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SRINIVAS UNIVERSITY BBA HONORS V SEM

SRINIVAS UNIVERSITY
(A unit of A Shama Rao foundation)
PANDESHWAR, MANGALORE

STUDY MATERIAL
SPECIALISATION: MARKETING
ADVERTISING MANAGEMENT

VI- Semester
BBA (NONORS)

Compiled by
PROF NELSON PEREIRA
Faculty
Dept of Management and Commerce
SRINIVAS UNIVERSITY

1
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

2020

Paper Code: 40 Hours


17BBAHNMM18BBAHN6 Elective IV IA: 50
3 ADVERTISING MNAGEMENT Exam:50
17MBAIGMM63
Theory/week:4
Hours Creditors:4

Unit I: Introduction to Advertising Management 8 Hrs


Advertising- Meaning, Definition, Features, Objectives, Importance, Classification of
advertising, Limitations of advertising, Functions of advertising, Limitations of advertising,
difference between advertising & personal selling, Difference between advertising &
publicity, Advertising Budget- Meaning, Factors influencing the advertising budget
allocation, Methods of allocating advertising budget.

Unit II: Advertising Media Planning 8 Hrs


Advertising media- Meaning, factors influencing media selection, Role of media in
advertising, Types of media- Print media, Electronic media, Outdoor media, Transit media,
Direct mail, and Speciality advertising.

Unit III: Advertising Copy and Layout 8 Hrs


Advertising copy- Meaning, Definition, Types, Essential qualities of advertisement copy,
Models of advertising copy- AIDA, DAGMAR, Advertising layout- Meaning, Elements,
Qualities of good advertisement layout, Advertising appeal- Meaning, Types of advertising
appeals.

Unit IV: Advertising Agency 8 Hrs


Advertising agency- Meaning, Definition, Functions, Types of advertising agency,
Organisation structure of an advertising agency, Agency compensation –Meaning, Types,

2
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

Client turnover- Meaning, Reasons for client turnover, measuring effectiveness of advertising
– Meaning, need for measuring effectiveness of advertising, Methods for measuring
effectiveness of advertising.

Unit V: Ethical Issues in Advertising 8 Hrs


Introduction, Suggestions for controlling unsocial and unethical advertising, Advertising
standards council of India (ASCI) - Introduction, Objectives of ASCI, Misleading advertising
– Advertising to children, Product endorsements, Stereotyping, Cultural religious and racial
sensitivity in advertising.

Case study: Ethical issues in advertising.


Total Hours: 40
Books for Reference:
1. Advertising Management - Chunawalla
2. Marketing Management -Dr.A.Siddiq
3. Marketing Management -C.N.Sontakki
4. Marketing Management -Philip Kotler

TEACHING PLAN

Paper Code: 40 Hours


17BBAHNMM63 Elective IV IA: 50
17MBAIGMM63 ADVERTISING MNAGEMENT Exam:50
Theory/week:4
Hours Creditors:4

Unit I: Introduction to Advertising Management 8 Hrs

Session 1 Advertising: Meaning definition, features 1 hr


Session 2 Objectives 1 hr
Session 3 Importance 1 hr

3
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

Session 4 Classification of advertising 1 hr

Session 5 Limitations of advertising 1 hr

Session 6 Functions of advertising, Limitations of advertising 1 hr

Session 7 Difference between advertising & personal selling 1 hr

Session 8 Advertising Budget- Meaning, Factors influencing the advertising budget 1 hr

8 Hrs

Unit II: Advertising Media Planning

Session 9 Advertising media- Meaning, factors influencing media selection 1 hr

Session 10 Media selection 1 hr

Session 11 Role of media in advertising 1 hr

Session 12 Print media, Electronic media 1 hr

Session 13 Outdoor media 1 hr

Session 14 Transit media 1 hr

Session 15 Direct mail 1 hr

Session 16 Speciality Advertising 1 hr

8 Hours

Unit III: Advertising Copy and Layout


Session 17 Advertising copy- Meaning, Definition 1 hr

Session 18 Types, Essential qualities of advertisement copy 1 hr

Session 19 Models of advertising copy- AIDA 1 hr

Session 20 DAGMAR 1 hr

Session 21 Advertising layout- Meaning, Elements 1 hr

Session 22 Qualities of good advertisement layout 1 hr

4
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

Session 23 Appeal- Meaning 1 hr

Session 24 Types of advertising appeals. 1 hr


Session 25 Essential qualities of advertisement copy 1 hr
7 Hours
Unit IV: Advertising Agency
Session 26 Advertising agency- Meaning, Definition 1 hr
Session 27 Types of advertising agency 1 hr
Session 28 Organisation structure of an advertising agency 1 hr
Session 29 Agency compensation –Meaning 1 hr
Session 29 Types of compensation 1 hr
Session 31 Client turnover- Meaning 1 hr
Session 32 Measuring effectiveness of advertising meaning 1 hr
Session 33 Need for measuring effectiveness of advertising 1 hr
Session 34 Methods for measuring effectiveness of advertising. 1 hr
9 Hrs
Unit V: Ethical Issues in Advertising

Session 35 Ethical Issues Introduction 1 hr


Session 36 Suggestions for controlling unsocial and unethical advertising 1 hr
Session 37 Advertising standards council of India (ASCI) 1 hr
Session 38 Introduction, Objectives of ASCI 1 hr
Session 39 Misleading advertising – Advertising to children. 1 hr
Session 40 Product endorsements, Stereotyping, Cultural religious adds 1 hr

Total 40 Hours

5
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

Definition of Advertising:

Every day we come across hundreds of advertising messages, which tell us about various
products such as soaps, detergent powder, soft drinks and services such as hotels, insurances
policies etc. Advertising is perhaps the most commonly used tool of promotion by an
organization. It is commonly understood as to communicate about a product or service. But it
is not correct and complete to understand it as so.

Actually, advertising includes all the activities performed by the enterprise to present the
goods and services to the consumer and to motivate them to buy these goods and services. It
is non-personal form of communication, which is paid for by the marketer (sponsor) to
promote his goods and services. The term “advertising” has been defined by many eminent
authors as

According to William J. Stanton, “Advertising consists of all the activities involved in


presenting to a group, a non-personal, oral or visual, openly sponsored message regarding a
product or service or idea, this message is called advertisement, is disseminated through one
or more media and is paid for, by the identified sponsor”.

According to Wheeler, “Advertising is any form of paid non-personal presentation of ideas,


goods and/or services for the purpose of inducing people to buy”.

According to American Marketing Association, “Any paid form of non-personal presentation


and promotion of ideas, goods and services, by an identified sponsor. The medium used are
print broadcast, and direct”.

Thus, advertising can be defined as a paid form of non-personal presentation of product or


service or idea. In developing advertising programme, one must start with the identification
of the needs and wants of the market and must take five major decisions regarding Mission,

6
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

Money, Message, Media and Measurement of the advertisement programme as stated by


Philip Kotler ‘as 5 M’s of advertising’ in his book Marketing Management.

Basic Features of Advertising:

From the above explanation and definition of the authors, we can say that advertising
has following distinguishing features:

i. Paid Form – It is a paid form of communication i.e. the sponsor has to bear the cost of
communication with the respondents.

ii. Non-Personal – There is no direct face-to-face contact between the prospect and the
advertiser. That is why it is referred as non-personal method of promotion.

iii. Identified Sponsor – Advertising is always undertaken by some identified individual or


company, who makes advertising efforts and also bears the cost of undertaking such effort.

Elements of Advertising

The elements of advertising are as follows:

i. Preparation or Homework:

Refers to the act of imagining and compiling all the possible advertisements by
numerous mediums, which are as follows:

a. Taking references from the advertisements of competitors

b. Reading books on advertising to collect ideas

ii. Unique Selling Proposition (USP):

It refers to the singular benefits and advantages of a product that creates a favourable
impression in the mind of customers. The advertisements should focus on USP of the
product.

iii. Maintaining a Unique Image:

7
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

It indicates that an organization should stick to its own image and personality. The
organization should not try to imitate its competitors rather should focus on the betterment of
its own product or service.

iv. Teamwork:

It refers to the collective efforts of advertising specialists of an organization. These specialists


work together towards the success of an advertisement. The collective efforts of specialists
ensure that the product and its important aspects are well explained to customers through the
advertisement.

v. Selecting an Efficient Advertising Medium:

It refers to the decisions taken to select the appropriate medium for advertising a product. The
choice of a medium depends on the advertising budget of the organization, type of product,
and targeted market. Few products do not require much explanation, thus, they can be
advertised through a medium, such as radio. In this case, the target market comprises radio
listeners who belong to lower-middle class families.

Few other products may require demonstrations or visual aids, for example, vacuum cleaners
and water purification machines. Such products targets middle-class and high-class families
and can be advertised through television.

vi. Retaining the Customers:

It indicates that an organization should not overlook its existing customers while trying to
make new customers. It is important for the organization to keep producing numerous
reminder advertisements to keep its existing customers updated about the existence of the
product.

Objectives of Advertising:

The objective of advertising is nothing but to sale the product or idea or a service. The real
objective of advertising is to increase awareness among the consumer about the sellers
product. According to Huigy and Mitchell, “The purpose of advertising is to sell goods,
services or ideas to a large group of prospective purchasers.”

8
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

R.S. Davar stated the advertising objective as, “Advertising aims at commencing the
procedure, educating the consumer, supplementing the salesman, connecting the dealer to
eliminate the competitor but above all, it is a link between the producer and the consumer”.

In simple words the following are the main objectives of advertising:

1. Preparing Ground for Sale of New Products:

Whenever a new product is introduced in the market, advertising becomes necessary for
informing potential consumers about the product. In this way, advertising can be used for
preparing ground for sale of new product.

For achieving this objective, various mass media like radio, television and cinema are used by
the advertisers.

2. Increasing Demand for the Product:

Another objective of the advertising is to increase the demand for the product. Advertising
helps in creating a favourable atmosphere for maintain or improving sales of the product. By
means of the advertising prospective customers may be induced to buy a particular product
by informing them about comparative quality price and other attributes of the product. Thus,
changing the habits of the consumers so as to shift from a rival product.

3. Educating the Consumers:

One of the basic objectives of every advertising is to educate the consumer and the users
about the uses and utilities of the product. This helps the consumers and users in making
good choice.

4. Building up Brand Image:

Another objective of advertising is to build up brand image and brand loyalty towards the
product. This objective is achieved through constant and repeated advertising about the
brand.

5. Facing the Competition:

9
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

One of the basic objectives of advertising is to help the marketer to face the existing
competition effectively and efficiently. The marketers inform the consumer about the price,
quality and availability of product through advertising.

6. Supplementing the Salesman:

The objective of advertising is also to assist the salesman’s efforts in increasing the sales of
the product. By means of educating customers about the product, advertising reduces the
work load of the salesman for selling the product.

Mathew’s, Buzzell and Frank had given the following objectives of the advertising:

(a) To make an immediate sales.

(b) To build primary market.

(c) To introduce a price deal.

(d) To inform about a product.

(e) To build brand recognition or brand insistence.

(f) To help salesmen by building an awareness of a product among retailers.

(g) To create a reputation for services, reliability or research strength.

(h) To increase market share.

(i) To modify existing product appeals and buying motives.

(j) To inform about the availability of new products or features or price.

(k) To increase the frequency of use of a product,

(l) To increase the number or quality of retail outlets,

(m) To build overall company image,

(n) To effect immediate buying action.

10
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

(o) To reach new areas or new segments of population within existing areas, and

(p) To develop overseas.

Types of Advertising:

Broadly speaking, advertising can be classified into two broad categories viz. product
advertising and institutional advertising.

