A STUDY ON ROLE OF ADVERTISING IN PROMOTING A PRODUCT

TABLE OF CONTENTS
1. Introduction
Definition
Kinds of Advertising
Finding Ideal Customer
Where to ads
Creating Ads
Functions
2. PLANNING OF AN ADVERTISING CAMPAIGN
Organization of an Advertising Campaign
Choosing Time for Promotional Activities
Advertising Department
3. ADVERTISING AND PRODUCT LIFE CYCLE
Concept of Product Life Cycle
Stages of Product Life Cycle
Curve of Product Life Cycle
The Effect of Advertising on the Product Life Cycle
Application of Advertising Types at Various Stages of Product Life Cycle
Practical application of the PLC model by a com. when planning an advertising campaign
4. SELECTION OF SPREADING METHODS
Sources of advertising:
Electronic advertising
5. IMPACT OF ADVERTISING ON CONSUMER BUYING BEHAVIOR
Psychology of advertising
Manipulation in advertising
6. THE EFFECTIVENESS OF ADVERTISING
Evaluation of Correctness of the Advertising Campaign
Examples of Wrong Advertising Campaigns
7. CONCLUSION
8. REFERENCES
 1. INTRODUCTION

Advertisement is, thus, the process of spreading

product information among the potential buyers through
a public medium in order to maximize sales. Such a
public medium includes, among others, newspapers,
magazines, television and radio.

According to William J. Stanton,

advertising consists of all the activities in presenting to a
group a non-personal, oral or visual, openly sponsored
message regarding a product, service or idea.
The American Marketing Association defines advertising
as

any paid form of non-personal presentation and promotion .of

goods, services or ideas by an identified sponsor.

The following points emerge from the above definitions

of advertising:

1. Advertising is a paid form of demand creation.

 2. It is a non-personal presentation of goods or
services.
3. It is done through a medium.
4. Such a medium may be a visual medium like
newspapers and magazines or an oral medium like
the radio or a visual cum oral medium like the
television.
5. The non-personal presentation of goods or services
or ideas through a medium should be done by an
identified sponsor. Such a sponsor may be the
producer himself or a dealer or some other person
or organization. Advertising, unlike personal selling,
is not directed at any particular individual. It is
directed at a mass audience. Advertising is often
used synonymously with publicity. Like advertising,
publicity is also a non personal presentation but it is
not paid for like advertising. Advertising is, thus, a
commercial transaction whereas publicity is not so.

Different kinds of Advertising

1. Product advertising
Most business houses try to sell their products and
services through advertising. The need for product
advertising arises mainly because the business has to
create demand for its products. This is being done
through a public medium like newspapers, television or
radio by means of an advertisement.

The advertisement may appear in a visual form with the

picture of the product together with its features
explained (in the case of newspapers and magazines). It
may also appear in the form of oral presentation of the
product idea (in the case of radio advertisement) or in
both visual and oral forms (as in the case of television
advertisement).
2. Institutional advertising
Here, the focus is on the company and its services. Such
an advertisement is not intended for the consumers
alone. It may also be meant for various other groups like
the shareholders, creditors, suppliers and so on. The
goal of such an advertisement is mainly to boost the
image of the concern. It may also be used to make an
offer or an announcement

Example: There may be an offer to the suppliers of

materials to submit price-quotations. The advertisement
may also announce the date and time of the Annual
General Meeting of the company.

3. Competitive advertising
In this case, the goal of advertisement is to show the
superiority of one product over the competing products.
Such an approach is resorted to when there is cut-throat
competition in the market. The advertisement stresses
on brand name, product quality, price and the company
image.

4. Comparative Advertising
Here, the marketer highlights the comparative features
of the competing products. Such advertisements are
quite common these days and also have become a matter
of controversy. Car, motorcycle and television
manufacturers adopt such an approach.

Example: The comparative features of different car

models are often advertised by the manufacturers. In the
same way, the comparative advantage of two-wheeler
are advertised. The advertiser invariably claims that his
product alone is superior.

5. Collective or Cooperative advertising

Certain products are jointly advertised by the
manufacturers and dealers together. Such an
advertising is what is known as collective or co-operative
 advertising. The manufacturers of car, motorcycle and
TV also use such an approach.

6. Non-commercial advertising
Advertisements for non commercial purpose are brought
out by charitable organizations mainly to secure
financial help from philanthropists. Organizations like
the Sivanandha Gurukulam in Chennai solicit financial
help from generous people, particularly during festival
times, for the benefit of the inmates.

Finding Your Ideal Customer

When trying to zero in on the types of people who are more likely to
need or want your goods or services, and be willing to shell out hard-
earned cash for it, you might look at demographic characteristics, such
as:

 Gender
 Age
 Education level
 Income level
 Zip code
By more precisely defining who your target customer is, you can better
choose advertising vehicles that will reach more of your target customers
for less money. Sure, you can buy an expensive ad in the Wall Street
Journal, for example, but if your best customers live in the western
Boston suburbs, you can buy ads in local papers there for far less.

Where to Advertise

Traditional advertising outlets include newspapers, magazines, TV and

radio stations. Today, however, advertisements are placed nearly
everywhere and anywhere, including:

 Roadside billboards
 Sides of buildings
 Websites
 Electronic newsletters
 Print newsletters
 Inside bills
 Product packaging
 Restaurant placemats
 Event bulletins
 Store windows
 The sides of cars and trucks
 Subway car walls
 Airport kiosks
 Sporting arenas
 YouTube videos

Creating Effective Ads

Advertising messages themselves are designed to persuade an
individual to buy a company’s goods or services. Even in business-to-
business transactions, individuals have to first be convinced to choose
one product over another. To accomplish this, ads have five main
components:

1. Headline - This is the key attention-getting message. “Got milk?” is a

perfect headline. Or Wendy’s old, “Where’s the beef?”
2. Subhead - Some ad headlines need clarification, much like a book’s
subtitle.
3. Body copy - The meat of the advertising message occurs in the main
section where the product or service’s features and benefits are
highlighted.
4. Image - Unless you’re advertising on the radio, including a product
photo, or image illustrating a key benefit is critical.
5. Call-to-action - At the end of the ad you want to invite the consumer
to take a step towards doing business with you, such as calling a toll-
free number, visiting a website, texting a certain number, or pulling into
the drive-thru window.
While advertising is the only way to guarantee that your message will be
seen or heard, it is expensive by comparison to other marketing
methods. For that reason, it is more popular with large corporations and
brands than small businesses.

Functions of Advertising

1. Economical function. The nature of the economical function of advertising is first of

all to stimulate sales and increase the volume of profits from the sale of a certain product
for a certain unit of time. Advertising informs, creates the need for a product or service,
and encourages people to purchase. The more people have responded to the ad, the
better it is for the economy and the economical well-being of society (Kotler, 2002).

