objectives, and their approach to

solving challenges.

6. **Financial Viability:** Examining the agency's financial stability, transparency in pricing, and

whether their proposed costs align with the value offered.

7. **Cultural Fit:** Considering the compatibility of the agency's culture and values with those of

the potential client, as a harmonious partnership often leads to better outcomes.

Both the pitching process and agency evaluation techniques aim to establish a strong

understanding between the agency and the client, ensuring a mutually beneficial relationship

based on shared goals, trust, and effective communication.

Summary: How agencies Gain new clients?

Competition for accounts in agency business is intense ; the most companies have already

organized for n advertising function and only a limited number of new business require such

services each year. In large agencies most new business results from clients that already have an

agency, but, decide to change their relationships. Thus, agencies must constantly search and

compete for new clients.

1. REFRENCES : Good agencies gain clients as a result of referrals from existing client, media

representatives and even other agencies maintain good working relationships with their clients , a

media and outside parties that might provide business to them.

2. SOLICITATION/ PROPOSALS : The act of asking for or trying to obtain something through

proposals, requests or making cold calls , following up on lead.

3. PUBLIC RELATIONS : Agencies also seek business through publicity, public relation efforts.

Thet often participate in civic and social groups and work with charitable organzations.

participation in professional associations such as AAAI and Ad club also lead to new clients

generations.

4. IMAGE AND REPUTATION : Perhaps, the most effective way an agency can gain new

business is through reputation. Testimonials of existing clients also helps.

5. PITCHING & PRESENTATIONS : A basic goal of new business development is to receive an

invitation from a company to make a presentation. This gives agency, an opportunity to

demonstrate its previous work.

Setting up an Agency:

“In a crowded marketplace, fitting in is failing. In a busy marketplace, not

standing out is the same as being invisible. If you travel on an airline and
they get you there safely, you don't tell anyone. That's what's supposed to
happen.” Quote from the book “purple cow” by Seth Godin
Nature of agency business
Stages in setting up a new business

a, Nature of agency business: Advertising agency is a facilitating institution of the advertising

industry. It helps the advertiser in the creation and production of advertising.

This advertising agency provides a full range of services to advertisers, from the conception of
idea to the exposure of printing of an advertisement and therefore large advertising agencies
organize various activities and maintain a formal structural relationship between various
departments.

Some large industries organize their own advertising or publicity department to undertake the
advertising task but sometimes they also take help from the agencies. More often they engage
experts and specialists. But small-scale industries do not have any other option but to employ an
advertising agency.

Now what does advertising agency do?

The advertising agency performs all the necessary functions on behalf of the customer or
advertiser and therefore if an advertising agency is appointed at all, the advertiser must
cooperate with it. The advertiser must consider different factors before selecting an agency and
must be very particular that it should not be changed very often. He should rather try to get best
of it.

Let’s not forget that unique aspect of advertising is the advertising agency, which, in most cases,
makes the creative and media decisions. It also often supplies supportive market research and is
even involved in the total marketing plan. In some advertiser agency relationships, the agency
acts quite autonomously in its area of expertise; in others, the advertiser remains involved in the
creative and media decisions as the campaign progresses.
An advertiser advertises with a desire to promote his product and services. He tries to influence
the behaviour of his prospective buyers. As the advertiser is not an expert to understand
advertising, he is driven to an advertising agency, which prepares the ad campaign on behalf of
the advertiser. The advertiser thus becomes the client of the advertising agency. The advertising
agency chosen may be an in house agency, which is owned and operated by the advertiser
himself.

What Advertising agency does for the clients?

EMBED PowerPoint.Slide.8

Functions of the Modern Agency:

The multifaceted services of an ad agency to its clients can be grouped under the following
heads:
Planning the ad campaign
Planning below-the-line activities and other communication packages.
Providing support systems.

1. Planning the ad campaign: a. Developing the brand positioning statement:

A study of the clients, products or service, to determine the advantages and disadvantages
inherent in the product itself and its relation to the competition.

An analysis of present and potential, markets for which the products or service is adapted.

Knowledge of the factors of distributions and sales and their methods of operation.

(b) Developing the central theme or appeal to be used in the ad.

(c) Developing the creative strategy
(d) Executing the strategy.
(e) Preparing the mechanical details of the ad that is preparing the art work of the ad.
(f) Preparing the story board for the TVC’s and filming the commercial. In the case of the Radio
advertising, a record will be cut.
(g) Executing the ad campaign by placing it in the relevant media. The above activities are also
called above-the-line as they
(h)A knowledge of all the available media and means that can be used profitability to carry the
interpretations of the product or service to consumers, wholesalers, dealers, contractors or
others.
(i) Formulation of a definite plan and presentation of his plan to the client.
(j) Execution of this plan through-
Writing, designing, and illustrating, the advertisements.
Contracting for the space, time, or other means of advertisement.
Incorporation of the message in mechanical form and forwarding it to the media.
Checking and verifying insertions display and so forth.
Auditing and billing for the service, space and preparation.
(k) Cooperation with the client’s sales force.
The above activities are also called above-the –line as they are the direct functional activities that
an agency performs to sell the product of an identified sponsor.

2.Planning below-the-line activities and other communication packages: Agencies are

expected to provide innovative programmes to reach the consumers through DM, Sales
Promotions, PR activities and corporate image building campaigns, Personal selling and internet
Marketing.

3. Providing Support Systems: An ad agency is expected to provide research inputs, before the
ad campaign is created and also after the campaign is launched.

Stages in setting up a new business

What is a Business Plan?

A business plan is a blueprint and communication tool for business. A device to help, the owner,
set out how he intends to operate his business. A road map to tell others how the entrepreneur
expects to get there.

Business plan is a written document that describes a business, its objectives, strategies, market
and financial forecast. Business plan is document that spells out a company's expected course of
action for a specified period, usually including a detailed listing and analysis of risks and
uncertainties. For the small business, it should examine the proposed products, the market, the
industry, the management policies, the marketing policies, production needs and financial needs.
Frequently, it is used as a prospectus for potential investors and lenders.

What's a Start-up Plan?

A simple start-up plan includes a summary, mission statement, keys to success, market analysis,
and break-even analysis. This kind of plan is good for deciding whether or not to proceed with a
plan, to tell if there is a business worth pursuing, but it is not enough to run a business with.

Various Stages in setting up a new business are as follows:

Concept development: the concept development stage has the following steps:

1. Idea generation: Idea generation about a few projects provides a way out of above tangle.
Project selection process starts with the generation: of a product or service idea. In order to select
the most promising project, the entrepreneur needs to generate a few ideas about the possible
projects he/she can undertake.

2. Sources of new ideas: The project ideas can be discovered from various internal and external
sources.

These may include:

Knowledge of potential customer needs
Watching emerging trends in demands for certain products
Scope for producing substitute product
Going through certain professional magazines catering to specific interests, like electronics,
computers etc.
Success stories of known entrepreneurs or friends or relatives,
Making visits to trade fairs and exhibitions displaying new products and services,
Meeting with the Government agencies,
Ideas given by the knowledgeable persons.
Knowledge about the Government policy,
concessions and incentives,
List of items reserved for exclusive manufacture in small- scale sector, and a new product
introduced by the competitor.

All of these sources putting together may give a few ideas about the possible projects to be
examined as the final project. This is also described as 'opportunity scanning and identification:
The main sources of the identification of potential business opportunities are as follows:
Observation: Observation is one of the most important sources of project ideas. The observant
mind continuously comes across situations which can be utilized to develop new opportunities.
The observation may be made during the course of one's routine occupation or otherwise the
dearth of a particular article or service may lead to the development of an industry, which can
provide the article or service in short supply
Trade & Professional magazines: Trade and professional magazines provide a very fertile
source of project ideas. The statistics and information provided by these magazines and
reports and records of professional bodies often reveal opportunities, which can be eventually
developed into investment propositions. It is very important for every person who is involved in
the process of development of new investment opportunities to remain in touch with the latest
developments in his own field of specialization and also in the other fields. Thus, technical and
professional literature stimulates and helps in the process of development of new project ideas.
Bulletins of Research Institutes: Bulletins of Research Institutes are also a very fertile source
of information for the development of new project ideas. These bulletins generally give the broad
outlive of the new processes or products developed" by Research Institutes and are very useful in
identification of new opportunities.
The Plan document published by the Government: In most developing countries, where
planned developments has been accepted as an approach towards the removal of poverty the
plan document published by the Government provides a very- useful source of project ideas. The
plan document generally analyses the existing economic situation in a country and also points out
the investment opportunities, which fit into the overall planning effort. Considerable information
can therefore be gathered from the plan
Departmental Publications: Departmental publications of various departments of Government
also provide useful information, which can help in the development of new project ideas. These
publications are either periodical in character or are issued on special occasions. The census
document, which is a periodical publication, is a very useful source of information about the
economic structure of the society, various trends in the growth of economy and purchasing power
and can be used to develop new ideas

3. Methods for generating ideas: Even with a wide variety of sources available, coming up with
an idea to serve the basis for a new venture can still be a difficult problem. The entrepreneur can
use several methods to help generate and test new ideas, including focus group, brainstorming,
and problem inventory analysis.

Focus Groups:
A moderator leads a group of people through an open, in-depth discussion rather than simply
asking questions to solicit participant response; for a new product area, the moderator focuses
the discussion of the group in either a directive or a nondirective manner. The group of 8 to 14
participants is stimulated by comments from other group members in creatively conceptualizing
and developing a new product idea to fulfill a market need.

