notes on advertising mgmt

7/23/2019 Notes on Advertising Mgmt

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SALES AND ADVERTISING MANAGEMENT

SALES MANAGEMENT

NATURE

Sales management refers to the administration of the personal selling component of a company's

marketing program. It includes the planning, implementation, and control of sales programs, as

well as recruiting, training, motivating, and evaluating members of the sales force. In a small

business, these various functions may be performed by the owner or by a specialist called a sales

manager. The fundamental role of the sales manager is to develop and administer a selling

program that effectively contributes to the organization's goals. The sales manager for a small

business would likely decide how many salespeople to employ, how best to select and train

them, what sort of compensation and incentives to use to motivate them, what type of

presentation they should make, and how the sales function should be structured for maximumcontact with customers. Sales management is just one facet of a company's overall marketing

mix, which encompasses strategies related to the "four Ps": products, pricing, promotion, and

place (distribution). Objectives related to promotion are achieved through three supporting

functions:

1. advertising, which includes direct mail, radio, television, and print advertisements,

among other media;

2. sales promotion, which includes tools such as coupons, rebates, contests, and samples;

and

3. personal selling, which is the domain of the sales manager.

The 5 sales tips for success are an acrostic for S.A.L.E.S:

S - Skill A - Attitude L - Leverage E - Energy S - Success

SCOPE OF SALES MANAGEMENT

Although the role of sales managers is multidisciplinary in scope, their primary responsibilities

are:

1. Manage marketing activities (4 Ps)

2. Marketing research3. setting goals for a sales force;

4. planning, budgeting, and organizing a program to achieve those goals; implementing the

program; and

5. controlling and evaluating the results. Even when a sales force is already in place, the

sales manager will likely view these responsibilities as an ongoing process necessary to

adapt to both internal and external changes.


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FUNCTIONS OF SALES MANAGEMENT

1. Hire, fire, and train sales staff - selection, maintenance and training of the sales staff is

key to any company's success. Sales managers must hire sales staff the can competentlymanage the sales process and meet or exceed quota. The Sales Manager must train and

motivate the staff to perform. The Sales Manager must also replace underreporting sales

staff. Ongoing training is key to understanding the company sales process, sales value

propositions and product sets.

2. Develop and manage sales territories and quotas, and manage any conflicts that arise as a

result of customer, territory, quota or commission questions

3. Develop and implement sales compensation plans

4. Create, document and train in the company sales process

5. Interact with all departments that contribute to product delivery and support, customer

service and finance.6. Prepare and manage a sales budget in line with company financial objectives.

7. Coach sales staff to maximize their professional performance

8. Plan and facilitate regular sales meetings to keep staff and rest of company informed,

energized and motivated.

The role of sales management varies from company to company, but the points above should

be addressed by every senior sales manager.

PROCESS OF SALES MANAGEMENT

There are major four steps in sales management

Although the role of sales management professionals is multidisciplinary, their primary

responsibilities are: (1) setting goals for a sales-force; (2) planning, budgeting, and organizing a

program to achieve those goals; (3) implementing the program; and (4) controlling and

evaluating the results. Even when a sales force is already in place, the sales manager will likely

view these responsibilities as an ongoing process necessary to adapt to both internal and external

changes.

GOAL SETTINGThe overall goals of the sales force manager are essentially mandated by the marketing mix. The

company coordinates objectives between the major components of the mix within the context of

internal constraints, such as available capital and production capacity. The sales force manager,

however, may play an important role in developing the overall marketing mix strategies. For

example, the sales manager may be in the best position to determine the specific needs of

customers and to discern the potential of new and existing markets.


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One of the most critical duties of the sales manager is to estimate the market potential and sales

potential of the company's offerings, and then to make realistic forecasts of sales. Market

potential is the total expected sales of a given product or service for the entire industry in a

specific market over a stated period of time. Sales potential refers to the share of a market

potential that an individual company can reasonably expect to achieve. A sales forecast is an

estimate of sales (in dollars or product units) that an individual firm expects to make during a

specified time period, in a stated market, and under a proposed marketing plan. Estimations of

sales and market potential are often used to set major organizational objectives related to

production, marketing, distribution, and other corporate functions, as well as to assist the sales

manager in planning and implementing the overall sales strategy. Numerous sales forecasting

tools and techniques, many of which are quite advanced, are available to help the sales manager

determine potential and make forecasts. Major external factors influencing sales and market

potential include: industry conditions, such as stage of maturity; market conditions and

expectations; general business and economic conditions; and regulatory environment.

Planning, Budgeting, and OrganizingAfter determining goals, the sales manager of a small business must develop a strategy to attainthem. A very basic decision is whether to hire a sales force or contract with independent sellingagents or manufacturers' representatives outside of the organization. The latter strategyeliminates costs associated with hiring, training, and supervising workers, and it takes advantageof sales channels that have already been established by the independent representatives. On theother hand, maintaining an internal sales force allows the manager to exert more control over thesalespeople and to ensure that they are trained properly. Furthermore, establishing an internalsale force provides the opportunity to hire inexperienced representatives at a very low cost.This determination typically entails a compromise between the number of people needed toadequately service all potential customers and the resources available to the company. Onetechnique sometimes used to determine sales force size is the "work load" strategy, whereby thesum of existing and potential customers is multiplied by the ideal number of calls per customer.After determining the composition of the sales force, the sales manager creates a budget, or arecord of planned expenses that is (usually) prepared annually. The budget helps the managerdecide how much money will be spent on personal selling and how that money will be allocatedwithin the sales force. Major budgetary items include: sales force salaries, commissions, andbonuses; travel expenses; sales materials; training; clerical services; and office rent and utilities.Many budgets are prepared by simply reviewing the previous year's budget and then makingadjustments.

Implementing

After setting goals and establishing a plan for sales activities, the next step for the sales manageris to implement the strategy. Implementation requires the sales manager to make decisionsrelated to staffing, designing territories, and allocating sales efforts. Staffingthe mostsignificant of these three responsibilitiesencompasses recruiting, training, compensating, andmotivating salespeople.

Recruiting The first step in recruiting salespeople involves analyzing the positions to be filled.This is often accomplished by sending an observer into the field, who records the amount of time


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a salesperson must spend talking to customers, traveling, attending meetings, and doingpaperwork. The observer then reports the findings to the sales manager, who uses theinformation to draft a detailed job description. The observer might also report on thecharacteristics and needs of the buyers, since it can be important for salespeople to share thesecharacteristics.

The manager may seek candidates through advertising, college recruiting, company sources, andemployment agencies. Candidates are typically evaluated through personality tests, interviews,

written applications, and background checks. Research has shown that the two most important

personality traits that salespeople can possess are empathy, which helps them relate to customers,

and drive, which motivates them to satisfy personal needs for accomplishment. Other important

traits include maturity, appearance, communication skills, and technical knowledge related to the

product or industry. Negative traits include fear of rejection, distaste for travel, self-

consciousness, and interest in artistic or creative originality.

Training After recruiting a suitable sales force, the manager must determine how much and

what type of training to provide. Most sales training emphasizes product, company, and industryknowledge. Only about 25 percent of the average company training program, in fact, addresses

personal selling techniques. Because of the high cost, many small businesses try to limit the

amount of training they provide. The average cost of training a person to sell industrial products,

for example, commonly exceeds $30,000. Sales managers can achieve many benefits with

competent training programs, however. For instance, research indicates that training reduces

employee turnover, thereby lowering the effective cost of hiring new workers. Good training can

also improve customer relations, increase employee morale, and boost sales. Common training

methods include lectures, case studies, role playing, demonstrations, on-the-job training, and

self-study courses. Ideally, training should be an ongoing process that continually reinforces the

company's goals.

