ADVERTISING &

SALES MANAGEMENT
Importance of Advertising
 “Advertising is telling and selling”
 Though it is one of the several functions
of marketing, it has taken the form of an
independent discipline.
The Meaning of Advertising
 The term originates from the Latin “adverto”,
which means to turn round.
 Advertising thus denotes the means employed to
draw attention to any object or purpose.
 “It is a paid form of non personal presentation an
promotion of ideas, goods or services by an
identified sponsor.”
 Through advertisement, the advertiser intends to
spread his ideas about his products among this
customers and prospects.
 Popularization is the basic aim of the advertising
activity
Key Components of the Advertising Job

 Decide the advertising objectives to be

accomplished
 Determine the target audience at whom the
message is to be aimed
 Decide the advertising appropriations
 Select the media
 Construct the actual advertisement in the
pretest its efficiency
 Coordinate the advertising effort with the rest of
the promotional Programmes
Four Major Decision Areas
 Deciding the Advertising Objectives
 Deciding the Budget

 Deciding the Copy

 Deciding the Media

Deciding the Advertising
Objectives
 Objectives are essential because it helps the
marketer know in advance what they want to
achieve and it also helps ensure that they are
proceeding in the right direction
 Goals are also made real through objectives
leading to effective development of advertising
Programmes for meeting the objectives.
 As Advertising became a business task it was
imperative that it was expected to yield results
proportionate to the effort and cost involved.
Two distinct schools of
thought
 What should be or what could be the objectives of
advertising?
 One school has it that advertising must bring in
more sales and therefore advertising objectives
should certainly include sales growth.
 The other school feels that advertising is about
communication and therefore goals should be
intended to shape awareness and attitudes of
consumers.
 “Advertising that does not sell is a waste” –David
Ogilvy
 Conflict Remains: Communicating certain ideas Vs
Direct Sales Task role
Four Sets of
Constructs/Themes
 The behavioral constructs e.g.. Trial
purchases and store visits
 Attitude; Attitude change and attitude
measurement
 Awareness; creating awareness of new
products and ideas
 Image creation and positioning (or
reinforcing)
Areas of Ad Objectives
 Introduction of new products in the market
 Expansion of the market for the existing products/brands
 Building a long term consumer franchise for the firm
 Countering Competition
 Reminding Customers
 Reassuring the customers by removing post purchase dissonance
 Building up brand image and company image
 Aiding the total selling function by taking the customer through all the
steps from awareness to purchase involved in the selling process
 Closing an immediate sale (Clincher ads)
 Supporting other sales promotion activities
 Stimulating impulse buying
 Enthusing the channel to stock the product
 Supporting and supplementing the salesman’s effort
 Supporting and supplementing the dealer’s selling effort
Advertising
How Advertising Works
 “AIDA”
 Attention
 Interest
 Desire

Action!
AIDA (Awareness, Interest,
Desire, Action)
 The AIDA sequence is conceptualized by
Strong (1925)
 Here the consumer is moved along a linear
continuum of internal states from
unawareness to awareness
 Then interest is elicited and desire (for the
brand) is aroused.
 Finally, the consumer is stirred into action.
Linear Communication and the
Hierarchy of Effects
 Theories reflect the methods and assumptions of
cognitive psychology.
 Analogy is drawn between the information
processing of computers and that of humans
 These research traditions have been drawn on by
models of advertising persuasion
 The consumer’s resistance is broken by an
accumulation of advertising effects hence the
expression “hierarchy of effects”
 The consumer processes information like a
computer sequentially according to rules
Hierarchy of Effects
 The hierarchy of effect represents “compounding
probabilities” (Percy et al. 2001)
 It is also criticized on the grounds that it conceives
of advertising consumption as an essentially dyadic
process transmitted through a media channel to an
individual viewer and consumed in social isolation
 A further criticism is that it represents only high
involvement purchases: many or most purchases
are spontaneous and do not engage consumers in
such rational processing
Social Process Vs Emotional
Process
 Ineluctably social process (Ritson and Elliot,
1999) – we do not generally view ads in an
experimental booth-our interpretation of them is
normally framed by the social context in which
we encounter them.
 Elliot, 1998; Holbrook and Hirschman, 1982 –
Subsequent models have incorporated stronger
elements of consumer emotionality into the
persuasion process to reflect the often irrational
and quirky motivations behind consumer
behavior.
Cognition
 Cognition (Thinking) refers to the rational appeal of
advertising as for example, a motor car ad which includes
data on engine performance or utility features.
 The affective stage refers to the emotional response of the
consumer to an ad. Not only does the ad seek to engage
with the consumer on a rational level by emphasizing
product benefits; it also tries to elicit a positive emotional
response with pleasing imagery and alluring symbolism.
 Motor car ads typically feature the engine and other product
data plus a carefully shot picture of the car and its
occupants in a pleasing setting.
 The emotional response is: desire, triggered by
identification. Finally conation refers to action: the
combination of rational and emotional appeal in the same ad
might act persuasively and motivate a purchase response.
Advertising
How Advertising Works
 Some things we know about people.
 “People read what interests them,
sometimes it’s an ad.” (Gossage)
 People are strategic - they look out for
their own best interests.
 People are bombarded with messages
 A key concern is getting through clutter
 People (and advertising) work from
both logic and emotion
The Linear Model of
Communication
NOISE

