Download Advertising and Sales Promotion

Integrated Marketing
Communications
Marketing Mix
•
•
•
•
Product
Price
Place
Promotion
Integrated Marketing
Communications
• IMC involves coordinating the various promotional
elements and other marketing activities that
communicate with a firm’s customers.
• Value of strategically integrating the various
communications functions rather than having them
operate autonomously
Tools of IMC
How
BIG is the business…
Size of the global advertising business
Country
USA
Japan
Germany
UK
China
Russia
France
Brazil
Italy
Spain
South Korea
Australia
2007
2010
USD Mn
179,251
41,017
25,758
25,433
15,438
13,904
12,249
10,738
9,967
9,831
190,210
43,335
27,145
28,691
22,922
16,110
14,315
14,161
13,050
12,121
The Indian advertising business
Year
2005
2006
2007
2008
2009
2010
Total
Newspapers Magazines
Rs. Mn
116,824
41
4
149,113
42
5
198,249
47
5
217,793
45
6
244,641
42
6
282,683
42
7
TV
41
40
35
37
38
35
Radio
% contrib.
3
2
3
2
2
2
Cinema
2
2
2
2
2
2
Outdoor
8
7
7
6
6
6
Internet
1
1
2
2
3
5
Big spenders in India
Product / Category - 2007 Spends
Category
TV
Print
Radio
Rs. Mn
Cellular Phone Service
Publications/books
Cars/jeeps
Educ-educational Institutions
Properties/real Estates
Cellular Phones
Two Wheelers
Internet Service
Toilet Soaps
Shampoos
Travel & Tourism
Insurance-life
Tooth Pastes
Tv Channel Promotions
Televisions
Soft Drink Aerated
Readymade Garments
Washing Powders/liquids
Jewellery
DTH Providers
6497
700
3049
336
790
3203
3286
2596
4453
3768
849
2585
3111
3
903
2567
649
2454
685
1441
2437
8328
5338
7448
6444
2318
2255
2359
202
198
2512
709
63
2444
1819
87
1972
113
1602
857
214
95
77
23
258
60
19
118
27
17
34
98
7
397
15
44
31
7
73
62
Total
9148
9123
8464
7807
7492
5582
5560
5073
4682
3983
3395
3392
3181
2844
2737
2698
2652
2575
2361
2361
Big spending categories in India
Cellular Phone Service - 2007 Spends
Advertiser
TV
Print
Radio
Rs. Mns
Total
Bharti Airtel
Reliance
Vodafone Essar
TataTeleservices
IdeaCellularLtd
BSNL
Aircel
MTNL
Bsnl/mtnl
SpiceTelecomLtd
Bpl Cellular
MatrixCellular
CellularIndustry
DigitalOutsourcing
SouthAsiasPremireMobile
Hfcl Infotel
Tata Cellular
Etisalat
Telenor
OmanMobile
Others
2322
1222
1362
789
558
102
64
11
0
1
0
24
0
14
13
0
7
3
3
0
1
260
745
274
379
165
311
105
61
50
40
19
3
18
0
0
7
0
0
0
1
1
52
31
34
10
21
2
1
51
0
0
10
0
0
0
0
0
0
0
0
0
0
2634
1998
1670
1178
745
414
170
124
50
41
28
28
18
14
13
7
7
3
3
1
2
Total
6497
2437
214
9148
Big spenders in India
Advertiser
Cars/ Jeeps - 2007 Spends
TV
Print
Radio
Rs in Mns
Total
Maruti UdyogLtd
Tata MotorsLtd
General MotorsIndiaLtd
Hyundai Motors
Ford India Pvt Ltd
Toyota Kirloskar MotorLtd
Mahindra Renault PvtLtd
Mahindra & Mahindra
Skoda Auto
Honda Siel Cars IndiaLtd
Fiat India Automobiles Ltd
Audi
Hindustan Motors Ltd
Mercedes Benz IndiaLtd
Volkswagen Group Sales IndPL
Bmw
Volvo India Pvt Ltd
Intl Cars And Motor Ltd
Nissan MotorCoLtd
Kia Motors Corporation
Others
692
722
316
297
165
99
213
211
76
99
80
43
3
23
0
0
0
0
1
7
0
1678
666
606
599
504
272
142
91
189
157
62
96
106
42
47
47
12
11
9
0
2
42
11
0
2
15
1
6
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2411
1399
923
