DEPARTMENT OF BUSINESS ADMINISTRATION & RESEARCH

Shri Sant Gajanan Maharaj College of Engg., Shegaon

Advertising
Management
MBA/3204/M

Dr. L B Deshmukh
 Objective
The aim of the paper is
• To acquaint the students with concepts, techniques and
give experience in the application of concepts for
developing an effective advertising program.
• To make students aware of the roles played by
Promotion in Business and society
• To familiarize students with the working of Advertising
Agencies and preparation of effective and ethical
Advertising
 UNIT-1
• Nature, Type & Functions, Scope of
Advertising
• Role of Advertising in Market Place
• Economic, Ethical and Social Aspects of
Advertising.
 UNIT-2
• Marketing Communication
• Process of Communication& its flow
• Types of Communication Systems
• Advertising Effect Models
 UNIT-3
• Advertising Planning & Objectives
• DAGMAR Approach
• Building of Advertising Program
• Message, Headlines, Copy, Logo, Illustration,
Appeals, Layout
 UNIT-4
• Media Planning & Strategies
• Media Buying – Broadcast & Print
• Advertising Budget
– Allocation
– Approaches
– Influencing Factors
 UNIT-5
• Advertising Campaign Planning
• Advertising Organization
– Selection,
– Compensation &
– Appraisal of Advertising Agencies
• Web Advertising
 Suggested Reading
1. Aaker, David A. etc., Advertising Management, 4th ed., New Delhi, Prentice
Hall of India, 1985
2. King, Advertising: Art and Science, Macmillan India, 2003.
3. Frank Jefkins, Advertising, Macmillan India, 2003.
4. Batra, Advertising Management, Pearson Education, 5th ed., 2003.
5. Clow, Integrated Advertising, Promotion and Marketing Communications,
PHI, 2003.
6. Jefkins, Advertising, 4th ed., Pearson Education.
7. Chunawalla & Others, Advertising Theory and Practice, 7th ed.,2002,
Himalaya Publishing House.
8. Rathor, B.S., Advertising Management, 11th ed., 2003.
9. Chatterjee, B.K., Marketing Management: A Finance Emphasis, Everest
Publishing House.
10. Kulkarani M.V., Advertising Management, 4th ed., 2003.
What is Advertising?
• Advertising is nothing but a
paid form of non-personal
presentation or promotion of
ideas, goods or services by an
identified sponsor with a view
to disseminate information
concerning an idea, product or
service. The message which
is presented or disseminated
is called advertisement.
 Five Basic Components of
Advertising
• Advertising is a paid form of communication.
• The sponsor is identified.
• Advertising tries to persuade or influence the
consumer to do something.
• Advertising reaches a large audience of
potential consumers.
• The message is conveyed through many
different kinds of mass media, which are
largely non-personal.
 Four Fundamental Elements of Effective
Advertising
• Advertising strategy
– The logic and planning behind the advertisement that gives it
direction and focus.
– Develop the ad to meet specific objectives.
• Creative idea
– The ad’s central idea that grabs your attention and sticks in your
memory
• Creative execution
– The details, the photography, the writing, the acting, the setting, the
printing, and the way the product is depicted all reflect the highest
production values available to the industry.
• Creative media use
– Every message has to be delivered somehow.
– E.g. traditional media,
media outdoor and transportation media, and the
Internet.
Two Techniques to Persuade
Consumers
• Hard-sell approach – use reasons to
persuade consumers, e.g. NOW Magazine
• Soft-sell approach – build image for a
brand and touch consumers’ emotions,
e.g. Auqalis
 Four Roles of Advertising -
Marketing
• The process a business uses to satisfy
consumer needs by providing goods and
services
– Product category
– Target market
– Marketing mix
– Brand
 Four Roles of Advertising -
Communication
• Can reach a mass audience
• Introduces Products
• Explains important Changes
• Reminds and Reinforces
• Persuades
 Four Roles of Advertising
- Economic
• Moves from being informational to creating
demand
• Advertising is an objective means for
providing price-value information, thereby
creating a more rational economy
• Signaling high quality
 Four Roles of Advertising
- Societal
• Informs consumers about innovations and
issues
• Mirrors fashion and design trends
• Teaches consumers about new products
• Helps shape consumer self-image
• Perpetuates self-expression
The Functions of Advertising
• Building awareness of products and brands
• Creating a brand image
• Providing product and brand information
• Persuading people
• Providing incentives to take action
• Providing brand reminders
• Reinforcing past purchases and brand
experiences
 The Key Players