SENDER ENCODE MESSAGE DECODE RECEIVER

NOISE
 Limitations of Linear Model
 It is easy to interpret in such a way that meaning and message are
understood to be synonymous. This risks misconstruing the interpretative
possibilities.
 Oversimplification of the customer’s cognitive engagement with
advertising by emphasizing a singular message that has one unproblematic
meaning.
 The advent of parallel processing: the assumption that computers and
human brains can process one bit of data at a time as been challenged by
more complex models
 The implication that explicit attention must be given to an ad is erroneous.
 The linear model of communication with its sequential processing translates
conveniently into a model of persuasion if these stages are replaced with
attitudinal or behavioral states (AIDA). A lot of research goes on in
measuring these states as they are an indicator of the likelihood of purchase
(and therefore an indicator of success of the advertisement campaign). Thus
these are necessary conditions for advertising to achieve its marketing goals
but not sufficient. Eg. A consumer may be aware of ad or may even like an
ad but that does not mean he will buy the product.
Advertising
How Advertising Works
 The Lavidge-Steiner Purchase
Learning Model
 How people “learn” ads Conviction
 Begins with Awareness
Preference
 Moves to Conviction
and Purchase Liking
 NOTE: Process may be
quite rapid and you Knowledge
may try before being
totally convinced
Awareness
Key
The SingleConcepts
Biggest Thing:
 Advertising dollars have great “elasticity”
 Planning and implementing the Right Advertising
is usually critical for success in the
marketplace
 The Wrong Advertising is usually worthless
 Advertising can be The Single Biggest Thing
 It can probably impact sales more than any other
element of the marketing mix.
 And … it is the most fun!
Key
The SingleConcepts
Biggest Thing
 Advertising is just a part of “The Five Ps”
 All of “IMC” is important
 However...
 Advertising dollars are...
 Often, the biggest item in the marketing budget
 The most visible part of marketing spending
 The most controllable marketing activity
 Advertising is often…
“the tail that wags the marketing dog”
Key Concepts
Campaigns:
 Origin of term
 Military Campaigns

 Political Campaigns

 Advertising Campaigns
Key Concepts
Campaigns:
 Origin of term
 Fr. campagne, It. campagna - open country
suited to military maneuvers
 Campaign - a series of military operations with
a particular objective in a war
 Campaign - a series of organized planned
actions with a particular purpose, as for
electing a candidate.
Key Concepts
Campaigns:
 Military Campaigns

“Victory is my objective.
War is my strategy.”
Winston Churchill
Key Concepts
Campaigns:
 Military Campaigns
 “a series of military operations with a particular
objective in a war”
 Advertising and marketing use both
the language and the military
mindset
 Example: a very popular
marketing book…
 Key Concepts
Campaigns:
 Political Campaigns

 Each single geographic or

statewide campaign may have
 In politics, as in war, you have its own objectives and
to pick your battles. National strategies which contribute
political campaigns focus on to the overall campaign.
key states and voter groups.
 The objective is a majority
in the Electoral College.
Key Concepts
Campaigns:
 Advertising Campaigns