Product Advertising:

Product advertising is that advertising whose main purpose is to inform and stimulate the
market about the advertiser’s product or services. This advertising usually promote specific
branded products in such a manner as to make it more desirable in the eyes of prospects than
competitor’s brand.

Product advertising on the basis of action can be further classified as Direct Action
Advertising and Indirect Action Advertising —

(a) Direct-Action Advertising – Direct-action advertising are those advertisements which


makes buyer to take action immediately. For example- Reduction in price during clearance
sales.

(b) Indirect-Action Advertising – Indirect-action advertising is done to stimulate demand


over a period of time and increase buyer’s respect towards manufacturer’s brand. Such
advertising is a form of long-range promotion and is designed to create desires in the buyer’s
mind.

Product advertising on the basis of demand may be sub-divided into pioneer demand
advertising and selective demand advertising.

(a) Pioneer Demand Advertising is used when a product is first introduced in the market. The
main aim of such advertising is to inform about what the product is, what it does, how it is
used and from where it can be purchased. For example – advertising of motor cars, electronic
items etc., for first time.

11
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

(b) Selective advertising is made to meet the selective demand for a particular brand or type
of product such as Ambassador Car. It is also known as competitive advertising as it point out
features and advantages that a consumer get by using it and that may not be available in
competing brand.

Product advertising can be also divided on the basis of product life cycle stage. It can be
informative, persuasive and reminder advertising.

(a) Informative advertising is that advertising which is done for the promotion of the
products. It seeks to develop initial demand for a product. These advertising ads are such that
they appeals to the consumer’s emotions as well as their rational motives. These are used at
the introduction stage of the product life cycle.

{b) Persuasive product advertising is done at growth and maturity stage in the product life
cycle. These advertisements aim at providing competitive advantage over the rivals’ product.

(c) Reminder product advertising aims at reminding the prospects about the features and
benefits of the products. It is generally used at the maturity as well as in decline phase of the
product life cycle. It is also known as retentive advertising.

Functions of Advertising:

For many firms advertising is the dominant element of their promotion mix. It is particularly
true in the case of producers producing convenience goods like – detergent, toilet soaps; soft
drinks etc. However, in recent times the use of advertising is continuously increasing in case
of shopping and speciality goods too, as we see in case of automobiles; home appliances etc.
Huge advertising is done by the marketers to introduce a new product and show its features to
the target audience.

Advertising can also be used to convince the potential buyers that firm’s goods or services
are superior to that of the competitor’s goods or services in terms of quality, quantity or price.
It also creates a brand image in the mind of the customer and make them loyal towards the
firms goods or services.

Advertising generally performs the following functions:

12
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

i. Promotion of firm’s goods and services and thereby increasing sales of the firm.

ii. Creating awareness in the potential buyer about the new product.

iii. Creating a favourable public image and thereby brand image in the market.

iv. Mass production facilities and thereby optimum utilization of resource of the firm.

v. Providing supportive roles to other promotional measures.

Media of Advertising:

1. Mural Advertising:

Mural or outdoor advertising has long life. It has a general and wide appeal. It can attract
attention of a large section of population. An advertiser has ample scope to use skill and art in
advertising.

2. Press Advertising:

Newspapers have a general and wide appeal. Repeat advertising is possible. Periodical
change in size and contents is also easy. Newspapers offer promotional assistance. They are
the best source of market information.

However, newspapers have short span of life. We cannot have coloured and attractive
advertisements. Waste in advertising is considerable. Illiteracy affects its utility.

3. Film Advertising:

It has a wide appeal. It can overcome language barriers. Audio visual technique has
maximum impact on audience. Sound and sight both are employed for communicating the
message.

4. Radio Advertisement:

Radio has the shortest closing times. Radio uses only an audio signal. Announcement can be
made very quickly. It can secure dealer support, has a very wide appeal and suitable even for
illiterate people. Repeat message is quite common.

13
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

5. Television Advertisement:

Television uses both video and audio signals. Television has all the advantages of radio,
namely, sound and explanation, plus the additional advantage of sight. It can appeal through
ear as well as eye.

Products can be demonstrated with explanation. Television reaches the audience almost like
personal face to face contact. To that extent it is just like personal salesmanship.

6. Transit Advertising:

It consists of car-card advertising, which is located within buses, subways, railways and
outside displays which appear on the front sides and backs of buses or other public transport
and at transportation terminals. It is the lowest-cost media.

7. Direct Mail:

Direct mail is any advertising sent by mail, including sales letters, folders, pamphlets,
booklets, catalogues and the like. Direct mail is the most personal and selective media. It
reaches only the desired prospects. It has minimum waste in circulation.

Benefits of Advertising:

Advertising helps in spreading information about the advertising firm, its products, qualities
and place of availability of its products, and so on. It helps to create a non-personal link
between the advertiser and the receiver of the message.

The significance of advertising has increased in the modern era of large scale production and
tough competition in the market. Advertising is needed not only by the manufacturers and
traders but also for the customers and the society.

1. Benefits to Manufacturers and Traders:

It pays to advertise.

Advertising has become indispensable for the manufacturers and distributors because
of the following advantages:

14
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

(i) Advertising helps in introducing new products. A business enterprise can introduce itself
and its products to the public through advertising.

(ii) It can create new taste among the public and stimulate them to purchase the new product
through effective advertisement.

(iii) Advertising assists to increase the sale of existing products by entering into new markets
and attracting new customers.

(iv) Advertising helps to create steady demand of the products. For instance, a drink may be
advertised during summer as a product necessary to fight tiredness caused by heat and during
winter as an essential thing to resist cold.

(v) Advertising help in meeting the forces of competition in the marketplace. If a product is
not advertised continuously, the competitors may snatch its market through increased
advertisements. Therefore, in certain cases, advertising is a necessity to remain in the market
and remind the customer as done by soft drink companies.

(vi) Advertising is used to increase the goodwill of a firm by promising improved quality to
the customers.

(vii) Advertisements increase the morale of the employees of the firm. The salesmen feel
happier because their task becomes easier if the product is advertised and known to the
public.

(viii) Advertising facilitates mass production of goods which enables the manufacturer to
achieve lower cost per unit of product. Distribution costs are also lowered when the
manufacturer sells the product directly to the customers. Advertising facilitates direct
distribution of the product through the retailers. Retailers are encouraged to purchase and sell
the advertised products.

2. Benefits to Customers:

Advertising offers the following advantages to customers:

15
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

(i) Advertising helps the customers to know about the existence of various products and their
prices. They can choose from the various brands to satisfy their wants. Thus, they cannot be
exploited by the sellers.

(ii) Advertising educates the people about new products and their diverse uses.

(iii) Advertising increased the utility of existing products for many people adds to the amount
of satisfaction which they are already enjoying.

(iv) Advertising induces the manufacturers to improve the quality of their products through
research and development. This ensures supply of the products of better quality to the
consumers.

3. Benefits to Society:

The society at large is also benefited because of advertisement:

(i) Advertising provides employment to persons engaged in writing, designing and issuing
advertisements. Increases employment brings additional income with the people which
stimulates more demand. Employment is further generated to meet the increased demand.

(ii) Advertising promotes the standard of living of the people by increasing the variety and
quality in consumption as a result of sustained research and development activities by the
manufacturers.

(iii) Advertising educates the people about the various uses of different products and this
increases their knowledge. Advertising also helps in find customers in the international
market which is essential for earning foreign exchange.

(iv) Advertising sustains the press, and other media. It provides an important source of
income to the press, radio and television network. The customers are also benefited because
they get newspapers and magazines at cheaper rates. The publishers of newspapers and
magazines are benefited because of increased circulation of their publications. Lastly,
advertising also encourages commercial art.

16
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

Definition of Advertising:

Every day we come across hundreds of advertising messages, which tell us about various
products such as soaps, detergent powder, soft drinks and services such as hotels, insurances
policies etc. Advertising is perhaps the most commonly used tool of promotion by an
organization. It is commonly understood as to communicate about a product or service. But it
is not correct and complete to understand it as so.

Actually, advertising includes all the activities performed by the enterprise to present the
goods and services to the consumer and to motivate them to buy these goods and services. It
is non-personal form of communication, which is paid for by the marketer (sponsor) to
promote his goods and services. The term “advertising” has been defined by many eminent
authors as –

According to William J. Stanton, “Advertising consists of all the activities involved in


presenting to a group, a non-personal, oral or visual, openly sponsored message regarding a
product or service or idea, this message is called advertisement, is disseminated through one
or more media and is paid for, by the identified sponsor”.

According to Wheeler, “Advertising is any form of paid non-personal presentation of ideas,


goods and/or services for the purpose of inducing people to buy”.

According to American Marketing Association, “Any paid form of non-personal presentation


and promotion of ideas, goods and services, by an identified sponsor. The medium used are
print broadcast, and direct”.

Thus, advertising can be defined as a paid form of non-personal presentation of product or


service or idea. In developing advertising programme, one must start with the identification
of the needs and wants of the market and must take five major decisions regarding Mission,
Money, Message, Media and Measurement of the advertisement programme as stated by
Philip Kotler ‘as 5 M’s of advertising’ in his book Marketing Management.

Basic Features of Advertising:

From the above explanation and definition of the authors, we can say that advertising
has following distinguishing features:

17
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

i. Paid Form – It is a paid form of communication i.e. the sponsor has to bear the cost of
communication with the respondents.

ii. Non-Personal – There is no direct face-to-face contact between the prospect and the
advertiser. That is why it is referred as non-personal method of promotion.

iii. Identified Sponsor – Advertising is always undertaken by some identified individual or


company, who makes advertising efforts and also bears the cost of undertaking such effort.

Elements of Advertising:

The elements of advertising are as follows:

i. Preparation or Homework:

Refers to the act of imagining and compiling all the possible advertisements by
numerous mediums, which are as follows:

a. Taking references from the advertisements of competitors

b. Reading books on advertising to collect ideas

ii. Unique Selling Proposition (USP):

It refers to the singular benefits and advantages of a product that creates a favorable
impression in the mind of customers. The advertisements should focus on USP of the
product.

iii. Maintaining a Unique Image:

It indicates that an organization should stick to its own image and personality. The
organization should not try to imitate its competitors rather should focus on the betterment of
its own product or service.

iv. Teamwork:

It refers to the collective efforts of advertising specialists of an organization. These specialists


work together towards the success of an advertisement. The collective efforts of specialists

18
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

ensure that the product and its important aspects are well explained to customers through the
advertisement.

v. Selecting an Efficient Advertising Medium:

It refers to the decisions taken to select the appropriate medium for advertising a product. The
choice of a medium depends on the advertising budget of the organization, type of product,
and targeted market. Few products do not require much explanation, thus, they can be
advertised through a medium, such as radio. In this case, the target market comprises radio
listeners who belong to lower-middle class families.

Few other products may require demonstrations or visual aids, for example, vacuum cleaners
and water purification machines. Such products targets middle-class and high-class families
and can be advertised through television.

vi. Retaining the Customers:

It indicates that an organization should not overlook its existing customers while trying to
make new customers. It is important for the organization to keep producing numerous
reminder advertisements to keep its existing customers updated about the existence of the
product.

Objectives of Advertising:

The objective of advertising is nothing but to sale the product or idea or a service. The real
objective of advertising is to increase awareness among the consumer about the sellers
product. According to Huigy and Mitchell, “The purpose of advertising is to sell goods,
services or ideas to a large group of prospective purchasers.”

R.S. Davar stated the advertising objective as, “Advertising aims at commencing the
procedure, educating the consumer, supplementing the salesman, connecting the dealer to
eliminate the competitor but above all, it is a link between the producer and the consumer”.