2. Social function. Advertising information has a significant impact on the formation of

the consciousness of each individual. When advertising is addressed to consumers,
besides the promotion of a product, it also
 helps to form ideological values of the society and at the end has an effect on the
character of social relations
 causes consumer instincts, encouraging people to improve their financial state
 improves the culture of consumption. Comparing different products and services, the
consumer, in any case, tends to get really the best (Kotler, 2002).

3. Marketing function. Advertising is an important component of marketing. Advertising

entirely connected to the tasks of marketing, whose final aim is the full satisfaction of
customer needs concerning goods and services (Kotler, 2002).

4. Communicating function. Advertising is also one of the specific forms of

communication. It is designed to perform an appropriate communicating function,
linking together advertisers and consumer audience by the means of information
channels (Kotler, 2002).

PLANNING OF AN ADVERTISING CAMPAIGN

Organization of an Advertising Campaign

Advertising campaign is the set of promotional activities, developed in accordance with

the marketing program and aimed at consumers, representing appropriate market
segments, in order to cause their reaction and find a solution for the strategic or tactical
objectives of a company. (Evans & Berman, 1995).
Specification of separate activities during the campaigns depends primarily on the
marketing strategy, which can be expressed, for example, by capturing the overall
market, its share or segment; introduction into a new niche; retention of previously
captured market positions. Marketing infrastructure, human and technical resources,
established level of communication and information supply are all worth considering.
Manufacturer can count on the high efficiency of advertising campaigns only if: firstly,
they are prepared and carried out on the basis of preliminary studies, taking into account
the dynamic nature of the market. Secondly, promotional products are reasonably
created, memorable and properly acting on a pre-selected consumer audience. Thirdly,
a sufficiently broad publication is provided by advertising means that are most
appropriate for the task. Fourthly, the events in different places and at different levels of
sales activity are coordinated. (Hopkins, 1966)
Each advertising campaign consists of three main stages: preparatory, meridian and the
final one. The preparatory stage is the most important one because two others depend
on it, as well as the success of an advertising campaign in general. The preparatory
phase includes planning of an advertising campaign. Planning considers the situation
around the product on the market, and determines the cost of advertising. After choosing
the types and methods of distribution and calculating the volume of advertising, it is easy
to calculate the cost of purchased place or time for it. (Evans & Berman, 1995).

Choosing Time for Promotional Activities

It is good to have an idea how to carry out advertising campaigns in different time
periods. Promotional activities may be periodic (before big holidays) or sporadic (as a
response to changes in demand, changes of market conditions, etc.). Promotional
activities can also be planned for any special occasions, for example, new products,
price change of existing products on the market, opening of new branches for the sale.
(Samarina & Kalugina, 1999) In those cases, if the trade turnover has dynamic seasonal
changes, the advertising policy provides the following strategy.

In this graph W is the cost of turnover; w describes the cost of advertising issues,
making a share of W depending on the product specifications; w * is advertising, the
intensity of which remains at the same level. The impact of advertising on sales or
market share is quite measurable.
The release of promotional products remains at the same level, i.e. promotional
materials are produced uniformly over the same period of time, if the seasonal nature of
the turnover dynamics cannot be changed. Changes in the release of promotional
products follow the changes in sales of goods, i.e. the use of seasonal advertising.
Dynamics of the release of promotional products follows the changes in circulation in the
form of anti seasonal advertising.

Advertising Department

For the organization of promotional activities the firm can use its own advertising
department or an external advertising agency. This planning stage is one of the most
important because it determines the degree and form of manager participation in the
implementation of the plan of an advertising campaign. A further planning process or the
process of implementation of the plan may be fully or partially delegated to the marketing
department or advertising agency. In order to make a decision on the establishment of
responsibilities manager should understand the advantages and restrictions of every
possible option. (Hopkins, 1966) Promotional activities in an organization can be
implemented by one of the organization's employees. It can be an employee of the sales
department, the deputy head of the organization, the chief executive or a specially
assigned person - advertising manager.

3. ADVERTISING AND PRODUCT LIFE CYCLE

Concept of Product Life Cycle

Volume and duration of production of a product change cyclically over time. This
phenomenon is called the product life cycle.
The concept of the product life cycle describes the marketing of the product, profit,
competition and marketing strategy from the moment when a product enters the market
till the removal from the market (Levitt, 1965).
The concept comes from the fact that any product sooner or later displaces from the
market by another, more perfect or cheap one. There is no eternal item.
The concept of product life cycle applies to categories of goods (TVs) as well as to
subcategories (color televisions), and even to a particular model or brand (color TVs
"Samsung"). (Although many economists say mostly just about the life cycle of goods in
general, almost denying the existence of the life cycle in the categories and
subcategories of goods.) Specific product model more clearly follows the traditional
product life cycle.
Product life cycle can be represented as a sequence of stages of a product’s existence
in the market, which has certain limits. The dynamics of a product’s life shows the
amount of sales at each time period when there is a demand.
4.3. Stages of Product Life Cycle
Life cycles of products are very diverse, but almost every time it is possible to identify
the main phases. In the classic product life cycle we can distinguish five stages or
phases:
1. Phase of introduction or market entry. This is the phase in which a new product
appears on the market, sometimes as test sales. It starts with the distribution and the
first sales. At this stage the product is still a novelty. Technology is still not
mastered. The manufacturer has not chosen the manufacturing process yet. The product
modifications are not available. The prices are usually increased. Sales volume is very
small and increases slowly. Supply chains are cautious concerning the product. The
growth of sales is small, trade is often unprofitable and competition is limited.
Competition in this phase can make only substitutable products. The aim of all marketing
activities is the creation of market for a new product. Firm incurs high costs, since in this
phase there are high costs of production and costs of promotion usually reach the
highest level. Customers are innovators willing to take risks in testing a new product. In
this phase there is a very high degree of uncertainty. The more revolutionary the
innovation is, the higher is the uncertainty. (Stark, 2011).

2. Phase of growth. If there is demand for product, the sales will start to grow
significantly. At this stage buyers usually accept the new product and its demand starts
to increase rapidly. Market coverage increases. Information about the new product is
transferred to new customers. The number of product modifications increases.
Competing firms pay attention to this product and offer their own similar products. Profits
are quite high, as a significant number of products is sold, and the competition is very
limited. By intensive sales promotion market capacity is greatly increased. The prices get
down slightly, as the manufacturer produces a large number of products by the proven
technology. Marketing costs are allocated to the increased volume of production. At this
stage customers are people who accept novelty. There is an increased number of
repeated and multiple purchases. (Stark, 2011).

3. Phase of maturity. It is characterized by the fact that most of the buyers have already
purchased the product. Sales growth rates are falling and this product goes into the
category of “traditional”. There is a large number of modifications and new brands.
Product quality is increased and production functions are better. Maximum of sales is
achieved. The profit of the enterprise is reduced and grows slowly. There are stocks of
goods in warehouse and competition is growing. There is price competition as well. The
firm makes sale at discount prices and weaker competitors are out of the market. Sales
promotions reach the maximum
efficiency. Customers here are people who slowly accept something new and who are
conservatives. This phase takes the longest time. (Stark, 2011).

