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Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
CHAPTER I
THE PROBLEM AND ITS SETTING
Introduction
Radio stations today generally run their advertising in clusters or sets, scattered
throughout the broadcasting hour. Studies show that the first or second commercial to
air during a commercial break has higher recall than those airing later in the set. Most
radio stations and advertising agencies subscribe to this paid service, because ratings
are key in the broadcast industry. Ad agencies generally purchase radio based on a
target demographic. For example, their client may want to reach men between 18 and
49 years old. The ratings enable advertisers to select a specific segment of the listening
audience and purchase airtime accordingly. Ratings are also referred to as numbers in
the business.
Advertising is a form of communication used to encourage or persuade the
listeners sometimes a specific group of people to continue or take some new action.
The purpose of advertising may also be to measure employees that a company is viable
or successful.
Radio is an ideal media for marketing fast moving consumer goods because it
can reach wide targeted listener demographics in urban habitat. A large number of
people listen to radio while commuting in urban areas and respond to the broadcast of
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
various commercial messages. This study aims at analyzing the impact of radio
advertisements on urban commuters towards buying behavior in retail stores and
attempts to determine the role of radio advertising on dissemination of information on
the sales promotions. The impact of radio advertisements on the store choice and
buying preferences are analyzed based on empirical investigation. The study reveals
that shopping behavior of urban consumer at retail stores in response to radio
advertisements is highly influenced by the physical, cognitive and economic variables.
Radio commercials hold a marginal share among the main media categories, for
example newspaper and television. However, it is still regarded as an important and
useful medium in marketing and advertising in large cities and metropolitans. The
broadcast of commercials on radio needs real feel orientation and voice is the single
major determinant that draws the attention of listeners. Programs on sales and market
news are the principal preferences of urban commuters for large metro radio stations
(Parker, 1993). The majority of short and informative advertisements for consumer
products in an urban setting use radio advertising with communication appeal related to
the efficacy of products and psychosocial enhancement of consumers at retail outlets.
Promotional efforts by manufacturing and retailing companies appear to focus on
positive emotional appeal to influence consumers through radio advertisements (Yusuff
and Yusuf, 2009).
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
FM radio is a new entity altogether and has to deal with new market dynamics.
Media owners dealing with new markets will virtually have to draw up their strategies as
they go along, create programming that is new, innovative and grab away eyeballs from
TV sets and make them tune into their radio sets. It’s a whole new challenge and
competition is never far away. Ad revenues will also not be easy to come by, as
advertisers will expect media players to put their money where their speakers are before
they commit large sums of money towards radio advertising. The other challenge for
radio in attracting advertisers is the nature of the medium-radio has always considered
being a reminder medium. The involvement of listeners to radio is low, Vis a Vis
television or print media.
Theoretical Framework
Populist style of radio advertisements on sales promotions at retail stores is
largely created with humor to add emotional value. Listeners perceive humor and
develop attitude towards communication and the brand. The purchase intentions are
higher for humorous advertisements containing moderate incongruity than those
conveying message directly (Pornpitakpan and Tan, 2000). Different levels of emotions
such as warmth, love, longing and desire, happiness and amusement were elicited by
different commercials of retail stores. The most memorable advertisements among radio
listeners have been those that evoked the most positive feelings and were the best
understood. However, need to acquire product significantly affect a person's
interpretation and emotional experience of a commercial (Mai and Schoeller, 2009).
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
Radio advertisements drive consumers to remember messages differently in reference
to the favorite jingle, program or music. Such beliefs of listeners help advertisement to
stay atop of the mind and consumers unconsciously associate with it as a personally
relevant information and have an enduring impact on their emotions. Short cycle radio
advertising is developed to have an enduring emotional impact on an audience by
facilitating their creation of personally relevant understandings of an advertisement
(Braun-Latour and Zaltman, 2006). Advertisements develop variety of emotional
dimensions ranging from pleasure and activation that include need activation, me too
feeling and loyalty to the brand. Such advertisements have a positive influence on
consumers. However, some advertisements which do not allow enough time to
consumers to analyze the contents and make a buying decision but dominate over
emotions, develop anger, irritation, and stress (Kim, 2000).
Conceptual Framework
The schematic diagram shows and explains the continuous flow of the study. The
input, process and output are presented by three geometric boxes.
The input box represents of radio advertising to the respondentin terms of sales
and popularity. AS illustrated in the second box, the process presents the economic
benefits derived in terms of taxes. The researchers formulate a questionnaire
addressing the problems by respondents in Tandag City.
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
Effects of Radio
Advertising to the
Respondents
Economic
Benefits derived
and Problems
Encountered
Recommendation
Figure1 Schematic diagram
Figure 1 shows the schematic diagram which explains the sequential flow of the study
conducted.