In simple words the following are the main objectives of advertising:

1. Preparing Ground for Sale of New Products:

19
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

Whenever a new product is introduced in the market, advertising becomes necessary for
informing potential consumers about the product. In this way, advertising can be used for
preparing ground for sale of new product.

For achieving this objective, various mass media like radio, television and cinema are used by
the advertisers.

2. Increasing Demand for the Product:

Another objective of the advertising is to increase the demand for the product. Advertising
helps in creating a favourable atmosphere for maintain or improving sales of the product. By
means of the advertising prospective customers may be induced to buy a particular product
by informing them about comparative quality price and other attributes of the product. Thus,
changing the habits of the consumers so as to shift from a rival product.

3. Educating the Consumers:

One of the basic objectives of every advertising is to educate the consumer and the users
about the uses and utilities of the product. This helps the consumers and users in making
good choice.

4. Building up Brand Image:

Another objective of advertising is to build up brand image and brand loyalty towards the
product. This objective is achieved through constant and repeated advertising about the
brand.

5. Facing the Competition:

One of the basic objectives of advertising is to help the marketer to face the existing
competition effectively and efficiently. The marketers inform the consumer about the price,
quality and availability of product through advertising.

6. Supplementing the Salesman:

20
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

The objective of advertising is also to assist the salesman’s efforts in increasing the sales of
the product. By means of educating customers about the product, advertising reduces the
work load of the salesman for selling the product.

Mathew’s, Buzzell and Frank had given the following objectives of the advertising:

(a) To make an immediate sales.

(b) To build primary market.

(c) To introduce a price deal.

(d) To inform about a product.

(e) To build brand recognition or brand insistence.

(f) To help salesmen by building an awareness of a product among retailers.

(g) To create a reputation for services, reliability or research strength.

(h) To increase market share.

(i) To modify existing product appeals and buying motives.

(j) To inform about the availability of new products or features or price.

(k) To increase the frequency of use of a product,

(l) To increase the number or quality of retail outlets,

(m) To build overall company image,

(n) To effect immediate buying action.

(o) To reach new areas or new segments of population within existing areas, and

(p) To develop overseas.

Types of Advertising:

21
ADVERTISING MANAGEMENT
SRINIVAS UNIVERSITY BBA HONORS V SEM

Broadly speaking, advertising can be classified into two broad categories viz. product
advertising and institutional advertising.

Product Advertising:

Product advertising is that advertising whose main purpose is to inform and stimulate the
market about the advertiser’s product or services. This advertising usually promote specific
branded products in such a manner as to make it more desirable in the eyes of prospects than
competitor’s brand.

Product advertising on the basis of action can be further classified as Direct Action
Advertising and Indirect Action Advertising —

(a) Direct-Action Advertising – Direct-action advertising are those advertisements which


makes buyer to take action immediately. For example- Reduction in price during clearance
sales.

(b) Indirect-Action Advertising – Indirect-action advertising is done to stimulate demand


over a period of time and increase buyer’s respect towards manufacturer’s brand. Such
advertising is a form of long-range promotion and is designed to create desires in the buyer’s
mind.

Product advertising on the basis of demand may be sub-divided into pioneer demand
advertising and selective demand advertising.

(a) Pioneer Demand Advertising is used when a product is first introduced in the market. The
main aim of such advertising is to inform about what the product is, what it does, how it is
used and from where it can be purchased. For example – advertising of motor cars, electronic
items etc., for first time.

(b) Selective advertising is made to meet the selective demand for a particular brand or type
of product such as Ambassador Car. It is also known as competitive advertising as it point out
features and advantages that a consumer get by using it and that may not be available in
competing brand.

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Product advertising can be also divided on the basis of product life cycle stage. It can be
informative, persuasive and reminder advertising.

(a) Informative advertising is that advertising which is done for the promotion of the
products. It seeks to develop initial demand for a product. These advertising ads are such that
they appeals to the consumer’s emotions as well as their rational motives. These are used at
the introduction stage of the product life cycle.

{b) Persuasive product advertising is done at growth and maturity stage in the product life
cycle. These advertisements aim at providing competitive advantage over the rivals’ product.

(c) Reminder product advertising aims at reminding the prospects about the features and
benefits of the products. It is generally used at the maturity as well as in decline phase of the
product life cycle. It is also known as retentive advertising

Functions of Advertising:

For many firms advertising is the dominant element of their promotion mix. It is particularly
true in the case of producers producing convenience goods like – detergent, toilet soaps; soft
drinks etc. However, in recent times the use of advertising is continuously increasing in case
of shopping and speciality goods too, as we see in case of automobiles; home appliances etc.
Huge advertising is done by the marketers to introduce a new product and show its features to
the target audience.

Advertising can also be used to convince the potential buyers that firm’s goods or services
are superior to that of the competitor’s goods or services in terms of quality, quantity or price.
It also creates a brand image in the mind of the customer and make them loyal towards the
firms goods or services.

Advertising generally performs the following functions:

i. Promotion of firm’s goods and services and thereby increasing sales of the firm.

ii. Creating awareness in the potential buyer about the new product.

iii. Creating a favourable public image and thereby brand image in the market.

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iv. Mass production facilities and thereby optimum utilization of resource of the firm.

v. Providing supportive roles to other promotional measures.

Media of Advertising:

1. Mural Advertising:

Mural or outdoor advertising has long life. It has a general and wide appeal. It can attract
attention of a large section of population. An advertiser has ample scope to use skill and art in
advertising.

2. Press Advertising:

Newspapers have a general and wide appeal. Repeat advertising is possible. Periodical
change in size and contents is also easy. Newspapers offer promotional assistance. They are
the best source of market information.

However, newspapers have short span of life. We cannot have coloured and attractive
advertisements. Waste in advertising is considerable. Illiteracy affects its utility.

3. Film Advertising:

It has a wide appeal. It can overcome language barriers. Audio visual technique has
maximum impact on audience. Sound and sight both are employed for communicating the
message.

4. Radio Advertisement:

Radio has the shortest closing times. Radio uses only an audio signal. Announcement can be
made very quickly. It can secure dealer support, has a very wide appeal and suitable even for
illiterate people. Repeat message is quite common.

5. Tele` `

`vision Advertisement:

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Television uses both video and audio signals. Television has all the advantages of radio,
namely, sound and explanation, plus the additional advantage of sight. It can appeal through
ear as well as eye.

Products can be demonstrated with explanation. Television reaches the audience almost like
personal face to face contact. To that extent it is just like personal salesmanship.

6. Transit Advertising:

It consists of car-card advertising, which is located within buses, subways, railways and
outside displays which appear on the front sides and backs of buses or other public transport
and at transportation terminals. It is the lowest-cost media.

7. Direct Mail:

Direct mail is any advertising sent by mail, including sales letters, folders, pamphlets,
booklets, catalogues and the like. Direct mail is the most personal and selective media. It
reaches only the desired prospects. It has minimum waste in circulation.

Benefits of Advertising:

Advertising helps in spreading information about the advertising firm, its products, qualities
and place of availability of its products, and so on. It helps to create a non-personal link
between the advertiser and the receiver of the message.

The significance of advertising has increased in the modern era of large scale production and
tough competition in the market. Advertising is needed not only by the manufacturers and
traders but also for the customers and the society.

1. Benefits to Manufacturers and Traders:

It pays to advertise.

Advertising has become indispensable for the manufacturers and distributors because
of the following advantages:

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(i) Advertising helps in introducing new products. A business enterprise can introduce itself
and its products to the public through advertising.

(ii) It can create new taste among the public and stimulate them to purchase the new product
through effective advertisement.

(iii) Advertising assists to increase the sale of existing products by entering into new markets
and attracting new customers.

(iv) Advertising helps to create steady demand of the products. For instance, a drink may be
advertised during summer as a product necessary to fight tiredness caused by heat and during
winter as an essential thing to resist cold.

(v) Advertising help in meeting the forces of competition in the marketplace. If a product is
not advertised continuously, the competitors may snatch its market through increased
advertisements. Therefore, in certain cases, advertising is a necessity to remain in the market
and remind the customer as done by soft drink companies.

(vi) Advertising is used to increase the goodwill of a firm by promising improved quality to
the customers.

(vii) Advertisements increase the morale of the employees of the firm. The salesmen feel
happier because their task becomes easier if the product is advertised and known to the
public.

(viii) Advertising facilitates mass production of goods which enables the manufacturer to
achieve lower cost per unit of product. Distribution costs are also lowered when the
manufacturer sells the product directly to the customers. Advertising facilitates direct
distribution of the product through the retailers. Retailers are encouraged to purchase and sell
the advertised products.

2. Benefits to Customers:

Advertising offers the following advantages to customers:

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(i) Advertising helps the customers to know about the existence of various products and their
prices. They can choose from the various brands to satisfy their wants. Thus, they cannot be
exploited by the sellers.

(ii) Advertising educates the people about new products and their diverse uses.

(iii) Advertising increased the utility of existing products for many people adds to the amount
of satisfaction which they are already enjoying.

(iv) Advertising induces the manufacturers to improve the quality of their products through
research and development. This ensures supply of the products of better quality to the
consumers.

3. Benefits to Society:

The society at large is also benefited because of advertisement:

(i) Advertising provides employment to persons engaged in writing, designing and issuing
advertisements. Increases employment brings additional income with the people which
stimulates more demand. Employment is further generated to meet the increased demand.

(ii) Advertising promotes the standard of living of the people by increasing the variety and
quality in consumption as a result of sustained research and development activities by the
manufacturers.

(iii) Advertising educates the people about the various uses of different products and this
increases their knowledge. Advertising also helps in find customers in the international
market which is essential for earning foreign exchange.

(iv) Advertising sustains the press, and other media. It provides an important source of
income to the press, radio and television network. The customers are also benefited because
they get newspapers and magazines at cheaper rates. The publishers of newspapers and
magazines are benefited because of increased circulation of their publications. Lastly,
advertising also encourages commercial art.

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Advantages and Disadvantages of Advertising

Everything you need to know about advantages and disadvantages advertising. Advertising is
defined as the paid, non-personal form of communication about products or ideas by an
identified sponsor through the mass media so as to inform, persuade or influence the
behaviour of the target audience.
Advertising is directed to a large number of people and not to one individual. That is why we
call it non-personal. Advertising is communication about products or ideas. It may inform us
about the features of iPod or new smart phone or spell out the need to have a cancer check-
up.
Some of the advantages and disadvantages of advertising are:-
A. Advantages of Advertising – 1. Promotion of Sales 2. Expansion of Production 3.
Enhances Goodwill 4. Large Turnover and Huge Profits 5. Information about Different
Options and Comparative Prices 6. Creates Employment 7. Higher Standard of Living

B. Disadvantages of Advertising – 1. Adds to the Cost of Production and Product 2. Leads to


Price War 3. Deceptive Advertising 4. Leads to Unequal Competition 5. Creates a
Monopolistic Market 6. Promotes Unnecessary Consumption 7. Decline in Moral Values.

Advantages and Disadvantages of Advertising


Advantages of Advertising:
The advantages of advertising are to be analyzed in terms of its advantages which are as
follows:
(i) From Viewpoint of Manufacturers:
A well-advertised product is easier to be sold by the salesman in the market. If a brand is
popular and well-known, people respond favourably to the salesman’s efforts. It provides a
support to salesmanship, as the audience understands the product and its uses more clearly
through the advertisement and the salesman’s effort is reduced to convince the buyers.

(a) Increase in Sales:


The main object of the manufacturer in advertising his products is to promote the sale of his
products. Goods produced on a mass scale are marketed by the method of mass persuasion
through advertising.