The brainstorming
The brainstorming method for generating new product ideas is based on the fact that people can
be stimulated to greater creativity by meeting with others and participating in organized group
experiences. Although most of the ideas generated from the group have no basis for further
development, often a good idea emerges.

This has a greater frequency of occurrence when the brainstorming effort focuses on a specific
product or market area.

When using this method, the following four rules should be followed:
1. No criticism is allowed by anyone in the group-no negative comments.
2. Freewheeling is encouraged-the wilder the idea the better.
3. Quantity of ideas is desired-the greater the number of ideas, the greater the likelihood of
useful ideas emerging.
4. Combinations and improvements of ideas are encouraged- ideas of others can be used to
produce still another new idea.
The brainstorming session should be fun, with no one dominating or inhibiting the discussion.

Problem Inventory Analysis:

Problem inventory analysis uses individuals in a manner analogous to focus groups to generate
new product ideas. However, instead of generating new ideas them-selves, consumers are
provided with a list of problems of general product category.

They are then asked to identify and discuss products in this category that have the particular
problem. This method is often effective since it is easier to known products to suggested
problems and arrives at a new product idea than generate an entirely new product idea by itself.

Problem inventory analysis can also be used to test a new product idea.

4. Product planning and development process:

Once ideas emerge from idea sources or creative problem solving, they need further
development and refinement into the final product or service to be offered. This refining process-
the product planning and development process-is divided into two major stages:

Product development Stage:

In the product development stage, consumer reaction to the physical product is determined. One
tool frequently used in this stage is the consumer panel, in which a group of potential consumers
is given product samples.

Test Marketing Stage:

Although the results of the product development stage provide the basis of the final marketing
plan, a market test can be done to increase the certainty of successful commercialization.

This last step in the evaluation process-the test marketing stage-provides actual sales results,
which indicate the acceptance level of consumers. Positive test results indicate the degree of
probability of a successful product launch and company formation.

Environmental scanning: Under environmental scanning, the aspects highlighted include

requirements for raw material, level of capacity utilization, anticipated sales, anticipated expenses
and the probable profits. It is said that a business should have always a volume of profit clearly in
view which will govern other economic variables like sales, purchases, expenses and alike. It will
have to be calculated how much sales would be necessary to earn the targeted profit.

Undoubtedly, demand for the product will be estimated for anticipating sales volume.
Therefore, demand for the product needs to be carefully spelt out as it is, to a great
extent, deciding factor of feasibility of the project concern. How to estimate demand for
the project is discussed later.

In addition to above, the location of the enterprise decided after considering a

gamut of points also needs to be mentioned in the project. The Government policies in
this regard should be taken into consideration. The Government offers specific incentives
and concessions for setting up industries in notified backward areas. Therefore, it has to
be ascertained whether the proposed enterprise comes under this category or not and
whether the Government has already decided any specific location for this kind of
enterprise.

Market Feasibility: Knowing the anticipated market for the product/ service to be produced
becomes an important element in every business plan. The various methods used to anticipate
the potential market, what is named in 'Management Economics' as 'demand forecasting',
range from the naive to sophisticated ones. The commonly used methods to estimate the
demand for a product are as follows:

While
preparing Market feasibility report, the following aspects relating to market potential of the
product should be stated in the report
Demand and Supply Position -State the total expected demand for the product and present
supply position. This should also be mentioned how much of the gap will be filled up by the
proposed unit.

Expected Price -An expected price of the product to be realised should be mentioned in the
project report.

Marketing Strategy -Arrangements made for selling the product should be clearly stated in the
project report.

After-Sales Service -Depending upon the nature of the product, provisions made for after-sales
service should normally be stated in the project report.

Transportation -Requirement for transportation means indicating whether public transport or

entrepreneur’s own transport should be mentioned in the project report.

Financial Feasibility:
Finance is one of the most important pre-requisites to establish an enterprise. It
is finance only that facilitates an entrepreneur to bring together the labour of one,
machine of another and raw material of yet another to combine them to produce goods.
In order to adjudge the financial viability of the project, the following aspects need to be
carefully analyzed.

Assessment of the financial requirements both - fixed capital and working capital
- needs to be properly made. You night know that fixed capital normally called 'fixed
assets' are those tangible and material facilities, which purchased once are used again
and again. Land and buildings, plants and machinery are the familiar examples of fixed
assets/capital.

The requirement for fixed assets/capital will vary from enterprise to enterprise
depending upon the type of operation, scale of operation and time when the investment is
made. But, while assessing the fixed capital requirements, all items relating to the asset
like the cost of the asset, architect and engineer's fees, electrification and installation
charges (which normally come to 10 per cent of the value of machinery), depreciation,
preoperational expenses of trial runs, etc., should be duly taken into consideration.
Similarly, if any expense is to be incurred in remodeling, repair and additions of buildings
should also be highlighted in the project report.

Making a business plan

A Standard Outline of a Business Plan?
If you have the main components, the order doesn't matter that much, but here's the outline for
Business Plan :

Executive Summary: Write this last. It's just a page or two of highlights.
Company Description:
The Nature of your Business
Vision Statement
Mission Statement
Long-term objectives
Short-term objectives
Key Personnel
Legal establishment, history, start-up plans, etc.
Product or Service: Describe what you're selling. Focus on customer benefits.
Market Analysis: You need to know your market, customer needs, where they are, how to reach
them, etc.
Strategy and Implementation: Be specific. Include management responsibilities with dates and
budget.
Management Team: Include backgrounds of key members of the team, personnel strategy, and
details.
Financial Plan: Include profit and loss, cash flow, balance sheet, break-even analysis,
assumptions, business ratios, etc.

Other important aspects in setting up an advertising agency:

“If you want to bring a fundamental change in people’s belief and behaviour… you need to create
a community around them, where those new beliefs can be practiced and expressed and
nurtured.” - The Tipping Point

There are 4 stages in the agency-client life cycle:

(a) Inception: (The beginning of undertaking the business)
(b) Development
(c) Maintenance, and
(d) Dissolution. (The termination of the formal or legal bond)

1) inception - the period before the agency has been hired; the first-impression stage when all
are on their best behaviour, trying to get the business or get the best agency
2) Development stage- The honeymoon period immediately after the agency has been retained
Rules are set and relationship established .First taste of reality of relationship
3) Maintenance stage- Maintenance stage is the day-to-day working relationship.
4) Termination stage- Period when all problems are tested which may or may not be resolved
Irreconcilable difference may occur. The way the termination stage is handled is an important
factor in determining whether the two ever get back together.

ANALYSIS agency/client relationships –

The three challenges for clients are:

to demand greater responsibility for business results,
To create a new set of ad metrics – moving away from the dominance on reach and toward a
focus on the effect on business results – and
For ad agencies to reposition themselves to focus on shareholder value.

Factors affecting the client-agency relationship:

Chemistry - between client and agency staffs. If there is proper understanding between them the
relationship will be smooth. If ego clashes occur the relationship will be stormy
Communication - constant, open, honest communication is vital for success.
Conduct - what everyone in the relationship does - both the work process and the work
Product. Changes: Many a time unannounced changes in product lead to major shift in the
strategy which might lead to friction.
Personnel: In change in Personnel on either side can lead to change in the relationship equation.
Competitive situation: Change in competitive situation demand more involvement on both side
professionals.
Working Environment on side will influence the relationship
Issues in the Agency-Client Relationships:
Even in good times, agency-client relationships can be a delicate dance. But with the economy
still stalling, the push-you-pull-me inherent in such relationships can be even more problematic.

Sales and corporate objectives: Most of the client want agency to focus on sales and marketing
objectives, instead of only focusing o the creative strategy.
Return on investment (ROI): Most clients place, return on investment at the heart of its account.
Innovation and creativity: Is another key toward enhancing the relationship, as companies
increasingly rely on agencies to come up with new and innovative ideas to drive sales.
The team members are too junior
Don't understand client business objectives: The biggest hurdle remains an inability among
agencies to understand their clients' business objectives while trust and cost also weigh heavily
on relationships.
Not responsive
Lack of trust in the relationship
Senior staff unavailable
Incapable of providing Strategic counsel
Overshooting or underestimating Cost and budget
A slowness to respond to changing needs was pinpointed as one of the major criticisms of
agencies by their clients

Five basic ways of addressing conflict were identified by Thomas and Kilmann

1. Competition – assert one's viewpoint at the potential expense of

another. It can be useful when achieving one's objectives outweighs
one's concern for the relationship.

2. Avoidance – avoid or postpone conflict by ignoring it, changing the

subject, etc. Avoidance can be useful as a temporary measure to buy
time or as an expedient means of dealing with very minor,
non-recurring conflicts. In more severe cases, conflict avoidance can
involve severing a relationship or leaving a group.

3. Collaboration – work together to find a mutually beneficial

solution. While the Thomas Kilman grid views collaboration as the only
win-win solution to conflict, collaboration can also be time-intensive
and inappropriate when there is not enough trust, respect or
communication among participants for collaboration to occur.

4. Accommodation – surrender one's own needs and wishes to accommodate

the other party.

5. Compromise – bring the problem into the open and have the third
person present. The aim of conflict resolution is to reach agreement
and most often this will mean compromise.

Understanding the Client's Business

When you understand the client's business, you tend to listen at a deeper level. You'll know
what's motivating your client, and will be able to function from a position of greater confidence
because you have a working knowledge of situational undercurrents.
You don't need to know all the details. But being familiar with the landscape of a client's business
demonstrates that you care about the relationship. And nothing builds trust more effectively than
simple attention.
How much is enough?
"A little learning is a dangerous thing. Drink deep," warned Alexander Pope. You don't have to
drink the ocean, but knowing enough to understand what your client goes through day by day
gives you an advantage over the other 99% of writers who do not trouble themselves to learn. It
also shortens your learning curve, meaning that you can take more quickly take problems off your
clients' hands -- and therefore off their minds.