Compensation After the sales force is in place, the manager must devise a means of

compensating individuals. The ideal system of compensation reaches a balance between the

needs of the person (income, recognition, prestige, etc.) and the goals of the company

(controlling costs, boosting market share, increasing cash flow, etc.), so that a salesperson may

achieve both through the same means. Most approaches to sales force compensation utilize a

combination of salary and commission or salary and bonus. Salary gives a sales manager added

control over the salesperson's activities, while commission provides the salesperson with greater

motivation to sell.

Although financial rewards are the primary means of motivating workers, most sales

organizations also employ other motivational techniques. Good sales managers recognize that

salespeople have needs other than the basic ones satisfied by money. For example, they want to

feel like they are part of a winning team, that their jobs are secure, and that their efforts and

contributions to the organization are recognized. Methods of meeting those needs include

contests, vacations, and other performance-based prizes, in addition to self-improvement benefits


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such as tuition for graduate school. Another tool managers commonly use to stimulate their

salespeople is quotas. Quotas, which can be set for factors such as the number of calls made per

day, expenses consumed per month, or the number of new customers added annually, give

salespeople a standard against which they can measure success.

Designing Territories And Allocating Sales Efforts In addition to recruiting, training, andmotivating a sales force to achieve the company's goals, sales managers at most small businessesmust decide how to designate sales territories and allocate the efforts of the sales team.Territories are geographic areas assigned to individual salespeople. The advantages ofestablishing territories are that they improve coverage of the market, reduce wasteful overlap ofsales efforts, and allow each salesperson to define personal responsibility and judge individualsuccess. However, many types of businesses, such as real estate and insurance companies, do notuse territories.Allocating people to different territories is an important sales management task. Typically, thetop few territories produce a disproportionately high sales volume. This occurs becausemanagers usually create smaller areas for trainees, medium-sized territories for more experienced

team members, and larger areas for senior sellers.Controlling and Evaluating

After the sales plan has been implemented, the sales manager's responsibility becomes

controlling and evaluating the program. During this stage, the sales manager compares the

original goals and objectives with the actual accomplishments of the sales force. The

performance of each individual is compared with goals or quotas, looking at elements such as

expenses, sales volume, customer satisfaction, and cash flow. According to Burstiner, each

salesperson should be evaluated using both subjective (i.e., product knowledge, familiarity with

competition, work habits) and objective (i.e., number of orders compared to number of calls,

number of new accounts landed) criteria.

DIFFERENCE BETWEEN MARKETING AND SALES MANAGEMENT

MARKETING SALES

1. determine future needs and has astrategy in place to meet those needsfor the long term relationship.

1. makes customer demand match theproducts the company currently offers.

2. One to many process Usually one to one process

3. fulfill customer's wants and needsthrough products and/or services the

company can offer.

fulfill sales volume objectives

4. Longer term Short term

5. Identifying customer needs (research),creating products to meet those needs,promotions to advertise said products.

Once a product has been created for a customerneed, persuade the customer to purchase theproduct to fulfill her needs

6. Pull strategy Push strategy

7. Marketing is a wider concept Sales is a narrower concept


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FUNCTIONS /RESPONSIBILITES OF SALES PERSON

Sales position

Delivery a product Order taker

Build goodwill

Demand creator

Actively seek orders and use creative and problem solving selling

Solve customer problems

Customer satisfaction

PERSONAL SELLING

Personal selling is a promotional method in which one party (e.g., salesperson) uses skills and

techniques for building personal relationships with another party (e.g., those involved in a

purchase decision) that results in both parties obtaining value. In most cases the "value" for the

salesperson is realized through the financial rewards of the sale while the customers "value" is

realized from the benefits obtained by consuming the product. However, getting a customer to

purchase a product is not always the objective of personal selling. For instance, selling may be

used for the purpose of simply delivering information. Because selling involves personal contact,

this promotional method often occurs through face-to-face meetings or via a telephone

conversation, though newer technologies allow contact to take place over the Internet including

using video conferencing or text messaging (e.g., online chat).

Personal selling is also known as Direct Selling

Most important tool of sales promotion

Directly persuade the prospect for buying the product &services

It is oral presentation of goods and services

Two way communication between buyers and sellers

Identifying the ability of sales person.

It enhances customers confidence in the seller

It promotes long term business relations through personal intimacy

It provides a human touch to business transactions

It helps facilitate the seller to understand each customers need and performances more

clearly

It helps satisfy a customer by modifying the product as per the customers choice and

preference.


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PROCESS OR STEPS IN EFFECTIVE PERSONAL SELLING

Throughout modern selling history, one of the oldest and most widely

accepted paradigms in the sales discipline is commonly referred to as the Seven steps of

selling. These seven steps present the typical sales scenario as composed of the following:

(1) Prospecting,

(2) Pre-approach,

(3) Approach,

(4) Presentation,

(5) Overcoming objections,

(6) Close, and

(7) Follow-up.

1. Prospecting and Qualifying

Prospecting is the method by which salespeople search for new customers and potential

customers. One obvious reason for prospecting is to expand the customer base, which is

important because most sales organizations lose customers every year. Sales textbooks typically

discuss methods of prospecting, such as referrals, networking, bird-dogging, cold canvassing,

and numerous others. Prospecting usually includes a discussion of qualifying the prospect and

thus developing some type of screening procedure. Traditionally, salespeople were expected to

find their own prospects. Prospecting was an essential and large part of the selling job, and for

many salespeople, this was the most difficult and tedious part of the jobin fact, it is an aspect

of sales jobs that has chased off many would-be salespeople.

Up to 20% of a firm's customer base can be lost for reasons such as transfer, death, retirement,

takeovers, dissatisfaction with the company and competition. A steadily growing list of qualified

prospects is important for reaching the sales targets.

Qualifying a prospect: A lead is a name on a list. It only becomes a prospect if it is determined

that the person or company can benefit from the service or product offered. A qualified prospect

has a need, can benefit from the product and has the authority to make the decision.


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2. Pre-approach

The pre-approach step includes all post prospecting activities prior to the actual visit with

a prospect or customer. The pre-approach step occurs on virtually every sales call. Sellers

are doing their research on the prospect or customer, familiarizing themselves with the

customers needs, reviewing previous correspondence, and pulling together any other

new and relevant material that might be appropriate for bringing to the sales call itself.

Preapproach activities also include talking with gatekeepers, doing homework on the

customer (individual and organization), mentally preparing for the approach and

presentation (rehearsal), and entering the customers office.

3. Approach

The approach usually takes the first minute or minutes of a sale. It consists of the

strategies and tactics employed by salespeople when gaining an audience and

establishing initial rapport with the customer. The approach includes opening small talk,

the handshake, eye contact, and generally making a good initial impression. Most salestextbooks include a variety of different approaches that can be used, including the

introductory approach, the assessment approach, the product approach, the consumer-

benefit approach, the referral approach, the consultative approach, and many others.

4. Presentation

The presentation is the main body of the sales call and should occur after the salesperson

has predetermined the needs of the customer. This step can be one presentation or

multiple presentations over a period of time. Goals for the sales presentation will vary.

First-time buyers must get sufficient information to adequately understand the products

benefits, which may be facilitated by building the presentation around a productdemonstration. Selling points and attributes are visualized and built around a call agenda

or sales proposal. This step can be complex, and preparation is essential. Sales textbooks

and sales training programs spend substantial time on this step of the selling process.

5. Overcoming objections

Objections can be broadly defined as customer questions and hesitancies about the

product or company. Salespeople should expect that objections will be encountered in

every sales presentation. A number of reasons exist for objections, and despite the fact

that objections can delay the sales process, for the most part they should be perceived in a

positive sense as useful. This is because by revealing objections, true buyer needs can be

uncovered. In the early days of selling, sales objections were viewed mostly as a hurdle

that salespeople had to overcome to get to the ultimate sale. In more modern times, a true

objection might be viewed as a sign not to pursue the sale further because a need may not

be met with a given product. Most sales textbooks provide a discussion of differing types

of objections and procedures for how the salesperson can overcome them.