“Advertising
is a team sport!”
Key Concepts
Campaigns:
 Advertising Campaigns
 A team effort
 Structured and
sequential
activities
 An imaginative
re-integration of
new and existing factors
 Shared objectives
and strategies
Key Concepts
Advertising Campaign:

 Next, we’ll show you four billboard ads for

a telecom company in Kansas City - Birch
Telecom
 Then, we’ll discuss some of the basic
common elements needed in an
advertising campaign
 Here’s the first ad...
Key Concepts
Advertising Campaign:
Key Concepts
Advertising Campaign:
Key Concepts
Advertising Campaign:
Key Concepts
Advertising Campaign:
Key Concepts
Advertising Campaign:

 What were the common elements?

1. ____________________________
graphic look
2. ____________________________
strategic message
3. ____________________________
benefit statement
4. ____________________________
brand personality
5. ____________________________
executional elements - the dog
6. ____________________________
anything else?
Key Concepts
Advertising Campaign:

 Campaigns are built with…

Plans & Strategies

Key Concepts
Plans & Strategies:
 Organized Actions and…
 “Imaginative Reintegration”

 Plans & Strategies are a combination of:

 Tightly organized planned actions
 Unique strategic configurations
 Plans may contain strategies
 Strategies need plans to be implemented
Key Concepts
Plans & Strategies:
 Kenichi Ohmae (head of McKinsey Japan)
“In business as on the battlefield, the object of
strategy
is to bring about the conditions most favorable
to one’s own side.
In strategic thinking ,
one first seeks a clear understanding
of the particular character of each element of a
situation,
and then makes the fullest possible use
of human brainpower to restructure the elements
in the most advantageous way.”
Key Concepts
Plans & Strategies:
 Kenichi Ohmae (head of McKinsey Japan)
“Phenomena and events in the real world
do not always fit a linear model.
Hence, the most reliable means of dissecting a
situation
into its constituent parts and then reassembling them
in the desired pattern is not a step-by-step
methodology such as systems analysis.
Rather, it is that ultimate non-linear thinking tool,
the human brain.”
Key Concepts
Plans & Strategies:
 Kenichi Ohmae (head of McKinsey Japan)
“No matter how difficult or unprecedented the
problem,
a breakthrough to the best possible solution
can come only from a combination of rational analysis
based on the real nature of things,
and imaginative reintegration
of all the different items into a new pattern
using nonlinear brain
power.”
Key Concepts
Plans & Strategies:
 Now let’s talk about Plans
 Marketing Plans are written:
 By the Advertisers
 By their Advertising Agencies
 Creative Plans may be called:
 Creative strategies
 Creative blueprints
 Creative platforms
 Creative briefs
 And sometimes the word “communication”
replaces the word “creative”
Key Concepts
Plans & Strategies:
 Plans contain Strategies and vice versa
 Marketing Plans may also have Strategies
and Plans for Sales Promotion and PR
 The Campaign will also have
 A Media Strategy - and…
 A Media Plan
 Media Departments write Media Plans
 TheAdvertising Strategy determines the
Creative Objective and the Media Objective
Key Concepts
Plans & Strategies:
 Here’s a graphic representation…
Marketing Objective
Sell one million of product

Market Strategy/Creative Market Strategy/Media

Establish brand as superior
Creative Objective
Establish brand as superior
Creative Strategy
To be determined
Target audience W 18-49
Media Objective
Deliver Advertising to
Target audience W 18-49
Media Strategy
To be determined
Key Concepts
Plans & Strategies:
 Who’s going to manage all of this?
 At the client, Director of Marketing
 Responsible for Marketing
 Usually sets Marketing Objective and Budget
 Agency is responsible for Advertising
 Good agencies seek to do this work for their clients
 At the agency, Account Managers:
 They are the link to the client
 They develop strategy - or lead development
 They manage the resources of the agency
 and, very often, they write the Plans
Key Concepts
Plans & Strategies:
 Agencies turn strategies into ideas
 And they turn those ideas into ads
 Creative people actually make the ads
 Copywriters and art directors
 Agencies turn plans into campaigns
 Clients and account management determine
needs and budgets
 Media departments turn budgets and strategies
into Media Plans
Key Concepts
Plans & Strategies:
 To make plans and strategies work, a lot of
people have to work together.
 And that means they have to speak…