897
685
371
362
302
266
257
142
139
110
65
47
47
12
11
10
7
2
Total
3049
5338
77
8464
Big spenders in India
Advertiser
Toilet Soaps - 2007 Spends
TV
Print
Rs.Mn
Radio
Total
Hindustan Lever Ltd
2215
Reckitt Benckiser (india)Ltd
631
Wipro Ltd
368
Johnson&JohnsonLtd
302
Godrej Consumer ProductsLtd 182
Nirma ChemicalsLtd
198
Henkel Spic IndiaLtd
143
Paras Pharmaceuticals Ltd
84
Cholayil Pharma
69
Vvf Limited
50
Anchor Health&Beautycare
38
Marico IndustriesLtd
43
SV Products
28
Dabur IndiaLtd
19
Jyothy LaboratoriesLtd
11
Karnataka Soaps& Detergents
8
The GoldCompany
11
Elder Pharmaceuticals
10
Shiv GramudhyogSanstha
0
SDPharmacy
7
LexusSoap
6
Others
32
78
4
23
11
33
1
8
0
11
0
8
2
0
0
1
3
0
0
8
1
0
10
14
1
2
0
0
7
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
2
2307
636
393
313
214
206
151
84
80
50
45
45
30
19
12
12
11
11
8
8
6
44
Total
202
27
4682
4453
Advertising
• Advertising is defined as any paid form of non
personal communication about an organization,
product, service, or idea by an identified
sponsor.
Advertising
• The world’s second oldest profession
OR
Advertising
• A mirror and maker of culture and society ….
OR
Advertising
• Magic in the marketplace…
OR
Scope
• Understanding Integrated Marketing
Communication
• The increasing importance of IMC
▫ Shifting from ‘advertising’ to IMC
• Role of IMC in the marketing process
• Understanding consumers and audiences
Promotion
• Promotion is often regarded as a more direct
form of persuasion
• Based frequently on external incentives rather
than inherent product benefits
• Designed to stimulate immediate purchase
The IMC toolkit
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•
•
•
•
•
Advertising
Promotions
PR
Direct Marketing
Internet/Interactive marketing
Personal Selling
Objectives of Advertisements
•
•
•
•
•
Building Brand image
Providing information
Persuasion
Supporting Marketing efforts
Encouraging Action
Types of Advertising
The different types of advertising
• Brand Advertising : Long term brand identity and image
 Nescafe, Dove, Hamam
• Retail : “ Buy it from our store”
 Big Bazzar, Pantaloons, Univercell
• Political: “People to vote for them or ideas”
 BJP shining India campaign, Obama’s campaign.
• Directory: Refer to find how out buy a product.
 Yellow pages, Just dial
• Corporate Advertising – “getting a corporate identity”
 Wipro, TCS
Different types of advertising
• Public Service : “ Do this, its good for all of us”
 Aids awareness, World tobacco day
• Business to Business: “directed at retailers, wholesalers for
doing business with them”
 Professional publications, SAP targeting SME s
• Direct response advertising: “Directly reaching
customers”
• Interactive advertising.
 Banner ads, web pages, You tube
Communication process
Sender
Encoding
Medium
Decoding
Receiver
Feedback
Appeal
• Appeal is how to design the advertisement that attracts
attention or presents information to consumers.

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


Humor
Sex
Fear
Logic
Emotions
Ethical issues
• Advocacy : Persuade its audience to do something.
• Accuracy : Are all claims are verifiable?
 Axe – attraction to opposite sex.
