ADVERTISING AND PROMOTION

DESIGN [APD]

Birat Shrestha
BBA Hons/Emph, KUSOM
February 05, 2018
 1. INTRODUCTION TO
INTEGRATED MARKETING
COMMUNICATION [IMC]
IMC: MEANING AND EVOLUTION
 IMC is integrating all the messages created by the advertiser‟s
various communication agencies and sent out by various
departments within the company to achieve consistency – one voice
communication
 IMC involves coordinating the various promotional elements and
other marketing activities that communicate with a firm‟s customers
 Many companies in in 1980s, began taking a broader perspective of
marketing communication and seeing the need for a more strategic
integration of their promotional tools like sales promotion, direct
marketing, public relations
 The firms asked their Ad agencies to coordinate various promotional
activities to create a communication impact among the target
customers
 Companies realized that product message should be communicated
by more than just an advertisement – involving other promotional
activities
 IMC: MEANING AND EVOLUTION
 IMC – a concept of marketing communications planning that recognizes the
added value of a comprehensive plan that evaluates the strategic roles of a
variety of communication disciplines – for example general advertising,
direct response, sales promotion, and public relations – and combines
these disciplines to provide clarity, consistency, and maximum
communications impact.
 Consumers‟ perceptions of a company and or its various brands are a
synthesis of the bundle of messages they receive or contacts they have –
media advertisements, price, packaging design, direct marketing
efforts, publicity, sales promotions, websites, point-of-purchase
displays in stores – the IMC approach attempts to portray an unified and
consistent message to the marketplace
 A contemporary perspective of IMC – identify the most appropriate and
effective methods for communicating building relationships with customers
and other stakeholders
 IMC – it is a strategic business process used to plan, develop, execute and
evaluate coordinated, measurable, persuasive brand communication
programs overtime with consumers, customers, prospects, employees,
associates, and other internal and external audiences to generate short-term
and long-term brand and shareholder value
REASONS FOR GROWING IMPORTANCE OF IMC
 Changing consumers, technology, and media consumption patterns
 Companies can take the synergies of various promotional tools
instead of just relying on mass media advertising for better ROI on
marketing
 Consumers are more sophisticated, cynical, and distrusting than
ever before, IMC approach would build customer belief and trust
through product showing and usages – this will bridge the gap
between what companies say and what their products do
 To respond to media fragmentation, marketers are increasing their
spending on media that are more targeted and can reach specific
market segments through micromarketing
 In the long-run, nourishing good customer relationships is far more
important than making simple exchanges
 THE ROLE OF IMC IN BRANDING
 Building and maintaining brand identity and equity
require the creation of well-known brands that have
favorable, strong, and unique association in the minds
of the consumer
 Companies recognize that brand equity is as important
as factory assets, patents, and cash as well-known
brands have the power to command premium price from
consumers as well as from investors
 Consumers develop certain brand associations through
the logo, color, symbols, packaging, designs etc.
 IMC approach build on the brand image by portraying a
consistent strong brand message and image
PROMOTION MIX COMPONENTS
Advertising
Sales Promotion
Personal Selling
Public Relation
Publicity
ADVERTISING
Advertising is a mass media communication
form designed to influence consumer buying
behavior
 Mass communication
 Impersonal communication
 Sponsor identified
 Paid in by the sponsor
 Informing & aspiring activity
 Media usage
SALES PROMOTION
 Demand stimulating activity
 Short run
 Consumer promotion
 Coupons
 Sampling
 Price Packs
 Premiums & Gifts
 Sweepstakes & Contests
 Subsidized financing
 Trade Promotion
 Off invoice
 Display schemes
 Gifts & Frees
 Slotting or facing allowances
 PERSONNEL SELLING

 Door to door selling

 Touch & feel advantage

 Tailor the communication

message
 Product demonstration
and trial
 More of convincing and
persuasion
PUBLIC RELATION
 The management function which evaluates public
attitudes, identifies the policies and procedures of an
individual or organization with the public interest,
and executes the program of action to earn public
understanding and acceptance
 News Stories & Media Editorial Content
 Event, Programs & Sports Marketing
 Lux: Lux Miss Nepal
 Sprite: Sprite Band Challenge
 Press Releases/ Press Conferences
 Product Placements/ Product Plugs (products placed
in TV programs and movies)
 Cause Related Marketing
 SCBNL : Seeing is Believing
 Lifebuoy: Scholarship
PUBLICITY

 A form of Public Relation

 It is not paid for
 News and Articles
 Word-of-Mouth
 Greater credibility
ROLE OF MARKETING
 Providing with target customer profile
 Setting marketing objective on which
basis advertising goals are set
 Brand positioning