• Advertiser
• Advertising agency
• Media
• Supplier
• Target audience
 Advertiser
• Uses advertising to send out a message about
its products
• Initiates the advertising effort by identifying a
marketing problem
• Approves audience, plan and budget
• Hires the advertising agency
 Advertising Agency
• Has strategic and creative expertise, media
knowledge, workforce talent, and negotiating
abilities
• In 2002-2003 ad agency gross income was
$10.6 billion worldwide. (Advertising Age)
• Advertising Age - Agency Family Trees
 Advertising Agency
• Advertising department
– Act as a liaison between the marketing department
and the advertising agencies and other vendors.
– Agency-of-record
• In-house agency
– Perform most, and sometimes all, of the functions
of an outside advertising agency.
 Media
• The channels of communication that carry the
message to the audience
• Are also companies or huge conglomerates
• Mass media advertising can be cost effective
because the costs are spread over the large
number of people the ad reaches
 Supplier
• Assist advertisers, agencies, and the media in
creating and placing the ads
• Vendor services are often cheaper than those
in-house.
 The Target Audience
• The desired audience for the advertising message
• Data-gathering technology improves accuracy of
information about customers
• Advertisers must recognize the various target audiences
they are talking to and know as much about them as
possible
• Purchasers are not always the product users.
• Interactive technology has created a new world of
targeting and ads can now be customized to individual
consumers to some extent.
 Types of Advertising
• Brand advertising
– The most visible type of advertising
– Focusing on the development of a long-term brand
identity and image.
• Institutional advertising
– It is also called corporation advertising or image
advertising.
– Focusing on establishing a corporate identity or
winning the public over to the organization’s point
of view.
 Types of Advertising
• Retail or local advertising
– Focusing on retailers or manufacturers that sell
their merchandise in a certain geographic area.
– Objectives: stimulating store traffic and creating a
distinctive image for the retailer.
• Direct-response advertising
– Trying to stimulate a sale directly.
– The consumer can respond by telephone, mail or
the Internet, and the product is delivered directly to
the consumer by mail or some other carrier.
 Types of Advertising
• Business-to-business advertising
– B2B advertising is sent from one business to
another.
– Advertisers place most business advertising in
professional publications or journals.
 Types of Advertising
• Nonprofit advertising
– Not-for-profit organizations advertise for customers,
members, and volunteers, as well as for donations and
other forms of program participation.
• Public service advertising
– Communicating a message on behalf of some good cause,
e.g. stopping drunk driving or preventing child abuse.
– These advertisements are usually created by advertising
professionals free of charge and the media often donate the
necessary space and time.
The Evolution of Advertising
• Age of print (1441~1850)
• Industrial revolution and emergence of
consumer society (1851~1900)
• Modern advertising era (1901~1915)
• Agency era (1916~1960)
• Creative era (1961~1980)
• Accountability era (1981~)
 Age of Print (1441~1850)
• Ads were primarily like classified advertising
in format and print media carried them.
• Objective: delivering information.
• Primary medium: newspaper.
Benjamin Franklin
Industrial Revolution and Emergence of
Consumer Society (1851~1900)

• Advertising grew in importance and size

because of numerous social and technological
developments.
• Purpose: devising an effective, efficient
communication system that could sell products
to a widely marketplace.
• National media developed as the country’s
transportation system grew.
 Modern Advertising Era
(1901~1915)
• The format of advertisement was getting to be
similar to the modern one.
• The emergence of advertising agency with
simple service
 Agency Era (1916~1960) &
Creative Era (1961~1980)
• Agency era: the advertising industry grew and
organizations specializing in modern
professional advertising developed.
• Creative era: showcasing an emphasis on new
creative practices to compete in a crowded
marketplace and build demand for brands.
 Accountability Era
(1981~)
• The beginning of the industry-wide focus on
effectiveness
• Clients wanted ads that produced sales so the
emphasis was on research and measurement.
The Development of Advertising
The Development of Advertising
The Development of Advertising
 The Current Advertising
Scene
• Interaction
• Integrated marketing communication (IMC)
• Globalization
 Interaction
• Electronic media, such as the Internet and
wireless communication, are changing the
media landscape
• New media are more personal and interactive
 Integrated Marketing
Communication
• IMC is the practice of unifying all marketing
communication tools so they send a consistent,
persuasive message promoting company goals.
 Globalization
• In the early 1990s the trade barriers throughout
much of Europe came down, making it the
largest contiguous market in the world.
• Eastern Europe, India, Russia, and China have
at least partially opened their markets to
international marketing.
• The advertising question is whether to practice
global or local advertising.
 Objective / Functions of
Advertising