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Repetition of advertisements, the manufacturers are not only able to retain existing markets
but are also able to expand the markets both by attracting more people to their products and
also by suggesting new uses for them. Advertising is a helping hand to selling

(b) Supplementing Salesmanship:


It creates a ground for the efforts of the salesmen. When a salesman meets its prospect, they
have just to canvass for a product with which the consumer may already have been
familiarised, through advertisements. Therefore, the salesman’s efforts are supplemented and
his task is made easier by advertising.

(c) Lower Costs:


Sales turnover and encourage mass production of goods are enhanced by advertising that
results in large scale production, average cost of production reduces and results in higher
profits. At the same time, when the cost of advertising and selling costs gets distributed over
a larger volume of sales, the average cost of selling also lowers down.

(d) Greater Dealer Interest:


Advertising creates demand by which every retailer gets an opportunity to share with others.
Hence, the retailers who deal in advertised goods are materially assisted by advertising in the
performance of their functions. The retailers have not to bother much about pushing-up the
sale of such products. Therefore, they evidence more interest in advertised products.

(e) Quick Turnover and Smaller Inventories:


A highly responsive market is created by well-organised advertisement campaign thereby
facilitating quick turnover of the goods. Resulting, in lower inventories in relation to sales
and being carried-on by the manufacturers.

(f) Steady Demand:

Seasonal fluctuations on demands for products are smoothened by advertising generally the
manufacturers tries to discover and advertise new possible uses of which a seasonal product
maybe put. The innovation of cold tea and cold coffee for the use during summer has helped
in increasing the demand for these beverages even in that season. The same maybe said for
refrigeration.

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(ii) From Viewpoint of Consumers:


(a) Improvement in Quality:
Usually, goods are advertised under brand names. When a person is moved by the
advertisement to use the product, they proceeds on the hope that the contents of the particular
brand will be better than the other brands of the same goods.

When his experience confirms his expectation, a repeat order can be expected. Or else, the
sales may rise very high once but may drop down very low subsequently when the
consumer’s confidence in the quality of the product fails.

(b) Facility of Purchasing:


Purchasing becomes easy for the consumers after advertising. Generally, the re-sale prices
(prices at which the goods are to be sold by the retailers) are fixed and advertised. Thus,
advertising offers a definite and positive assurance to the consumer that they will not be
overcharged for the advertised product. The consumer can make his purchases with utmost
ease and confidence.

(c) Consumer’s Surplus


The utility of given commodities is increased by advertising for many people. It points-out
and pays even more for certain products which appear to have higher utility to them. If these
products are available at the original lower prices, there will naturally be a certain amount of
consumer’s surplus in terms of increased satisfaction or pleasure derived from these products.

(d) Education of Consumers:


Being an educational and dynamic principle, the prime objective of advertising is to inform
and educate the customers about new products, their features, prices and uses. It also
convinces them to adopt new ways of life, giving up their old habits and inertia and have a
better standard of living.

(iii) From the Viewpoint of Middleman:

(a) Retail Price Maintenance becomes Possible:


The consumers are quite keen on getting quality products at stable prices over a period of
time. Each consumer has his or her own family budget where he or she tries hard to match the
expenditure to the disposable income for a socially acceptable decent living.

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In case the prices go on changing abruptly, these individual budgets are likely to be distorted
to such an extent that the consumers will have to think of substitutes for the products they are
enjoying at present.

(b) Acts as a Salesman:


What a travelling salesman does for this organisation is done by the advertising at least cost.
This is the reason that most of the retail organisations do not employ large army of travelling
salesman, rather they are willing to spend on advertising which attracts consumers to the
sores where the counter salesmen cater to their needs.

(c) Ensures Quick Sales:


Every retailer having the stock of different producers needs a quick turnover. By bringing the
wide range of these products to the notice of the consumers, advertising boosts up of sales.

Faster sales imply the specific advantages such as reduced capital look-up, reduction in losses
of holding stock over longer period, increased profits even by reducing the profit margin per
unit. Further, advertising gives much leeway and freedom to better serve the needs of the
consumers.

(iv) From the Viewpoint of Society:


(a) Change in Motivation:
Radically advertising has changed the basis of human motivation. While people of earlier
generations lived and worked mainly for bare necessities of life, the modern generation works
harder to supply itself with the luxuries and semi-luxuries of life.

(b) Sustaining the Press:


For support and sustenance the newspapers, periodicals, journals, looks for advertisers, press,
look to advertisements. In the absence of income from advertising, the newspapers have to be
produced at a higher cost and may not be able to keep themselves free from its competitors.

(c) Encouragement to Artists:


Designing artists, writers to do creative work. They earn their living from preparing
advertisements.

(d) Encouragement to Research:

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When manufacturers are assured of sufficient profits. They undertake research and discover
new products or new uses for existing products. Advertising puts forward this assurance and
thereby encouraging industrial research with all its advantages.

(e) Glimpse of National Life:


A glimpse of national life is provided by national life.

Disadvantages of Advertising:
Advertising too have its own limitations. In some case it’s being misused by few people over
looking their business interests.

The main weaknesses of advertising are discussed below:


i. Deferred Revenue Expenditure:
It is a deferred revenue expenditure, as the results are not immediate. As advertising occupies
a substantial portion of the total budget of the organisation. Hence, investing a large sum in it
does not necessarily yield immediate results thus limiting its utility.

ii. Misrepresentation of Facts:


A major drawback of advertising is misrepresentation of facts regarding products and
services. Advertisers usually misrepresent unreal/false benefits of a product and make tall
claims to excite people to indulge in actions leading to their benefit, but opposed to
consumer’s self-interest.

iii. Consumer’s Deficit:


Advertising creates desires as consumers have low purchasing power. It leads to
discontentment. Such discontent is obviously not very desirable from the point of view of
society, particularly if it affects a large majority of people. But it is important if it acts as a
spur to social change.

iv. Barriers to Entry:


Advertisements promote industrial concentration to a greater or lesser degree. The extent of
such concentration may vary with the character of the individual trade, the advertisability of
the product and the technical conditions of its production. Although, studies on this subject
are not conclusive. The evidence of positive association between advertising and
concentration is weaker than can be expected.

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v. Wastage of National Resources:


It is objected that advertisement is that it is used to destroy the utility of goods before the end
of their normal period of usefulness. Now models of automobiles with nominal
improvements are, for example, advertised at such high pressure that the old models have to
be discarded long before they become useless, not that merely, the most-advertised products
are delicate, fragile, and brittle.

vi. Increased Cost:


It is much debated whether advertising induces additional cost upon a product which the
community has to pay. In a sense, it is true since expenses on it form a part of the total cost of
the product. But at the same time, it would be unjust to infer that if the advertising costs were
cut down the goods would necessarily be cheaper. Advertising is, one of the items of costs
but it is a cost which brings savings in its wake on the distribution side.

vii. Product Proliferation:


Critics state that advertising encourages unnecessary product proliferation. As it leads to the
multiplication of products that are almost identical, resulting in wastage of resources which
could otherwise have been used to produce other products.

viii. Multiplication of Needs:


Advertising compels people to buy things they do not need as it is human instincts, to
possess, to be recognized in the society, etc., are provoked by advertiser in order to sell
products. At times, various types of appeals are advanced to arouse interest in the product.
Sentiments and emotions are played with to gain customers.

Benefits of Advertising:
i. Internet Advertising is Huge:
With the growth of information on the Internet has growth the amount of time people spend
on it, which has in turn generated a new market for Internet advertising. Some of the
wealthiest companies in the world have made sure that they get a piece of the internet
marketing pie, and for a good reason.
ii. Internet Advertising is Targeted:

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As a company looking for advertising opportunities to a specific market, Internet advertising


offers some targeting methods that insure that those who see your ads are the ones most likely
to buy. Programmes like Google’s Ad Words and AdSense match up advertisers with content
that their target market peruses regularly. Forget the costly machine- gun strategy of
newspaper advertisements, Internet advertising is targeted!
iii. Internet Adverting Enables Good Conversion Tracking:
It is impossible to get a good idea of how many people see advertising through traditional
means. Tracking the reach of newspaper and television advertisements is difficult. However,
Internet advertising allows the advertiser to track the number of impressions an ad gets (how
many people see it), and how many visits their business web site gets from particular ads,
making it easy to see what kind of conversion rates internet advertisements are getting.
iv. Internet Advertising has a Lower Entry-Level Fees:
If you have a limited budget, Internet advertising can be much more in reach than traditional
methods. A small yellow-page ad can cost thousand rupees. However, you can bid for
advertisements on Google and Overture on a performance basis. That means that you only get
charged when visitors click on the advertisement, and bidding starts at a few rupees pop.
v. Internet Advertising can be Much Cheaper:
Because of the targeted nature of Internet advertising and the ability to track the effectiveness
of ads, conversion rates from internet advertising is typically much better than traditional
mediums.
vi. Internet Advertising has Greater Range:
One more benefit is that, since the Internet spans the globe, pockets of your target market
scattered around the world can all be targeted at once, rather than trying to find different
publications, radio stations and television stations that cater to a particular geographical area.
On the whole, Internet advertising can be a great way to get the word out there about your
service or product in a cost- effective, efficient way.
Limitations:
i. Measurement problem – It is difficult to measure effectiveness of advertising.
ii. Surfing speed – Due to traffic and technical difficulties users find that the time required to
access sites can be long.
iii. Clutters – Too many ads over a short period could result in low registration of the
message.
iv. Privacy – Like telephones being misused for telemarketing, Internet is also accused of
invading user privacy.

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Advantages of Advertising:
Advertising is beneficial to manufacturers, traders, consumers and society as a whole:
1. Promotion of Sales:
Advertising helps the producer to increase his sales. A form attempts to increase the demand
for its product, either by reducing the price or by inducing buyers to purchase more of its
product; even at the constant price. The latter involves the use of sales promotion and hence
advertising.
2. Expansion of Production:
Increased demand brought about by advertising has to be met by a corresponding increase in
production. In this way, advertising causes production to expand in order to cater to an
increased demand.
3. Enhances Goodwill:
Advertising is instrumental in increasing the goodwill of the company (advertises). It
introduces the manufacturer and his product to the people. Repeated advertising and better
quality of products strengthens manufacturer’s reputation and enhances his goodwill.
4. Large Turnover and Huge Profits:
An increased demand, generated through advertisements can create a larger turnover for the
company and eventually resulting in more profits.
5. Information about Different Options and Comparative Prices:
Advertisement keeps the buyers well informed by providing information about the different
products and their relative prices. This helps the consumer to take adequate decision
regarding the features they want and the amount they want to spend, even before physically
going to the shops.
6. Creates Employment Opportunities:
Advertising is capable of providing employment to large section of the society including the
professionals like painters, photographers, singers, cartoonist, musicians, models and people
working in different advertising agencies.
7. Higher Standard of Living:
Advertisement promotes larger consumption, increased production and greater employment.
This further reflects on lower prices, better quality and greater variety of goods to the
consumers. Advertising, thus, ensures better and happier living.
Disadvantages of Advertising:

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Despite of being regarded as the life-blood of modern business advertising has the
following disadvantages:
1. Adds to the Cost of Production and Product:
Advertising increases the cost of the advertised product, as the expenses on advertisement
add to the total cost of the product. To mitigate the cost incurred during advertising of the
product or the service, the advertiser adds the cost of advertisement to the total price of the
product or the service. So, the advertising cost is actually being borne by the consumers.
2. Leads to Price War:
Large scale competitive advertising by prominent competing firms can possibly lead to
advertising wars with the consumers being made to pay for it. It leads to a situation of price
war and that makes the production activity unduly wasteful. The entire industry has to suffer
a setback.
3. Deceptive Advertising:
Sometimes, advertising is used as an instrument of cheating. Unscrupulous firms defraud the
consumers by misrepresenting their products through advertising. In order to induce people to
purchase their product, firms issue false statements with regard to different virtues of a
products; this undermines public confidence in advertising. As a result we have the
Advertising Code of Conduct that regulates advertising and ensures commercial honesty.
4. Leads to Unequal Competition:
The producers spend a huge amount of money for the advertisement of their products and
services. Small local firms cannot match the big advertising budgets of multinational
companies. Therefore, the scales are always tilted in favour of the bigger producers leading to
unequal competition.
5. Creates a Monopolistic Market:
Larger firms by virtue of their larger advertising budgets drive the smaller firms out of the
market. This leaves the market open to just a few large producers. In this way the bigger
firms win competition and monopolize the market.
6. Promotes Unnecessary Consumption:
Advertising promotes the consumption of goods and services which are not even required by
the people. Hence it is wastage of national resources.
7. Decline in Moral Values:
In order to attract attention of the people, many times advertisers use indecent, vulgar
language and obscene photographs.