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6. Close

The close is defined as the successful completion of the sales presentation culminating in

a commitment to buy the good or service. Once any objections have been successfully

overcome, the salesperson must actually ask for the business and thus begin the process

of closing the sale. This step traditionally has been trumpeted as difficult for many

salespeople (especially new salespeople) because many simply do not ask for the order. A

myriad of closing tactics are available, some of which are quite colorful, that are typically

discussed in sales textbooks and sales training sessions.

7. Follow-up

As mentioned earlier, the follow-up step is a relatively newer addition to the steps of

selling in which the salesperson does not assume the sale is over with the acceptance of

an order. Rather, much work begins after the sale to make sure the customer is happy

with the product/ service and that everything that was promised is being delivered.Examples that are frequently given include a thank-you letter to the customer or a follow-

up phone call to ensure the customer is happy.

OBJECTIVES OF PERSONAL SELLING

Personal selling is used to meet the five objectives of promotion in the following ways:1.

Building Product AwarenessA common task of salespeople, especially when selling

in business markets, is to educate customers on new product offerings. In fact,salespeople serve a major role at industry trades shows (see the Sales Promotion tutorial)where they discuss products with show attendees. But building awareness using personalselling is also important in consumer markets. As we will discuss, the advent ofcontrolled word-of-mouth marketing is leading to personal selling becoming a usefulmechanism for introducing consumers to new products.

2. Creating Interest The fact that personal selling involves person-to-personcommunication makes it a natural method for getting customers to experience a productfor the first time. In fact, creating interest goes hand-in-hand with building productawareness as sales professionals can often accomplish both objectives during the firstencounter with a potential customer.

3. Providing Information When salespeople engage customers a large part of theconversation focuses on product information. Marketing organizations provide their salesstaff with large amounts of sales support including brochures, research reports, computerprograms and many other forms of informational material.

4. Stimulating Demand By far, the most important objective of personal selling is toconvince customers to make a purchase. In The Selling Process tutorial we will see how


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salespeople accomplish this when we offer detailed coverage of the selling process usedto gain customer orders.

THEORY OF SELLING

1. AIDAS theory of selling

The AIDAS theory of selling is one of the widest known theories and is the basis for trainingmaterials across numerous organizations. AIDAS stands for Attention, Interest, Desire, Action,Satisfaction. The AIDAS theory simply states that a prospect goes through five different stagesbefore finally responding satisfactorily to our product. thus he should be led comfortably throughall five stages.Attention -Gaining attention is a skill and just like any skill, gaining attention can be improvedupon with practice. A common phrase applicable over here is First impression is last

impression. The initial attempt of the sales person must be to put the customer completely atease. Casual conversation is one of the best openers after which the sales person can gain

customer attention by leading him onto the sale.Interest -Once you have gained attention, it is very important to maintain interest. Some salespeople are very good in the opening but as the technicalities take over, they becomeuncomfortable while explaining the product. Whereas others who are strong in the productdepartment might open bluntly but create interest in the second stage. Maintaining interest is acrucial part of the sales process and hence is included in the AIDAS theory.Desire -Have you seen the commercials wherein you just have to get out of your house and getthe product? Perhaps a car, an ice cream or a house. The same has to be done by the sales personin personal selling. He has to create enough desire in the customers mind such that heimmediately has to buy the product. Imagine an aqua guard sales man or a Tupper ware salesperson. They highlight the product in such a manner that you might be thinking Why didnt i

buy this product before. Thus kindling that desire becomes an integral part of the AIDASselling theory. Read more on how to create desire for the productAction - Although there may be desire for the product, the customer might not act on it. Hemight want to buy the product but he might NOT buy it. In such cases the customer needs to beinduced. There are various ways to induce the customer such that he buys the product. It isimportant for the sales person to understand whether to directly induce the customer or whetherto push subtle reminders that you are there for a sales call. Both methods work, but you need toknow your customer.Satisfaction -What would you do after the customer has given the order? Will you stand up,Point at him and shout Fooled ya. I dont think so. The customer has just parted with his

money. Just like you part your money and expect good service, he expects the same too. So even

after he has bought the product, you need to reassure the customer that he has made the rightdecision. The product is good for the customer and you only presented the product. It was hisdecision and he is right about it. These small cues post the sales process really give confidence tothe customer and he then looks forward to your product rather than thinking whether or not hehas made the right decision.

For example-

Securing attentionTelling about RO water purifier and its quality to purify water


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Gaining Interest by showing flipcharts, presentations and brochures and also focusing onpurity and health of the family members.Kindling Desireto make them use the RO water purifier for their useInduction consumer purchase the product due to its effectiveness in providing pure and germfree water

Building Satisfactionappreciate the customer by saying that he has made the good purchaseby relating its health factor .

2. RIGHT SET OF CIRCUMSTANCES THEORY

This theory sometimes is also called Situation Response theory, had its psychological origin inexperiments with animals and holds that the particular circumstances prevailing in a givenselling situation cause the prospect to respond in a predictable way. If the sales person succeedsin securing the attention and gaining the interest of the prospect, and if the salesperson presentsthe proper stimuli or appeals, the desired response will result.

Furthermore the more skilled the salesperson is in handling the set of circumstances, the morepredictable is the response. The set of circumstances includes factors external and internal to theprospect. To use a simplified example, Suppose a salesperson sales to the prospect, Lets go out

for lunch. The salesperson and the remarks are the external factors. But at least 4 factorsinternal to the prospect affect the response. These are the presence or the absence of desires(1)First to go out for lunch(2)To have it now(3)To go out(4)To go out with salespersonProponents of this theory tend to stress external factors and at the expense of internal factors.They seek selling appeals that evoke desired responses. Sales personnel who try to apply thetheory experience difficulty traceable to internal factors in many selling situations, but theinternal factors are not readily manipulated. This is a seller oriented theory: it stresses theimportance of the salesperson controlling the situation, does not handle the problem ofinfluencing the factors internal to the prospect, and fails to assign appropriate weight to theresponse side of the situation response interaction.

For example

Suppose you provide a Paying guest accommodation as well as provide Tiffin services to thoseliving in PG as well as to others and charge for it.

3. Buying Formula theory of selling :This theory emphasizes the buyers side of the buyers seller dyad. The buyers need or problemreceives major attention and the sales person role is to help buyer find solutions. This theorypurports: what thinking process goes on mind that causes the decision to buy or not to buy?

The buying formula is a schematic representation of a group of responses arranged in apsychological sequence .The formula theory emphasizes the prospects responses anddeemphasizes the external factors ,on the assumption that the salesperson, being naturallyconscious of the external factors will not overlook them.The mental involved in the purchase are


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Need Solution Purchase

Because the outcome of the purchase affects the chance that a continuing relation will developbetween the buyer and the seller and because nearly all sales organizations are interested in

continuing relationship. It is necessary to add a fourth element the fourth elements then are

Need solution purchase satisfactionWhenever a need is felt or problem recognized, the individual is conscious of a deficiency ofsatisfaction. When definite buying habit has been established the buying formula is Need productservice and or trade name purchase satisfaction dissatisfaction emphasized.

MARKETING COMMUNICATIONS AND ELEMENTS OF COMMUNICATION MIX

Marketing communications is a subset of the overall subject area known as marketing. Marketinghas a marketing mix that is made of price, place, promotion, product (know as the four P's), thatincludes people, processes and physical evidence, when marketing services (known as the sevenP's).How does marketing communications fit in? Marketing communications is 'promotion' from themarketing mix.Why are marketing communications 'integrated?' Integrated means combine or amalgamate, orput simply the jigsaw pieces that together make a complete picture. This is so that a singlemessage is conveyed by all marketing communications. Different messages confuse yourcustomers and damage brands. So if a TV advert carries a particular logo, images and message,then all newspaper adverts and point-of-sale materials should carry the same logo, images ormessage, or one that fits the same theme. Coca-Cola uses its familiar red and white logos andretains themes of togetherness and enjoyment throughout its marketing communications.