4. Phase of saturation. At this stage the sales growth ceases. The price is greatly
reduced. However, despite the decrease in prices and the use of other methods to
influence the customers, the growth of sales stops. Market coverage is very high.
Companies seek to increase their market sector. Sales network also does not expand.
Technology is the same. At this stage technological improvement of the product and its
technology is likely to be repeated. This stage is often connected to the stage of maturity
for the reason that there is no clear difference between them. (Stark, 2011).

5. Phase of decline. This stage is a period of a sharp decline in sales and profits. The
sales may drop to zero or remain at very low levels. The main reason is a new and
better product or changing customer preferences. Many firms leave the market. The
budget for sales promotion is reduced or completely stopped. Consumers lose interest in
the product, and its number decreases. The main consumers are conservatives with low
wages. At this stage it is better to remove the product from the production in order to
avoid large financial losses. (Stark, 2011).

The transition from one stage to another goes without sudden jumps. The duration of the cycle
and its individual phases depend on the product itself and the particular market. The life cycle is
also affected by external factors such as the economy in general, inflation, consumer lifestyle,
etc

Curve of Product Life Cycle

Product life cycle and its stages can be represented graphically.

The X-axis represents the time and the Y - axis represents the sales volume of goods at
a given time.
 This figure shows the traditional curve of the product life cycle. It describes the distinct
periods of introduction, growth, maturity, saturation and decline. There is also an ideal curve
and the worst one:

These graphs are not mathematically precise. The curve of sales in the graphs
falls below zero at one point. Of course this cannot happen, since it would mean that the
company buys its own goods. By this way it schematically indicates the material costs of
the company to develop a new product, i.e. purchase of other goods (labor, technology,
etc.)
Types of product life cycle curves
Depending on the specific characteristics of the product and its demand there are
different types of PLC, which differ both in duration and form of development of the individual
phases.
 The
curve above describes a very popular product with stable sales during a long period of time. An
example of such product can be "Pepsi." In the case of such a product life cycle curve a firm
manufactures the product and makes profit for a long time.

The curve in graph 6 describes the product with fast rising and falling sales. Such a curve often
relates to a trendy and popular product. An example of such a product can be once-fashionable
glasses Wildfox, which nowadays cannot be even found on the market.
The curve in graph 7 also describes a popular product, but this product is still part of the
consumer preferences.

In graph 8 one
can see a curve of such a product that is sold well during certain period of time. Such goods may
be winter or summer clothing, Christmas gifts, etc.

Graph 9 describes how demand for a product falls, but after a while resumes. An example would
be a return to the women's platform shoes that were popular in the 1970s.
The curve in graph 10 characterizes a product that almost immediately loses demand among
buyers.

The curve presented in graph 11 describes goods, whose sales ceases to grow, but after a little
improvement and additional useful properties the company manages to increase the sales
again. Such products are chewing gums ("Orbit", "Dirol"), which firstly are just means to take
care of teeth, and then make it better and better through the use of new components (xylitol) or
refuse of old one (sugar).

The curve is characterizing the goods whose entrance to the market was badly planned
and carried out, but with the second try they got a great success. For example,
Facebook is in the mature phase of the product life cycle. Once it became the norm for
everyone to have a Facebook account, the growth stage was over. No new or obsoleting
technology is expected to appear soon which would put Facebook out of business. While
Facebook competes with other social media sites such as Google+ and Twitter, it
appears to be hold by its own. Thus, we can say that Facebook is comfortably in the
maturity stage.
The iPod touch is also currently in the mature phase of the product life cycle. This is
because the iPod touch is just an evolution of a product that has been around for long
time. Competitors like Microsoft's Zune have just followed Apple's design and
technology, while the iPod has evolved over multiple "generations," each adding new
features and functionalities. Today, the iPod touch is more than just a music player; it
plays videos, runs apps and can be used as an organizer. Such a product may be
difficult to classify using the product life cycle model - is it the same old iPod, or an
entirely new product?
Different products will have differently shaped product life cycle curves. Product life
cycles are a useful guide to lifetime sales and profits, and can help marketers
understand what strategies to deploy and when.
4.5. The Effect of Advertising on the Product Life Cycle
Since advertising increases sales, it affects the life cycle of the product and its curve.
Using advertising and other means to promotion the producers not only increase sales,
but also prolong the life cycle of the goods. The impact of advertising on the product life
cycle can be described graphically by drawing the life cycle curve of a product without
advertising support, and a product that is widely advertised.

The additional volume of

goods sold during the advertising campaign is shown by the hatched area in the figure.
By selling these products, the company receives an additional profit. However, part of it
is spent on advertising costs. The rest is an extra profit of the firm, which is received as a
result of doing the advertising support of its product.
Deformation of the product life cycle curve can be considered by studying the change of
the length and sales of each stage:
1. Introduction. The new curve shows a reduction of the introduction phase when
product is entering the market. A large number of potential buyers quickly learn about a
new product from its advertising and often make the first (often a trial) purchase. In case
the buyer likes the product, he will make repeat purchases. With intensive advertising of
a product, this phase of its life cycle can be reduced from several years to a few months
or weeks. On the graph the curve is shifted to the left. (Carter, 1986).

2. Growth. This phase also decreases in time. Because of increased advertising the
majority of people will learn about the new product and will agree to make their first
purchase. The phase passes with greater intensity and ends with a greater
volume of goods sold. On the graph the curve is shifted to the left and up. (Carter, 1986).

3. Maturity. This phase begins much earlier and due to the increased agitation delays for
some time. In addition, the sales at this stage are much greater than sales without
advertising support. Advertising persuades many buyers to buy the product once again.
On the graph the curve is shifted up and extension to the right. (Carter, 1986).

4. Saturation. Advertising manages to postpone this stage by exhortations of clients.

Saturation occurs later and the company manages to sell more goods and inventories.
On the graph the curve is extended to the right. (Carter, 1986).
5. Decline. At this stage, the company usually does not make any advertising of its
product and remove it from the market. The sales go much faster than it would go if the
product was not advertised at all. Seeing the continuous decline in demand, the
company stops creating a myth about a good and useful product and consumers quickly
start buying other products (often a modification of the first one). Effect on the curve is a
gentle slope on the decline stage. (Carter, 1986).
4.6. Application of Advertising Types at Various Stages of Product Life Cycle
Each stage of the product life cycle requires a special approach to advertising. It is
needed because the economic and competitive environment varies in each phase of the
life cycle, and the manufacturer's cost structure changes from phase to phase.
Therefore, when planning an advertising campaign it is necessary to define the
objectives, methods and types of advertising exposure. (Carter, 1986)
Let us consider the stages of the product life cycle and define the goals and methods of
advertising in each of them:
Introduction. At this stage it is necessary to consider the complete ignorance of
consumers about a new product, so the main objectives of advertising are:

Make people aware of the new product and brand

 Inform the market about the benefits of the new product
 Encourage customers to try the new product
 Encourage distributors (wholesalers and retailers) to take the goods for sale.
Thus, the main purpose of the advertising focuses on informing buyers and distributors
about the functions, scope, basic characteristics, and the name of a new product.
Adverting at this point requires a significant investment that exceeds the profits.
Manufacturers often resort to giving away free samples of the new product. (Romat,
1991).
Growth. At this stage, the level of sales is growing rapidly. Many customers begin to
make repeat purchases. Most buyers know about the product and brand (often from
advertising on the first stage of the life cycle). Since competitors start to appear on the
market, the main purpose of advertising is not just informing about the product, but the
formation of brand preferences. All advertising objectives can be formulated:
 Create a strong, sustainable brand image
 Create and maintain brand adherence
 Promote the acquisition of goods
 Further enhance of buyers awareness.