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All these reasons together justify the statement that “Advertising is Social Waste”, because it
does not add any real value to the society.

Advantages of Advertising:
Money spent on advertisement is an investment – This is because it gives rise to many
benefits to various. Categories viz., Producers, Middlemen, Consumers and entire society.
The various benefits are as under:
A. Benefits / Advantages to Producers / Manufacturers:
1. Communication of Information to Consumer, i.e., Information about product, price and
place from where it can be bought. Latest innovations and arrivals. Changes in product by
manufacturer.
2. Brand Building – Advertisement is actually brand building. Advertisement creates brand
preference for company’s products. Brand equity is established with the help of
advertisement Brand equity refers to over-all strength of a brand in the market and its value to
the company owning it.
3. Increase in sales – Old customers are kept tied up with the firm, reminding them about
product, again and again through advertising. New customers are created by creating
attraction towards product. Demand for new products is created by explaining merits of the
product showing superiority over rivals’ products and giving knowledge about new products.
4. Help in facing competition and protecting manufacturer against unfair competition as
advertisement creates a brand name.
5. Increase in Profits via increased sales.
6. Creation/Enhancement of Goodwill of Company and Product as clientele increases.
7. Stability in seasonal Demand – Advertisement helps in creating demand over all the
seasons by discovering new product and new usage of product. For example, tea is sold in
summer, ice-cream in winter due to advertising.
8. No Overstocking due to Quick Sales/turnover by creating high responsive market. Also
this results in lower inventories.
9. Economies/Advantages of Large Scale Operation as sales increase.
10. Establishing Direct Relations/Contact between manufacturers and consumers through
mass communication of messages about product.

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11. Getting Efficient and Experienced Middlemen – Advertisement helps manufacturers in


getting a team of efficient and experienced middlemen because increase in demand for a
product encourages middlemen to maintain its stock/inventory.
12. Quickening the turnover by creating high responsive market resulting in lower inventory.
13. Advertisement gives employees a sense of practice on their jobs and a feeling to be in the
service of a concern of repute. As such, it inspires executives, employees and workers to
improve their performance and efficiency.
B. Benefits/Advantages to Middlemen (Wholesalers and Retailers):
1. Convenience in Selling without much effort as advertised goods are already in demand and
customers are well convinced about such goods.
2. Increased Sales and Profits due to high demand, easy sale of products, and high rate of
turnover.
3. No risk of overstocking as demand is already high.
4. Increase in goodwill as they become known for dealing in standard, quality goods.
5. Economy in selling as their overheads are saved and they need not spend on advertising.
6. Stability in sales and profits due to all-seasons demand through advertising.
7. It enables wholesalers and retailers to have product information.
C. Advantages to Salesmen:
1. Salesmanship is incomplete without advertising.
2. Advertising serves as a forerunner of salesman in selling goods.
3. Salesmen are helped by advertisement in following ways –
i. Selling becomes easy and convenient as products are already advertised informing
consumer about product’s characteristics and quality.
ii. Advertising prepares requisite ground for salesman; as such his sales efforts are reduced.
iii. Contact between salesman and customer becomes permanent through effective advertising
as customer is assured of quality and price of produce.
iv. Salesman can also weigh advertising effectiveness through direct contacts with customers.
D. Benefits / Advantages to Consumers:
1. Knowledge about New Products.
2. Saving of time and Labour in making purchases as they already know details about product
through advertising viz., features, place where available.
3. Advance Decision to buy Consumers are able to take advance decision to buy in the light
of advertisement.

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4. Protection against cheating by Sellers as advertising message often provides details about
weight, packing, price, discounts, special schemes and ‘alerts and warnings’.
5. Knowledge about variety of Products as different producers advertise their products.
6. Knowledge about Alternative Use of Products.
7. Enhancement in Consumers’ Marketing knowledge through advertising about existing
products, new products, their different as well as new uses, place and manufacturers where
available, other details.
8. Elimination of Middlemen and their costs in cases where direct relation between producer
and consumer develops and this reduces consumer price.
9. Helps retailer’s Anticipation of actual sales.
10. Unfair competition and price wars are avoided as prices are controlled by manufacturers
through advertisement.
11. Increase in Standard of living as people come to know about new home products, gadgets
and appliances which makes their living more comfortable and living standard higher.
E. Advantages/Benefits to Society/Community:
1. Increase in standard of living of citizens.
2. Larger and Handsome Employment opportunities.
3. Development of Advertisement Industry viz., advertising firms / agencies, artists, writers,
models, art designing.
4. Boon to Press, that is Newspapers, Magazines etc. as their income increases.
5. Encourages R & D.
6. Encourages Healthy Competition.
7. Educative, providing lot of information to people.
8. Provides new Horizon of knowledge.
The main reason is that advertisement benefits not only different sections of society but also
the society as a whole. One can therefore also say that money spent on advertisement is an
investment and not a waste.
Criticisms of Advertising:
Despite its various advantages, advertising has not been free from criticisms.
1. Burden upon Consumers:
Media of advertisement being costly, manufacturers have to spend huge amount on
advertising. This ad spend adds to cost of production and increases cost per unit and finally
the price of the product. Increased prices are a burden on consumer.

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This criticism is not fully correct. Advertisement also raises demand for products, increases
scale of production, brings economies of large scale production and thus finally decreases
cost per unit and hence price.
2. Advertisement Creates Monopoly:
Advertising ultimately blocks other firms from entering an industry (barriers to entry) leading
to market power for the firm and ultimately to higher prices. If sheer advertising volume
expenditure is directly related to increased sales, small firms cannot afford it. This enables
large-scale manufacturer to stay and enjoy monopoly.
However, advertisement also creates healthy competitive market for the products.
3. Advertisement Leads to Consumerism:
Advertising encourages excessive and at times unnecessary expenditure by consumers.
Frequent and repeated advertising compels consumers to buy a product even when it does not
suit him or is not needed.
4. Advertisement Leads to Luxurious Life:
Advertising luxurious goods is often done in a manner that consumers feel them necessary to
buy. Such goods become status symbol. Consequently, people are made to live a luxurious
life even when they cannot afford it
However, in so far as advertising offers wide choice in making their purchases, it improves
their life style and raises their standard of living.
5. Advertisement is a Wastage:
Money spent on advertising is a wastage if demand for advertised goods and services does
not increase.
This is however not necessarily so because very often, advertisement increases demand
through wider coverage and new uses of product.
6. Advertisement Leads to Falsehood in Business:
Advertisements often mislead people, and at times exaggerate benefits of products or their
attributes.
While it is true that some of the advertisements are untrue and fraudulent, this is not
disadvantage of advertisement. Rather it is the advertiser who is to be blamed.
7. Advertisement Gives Birth to Social Evils:
Advertisement often gives birth to social evils like smoking, drinking etc.
Conclusion – While various criticisms are true, measures can be adopted to check these social
evils.

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Advantages of Advertising:
1. Advertising stimulates production, employment and income, leading to rising purchasing
power and better living standards.
2. Commercialization of inventions, accelerated public acceptance of innovations, new
products, etc., can be realised only due to effective mass communication or advertising.
Change is the essence of life. It can be brought about by science and technology but it has to
be accepted by the public without much resistance. For quick acceptance of new products and
new ideas we need advertising.
3. Informative advertising enables consumers to secure relevant and adequate information
about all rival products and their relative merits. Thus, advertising helps consumers to
exercise their right to choose and buy a product of service intelligently. We have a wide
variety of goods many of them complicated and sophisticated. Hence, wise purchases demand
adequate information flow.
4. Advertising facilitates mass production and mass distribution. We have, therefore, lesser
unit cost of production as well as lesser unit cost of distribution. Scientific management
reduces cost of production. Scientific marketing research ensures reduction in the cost of
distribution.
Marketing research can be used to reduce the cost of all components of the marketing mix
including advertising. Reduction in costs enables corresponding reduction in prices.
Competition in business also ensures price reduction and fair prices. Thus, consumers enjoy
all the benefits of effective advertising and marketing. They can have increasing real income
also in terms of goods and services.
5. Advertising builds up brand preference and brand loyalty. In the long run these are not
possible under keen competition unless the brand quality is maintained and steadily improved
by the manufacturer. Thus, consumers can get not only goods at lower prices but also goods
of standard quality and quantity.
6. Advertising has educative value also. It teaches us to adopt new ways of life and higher
standard of living. It can educate the community to demand quantity of life, e.g., freedom
from pollution.
Disadvantages of Advertisement:
1. Loading the Price:

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Advertising is expected to reduce total costs due to mass production and mass distribution
and ultimately enable consumers to buy at lower prices. Experience proves otherwise. In
reality advertising increases the prices of goods.
National brands demand heavy expenditure on advertising and promotion and their prices are
higher by about 20 per cent than the prices of dealer brand though products under both brands
are manufactured by the same enterprise. There is some element of truth in this criticism.
However, it is due to extreme product differentiation resorted to by manufacturers through
branding and higher prices are due to element of monopoly.
2. Creating Wastes:
Advertising is wasteful. It can never appeal accurately to the target market like salesmanship.
Many people may not read, hear or view your advertisement. Press, radio, and TV
advertisements have short life span and relatively costly persuade unit of space or time.
Competitive advertisement is a waste as it enables only reshuffling of customers-one
Company stealing customers from another. Measurement of effectiveness of all
advertisement statistically is practically impossible. But research in advertising and
distribution can enable a company to reduce waste of expenditure in advertising appreciably.
3. Monopoly:
A few firms in an industry do utilise the weapon of advertising to prevent entry of small firms
in the market and thus advertising enables creation of monopoly or oligopoly in the market. It
kills competition and to that extent consumers’ interest is sacrificed. Only giant
manufacturers can afford to spend lavishly on extensive and intensive advertising to retain
and even enlarge their market share.
However, if government can effectively control and regulate monopolistic tendencies, we can
have reasonable competition in the market. We have to crush monopolies in the world of
business to protect consumers against evils of monopolies.
4. Fraud on Consumers:
Some advertising is fraudulent, misleading or deceptive. Advertising causes us to buy goods,
we do not want, at prices we cannot pay, and on terms we cannot meet. It is true that hard-
sell, high pressure advertising does coerce the innocent and ignorant buyers to purchase many
unwanted and shoddy goods. It is true that advertising often persuades people to buy things
they should not buy, they do not need nor they can afford.
Public attitude toward advertising as a persuader is constantly unfavourable. This has been
proved through opinion polls in the U.S.A in 1960s. Only self-regulation by business firms
can ensure truthful advertising. The seller should ensure that his advertisements mean what

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they say and they say what they really mean. Consumer legislation can also prevent such
abuses of advertising. Consumerism through self-help can also safeguard consumer interest
against bogus advertising.
Marketing mix based on marketing concept (consumer-oriented marketing approach) can also
reduce substantially these abuses of advertising. Marketing research and customer-centred
marketing plans and policies can definitely provide judicious and best use of advertising,
sales promotion and personal selling in our promotion mix.
Enlightened and scrupulous top marketing management can recognise consumerism not as an
obstacle but challenge and primarily through self-regulation streamline the entire marketing
process based on the new marketing concept, then only marketing communication complex
(promotion mix) can deliver rich dividends and ensure bright public image of business
concerns.