 Developing marketing program and

setting promotional mix
 Guiding the advertising strategy
ADVERTISING
Advertising is the structured and
composed, non-personal communication
of information, usually paid for and
usually persuasive in nature, about
products (goods, services, and ideas) by
an identified sponsors through various
media
ADVERTISING OBJECTIVES
 Inform (awareness, recognition)
 Persuade (developing positive
feelings, judgment, attitude)
 Build Brands (brand equity and
image association)
 Encourage Purchase (sales
through consumer action)
 Remind (reinforcing consumer
memory)
Types of Advertising
 BY TARGET AUDIENCE
 Consumer advertising
 Informative (describing product attributes and features)
 Persuasive (developing consumer liking and preferences)
 Reminding (refreshing consumers' memory)
 Business advertising
 Trade Advertising (to obtain greater distributions)
 Professional Advertising (to convince professional people,
to recommend or prescribe a product or a service, to buy and
use particular product or equipment)
 Agricultural Advertising (agribusiness products and
equipments)
 Government advertising (procurement and public
awareness)
 BY GEOGRAPHICAL AREA

 Local advertising

 Regional advertising

 National advertising

 International advertising
 BY MEDIUM

 Print advertising
 Broadcast (electronic)
advertising
 Alternative/Ambient Media

 Out-of-home (outdoor)
advertising
 Direct-mail advertising

 Interactive advertising

 Transportation advertising
 BY PURPOSE
 Product advertising

 Non-product (corporate or institutional)

advertising

 Commercial advertising

 Non-commercial advertising

 Action advertising

 Social Awareness advertising

 CORPORATE ADVERTISING
The broad area of non-product
Advertising aimed specifically at
enhancing a company‟s image and
increasing lagging awareness.
It is promoting the company‟s desired
image
 Public Relations Advertising
 Institutional Advertising
 Corporate Identity Advertising
 Recruitment Advertising
 Advocacy Advertising (to communicate
views on issues that affect businesses)
– Advertorials
IMPORTANCE OF ADVERTISING
 Importance to a Firm
 Sales and market share
 Brand/corporate image and positioning
 Competitive tool and maintain brand loyalty
 Supporting sales-force and personal selling

 Importance to Marketing Channels

 Increased product movement
 Product recognition and self-service from customers

 Importance to Consumers
 Product type, features, attributes, benefits information and
knowledge
 Freedom of choice and risk reduction through brand image and
assurances and ego enhancement
 Benefits to Society
 Change in attitudes and behavior towards new products
 Economic impact by demand and employment creation
 Education and social awareness
THE EVOLUTION OF ADVERTISING
(AS AN ECONOMIC TOOL)
1. The Preindustrial Stage
2. The Industrializing Stage
3. The Industrial Stage
4. The Post Industrial Stage
5. The Global Interactive Age
1. THE PREINDUSTRIAL STAGE
 The marketplace grew and became complex
 Merchants hung carved signs and symbols
 The Chinese invented paper and Europe has its first paper mill in 1275
 Johannes Guntenberg invented printing press in Germany in 1440s –
this allowed facts to be established, substantiated, recorded, and
transported
 First formats of advertising – posters, handbills, signs
 The first Ad in English – a handbill tacked in Church doors in London
announcing prayer book on sale
 First newspaper Ad – reward for 12 stolen horses
 Ad announcing the availability of Stage Waggons to carry passengers
from Powles Hook Ferry to Philadelphia – 1767
 Benjamin Franklin, innovator of advertising art – made more readable
by using larger headlines, changing fonts, and adding art
2. THE INDUSTRIALIZING STAGE
 Industrial Revolution began in England – mid 1700s and reached North
America by the early 1800s
 Large companies increased their productivity through mass production
 Growth of Advertising was fueled by mass consumption
 The primary burden of marketing fell on wholesalers to arrange for the
products‟ delivery to markets as manufacturers were into mass
productions
 Volney B. Palmer set up advertising business in Philadelphia in 1841 –
contracted newspapers for large volumes of advertising space at discount
rates and resold the space to advertisers
 The Advertisers prepared the Ads
 In 1869, Francis Ayer formed an Ad agency in Philadelphia, named after
his father N.W. Ayer & Sons – first agency to conduct market survey,
planning, creating, and executing complete Ad campaigns for media-
commissions
 3. THE INDUSTRIAL STAGE CONTD...
 Started around the turn of the twentieth century and lasted well into 1970s
 An industrial growth of consumer packaged goods
 The manufacturer changed their focus from production orientation to sales
orientation as wholesalers were playing by changing manufacturers that
hurt the profit of producers
 The manufacturers developed new products and strengthened their sales-
force, packaged and branded their products, and executed national brand
advertising – Coca-Cola, Kellog‟s, Campbell, Wrigley‟s
 Advertising reached the status of science – “Scientific Advertising” by
copywriter Claude Hopkins at Albert Lasker‟s agency, Lord & Thomas,
published in 1923
 Radio became the primary means of mass communications
 Due to great depression in 1929, there was consumer resistance to sales
that lead to cutting in corporate budget – for an advertising industry to
improve effectiveness - it turned to research – Daniel Starch, A.C. Nielsen,
George Gallup founded research group to study consumer attitude and
preferences
3. THE INDUSTRIAL STAGE CONTD...