The main emphasis in advertising is made on quality of the product, its prestige and
additional services provided by firm. Advertising costs in general remain constant, but as
there are more goods sold, costs are constantly decreasing per unit. Profit appears and
grows because all promotion expenses drop to normal levels. At this stage, the main
type of advertising is campaigning (persuasive) advertising and informational elements.
(Romat, 1991).
Maturity. There are few new buyers at this level and the sales mainly consist of repeat
purchases. The stage of maturity is the peak of the advertising campaign. Positions of
the main competitors and their brands are well known. The market is not expanding, so
the main purpose of advertising is to prevent the reduction of the sales of the product.
The main emphasis in advertising is placed on a variety of discounts when buying
goods, sales at discount prices, additional services and further quality improvement. The
main type of advertising is campaigning advertising. (Romat, 1991).
Saturation. This phase is not much different from the previous one, so the main
objectives and types of advertising are the same. However, at this stage the main focus
of advertising is on the improvement of the company image (PR or prestigious
advertising) and large price decline (at this stage the technology is fully developed, the
initial costs for development and removing are paid off). Competition is mainly about the
price. At this stage, the company creates a product modification (the probability of which
is very high) and advertises it or gradually prepares to leave the market and starts to
reduce advertising. Moreover, the firm begins to use this kind of advertising as a
reminding advertising. Sometimes the company makes a new advertising campaign for
sale of the remaining products in stock before removing the goods from the production.
(Romat, 1991).
Decline. At this stage, there is a sharp decline in sales and advertising is inexpedient.
Product is removing from the market. However, if there still is a large amount of goods in
stock, the company still advertises the goods until full sales (sometimes with a very big
discount). (Romat, 1991).
The need to use the product life cycle theory in planning an advertising campaign is
caused by the fact that to improve the effectiveness of advertising campaigns advertising
should not be the same at all stages of the life cycle. It can be described by easy
example:
When a new product enters the market, for example, copy machines, it is unwise to
advertise them with the slogan "Buy Xerox." The buyer does not know what it is and if he
needs it. Such advertising will not be accepted by the buyer, he is not ready for it. Firstly,
advertising must tell (sometimes in details) about a new product, its manufacturer, and
the advantages comparing with previous models. Once all potential buyers know about
the new product (or new properties of the old product) and many of its characteristics, to
continue focusing advertising on its new consumer properties is pointless. Since the
buyer already has information that was provided in advertising and such announcement
will not be as effective as advertising, which will describe some new aspects of the
product or which is designed mainly to remember the product and the manufacturer's
name. The main emphasis in advertising changes from informing about the properties of
goods to the formation of brand preferences in the buyers’ minds, creating a sustainable
image of goods and firm. Further advertising assumes that the consumer is not only
aware of the product characteristics, but he also has an image of this product and the
company. The purpose of this advertising is to make buyers not to forget what they
already know about the product and the company. Advertising must constantly remind
the customer of the existence of the product.
Advertising, built on this principle will be more effective than the monotonous message
to the buyer about the product and its properties. Constant repetition after a certain time
will be skipped by the buyer. (Carter, 1986)
As a real life example I will consider the case of “Apple”, an American corporation, a
manufacturer of personal and tablet computers, music players, phones, new software.
Due to innovative technology and aesthetic design, Apple Inc. has established a unique
reputation comparable with the cult, in the consumer electronics industry.
The first advertising campaign for the original phone was launched in 2007 by
TBWA/Media Arts Lab, the same group that was responsible for “Get a Mac” advertising.
In the first year’s ads the emphasis was largely on showing how the iPhone worked, and
trying to create some contextual references linking it to the iPod and its popularity. The
first add played the main role in creating product awareness and it also helps “Apple” to
control the cash flow in order to support the new product.
In the growth stage the sales increased and “Apple” started producing more iPhones.
People were already aware of the iPhone so “Apple” came with a new add to remind
people why the product is still better than other offered by the competitors. This helped
the product to make better use of capacity so the firm was operating more efficiently and
the unit cost of the product was getting dawn.
In the maturity stage of the product life cycle “Apple” continued its promotions and
reminded people why the products is still good, making some new modifications
(iPhone4-4S) showing the advanced technology. In this case the cash flow was positive
and profit was made.
There was an extension of sales strategies on the saturation stage. Apple carried out
different promotions to motivate sales, for example, if you will buy one iPhone you will
get sales offer for iPad.
Apple is one of the most successful companies that have not reached its decline stage
of the product life cycle yet. In May 2011, the trademark of Apple has been recognized
as the most valuable brand in the world ( $ 153.3 billion) in the ranking of the
international research agency Millward Brown.
4.7 Practical application of the product life cycle model by a company when
planning an advertising campaign
In order to clarify and fully understand how to use the product life cycle model when
planning an advertising campaign, I will give an example of the possible application. In
my example, I will show the possible advertisements of a new firm that enters the market
with a new service. For simplicity I will consider only its possible advertising in the press,
without mentioning any other means of advertising. Moreover, I do not pay attention to
the formation of the ad in terms of psychological aspects of advertising. I am interested
in the main types of advertising information and general principles for creating the
advertisement.
Let us assume that there is such a firm entering the Russian market as a "Non-State
Pension Fund DeLKI" which sells such service as private pension insurance. It is a new
type of service in Russia and buyers do not know what it is. How should advertising
campaign of "NSPF DeLKI" be build?
At the introduction stage the firm must invest significantly in advertising, containing
information about what this pension fund is, what it is for, the terms ofcontributions and
pensions (see APPENDIX 1). It is also very important to create an image of the company
(name, logo, slogan) and provide the address of the company (or addresses of
branches). The company can also provide its license number and the size of the
authorized capital to increase its confidence. (Glushakova, 1999).
At the stage of growth the majority of buyers are already aware of what a pension fund
is, and some even decide to use the services of the firm "DeLKI" (see APPENDIX 1).
The emphasis shifts from informing consumers about the goals and objectives of NSPF
to gradual agitation for using its services. A large amount of information in the
advertisement is no longer required, although the firm may continue to inform people.
Since at this stage the main focus of advertising should be on advertising the firm itself,
it is necessary to emphasis the brand name. Greater emphasis should also be placed on
the company slogan (in this case: "We will provide you a dignified old age"). By reducing
the amount of information one can reduce the size of the advertisement or relatively
increase the area needed to locate the logo, company name and slogan. (Glushakova,
1999).