Advantages of Advertising:
(1) Low cost per contact.
(2) Ability to reach potential visitors where sales staff cannot reach.
(3) Great scope for creative versatility and dramatization of messages.
(4) Ability to create images that sales staff cannot.
(5) Non-threatening nature of non-personal presentation.
(6) Prestige and impressiveness of mass media advertising.
Disadvantages of Advertising:
(1) Inability to close sales.
(2) Advertising clutter or too much competition.
(3) Viewer visitor may ignore advertising messages
(4) Difficulties in getting immediate response and actions.
(5) Difficulties in getting quick feedback and in adjusting messages.
(6) Difficulties in measuring effectiveness.

The importance of advertising is realised on all hands. In fact, advertising has already become
such an integral part of our life that we never feel the need of pausing to consider its value
and importance. There is no doubt about the fact that in the absence of advertising, our lives
would have been lived very differently.

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Advantages of Advertising:
Such being the place of advertising in our life, it will be worthwhile to consider some of
the important advantages of advertising here:
1. Advantages to Manufacturers:
There is justification in the adage, “it pays to advertise” because of the following
advantages of advertising accruing to manufacturers:
(i) Increased Sales:
The chief object of the manufacturer in advertising his products is to promote the sale of his
products. Goods produced on a mass scale are marketed by the method of mass persuasion
through advertising. By repeating advertisements, the manufactures are not only able to retain
existing markets but are also able to expand the markets both by attracting more people to
their products as also by suggesting new uses for them. Advertising acts as an aid to selling.
(ii) Steady Demand:
Advertising has led to the smoothening cut of the seasonal fluctuations in demand for many
products. The manufactures are generally trying to discover and advertise new possible uses
to which a seasonal product may be put. The innovation of cold tea and cold coffee for the
use during summer has helped in increasing the demand for these beverages even in that
season. The same may be said for refrigeration.
(iii) Quick Turnover and Smaller Inventories:
A well-organised advertisement campaign creates a highly responsive market thereby
facilitating quick turnover of the goods. This, in turn, results in lower inventories in relation
to sales being carried on by the manufactures.
(iv) Greater Dealer Interest:
The retailers who deal in advertised goods are materially assisted by advertising in the
performance of their functions. Advertising creates demand which every retailer gets an
opportunity to share with others. The retailers have not to bother much about pushing up the
sale of such products. So they evidence more interest in advertised products.
(v) Lower Costs:
Advertising provides a spur to the sale and increases the turnover tremendously. This is
advantageous in two ways – on one side, the selling costs including the cost of advertising get
spread over a large volume of sales, thus lowering the average cost of selling; while on the
other side, higher turnover necessitates higher volume of production, thus lowering the
average cost of production per unit.
(vi) Supplementing Salesmanship:

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Advertising prepares the necessary ground for the efforts of the salesmen. When a salesman
visits a prospect, he has just to canvass for a product with which the consumer may already
have been familiarised through advertisements. Thus, the salesman’s efforts are
supplemented and his task is made easier by advertising.
(vii) Creation of Goodwill:
By constantly associating the name of the manufacturer with certain standards of quality,
advertising builds a fund of goodwill for him. Goodwill thus created is a valuable asset not
merely because it enables him to get more and more of repeat orders for his existing products
but also for the reason that the manufacturer can introduce new products in the market with
confidence. The Godrej concerns have been able to sell the whole range of products ranging
from oils to soap and from locks to typewriters mostly on the strength of their goodwill.
(viii) Encouragement to Better Performance:
Advertising gives the employees that feeling of pride in their jobs and the products they
produce or help to produce, which is basic to high morale. It can, thus, inspire executives and
workers to improved performance. Moreover, an advertiser may have built up a vast fund of
goodwill which will serve as assurance of security to the employers. This will also serve to
boost up the morale of the men working in the manufacturer’s organisation.
2. Advantages to Consumers:
(i) Facility of Purchasing:
Advertising makes purchasing easy for the consumers. Moreover, the resale prices (prices at
which the goods are to be sold by the retailers) are generally fixed and advertised. Thus,
advertising offers a definite and positive assurance to the consumer that he will not be
overcharged for the advertised product. The consumer can make his purchases with utmost
ease and confidence.
(ii) Improvement in Quality:
Goods are generally advertised under brand names. When a person is moved by the
advertisement to use the product, he proceeds on the hope that the articles of the particular
brand will be better than the other brands of the same goods. If his experience confirms his
expectation, a repeat order can be expected.
Otherwise, the sales may rise very high once but may drop down very low subsequently when
the consumer’s confidence in the quality of the product is shaken. The manufacturer is thus
prompted to maintain and, if possible, improve the quality of his brand so that the confidence
of the consumers can be maintained.
(iii) Elimination of Unnecessary Intermediaries:

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By advertising his goods, a manufacturer may seek to establish direct contacts with the
consumers. In this process, the number of middlemen whose profits increase the price and
reduce the manufacturer’s margin of profits may be considerably reduced. This will mean
large profits for the manufacturer and cheaper products for the consumers.
(iv) Education of Consumers:
There is considerable truth in Sir William Leverhulm’s remark that advertising is an
educational and dynamic principle. Advertising aims at educating the buyers about new
products and their diverse uses. In this process, it introduces new ways of life to the people at
large and prompts them to give up their old habits and inertia. Advertising thus paves the way
to better standards of living.
(v) Consumer’s Surplus:
Advertising increases the utility of given commodities for many people. It points out and
emphasizes the qualities possessed by certain goods and leads consumers to appreciate more
strongly the utility of such goods. As a result, the consumers may be willing to pay even
more for certain products which appear to have higher utility to them.
If these products are available at the original lower prices, there will naturally be a certain
amount of consumer’s surplus in terms of increased satisfaction or pleasure derived from
these products.
3. Benefits to Society:
(i) Sustaining the Press:
When advertising made its beginning, advertisements generally occupied some odd nooks
and corners in the newspapers. The present situation is just the reverse. The newspapers,
periodicals, journals, nay the whole press, look to advertisements for support and sustenance.
In the absence of income from advertising, the newspapers have to be produced at a higher
cost and may not be able to keep themselves free from party pulls and pressures from
business lords.
(ii) Encouragement to Research:
The manufacturers will undertake research and discover new products or new uses for
existing products only when they are assured of sufficient profits. Advertising provides this
assurance and thus encourages industrial research with all its advantages.
(iii) Change in Motivation:
Advertising has radically changed the basis of human motivation. While people of earlier
generations lived and worked mainly for bare necessities of life, the modern generation works
harder to supply itself with the luxuries and semi-luxuries of life.

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Advertising has brought to the notice of the masses numerous products which are more than
mere necessities and has created in their minds a desire to possess them. Thus, the motive
force of fear (or going without the bare essentials of life) has been replaced by desire (for
more and newer products).
(iv) Higher Standards of Living:
Advertising leads to a rise in the standards of living, not only through the education of the
buyers but also through greater consumption, increased production and a larger volume of
employment.
(v) Encouragement to Artists:
Men of talent, including artists, story writers, announcers, etc., get an opportunity to do some
creative work while earning their livelihood through the designing of advertisements and the
use of ideas in advertising various products.
(vi) Glimpse of National Life:
Advertising does provide a glimpse of a country’s way of life. It is, in fact, a running
commentary on the way the people live and behave and is also an indicator of some of the
future trends in this regard.
Objections against Advertising:
Advertising has also been subjected to a number of objections mainly because it has been
misused by some people to serve their own ends, overlooking the business interests. An
examination of some of the forceful objections will be of interest.
(i) Multiplication of Needs.
It is said that advertising compels people to buy things they do not need. Human instincts,
like desire to possess, to be recognised in the society, etc., are provoked in order to sell
products. Sometimes, various types of appeals are advanced to arouse interest in the product.
Sentiments and emotions are played with to gain customers. To say this would not however,
be correct inasmuch as advertising cannot force anybody to buy a thing which he considers
unnecessary.
(ii) Misrepresentation of Facts:
Through misrepresentation of the benefit a product will give, goods of no real value are sold.
Tall claims are made by the advertisers to tempt people to take such actions as go purely to
their advantage and cause tremendous loss to the consumer. Even adulterated food and
medicines are marketed, which by no stretch of imagination can benefit anybody.
By sheer exaggeration of facts, demand for the merchandise advertised is created without
much difficulty even when the commodities carrying greater worth or satisfaction are already

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there in the market. Such unscrupulous actions of a few tell upon public confidence in
advertising.
(iii) Consumers’ Deficit:
While advertising leads to increased satisfaction from commodities already in use, it also
creates discontent in the minds of many people who are tempted to purchase some
commodities but are not able to do so because of insufficient purchasing power. Such
discontent is obviously not very desirable from the point of view of society, particularly if it
affects a large majority of people. But it is important if it acts as a spin to social change.
(iv) Wastage of National Resources:
A more serious objection against advertising is that it is used to destroy the utility of goods
before the end of their normal period of usefulness. New models of automobiles with nominal
improvements are, for instance, advertised at such high pressure that the old models have to
be discarded long before they become useless.
Not that merely, the most-advertised products are delicate, fragile and brittle. In the U.S A.,
there is evidence of a marked decline in the quality and durability of cars, furniture, rugs,
television sets, refrigerators, etc. That appears to be the way in which the increased demand
created through advertising can be sustained.
The same is true of dresses, furniture and other products. From the point of view of the
community it is a waste of resources. The natural resources, capital equipment and labour
energy which go into the production of new items to take the place of the discarded ones
amount to waste when measured in terms of social well-being.
(v) Increased Cost:
There is a great deal of controversy as to whether advertising leads to increase in the cost
which the community has to pay for a product. In a sense it is true since expenses on it form a
part of the total cost of the product. But at the same time it would be wrong to infer that if the
advertising costs were cut down the goods would necessarily be cheaper.
Advertising is, no doubt, one of the items of costs but it is a cost which brings savings in its
wake on the distribution side. On manufacturing side, it is one of the factors that make large-
scale production possible and anyone would agree that large-scale production leads to lower
costs.
It is quite usual for the small non-advertiser retailer to say, “We don’t advertise—we put the
cost of advertising into the goods.” But it is often nothing more than an attempt to justify his
“side street location, the quality of his goods and his high price.” In fact, if comparisons are

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made between advertisers and non-advertisers, it will usually be found that the merchants
who advertise have larger stores and lower prices than those who do not advertise.
Sears, Roebuck and Co., is one of the heaviest advertisers of the U.S.A. spending over $16
million a year for newspaper advertising alone and, in addition, $30 million or more on other
forms of advertising including catalogues. In spite of such a heavy expense on advertisement,
the Company is known for its low prices.
In fact the history of American business is full of examples of such industries as have
lowered prices and supplied better quality while spending millions of dollars for advertising.
This has been possible because advertising has raised the volume of their sales tremendously
thus bringing about a number of economies in production and selling.
(vi) The ‘Monopoly Argument’:
An objection which is most commonly raised against advertising is that it tends to develop
monopolies. As it is, most advertising is devoted to the promotion of branded merchandise.
The manufacturer usually chooses a particular brand name or trade mark for his product and
uses advertising to create an impression on the mind of the consumer that his brand or
product is superior to all other brands.
Through constant repetition of the brand name and its qualities, the manufacturers may
ultimately succeed in creating the desired ‘brand image’ in the mind of the prospect.
Although the particular ‘brand’ may be similar to another brand in all respects including
physical construction, yet the similarity is concealed from the public by the use of an
exclusive name and illusion is created that it is superior to the competing brands.
This gives rise to a ‘brand monopoly’. On reflection, however, it will be found that this kind
of monopoly will be based upon a control of human attitudes, and it will not give the
manufacturer a monopolistic control over the supply of goods or services which are similar in
everything but name.
Besides, brand monopoly created through large-scale advertising will provide only slight
power to increase prices. The moment prices are increased substantially in the wake of a
brand monopoly; rival companies may rush into the market with lower-priced product and
may use extensive advertising to push its sales. This may be followed, in course of time, by a
shift of choice on the part of the consumers.
A brand monopoly secured through expenditure on advertising does not necessarily give the
manufacturer an effective monopoly of particular industry. The Golden Tobacco Company
has a monopoly of Panama brand of cigarettes but not of the whole cigarette industry.