 Brands sought to sell their own special qualities

 Manufacturers followed the strategy of product
differentiation
 USP (Unique Selling Proposition)
 During the post-war prosperity of late 1940s and early
1950s, consumers tried to climb the social ladder by buying
more modern products
 Advertising entered its golden era
 A creative revolution ensued in which Ads focused on
product features that implied social acceptance, style,
luxury, and success
 Advertising giants – Leo Burnette, David Ogilvy, Bill
Bernbach built their agencies that changed the advertising
was planned and created
3. THE INDUSTRIAL STAGE CONTD...

 Companies turned to “Market Segmentation” –

advertiser‟s emphasis shifted from product
features to brand image or personality to align it
with the target segments – Cadillac as an image
of success
 Positioning Strategy – proposed by Al Ries and
Jack Trout, acknowledged the importance of
product features, but insisted on the ranking of
brand in the minds of the consumers
 Positioning strategy proved to be an effective way to
separate a particular brand from its competitors by
associating that brand with a particular set of customer
needs that ranked high on the consumers priority – Avis
(We‟re only no. 2), VW (Think Small), 7UP (The Uncola)
4. THE POST INDUSTRIAL STAGE
 During 1970s and 1980s, a new marketing term – “demarketing”
appeared – due to energy shortages advertisers asked people to use
less of the appliances – advertising to slow demand
 Demarketing was also used to stop the use of competitor‟s product
and tobacco related products
 TV was the hot medium – more creative executions
 There was the growth of sophisticated products
 “Marketing Warefare” by Al Ries and Jack Trout was published in
1980s – outlined four strategic positioning in the marketplace –
defensive, offensive, flanking, and guerrila
 Cosmetics industry aiming the „me‟ generation – “L‟Oreal. Because
I‟m worth it
 Affluent consumers were more concerned with the quality of their
lives
 Shifts from sales promotion to building brand value advertising
5. THE GLOBAL INTERACTIVE AGE
 The explosion of technology affected advertising –
cable TV, satellite receivers
 Transformation from mass media to a more
specialized “narrowcasting” medium
 Video recorder

 Computer technology

 Database marketing

 Social Media Marketing (SMM)

 ADVERTISING AND THE MARKETING PROCESS
 Review the Marketing Plan
 Situation analysis for SWOT (internal strengths and
weaknesses and external PEST for opportunities and threats
and market competition analysis)
 Marketing objectives (SMART) to provide direction, a time
frame for marketing activities and a mechanism for
measuring performance
 A marketing strategy that include selection of target
market(s) segment - consumer market and or business market
 The program for implementing the marketing strategy, the
four elements of the marketing mix
1. Product (categories of goods and services)
2. Price (strategies for emphasizing value as economy or premium)
3. Place (the distribution element – local, regional, national, global)
4. Promotion (the communication element of product or institution –
advertising, personal selling, sales promotion, public relations and
publicity)
 ADVERTISING AND THE MARKETING PROCESS
 Promotional Program Situation Analysis
 Internal analysis of the strengths and weakness of the brand and
the firm’s capability of implementing promotional programs and
the usage of Ad agency
 External analysis focuses on the firm’s customers including their
buying patterns, psychographics, market segments, direct and
indirect competitors, positioning strategies, promotional budgets,
message and media strategies
 Analysis of Communication Process
 Decisions regarding source, message, and channel factors
including spokesperson and media-mix options (TV, radio,
newspaper, magazine, outdoor, digital)
 Establishing communication goals and objectives (marketing
objectives refer to what is to be accomplished by the overall marketing
program stated in terms of sales, market share, profitability;
communication objectives refer to what the firm seeks to accomplish
with its promotional program or communication effects including creating
brand awareness, and knowledge about product attributes and benefits,
creating an image and developing favorable attitude and preference
towards the brand and purchase intention)
ADVERTISING AND THE MARKETING PROCESS
 Budget Determination (as per the promotional-mix
strategy)
 Developing the Integrated Marketing
Communication Program (advertising, direct
marketing, interactive/Internet message strategy, sales
promotion tactics, PR strategy, personal selling
strategy)
 Message development also referred to as creative strategy,
involves determining the message theme and appeal to be
conveyed to target audience
 Media strategy involves determining which communication
channels will be used to deliver the advertising message to
the target audience
 Monitoring, Evaluation, and Control (to meet the
communication objectives)
 THE ADVERTISING AGENCY

