Advertising & Brand Management

Advertising Definition
Advertising is any paid form of non-personal presentation

& promotion of ideas, goods & services by an identified sponsor. (American Marketing Association) Advertising is controlled, identifiable information & persuasion by means of mass communications media.(John S. Wright, Willis L. Winter & Sherilyn K. Zeigler) Advertising is a message paid for by an identified sponsor & delivered through some medium of mass communication. It is persuasive communication; it is not neutral; it is not unbiased. It says I am going to sell you a product or an idea. (J. Thomas Russell & W. Roland Lane)

Features
It is paid form & commercial in nature.
It is non- personal presentation. It is aimed at promoting & selling. It has an identified sponsor. It informs the potential consumer.

Social Functions
Inform about availability of different products & services.
Inform about use of different products & services. Influence people way of thinking, buying behavior &

lifestyle.

Economic Functions
Helps in creation of production, distribution &

employment. Enhances demand of products & services. Plays a great role in the economic growth.

Benefits
To Manufacturer: Increases sales, Reduces cost, Builds brand image, Assist dealers, Helps introducing new products & organizations. To salesmen: Prepares a platform for sales, Lessens the burden. To consumers:Creates awareness, Assist in purchase decision, Ensures quality of product or services received.

To society: Increases standard of living, Generates employment, Enhance knowledge , Transforms culture

Role of advertising in marketing process

Determining the marketing mix
Developing & managing the brand Achieving effective market segmentation, differentiation &

positioning Contributes to revenue & profit generation

Types of advertising

ADVERTISING TO CONSUMERS

Classified ads

End- product ads

Display advertising
National advertising Retail(local) advertising

Co-operative ads

Direct response ads

Types of advertising

ADVERTISING TO BUSINESS & PROFESSION

Trade ads

Industrial ads

Professional ads

Corporate or institutional ads

Types of advertising

NON- PRODUCT ADVERTISING

Idea advertising

Service advertising

Political Advertising

Surrogate Advertising

Primary demand ads

Selective demand ads

Economic aspects of advertising

Effects the value of products or services Effects prices of products or services Effects consumer demand & choice

Effects the competitive environment

Social Aspects of Advertising

Advertising educates consumers Pro: Advertising informs Con: Advertising is superficial Advertising improves living standards Pro: Ads lower the costs of products Con: Ads are wasteful and help only some

Critics of advertising feel that advertising is superficial because many ads carry little actual product information. Do you think advertising is superficial?

Advertising Affects Happiness and Well-Being

Con: Ads create needs. Pro:

Ads address a wide variety of basic human

needs. Con: Ads promote materialism. Pro: Ads reflect societys priorities.

Critics feel advertising promotes materialism

Advertising: Demeaning and Deceitful, or Liberating and Artful?

Con: Ads perpetuate stereotypes Pro: Advertisers are more sensitive now Con: Ads are often offensive Pro: Ads are a source of liberation Con: Ads deceive via subliminal stimulation

Pro: Advertising is art

Legal aspects of advertising

Federal Trade Commission FTC, established in 1915, is an

independent agency of us Government with its main objective to keep business free and fair. It regulates deceptive advertising & controls advertising process Food & Drug Administration FDA regulates the advertising of food, drug, cosmetic & medical products. Prohibits false labeling & packaging. Federal Communications Commission- FCC prohibits obscenity, fraud & lotteries on radio , telephone, telegraph & television. It has the authority to deny or revoke broadcast licence. Advertising Review Council ARC monitors all advertising, promotional & marketing materials for print ads, packaging, radio & television spot, internet ads, online stores, poster and demos. Securities and Exchange Commision- SEC regulates advertising of securities & the disclosure of information in annual reports

Legal aspects of advertising

Bureau of Alcohol, Tobacco, Firearms & Explosives ATF is responsible

for putting warning labels on alcoholic beverage advertising & banning active athletes as celebrities in beer ads. Childrens Advertising Review Unit CARU resolves issues regarding advertising to children. It reviews & evaluates claims for truth & accuracy which are directed towards children. Other important regulatory bodies are:Advertising Standards Authority ASA National Advertising Division NAD National Advertising Review Board NARB Advertising Standard Council of India ASCI Information & Broad casting Ministry Advertising Agencies Association of India (AAAI)

Legal Acts The Indian Penal Code (IPC), 1860 Drugs & Cosmetics Act, 1940 Drugs Control Act, 1950 The Drugs & Magic Remedies (objectionable Advertisement) Act, 1954 The young person (harmful publication) Act, 1950 The Indecent Representation Of women (Prohibition) Act, 1950 The prevention of Insults to the National Honor Act, 1971 The Prize Competitions Act, 1955 The Prize Chits & Money Circulation Scheme (banning) Act, 1978 The Infant Milk Substitutes, Feeding Bottles & Infant Foods (Regulation of production, supply & distribution) Act, 1992 Indian Copyright Act, 1957 Trade Marks Act, 1999 The Pharmacy Act, 1948 The Monopolies & restrictive Trade Practices (MRTP) Act, 1984 The Consumer Protection Act, 1986 Broadcasting Services Regulation Bill, 2006 The Cable Television Networks (Regulation) Act, 1995 Cigarettes & other Tobacco Products (Prohibition of Advertisement & Regulation of Trade & Commerce, Production, Supply & Distribution) Act, 2003

Legal aspects of advertising

Ethical aspects of advertising

1. 2. 3. 4.