Marketing communications has a mix. Elements of the mix are blended in different quantities ina campaign. The marketing communications mix includes many different elements, and thefollowing list is by no means conclusive. It is recognised that there is some cross over betweenindividual elements (e.g. Is donating computers to schools, by asking shoppers to collect


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vouchers, public relations or sales promotion?) Here are the key of the marketingcommunications mix.

The Marketing Communications Mix.

Personal Selling - For eg:- Salesman

Sales PromotionVarious schemes like free coupons, gifts Public Relations (and publicity).

Direct Marketing.

Trade Fairs and Exhibitions - For eg:- Numaish in Hyderabad

Advertising (above and below the line).

Sponsorship.

PackagingFor eg :- Dairy milk

Merchandising (and point-of-sale).

EMarketing (and Internet promotions).

Brands.

Integrated Marketing CommunicationsIntegrated Marketing Communications (IMC) is the coordination and integration of all marketingcommunication tools, avenues, functions and sources within a company into a seamless programthat maximizes the impact on consumers and other end users at a minimal cost.

Process for managing customer relationships that drive brand value.

Its foundation is communication

Cross-functional process for creating and nourishing profitable relationships withcustomers other stakeholders by strategically controlling or influencing all messages sentto these groups and encouraging data-driven, purposeful dialog with them.

Integrated marketing communications (IMC) is the coordination and integration of allmarketing communication tools, avenues, and sources within a company into a seamlessprogram that maximizes the impact on consumers and other end users at a minimal cost.This integration affects all firm's business-to-business, marketing channel, customer-focused, and interally directed communications

ADVERTISING : The activity of attracting public attention to a product or business, as by paidannouncements in the print, broadcast, or electronic media.

One definition of advertising is: "Advertising is the nonpersonal communication of informationusually paid for and usually persuasive in nature about products, services or ideas by identifiedsponsors through the various media."

NONPERSONAL First, what is "nonpersonal"? There are two basic ways to sell anything:

personally and nonpersonally. Personal selling requires the seller and the buyer to get together.

There are advantages and disadvantages to this. The first advantage is time: the seller has time to


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discuss in detail everything about the product. The buyer has time to ask questions, get answers,

and examine evidence for or against purchase.

A second advantage of personal selling is that the seller can see you. the person selling to. She

can see your face; see how the sales message is getting across. If you yawn or your eyes shift

away, you're obviously bored, and the seller can change approach. She can also see if you'rehooked, see what features or benefits have your attention, and emphasize them to close the sale.

Finally, the seller can easily locate potential buyers. If you enter a store, you probably have an

interest in something that store sells. Street vendors and door-to-door sellers can simply shout at

possibilities, like the Hyde Park (London) vendors who call out, "I say there, Guv'nor, can you

use a set of these dishes?", or knock at the door and start their spiel with an attention grabber.

From there on they fit their message to the individual customer, taking all the time a customer is

willing to give them.

Disadvantages do exist. Personal selling is, naturally enough, expensive, since it is labor-intensive and deals with only one buyer at a time. Just imagine trying to sell chewing gum orguitar picks one-on-one; it would cost a dollar a stick or pick.In addition, its advantage of time is also a disadvantage. Personal selling is time-consuming.Selling a stereo or a car can take days, and major computer and airplane sales can take years.Nonetheless, although personal selling results in more rejections than sales, and can be nerve-

racking, frustrating and ego destroying for the salesperson, when the salesperson is good it is

more directed and successful than advertising.

From the above, it appears that personal selling is much better than advertising, which isnonpersonal. This is true. Advertising has none of the advantages of personal selling: there is

very little time in which to present the sales message, there is no way to know just who thecustomer is or how rhe is responding to the message, the message cannot be changed in mid-course to suit the customer's reactions.Then why bother with advertising? Because its advantages exactly replace the disadvantages ofpersonal selling, and can emulate some of the advantages. First let's look at the latter.First, advertising has, comparatively speaking, all the time in the world. Unlike personal selling,the sales message and its presentation does not have to be created on the spot with the customerwatching. It can be created in as many ways as the writer can conceive, be rewritten, tested,modified, injected with every trick and appeal known to affect consumers. (Some of the latter isthe content of this book.)Second, although advertisers may not see the individual customer, nor be able to modify the

sales message according to that individual's reactions at the time, it does have research aboutcustomers. The research can identify potential customers, find what message elements might

influence them, and figure out how best to get that message to them. Although the research is

meaningless when applied to any particular individual, it is effective when applied to large

groups of customers.

Third, and perhaps of most importance, advertising can be far cheaper per potential customerthan personal selling. Personal selling is extremely labor-intensive, dealing with one customer at


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a time. Advertising deals with hundreds, thousands, or millions of customers at a time, reducingthe cost per customer to mere pennies. In fact, advertising costs are determined in part using aformula to determine, not cost per potential customer, but cost per thousand potential customers.Thus, it appears that advertising is a good idea as a sales tool. For small ticket items, such as

chewing gum and guitar picks, advertising is cost effective to do the entire selling job. For large

ticket items, such as cars and computers, advertising can do a large part of the selling job, andpersonal selling is used to complete and close the sale.

Advertising is nonpersonal, but effective.COMMUNICATION Communication means not only speech or pictures, but any way oneperson can pass information, ideas or feelings to another. Thus communication uses all of thesenses: smell, touch, taste, sound and sight. Of the five, only two are really useful in advertising -- sound and sight.INFORMATION Information is defined as knowledge, facts or news. However, you should

bear in mind that one person's information is another person's scam, particularly when

advertisers talk about their products.

Information comes in many forms. It can be complete or incomplete. It can be biased or

deceptive. Complete information is telling someone everything there is to know about

something: what it is, what it looks like, how it works, what its benefits and drawbacks are. Thus,

for advertising, information must of necessity be incomplete, not discussing everything there is

to know about the subject. In advertising, what appears is everything the writer thinks the

customer needs to know about the product in order to make a decision about the product. That

information will generally be about how the product can benefit the customer.

"Sometimes the consumer is provided not with information he wants but only with the

information the seller wants him to have. Sellers, for instance, are not inclined to advertisenegative aspects their products even though those aspects may be of primary concern to theconsumer, particularly if they involve considerations of health or safetyPAID FOR ". . . paid for . . . " is pretty straightforward. If an ad is created and placed in the

media, the costs of creation and time or space in the media must be paid for. This is a major area

in which advertising departs from public relations.

PR seeks to place information about companies and/or products in the media without having topay for the time or space. PR creates news releases and sends them to news media in hopes theywill be run. Often PR departments produce events that will be covered by news media and thusreceive space or time. There is no guarantee that the media will run any of the PR material.

Advertising doesn't have that problem. If time or space is bought in the media, the ads (as long asthey follow the guidelines set down for good taste, legal products and services, etc.) will appear.The drawback is that ads are clearly designed to extol the virtues of products and companies, andany ad is perceived by consumers as at least partly puffery. PR pieces are usually not soperceived.PERSUASIVE "Persuasive" stands to reason as part of the definition of advertising. The basic

purpose of advertising is to identify and differentiate one product from another in order to


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persuade the consumer to buy that product in preference to another. The purpose of this book is

to discuss some basic elements of persuasion.

PRODUCTS, SERVICES OR IDEAS Products, services or ideas are the things that advertiserswant consumers to buy (in the case of ideas, "buy" means accept or agree with as well as lay out

hard, cold cash). However, there is more involved in products or services than simply items forpurchase. (During the following discussion, "products" will mean products, services and ideasunless otherwise noted.)A product is not merely its function. It is actually a bundle of values, what the product means tothe consumer. That bundle may contain the product's function, but also the social, psychological,economic or whatever other values are important to the consumer.For example, let's look at a car. If the function of a car, transportation, is all that is important,then manufacturers would need only build motorized boxes on wheels, and consumers would behappy with them. Such is obviously not the case: the number of models and types of cars is huge,and if consumers didn't demand the variety it wouldn't exist. Consumers must find factors otherthan mere transportation just as, if not more important.