An advertising agency is an independent organization

of creative people and business people who specialize in

developing and preparing marketing and advertising

plans, advertisements and promotional tactics for the

clients and brands in their account

THE ADVERTISING BUSINESS AND ITS SUPPLIERS
ADVERTISER ADVERTISING
(Client/Company) AGENCY

RESEARCH
AGENCY

SUPPLLIERS
(Photographer/Illustrators/
Printers/Web Developers/Studios

MEDIA HOUSE
(Publications/Broadcasters/
Outdoor/Digital Media

TARGET
CONSUMER/S
 TYPES OF AD AGENCIES
 Local, Regional, National, and International agencies
 Full service agencies
 Advertising services (creating Ads, research, media planning)
 Non advertising functions ( packaging, PR, sales promotion,
exhibition)
 General consumer agency & B2B agencies
 Entrepreneurial agencies – limited clients, full fledged service
 Specialized Agencies
 Creative boutiques
 Pool of graphic designers, copywriters, cinematographers
 Creative Artists Agency (CAA) took Coke campaigns from its long-
time agency McCann-Erickson Worldwide
 Media Buying Agencies (Bulk media buying - space & time)
 Interactive agencies (interactive website, direct-
response, sales promotions)
 ORGANIZATION STRUCTURE OF AN AD AGENCY
 Ad agency organizes its functions, operations, & personnel
according to types of accounts it serves, its size, & its geographic
scope

 In small agencies an employee might require to wear many hats

 The owner supervises operations, client services, & business

development

 AEs do the creative works like copy writing & media buying

 Art director can do the designs or designs purchased from a

free lancer

 Medium & large agencies are structured in departmental or group

system
 ORGANIZATION STRUCTURE OF AN AD AGENCY

 In departmental system, the agency organizes its various

functions – account services, creative services, marketing services,
media services, and administration into separate departments

 In the group system, the agency is divided into a number of little

agencies or groups, where each group may serve one large account
or few smaller account.
 Each group will consist of AE, copywriter, art director, media personnel,
headed by the account supervisor.
 DEPARTMENT SYSTEM OF AN AD AGENCY

BOD/MD/ CEO

Account Creative Media

Department Department Department
Creative Director

Account -Copy Media Director

Director writer -Media
-Visualizer Planner
- Account -Art
Executives -Media
director
Buyer
 GROUP SYSTEM OF AN AD AGENCY

BOD/MD/ CEO

Client/Brand I Client/Brand II Client/Brand III Client/Brand IV

Account
Creative Service Media Service
Managemt Service
 FUNCTIONS OF AN ADVERTISING AGENCY
 Market Research and Account Planning
 Clients and agencies must give their creatives (artists and
copywriters) a wealth of product, market, and competitive
information, as advertising is based on market information
 Account planning uses research to bridge the gap between
account management and creatives by defending consumer‟s
point of view and creative strategy
 Account planners study consumer needs and desires through
surveys, focus group discussions and personal interactions
 The help creative team translate its findings into imaginative,
successful campaigns by reflecting research into Ads
 By putting the consumer at the center of the process, account
planning creates Ad that nurtures relationship between
consumer and the brand through understanding, intuition and
insight
 FUNCTIONS OF AN ADVERTISING AGENCY
 Creative Concept Development
 The agency‟s copywriter and artists work as a creative team under a
creative director to develop – message theme, copy, art and designs
 The nonverbal communication is developed by art directors, graphic
designers, and production artists, who determine how the Ads‟ verbal
and visual symbols will fit together
 Advertising Production: Print and Broadcast
 Once an Ad id designed, written, and approved by the client, it is
turned over to the agency‟s print production manager or broadcast
producers
 Print Ads – the production department buys type, photos,
illustrations, and works with designers, printers, engravers,
fabricators
 Broadcast commercial- production team work from an approved script
or storyboard by using – actors, models, camera operators, production
specialists (studios, directors, editors)
 Creation of dealers kit, direct mailing letters, media literature
FUNCTIONS OF AN ADVERTISING AGENCY
 Media Planning and Buying
 Media research, negotiating, scheduling, buying, and
verifying
 IMC and relationship marketing
 Creative media solutions
 Press releases, articles, interviews, event coverage
 Traffic management – keeping up with media deadlines and
sending the Ad materials on time as per the schedule
 Non-Advertising Services
 Sales promotion department – sales scheme development,
dealer Ads, window posters, point-of-purchase displays, and
dealers sales material.
 Public relations, event management, press releases and
direct marketing
 Digital media designs, web page designs, package designs
 Agency administration
 ACCOUNT PLANNING AND WORKING
PROCEDURES OF AN ADVERTISING AGENCY
1. Agency brief (client describing the product promotion
objectives, target market segment profile, product USP,
message objective)
2. Creative brief (the account planning executive briefing
the client requirement, target market profile, message
theme and execution appeal to the creative team in an
agency)
3. Creative presentation and approval (agency
presenting the creative concept and media plan to the
client for approval)
4. Creative productions (print and broadcasts)
5. Media planning, scheduling and buying
(ATL and BTL)
6. Advertising campaign execution (releasing the Ads)
Advertising Agency Compensation
 MEDIA COMMISSIONS
 Started by space brokers & reps for newspaper
 They saved media from sales & collections
 Media allowed agencies to retain a 15 % media commission
 Calculations
 Rate card price of full page Ad - $100,000
 Agency bills the client - $100,000
 Agency send the media by retaining 15 % profit- $85,000 (media billing)
 Agency profit - $15,000