There is no greater reward than being trustworthy enough to perform such a service.
Pay attention to the general flow of your client's business. What's the business focus? Who are
the client's customers? What does it take to get the client's product or service into those
customers' hands? What is the client's long-term business strategy?

When working with a small organization, the answers to those questions will revolve around the
whole business. In a larger company your focus must be on the client's immediate business
concerns, which are often on satisfying the needs of internal customers. The questions, though,
remain the same in either case.
Understanding the client's business takes time. Approach the task with determined patience, and
avail yourself of tools that simplify the task. One of the most effective tools you can use to build
your knowledge over time is the client profile.

Understanding the Client behaviour

Any marriage counsellor will tell you that 98% of problems in relationships are caused by a lack of
communication. A lack of communication in terms of direct verbal exchange or as is often the
case where exchanges occur, a lack of understanding as to what each partner is intending or
meaning. Too much is left open to interpretation.

The essence of successful client satisfaction therefore comes from successfully aligning the
mindset and expectations of both client and professional providers. This needs to be done not
just once but also on a regular update basis.

Managing a client relationship up to that level is not easy. It involves a mixture of direct and
indirect inputs that need to be repeated for every piece work and for every client. Here are some
suggestions for partners to follow:
Send 'thank you' letter on client acceptance of assignments. Ensure that all work is proceeding in
the way that both parties agreed. To ensure it is on time.
To ensure it is within cost parameters;
To turn 'promises' into 'realities';
Ideally checking at pre-arranged review points. monitor and report the results of your activities:
To keep the initiative. To create new opportunities;
To keep in contact with the decision-maker(s);
To re-emphasise the benefits of your work to the client. Expand your contacts in the client firm. To
increase your awareness of your client's total activity.
To brief, where ethical, other executives on past and present activities, and on the benefits to
them.
Keep up to date with the client's industry and business. Which will help you identify other
recommendations?
To confirm the client's confidence in you as an interested and informed business partner.
Read the client's publications:
To identify additional client priorities or needs.
To keep abreast of the market language.
Try to attend internal meetings of key clients:
To present your services on subjects under discussion;
To keep clients informed on any of the firm's activities which might be of interest.
Invite the client or his staff where appropriate, to your functions to cement the relationship.
Try to get involvement in the client's planning processes.
Establish a key client monitoring system:
To record past and current activities;
To plan future activities together.
However, the issue of client care is much broader than just partner client relationships. Client care
needs to permeate the whole firm from top to bottom. Partners need to lead by example, and set
the tone for the staff to follow. They also need to monitor and evaluate the consistence and
quality of the care delivered.
In turn, the consistency of client care, and thus client happiness, requires a firm to introduce
processes, procedures and systems that are built around a commitment to quality.

What happens when the agency and client are at loggerheads? How to resolve issues ?

The eight-stage negotiation process:

This is a unique combination framework that puts together the best of many other approaches
to negotiation. It is particularly suited to more complex, higher-value and slower negotiations.

Prepare: Know what you want. Understand them.

Open: Put your case. Hear theirs.
Argue: Support your case. Expose theirs.
Explore: Seek understanding and possibility.
Signal: Indicate your readiness to work together.
Package: Assemble potential trades.
Close: Reach final agreement.
Sustain: Make sure what is agreed happens.
There are deliberately a larger number of stages in this process as it is designed to break down
important activities during negotiation, particularly towards the end. It is an easy trap to try to
jump to the end with a solution that is inadequate and unacceptable.

The bottom line is to use what works. This process is intended to help negotiate, not to use it
blindly. It is not magic and is not a substitute for thinking. If something does not seem to be
working, one must try to figure out why and either fix the problem or try something else.
Although there are commonalities across negotiations, each one is different and the greatest
skill is to be able to read the situation in the moment and adapt as appropriate.

Conflict resolution
What happens when despite the establishment of high quality standards, things go wrong? What
does one do?

In normal circumstances, our natural reaction when things go wrong is to try to put them right.
Often however, in a working environment the notion of responsibility is submerged by the fear of
being blamed for wrongdoing, black marked or associated with failure. This phobia is particularly
acute in professional firms where individual performance is everything.

Despite all the public pronouncements made by various firms that accepting failure or making a
mistake is an integral part of individual growth, the practical reality is that most partners find
failure or problem resolution particularly difficult to manage. This is particularly true where blame
or fault is clearly identified. This is understandable. The combative and confrontational style of
management in certain industries often creates an environment of blame and aggression.

Ironically part of the issue of failure in these areas is the very fact that failure or admission of
failure being seen as unacceptable creates a tendency for people to cover things up. This in turn
often makes things worse when the mistakes are eventually uncovered.

None of us are immune from this tendency; the issue of complaints or unhappy clients is often felt
as one would a personal attack. Our instinctive reaction is to pull back and back off.
Five basic ways of addressing conflict were identified by Thomas and Kilmann

1. Accommodation – surrender one's own needs and wishes to accommodate

the other party.

2. Avoidance – avoid or postpone conflict by ignoring it, changing the

subject, etc. Avoidance can be useful as a temporary measure to buy
time or as an expedient means of dealing with very minor,
non-recurring conflicts. In more severe cases, conflict avoidance can
involve severing a relationship or leaving a group.

3. Collaboration – work together to find a mutually beneficial

solution. While the Thomas Kilman grid views collaboration as the only
win-win solution to conflict, collaboration can also be time-intensive
and inappropriate when there is not enough trust, respect or
communication among participants for collaboration to occur.

4. Compromise – bring the problem into the open and have the third
person present. The aim of conflict resolution is to reach agreement
and most often this will mean compromise.

5. Competition – assert one's viewpoint at the potential expense of

another. It can be useful when achieving one's objectives outweighs
one's concern for the relationship.

Accountability
So what are the specifics of dealing with complaints?
*Don't procrastinate and delay - respond quickly.
*Don't be aggressive or irritable but rather be understanding.
*Apologise - this is not the same as accepting liability.
*Be thorough in your investigation - this is no time for overlooking other potential issues.
*Give a full explanation.

The benefits of resolving client dissatisfaction are significant. Research shows that consumers
who have had complaints dealt with satisfactorily are more loyal and more active advocates of the
firms they have used than those who have not had cause to complain.

A happy client is a client who has trust in his professional adviser. Trust that the adviser has his or
her client's best interest at heart. Trust that the professional adviser has the capacity and
capability to deliver the required expertise and trust that the fees charged are fair and equitable.

Client trust is built up over time. It comes from clear two-way communication. Good listening skills
are essential here. The communication must be supplemented by regular dialogue between client
and provider. The dialogue must be structured and incorporate measurable quality standards.
Where there is a breakdown in communication and mistakes have occurred, these must be dealt
with positively and promptly.
This will not guarantee the perfect marriage but it will certainly generate a happier partnership.
advertisers, ad agencies, and the media have helped quantify the results of advertising. But most
continue to face basic questions such as: Does your Advertising work? How hard does it work?
What specifically does it do for your business? Should I increase, maintain, or decrease
spending? What’s the best message I can put in my advertising?

There are no easy answers to these questions. Solutions are a mixture of science and art.

Integrated Marketing Communication.

Within the context of marketing, we see that marketing communication plays an important role in
the dissemination of information. Marketing communication is a term used in a broader sense for
promotional strategy. So it is more of a planned promotional communication.

For many years, the promotional function in most companies was dominated by mass media
advertising. Companies relied primarily on their ad agencies for guidance in nearly all areas of
marketing communications. Most marketers did use additional promotional and marketing
communication tool, but sales promotion and direct marketing agencies as well as package
design firms were generally viewed as auxiliary services and generally used on a per project
basis. PR agencies were used to manage the organizations publicity, image and affairs with
relevant publics on an ongoing basis but were not viewed as integral participants in the marketing
communication process.
Many marketers built strong barriers around the various marketing and promotional functions and
planned and managed them as separate practices, with different budgets, different views of the
market, and different goals and objectives. These companies failed to recognize that the wide
range of marketing and promotional tools must be coordinated to communicate effectively and
present a consistent image to target markets.

IMC can be defined as:

A concept of marketing communications planning that recognizes the added value of a

comprehensive plan that evaluates the strategic roles of a variety of communication disciplines. In
other words, the message and approaches of general advertising, direct response, sales
promotion, public relations, and personal selling efforts are combined to provide clarity,
consistency, and maximum communications impact.

IMC, thus, calls for a "big picture" approach to planning marketing and promotion programs and
coordinating the various communication functions. It requires firms to develop a total marketing
communications strategy that recognizes what the sum total of a firm's marketing activities, not
just advertising, communicate to its customers. Consumers' perceptions of a firm and/or brands
are a synthesis of the messages they receive from various sources. These include media
advertisement, price, direct marketing efforts, publicity, and sales promotions, as well as
interactions with salespeople and other customer-contact employees. In a global economy with
international markets and instantaneous communications, no aspect of marketing can be studied
in a vacuum or in isolation if one expects to be accurate and relevant. Marketing tools, used as
planned business-building techniques are more likely to facilitate attainment of organizational
goals than current "silo" approaches.

.
Various elements of IMC are:

Advertising: Advertising is but a part of this integrated marketing communication.