IDENTIFIED SPONSORS Identified sponsors means whoever is putting out the ad tells theaudience who they are. There are two reasons for this: first, it's a legal requirement, and second,

it makes good sense.

Legally, a sponsor must identify rherself as the sponsor of an ad. This prevents the audience fromgetting a misleading idea about the ad or its contents. For example, many ads that appear innewspapers look like news articles: same typeface, appearance, use of columns, etc.. If the ad isnot identified as such, the audience could perceive it as news about a product, rather than anattempt to persuade the audience to buy it. Case in point: what looks like a news article discussesa weight-loss plan. In journalistic style it talks about the safety, efficacy, and reasonable price ofthe product. A reasonable person might perceive the "article" as having been written by a

reporter who had investigated weight-loss programs and decided to objectively discuss thisparticular one. Such a perception is misleading, and illegal. Since it is an ad, somewhere on itthere must appear the word "advertisement" to ensure the audience does not think it is anobjective reporting of news.Second, it makes good sense for a sponsor to identify herself in the ad. If the sponsor doesn't, it

is possible for the audience to believe the ad is for a competitor's product, thus wasting all the

time, creativity and money that went into making and placing the ad.

IMPORTANCE OF ADVERTISING

Advertising has a major impact on society: Ads help establish what is cool in society; theirmessages contribute to the public dialogue. It makes kids to dance together. It creates pleasurefullness. Thus, it pays to advertise. It is the lever that motivates the world of commerce andindustry. It is the pride of dynamic marketing. It provides benefits to various groups whichincludes the producer, consumer, dealers, salesmen, and the society and economy. Theimportance of advertising to these groups is explained below:


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I. Importance of Advertising to Producers

Increase in Demand: Advertising awakens interests, stimulates emotions and creates desire tobuy the product. For eg:- Tide

2. Large-Scale Production: Advertising increases and stabilises the sales-turnover. It helps torepeal sales. It creates customers and loyal clientele. The increased demand necessitates toproduce on large-scale. For eg:- Sunsilk

3. Cuts Costs: Advertising helps in cutting down the production and selling costs. Increasingunit sales decreases unit costs.

4. Good Selling Tool: Advertising is a good selling tool for big businessmen. It puts less burdenon other selling methods.

5. Explores New Markets: Advertising maintains the existing markets. But it also expands and

explores new markets by better informing and serving the customers.

6. Facilitates Innovation: Advertising promotes new product. In a way it reduces the risk ofinnovation.

7. New Industries and New Jobs: Otto Kleppner has asserted that Due to advertising newand improved products and services constantly appear, enrich our lives, change life-styles, createnew industries and new jobs.

8. Lowers Prices: Advertising reduces products prices by keeping down various costs to theadvantage of consumers.

9. More Profits: Advertising increases profits by increasing sales.

10. Control on Trade Cycles: Advertising can help to stimulate business recovery in severerecessions. It stimulates latent needs, and reinforces the aroused wants in depression period.

11. Competitive and Promotional Weapon: Advertising is a powerful weapon to countercompetitive moves. It creates brand image.

12. Builds Brand Image: Manufacturers use advertising to build a brand image.

13. Other Benefits:(i) It increases business activities.

(ii) It increasesgoodwill of the firm.

(iii) It increasesInterest among dealers in manufacturers goods.

(iv) It makes possible the use of modern technology in productional process.


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II. Importance of Advertising to Consumers

1. Help in Rational Buying: Advertising disseminates useful information about the relativemerits and unique features of the products in terms of quality, utility, price, durability andconvenience.

2. Ensures Quality Products at Reasonable Prices: Advertising stimulates the sale of qualityproducts. It creates a right image of good products. For eg:- Saras

3. More Products: Advertising is a feature of free competitive enterprise and can be acontributory factor towards greater availability of goods.

4. Creates Varied Tastes: Consumers demand differences in colour and style. They want newstyles in various products. Advertising responds to what people want.

5. Information: Consumers need information about various goods and services. Advertising

is a means of pleasant informations for pleasureful life and good buying.

6. Offers Solutions to Buying Problems: Consumers may have problems like hair-falling, toothdecay, ill-health, not finding desired product or design, right quality, or right price, etc.

7. Better Standard of Living: Sir Winston Churchill has very aptly stated, Advertising

nourishes the consuming power of men. It sets up before a man the goal of a better home, betterclothing, better food for himself and his family.

8. Saves Time: Advertising is informative, educative and convincing. It brings manyinformations to the notice of consumers.

9. Reduces Dissonance: Advertising helps to reduce may tensions and mental anxieties afterbuying the product by producing facts and proofs in favour of his decision.

10. Educates Consumers: Advertising is also a means of educating the consumers about theproper use of product.

III. Importance of Advertising to Middlemen

1. Guarantees Quick Sales: Advertising quickens the pace of sales by brining products to theknowledge of the consumers.

2. Acts as a Salesman: Advertising is a very potent and effective salesman of middlemen.

4. Price Maintenance: Customers always remain interested in getting quality products atstable prices over longer time. If the prices constantly change, the budgets of consumersare disturbed. Advertising also discourages price-haggling and bargaining with retailers.


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IV. Importance of Advertising of Salesmen

1. Drives the Consumers: While marketing drives products towards the consumer, advertisinghelps to drive the consumer towards the salesmen at the point of sale.

2. Creates Colourful Environment: Advertising creates an inducing and colourful

environment. Personal selling alone is like a song without music.

3. Lightens the Selling Job: Selling job is highly complex and difficult, if performed alone. Inthe absence of advertising, salesman is forced to play a double role. With the help of advertising,the salesman can easily explain the product and its benefits, can meet the objections raised bycustomers and may close the sale.

4. Instills Self-Confidence and Initiative: Advertising acts as a creative force. It educates thesales-force. It instills self-confidence and initiative in them.

SOCIAL AND ECONOMIC ASPECTS OF ADVERTISING

V. Importance of Advertising to Society and Economy

1. Socio-economic Institution: Advertising is only one of societys many institutions: It is

literally imbedded in much more basic and powerful institutions such as the family, the school,the church, and the political and legal system.

2. Instrument of Social Influence and Control: It dominates the media, it has vast power in theshaping of popular standards, and it is really one of the very limited group of institutions whichexercise social control.

3. Wide Power of Persuasion: Advertising is a powerful technique of persuasion in a society.Advertising is fundamentally the same psychological device that we apply daily in sellingproducts to consumers, and selling ideas at home.

4. Component of the educational System: Advertising is basically a part of knowledge. Itimparts values, cultural ideas and valuable lessons of life-styles.

5. Upholds the Culture of a Nation: Cultural values reflect a nation and its people. Culture of anation is affected by social dynamics. Advertising accepts and maintains the value structure ofsociety.

6. Uplifts the Standard of Living: It has been widely accepted that advertising raises the livingstandard of millions. It creates wants. It increases production and consumption.

7. Social Guide: Advertising has become a means of social change. It is an inseparable part offree speech.It is our social leader. It provides ideas about style, morality, behaviour.

8. Generates Employment Opportunities: Advertising generates employment opportunitiesdirectly and indirectly. Direct employment is open in various jobs created by advertising such as


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copy designers, copy writers, artists, painters, photographers, singers, message-writers,comperes, musicians, pressmen, executives and many others to help in advertising process.

9. Fosters Economic Growth: Advertising is a key tool used to aid a countrys growth. It can

help in improving the economies of developed and developing countries. It can stimulate

increase in production and consequently generate more employment.

10. Growth of Media: The acceptance of advertising by different media enhances the potentialfor raising revenues.

LIMITATIONS OF ADVERTISINGThough advertising is multi-dimensional and powerful mass-communication, it suffers fromserious limitations. Its main evils and criticisms are as follows:1. Increase in Unnecessary Wants: Critics argue that most advertising cause people to buythings they dont really need. Advertising create unnecessary wants and desires which become a

monetary burden on consumers and their regular budget is disturbed.

