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ADVERTISING AND SALES PROMOTION NOTES INTERNAL UNIT (1,2,3)
QUES 1) CLASSIFY DIFF TYPES OF ADVERTISING ON THE BASIS OF:
a) Geography-Global, National,Local
b) Target group-demographic,consumer,business
c) Corporate philosophy-Brand or institutional
d)Media-Print,broadcast,outdoor
Advertising can be understood in different ways depending on various factors. Let’s break down the different types of advertising based on geography, target group, corporate philosophy, and media in a simple and detailed manner.
a) Geography: -
Global Advertising: This type of advertising is aimed at people all around the world. Companies that operate in many countries use global advertising to create a single message that can appeal to many different cultures. For example, a soft drink brand might have the same ad running in multiple countries, adjusting only minor details to fit local tastes.
National Advertising: This focuses on a specific country. Here, companies design their ads to connect with people living in that particular nation. They consider local customs, languages, and preferences. For instance, a national clothing brand in India might showcase traditional attire in its ads to resonate with Indian consumers.
Local Advertising: This targets a smaller area, like a city or neighborhood. Local businesses, such as restaurants or shops, use local advertising to attract customers nearby. They often promote special offers or events happening in the community, making their ads very relevant to local residents.
b) Target Group:
- Demographic Advertising: This type of advertising focuses on specific characteristics of people, such as their age, gender, income level, and education. For example, an ad for a luxury car might target high- income individuals, while an ad for toys would focus on parents with young children.
- Consumer Advertising: This is directed at everyday people who will actually use the products or services. It highlights how the product can benefit them in their daily lives. For example, an ad for a new smartphone might showcase its camera features to attract tech-savvy consumers.
- Business Advertising: Also known as B2B (business-to-business) advertising, this targets other businesses rather than individual consumers. For instance, a company that sells office supplies might advertise its products to other businesses, focusing on bulk pricing and quality service.
c) Corporate Philosophy:
- Brand Advertising: This type is all about building a brand's identity. It aims to create a strong image in the minds of consumers. For example, a sportswear brand might use ads featuring famous athletes to promote an active lifestyle and connect emotionally with customers.
- Institutional Advertising: This focuses on promoting the overall company rather than specific products. The goal is to improve the company’s image and reputation. For example, a company might run ads about its commitment to sustainability and community service, aiming to create a positive public perception.
d) Media:
- Print Advertising: This includes ads in newspapers, magazines, brochures, and flyers. Print advertising allows for detailed information and can be very effective for local and national campaigns. For example, a local restaurant might place an ad in a community magazine to attract nearby customers.
- Broadcast Advertising: This includes television and radio ads. Broadcast advertising can reach a large audience quickly and is often used for both local and national campaigns. For instance, a new movie might have commercials on TV and radio to create buzz before its release.
- Outdoor Advertising: This includes billboards, posters, and ads placed in public spaces like bus stops or trains. Outdoor advertising aims to catch the attention of people who are on the go. For example, a new product launch might feature large billboards in busy areas to create awareness. In summary, advertising can be classified in many ways, and each type serves a unique purpose. Understanding these categories helps businesses choose the right advertising strategy to reach their target audience effectively.
QUES 2) ROLES AND FUNCTIONS OF ADVERTISING
Advertising plays a crucial role in the modern economy and society. Here’s a detailed explanation of the roles and functions of advertising in simple language:
1. Informing Consumers
One of the primary roles of advertising is to provide information about products and services. It helps consumers understand what is available in the market, the features of different products, and how they can meet their needs. For example, when a new smartphone is launched, advertisements will highlight its specifications, price, and unique features.
2. Persuading Consumers
Advertising aims to persuade consumers to choose one product over another. This is done through creative messaging, appealing visuals, and emotional connections. For instance, an ad for a chocolate brand might focus on happiness and sharing, encouraging people to associate the product with positive feelings.
3. Creating Brand Awareness
Advertising can shape consumer behavior by creating desires and influencing choices. By showcasing a lifestyle or an ideal image associated with a product, ads can make consumers want to buy that product to feel a certain way or fit in with a particular group.