Advertising: Advertising is the most visible element of the communications mix
because it makes use of the mass media, i.e. newspapers, television, radio,
magazines, bus hoardings and billboards. Mass consumption and geographically
dispersed markets make advertising particularly appropriate for products that rely on
sending the same promotional message to large audiences. Many of the objectives of
advertising are only realized in the longer term and therefore it is largely a strategic
marketing tool. The objectives of advertising are broader than that of directly
stimulating sales volumes.

Sales Promotion: Sales promotion employs short-term incentives, such as free gifts,
money-off coupons, product samples etc., and its effects also tend to be short-term.
Therefore, sales promotion is a tactical marketing instrument. Sales promotions may
be targetted either at consumers or members of the channel of distribution, or both.

Public relations: Public relations is an organisation's communications with its various

publics. These publics include customers, suppliers, stockholders (shareholders,
financial institutions and others with money invested in the business), employees, the
government and the general public. In the past, organisations thought in terms of
publicity rather than public relations. The distinction between advertising and publicity
was based on whether or not payment was made to convey information via the mass
media. Advertising requires payment by the sponsor of the message or information
whilst publicity is information which the media decides to broadcast because it is
considered newsworthy and therefore no payment is received by the media from a
sponsor. It is more common these days to speak of public relations than of publicity.
Public relations is much more focused in its purposes.

The objectives of public relations tend to be broader than those of other components
of promotional strategy. It is concerned with the prestige and image of the organisation
as a whole among groups whose attitudes and behaviour can impact upon the
performance and aims of the organisation. To the extent that public relations is ever
used in product promotion, it constitutes an indirect approach to promoting an
organizations products and/or services.

Personal selling: This can be described as an interpersonal influence process

involving an agribusiness' promotional presentation conducted on a person-to-person
basis with the prospective buyer. It is used in both consumer and industrial marketing
and is the dominant form of marketing communication in the case of the latter.

Direct Marketing: Any medium that can be used to deliver a communication to a

customer can be employed in direct marketing. Probably the most commonly used
medium for direct marketing is direct mail, in which marketing communications are
sent to customers using the postal service.

PROS AND CONS OF THE IMC

It has been argued that the concept of integrated marketing is nothing new, particularly in
smaller companies and communication agencies that have been coordinating a variety of
promotional tools for years.

And larger advertising agencies have been trying to gain more of their client’s
promotional business for over 20 years. However in the past, various services were run as
separate profit centers. Each was motivated to push its own expertise and pursue its goals rather
than develop truly integrated marketing programs. Moreover, the creative specialists in many
agencies resisted becoming involved in sales promotion or direct marketing. They preferred to
concentrate on developing magazine ads or television commercials rather than designing
coupons or direct mail pieces.

Proponents of the integrating marketing services agency (the one –stop shop) contend
that the past problems are being solved and the various individuals in the agencies and
subsidiaries are learning to work together to deliver a consistent message to the client’s
customers. They argue that maintaining control of the entire promotional process achieves better
synergy among each of the communications program elements. They also note that it is more
convenient for the clients to coordinate all of its marketing efforts.-media advertising, direct mail,
special events, sales promotions and public relations- through one agency. An agency with
integrated marketing capabilities can create a single image for the product or service and address
everyone from wholesalers to consumers, with one voice.

But not everyone wants to turn the entire IMC program over to one agency. Opponents
say the providers become involved in political wrangling over budgets, do not communicate with
each other as well and as they should, and do not achieve synergy.
they also claim that the agency’s efforts to control all the aspects of the promotional program are
nothing more than an attempt to hold on to the business that might otherwise be lost to
independent providers. They note that synergy and economies of scale, while nice in theory, have
been difficult to achieve, and competition and conflict among agency subsidiaries have been a
major problem.

Many companies use a variety of vendors for communication functions, choosing the
specialist they believe is best suited for each promotional task, be it advertising, sales promotions
or public relations. Many marketers are of this view that, “why should the organization confine
itself to one resource when there is a tremendous pool of fresh ideas available?”

CASE: Ghaadi detergent is getting relaunched as ghaadi 2in1 that will deliver dual functional
benefits - Deep cleaning of clothes& Malodor (smell) removal. These two benefits are the highest
rated requirement among mass consumers. We want To get Non- users to buy ghaadi 2in1
detergent.
You are in charge of the marketing communications
(i) 0utline communication plan, 5
(ii) State the Advertising objectives. 4
(iii) Support your advertising strategy with any two IMC tools. 6

HOW TO MAKE AN OUTLINE OF THE COMMUNICATION PLAN?

the communication plan comprises of the following.
1. Introduction & SWOT Analysis (If you are clear else avoid Swot)
2. Communication Goals
3. Marketing Objectives
4. Positioning Statement
5. Key Message
6. Key Audience
7. Evalutaion

1. Introduction : WRITE BRIEFLY ABOUT THE BRAND

TIP : Read the case study carefuly, the introduction is usually hiding in the question.Add
some of your GK about the Brand in the Swot Analysis , avoid if not clear about the brand.

Ghaadi detergent, a washing powder, is getting relaunched as ghaadi 2in1 .

This plan is being proposed to help Ghaddi 2-in-1 reach out to the target audience emphasising
on the new two benefits, deep cleaning and malodor.

SWOT Analysis
STRENGTH
1. The tagline ‘Pehle istemaal kare fir wishwaas kare’ has struck a chord amongst the price-
sensitive mass market.
2. Good branding and recall through TVCs and print ads
WEAKNESS
1. Limited export market as compared to international brands
2. Unable to completely penetrate in premium segment because of image
OPPORTUNITY
1. Entering into the premium segment would be a huge market opportunity
THREAT
1.Threat from existing and new players in the market

2. Communication Goals : To objective is to inform the audience about thenew ghadi 2-in-1
detergent.
TIP : The communication goals are usually to inform or to remind or to reinforce attitute
towards the brand/to persuade/ depending on the case study.

3. Marketing Objectives : To Increase the sales

TIP: Almost all Marketing objectives are "to increase the sale"

4. Positioning Statement : The brand distinguishes itself in the market by its unique tagline ‘Pehle
istemaal kare fir wishwaas kare’. It has a reassuring tone.

TIP : Single Liner which tells the position/ tells the image of the brand in the market.
You can rely on the by line of the brand, you can also you words like, it has reassuring
tone/ has acquired trust among people/ Unlike others it has convenience/ lesser price/
better quality/ Top-End Product dependng on the case study etc

5. Key Message : The Key message is 2-in-1 , Deep cleaning and malador removal
TIP : Identity the key message from the question itself

6. Key Audience :
Demographic Segmentation
Ideally we would like to target Females, although used by both Female and Male, the Purchasing
Power is with the Female. The Age is starting from 30 to 60. Targeting Home makers/Part time
Worker/ Full time Worker.
Psychographic segmentation
The best way to describe the audience in terms of lifestyle would be the Budget-conscious TG,
The Family oriented simple living but high thinking theory.

7. Evaluation:
The success or the failure of the campaign will on the basis of achieveing marketing and
communication objectives.
TIP : Just write this line for all case studies
HOW TO STATE THE ADVERTISING GOAL/OBJECTIVES?

Draw this inverted pyramid

Explain
90% awareness through TVC and Radio
70% knowledge through Print Ads
40% liking + 25% Preferences through Outdoor, Online advertising, PR activities
20% trial through sales promotion
5% through actual sale - the ultimate output.

TIP: Herein you have to be clear how would you like to suggest the reach of the
campaign , should it be outdoor heavy etc depending on the case study

HOW TO STATE ANY TWO IMC PLANS?

The integrated marketing mix Communication Planshould be an ideal mix. We suggest that along
with the Traditional Mediums such as Television Commercial, Print Ads, outdoor Media etc, we
must invest in
1. Public Relations : Promoting 2-in-1 concept through community work, NGO'S , Sponorships to
Women Marathon/Talent shows
2. Sales Promotion : By sending trial samples of the product with the monthly Grah Laxmi
magazine/ Femina Magazine etc

TIP: Depending on the TG Choose the best communication path for IMC.

Advertising in the Marketing Plan: The Company’s overall marketing plan determines
promotional objectives and from these objectives, advertising objectives are derived. Promotion
objectives specify what is to be accomplished and where advertising fits in. The next step is to set
specific ad objectives and goals.