2. Increase in Costs and Prices: Critics argue that advertising increases the prices consumerspay for products and services.

3. Creates Indecisiveness: Various advertisements influence and move the desire of consumers.They all attract to buy their own products. They all pull consumers towards their own products.This creates a state of confusion conflict, and undecisiveness for the consumer.

4. Too Much Puffery and Deception: Deceptive advertising has became a major problem forthe consumers. Consumers are cheated by deceptive pricing, false criticisms of competingproducts, deceptive guarantees ambiguous statements, false testimonials, and other deceptive

practices.

5. Arouses Emotions: Most of the advertisings arouse emotions, instigate feelings and inducedesires of consumers and compel them to buy irrationally. They have difficulty in fitting the ideaof persuasion and emotional approaches into their concept of the economic person who makes

decisions rationally, not emotionally.

6. Obscene and Unethical: Critics say that today advertising has become offensive andunethical. Youths are offended by increasing bad taste, violence, nudeness, obscenity, andsexuality in advertising. Such advertisements provoke ill-thoughts in the minds of people.

7. Promotes Social Evils: Many advertisings make life luxurious. They promote materialism,rather than intellectual or spiritual things. They promote the use of many objectionable productslike tobacco, alcohol, cigarettes, banned drugs, etc.

8. Endangers Competition: Advertising can endanger competition. Big advertisers canmonopolize the market. It makes difficult for other firms to enter the market. This results in lesscompetition and higher prices and small firms are often driven out of business.


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9. It is Wasteful: Advertising is also regarded as waste of national resources. It introduces newproducts, creates new tastes, new fashion and new

ESSENTIALS OF EFFECTIVE ADVERTISING

1. Relevant Message: Advertising must satisfy consumers objectives by delivering them arelevant message.

2. Offers Enough Incentive: The ad must offer enough incentive for the consumer to riskchange because it can show consumer how to satisfy needs in a manageable way.

3. Sound strategy: Every effective ad has a sound strategy.

4. Creative Thinking: The creative concept is the ads central idea that grabs your attention

and sticks in your memory.

5. Proper Execution: Effective ads are well-executed. It means that the message details, thephotography, setting, printing, and the production values all must be fine-tuned.

6. God-Directed: Advertising must be goal-directed. Advertising must hope to achievesomething. Every advertiser, deep down inside, hopes or assumes that each ad will produce sales.

7. Persuasion: To be effective, advertising must communicate and persuade.

8. Based on Reasoning: Effective advertisingprovokes thought on the part of the viewer, thatstimulates interests, evaluation, judgment, and decision-making inside the consumers mind.

9. Ad by Emphasis: Advertising by emphasis aims for small delayed effects, just enough effectto tip the scales in favour of brand A over B.

10. Continuity: It can be noted that much advertising is quickly forgotten if not continuouslyexposed.


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FIVE MS OF ADVERTISING

Advertising is an important promotional tool for any marketing campaign. So much so thatwhenever we think of marketing we think of advertising although it is just one of the marketingtools. Today government bodies as well as nongovernment organizations go for high profileadvertising campaigns. The purpose here is not to increase the sales figure but to increase theawareness of people regarding the relevant topics. Today the marketing manager has a range ofadvertising options to choose from interpersonal communication to Internet. Deciding on acorrect option calls for detailed analysis aspects like objective behind advertising (Mission),companys earmarked budget (Money), content of communication through advertising

(Message), advertising vehicle (Media) and impact of advertising (Measurement). These can bebroadly classified as the five Ms of advertising.

MISSION First of all the marketing manager must be clear on the companys purpose foradvertising. Increase in sales figure will be a very broad and to a certain context a vague

objective. According to Mr. Philip Kotler, a renowned authority in this field, there can be threepossible objectives behind advertising: Information- when a new product is launched, thepurpose should only be to inform people about the product Persuasion- Persuading people toactually go out and buy the product. This objective is of paramount importance because ofcutthroat competition. Any advertisement must be persuasive in nature, attracting consumerstowards the brand Reminder: This objective is relevant for well-established companies. Thesetypes of advertisements only try to remind the consumers of the brand existence. For instancewhenever we hear or read yeh dil maange more, we tend to think about Pepsi. Same way we tendto associate two minutes with Maggie noodles. The marketing manager should establish a clear

goal as on the purpose of advertising, information, persuasion or reminder.

MONEYAfter the objective has been decided upon, the next step is to decide upon the budget.There are several methods for deciding on the advertising budget. The most common amongthem is the percentage of sales method. Under this method, a certain percentage of sales areallotted for advertising expenditure. Though this method is used widely, there are some problemswith this method. The first issue is what percentage the company should take? Even if acompany somehow decides a percentage figure, this would mean increase in advertising


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expenditure when sales are up and less spending when sales are down. This in some ways isquite paradoxical, because logically the reverse should happen. The company needs to spendmore on advertising when sales are down. But this method uses circular reasoning and viewssales as cause for promotion. In fact sales are a result of promotion. Another method suggeststhat a company should spend as much as its competitors are spending. This method claims that it

would prevent promotional wars. But then like each individual each company is also different. Itmay not make any sense in spending like your competitor because competitor might be on adifferent footing.

MESSAGEAs a common experience, we love some advertisements, while the others just irritateus. An appealing advertising will win consumers and will consequently induce them to purchasethe product. On the other hand, irritating advertising will create an adverse effect. This is whymany companies hand over this task to advertising agencies, which has professionals to makeimpact -making ads. The message that company wants to convey should be put in a manner thatwill arouse interest. Moreover it should convincingly highlight upon the products USP. What issaid is definitely important but what is more important is how it is said. The tone should be

appealing. Words used should be catchy and retentive. These days both electronic as well asprint media are overflowing with ads. People have no time to read or see them, and thereforethey have to be attractive enough to target audiences attention. This is the job of message.

MEDIA Selecting the proper media vehicle for communicating the message goes a long way in

the success of any kind of advertising. Each media vehicle has its positive and negative points

with a different reach and impact. Therefore a company has to be very clear about its target

audience. Choices available are Internet, TV, newspapers, magazines, direct mails, radio and

hoardings. Everyone of this has its advantages and disadvantages. Companies often go in for a

media mix, i.e. they select more than one of the available choices. Timing is of great significance

here. Many industries face seasonal fluctuations and pass through cycles. Therefore advertising

should be timed that way to take care of these fluctuations. A limited budget should be prudentlyallotted among these media vehicles.

MEASUREMENT It is necessary that effectiveness of any advertising be judged. Only on the

basis of this measurement, can further decisions regarding continuation or termination of the

particular advertising campaign be taken. An ad can be judged on the basis of its reach and

impact on sales. Good advertising is one that generates brand awareness and consequently brand

preference. How much of sales can be attributed to advertising, is a difficult question to answer.

Sales are influenced by many factors besides advertising. It is not easy to isolate the impact of

advertising on sales. Nonetheless there are some advanced statistical techniques available that

can be used with the help of computer softwares like SPSS. Thus a systematic and balanced

understanding of these five Ms of advertising will help in designing better advertising campaigns

that create a favorable impact on the target audience.


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ADVERTISING BUDGET

An estimation of a company's promotional expenditures over a period of time. An advertisingbudget is the money a company is willing to set aside to accomplish its marketing objectives.When creating the advertising budget, a company must weigh the trade-offs between spending

one additional advertising dollar with the amount of revenue that dollar will bring in as revenue.Companies can determine what level to set their advertising budget several different ways, eachof which has its positives and negatives. A business can set its budget as a percentage of sales, atthe same level as its competitors, as the amount required to meet a certain objective, as theentirety of its profits or as a function of the units of product it wants to sell among others.

METHODS OF ADVERTISING BUDGET

Each of the many ways in which to establish an advertising budget has its problems as well as itsbenefits. No method is perfect for all types of businesses, nor for that matter is any combinationof methods. The following are the most usual methods in use today.