10. Reinforcing Brand Image
Through consistent messaging and visuals, advertising helps reinforce a brand's image in the minds of consumers. For example, luxury brands often use high-quality visuals and sophisticated messaging to maintain their image of exclusivity and prestige.
QUES 3) DAGMAR
DAGMAR stands for "Defining Advertising Goals for Measured Advertising Results." It's a marketing communication model that was developed by Russell Colley in 1961. The DAGMAR approach emphasizes the importance of setting specific goals for advertising campaigns and measuring their effectiveness based on those goals. Here’s a breakdown of the key components:
Key Concepts of DAGMAR:
- Awareness: The first step in the DAGMAR model is creating awareness of a product or service. This means that potential customers need to know that the product exists before they can consider purchasing it.
- Comprehension: After awareness, the next step is comprehension. This involves ensuring that the target audience understands what the product is, what it does, and its benefits. Effective communication is crucial here.
- Conviction: Once the audience is aware and understands the product, the next goal is to build conviction. This means persuading the audience that the product is worth purchasing and that it meets their needs or solves their problems.
- Action: The final step in the DAGMAR model is action, which refers to the actual purchase or engagement with the product. This is where the effectiveness of the advertising campaign can be measured by looking at sales figures or other relevant metrics.
Here are some key reasons why DAGMAR is significant:
- Clear Objectives: DAGMAR helps advertisers set clear and specific goals for their advertising campaigns. Instead of just saying, "I want to sell more," it encourages them to define what they want to achieve, such as increasing brand awareness or boosting sales by a certain percentage.
- Measurable Outcomes: One of the main focuses of DAGMAR is to measure the results of advertising efforts. This means that advertisers can track how well their campaigns are performing. They can see if they are reaching their goals and how effective their advertising strategies are.
- Better Communication: By using the DAGMAR framework, advertisers can create messages that are clear and focused. This helps ensure that the audience understands what the product or service is all about. Clear communication is essential for attracting and retaining customers.
- Informed Decision Making: DAGMAR allows marketers to analyze the performance of their campaigns. By understanding what works and what doesn’t, they can make better decisions for future advertising efforts. This leads to more effective campaigns over time.
- Understanding Consumer Behavior: The DAGMAR model emphasizes understanding consumer behavior. It helps marketers figure out how their target audience thinks and what they need. By knowing their audience better, advertisers can tailor their messages to resonate more effectively.
- Resource Allocation: With clear goals and measurable outcomes, advertisers can allocate their resources more efficiently. They can decide where to spend their budget to get the best results, whether it’s on social media, television, or other advertising channels.
- Execute and Monitor the Campaign: After planning, it’s time to put your media plan into action. Launch your ads and start monitoring how they perform. Keep an eye on key metrics like impressions, clicks, and engagement to see if your campaign is working as intended.
- Evaluate and Adjust: Finally, after the campaign has run for a while, evaluate its success against your initial goals. Look at what worked well and what didn’t. If something isn’t performing as expected, make adjustments to improve the results. This could mean changing your messaging, reallocating budget, or trying different media channels.
QUES 5) ADVERTISING BUDGET
An advertising budget is the amount of money a business sets aside to spend on promoting its products or services. This budget helps decide how much to spend on different advertising methods, like TV ads, social media, or online promotions. It’s important to plan the budget carefully so that the business can reach its target audience effectively and get the best results for its money. By keeping track of how much is spent and what works best, businesses can adjust their budgets in the future to improve their advertising efforts.
There are several important factors that affect how a business sets its advertising budget. Here are some of the key ones:
- Business Goals: The main objectives of the business play a big role in determining the budget. For example, if a company wants to launch a new product or enter a new market, it may need to spend more on advertising to create awareness and attract customers.
- Target Audience: Understanding who the audience is can influence the budget. If the target audience is large and diverse, the business might need to spend more to reach different groups effectively through various channels.
- Competition: The level of competition in the industry can also impact the budget. If competitors are spending heavily on advertising, a business may need to increase its budget to stay visible and attract customers.
- Market Conditions: Economic factors, such as the overall health of the economy, can affect how much a business is willing to spend. In a strong economy, companies might feel more confident to invest more in advertising, while in a downturn, they may cut back.