Market Analysis

Consumer Analysis

Competitive Analysis

Brand

Organizational Realities

Marketing Plan

Marketing Objectives
Sales Objectives

Advertising Objectives

Advertising Strategy
Advertising Tactics
Promotions

Media Strategy

Creative Strategy

Advertising Objectives

Sales Oriented Objectives

Communication Oriented Objectives

Cognitive

Affective

Behaviour

The Three Stages

Unawareness/Awareness

Comprehension

Conviction

Action

Other Quotes that you can sprinkle around in your answers from various books that are
recommended

1. “Hire great writers If you are trying to decide among a few people to
fill a position, hire the best writer. It doesn’t matter if that person is a
marketer, salesperson, designer, programmer, or whatever; their
writing skills will pay off. That’s because being a good writer is about
more than writing. Clear writing is a sign of clear thinking. Great
writers know how to communicate. They make things easy to
understand. They can put themselves in someone else’s shoes. They
know what to omit. And those are qualities you want in any
candidate.”
― Jason Fried, Rework

“You don’t create a culture. It happens. This is why new companies

don’t have a culture. Culture is the by-product of consistent behavior.”
― Jason Fried, Rework

“Besides, the perfect time never arrives. You’re always too young or
old or busy or broke or something else. If you constantly fret about
timing things perfectly, they’ll never happen.”
― Jason Fried, Rework

“The best ads ask no one to buy. That is useless. Often they do not
quote a price. They do not say that dealers handle the product. The
ads are based entirely on service. They offer wanted information.”
― Claude C. Hopkins, Scientific Advertising

“We are influenced by our surroundings. The prosperous mingle with

the prosperous, so do those of certain likes and inclinations. The
higher we ascend the farther we proceed from ordinary humanity.
That will not do in advertising. I have seen”
― Claude C. Hopkins, My Life in Advertising and Scientific
Advertising

“A man who has made a success desires to see others make a

success. A man who has worked wants to see others work. I am that
way. Countless young people now flock to my home, but the welcome
ones are those who work, whether young men or young women. A
boy having a good time on his father's money has always been
offensive to me. So, to a degree, a young woman.”
― Claude C. Hopkins, My Life in Advertising

Other very famous lines

"Think like a wise man but communicate in the

language of the people." - R.K. Swamy

"In advertising, not to be different is virtually suicidal." -

Alyque Padamsee
"Creativity without strategy is called art, creative with
strategy is called advertising." - Prathap Suthan
 "The best ideas come as jokes. Make your thinking as
funny as possible." - David Ogilvy

"Advertising is not a science; it's persuasion. It's about

touching hearts, not just minds." - Piyush Pandey

The best advertising is not just about selling, it's about

connecting. It's about telling a story that resonates with
people - Prasoon Joshi

Added notes :

The Client - Agency

Relationship 3P’s of
Service: Physical
evidence, Process and
People
The Gaps Model of service quality
Stages in the client-agency relationship
How Agencies Gain Clients
Why Agencies Lose Clients
Evaluation Criteria in Choosing an Ad Agency
The roles of advertising Account executives

Defining the Essence of a Service

An act or performance offered by one party to another. An

economic activity that does not result in ownership. A process
that creates benefits by facilitating a desired change in:
 • customers themselves
• physical possessions
• intangible assets

a. Distinguishing Characteristics of Services

• Customers do not obtain ownership of services
• Service products are ephemeral and cannot be
inventoried
• Intangible elements dominate value creation
• Greater involvement of customers in production process
• Other people may form part of product experience
• Greater variability in operational inputs and outputs
• Many services are difficult for customers to evaluate
• Time factor is more important--speed may be key
• Delivery systems include electronic and physical
channels

a. Elements of the Services

Marketing Mix “7Ps” of the
Services Marketing Mix
Process: A process is the method and sequence of actions
in the service performance.
Creating and delivering product elements to customers require
the design and implementation of effective. Process refers to the
systems used to assist the organisation in delivering the service.
Imagine you walk into Burger King and you order a Whopper
Meal and you get it delivered within 2 minutes. What was the
process that allowed you to obtain an efficient service delivery?
Banks that send out Credit Cards automatically when their
customers’ old one has expired again require an efficient
process to identify expiry dates and renewal. An efficient
service that replaces old credit cards will foster consumer
loyalty and confidence in the company.

People: People strongly influence the customer’s perception

of the quality of the service.
Significant effort given to recruiting, training and motivating
employees. An essential ingredient to any service provision is
the use of appropriate staff and people. Recruiting the right staff
and training them appropriately in the delivery of their service
is essential if the organisation wants to obtain a form of
competitive advantage. Consumers make judgments and deliver
perceptions of the service based on the employees they interact
with. Staff should have the appropriate interpersonal skills,
aptititude, and service knowledge to provide the service that
consumers are paying for.

Physical Evidence: Service firms need to manage

physical evidence carefully as it can
have a profound impact on customers’ impressions. Physical
evidence is in the form of buildings, landscaping, vehicles,
interior furnishing, equipment, staff members, signs, printed
materials & other visible cues which provide tangible evidence
of a firm’s service quality. physical Evidence is the element of
the service mix which allows the consumer again to make
judgments on the organisation. If you walk into a restaurant
your expectations are of a clean, friendly environment. On an
aircraft if you travel first class you expect enough room to be
able to lay down! Physical evidence is an essential ingredient
of the service mix, consumers will make perceptions based on
their sight of the service provision which will have an impact on
the organisations perceptual plan of the service.

Creating Value:
Important to create value for customers and thus give
importance to all the 7Ps.
Value can be defined as the worth of a specific action or object,
relative to an individual’s or organisation’s needs at a particular
time, less the costs involved in obtaining those benefits.
Service Encounters as “Moments of Truth”

The phrase “Moments of Truth” was popularized by the CEO of

Scandinavian Airlines, Jan Carlzon. All encounters or
transactions where the customer interacted with the company
(anyone representing it) were ‘moments of truth’ that moulded
the customer’s opinion about the company. If these moments
could be well managed, the result would be a great service
company and a happy customer.

b. THE GAPS MODEL OF

SERVICE QUALITY
SERVQUAL (service quality gap model) is a gap method in
service quality measurement, a tool that can be used by Product
Manager across all industries. The aim of this model is to:
Identify the gaps between customer expectation and the actual
services provided at different stages of service delivery.
Today’s consumer has become increasingly demanding.
They not only want high quality products but they also expect
high quality customer service. Even manufactured products
such as cars, mobile phones and computers cannot gain a
strategic competitive advantage through the physical products
alone. From a consumer’s point of view, customer service is
considered very much part of the product.
Delivering superior value to the customer is an ongoing
concern of Product Managers. This not only includes the actual
physical product but customer service as well. Products that do
not offer good quality customer service that meets the
expectations of consumers are difficult to sustain in a
competitive market. SERVQUAL (service quality gap model) is
a gap method in service quality measurement, a tool that can be
used by Product Manager across all industries.

The aim of this model is to:

Identify the gaps between customer expectation and the

actual services provided at different stages of service
delivery
Close the gap and improve the customer service
This model developed by Parasuraman, Zeithalm and Berry in
1985 identifies five different gaps:
The following are the five gaps:
GAP 1: Not Knowing what customers expect
GAP 2:The wrong service quality standards
GAP 3: The Service Performance Gap
GAP 4: When promises do not match delivery
GAP 5: Expected Service-perceived Service Gap

GAP 1: Not Knowing what customers expect

According to the model, the first GAP ocurs bacause of the
difference betwen what customers expect and what managers
perceive they expect.

Many reasons exist for managers not being aware-of what

customers expect:
a. They may not interact directly with customers
b. Be unwilling to ask about expectations, or be
unprepared to address- them.

c. When people with the authority and responsibility for

setting priorities do not fully understand customers'
service expectations, they may trigger a chain of bad
 decisions and sub optimal resource allocations that
result in perceptions of-poor service quality.
d. Inadequate upward communication from contact
personnel and management and too many levels of
management seperating contact personnel from top
managers are the other reasons for this gap.
e. Another key factor' related to provider gap 1 involves
the lack of company strategies to retain customers and
strengthen relationships with them, an approach called
relationship marketing.

When organizations have strong relationships with

existing: customers; provider gap 1 is less likely to occur.
Relationship marketing is distinct from transactional
marketing, the term used to describe the more conventional
emphasis on acquiring new customers rather than on retaining
them.
When companies focus too much on attracting new
customers, they may fail to understand the changing needs and.
expectations of their current customers. The final key factor
associated with provider gap 1 is lack of service recovery. It is
critical for an organization to understand the importance of
service recovery-why people complain, what they expect when
they complain, and how to develop effective service recovery
strategies for dealing with inevitable service failures. This
might involve a well-defined complaint-handling procedure and
empowering employees to react on the spot; in real time to fix
the failure; other times it involves a-service guarantee or ways
to compensate the customer for the unfulfilled promise.

GAP 2:The wrong service quality standards:

The difference between company's understanding of the service
desired by customer and the service as designed to be delivered
by the company, and the performance standards set for the
same.
Provider gap 2 exists in service organizations for a variety
of reasons:

a. Those responsible for setting standards, typically

management, sometimes believe that customer
expectations are unreasonable or unrealistic.
b. They may also believe that the degree of variability
inherent in service defies standardization and therefore
that setting standards will not achieve the desired goal.
compensated.

c. When service standards are absent or when the

standards in place do not reflect customers'
expectations, quality of service as perceived by
customers is likely to suffer.
d. In contrast, when there are standards reflecting what
customers expect, the quality of service' they receive is
likely to be enhanced.
Therefore closing provider gap 2 by setting customer defined
performance standards has a powerful positive effect- on
closing the customer gap.
One of the most important ways to avoid gap 2:
 a. Is to clearly design services without over simplification,
incompleteness, subjectivity, or bias.
b. To do this, tools are needed to ensure that new or an
existing services are developed and improved in as
careful a manner as possible. Another factor involved in
provider gap 2 is physical evidence the tangibles
surrounding the service. By physical evidence we mean,
everything from business cards to reports, signage,
Internet presence, equipment, and facilities used to
deliver the service.
c. The services cape, the physical setting where the service
is delivered, must be appropriate. Think of a restaurant,
a hotel, a theme park, health club, a hospital, or a
school. The services cape-the physical facility is critical
in these industries in terms of communicating about the
service and making the entire experience pleasurable.

GAP 3: The Service Performance Gap or

Not delivering to service standards
The discrepancy between service specifications and the actual
service delivered initiates this gap. In general, this gap appears
when employees are unable and/or unwilling to perform the
service at the desired level.

Various reasons are:

• role ambiguity,
• role conflict,
 • poor employee-job fit,
• poor technology-job fit,
• inappropriate supervisory control systems leading to
inappropriate evaluation/compensation system,
• lack of perceived control on the part of employees, and
• lack of teamwork.
• When the level of service-delivery performance falls
short of the standards, it falls short of what customers
expect as well. Narrowing gap 3-by ensuring that all the
resources needed to achieve the standards are in place-
reduces the customer gap.