Percentage of sales or profits

The most widely used method of establishing an advertising budget is to base it on a

percentage of sales. Advertising is a legitimate business expense and should be relatedto the quantity of goods sold.

Its helpful to use the percentage-of-sales method because its quick and easy. Itensures that your advertising budget isnt way out of proportion for your business. Its

a sound method for stable markets. But if you want to expand your market share, youllprobably need to use a larger percentage of sales than the industry average.

The percentage-of-sales method avoids some of the problems that result from usingprofits as a base. For instance, if profits in a period are low, it might not be the fault ofsale or advertising. But if you stick with the same percentage figure, youllautomatically reduce your advertising allotment. In the short run a small businessowner might make small additions to profit by cutting advertising expenses, but such apolicy could lead to a long term deterioration of the bottom line.

By using the percentage-of-sales method, you keep your advertising in a consistentrelation to your sales volume which is what your advertising should be primarily

affecting. Gross margin, especially over the long run, should also show an increase, ofcourse, if your advertising outlays are being properly applied.

What percentage should you use? You can guide your choice of a percentage-of-salesfigure by finding out what other firms in your line of business are doing. These

percentages are fairly consistent within a given category of business.

Unit of sales

In the unit-of-sales method you set aside a fixed sum for each unit of product to be

sold, based on your experience and trade knowledge of how much advertising it takes


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to sell each unit. The unit-of-sales method is particularly useful in fields where the

amount of product available is limited by outside factors, such as the weather's

effect on crops. If that's the situation for your business, you must first estimate

how many units or cases will be available to you. Then, you advertise only as

much as experience tells you it takes to sell them. Thus, if you have a pretty good

idea ahead of time how many units will be available, you should have minimalwaste in your advertising costs.

This method is also suited for specialty goods, such as washing machines and

automobiles; however, it's difficult to apply when you have many different kinds of

products to advertise and must divide your advertising expenses among these

products. The unit-of-sales method is not very useful in sporadic or irregular

markets or for style merchandise.

Objective and task

The most difficult (and least used) method for determining an advertising budget is theobjective-and-task approach. Yet, its the most accurate and best accomplishes what all

budgets should:

It relates the appropriation to the marketing task to be accomplished.

It relates the advertising appropriation under usual conditions and in the longrun to the volume of sales, so that profits and reserves will not be drained.

To establish your budget by this method, you need a coordinated marketing programwith specific objectives based on a thorough survey of your markets and their potential.

Purchasing stream

The budget for advertising to attract new customers is often based on expected totalincome called a purchasing stream from your new customer.

FACTORS AFFECTING ADVERTISING BUDGET

Advertising Budget is the amount of money which can be or has to be spent on advertising

of the product to promote it, reach the target consumers and make the sales chart go on the

upper side and give reasonable profits to the company.

Before finalizing the advertising budget of an organization or a company, one has to take a lookon the favorable and unfavorable market conditions which will have an impact on the advertisingbudget. The market conditions to watch out for are as follows:

Frequency of the advertisement Competition and Clutter Market Share of the Product Product Life Cycle Stage


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1. Frequency of the Advertisement

This means the number of times advertise has been shown with the description of theproduct or service, in the granted time slots. So here, if any company needs more advertisingfrequency for its product, then the company will have to increase its advertising budget.

2. Competition and ClutterThe companies may have many competitors for its product. And also there are plenty ofadvertisements shown which is called clutter. The company has to then increase theiradvertising budget.

3. Market Share

To get a good market share in comparison to their competitors, the company should have abetter product in terms of quality, uniqueness, demand and catchy advertisements withresultant response of the customers. All this is possible if the advertisement budget is high.

4. Product Life Cycle Stage

If the company is a newcomer or if the product is on its introduction stage, then the companyhas to keep the budget high to make place in the market with the existing players and tohave frequent advertisements. As the time goes on and product becomes older, theadvertising budget can come down as then the product doesnt need frequent advertising.

When the market conditions are studied thoroughly, then the company has to set up itsadvertising budget accordingly. For setting advertising budget, there are four methods:

They are as follows.

Percentage Of Sales:In this method, the budget is decided on the basis of the salesof the product from previous year records or from the predicted future sales. This is apure prediction based method and best applicable to the companies which have fixedannual sales. But if in case there is a requirement for more promotional activitiesthen this method has a disadvantage because there will be decrease inadvertisements as the budget is fixed.

Affordability:this method is generally used by the small companies. Only thecompanies which have funds and can afford advertising opt for this method. Thecompanies can go for advertising at any time in whole year whenever they havemoney to spend. The amount spent also varies from time to time as per theadvertisements takes place.

Best guess:This method is basically for newcomers who have just entered themarket and they have no knowledge or say they are not aware of how the market isand how much to spend on advertising. Thus, this method is applied by the higherlevel executives of the company as they are the only experienced people.

Thus, doing the homework and then moving forward, i.e. searching for best market conditions andsetting the best advertising budget will have a great impact on improvement and development of thecompany.


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ADVERTISING MEDIAThe media planner has to know the capacity of the major media types of delivery, reach,frequency, and impact. The major advertising media are:

a) Newspapers

b) Televisionc) Direct mail

d) Radio

e) Magazines

f) Outdoor

g) Yellow Pages

h) Newsletters

i) Brochures

j) Telephone

k) Internet

Evaluating Advertising Effectiveness: An advertising measurement is adopted both before andafter an advertising campaign is launched. While the advertising plans are being implemented,the advertiser and the producer must know the extent of the success that has been achieved. Thecompetitors success, the producers objectives, the tasks given to distributors, price policy, etc.all these are considered while measuring advertising effectiveness. The methods of measuringthis effectiveness are explained in the light of objectives, the measuring of sales and

communication performance.

AD COPY AND AD AGENCYThe word copy has specific meaning in the world of advertising. Copy is the soul ofadvertisement. An advertising copy is all the written or spoken matter in an advertisementexpressed in words or sentences and figures designed to convey the desired message to the targetconsumers. In a print media an advertisement copy is made-up of head-line, sub-headlines, bothof the copy, illustration, long-type, slogan and brand name.

Approaches to Copy WritingA successful copy writer is to answer the following questions to get much out of it. Thesequestions are:1) What am I advertising?

2) To whom am I advertising?

3) How can I convey best the advertising message to my readers?

4) Where and how the product is being sold?5) When the product is purchased and used?

6) What legal implications are involved?

LayoutA layout is a miniature sketch or the proposed advertisement. A rough layout is first prepared inwhich the headline and subheads are lettered in artwork and photographs are drawn or provided,and the4 position of the copy is indicated. The rough layout is tested and modified to prepare the


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final layout. The final layout is appended with many explanations and mechanical designs togive a comprehensive view. It refers to specifications for estimating costs, guidance forengravers and blueprints for advertisers.Layout means two things; in one sense, it means the total appearance of the advertisement itsdesign and the composition of its elements; in another sense, it means physical rendering of the

design for the advertisementits blueprint for production purposes.

Functions of the Layout1) It Organizes all the Elements

2) It Brings Together Copy Writer and Art Director

3) It Enables the Advertiser to Visualize his Future Advertisement.

4) It Acts as a Guide to the Copy Specialists.


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Advertising Agency and its functionAdvertising agency is an independent business organization specialized in advertising workwhich undertakes the work of planning, preparing and executing advertising campaign for itsclients. It is a body of experts who specialize in advertising.

1) Planning: Planning here referred to study of clients product, or services, to identify it sinherent qualities in relation to competitors product, analysis of various components of

marketing environment and formulation of advertising plan.

2) Preparing: It refers to writing, designing and producing the advertisement. It is mainlyrelated to formation of ad-copy.

3) Executing: It means contacting right kind of media for time and space, delivering the ads inappropriate form, checking and verifying advertisement release in media, paying the media,billing the clients etc.