- Advertising Channels: Different advertising methods come with different costs. For example, TV ads may be more expensive than social media ads. The business needs to consider which channels will provide the best return on investment and allocate funds accordingly.
- Past Performance: Looking at the results of previous advertising campaigns can help in setting the budget. If certain strategies worked well in the past, the business may choose to invest more in those areas.
- Seasonality: Some businesses experience seasonal peaks, like holidays or specific events, which can affect budgeting. They may need to allocate more money during these times to take advantage of increased consumer spending.
Advertising budgeting has several important benefits that can help a business succeed. Here are some of the key advantages:
- Control Over Spending: A budget helps keep track of how much money is being spent on advertising. This control prevents overspending and ensures that the business does not go beyond its financial limits. It helps in making sure that money is spent where it can have the most impact.
- Measuring Effectiveness: With a budget in place, businesses can measure the success of their advertising campaigns more easily. By comparing the results of different campaigns against the budget, they can see which strategies worked best and which ones need improvement. This information is valuable for future advertising efforts.
- Improved Decision Making: When a business has a budget, it can make informed decisions about where to invest its advertising dollars. It can analyze past performances, market trends, and competition to choose the best advertising methods. This leads to smarter spending and better results.
- Increased Accountability: A budget creates accountability within the marketing team. Everyone involved knows how much money is available and what goals need to be achieved. This encourages team members to work together to maximize the effectiveness of the advertising efforts.
- Focus on Goals: Advertising budgets are often tied to specific business goals, such as increasing sales or launching a new product. This focus helps ensure that all advertising activities are aligned with the overall objectives of the business. It keeps the team motivated and on track.
- Flexibility and Adjustment: Having a budget allows businesses to be flexible. If certain advertising strategies are not working as planned, they can adjust their budget to invest more in successful areas or try new approaches. This adaptability is crucial in a changing market.
There are several methods that businesses use to create their advertising budgets.
- Percentage of Sales Method: This is one of the most popular methods. In this approach, a business decides to spend a certain percentage of its sales on advertising. For example, if a company makes ₹100,000 in sales and decides to spend 10% on advertising, they will set aside ₹10,000 for ads. This method is easy to use and helps businesses adjust their advertising budget based on sales performance.
- Objective and Task Method: This method is all about setting clear goals for advertising. First, the business decides what they want to achieve, like increasing sales or launching a new product. Then, they figure out what tasks they need to do to reach those goals and how much money each task will cost. Finally, they add up all the costs to create their budget. This method helps ensure that the budget is directly linked to specific goals.
- Competitive Parity Method: In this method, businesses look at how much their competitors are spending on advertising. They try to match or stay close to that amount. For example, if a competitor spends ₹50, on advertising, a business might decide to spend a similar amount.
- Selecting Tools: Once you have your objectives, you need to choose the right tools to achieve them. There are different types of promotion tools you can select:
- Consumer-Promotion Tools: These are aimed directly at consumers and can include discounts, coupons, contests, free samples, or loyalty programs. They encourage consumers to make a purchase.
- Trade-Promotion Tools: These are designed for retailers or distributors. Examples include trade allowances, promotional allowances, and point-of-purchase displays. They help motivate retailers to promote your product.
- Business and Sales Force Promotion Tools: These tools target your sales team and business partners. They can include incentives, bonuses, or training programs to encourage them to sell more effectively.
- Developing the Plan: After selecting the tools, you need to develop a detailed plan. This includes:
- Size: Determine how big the promotion will be. Will it be a local event or a nationwide campaign?
- Conditions: Clearly outline the terms and conditions of the promotion, such as eligibility and restrictions.
- Duration: Decide how long the promotion will run. A well-defined timeline helps create urgency.
- Distribution Vehicle: Choose how you will communicate the promotion to your audience, whether through social media, email, in-store displays, or advertisements.
- Timing: Pick the right time for the promotion. Consider factors like holidays or seasonal trends that might impact consumer behavior.
- Sales Promotion Budget: Establish a budget for the promotion, taking into account all costs associated with the tools and activities.