Should not mislead the consumer What it promises must be there in the performance of products Ad should not be indecent and obscene As advertising is also a social process, it must honor the norms of social behavior, and should not offend our moral sense ASCI (Advertising Standards Council of India) regulates the advertising in India - has the set guidelines To ensure the truthfulness and honesty of representations and claims made by advertisements and to safeguard against misleading advertising. To ensure that advertisements are not offensive to generally accepted standards of public decency. To safeguard against indiscriminate use of advertising for promotion of products which are regarded as hazardous to society or to individuals to a degree or of a type which is unacceptable to society in large. To ensure that advertisements observe fairness in competition so that consumers need to be informed on choices in the market place and the canons of generally accepted competitive behavior in business are both served.

Ethical aspects of advertising

Advertising is a highly visible business activity and any lapse in ethical standards can often be risky for the company. Some of the common examples of ethical issues in advertising are give below: Vulgarity/Obscenity used to gain consumers attention Misleading information and deception Puffery Stereotypes Cultural, religious & Racial issues Controversial products (e.g. alcohol, gambling, tobacco etc) Comparative advertising Freedom of speech in advertising Surrogate advertising Advertising to children Matters of questionable taste Subliminal advertising

The communication process of advertising

Noise : External Public opinion Marketing strategy Competition Other noise Message : Encoding strategy & tactics ( by agency) Media mix: channels (one way & two way) Receiver: message reception & response: Perception Learning Persuasion action

Source: Advertiser (objectives)

Noise: internal Perceived needs, information processing, attitudes, opinions & others

feedback

Advertising response hierarchy model

AIDA model was presented by Elmo Lewis to explain how personal selling works. It shows a set of stair-step stages which describe the process leading a potential customer to purchase. The stages, Attention, Interest, Desire, and Action, form a linear hierarchy. Illustration Reliance India Mobile campaign can be used to explain this model better. Awareness- the elaborate advertisement where Mukesh Ambani spoke about the new project being introduced on his fathers 70th birthday. Interest- was generated as the company spokesperson featured in the ad, as a representative of the company image and also spoke about introducing a new technology CDMA. Desire- was created with various offers like free SMS, 40paise STD calls, easy payment schemes, and discount coupons worth Rs. 1 lakh. Action- Dhirubhai Ambani Pioneer offers induced people to go for the product.

Two step flow of communication

Development of the Two-step Flow of Communication theory It was first identified in a field somewhat removed from communications-sociology. In 1948, Paul Lazarsfeld, Bernard Berelson, and Hazel Gaudet published The People's Choice, a paper analyzing the voters decisionmaking processes during a 1940 presidential election campaign. The study revealed evidence suggesting that the flow of mass communication is less direct than previously supposed. The study suggested that communication from the mass media first reaches "opinion leaders" who filter the information they gather to their associates, with whom they are influential. Lazarsfeld et al suggested that "ideas often flow from radio and print to the opinion leaders and from them to the less active sections of the population." People tend to be much more affected in their decision making process by face to face encounters with influential peers than by the mass media (Lazarsfeld, Menzel, 1963)

The Opinion Leaders

A study by Robert Merton revealed that opinion leadership is not a

general characteristic of a person, but rather limited to specific issues. Individuals who act as opinion leaders on one issue, may not be considered influentials in regard to other issues (Merton, 1949). A later study directed by Lazarsfeld and Katz further investigated the characteristics of opinion leaders. This study confirmed the earlier assertions that personal influence seems more important in decision making than media. The opinion leaders seem evenly distributed among the social, economical, and educational levels within their community, but very similar in these areas to those with whom they had influence.

Characteristic of opinion leaders

the opinion leaders were identified as having the strongest interest in

their particular niche. They hold positions within their community affording them special competence in their particular niches. They are generally gregarious, sociable individuals. Finally, they had/have contact with relevant information supplied from outside their immediate circle. The opinion leaders receive a disproportionate amount of their external information from media appropriate to their niche. Studies by Glock and Nicosia determined that opinion leaders act "as a source of social pressure toward a particular choice and as a source of social support to reinforce that choice once it has been made (1966). Charles Glock explained that opinion leaders often develop leadership positions in their social circles. They achieve these positions based on their knowledge of situations outside their circles (1952).

Criticisms
Although the theory of indirect flow of information from media to the target was quickly adopted, the original study performed by Lazarsfeld, Berelson, and Gaudet was not. It had a few faults. The panel method by which they attempted to better understand the influences reaching a voter was unfaulted. The faults lie in the manner with which the researchers addressed the flow of influences. The first problem concerning the findings of the study were that the data had to be collected in a random sample, but subjects in a random sample can only speak for themselves. For these reasons, each person could only say whether or not they considered his/herself an advice giver. Lazarsfeld and his associates in the 1940 election study were unable to determine the specific flow of influence. They determined there were a number of opinion leaders spread throughout the socio-economic groups; however, these leaders were not directly linked to particular groups within the socio-economic levels.