The same
language!
Key Concepts
Vocabulary:
 The Language of Marketing & Advertising
 Originalconcepts came from military
 Now the business of marketing has its
own intellectual infrastructure - a way of
thinking and a way of talking
 Understanding the specific meanings of key
words and concepts is critical
Yes, it will be on the test!
Key Concepts
Vocabulary:
 Mission: Overall goals & values
your “reason for being”
 Objective: What you want to accomplish.
 Strategy: How you are going to do it.
 Tactic: Specific action. (Should be
specific action that helps meet strategic
goals - tactics should be on strategy.)
 Remember, objectives first, then
strategy. (If you don’t know where
you’re going, any road will take you
there.)
Key Concepts
Vocabulary:
 Mission: Overall goals & values
your “reason for being”
 Objective: What you want to accomplish.
 Strategy: How you are going to do it.
 Tactic: Specific action. (Should be
specific action that helps meet strategic
goals - tactics should be on strategy.)
 Remember the acronym M.O.S.T.
Mission, Objective, Strategy, Tactics
Key Concepts
Vocabulary:
The Value
The
 Value Ladder
Ladder “Laddering”
 Value “I’m a good mom”
 Benefit Good food for my family
 Consumer Benefit Kids like it
 Product Benefit Easy to serve
 Feature E-Z Open glass jar
 Attribute Apple sauce is made
from apples
Key Concepts
Vocabulary:
 Some More Important Words…
 Target audience - person or group to
whom advertising is directed
 Primary target - the target audience
 Secondary target - usually, the trade
 Demographics - statistical description of
target audience
 Psychographics - psychological traits of
target audience
Key Concepts
Vocabulary:
 Some More Important Words…
 Sales Promotion - use of incentives (a small
bribe) to develop or stimulate sales
 Public Relations (PR) - publicity through
non-paid media
 Publics - a PR version of target audience
 Situation
Analysis - beginning section of plan
where current situation is evaluated
 “SWOT” Analysis - Strengths, Weaknesses,
Opportunities, and Threats
Key Concepts
Vocabulary:
 Some Important Media Words…
 Reach - percentage of the audience exposed
to an advertising message
 Frequency - average number of times
audience has had the opportunity to see the
message
 GRPs (Gross Rating Points) - the sum of the
ratings points (a point is one percent of the
audience)
 TRPs (Target Rating Points) - this is a subset,
measuring rating points for the target group
Key Concepts
Vocabulary:
 Some More Important Media Words…
 CPM (Cost per thousand) - how much it costs
to reach a thousand people (the “M” is the
Roman numeral for a thousand)
 CPP (Cost per point) - how much it costs to
buy a “point” of the broadcast audience
 Share - percentage of an audience tuned to a
specific station
 OK,now that we know how to talk about
advertising, let’s talk about how it works…
works
Advertising
How Advertising Works
 Let’s
talk about how advertising
works. Next, we’ll cover...
 Some things we know about people
 Some things we know about
advertising messages
 The Lavidge-Steiner Learning Model

 “AIDA”
Advertising
How Advertising Works
 Some things we know about people.
 “People read what interests them,
sometimes it’s an ad.” (Gossage)
 People are strategic - they look out for
their own best interests.
 People are bombarded with messages
 A key concern is getting through clutter
 People (and advertising) work from
both logic and emotion
Advertising
How Advertising Works
 Some things we know about
Advertising
 Branding and Advertising
 Branding = overall brand equity building
 Advertising = specific messages and goals
 Advertising contributes to Branding
 Advertising is concerned with:
 The Advertising Message
 Media Planning and Placement
Advertising
How Advertising Works
 Some things we know about
 An
Advertising
Advertising Communication Model
Advertising Communication Model
Feedback
Advertiser Audience
Sender Receiver
(Encoder) (Decoder)
MES SA GE
 Note it is more difficult for the audience to
communicate back to the advertiser.
 Feedback is one purpose of Market Research
Deciding the Advertising Budget
(how much should a company
spend?)
 No Standard Formula or Norm
 Varies from industry to industry

 Varies from company to company

 Varies from company to company within same

industry
 Varies within same company over time
General Practices in Budgeting
 Competitive Parity (Competitor Standards)
 Affordability (Small Firms)

 Fixed Percentage of Turnover (1-2% of

turnover; ignores varying requirements of
advertising effort at various stages of PLC)
Based on Functions to be
performed
 Advertising Objectives are Pinpointed
 Their role in achieving the overall marketing
objectives is decided
 Advertising appropriations are decided on a
market to market, product to product and
brand to brand basis
Regression equation
 The regression equation deals with the following variables:

 The unknown parameters denoted as β. This may be a scalar or a vector of length k.