At the stages of maturity and saturation the firm “DeLKI” should totally minimize the
information in its advertisements, because almost all the customers already know about the
purpose and conditions for purchasing services of the firm "DeLKI" (see APPENDIX 1). The
company should switch completely to its own promotion and maintaining of its image. It is
totally enough to put the logo and the main slogan in the advertisement (in case if there is no
name in the logo of the company, we should put the name - "DeLKI"). The most important at
this stage is memorability and frequency of advertisements. (Glushakova, 1999). In the last
stage (if such is possible in a pension fund) advertising of the firm "DeLKI" is inexpedient.

5. SELECTION OF SPREADING METHODS

For an advertiser it is very important task to choose the right means of distribution of his
advertising message. To do this he must decide how wide coverage should his
advertising should have, and how often it should appear. Moreover, the main means of
distribution according to its cost should be chosen. Here is more detailed information
about the criteria that must be considered:
1. Coverage includes how many people will be able to learn about the advertising
message through one contact. For television and radio, for example, it is the total
number of viewers (listeners) who are expose to the advertising. The printed materials
coverage includes two components - the circulation and transmission rates (how many
times each item gets to a new reader). For example, one copy of the newspaper
“Kalajokilaakso” is read by about 5 people. Furthermore, the transmission power for
magazines is much higher than for daily newspapers. (Kotler, 2002).

2. Frequency determines how many times an average representative of the target

audience must face the advertising. It is the highest for newspapers, radio and
television, where advertisements appear daily. The lowest frequency is at telephone
directories, any outside advertising, magazines and direct mail. One should also
remember that the information in the special telephone directories can be placed or
changed only once a year. (Kotler, 2002).

3. The impact of advertising message depends on the distribution channel. For example,
a commercial on the radio is less impressive than on TV, and also various magazines
may have different level of impact. The TV has the highest impact because it is able to
combine sound, color, motion and other factors. In addition, this figure is significant for
magazines. Some newspapers specifically improve printing technique to print colorful
photos and increase the level of impact. (Kotler, 2002).

4. Stability of the message shows how often the ad is seen by people and how it is
remembered. A large number of people see the billboards, ads on the roads and
telephone directories. Magazines are stored at the consumer’s home for long,
while commercials on the radio and television last around 30 seconds. (Kotler, 2002).

5. Occupancy characterizes the number of advertisements contained in one program,

one page, one publication, etc. If many advertisements were given, the occupancy rate
is very high. Television is often criticized for the fact that it repeatedly shows very short
commercials. Since 1967, the number of commercials on television has been increased
in three times. (Kotler, 2002).
6. Deadline for submission is the period when the information source can release the
advertisement. It is the smallest for newspapers and the largest for magazines and
telephone directories. Its duration indicates for how many weeks or months the firm
should plan ahead its campaign and face the possibility of wrong messages in a
constantly changing environment. (Kotler, 2002).
Useless audience - the part of the audience, from which there was no expected
response on the advertising campaign. Due to the fact that the advertising efforts aimed
at a mass audience, this is a very significant factor. For example, one firm has
advertised its garden houses in one of the magazines for gardeners, using market
research this firmed has determined that about 500 000 readers are interested in such
buildings, and 150 000 are not. Therefore, 150 000 readers make a useless audience
from the advertiser’s point of view.
The main distribution methods of advertising messages (by cost) or means of advertising
are media, direct mail and outdoor advertising. (Kotler, 2002).
- The media includes television, radio, newspapers, magazines.
- Direct mail (direct post advertising) – is a way of bringing the advertising message in a
written form, printed or in a specially processed form by controlled distribution directly to
selected individuals.
- Outdoor advertising includes signs, posters, billboards and light installations. In
addition to this, advertisers use advertising on transport, souvenirs and promotional gifts,
advertising at points of sale, packaging, labels, inserts, movies.

TABLE1. The main means of advertising

Sources of advertising:

Printed advertising
The main means of distribution of printed advertising are newspapers, magazines,
catalogs and directories. Despite the fact that currently there are newer technologies
used for advertising such as the Internet and television, however, the print media
continue to hold the leading position in this field for the majority of goods and services. In
return, customers get the most significant part of the advertising information through the
press by means of newspaper.
а) Advertising in the newspapers
Newspapers represent a truly nationwide media. Why do people still prefer newspapers?
I think they are more inclined to trust what they have read by themselves but not what
they have heard from someone. Moreover, they are simply more convenient to study
advertising information from the newspaper, or maybe just because of the fact that the
newspaper is the most affordable means of information. At the same time, every
newspaper has its own audience. Readership is the most important for the advertising
development, because we are talking about people who read the newspaper
information, including advertising. Employees of the advertising agencies must always
know about the readers of publications in which they intend to post their advertising.
(Kotler, 1990).
However, I would like to tell more about what advertisers usually take into account when
choosing an appropriate newspaper for their advertisements and what distinguishes
newspapers from each other:
Parameters of newspapers release. The most important parameters are the frequency of
publication of the newspaper, its circulation, format and volume, availability of
appendices and additional issues.
Periodicity. Of course, the frequency of publication is taken into account by customers
and advertising distributors primarily because it regards the timing of bringing advertising
to consumers. Daily newspapers allow you to do with more 40 efficiency. Weeklies are
more suitable for advertising that needs to be re-published again.
Circulation. Circulation is a very important indicator for those who work in advertising
environment. Knowing the real circulation of the newspaper, it is easy to determine how
wide audience one can reach, calculate its cost, and estimate the effect.
Format. A professional advertiser assumes that in practice an advertising of a larger
format appears to be more effective.
Another important parameter for advertisement is the volume of the newspaper. Reliable
information about number of pages of the newspaper will certainly improve the quality of
execution of advertising, as a consequence - increase its effectiveness.
Classified and display advertising in newspapers. In accordance with the existing rules,
advertisements posted in newspapers are usually subdivided into a display and
classified. Display advertising can be located almost at any page of the newspaper or
exit in a form of appendices or special advertising inserts.
Classified advertising is the part of the newspaper advertising, which is specially sorted
out and published as a separate section of the newspaper, settled by themes - real
estate, construction materials, etc.
Important features of classified advertising are:
 Almost complete absence of the images in such advertising.

 Relatively small amount of advertising message.

 Black-and-white print, limited selection of fonts, simplified text layout.

 Placement of promotional offers in a specific order within the groups.

 One form of presentation of advertising text.