- Pre-testing the Program: Before fully launching the promotion, it’s wise to conduct a pre-test. This can involve running a small-scale version of the promotion to gauge customer reactions and effectiveness. Feedback from this test can help refine the promotion before the full rollout.
- Implementing and Controlling the Program: Once everything is set, launch the promotion. Ensure that your team is well-informed and that all promotional materials are in place. Monitor the program closely to ensure it runs smoothly and make adjustments if necessary.
- Evaluating Results: After the promotion ends, it’s crucial to evaluate its success. Analyze sales data, customer feedback, and other metrics to determine if you met your objectives. This evaluation helps you understand what worked well and what didn’t, providing valuable insights for future promotions.
QUES 7) TESTING ADVERTISING EFFECTIVENESS
Testing advertising effectiveness involves checking how well an ad performs in reaching its goals. This can be done through different methods, such as surveys to gather feedback from viewers, tracking sales before and after the ad runs, or using online metrics like click-through rates and engagement levels. By analyzing this data, businesses can see if their ads are successful in attracting customers and making sales, and they can make changes to improve future advertising efforts. Overall, it helps ensure that advertising money is spent wisely and effectively.
There are two main types of methods to test advertising effectiveness: pretesting and post-testing.
Let's focus on pretesting methods first.
- Concept Testing: This method involves showing potential ad ideas or concepts to a target audience before the ad is created. The goal is to gather feedback on which concepts resonate best with consumers. This helps advertisers refine their ideas based on audience reactions.
- Copy Testing: In this method, the actual ad copy (the text and messaging) is tested with consumers to see how well it communicates the intended message. This can involve showing the ad to a group and asking for their thoughts on clarity, appeal, and persuasion.
- Mock-Ups and Storyboards: Advertisers create visual representations of the ad, either as mock-ups (like a rough draft of the ad) or storyboards (a sequence of images showing how the ad will flow). These are then presented to focus groups for feedback on visuals and storytelling.
- Focus Groups: This method brings together a small group of people from the target audience to discuss their reactions to the ad concepts. A moderator guides the discussion to gather insights on what works and what doesn’t.
- Online Surveys: Advertisers can use surveys distributed online to collect feedback from a larger audience. Questions can focus on various aspects of the ad, such as appeal, message clarity, and likelihood of engagement.
Here are the benefits of using pretesting methods for advertising in simple language:
- Improves Quality: Pretesting helps you find out what works and what doesn’t in your ad. By getting feedback early, you can make changes to improve the quality and effectiveness of the ad before it goes public.
- Saves Money: Making changes after an ad is launched can be very expensive. By testing ideas first, you can avoid costly mistakes and ensure that your final ad is more likely to succeed.
- Understand Effectiveness: Post-testing helps companies see if their ads actually worked. They can find out if people noticed the ad and if it made them want to buy the product.
- Improve Future Ads: By knowing what worked and what didn’t, companies can create better ads next time. They can learn from their mistakes and successes.
- Measure Return on Investment (ROI): Companies can see if the money they spent on ads brought in more sales. This helps them decide if advertising is worth it.
- Target Audience Insights: Post-testing shows which audience responded best to the ads. This helps companies target the right people in future campaigns.
- Adjust Strategies: If certain ads don’t perform well, companies can quickly change their approach or messaging based on feedback and data.
QUES 8) RELATIONSHIP BETWEEN SALES PROMOTION AND MARKETING MIX
Sales promotion is a marketing strategy used to encourage customers to buy a product quickly. It includes special offers like discounts, free samples, buy-one-get-one-free deals, or contests. These promotions create excitement and urgency, making people more likely to make a purchase. Companies use sales promotions to boost sales in a short time and attract new customers, helping them stand out in a competitive market.
Marketing mix is a combination of different strategies that businesses use to sell their products effectively. It includes four main elements: product, price, place, and promotion. The product is what the company is selling, the price is how much it costs, place refers to where it is sold, and promotion involves the ways to advertise it. By carefully balancing these elements, businesses can attract customers, meet their needs, and increase sales.