 The independent variables, X.
 The dependent variable, Y.

 Regression equation is a function of variables X and β.

Y = f (X, β)
 The user of regression analysis must make an intelligent guess about this function. Sometimes
the form of this function is known, sometimes he or she must apply a trial and error process.
 Assume now that the vector of unknown parameters, β is of length k. In order to perform a
regression analysis the user must provide information about the dependent variable Y:
 If the user performs the measurement N times, where N < k, regression analysis cannot be
performed: there is not provided enough information to do so.
 If the user performs N independent measurements, where N = k, then the problem reduces to
solving a set of N equations with N unknowns β.
 If, on the other hand, the user provides results of N independent measurements, where N > k,
regression analysis can be performed. Such a system is also called an overdetermined system;

Regression coefficient - when the regression line is linear (y = ax + b) the

regression coefficient is the constant (a) that represents the rate of change
of one variable (y) as a function of changes in the other (x); it is the slope of
the regression line
Regression Analysis
 Based on historical data
 Time Series Data: Records of past advertising
expenditures and sales over time
 Cross Sectional Data: Records of advertising
expenditure and sales for a specific period over different
markets
 Most firms using Regression Analysis go for Time Series
Data
 The aim is to predict dependent variable-sale or
market share
 The advertising expenditure level would be one of
independent variables.
 The regression coefficient corresponding to the
advertising variable serves as a measure of the short
term response to advertising. it is the slope of the regression line
The Adaptive Control Model

 The model recognizes that the budget decisions need

updating because the relationship between the advertising
and sales changes over time with changes in market
conditions.
 This model starts with a sales response curve and locates
an optimal level of ad expenditure.
 The firm will now experiment with non optimal levels in
select test markets. This is done to get more knowledge
about the sales response curve set originally.
 The new information therefore coming out of experimental
marketing is added to the sales response function for
arriving at current optimal advertising expenditure rate.
The Compromise

 A “compromise budget” is arrived at after considering the

basic questions:

 What is the audience to be reached by advertising?

 What is its size, location etc?
 What are the media available for delivering the advertising
message?
 Of the available media which media or media combination
are likely to most cost effective?
 What are the features of the proposed campaign? Does the
campaign involve single release of an advertisement or
repeat releases? What is the releases proposed?

Therefore, the Advertising Budget is a function of: Advertising

Objectives, Media Decisions and Copy Decisions
Deciding the Copy/Layout
 “Copy”:

 Written Matter
 Pictures
 Labels
 Logo
 Design

 Copy is synonymous with layout

 Copy development has become the task of professional
advertising agencies;
 however copy development becomes successful only when
there is close interaction between the advertiser and the agency
Main Steps in Copy
Development
 Facts Finding Stage

 What is the central issue to be tackled?

 What is the issue to which the total campaign has to
address itself?
 What are the overall communication objectives?
 What is the specific communication objective of the
proposed campaign?