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Even in those cases, where the popularity of a brand places the manufacturer in a position of
near- monopoly, the competitors generally use advertising to break his hold on consumers’
attitudes secured through advertising.
It may be concluded that advertising can create temporary brand monopolies which are
abolished through competitive advertising -by other manufacturers. Even these short-lived
monopolies are more useful for increasing sales than for increasing prices and profit margins.
As Heppner aptly points out, “Advertising stimulates competition. It often enables the small
businessman to compete with large concerns as well as to start new business.”
Though one cannot entirely turn one’s face away from the objections which are raised against
advertising, it is clear that much of the criticism is either ill-founded or exaggerated.
Fundamentally most of the drawbacks attributed to advertising are inherent in the competitive
system of economy.
The social wastage involved in the struggle for more markets as between brands of a product
is, for example, a basic feature of the competitive market economy. As Sandage puts it, “As a
competitive tool, advertising is perhaps less costly than many other tools which will be used
to a greater degree if advertising were banned.”
He obviously refers to the personal selling and the giving of greater dealer’s margins to the
retailers which might be used in place of advertising. Either of them would be costlier for the
society.

Advantages and Disadvantages of Advertising – As a Promotional Tool


Strengths of Advertising:
Advertising is a major promotion tool.
It has the following basic plus points or strengths as a promotion tool:
(1) It offers planned and controlled message.
(2) It can contact and influence numerous people simultaneously, quickly, and at a low cost
per prospect. Hence, it is called mass means of communication.
(3) It has the ability to deliver messages to audiences with particular demographic and socio-
economic features.
(4) It can deliver the same message consistently in a variety of contexts.
(5) It can reach prospects that cannot be approached by salesmen, e.g., top executives.
(6) It helps to pre-sell goods and pull the buyers to retailers.

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(7) It offers a wide choice of channels for transmission of messages such as visual, aural,
aural and visual.
(8) It is very useful to create maximum interest and offer adequate knowledge of the new
product when the innovation is being introduced in the market.
Weaknesses of Advertising:
Advertising as a promotion tool has the following weaknesses:
(1) It is much less effective than personal selling and sales promotion at later stages in the
buying process, e.g., in convincing and securing action.
(2) It is less flexible than personal communication. It cannot answer objections raised by
prospects.
(3) It is essentially one-way means of communication. It cannot obtain quick and accurate
feedback in order to evaluate message effectiveness. In absence of feedback, personal
salesmen becomes necessary.
(4) It is most efficient communication (very low cost persuasion prospect) but it is least
effective as a tool of communication.
(5) It is unable to reach prospects when they are in a buying mood. Hence, we have to repeat
advertisements and repetition involves additional cost.
(6) Advertising media, e.g., newspapers, magazines, carry many messages competing to
secure attention of audience simultaneously. Thus, it creates noise in communication.
(7) Advertising, many a time, lacks credibility and trustworthiness.
Many of the aforesaid weaknesses can be eliminated by other elements of promotion when
they are combined with advertising.

Important Functions of Advertising

Functions of Advertising:- Have you ever thought of a business with no concept of


advertising lurking inside of it? Seems strange, huh? Well! It surely feels like a person with
no physical appearance. The functions of advertising are not limited to just giving your
brand exposure to the markets which you target for your business or spreading its
influence, but also for spreading the word about the usefulness of your products and
encouraging new customers to give your services and products a try.

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Each function, the advertising boasts of, has its own limitations and is responsible for its own
effects whether positive or negative. The effects and outcome of each of the function might
be different but the ultimate goal of taking the company to success and the means of
implementation are same. And that’s what makes advertising so much interesting to both, the
business owners and the advertisers.

Functions of Advertising and their Effects

1. Communicating a Brand’s Identity

The primary objective of any advertising strategy is to communicate the identity of any brand
to its existing customers and to build relationships with new customers. Since companies are
meant to act just like the face and name do for a person. Companies are the identity of any
product and to help the people in getting the idea that a particular belongs to a specific
company or that specific company has that much amazing product under its list of creations,
advertising is put to good use.

This lets a brand getting distinction in a competition flooded market thus clearing up the way
for the business to make strong emotional relationships with the customers. This relationship
when passes the tests of years becomes the most valuable asset of that company.

2. Supplying Information to Consumers

Advertising a brand out in the target market is the best way of informing people that what
your brand is and surprising them by showing the enormous potential that your brand holds in
it. And for that purpose, one can make use of any advertising medium so that he can
broadcast the detailed features of a particular product in such a compelling way that people
are automatically attracted to services and products which his company provides. Those
details can be anything ranging from the price of that product to its color and size and it goes
as far as the information about the store which holds that product in its “to be sold” category.

3. Persuading customers to go for your Products

If your advertising strategy has got what it needs to compel the customers for purchasing
your products, then surely there’s nothing that can stop you from doing business. Among the
most obvious functions of advertising, persuasion belongs to the most important category,

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also. That’s why it is important for a business to create powerful and creative visual
presentations with a strong action driving effect so that the customers get the feel of your
company as a trustable and a reliable one.

This core mission tries to persuade the customers to buy your products by showing them off
your products’ advantages and thus, makes them understand that their life will be much easier
with that creation of yours. O’Sullivan says that images and ideas are an important part of
advertising since those are what, which bring a meaning to it.

4. Generating demand

Getting a feel in hearts of consumers that how easy it all will get with your brand and
products to tackle many difficult tasks of everyday life and thus, ultimately leading to a rising
demand for it. It is one of the most powerful functions of advertising since it lets you
manipulate the consumers thinking to your advantage, therefore luring them to your business.
Because of targeted advertising, a company is likely to get a refined customer base consisting
of customers that are interested in buying only your product.

5. Maintaining Customer Base

It is a fact that demand generation is the job of advertising but fulfilling that demand and
keeping the customers happy with the product quality is the next most important thing that
your company needs to care for. Yet there too, advertising comes in as a savior and keeps the
confidence of your customer up by encouraging the purchasing activity. Moreover, the
loyalty of the customers increases, in a pretty much similar pattern, as that of the quality
consistency of the both the product and advertisements.

As already mentioned, the main objective of the functions of the advertising to seek out new
customers and keeping the older ones loyal to you. And they are quite responsible in doing
the job by keeping people bounded to your services by bringing out new information even
about older products.

6. Pricing Comparisons

Once you put an ad on any of the advertising media, it is very likely to be seen by hundreds
and thousands of customers (and there are also chances for the number to grow up to millions

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and billions). This, along with the ads from your competitors helps the customers in making
the comparison between your product and that of your competition. This comparison can be
made on the basis of features, qualities, drawbacks and mainly, prices. Since price is one of
the main factors that drives the customers purchasing activities.

This can be much of a golden chance for you as well your competitors in knowing the
performance level of each other. You can get information about how your competitor
is marketing its product. Moreover, the information about sales, promotional methods, and
advertising campaigns can also be reaped from it. Therefore, the functions of advertising can
assure you that your brand is getting the most out of its advertising strategies.

7. Previewing New Trends

Whenever a new product hits the market, it is very likely that it will lead to the formation of a
new and lasting trend. But how far it lasts depends on its features, the quality level of the
advertising strategies meant for promoting it as well as the disturbance it causes in the current
business levels of your competitors. You can think of it as a product unique of its kind starts
getting a lot of sales, then there are huge chances that your customers will also try to jump
right into the competition with their products.

So that’s how the functions of advertising let you preview the trends driven by the new
products since these motivate the customers to go for them. With the help of advertising, it
can get a lot more customers than it will actually be getting without it, because it lets you a
way to promote your product using coupons, trials and many other types of offers.
Previewing new trends are as important as to keep going with your existing product range
since it’s the best way to keep an eye on rest of competitors and to struggle towards the
ultimate product relating to that trend.

Difference between Advertising and Personal Selling

Difference between Advertising and Personal Selling

Advertising is an uncongenial, paid form of contact used by the marketers for the promotion
of goods and services. It is a method of influencing your existing customers as well as your

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non-existing customers about any exacting product. There are dissimilar modes through
which advertisements can be done which are – newspapers, banner, magazine, social media,
and others.

On the other hand, personal selling involves direct communication of the seller with possible
consumers. It is the procedure of persuading a possible consumer to buy the product. It is
designed to be used as a short-term approach to boost sales – it is rarely suitable as a
technique of building long-term consumer reliability.

Advertising – It is a means of communication, which calls customer’s awareness towards the
product or service, through mass media.

 Advertising is more useful in marketing to the ultimate consumers who are large in
numbers.

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 Advertising is an impersonal form of communication. It is one-way communication.


So, it has lacked direct feedback
 Advertising involves the transmission of standardized messages, i.e., the same
message is sent to all the customers in a market segment.
 Advertising is inflexible as the message can’ t be adjusted to the needs of the buyer.
Its activities may result in an instant growth in sales but for the short term only.
 It reaches masses, i.e., a large number of people can be approached.
 In advertising, the cost per person reached is very low. And the product value is
comparatively low and easy to use.
 Advertising can cover the market in a short time. It follows Pull strategy
 Advertising makes use of mass media such as television, radio, newspaper, and
magazines. It is a tool used to stimulate sales by employing an incentive element to attract
customers.
 Conveys the message to the end number of individuals in less time.

Personal Selling – It refers to an outline of promotion, wherein the sales representative sells
the product to customers, by straight visiting them.

 Personal selling is more helpful in selling products to the industrial buyers or to


intermediaries such as dealers and retailers who are relatively few in numbers.
 Personal selling is a personal form of communication. It is two-way communication.
So, it facilitates direct and instant feedback
 In personal selling, the sales talk is adjusted keeping view customer’s background and
needs.
 Personal selling is highly flexible. as the message can be adjusted. It can be seen in
the long run when there is an increase in sales.
 Only a limited number of people can be contacted because of time and cost
considerations.
 The cost per person is quite high in the case of personal selling. It is used when the
product value is high, and it is difficult to understand.
 Personal selling efforts take a lot of time to cover the entire market. It follows the
Push strategy.

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 Personal selling makes use of sales staff, which has limited reach. It is an element of
the promotional mix, where a salesman visits the customer and displays the goods to
initiate the purchase.
 Conveys the message to a few customers only in relatively high time.