Interconnection between sales promotion and marketing mix:
- Part of Promotion: Sales promotion is a key element of the promotion aspect of the marketing mix, which also includes advertising and public relations.
- Boosts Sales: It helps increase sales quickly by encouraging customers to buy through tactics like discounts, coupons, and limited-time offers.
- Attracts Attention: Sales promotions can grab customer attention, especially when a product is new or not selling well.
- Supports Pricing Strategy: If a product is priced higher than competitors, a sales promotion can make it more appealing and encourage customers to try it.
- Enhances Product Appeal: Promotions can highlight the benefits of the product, making it more attractive to potential buyers.
- Needs Proper Placement: For promotions to be effective, they must be available in the right places (stores or online), ensuring they reach the target audience.
- Short-term Strategy: Sales promotions are often used for short-term goals, while the marketing mix focuses on long-term strategies.
- Integrates with Other Elements: Successful marketing strategies integrate sales promotions with product features, pricing, and distribution channels to create a cohesive approach.
- Encourages Trial Purchases: Sales promotions can encourage customers to try a new product, which can lead to repeat purchases if they like it.
- Builds Customer Loyalty: Effective promotions can create a positive experience, leading to increased customer loyalty and repeat business.
Here are the key differences between sales promotion and marketing mix:
- Definition:
- Sales Promotion: Refers to specific marketing activities aimed at boosting short-term sales through incentives like discounts, coupons, and contests.
- Marketing Mix: A broader concept that includes all the elements (Product, Price, Place, Promotion) that a company uses to market its products or services.
- Purpose:
- Sales Promotion: Primarily focuses on increasing immediate sales and attracting customers quickly.
- Marketing Mix: Aims to create a comprehensive strategy for long-term brand building and customer satisfaction.
- Duration:
- Sales Promotion: Usually short-term, often running for a limited time to create urgency.
- Marketing Mix: Involves ongoing strategies that can evolve over time to adapt to market conditions.
- Components:
- Sales Promotion: Consists of specific tactics and offers, such as discounts, buy-one-get-one-free deals, and loyalty programs.
- Marketing Mix: Encompasses the 4Ps (Product, Price, Place, Promotion) and how they interact with each other.
- Target Audience:
- Sales Promotion: Often targets price-sensitive customers or those looking for immediate value.
- Marketing Mix: Targets a broader audience, considering various demographics and customer needs.
- Brand Building: Advertising plays a crucial role in building brand identity and awareness. It helps establish a brand’s image and can differentiate it from competitors in the market.
- Market Expansion: Through advertising, companies can reach new markets and expand their customer base. It helps introduce products to different demographics and geographical locations.
- Customer Engagement: Advertising can foster engagement with consumers, encouraging them to interact with the brand through social media, contests, or feedback, leading to stronger customer relationships.
- Sales Support: Advertising supports sales efforts by driving traffic to stores or websites, ultimately leading to increased sales and revenue for businesses.
- Crisis Management: In times of crisis or negative publicity, advertising can help manage the situation by communicating the brand’s values, addressing concerns, and rebuilding trust with consumers.
- Educational Purpose: Advertising can also serve an educational role by informing consumers about new products, services, or industry trends, helping them make informed purchasing decisions.
Importance of Advertising:
- Increases Sales: Effective advertising can significantly boost sales by attracting new customers and encouraging repeat purchases from existing ones.
- Creates Brand Awareness: It helps create awareness about a brand and its offerings, making it easier for consumers to recognize and remember the brand when making purchasing decisions.
- Competitive Advantage: Advertising allows businesses to differentiate themselves from competitors, showcasing unique features that can give them an edge in the market.
- Influences Consumer Behavior: Advertising can shape consumer perceptions and attitudes, influencing their buying behavior and preferences over time.
- Supports Economic Growth: By promoting products and services, advertising contributes to economic growth by driving consumer spending and creating demand in the market.
- Encourages Innovation: The need to stand out in advertising often encourages companies to innovate and improve their products or services to meet consumer expectations.
- Builds Customer Loyalty: Consistent and positive advertising can foster customer loyalty, encouraging consumers to choose a brand repeatedly over competitors.