Research and company experience has identified many of

the critical inhibitors to closing gap 3):
a. These include employees who do not clearly
understand the roles they are to play in the company.
b. Employees who see conflict between customers and
company management,
c. The wrong employees,
d. Inadequate technology,
e. Inappropriate compensation and
f. Recognition and lack of empowerment and teamwork.

These factors all relate to the company's human resource

function, involving internal-practices such as recruitment,
training, feedback job design, motivation, and organizational
structure. To deliver better service performance, these issues
must be addressed across functions (e.g., with both marketing
and human resources) if they are to be effective.

GAP 4: When promises do not match

delivery
The difference between what a firm promises about a service
and what it actually delivers is described as Gap 4. The
difference between service delivery and the service provider's
external communications. Promises made by a service company
through its media "advertising” sales force, and other
communications may potentially raise customer expectations
that serve as the standard against which customers assess
service quality. The discrepancy between actual and promised
service therefore has an adverse effect, on the customer gap.
Broken promises can occur for many reasons:
• over promising in advertising or personal selling
• Inadequate coordination between operations and
marketing, and
• Differences in policies and procedures across service
outlets.
In addition to unduly elevating expectations through
exaggerated claims, there are other, less obvious ways in
which external communications influence customers'
service quality assessments. Service companies frequently
fail to capitalize on opportunities to educate customers to
use services appropriately. They also frequently fail to
manage customer expectations of what they will receive in
service transactions and relationships. Two factors
contribute to this gap
 • Inadequate communication among
operations,marketing, and human resources, as well as
across branches; and
• Propensity to over-promise in communications

GAP 5: Expected Service-perceived

Service Gap
Gaps 1 through 4 contribute to the emergence of Gap 5, which
is the difference between what the customer expected to receive
from the service and what she believes she actually did receive.
Customers’ perceptions are influenced by many sources,
which include word-of-mouth communications, personal
needs,past experiences, and communications from the
service organization. The most important gap, if
perceived service falls short of the customer’s
expectations, she will be disappointed and dissatisfied.
Conversely, if the peceived service exceeds the
customer’s expectations, she will be not only satisfied
but delighted. Putting it all together: Closing the gaps:

The key to closing the customer gap is to close provider gaps 1

through 4 and keep them closed. To the extent that one or
more of provider gaps 1 through 4 exist, customers perceive
service quality shortfalls. The model, called the gaps model of
service quality, serves as a framework for service
organizations attempting to .improve quality service and
services marketing. Service Quality Gap Model
c. Stages in the client-agency
relationship
Business partnerships assume a prominent role in the
strategy of leading firms, large and small. Successful
business partnerships are built on trust, confidence,
understanding, and mutual success. These relationships
require a pro-active effort to sustain and are critical to
future growth.
Client-agency relationships are one of the most
complex in the business environment, requiring a
substantial level of collaboration to be effective. There are
four stages in the Client- Agency relationship:

1) Pre-relationship stage - In the first phase of a

client-agency lifecycle a client is
seeking for an agency that helps promoting or advertising an
activity. An agency needs to have great presentation skills to
convince new clients and guarantee a success with pitching and
the agency should also have a networking and new business
specialist who is agile to build up a strong relationship with the
top executives of potential clients. Both clients and agencies
value certain key attributes like positive recommendation or
agencies creativity. It is certainly the case that a client pays
great attention to the people factors concerning a prospective
relationship with a new agency. That again means that
advertising is a service that highly depends on the key contact
person and the team that provides the service. Wackman et al.
(1987) stated that clients do not always thoroughly selected
agencies by its competences but by mirroring its personality.
According to Jonathan M. Lace (1998) there are task
competencies in each functional role of an employee of an
advertising agency, which influence the client’s perception.
Sometimes first impressions cannot be changed and therefore
advertising agencies should pay attention to its presentation of
their functional roles. Even though most competencies will be
realized and evaluated during the relationship development and
maintenance phase first feelings of the clients are essential for
an agency’s selection.

2) Development stage- Once the client has selected

an agency or continues working
with its current one it is important that both parties successfully
develop and maintain the relationship. On the one hand there
are the factors that make a relationship productive or
unproductive. On the other hand there is the role of agency
reviews and audits that maintain a client-agency satisfaction.
There is no single factor that influences the work activity but
there are always many factors. It is often the case that if
dissatisfaction evolves that tangentially the other partner is
blamed. Statistics state that agencies are usually more critical
of their clients than on themselves. In general trouble in a
client-agency relationship has little to do with the capabilities of
an advertising agency but with the lack of maintaining a
performance system. There are several factors which are
identified if a client is appraising an advertising agency: the
method of evaluation needs to be simple, the environment needs
to be calm and objective, appraise regularly and make the
agency a partner in the appraisal effort (David S. Waller, 2004).
It is important to keep the communication flow going and have
regular contact between the agency and its client. There arise a
lot of problems due to a lack of communication. The more
experience both parties have with playing the game of client-
agency relationships the better the outcome. However agencies
are usually in a poor situation concerning the money and job
security factor. 3) Maintenance stage- Another
important factor of the maintenance phase is the
performance issue. If a client does not define the agency’s
competencies and tasks it is difficult for an agency to satisfy the
client. Apart from the general performance issue, the problem
of bad briefing is present at all agencies. If a client does not
brief an agency correctly on new activities it is most likely that
the agency will fail its task. Sometimes it is the case that the
agency and its client have different attitudes. Analysing these
differences can be used to define and eventually solve the
conflict. In the end the development and maintenance phase is
successful for both the agency and the client if communication
is kept running and expectations are defined in the beginning.

4) Termination stage- The final stage of a client-

agency lifecycle is a review of the agency’s performance which

either results in a contract renewal or in a termination. A

termination of the client-agency relationship is when the client

is dissatisfied with the agency and that again leads to an end of

the cooperation.

The agency has two options now. Either is gives the agency a

new try and invite tenders for pitch where the existing agency

can proof its capabilities in a competitive presentation. Or the

client directly changes the agency and does not allow the

existing agency to participate in a new pitch. The trend in

client-agency relationships is to terminate those that under-

perform. In 1984, the average client-agency relationship tenure

was 7.2 years. By 2010 that number declined to 4 years.

Clients continue to cite the same reasons for terminating their

relationship with their agency. Most of the time, these issues

might have been resolved if they were acknowledged and

addressed earlier.
• Turnover – New marketing director
• Lack of interest/understanding of client’s business
• Strategy and creative linkage unhinged
• “Outgrown” the agency
• Understaffing and inexperienced personnel
• Changes at the top
• Research scores consistently below norms
• Creative intransigence and arrogance
• Mandated consolidation
• Loose attention to budgets

Avoiding the Pitfall of Failed

Relationships
Successful relationships do not sustain themselves. Many client-
agency relationships fail to meet expectations because too little
attention is given to nurturing the close working relationships
and interpersonal connections that unite them.
All parties involved must remain pro-active in monitoring and
evaluating the level of trust, confidence, understanding, and
success felt by every other member of the group. Disconnects
can strain the relationship until it collapses. Only constant, open
communication can solidify the client and agency’s
expectations and perspectives regarding the other.
ANALYSIS
agency/client
relationships
– The three
challenges
for clients
are:
a. to demand greater responsibility for business results,

b. To create a new set of ad metrics – moving away from

the dominance on reach and toward a focus on the
effect on business results – and
c. For ad agencies to reposition themselves to focus on
shareholder value.

Factors affecting the client-agency

relationship:
a. Chemistry - between client and agency staffs. If there is
proper understanding between them the relationship
will be smooth. If ego clashes occur the relationship
will be stormy
b. Communication - constant, open, honest
communication is vital for success.
c. Conduct - what everyone in the relationship does - both
the work process and the work

d. Product. Changes: Many a time unannounced changes

in product lead to major shift in the strategy which
 might lead to friction.
e. Personnel: In change in Personnel on either side can
lead to change in the relationship equation.
f. Competitive situation: Change in competitive situation
demand more involvement on both side professionals.
g. Working Environment on side will influence the
relationship

Issues in the Agency-Client

Relationships:
1. Even in good times, agency-client relationships can be a
delicate dance. But with the economy still stalling, the
push-you-pull-me inherent in such relationships can be
even more problematic.
2. Sales and corporate objectives: Most of the client want
agency to focus on sales and marketing objectives,
instead of only focusing o the creative strategy.
3. Return on investment (ROI): Most clients place, return
on investment at the heart of its account.
4. Innovation and creativity: Is another key toward
enhancing the relationship, as companies increasingly
rely on agencies to come up with new and innovative
ideas to drive sales.
5. The team members are too junior

6. Don't understand client business objectives: The biggest

hurdle remains an inability among agencies to
understand their clients' business objectives while trust
 and cost also weigh heavily on relationships.
7. Not responsive
8. Lack of trust in the relationship
9. Senior staff unavailable
10. Incapable of providing Strategic counsel
11. Overshooting Cost and budget

12. A slowness to respond to changing needs was

pinpointed as one of the major criticisms of agencies by
their clients

d. How Agencies Gain Clients:

The agency, like any other business organization, has something
to sell. The business of the agency should, therefore, grow so
that, at any stage, its volume of business may justify its
facilities for the services that are offered by it. Moreover,
growth is one of the desirable requirements of any business. It
is, therefore, logical to have a separate cell in the agency, which
is responsible for the growth of business. This growth may be
achieved either by increasing the business with the present
accounts or by getting new accounts. The first is within the
jurisdiction of the account executive, while he may look after
the second in a small agency. In large agencies, the top
management assumes this responsibility. It has a few executives
who are exclusively hired for developing new accounts.
Some agencies aggressively solicit new business by themselves
engaging in advertising. They highlight the agency's competent
personnel, the resources and the facilities at their disposal, the
influential accounts they service and the successful
-advertisement campaigns they have handled. Currently most of
the contemporary advertising agencies are focusing on the two
new emerging business opportunities:

Why Agencies Lose Clients

What are the factors that influence the success or failure of an
advertising agency-client relationship? What really determines
the success or failure of a relationship? To what extent do hard
facts play a role?
Reasons Advertising Agencies Lose Clients:

a. Poor Communication: The client and agency personnel

fail to develop or maintain the level of communication
necessary to sustain a favourable working relationship.
b. Unrealistic Demand by the Client: The client places
demands on the agency that exceed the amount of
compensation received and reduce the account’s
profitability.
c. Personality Conflicts: Personnel working on the account
of the client and agency sides do not have enough
rapport to work well together.
d. Personnel Changes: A change in personnel at either the
agency or the advertiser can create problems. New
managers may wish to use an agency with whom they
have established this. Agency personnel often take
accounts with them when they switch agencies or start
their own.
e. Changes in Size of the Client or Agency: The client may
out grow the agency or decide to take help of a larger
agency to handle its business. If the agency gets too
large, the client may represent too small a percentage of
its business to command attention.
f. Conflicts of Interest: A conflict may develop when an
agency merges with another agency or when a client is
part of an acquisition or merger.
g. Changes in the Client’s Marketing Strategy: A client
may change its marketing strategy and think a new
agency is needed to carry out the new programme.
h. Declining Sales: When sales of the client’s product or
service are stagnant or declining, advertising may be
seen as contributing to the problem. A new agency may
be sought for a new approach.
i. Conflicting Compensation Philosophies: Disagreement
may develop over the level or method of compensation.
j. Changes in Policies: Policy changes may result when
either party reevaluates the importance of the
relationship, the agency acquires a new (and larger)
client, or either side undergoes a merger or acquisition.
If the agency recognizes these warning signs it can try
to adopt its programmes and policies to make sure that
the client satisfied. Some of the situations discussed
here are unavoidable, and others may be beyond the
control of the agency. But to ensure maintenance of the
account, those within the agency’s control
must be addressed. Most of the theoretical framework
 proves that there is no single factor that influences the
work activity. The results of the empirical finding plug
into this idea. An interesting observation is that the
Account Manager as well as the clients mentioned soft
skills as the most important factors that influence the
success but also the failure of a client-agency
relationship. The top of the list is lead by reliability and
loyalty. Hard facts such as success and outcome of the
creative work are certainly mentioned by the Account
Managers and clients but are in the back seat.
k. The lack of ongoing evaluation during a client-agency
relationship is also a common reason of the failure of
cooperation. All Account Managers and clients agreed
that an evaluation process is essential in a client-agency
relationship.

MODULE: IV-2 MARKETING

PLAN

“Marketing Plan”
• A marketing plan outlines the specific actions corporate
 intend to carry out to interest potential customers and
clients in their product and/or service and persuade
them to buy the product and/or services they offer.
• The marketing plan implements marketing strategy.
• "The marketing plan is the specific roadmap that's going
to get you there.
• “A marketing plan may be developed as a standalone
document or as part of a business plan. Either way, the
marketing plan is a blueprint for communicating the
value of your products and/or services to your
customers. Marketing strategy provides the goals for
marketing plans. It tells you where you want to go from
here.

What's the difference between a marketing strategy and a

marketing plan?

The marketing strategy is shaped by overall business goals. It

includes a definition of business, a description of products or
services, a profile of target users or clients, and defines
company's role in relationship to the competition. The
marketing strategy is essentially a document that managers use
to judge the appropriateness and effectiveness of thier specific
marketing plans. The first step in developing a marketing plan:
is to create specific marketing objectives and write them down.
What do you want your promotion efforts to do for you?
E.g. 2% increase in market share after the Advertising
campaign.
How Marketing Plans Work:
• Planning company's marketing program is a process
much like the one you go through as a young person
deciding what you want to do with your life. You go
through phases of:
• Learning and discovery of the world around you
development and self-realization of skills, strengths and
weaknesses
• goal setting based on those strengths and weaknesses
• setting strategies for achieving your goals
• planning your attack
• working through that plan to make it happen

The Benefits of a Marketing Plan

A marketing plan, on the other hand, is plump with meaning. It
provides you with several major benefits. Let's review them.
Rallying point: Your marketing plan gives your troops
something to rally behind. You want them to feel confident that
the captain of the vessel has the charts in order, knows how to
run the ship, and has a port of destination in mind. Companies
often undervalue the impact of a "marketing plan" on their own
people, who want to feel part of a team engaged in an exciting
and complicated joint endeavor. If you want your employees to
feel committed to your company, it's important to share with
them your vision of where the company is headed in the years to
come. People don't always understand financial projections, but
they can get excited about a wellwritten and well-thought-out
marketing plan. You should consider releasing your marketing
plan-perhaps in an abridged version--companywide. Do it with
some fanfare and generate some excitement for the adventures
to come. Your workers will appreciate being involved. Chart to
success: We all know that plans are imperfect things. How can
you possibly know what's going to happen 12 months or five
years from now? Isn't putting together a marketing plan an
exercise in futility . . . a waste of time better spent meeting with
customers or fine-tuning production? Yes, possibly but only in
the narrowest sense. If you don't plan, you're doomed, and an
inaccurate plan is far better than no plan at all. To stay with our
sea captain analogy, it's better to be 5 or even 10 degrees off
your destination port than to have no destination in mind at all.
The point of sailing, after all, is to get somewhere, and without a
marketing plan, you'll wander the seas aimlessly, sometimes
finding dry land but more often than not floundering in a vast
ocean. Sea captains without a chart are rarely remembered for
discovering anything but the ocean floor. Company
operational instructions: Your child's first bike and your new
VCR came with a set of instructions, and your company is far
more complicated to put together and run than either of them.
Your marketing plan is a step-by-step guide for your company's
success. It's more important than a vision statement. To put
together a genuine marketing plan, you have to assess your
company from top to bottom and make sure all the pieces are
working together in the best way. What do you want to do with
this enterprise you call the company in the coming year?
Consider it a to-do list on a grand scale. It assigns specific tasks
for the year.
Captured thinking: You don't allow your financial people to
keep their numbers in their heads. Financial reports are the
lifeblood of the numbers side of any business, no matter what
size. It should be no different with marketing. Your written
document lays out your game plan. If people leave, if new
people arrive, if memories falter, if events bring pressure to alter
the givens, the information in the written marketing plan stays
intact to remind you of what you'd agreed on. Top-level
reflection: In the daily hurly-burly of competitive business, it's
hard to turn your attention to the big picture, especially those
parts that aren't directly related to the daily operations. You
need to take time periodically to really think about your
business--whether it's providing you and your employees with
what you want, whether there aren't some innovative wrinkles
you can add, whether you're getting all you can out of your
products, your sales staff and your markets. Writing your
marketing plan is the best time to do this high-level thinking.
Some companies send their top marketing people away to a
retreat. Others go to the home of a principal. Some do marketing
plan development at a local motel, away from phones and fax
machines, so they can devote themselves solely to thinking hard
and drawing the most accurate sketches they can of the
immediate future of the business. Ideally, after writing
marketing plans for a few years, you can sit back and review a
series of them, year after year, and check the progress of your
company. Of course, sometimes this is hard to make time for
(there is that annoying real world to deal with), but it can
provide an unparalleled objective view of what you've been
doing with your business life over a number of years.

There are seven steps in marketing plan

Step 1: The marketing brief: Understanding

the client marketing strategy by getting the detailed

information from them. Understanding in detailed the

various facet of clients business is the precursor to

marketing plan.
Step 2: Marketing audit: Marketing Audit
is a systematic, comprehensive,
and periodic review of the entire marketing activities of an
organization.
THE PURPOSE OF THE AUDIT IS TO:
• Determine what is currently being done
• Evaluate what is being done
• Recommend what should be done in the future

Step 3: Marketing Objectives: Marketing

objectives should be the means to achieve sales objectives.

By working through target market data and your market

segment data, you should come up with marketing

objectives that address every group. Marketing objectives

should follow the same rules as the sales objectives, and

be measurable, quantifiable (meaning there is a specific

number of some sort assigned to each one), and time

specific. You should have a marketing objective that

addresses each group in your target market. For this

reason, you need to have good data about the sizes of your

market, potential market, and your current customer base.

To this data, add information such as recognized

opportunities, your customers' buying rates, and other

behavioural issues. This information will help you

estimate the numbers you need to attach to your marketing

objectives.
Typically, clients marketing objectives include some or all of the
following:
• Increase sales
• Build brand awareness
• Grow market share
• Launch new products or services
• Target new customers
• Enter new markets internationally or locally
• Improve stakeholder relations
• Enhance customer relationships
• Improve internal communications
• Increase profit
Developing SMART Marketing Objectives

Essentially your marketing objectives need to fit in with the

overall business objectives and drive the direction of your
marketing strategy. To be effective, any objective should be
SMART.
A SMART objective is always:
• Specific
• Measureable
• Achievable
• Realistic
• Time-bound

Step 4: Marketing problem/opportunity

definition:
It consists of the following steps:
a. SWOT Analysis
b. Environment scanning, and
c. competitive analysis.

a. SWOT analysis consists of identifying internal

strengths (S) and weaknesses (W) and also examining
external opportunities (O) and threats (T).
SWOT Analysis

SS Things the company does well.Things the

company does well.