 In some cases media will pass on additional corporate discount to high

volume advertising client, passed through agency billing system.
 The agency still will keep 15% agency discount
 The agency provides design services out of this 15% commission, if the
business volume is huge
 But agencies have started to charge separate creative fees
 MARKUPS
 In the process of creating an Ad, the agency buys a variety of services
like photography, printing & production, illustrations, paintings etc.

 The agencies will add on 17.65% on the suppliers bill as a 15% margin
to the cost

 Calculation
 Photography cost - $8,500

 Markup - $8,500 x 17.65% = $1,500

 Total bill to client - $8,500 + $1,500 = $10,000

 Markup - $10,000 x 15% = $1,500

 In some cases agencies put up to 20% to 25% as a markup depending

upon business volume
 FEES

 Agencies have the role to solve the business problem of the client

 Agencies charge clients with fees for brand plan, concept, design &
strategy recommendations

 Agencies have started to work on the fee-commission combination

 In the straight-fee or retainer method, agencies charge for all their

services, either by the hour, month

 Sometimes agency is compensated on the incentive based system,

targeting certain goals.
ETHICAL CONSIDERATIONS AND ASPECTS IN ADVERTISING
 Making people buy more than they can afford
(people buying with credit cards, but this has
increased demand and employment that has enhanced
the economy)
 Advertising by overemphasizing materialism
(advertisement promoting luxury products by
surrounding consumers with images of good life that
can be gained through the advertised products but also
has raised living standard)
 Advertising to increase the cost of goods and
services (advertising to increase price but it has also
built brand image that provide status)
 ETHICAL CONSIDERATIONS AND ASPECTS IN ADVERTISING
 Advertising perpetuating stereotypes (negative
stereotyping of women as a weaker gender, as housewives
or as sex objects; elderly people as dumb and helpless; but
progress has been made to portray women as strong and
smart and elderly as self-dependant and wise)
 Advertisement promoting habits (showing smokers
and alcohol drinkers as successful and smart people –
advertisement of sanitary pads, condoms have created
social harmony)
 Advertisers using unfair tactics (Ads with the
message like – “happiness depends on physical
attractiveness” thus creating insecurity about looks –
particularly fair complexion, slim and younger looks and
sexual potency linked with smartness and successful)
 ETHICAL CONSIDERATIONS AND ASPECTS IN ADVERTISING
 Advertisers using deceptive and misleading
advertisements (making product claims without any
substantial proofs; not awarding the contest winner or giving
deceptive prizes – right to use puffery and making subjective
claims – but some are deliberately untruthful or misleading)
 Advertising of professional services (doctors, engineers,
lawyers)
 Advertising to children (as they does not have the skill to
evaluate and analyze the advertisement message – they get
attracted easily)
 Advertisers creating offensive advertisements
 Sexual appeals (sexual suggestiveness and nudity; presenting
women as sex objects or sexually viable; but some sex appeal has
upgraded the brands)
 Shock advertisements (using startling, sexually arousing, and
controversial images to get consumer attention)
Questions/Answers/Discussions
Thank You/Best Wishes