Advertising in magazines
It is easy to distinguish magazines from newspapers by their form and content. These
circumstances have affected the content and the appearance of magazine advertising. It
is also affected by some other parameters of output data of magazines. The main
parameters of the output data are periodicity, circulation, size and volume, the
availability of appendices and additional issues. Most of magazines reflect the interests
of a very narrow readership and do not have large circulation. On this basis it is
necessary to consider the thematic focus of magazines. In a colorful variety of them the
most clearly distinguished are social, political, consumer, business and professional
journals. Political magazines nowadays are not popular. Therefore the circulation of such
magazines decreases. However, there are more consumer magazines that tell about the
advantages and disadvantages of surrounding us goods and services of a wide demand.
There is a growing range of business magazines. There are magazines for certain
professions - educators, doctors, designers, etc. Special magazines tell readers about
new movies, life arrangements - the construction and repair of houses and apartments,
furniture design, etc. This group also includes car magazines and magazines about
animals. There is a type of magazine such as a catalog. The content of such magazines
entirely consists of materials containing a large amount of hidden advertising.
(Samarina, 1999).
Classified and display advertising in magazines. Display advertising increasingly
dominates in magazines. Classified advertising has a least honorable place in
magazines since it is primitively performed and can damage the face of the journal and
scare a part of readers, while display advertising presents in magazines in different
variations (on the cover page, inside the journal, in the form of appendix or insertion),
hitting the reader's imagination by its level of performance. (Samarina, 1999).
c) Outdoor advertising
Posters on billboards of outdoor advertising are usually located along busy highways
and in public places and remind consumers about companies or the products that they
already know or inform potential buyers about the places where they can make their
desired purchase or receive appropriate services.
An outdoor advertisement is usually brief and cannot fully inform about the company or
product, so the acquaintance of potential consumers with new goods through this media
is not efficient enough.
The main type of outdoor advertising is a large-sized poster. There are also electrified
lighting panels. There are boards of different sizes and shapes, manufactured on special
order.
Electronic advertising
Electronic advertising, in comparison with printed is very young. It has increasingly been
used in the last 40-60 years. Electronic advertising today has almost no spatial or
temporal constraints.
Advertising on radio
Radio still remains the most appropriate means of information for population. First of all it
is free. Secondly, radio is more accessible for listeners, in the sense that one can listen
to it at home, at work, in public transport, in the car, in the forest and in the countryside.
This fact definitely attracts advertisers.
Originally the advertiser defines the nature of information advertising policy, which he
intends to sell through a radio station. In turn, information and advertising policy on the
radio is implemented in accordance with one of two basic strategies of advertising
distribution - network or spot advertising.
Network radio advertising is distributed by broadcasting network, a group of radio
stations which are often located in different regions of the country (FM-radio). Spot
advertising is the opposite of network one, because such advertising is located not on
the network but on separate stations.

 Such advertisement requires a small period of preparation

 Low cost of production and distribution

 Speed of information

Advertising on television
Television advertising is the most popular nowadays. Television occupies a significant
part of our lives. That is why television advertising is the most powerful means of
information influence a potential consumer.
Classification of TV advertising. Modern TV advertising can be classified by three criteria
- form of execution, distribution channel and implementation strategies. (Samarina,
1999).
By form of execution:
 Identification advertising (in the form of a logo, demonstrable in the corner);

 TV ads (in the form of speech and "ticker");

 Demonstration videos (both film and animation);

 Short movies

By distribution channel:
 National television;

 Local TV
efficiency. Weeklies are more suitable for advertising that needs to be re-published
again.
Circulation. Circulation is a very important indicator for those who work in advertising
environment. Knowing the real circulation of the newspaper, it is easy to determine how
wide audience one can reach, calculate its cost, and estimate the effect.
Format. A professional advertiser assumes that in practice an advertising of a larger
format appears to be more effective.
Another important parameter for advertisement is the volume of the newspaper. Reliable
information about number of pages of the newspaper will certainly improve the quality of
execution of advertising, as a consequence - increase its effectiveness.
Classified and display advertising in newspapers. In accordance with the existing rules,
advertisements posted in newspapers are usually subdivided into a display and
classified. Display advertising can be located almost at any page of the newspaper or
exit in a form of appendices or special advertising inserts.
Classified advertising is the part of the newspaper advertising, which is specially sorted
out and published as a separate section of the newspaper, settled by themes - real
estate, construction materials, etc.
Important features of classified advertising are:
 Almost complete absence of the images in such advertising.

 Relatively small amount of advertising message.

 Black-and-white print, limited selection of fonts, simplified text layout.

 Placement of promotional offers in a specific order within the groups.

 One form of presentation of advertising text.

41
Along with the classified advertising the majority of newspapers increasingly use display
advertising. An example of such advertising can be any newspaper advertising message
that:
 Is located within the page, which is initially not made for advertising.

 Has an arbitrary size and form of presentation.

 Has free and original content.

 Carries all the information of consumer interest.

Of course, newspaper advertising has many advantages, but there are disadvantages
too. It should be noted that, first of all, quite a significant proportion of young people
aged from 18 to 24, and the population having vision problems do not tend to read the
newspapers. On the other hand, following the habit, newspapers are preferred by almost
all major consumer groups.
b) Advertising in magazines
It is easy to distinguish magazines from newspapers by their form and content. These
circumstances have affected the content and the appearance of magazine advertising. It
is also affected by some other parameters of output data of magazines. The main
parameters of the output data are periodicity, circulation, size and volume, the
availability of appendices and additional issues. Most of magazines reflect the interests
of a very narrow readership and do not have large circulation. On this basis it is
necessary to consider the thematic focus of magazines. In a colorful variety of them the
most clearly distinguished are social, political, consumer, business and professional
journals. Political magazines nowadays are not popular. Therefore the circulation of such
magazines decreases. However, there are more consumer magazines that tell about the
advantages and disadvantages of surrounding us goods and services of a wide demand.
There is a growing range of business magazines. There are magazines for certain
professions - educators, doctors, designers, etc. Special magazines tell readers about
new movies, life arrangements - the construction and repair of 42
houses and apartments, furniture design, etc. This group also includes car magazines
and magazines about animals. There is a type of magazine such as a catalog. The
content of such magazines entirely consists of materials containing a large amount of
hidden advertising. (Samarina, 1999).
Classified and display advertising in magazines. Display advertising increasingly
dominates in magazines. Classified advertising has a least honorable place in
magazines since it is primitively performed and can damage the face of the journal and
scare a part of readers, while display advertising presents in magazines in different
variations (on the cover page, inside the journal, in the form of appendix or insertion),
hitting the reader's imagination by its level of performance. (Samarina, 1999).
c) Outdoor advertising
Posters on billboards of outdoor advertising are usually located along busy highways
and in public places and remind consumers about companies or the products that they
already know or inform potential buyers about the places where they can make their
desired purchase or receive appropriate services.
An outdoor advertisement is usually brief and cannot fully inform about the company or
product, so the acquaintance of potential consumers with new goods through this media
is not efficient enough.
The main type of outdoor advertising is a large-sized poster. There are also electrified
lighting panels. There are boards of different sizes and shapes, manufactured on special
order.
Electronic advertising
Electronic advertising, in comparison with printed is very young. It has increasingly been
used in the last 40-60 years. Electronic advertising today has almost no spatial or
temporal constraints. 43
a. Advertising on radio
Radio still remains the most appropriate means of information for population. First of all it
is free. Secondly, radio is more accessible for listeners, in the sense that one can listen
to it at home, at work, in public transport, in the car, in the forest and in the countryside.
This fact definitely attracts advertisers.
Originally the advertiser defines the nature of information advertising policy, which he
intends to sell through a radio station. In turn, information and advertising policy on the
radio is implemented in accordance with one of two basic strategies of advertising
distribution - network or spot advertising.
Network radio advertising is distributed by broadcasting network, a group of radio
stations which are often located in different regions of the country (FM-radio). Spot
advertising is the opposite of network one, because such advertising is located not on
the network but on separate stations.
Radio advertising has many advantages:
 Such advertisement requires a small period of preparation