According to American Marketing Association, An advertising agency is:i) An independent business organization,

ii) Composed of creative and business people,

iii) Who develop, prepare and place advertising in advertising media,

iv) For sellers seeking to find customers for their goods and services.

Functions of Advertising Agency

1) Contacting Clients: Ad-agencys first and foremost task is to contact and select clients whoare desirous of advertising their products or services. The preference in choosing the clients isgiven to those firms which are financially sound, make good quality products and services and

have efficient management.

2) Advertising Planning: Another function of advertising agency is planning the ad for itsclients. For this, the agency has to perform following tasks:

i) Study of clients product to identify its inherent qualities in relation to competitors product.

ii) Analysis of present and potential market for the product

iii) Study of trade and economic conditions in the market.

iv) Information about season when maximum sale can be made.

v) Information about level of competition, competitors spending on advertising.

vi) Knowledge of channels of distribution, their sales, their methods of operation, etc.

vii) Formulation of advertising plan.


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3) Creative Function: According to David Ogilvy, Creative function is the most important ofall advertising functions. The copywriters, artists, art-directors and graphic-specialists arereferred as creative people.

4) Developing and Preparing Advertising Copy: Ad-agency is a specialized organization and

involves specialists such as: writers, artists, market-analysts, website-designers, animators,graphic-designers, researcher, film director etc.

i) Ad-Copy for Print-Media

ii) Ad-Copy for Broadcast Media

5) Approval of Client: After that the ad-copy is prepared, it is shown to client for his approval.

6) Media Selection and Media Scheduling: Another important function of ad-agency isselecting appropriate media for its clients. Various factors like media cost, media circulation,media coverage, nature of product, nature of customers, ad-budget of client, needs of clients,

etc., are considered by ad-agency for selecting media for its clients.

7) Ad-Execution: After obtaining approval from client, the advertising copy is handed over tomedia for its execution.

8) Evaluation Function: The next major function of ad-agency is to evaluate the effectivenessof advertisement for the benefits of its clients.

9) Marketing Function: The advertising agency also performs marketing functions, such asselecting target-customers, designing products, packages, developing channels of distribution,determining prices; new product development, conducting marketing research, sales promotion,

publicity, improving public relations, etc.

10) Research Function: It includes continuous research regarding different media, theircirculation, media-cost, entry of new newspapers/magazine, collecting information about ratingof various TV programmes, serials so that time of ad can be decided.

11) Accounting Function: Accounting function of agency includes checking bills received frommedia, cash discount allowed by media billing to client, collection of dues from clients, makingpayment to media, payment to outside professionals like-writers, film-producers, models, makingpayment for purchasing advertising materials, salary to staff, etc.

Types of Advertising Agencies

1) Full service agency,

2) In house agency,

3) A creative boutique,

4) Media buying services,

5) The La carte agency,


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6) Special service agency (Group)

7) Sweet shops

1) Full-Service Agencies: Many companies employ what is known as a full-service agency,which offers its clients a full range of marketing, communications, and promotions services,

including planning, creating, and producing the advertising; performing research; and selectingmedia. A full-service agency may also offer no advertising services such as strategic marketplanning; sales promotions, direct marketing, and interactive capabilities; package design; andpublic relations and publicity.

2) In-House Agencies: An in-house agency is often referred to as the advertising department ina firm and takes responsibility for the planning and preparation of advertising materials. Thisoption has the advantage of greater coordination and control in all phases of the advertising andpromotion process. Some prominent advertisers who do most of their work in=house are Gap,Calvin Klein, and Revlon.

3) Creative Boutiques: A creative boutique typically emphasizes creative concept development,copywriting, and artistic services to clients. An advertiser can employ this alternative for thestrict purpose of infusing greater creativity into the message theme or individual advertisement.As one advertising expert put it, If all clients want is ideas, lots of them, from which they canpick and mix to their hearts delight, they wont want conventional, full-service agencies. Theyall want fast flashy fee-based idea factories. Creative boutiques are these idea factories.A creative boutique is an agency that provides only creative services. These specializedcompanies have developed in response to some clients desires to use only the creative talent of

an outside provider while maintaining the other functions internally.4) Media Buying Services: Media buying services are independent companies that specialize inthe buying of media, particularly radio and television time. The task of purchasing advertising

media has grown more complex as specialized media proliferate, so media buying services havefound a niche by specializing in the analysis and purchase of advertising time and space.Agencies and clients usually develop their own media strategies and hire the buying service toexecute them.

5) A La Carte Agency: Some advertisers prefer to order a la carte rather than using all of anagencys services. A la carte services can be purchased from a full service agency or from an

individual firm that specializes only in creative work, media, production, research, or newproduct development.

6) Special Service Agency (Group): Some agencies focus their efforts only in some selectedareas and then become specialists in those areas. These firms collectively are called specialservice groups and they are by far the least known component of the advertising industry. Forexample, if an agency is specializing in direct response advertising either in media or direct mail,knowledge of their availability and function is vital if the structure of the advertising business isto b fully understood.

7) Sweet Shops: These agencies are very small agencies, which operate only in one city. Theircost is less and their service personalized. These agencies are very useful for small clients, who


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wants to issue ads in local media, like as in local cable, pamphlets, banners, evening newspapersetc.

Different aspects, on the basis of which a company Selects an Advertising AgencyThe advertiser should select that advertising agency whose talent, experience, record matches

with the requirements of advertiser. Following factors should be considered while selecting anadvertising agency:1) Location: A major consideration in the choice of an advertising agency is location of office ofagency. Local and nearby ad-agencies should be preferred. A considerable amount ofcommunication is required at various stages of decision making with regard to ad-planning andad-execution. Outstation advertisers are at a disadvantage as the costs of regular visits may behigh. So it is desirable that office of ad-agency is located nearby and is easily accessible.

2) Size: Both large size-agencies and small-size agencies have their own merits and demerits.Large-agencies provide wide range of facilities, services and have more experienced staff. Butlarge-size agencies have certain limitations viz. these are costly, these cannot give personal

attention to all clients because of large number of clients, these dont give much attention tosmall clients as these agencies have many big clients.

3) Agency Working for Competitors: Advertiser should avoid giving his advertising work toan agency that handles the advertising work of his competitor. Because in that case ad-agencymay not be in a position to prepare ads which help the advertiser to take an edge overcompetition and agency will not prepare such ads which go against advertisers competitors, i.e.,

agency will not make competitive ads for advertiser.

4) Image of Agency: Before selecting the ad-agency advertiser should enquire about its image,integrity, its ethical standards, and its relation with clients, etc.

5) Services Offered by Ad-agency: Now-a-days ad-agency give wide range of services likeplanning and preparation of ad, execution of ad, selection of media, follow-up to evaluate ad-effectiveness, sales-promotion, public-relation, publicity, market analysis, market-research, etc.

6) Rates Charged: The rates charged by the advertising agency should be quite reasonable.These rates should suit the pocket of client and should be within ad-budget of client.

7) Creative Skills and New Ideas: Creativity is the main element of advertising. If the ad-agency is capable of generating new ideas which are creative and unique then its ads will bemore successful in attracting the attention of target audience.

8) Past Record of Agency: Past record of ad-agency should be checked to know:

i. Who were the past clients of agency; why they left the agency; how long were they withagency, how big were they?


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ii. Who are the present client, how big are they; since how long are they with agency, theirrelationship with agency?

iii. Brand-image of products of agencys clients.

9) Quality and Caliber of Staff: Ad-agency has various specialists like copy-writers, marketanalysis, media experts, art-directors, researchers, artists, models, etc.

10) Financially Sound: The ad-agencies which are financially sound-and have good turnoverhave better contacts with media-owners. Financially sound agencies can afford betterinfrastructure, well-equipped-ad labs, and specialists, national and international image.

11) Agency Experience: Agency which has long existence generally performs better because ofits experience and familiarity with different components of marketing environment likecompetitors policies, tastes of consumers, income of consumers, fashions and trends, circulation

and reputation of different media.

notes on advertising mgmt

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