• Creation of Demand
• Facing the Competition
• Creating or Enhancing Goodwill
• Informing the Changes to the Customers
• Neutralizing Competitor’s Advertising
• Barring New Entrants
Benefits or Importance of Advertisement
Benefits to Manufacturers
• It increases sales volume by creating attraction towards
the product.
• It helps easy introduction of new products into the
markets by the same manufacturer.
• It helps to create an image and reputation not only of
the products but also of the producer or advertiser. In
this way, it creates goodwill for the manufacturer.
• Retail price, maintenance is also possible by advertising
where price appeal is the promotional strategy.
• It helps to establish a direct contact between
manufacturers and consumers.
 Benefits to Manufacturers
• It leads to smoothen the demand of the product. It
saves the product from seasonal fluctuations by
discovering new and new usage of the product.
• It creates a highly responsive market and thereby
quickens the turnover that results in lower
inventory.
• Selling cost per unit is reduced because of
increased sale volume. Consequently, product
overheads are also reduced due to mass
production and sale.
 Benefits to Manufacturers
• Advertising gives the employees a feeling of
pride in their jobs and to be in the service of
such a concern of repute. It, thus inspires the
executives and worker to improve their
efficiency.
• Advertising is necessary to meet the
competition in the market and to survive.
Benefits to Wholesalers and Retailers
• Easy sale of the products is possible since consumers are
aware of the product and its quality.
• It increases the rate of the turn-over of the stock because
demand is already created by advertisement.
• It supplements the selling activities.
• The reputation created is shared by the wholesalers and
retailers alike because they need not spend anything for
the advertising of already a well advertised product.
• It ensures more economical selling because selling
overheads are reduced.
• It enables them to have product information.
 Benefits to Consumers
• Advertising stresses quality and very often prices.
This forms an indirect guarantee to the consumers of
the quality and price. Further large scale production
assumed by advertising enables the seller to seller
product at a lower cost.
• Advertising helps in eliminating the middlemen by
establishing direct contacts between producers and
consumers. It results in cheaper goods.
• It helps them to know where and when the products
are available. This reduces their shopping time.
 Benefits to Consumers
• It provides an opportunity to the customers to
compare the merits and demerits of various
substitute products.
• This is perhaps the only medium through which
consumers could know the varied and new uses
of the product.
• Modern advertisements are highly informative.
 Benefits to Salesmen
• Salesmanship is incomplete without advertising.
Advertising serves as the forerunner of a
salesman in the distribution of goods. Sales is
benefited the advertisement in following ways:
• Introducing the product becomes quite easy and
convenient because manufacturer has already
advertised the goods informing the consumers
about the product and its quality.
• Advertising prepares necessary ground for a
salesman to begin his work effectively. Hence
sales efforts are reduced.
 Benefits to Salesmen
• The contact established with the customer by a
salesman is made permanent through effective
advertising because a customer is assumed of
the quality and price of the product.
• The salesman can weigh the effectiveness of
advertising when he makes direct contact with
the consumers.
 Benefits to Community or Society
• Advertising, in general, is educative in nature. In the words
of the late President Roosevelt of the U.S.A., “Advertising
brings to the greatest number of people actual knowledge
concerning useful things: it is essentially a form of education
and the progress of civilization depends on education.”
• Advertising leads to a large-scale production creating more
employment opportunities to the public in various jobs
directly or indirectly.
• It initiates a process of creating more wants and their
satisfaction higher standard of living. For example,
advertising has made more popular and universal the uses of
such inventions as the automobiles, radios, and various
household appliances.
 Benefits to Community or Society
• Newspapers would not have become so popular and so
cheap if there had been no advertisements. The cheap
production of newspapers is possible only through the
publication of advertisements in them. It sustains the
press.
• It assures employment opportunities for the professional
men and artist.
• Advertising does provide a glimpse of a country’s way of
life. It is, in fact, a running commentary on the way of
living and the behavior of the people and is also an
indicator of some of the future in this regard.
Questions & Doubts