 Low cost of production and distribution

 Speed of information

However, there are also some significant disadvantages:

 Overload of radio advertising, when there is the maximum number of audience

 A complicated system of planning the advertising time

44
b. Advertising on television
Television advertising is the most popular nowadays. Television occupies a significant
part of our lives. That is why television advertising is the most powerful means of
information influence a potential consumer.
Classification of TV advertising. Modern TV advertising can be classified by three criteria
- form of execution, distribution channel and implementation strategies. (Samarina,
1999).
By form of execution:
 Identification advertising (in the form of a logo, demonstrable in the corner);

 TV ads (in the form of speech and "ticker");

 Demonstration videos (both film and animation);

 Short movies

By distribution channel:
 National television;

 Local TV;

By implementation strategies:
 Sponsorship advertising;

 Advertising, implemented on the basis of shared investments;

 Spot advertising (those "commercial breaks", which fills the space between
broadcasting sessions or wedged into their structure).
45
Specificity of TV advertising perception. Today the whole country is watching TV, but
that does not mean that all the audience is fully covered by advertising. Some people
have already learned how to skip advertising, for example, turning off the sound or
changing the channel. However, lately most channels try to put advertising
simultaneously. Properly made advertising is almost always convincing and good audio
series enhances the impression. Furthermore, it was found that the reaction of the
audience for advertisement also varies under the influence of a number of minor factors.
Among them there are:
 Variety of the advertised products;

 Time of broadcasting;

 Level of concentration of the audience's attention;

 Programming environment.

Let us come back to the popular brand “Apple” (see Chapter 4.6). Most often one can
see the Apple ad on the Internet or on television. This implies that the company primarily
uses television advertising, Internet advertising and magazine advertising by slightly
different popular theme magazines.
Recently it became very popular to make advertising in blogs. They really help to sell
products for really small money. Advertising would have cost more. Finally, the
advertising is made by blogs and by fans of a particular brand (such as fan club of Apple
computers - Theappleblog.com)
On Internet one can often meet fans of Apple, who strongly recommend, for example, using the
Macintosh. Despite the fact that more than 1.5 thousand Microsoft employees have blogs, the
Apple blogosphere is still very popular and has only a couple of unpopular blogs. The reason is
that Apple has a strong army of fans, users who like its product.

6. IMPACT OF ADVERTISING ON CONSUMER BUYING BEHAVIOR

It is obvious that advertising borrows methods of impact to improve its own efficiency.
Not only because psychologists say so, if we analyze our buying behavior by ourselves,
we will realize that we are making a purchase, obeying some impulse: we can think and
hesitate for some time but finally we buy. A good advertising helps such impulse to come
out. Thus, advertising contributes to a trance with the buyer’s manifestation of consumer
pulse. (Scott, 2010).
"All sciences are important. But for advertisement the most important is a psychology. It
gives the basic parameters for the development of advertising concepts. And
professional skills of an adman should convert these psychological concepts into all
possible advertising forms. The adman should translate complex psychological
calculations to attractive language that everyone can understand”. (Feofanov, 2004).
Psychology of advertising
The majority of buyers have many of well-known stereotypes:
 Deficit - always good and valuable. Good things cannot be too much. It is better if the
product exists in a in strictly limited quantities. One has only to organize an advertising
campaign: "There are only 10 "Porsche" cars left in the country!”. And there are already
several thousands of people signed up to buy it! These cars will be bought up in two
days. (Scott, 2010).

 Expensive product - means a good product.

 All traditional is good and worthy of purchase. Some vendors write on the bottles of
wine that it has been made since 18 ... year. Some Russian sellers are even making an
antique style to prove that their wine or vodka is really "classical”, even the label is
written in the old Russian style to emphasize the continuity of winemaking traditions.
Some advertisers simply place in the center of the label a portrait of the queen believing
that the buyer will understand that Catherine the Great has been drinking this wine by
herself, and in this way it definitely cannot be bad. (source: author)

Manipulation in advertising
The basis of any advertising technology is the manipulation of consumer behavior.
Manipulation is always done secretly, because who, being in a right mind, will agree to
be forced to perform any acts. The most important thing is that the choice we made will
be considered by us as our own reasonable and balanced decision.
There are plenty of manipulation methods, for example, such techniques as
fragmentation and localization. When, for example, the most interesting article in
magazine is divided into several parts, which are scattered around the magazineThus,
the reader is forced to look through the whole magazine, including advertising tabs. On
TV the promotional tabs always interrupt the movie at the most interesting scene, but as
the viewer tends to see the end of the story, he is forced to watch the advertising as well.
(Fennis & Stroebe, 2010).
It is very effective and easy method of manipulation, especially in political advertising,
when carefully chosen rumors diluted by unrelated and insignificant pieces of truth,
presented on a background of foggy reasoning of some "experts" from a little-known
research institutes, are issued for a reasoned analysis of the situation. (Fennis &
Stroebe, 2010).

7. THE EFFECTIVENESS OF ADVERTISING

The problem of determining the effect of advertising, i.e. the calculation of the results of
firm activities through advertising is one of the toughest in advertising practice.
The concept of advertising effectiveness contains such different ideas as economic
benefits, psychological and social effect expressed in a certain impact on the society in
whole (in particular, the influence on the formation of taste preferences of people, their
views and ideas about different moral and material values).
Effectiveness of advertising campaigns is measured by reaching the target indexes of
sales volume, market share, awareness and consumer preferences, i.e. achievement of
all planned goals and objectives. (Glushakova, 1999).
Part of these parameters can easily be determined in the process of accounting, but
biggest part requires a special registration of requests to the company, or organization of
specific marketing research. (Glushakova, 1999).
The effectiveness of advertising messages can be measured by preliminary testing or
testing after the campaign.
As all other types of researches and searches (market research, motivation, etc.), pre
and post tests are designed only to reduce the degree of uncertainty and are useful in
order to verify the accuracy of selected behaving method, advertising core and bait
(promises of benefits to the buyer). Preliminary tests are carried out on a sample of the
target audience and with the involvement of promotional material that will be used in the
subsequent campaign. (Krylov,1996).
Thus, the basic parameters of the advertising and information policy are tested:
 attention: how many people remember that they have seen the commercials;
 identification: how closely the advertisement or the product are related to brand or
advertiser;

understandability: if the information that advertisement is providing makes any sense;

 reliability: does the message include arguments so the potential client can trust it;

 «positive» interest: if the advertising is interesting enough for a potential customer that
it can lead to the purchase of the advertised product.
As a result of preliminary tests opinions, attitudes and memorability can be researched:
 tasks for ranking and defining the best advertisement out of several proposed;

 a series of direct questions;

 measurements of the opinions using rating scales ("like - not like", "for me - not for
me");

 identifying fundamental reactions using indirect interviews or projective techniques.