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
Statement of the Problem
This study intended to evaluate the Effectiveness of Radio Advertising as a
Marketing Tool.
Specifically, it sought to answer the following questions:
1. Effects of radio advertising to the respondents in terms of:
1.1 Sales
1.2 Popularity
2. What are the economic benefits derived from advertisements
2.1 Taxes
3. Are respondents satisfying with services of the radio stations?
4. What are the problems in this kind of marketing tool?
5. What recommendation may be proposed as an output of the study?
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
Significance of the Study
This study is of great importance and benefits to the following people.
Business owner. They are the first to benefit this study because it will help them
to get ideas on how to solve the problems encountered. For them to become more hardworking, idealistic and ready to handle such responsibilities and to be aware in what
kind of marketing tool would be use and what would be the best thing to do.
Radio Stations. They are the second to benefit this study because it will help
them to improve their services through advertising such products.
Future Researchers. They will find practical ideas to improve practices or may
find ideas worth investigating to get some information as basis or guide to their paper
works.
Scopes and Limitations of the study
This scope of this study focuses on the effects of radio advertising as a
marketing toolin Tandag City, Surigaodel Sur. The year coverage of the study is from
June to October 2012. There were thirty (30) respondents utilized. The researchers are
limited in assessing the effects of radio advertising as a marketing tool.
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
Definition of terms
To have better understanding of this study, the terms are defined conceptually
and operationally.
Advertising.According to the Funk and Wagnalls Standard Desk Dictionary, the
term is defined as an advertisements collectively; the business of writing and publicizing
advertisements. In this study the term is used on a particular product or services that
promote and give publicity through radio broadcasting.
Effective.According to the Funk and Wagnalls Standard Desk Dictionary, the
term is defined as the producing or adapted to produce the proper result; being in force,
as a law; producing a striking impression as a speaker. In this study the term is used as
a productive of producing a result.
Management.According to Meriam Webster Dictionary, the term is defined as
conducting and supervising of something (as a business); specially the executive
function of planning, organizing, coordinating, directing, controlling and supervising any
industrial or business product or activity with responsibility for the result. In this study
the term is used in management of a radio station.
Marketing.The
activity
set
of
institutions
and
processes for
creating,
communicating, delivering, and exchanging offerings that have value for customers,
client, partners, and society at large (http://dictionary.com).
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
Popularity.According to the Funk and Wagnalls Standard Desk Dictionary, the
term is defined as the as the condition of being popular. In this study the term is used in
popularity of the advertised product.
Radio Stations.According to the Funk and Wagnalls Standard Desk Dictionary,
the term is defined as the as an installation of all the equipment needed for effective
radio broadcasting, esp. when used for commercial or educational purposes and
licensed to employ an assigned frequency and power.
Sale. According to the Webster’s Dictionary, the term is defined as the act of
selling; the exchange of anything for money; a selling of goods more cheaply than
usual. In this study the term is used as an act of completion of a commercial activity.
Satisfaction.According to the Funk and Wagnalls Standard Desk Dictionary, the
term is defined as the act of satisfying or the state of being satisfied; gratification; the
making of amends, reparation, or payment, as of a claim or obligation. In this study it
refers to the satisfaction of the business owner of an product advertised.
Services.According to the Webster’s Dictionary, the term is defined as the work
of a servant or employee; the time spent in the forces. In this study, it refers to the
services offered by the radio stations.
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
CHAPTER II
LITERATURE REVIEW AND STUDIES
This chapter presents the related literature and studies from which the present
study is anchored.
Related Literature
Foreign
Great advertising is memorable. Advertising can use a variety of techniques to
make
an
ad
memorable.
A
few
of
those
approaches
includes
originality,
provocativeness, intelligence, entertainment, or revealing product or consumer insights.
One thing worth nothing is that a memorable ad in and of itself is not enough. The
consumer must remember the product or brand. There are plenty of ads that are
memorable, but consumers don’t remember who or what they were advertising.
Advertising cannot be great if people don’t remember the brand or the product (Moriarty,
Mitchell and Wells, 2009).
Back in the 1890’s, advertising was thought of as “news about products and
services”. Advertising often gives consumers news: news about the new car models,
news of the grand opening of a supermarket or bank, or news about a clearance of
summer furniture at a department store. But advertising is more than just news, and a
famous advertising writer, John E. Kennedy, revolutionized the advertising business in
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
1904 when he unveiled his own definition. “Advertising”, he said, “is salesmanship in
print”. Nobody had looked at advertising this way before, and Kennedy’s statement
astounded business people. But there was truth in Kennedy’s definition. Advertising is a
form of selling, for its job is to persuade the consumer to take some action favorable to
the advertiser: to buy the product, use the service, or accept an idea about a company
or an industry. John E. Kennedy’s Definition was good for advertising because it
influenced advertising writers to concentrate on the persuasive aspect of advertising,
and it was good for Kennedy because it made him rich. But it is not good enough for
advertising today. We now define advertising as follows: Advertising is a sales
message, directed at a mass audience that seeks through persuasion to sell goods,
services, or ideas on behalf of the paying sponsor (Burke, 1980).