Internal

W Things the company does not do well.Things the

company does not do well.

OO Conditions in the

external

environment

Conditions in the

external

environment that

favor strengths.that
 favor strengths.
External
Conditions in the external environment
Conditions in the external environment

TT that do not relate to existing strengths that do

not relate to existing strengths ©South-Western College Publishing

or favor areas of current weakness.or favor areas of current
weakness. 3 - 19

b. Environmental Scanning: collection and

interpretation of information about

forces, events and relationships in the external

environment that may affect the future of the organization
or the marketing plan implementation.

Examination of macro environmental forces

• Social
• Demographic
• Economic
• Technological
• Political / Legal
• Competitive
 Market opportunities are areas where there are
favorable demand trends, where the company believes
customer needs and opportunities are not being satisfied,
and where it can compete effectively.
c. Competitive Analysis:
An important aspect of marketing strategy development is
the search for a competitive advantage; something special
a firm does or has that gives it an edge over competitors.
Ways to achieve a competitive advantage include having
quality products that command a premium price,
providing superior customer service, having the lowest
production costs and lower prices, or dominating channels
of distribution. Competitive advantage can also be
achieved through advertising that creates and maintains
product differentiation and brand equity.

Step 5: Develop marketing strategy: After

evaluating the opportunities
presented by various market segments, including a
detailed competitive analysis, the company may select
one, or more, as a target market. This target market
becomes the focus of the firm’s marketing efforts, and
goals and objectives are set according to where the
company wants to be and what it hopes to accomplish in
this market.

There are three steps in deciding marketing strategy:

A. Segmentation,
B. Targeting,
C. and Positioning

A. Market segmentation:
Market Segmentation is a process, in which groups of buyers
within a market are divided and profiled according to a range of
variables, which determine the market characteristics and
tendencies. The process of Segmentation is part of a
chronological order, which follows on to include Targeting and
Positioning.

Market segmentation is “dividing up a

market into distinct groups that: a) Have a
common needs and
b) Will respond similarly to a marketing action.

Segmenting Consumer Markets based on

the following:
Well known ways to segment your audience include:

a. Geography: Drill down by Country, region, area,

metropolitan or rural location, population density or
even climate.
b. Demographics: Breakdown by any combination: age,
gender, income, education, ethnicity, marital status,
education, household (or business), size, length of
residence, type of residence or even profession/
Occupation. An example is Firefox who sell 'coolest
things', aimed at younger male audience. Though,
Moshi Monsters, however, is targeted to parents with
fun, safe and educational space for younger audience.
c. Psychographics: This refers to 'personality and
emotions' based on behaviour, linked to purchase
choices, including attitudes, lifestyle, hobbies, risk
aversion, personality and leadership traits. magazines
read and TV. While demographics explain 'who' your
buyer is, psychographics inform you 'why' your
customer buys.
There are a few different ways you can gather
data to help form psychographic profiles for your
typical customers.
i. Interviews: Talk to a few people that are
broadly representative of your target
audience. In-depth interviews let you
gather useful qualitative data to really
understand what makes your customers
tick. The problem is they can be
 expensive and difficult to conduct, and the
small sample size means they may not
always be representative of the people you
are trying to target.
ii. Surveys: Surveys let you reach more
people than interviews, but it can be harder
to get as insightful answers.
iii. Customer data: You may have data on
what your customers tend to purchase from
you, such as data coming from loyalty
cards if an FMCG brand or from online
purchase history if you are an ecommerce
business. You can use this data to generate
insights into what kind of products your
customers are interested in and what is
likely to make them purchase. For
example, does discounting vastly increase
their propensity to purchase? In which case
they might be quite spontaneous. An
example is Virgin Holidays who segment
holidays into 6 groups.
iv. Lifestyle: This refers to Hobbies,
recreational pursuits, entertainment,
vacations, and other non-work time
pursuits. Companies such as on and offline
magazine will target those with specific
hobbies i.e. FourFourTwo for football
fans. Some hobbies are large and well
 established, and thus relatively easy to
target, such as the football fan example.
However, some businesses have found
great success targeting very small niches
very effectively. A great example is the
explosion in 'prepping' related businesses,
which has gone from a little heard of
fringe activity to a billion dollar industry
in recent years.
v. Belief and Values: Refers to Religious,
political, nationalistic and cultural beliefs
and values. Going the extra mile with
demographic research can lead
to discovering new marketing opportunities
and thinking outside the box.
opportunity waiting to be seized!

vi. Life Stages: Life Stages is the

Chronological benchmarking of people’s
lives at different stages. An example is
Saga holidays which are only available for
people aged 50+. They claim a large
enough segment to focus on this life stage.
vii. Behaviour: Refers to the nature of the
purchase, brand loyalty, usage level,
benefits sought, distribution channels used,
reaction to marketing factors. In a
B2B environment, the benefits sought are
often about ‘how soon can it be delivered?’
 which includes the ‘last minute’ segment -
the planning in advance segment. An
example is Parcelmonkey.co.uk who offer
same day, next day and international parcel
deliveries.
d. Benefit: Benefit is the use and satisfaction gained by
the consumer. Smythson Stationary offer similar
products to other stationery companies, but their clients
want the benefit of their signature packaging: tissue-
lined Nile Blue boxes and tied with navy ribbon!
B. Targeting,
Depending upon the emerging patterns of market segmentation,
homogeneous preference (showing no natural segments) as in
case of soft drinks sale by Pepsi and CocaCola), diffused
preference (showing clear preferences as in case of automobile
market), and clustered preference (market showing natural
segments as in case of occupation having impact on the types of
clothes worn), a company chooses its market segmentation
strategy.

a. Undifferentiated Marketing: It is a market

coverage strategy in which the company treats
the target market as one and does not consider
that there are market segments that exhibit
uncommon needs. The company focuses on the
centre of the target market to get maximum
advantage. The feature of ‘one product-all
 segments’ calls for presenting one marketing
mix for the target market. For example, the
CocaCola Company sells Coke, Limca, Thums-
up etc., and does not distinguish the target
audience.
b. Differentiated Marketing: It is a market
coverage strategy in which the company goes
for proper market segmentation as depicted by
its analysis of the total market. The company,
therefore, goes for several products or several
segment approach which calls for preparing
different marketing mixes for each of the
market segment. This strategy is followed by
Hindustan Lever Limited
which sells different soaps (Life Buoy, Lux,
Rexona, Liril, Pears etc.) and each of them has
its own market. Thus, the company creates
segments in the soap market and not in
toiletries market (including soaps, detergents,
toothpaste, etc.)
c. Concentrated Marketing: It is a market
coverage strategy in which company follows
‘one product-one segment’ principle. For
example, Ashok Leyland produces large chassis
of machine which can be used for buses and
trucks. The manufacturer gets maximum
knowledge about the segment’s needs and
therefore acquires special reputation. This
 strategy can also help the small company to
stand against a large corporation because the
small company can create niches in its one-
product one-segment approach by providing
maximum varieties.

C. Marketing: Positioning and Re-positioning

Positioning refers to the place that a brand occupies in the

minds of the customers and how it is distinguished from the
products of the competitors. Positioning places a brand in the
consumer mindset, which enables the consumer, recognize
brands distinctly as separate offerings. Position communicates
the entire set of value propositions for the brand that the buyer
associates himself with. It is that degree of differentiability that
any brander charges in his price. A right position can and does
convey powerful signals about the brand and can clearly help
the consumer to associate properties, which are distinguishable.
The key idea in positioning strategy is that the consumer must
have a clear idea of what your brand stands for in the product
category, and that a brand cannot be sharply and distinctly
positioned if it tries to be everything to everyone.

Positioning benefits:
• Consumer distinguish brands from each other
• Consumer can rank brands in order of their preference
• Creates Value for money equations and facilitates
purchase Seven approaches to positioning strategy:
a. Using product characteristics or customer benefits
 ( Daag jayga per raang nahin jayga
Surf excel)
b. The price-quality approach. Isse sasta aur accha kahin
nahin)
c. The use or applications approach ( Aspirin)
d. The product-user approach ( Santro, smart, intelligent,
handsome)
e. The product-class approach Manikchand Unche log
unche pasand)
f. (The cultural symbol approach ( Videocon, the indian
multinational, desh ki dadkan,
Hero Honda, Tata Namak Desh ka namak) , and
g. The competitor approach.( Maruti)

STEP: 6; Executing the plan: A marketing plan

is more than just a statement of
objectives; it provides guidance throughout the year and directs
all of marketing efforts. It helps corporate and its marketing
team to work together towards a common goal as they execute
their plan.
Follow the Plan
• Utilizing the integrated financial projections and
milestones, one can refer back to Plan Write for
marketing often. One can:
• Compare actual data to projections
• Modify projections
• Determine what can be done to get back on track
• Produce Winning Results
The fact that one has a written a marketing plan puts one ahead
of the pack. Executing that plan will drive one even further
ahead, increasing chance for success.

Step 7: Evaluating Plan:

• Compare actual performance with the planned
performance
• Input Variables (Where are we now?)
• Input into plan
• Marketing needs/analysis - Baseline data (Where are we
now?)
• Process Variables (What did we do?) Marketing
Specialist Schedule
• Product variables (What was developed for marketing
plan?)
• Outcome Variables (Who knows about it?/What
happened?)