QUES 3) OBJECTIVES OF ADVERTISING
- Create Awareness: Advertising helps to inform people about a product or service. It makes them aware of what is available in the market.
- Generate Interest: Good advertising grabs attention and makes people interested in the product. It shows them why they should care about it.
- Encourage Desire: Advertising aims to create a desire for the product. It highlights the benefits and features that make the product appealing.
- Stimulate Action: The ultimate goal of advertising is to encourage people to take action, like buying the product or visiting a store.
- Build Brand Loyalty: Effective advertising helps to build a strong brand image. It makes customers feel good about choosing a particular brand, which encourages them to keep buying it.
- Inform About Offers: Advertising can also inform customers about special offers, discounts, or new products. This can motivate them to make a purchase.
- Differentiate from Competitors: Advertising helps a brand stand out from its competitors by highlighting what makes it unique. This can attract customers who are looking for something specific.
Q 4) TYPES OF ADV. ONLY BASED ON MEDIA
- Print Advertising: This includes ads in newspapers, magazines, brochures, and flyers. Print advertising is great for reaching specific audiences and can be saved for later reference.
- Television Advertising: TV ads reach a large audience and can combine visuals and sound to create memorable messages. They can be shown during specific programs to target certain demographics.
- Radio Advertising: Radio ads use sound to convey messages. They can be effective for reaching people while they are driving or doing other activities. Radio ads are often short and catchy.
- Online Advertising: This includes ads on websites, social media platforms, and search engines. Online advertising can be highly targeted based on user behavior and interests, making it very effective.
- Outdoor Advertising: Billboards, transit ads (like those on buses and subways), and posters fall under this category. Outdoor advertising is designed to catch people's attention while they are on the go.
- Direct Mail Advertising: This involves sending promotional materials directly to people's homes or businesses. It can include postcards, catalogs, or letters, allowing for personalized messages.
- Mobile Advertising: Ads that appear on mobile devices, like smartphones and tablets, are part of this category. They can be in the form of app ads, SMS promotions, or mobile web ads.
Q 5) APPEALS IN ADV.
- Emotional Appeal: This type of appeal aims to connect with the audience's feelings. Advertisements might use happiness, sadness, or nostalgia to create an emotional bond with the product.
- Rational Appeal: Rational appeals focus on logic and facts. These ads provide information about the product's features, benefits, and price to convince customers that it’s a smart choice.
- Impact on Behavior: Proper frequency can influence consumer behavior, encouraging them to take action.
Impact:
- Definition: Impact measures how effectively an ad influences the audience’s attitudes or behaviors.
- Message Clarity: A strong impact means the ad clearly communicates its message and resonates with viewers.
- Emotional Connection: Ads that create an emotional connection tend to have a greater impact.
- Behavior Change: The ultimate goal of impact is to motivate the audience to take action, like making a purchase.
- Brand Perception: Impact also affects how consumers perceive the brand, which can influence loyalty.
- Evaluation Methods: Surveys, focus groups, and sales data can help evaluate the impact of an ad.
- Long-Term Effects: The impact of media decisions can also be seen in long-term brand recognition and customer loyalty.
Here are some key considerations and methods for analyzing the impact of media decisions:
- Set Clear Objectives: Before analyzing, define what you want to achieve with your media decisions, like increasing brand awareness or driving sales.
- Track Key Metrics: Use metrics like impressions (how many times the ad was displayed), clicks (how many times people interacted with the ad), and conversions (how many made a purchase) to measure success.
- Audience Analysis: Understand who your audience is and how they interact with different media. This helps in assessing whether your media choices are reaching the right people.
- Compare Different Channels: Analyze the performance of various media channels (like TV, social media, or print) to see which ones are delivering better results.
- Conduct Surveys or Feedback: Gather direct feedback from your audience through surveys or polls to understand their perception of the ad and its effectiveness.
- A/B Testing: Run different versions of an ad (like different visuals or messages) to see which one performs better. This helps in refining your media strategy.
- Analyze Sales Data: Look at sales data before, during, and after the ad campaign to see if there’s a noticeable increase linked to your media efforts.
Q2) DIFF B/W ADVERTISING AND SALES PROMOTION