When testing the memorability experiment the participants are asked about what they
have seen or read, without displaying ads in question.
For comparative testing of advertising methods they should be provided with the same
information with the followed analyzes of consumers responses. (Krylov,1996).
To analyze the effectiveness of advertising, many firms conduct surveys in the places of sales.

Evaluation of Correctness of the Advertising Campaign

As an example, I will analyze promotional activities of Moscow freight forwarding

company. Two years ago they made an advertising campaign using the following
media : Auto radio, advertising magazine " Auto-rosto", the newspaper "Hand to Hand",
the directory "Golden Pages", "Address-auto" advertising on transport, the catalog
"Golden Business", the supplement to "Economics and life" reference service "Business
050", "The Market", "Goods from stock at retail and wholesale". Later during 8 months
from September to May they monitored the response of consumers.
The company spent $4500 on advertising on Auto-radio. After the first ad 6 orders were
recorded, then the number was increasing and reached its peak in November (9 orders),
then it decreased and orders ceased totally by May. The effectiveness of this advertising
campaign was extremely low.
Some other advertisements were also not so successful: "Address - auto" (6 orders),
advertising on transport (16 orders), "Goods from stock at retail and wholesale" (1
order), the catalog "Golden Business", the supplement to the "Economy and life".
(Kononenko, 1998).
Publication in the directory "Golden Pages" was more effective. The edition of the
directory is 1 million copies, periodicity - 1 time per year. The advertisement cost the
company $11,800. During the whole period of advertising from September to October
190 customers have been addressed to the firm, or 0.019% of the audience. In terms of
advertising costs, one customer cost $62. However, these costs were fully paid off by
the profit.
The most effective way to attract customers (by number of orders) was advertising in the
newspaper "Hand to Hand". The maximum number of orders came in the first two months (455
orders). In December the number of orders was 325, then it was decreasing but at the end it
stabilized at 120 - 140 orders per month. This indicates that there was a stabilization of the
demand, and an increase of advertising massaging for this audience will be ineffectually. There
were 80,000 copies issued in Moscow, the publication was three times per week and reached
960,000 people a month that cost the firm 9415 rubles for the period of the survey.

Examples of Wrong Advertising Campaigns

One can invest in the development of advertising a large amount of money and attract
the best talents to create the future masterpiece, but do not achieve the desired result.
The reason for this phenomenon is a bad choice of place, incomprehensible promise for
the audience or an idea with a questionable content.
David Ogilvy, who nowadays is called as a “father of advertising” said:
"Half of your advertising budget is wasted; you just never know which half."
The following information is a vivid example of broken, just inactive and unsuccessful
advertising which manufacturers have only wasted their time and advertiser’s money
without offering them a decent quality product which would bring a profit and recognition
of the audience.
Students from the faculty of Economics of Alaska University have collected the most
paradoxical mistakes made by U.S. companies due to inaccuracies in the translation and
misunderstanding of the realities that exist in other countries.
A well known company General Motors had a fiasco, trying to bring to the markets of
Latin America its new car Chevrolet Nova. Sooner it became clear that “No va” in
Spanish means "can not move".In the U.S. in the advertising of the beer “Coors” then
used the slogan “Turn It Loose!” (Be free). The literal translation of the slogan into
Spanish has led to a masterpiece "Suffer from diarrhea".
A perfume company Clairol has introduced in Germany its dry deodorants using the
slogan “Mist Stick”. In Germany it was found out that the word “Mist” in German slang
means "manure".
Pepsi has translated literally into Chinese its main advertising slogan “Come alive with
the Pepsi generation”. Chinese were shocked: the slogan has acquired an unexpected
sounding "Pepsi makes your ancestors rise from their graves "
Coca-Cola Company for a long time could not pick up their name for sale in China. The
reason is that Chinese pronounce the name of this drink as "Kekukela" which means
"Bite a waxy tadpole". The company was forced to move 40 thousand spellings of its
brand before it was set to "Koka Kola", which means "Happiness in the mouth."
The manufacturer of stationery Parker also tried to translate the slogan into Spanish. Its
advertising of pens in English sounds: “It won't leak in your pocket and embarrass you”.
The translator made a mistake and mixed two Spanish words. As a result, Parker
advertising campaign in Mexico was held under the slogan "It won't leak in your pocket
and make you pregnant."
American Airlines installed leather seats in their aircraft and decided to inform the
Mexican consumers about it. The English slogan sounded perfect: “Fly in Leather”.
Literally translated, this expression has acquired a different meaning: "Fly Naked".
However, not only Americans are making these kinds of mistakes. For example, Scandinavian
manufacturer Electrolux launched its vacuum cleaners on the U.S. market, using the slogan
“Nothing sucks like an Electrolux”.
CONCLUSION
Companies need not only to produce good quality products, but also to inform
consumers about their benefits, as well as to achieve clear positioning of their products
in the minds of the consumers. In order to make a new product to succeed, it must have
the desired parameters for consumers, to be unique, and consumers should have the
information about its characteristics.
To do this, companies need to use different means of promotion that is an essential part
of a series of the marketing activities, a kind of information output to the consumer. The
main way of promoting of products is the advertising.
Advertising is any paid by a specific sponsor form of non-personal presentation and
promotion of ideas, goods and services. Organizations use advertising to tell about
themselves, about their products and services, or about some of their activities for an
audience selected in a certain way and with the hope that this message will cause a
responding reaction.
The reaction may be very different. For example, the consumer generates a certain
attitude or opinion about this product or brand. This is a reaction of the level of
perception. The responding reaction, in fact, is when the consumers start buying the
advertised product or increase its consumption.
Properly organized promotion of products is very effective and allows one not only to
solve problems with marketing, but also constantly increase sales volumes. The study of
various means of promoting includes the choice and preliminary tests, as well as the
study of the effectiveness of their impact after applying.
The aim of my thesis was to analyze the effect of advertising on a product life cycle and to find
out the right ways and methods of advertising and how to apply them at every stage of the
product life cycle. In my thesis I tried as much as possible to discover the essence of advertising
and to identify particular qualities of its impact on the promotion of products and services.

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