• Acquisitiveness: greed to increase one's possessions
 Eg: Volvo car roof controversy
Ethical issues
• Ethical issues to be considered because advertisements
are highly visible and damage the company.
• Ban on marketing of alcohol beverages through
sponsorship of sports, etc.
• Targeting youth : underage drinking.
• Benetton Ads – controversial.
Advertising as untruthful
• False or misleading claims.
• Presenting the information which is favorable to them.
 Telemarketing from banks.
• Failing to award claims in contests
 Eg: Scratch cards
Advertising in Bad Taste
• Home computers - young children couldn’t use it, they
would fail in school.
• Depicting women as sex objects – condoms, lingerie.
• shock advertising, in which marketers use nudity, sexual
suggestiveness to get consumers’ attention.
Advertising and Children
• Television is an important source of information for
children about products.
• Lack the experience and knowledge to understand.
• child may learn practices from advertising that can affect
his or her health.
Social consequences
• It provides ideas about style, morality, behavior.
• Adverse effect on consumer values by encouraging
materialism.
• Symbols of status, success, and accomplishment.
 Eg: Onida
Stereotyping
• Depicts women as preoccupied with beauty, household
duties, and motherhood.
• Boys shown as aggressive and in outdoor than girls.
• Creating ads based on race.
• Advertising controls media channels.
Economic Effects of Advertising
• Can encourage consumption and foster economic
growth.
• Economies of scale  low cost
• Effects on Consumer Choice
• Restricts the choice alternatives to a few well-known
 soft drinks, beer, and cereals
Effects on Competition
• Too much of ads restricts market entry
• Results in less competition and higher prices.
• Firms such as Procter & Gamble and PepsiCo, which
spend over $2 billion a year.
• Critics say that it only facilitates.
• Effects on Product Costs and Prices
• Critics argue that advertising increases the prices
consumers pay for products and services.
• increases the perceived differences and allows brands to
command a premium price
Participants in IMC
•
•
•
•
•
Advertiser ( Client)
Agency
Media organizations
Collateral services
Marketing communication specialists
▫ E.g.: PR agency, Sales promotion agency
A Procter & Gamble – Category
management
Ad agencies
• In-house agency is an advertising agency that is set
up, owned, and operated by the advertiser.
▫ Saving money
▫ Bad experiences with outside agencies
▫ Increased coordination
• Consolidation of number of medium-size agencies.
▫ Omnicom Group, WPP Group
Reasons for Using an Agency
• Highly skilled who are specialists in their chosen fields.
• Specialize in a particular type of business
• Previously worked with the competitor.
Types of Ad Agencies
• Full-Service Agencies
• Creative Boutiques
• Media Buying Services
Full service
• Full range of marketing, communications ,promotions
services including planning, creating, and producing the
advertising; performing research; and selecting media.
▫ Account service : Understanding the advertiser’s marketing
and promotions needs and interpreting them to agency personnel
▫ Marketing services : a) Research department
▫
b) Media department
▫ Creative services : conceive the ideas for the ads and write the
headlines – copy writers
 Art department
 Production department – movie directors
▫ Management and Finance:
Creative and Media buying
• A creative boutique is an agency that provides only
creative services.
• Coca –cola entered into a JV with Disney.
• Media buying: specialize in the buying of media,
particularly radio and television time.
• Purchase such large amounts of time and space, they
receive large discounts.
Selection of agency
• Steps:
▫
▫
▫
▫
▫
▫
▫
Goal setting
Select process and criteria
Screen initial list of applicants
Request client references
Reduce the list to two or three
Creative pitch
Select agency
Steps
• Goal setting
▫ Identify and prioritize corporate goals.
▫ To create a fit between company and agency
• Selection criteria
▫
▫
▫
▫
▫
Size of the agency
Relevant experience
Conflicts of interest
Reputation – awards won
Production capabilities
Steps
▫ Media purchasing capabilities – Read web pages,
annual reports, etc.
Agency compensation
• Commission system
• Fee, Cost and incentive based system.
• Percentage charges.