Praises and Support

Lazarsfeld and his associates detailed five characteristics of personal contact that give their theory more validity: Non-purposiveness/casualness One must have a reason for tuning into a political speech on television, but political conversations can just "pop-up". In this situation, the people are less likely to have their defenses up in preparation, they are more likely open to the conversation. Flexibility to counter resistance In a conversation, there is always opportunity to counter any resistance. This is not so in media, a one sided form of communication. Trust Personal contact carries more trust than media. As people interact, they are better able through observation of body language and vocal cues to judge the honesty of the person in the discussion. Persuasion without conviction The formal media is forced to persuade or change opinions. In personal communication, sometimes friendly insistence can cause action without affecting any comprehension of the issues.

BACKGROUNDTHE PROPONENT
Wilbur Schramm (1907-1987)
The founder of the academic field

of communication First Professor of communication

Schramms Communication Model

It is based on Shannon & Weavers prior mathematical model.

It focuses on the Fields of Experience

Focuses on role of Exchangeability Feed back loops play a important role in this model Emphasized the process of encoding and decoding the message.

Envisioned the process as a two-way circular communication between

the sender and receiver Schramm incorporates the study of human behavior in the communication process

Elements of the Schramns model

Encoding Decoding Interpreting Message Source Destination Signal Feedback

Suggestion of Dr. Schramns

Feedback the return process in which the originator of a message also acts as the recipient of a message resulting directly from the first message

Two Sources of Feedback - The message returning to the originator of the first message from the recipient (originated with Ferdinand de Saussure 1915)
People are constantly monitoring their personal communication behavior and evaluating it what is sometimes called self-monitoring.
message can be complicated by different meanings learned by different people. Meanings can be denotative or connotative. Denotative meanings are common or dictionary meanings. Connotative meanings are emotional or evaluative and based on personal experience. characteristics of messages that impact communication between two individuals are: intonations and pitch patterns, accents, facial expressions, quality of voice, and gestures. The successful transmission of a message depends on the acceptance of the message. Follows the process of interpreting the message. This process is influenced by the presence of both physical (phone, TV, sirens, etc.) and semantic (distractions, age, attitudes, etc.) noise.

Diagram of Schramm's feedback loop

Diagram of Schramm's field of experience

STRENGTHS
The model provides an additional perspective which is the field of

experience Included feedback, context and culture Adapted by other model designers

Why is this important?

Applying Communication to Educational Communication
Being able to identify noise Helping Create Overlapping fields of experiences Communication has a great impact on society

Schramms model for everyday use

Gaining attention (reception) Informing learners of the objective (expectancy) Stimulating recall of prior learning (retrieval) Presenting the stimulus (selective perception) Providing learning guidance (semantic encoding) Eliciting performance (responding) Providing feedback (reinforcement) Assessing performance (retrieval) Enhancing retention and transfer (generalization).

Cognitive Dissonance Theory

Leon Festinger in 1962 gave the theory of Cognitive Dissonance. This theory of Cognitive Dissonance says that human beings often have conflicting beliefs with actions they take, or other beliefs they have. This dissonance creates a tension and tension reduction is automatically sought by changing our evaluations by some degree. Cognitive Dissonance is when you have two good choices and you make your decision then you find yourself unsure or in doubt about the choice you made. You might have to downplay the other choice in order to reassure yourself. Individual Interpretations: This theory gives a basic explanation for the way humans react when they act outside of their beliefs. We cannot carryout actions that we believe are wrong, so we either cease the action or believe that we are right.

 Critique:

This theory explains what dissonance is and how it is created along with predicting what will happen when one experiences it. It is put in the most general, simple terms possible and could be applied to any thought or action. The theory of cognitive dissonance could be proved false through testing and invites new research on specific aspects of the concept.
Ideas and Implications:

It implies that when there is tension we change a belief or an action. It implies that we experience more dissonance when the issue is more important, when we put off a decision and the decision is permanent. This theory could be used in the persuasive context in a variety of ways. When marketers want to persuade their audience to buy a product or perform a subject they must convince them that this is a good action and if their beliefs do not match this action, they must persuade them to change their beliefs.

Use:

 Marketing (buyers remorse): theory that a consumer may use a

particular product because he or she believes the advertising for that product, which claims that the product is the most effective of its kind in the job that it does. The consumer may then see a competitors advertisement that seems to prove conclusively that this competitive product is better. This creates dissonance. The consumer must now relieve the uncomfortable feeling that the dissonance brings about and will often do so by switching products. Even though advertisers want to create dissonance for nonusers of their product, they do not want to create it for those who do use their product. Cognitive dissonance most often occurs after the purchase of an expensive item such as an automobile. A consumer who is experiencing cognitive dissonance after his or her purchase may attempt to return the product or may seek positive information about it to justify the choice. If the buyer is unable to justify the purchase, he or she will also be less likely to purchase that brand again.