 Advertiser and the agency have to work out literally together

 The agency becomes an insider as far as the advertiser is
concerned.
 The agency gathers and analyses all pertinent data to come to
grip with the problem and to decide the course to be taken
Idea Finding Stage
 Tentative ideas are developed under different “idea heads.”
 They are further processed, developed and screened.
 The less promising ones are eliminated.
 To develop ideas different routes are adopted. Interviewing a
selected sample of target audience is a route normally taken for
eliciting ideas.
 Sometimes the agencies also attempt to focus on group interviewing
and brainstorming.
 All processes are aids to get access to some creative ideas on
which the ad man can work further. He has to further develop the
theme and total advertisement story.
 He has to decide: kind of source for conveying message, frame
message, its style and structure.
 He normally the ad man/agency comes up with a number of copy
alternatives and places them before the advertiser.
 The copies are normally tested in selected segments of market
before final decision on choice of copy is made.
The Main elements of a copy
 Message
 Message Structure
 Message Sidedness (One side argument or two side argument)
 Order of Presentation
 Climax Order (Strong points are placed at the end-applies to high
interest material); Anti-Climax (Strong points placed at the beginning-
applies to low interest material); Pyramidal Order (important points
presented at the middle-effect is least persuasive)
 Stating Conclusion in a Message (Should there be an explicit conclusion? It
is preferable to leave something out of the message for the audience to
guess)
 Message Appeal
 Product oriented appeals
 Physical Features oriented appeal
 Function oriented appeal
 Brand to Brand comparison appeal
 Consumer oriented appeals
 Consumer Oriented appeal (Attitude, Class, Lifestyle)
 Appeals evoking pleasant sensations and moods
 Appeals evoking sense of luxury and distinctiveness
 Humor appeals
 Fear appeal
The Main elements of a copy

 Source
 The Credibility of the Source
 Likeability/Attractiveness of the Source
 The Source’s approach to the views and
Disposition of the audience
Snapshots
 Source tone: soothing, authoritative, upbeat;
familiarity or lack of it.
 Color: Blue-Cold, used to create distance, blue
skies. Red-Intense. Orange (Warm). Black
(Mysterious, Sinister), Purple (Luxury). Colors can
be treated as metaphors for nature: green grass,
brown earth, red blood and passion
 Serif Old Roman Style: Tradition and Authority
 Times, Century Schoolbook (Transitional),
Media Selection
 Deciding on:

 Reach (% of people in the target market exposed to an ad

campaign during a given period)
 Frequency (the no. of times the average person is
exposed to an advertising message in a given period)
 Media Impact (qualitative value of a message exposure
through a given medium) Eg. Radio Vs TV

 More the reach, frequency and media impact advertiser

seeks the higher the advertising budget will have to be.

 Choosing Among Major Media Types

Profiles of Major Media Types
MEDIUM ADVANTAGES LIMITATIONS
Newspapers Flexibility, Timeliness, Short Life; Poor
Good Local Market; Broad Reproduction Quality
Acceptance; High
Believability
Television Combines sight, sound, High absolute cost; less
and motion; appealing to audience selectivity
senses; high attention;
high reach
Direct Mail Audience Selectivity, Relatively High Cost; “Junk
Flexibility; No Mail” Image
Competition;
Personalization
Radio Mass Use; high Audio Presentation only;
geographic and lower attention than
demographic selectivity; television; non standardized
low cost rate structures; fleeting
exposure
Magazines High geographic and Long ad purchase
demographic lead time; some
selectivity; credibility waster circulation; no
and prestige; high guarantee of position
quality production;
long life

Outdoor Flexibility; high repeat No audience

exposure; low cost; selectivity; creative
low competition limitations
 Selecting
Specific Media Vehicles (Specific
Magazines, Television Shows, Radio
Programmes)

 Deciding on Media Timing (Scheduling the

advertising over the course of a year)
 Advertising Evaluation
Measuring the communication effect of an ad-copy testing-tells whether
the ad is communicating well.

 Methods of Advertising Pretesting:

 Direct Rating (Exposes to consumer panel to alternative ads
and asks them to rate the ads)
 Portfolio Tests (Consumers view or listen to a portfolio of an
advertisements taking as much as time as they need. They are
then asked to recall all the ads and their content, aided or
unaided by the interviewer. )
 Laboratory Tests (Physiological Reactions are measured:
heartbeat, B P, pupil dilation, perspiration. These help measure
ad’s attention getting power but reveal little on belief, attitude or
intentions)

 Post Testing Methods:

 Recall Tests (Recall everything they can about the advertisers
and products they saw)
 Recognition Tests (Eg. Readers of a given issue of a magazine
are asked to point out what they recognize as having seen
before)
Measuring the Sales Effect
 What sales are caused by an ad that increases brand
awareness by 20% brand preference by 10%?
 Sales effect is harder to measure than communication
effect
 Sales are effected by multiple factors apart from
advertising: product features, price, availability etc.

 Methods:

 Past Sales comparison with past advertising

expenditures
 Varying Advertising Spends (keeping market areas
and marketing efforts constant)