Every great ad implements a sound strategy. The advertiser develops the ad to
meet specific objectives, carefully directs it to a certain audience, creates its message to
speak to that audience’s most important concerns, and runs it in media ( print,
broadcast, radio or internet, for instance) that will reach its audience most effectively.
Retail advertising is local and focuses on the store where a variety of products can be
purchased or where a service is offered. The message announces products that are
available locally, stimulates store traffic, and tries to create a distinctive image for the
store. Retail Advertising emphasizes price, availability, location and hours of operation.
Marketing is the process a business uses to satisfy consumer needs and wants through
goods and services. The particular consumers at whom the company directs its
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SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
marketing effort constitute the target market. The tools available to marketing include
the product, its price and the means used to deliver the product, or the place. Marketing
also includes a method for communicating this information to the consumer called
marketing communication, or promotion (Wells, Burnett & Moriarty, 2001).
Local
Advertising is communicating your key brand messages to your potential
customers. It makes people aware of your product, and the benefits the products offer.
Advertising also aims to convince other brands offering similar benefits. Advertising also
encourages the customers to try your product as early as possible, and as regularly as
possible. An effective advertising campaign is the end result of a combination of a
myriad of data, policies, objectives, Strategies. In fact, the advertising plan, from which
every ad campaign emanates, is a part of a more comprehensive plan called the annual
marketing plan (Villanueva, Jr, 2000).
More than any tool of communication, advertising has diffused information about
commodities and services, marketed them, and persuaded audiences of their important
place in their lives. However, advertising has done more than these. Advertisements
have become vignettes of social life. They portray individuals as having many social
relationships. They suggest ways of dealing with those relationships. Subtly, too,
advertisements advise a great deal about work, health, lifestyle and role in society. In
the absence of traditional authority, advertising has become a kind of social guide,
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SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
depicting us in all the myriad situations possible to a life of free choice. To some extent,
advertising describes human relationships: between one individual and another,
between an individual and institutions. In so doing, advertising acts as more than a
guide to consumption (Miranda, 2002).
Much had been written about the advantages of radio compared to other media. We’ve
learned valuable lessons about this cost-effective medium. Needless to say, numerous brands
have gained from it many times over.
There are hundreds of reasons why marketers should advertise on radio. A radio
ad that is relevant and entertaining can build critical mass. A radio ad sang with a
catchy tune is many times even more effective than an ad that is simply verbalized and
twice as much when read. (http://www.inquirer.net/mobile/10/07/29/html_output/xmlhtml
/20100729-283930-xml.html)
Related Studies
Foreign
Though the print and television media has taken the major share of revenue from
commercials, advertisements on radio still hold audience of large cities. However, little
research has been published on the impact of commercial broadcast by AM or FM radio
on urban consumers. Most studies did not consider radio and outdoor advertising as
principal research agenda, despite their importance in business communication,
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SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
consumer behavior and towards sale stimulation for retailers (Mulhern, 1997; Volle,
2001).This paper aims at analyzing the impact of radio advertisements on urban
commuters towards buying behavior in retail stores. The study attempts to determine
the role of radio advertising supported by outdoor advertising by retailing firms on
situational variables on re-dissemination of information, the store choice and buying
preferences based on empirical investigation in Mexico City. The moderating role of
individual variables such a past buying behavior and psychodynamics also been
discussed in the study in the context of the radio commercials and outdoor advertising.
Accordingly, this paper contributes to the existing literature on the subject.
The differential effects of advertising campaign of leading and challenger retail
firms on expected sales of products reveal that radio advertisements produce
substantial arousal among consumers and enhance volume of sales in various outlets
of retail stores. Thus retailing firms replicate this advertising strategy in large cities and
metropolitan areas during different leisure sales seasons (Panagopoulos and Green,
2008). Commuters in metropolitan areas enjoy higher quality commercial broadcasts
differentiated by music, traffic information and news headlines. Audience in confined
place like automobiles in large cities and competitive markets benefit from higher quality
radio communication services than household audience listening radio programs at
leisure time. However, it is argued that lack of format variety causes low listenership
and consequently the competitive markets are underserved by commercial radio
stations (Halcoussis and Lowenberg, 2003). The creative strategies used in radio
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Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
commercials are different and advertising firms adjust their communication strategies in
response to the specific needs of different consumers. The Central Place theory
advocates that products with higher price and lower buying frequency influence
positively the perception of consumer on the promotional communication of stores
delivered through the radio programs and outdoor advertising (Hubbard, 1978; Yadav,
1994). The perception of radio as an intimate medium of communication during the nonavailability of visual media profoundly affects the way people consider listening to radio
programs including commercials, perform information analysis, and make applied
decisions. Since urban commuters have easier access to radio communication, they
develop higher perceived intimacy to the broadcasts (e.g. Kuffert, 2009).
Listening to radio while travelling either by public or personal transport in
metropolitans has become a way of life which is not only used as a relaxing tool but also
as a source to seek current information and track events. Certain advertising attributes
of radio commercials trigger emotional responses and advertisements stimulate
audiences in a pleasurable way. Most radio commercials address retailing campaigns
that elicit an emotional response, especially happiness among consumers (Chaudhury
and Watt, 1995). Consumer products companies use radio for campaigns more than
television, as precision and effectiveness of message is possible by more meticulously
targeted radio advertisements than broadcast over the visual media (Overby and Barth,
2006). In developing countries the radio advertisements enhance the pleasure of
entertainment as well as serve as source of current market information. It is observed
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Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
that short-term effect of radio advertisement towards store-level promotions and store
choice is significant, though choice is mainly driven by loyalty. Broadcast of
advertisements on radio are generally loud, compressed and often music suppresses
the contents of the message. Thus, radio advertisements sometime fail to generate
shopping arousal among listeners (Volle, 2001).
Local
Another media expert, Angelito “Boy P” Pangilinan, Managing Director of
MediaCom Philippines, cited several studies showing the effectiveness of radio as an
advertising medium. Among these is the research done by the Radio Ad Effectiveness
Lab (RAEL) and published in 2004 which suggests that radio ads work even better
when it’s added to television. Another RAEL study, according to Pangilinan, showed
that radio is about 80% as potent as TV – for a single exposure of an average spot.
RAEL is a non-profit organization founded in 2001 dedicated to creating and
disseminating research about how radio advertising works in the United States.
Although it should be noted that these research were done in the U.S., Pangilinan said
that they could be true of the Philippines as well because of the high penetration of
radio.
Pangilinan said that another strong characteristic of radio that was borne out by
research is that listeners tend to perceive radio ads as directed personally to them,
creating a powerful advertising environment of personal relevance and connections. He
Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
also said that several surveys have shown that the acceptance by the audience of radio
ads is better than TV or internet advertising.
Pangilinan shared his own experience with radio where a client’s low budget
forced him to turn to radio instead of television. The campaign resulted in a 28%
increase in sales over the previous year.
According to Pangilinan, radio has a great opportunity to reinvent itself given the
positive attributes related to it. It should not be seen as competing with the digital media,
but as complementary, he said (http://www.kbp.org.ph/harnessing-the-power-of-radio).
Some advertisers use radio advertising as a medium only to “remind” consumers
about their brands’ presence. Wiser advertisers use it not just to remind consumers but
make it as primary medium. The smartest of all walks a little farther by spicing their
radio ads with bouncy melodic tunes.
An ad with a song separates the ordinary from the extraordinary, the boring from
the likable. “A radio ad without a song is like a girl on a senior’s prom whom nobody
wants to ask for a dance,” says a well-known Pinoy radio jingle-maker. Is your brand
becoming a boring household item? Do people ignore it because you’re out-of-tune with
marketing strategies? Do you want to make it come alive and have a personality of its
own? Don’t just say it. Sing it.
Republic of the Philippines
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Tandag City, Main Campus
COLLEGE OF BUSINESS AND MANAGEMENT
A good jingle can bring your business to life. It can resuscitate a brand that’s on
the brink of fading into oblivion. A radio ad with a catchy melody can attract a broader
audience and rejuvenate a boring product.
In the long run, advertising on radio will give you pay back time and prove its
worth. As other media milk your advertising budgets quarterly for new campaigns and
executions, radio’s durability over the months churns in recall and awareness ratings for
your brands (http://services.inquirer.net/mobile/10/07/29/html_output/xmlhtml/20100729
-283930-xml.html).
Synthesis
The context above are the related literatures from different country that
contributed ideas and learning to the study which show similarities in the effects of radio
advertisements. The literature and studies provide the background and information that
are important to the better understanding of the study. It enriched the basic concepts of
this research, and has guided the researcher s conceptualizing of this paper. The
various studies also help the researchers to gain insights, concepts and ideas on the
importance of radio advertising to a certain business.