Difference between advertising & publicity

Advertising Vs Publicity

The terms advertising and publicity are used interchangeably by many of us. But there is a
considerable difference between the two. The critical difference between the two is that;
former is a paid promotion of products done with the aim of increasing sales volume.
However, the latter is an unpaid promotion through a third party aimed at creating a buzz or
revealing a public interest story.

However, both advertising and publicity are used as a promotional tool by companies. Each
of them has a different purpose and way of marketing the brand and its products. When
advertising develops a brand name, publicity may create a negative impact on sales of a
product.

Content: Difference Between Advertising and Publicity

1. Difference and Comparison


2. Example
3. What is Advertising?
4. What is Publicity?
5. Types
6. Objectives
7. Advantages
8. Disadvantages
9. Summary

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Difference and Comparison

BASIS ADVERTISING PUBLICITY

Meaning Advertising is a sponsored promotion Publicity is a free activity done


done with the objective of selling the for circulating information or
product. news.

Sub-part of Promotion mix Public relations

Nature Impersonal and general Both personal and impersonal

Control Company Third party

Target Prospective customers or buyers Public in general


Audience

Initiative Initiated by the company Initiated by the media

Cost Involved Involves advertising expenses Involves no or very less


expenditure on arrangements

Impact Increase in sales volume Brings out negative or positive


aspect of a product or brand

Benefit Builds brand image Creates goodwill and develops


trust

Audience's Mere sales promotion Source of genuine information


Perception

Duration or Runs repetitively Featured only once


Longevity

Creativity Creative ways are used to draft and Creativity is used to create a buzz

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BASIS ADVERTISING PUBLICITY

deliver the message or news on media

Credibility Less Comparatively high

Sponsorship Sponsored Not sponsored

Follow Up Results can be measured in terms of sales Difficult to measure the result in
volume numbers

Example

Advertising:

Let us understand advertising with the advertisement for P&G on cleaning and household
goods.

This ad portrayed the life of athletes and their mothers who are behind their success. The
mothers push their children at every step of life to achieve success. In their athletic journey,
the mothers have to do a lot of cleaning and other household work. In which P&G is
presumed to make their job easier.

The advertisement was quite powerful and influential in creating the desired impact on the
audience.

Publicity:

One of the best examples of publicity is the launch of cosmetic range by a billion-dollar
brand Benckiser for Indian women was featured as the cover story of India Today magazine,
in the year 1996.

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The magazine created a buzz for the thirty new cosmetic products which Benckiser was going
to launch the next year in India. This publicity stunt became the talk of the town, creating a
positive image for the brand.

The publicity is a more reliable form of marketing where the credibility is high and more
information about the product is disclosed.

What is Advertising?

Advertising is a paid marketing strategy followed in seeking the attention of potential


customers towards a product by drafting a creative message and circulating it among the mass
audience through different media sources.

Characteristics: To understand the concept of advertising in detail, let us go through its


features:

One way communication: Advertising can be termed as a one-way communication process.


Here, the company introduces the prospective customers to its product through various media
sources, and the customer’s feedback or response cannot be taken.

Paid Activity: Advertising activities right from the creation of an advertisement, i.e. the
message to the buying of a media slot for making the ad live, everything requires finance.

Promotional Tool: It is purposefully done as a strategy of promotion mix with the aim of
generating sales and increasing the customer base for a product.

Involves Creativity: Since it is a one-way communication, it has to be highly influential.


Therefore to leave an impact on the audience, the message, as well as its presentation, must
be very creative and innovative.

Impersonal in Nature: Advertising is usually impersonal, i.e. it is done with the aim of
targeting a massive audience through the standard media like television, newspaper, radio,
etc.

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What is Publicity?

Publicity is the means of unpaid promotion through the third party usually media which
features the complete information about the product or the brand in the form of news or buzz.

Characteristics: Publicity is a useful tool, to know more about it, let us understand its

features:

 Belongs to Public Relations: Publicity is a part of public relations since its efforts are
directed towards establishing and maintaining strong business relations.
 Non-Paid Activity: It is a free promotional activity done by a third party to spread
information about the product.
 Media Oriented: Publicity is driven and initiated by the press or the media to create
news about the product.
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 Controlled by Third Party: The message to be delivered through the press release or
news or other media is controlled by the third party, i.e. the publisher or the media
house.
 Involves Low Cost: Publicity may include the minimal cost incurred on arrangements
of publicity events.

Types of Advertising

Advertising can be categorized by the medium used for the purpose. Following are the
different ways of advertising:

 Digital Advertising: Digital advertising includes social media like Facebook, Twitter,
Instagram; emails like Yahoo mail and Gmail; and other digital platforms. It is used to
put advertisements and target potential customers.
 Print Advertising: The advertisements in written form such as in the newspapers,
journals, magazines, pamphlets, brochures, etc. are considered as print advertising.
 Outdoor Advertising: The companies advertise their product on roadside banners,
flags, hoardings and wraps.

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 Product or Brand Integration: Products are promoted through entertainment


channels running on television, youtube video, etc.
 Broadcast Advertising: Usually in the video or audio form, the commercials on
television and radio are known as broadcast advertising.

Types of Publicity

The different ways in which publicity is done determines its type. Each of which is explained

below:

 Visits: The third party, i.e. press or media, conduct a visit to the business outlets for
promoting innovative products.
 Press Conferences: The company’s representatives give an interview to the
journalists regarding their product or brand in a press conference which is further
featured in media.
 Informal Discussions: Oral publicity or word of mouth is one of the most potent
ways of publicity. If the third party share its experience with the company with the
potential customers, it becomes easy for the company to gain their trust.
 Press Releases: The public relations professional frames out a short story on the
innovative product to be published by the journalist as news reports.
 Presentations: The company introduces the media to its new product through a
demonstration, lecture or speech to be featured by them.

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Objectives of Advertising

The ultimate purpose of advertising for the companies is to draw customers’ attention
towards their product. Following are its various objectives:

 Advertising aims at promoting the product by making the audience aware of the
product features.
 It is done to pursue potential customers to buy the products.
 The company tries to build a strong and confident image of its brand and its product
in front of potential customers.

Objectives of Publicity

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Publicity aims at providing long-term benefits to the company. The other purposes of
adopting this strategy are as follows:

 Publicity creates goodwill of the company since it is more trusted and relied upon by
the customers.
 The consumers assume that the information so provided is more genuine and holds
high credibility.
 Publicity usually creates a buzz or talk of the town, seeking attention from the public.
 It is an accelerating activity for the sales function, ultimately improving product sales.

Advantages of Advertising to the Customers

Advertising helps the customers in decision making since they have a variety of similar


products to compare and choose from. They become aware of the new products offered by
the company and get educated about its features and usage. The customers can view better
quality products since advertisements are mostly carried out by big brands having superior
product range.

Advantages of Advertising to the Company

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For the company, advertising is a means of building brand image in the market. It
emphasizes those product features which differentiate it from its competitors, thus
facilitating product differentiation. Moreover, it helps the companies to reach out mass
audience who can be considered as potential customers for the company. It also increases the
sales volume by encouraging more and more customers to buy the product.

Through advertising, the company promote its new product by generating a vast customer
base. It can influence the audience in such a way that the potential customers can be
converted into buyers.

Advantages of Publicity

Publicity being a free practice is more cost-efficient. It is considered to be a more trustworthy


source of information by the customers. It is also a source of detailed information about the
product and the brand.

Publicity is a useful promotional tool having a high number of readers or viewers since the
product information is in the News form. It is a faster means of promotion since it has a
significant number of genuine audiences. It helps the company to become famous and go
viral. Thus, it helps in building strong business relations.

Disadvantages of Advertising

Advertising of products involves a lot of expenses which are recovered from the customers
by increasing the per-unit cost of the product. Therefore, it also seems to be unaffordable by
small businesses.

The customers get confused about what to buy due to the numerous options available to
them. Advertising sometimes misleads consumers by providing false information to the
audience.

Advertising has no product selection criteria based on the quality, which means the false
promotion of inferior products can even take place. It is a tool for grabbing customer’s
attention, but it doesn’t lead to customer retention. Retention of customers depends upon
their buying experience and product worthiness.

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Disadvantages of Publicity

Publicity can be either way, good or bad. Bad publicity can adversely affect the company
by ruining the brand image. It may even decrease the sales volume drastically, as an impact
of bad publicity.

In the case of bad publicity, loyal customers may lose trust over the brand and its products.
The company may also lose its associates and business partners due to its poor reputation in
the market.

By the above comparison chart, the differences between advertising and publicity are
summarized in the following points:

1. Advertising is a sponsored promotion done for the purpose of selling the product,
whereas publicity is a free activity aiming at spreading information or news.
2. When advertising is a strategy belonging to the promotion mix, publicity can be seen
as a part of public relations.
3. Advertising activities are impersonal addressing the mass audience; publicity can be
both personal or impersonal.
4. In advertising, the company has full access and control over the message and how it is
to be presented. In publicity, the company holds minimal control over the message and
its circulation, whereas the third-party majorly controls the activities.
5. The target audience in case of advertising is the potential customers, and it is
considered as a sales function. Whereas, in publicity, the target audience is the public,
i.e. all the people associated or looking for a future association with the company.
These include employees, sales personnel, customers, business partners, etc.
6. The former is a strategy adopted and initiated by the company itself. However, the
latter is the media or press commenced activity.
7. Advertising involves huge cost spent on the creation of the message and buying off
the media slot and making the ads live. On the contrary, publicity is a free activity or
may involve some minimal expenses incurred in making the arrangements.
8. The former increases the sale of the product, whereas the latter may have a positive or
a negative impact on the company’s image and reputation.

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9. Advertising builds the right image of the product and the company in the market.
Publicity, on the other hand, creates the goodwill of the brand by developing trust
among the public.
10. The audience, i.e. the smart potential buyers assume advertising just as a sales
promotion activity. Whereas, publicity is taken as a source of factual information by
the public.
11. If the company’s advertising budget allows, the company can run ads repetitively. On
the contrary, publicity is done through news, press release or reviews is featured only
once.
12. Creativity is essential in both activities. The only difference is that; former uses
creativity to draft and deliver the message, whereas; the latter find out innovative ways
to create buzz or news on media.
13. Advertising is considered to be less credible and reliable, whereas publicity holds
high credibility due to third party promotion.
14. The former is run by identified sponsors, but the latter requires no sponsorship.
15. The result of advertising can be easily measured regarding the sales volume; however,
the same is quite tricky in case of publicity.

For the above differences, we can analyze that advertising is a good strategy if the company
aims at boosting up sales in a short period. It can also be used to launch a new product in the
market successfully.

But if the company has the objective of creating goodwill for its brand in the long run along
with building strong relations with the people associated with it, it must adopt the strategy of
publicity.

Publicity and advertising both are popular techniques used for market promotion. The key
difference between the terms has been discussed below;

Publicity:
1. It is not a paid form of communication.

2. Mostly, publicity can be carried via newspapers, magazines, radio or television

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3. Company has no control over publicity in terms of message, time, frequency, and medium.

4. It is undertaken for a wide variety of purposes. They may include promotion of new
product, pollution control efforts, highlighting special achievement of employees, publicizing
new policies, or increasing the sales.

5. It may not be repeated. It takes place only once.

6. It has a high degree of credibility or reliability as it comes from mass media independent

7. It is in forms of news or reports presented differently than propaganda.

8. Publicity can be done at a much lower cost than advertising.

9. It is not given by company or producer. It is given by the third party whose opinion carries
more reliability.

10. Publicity message is more likely to be read and reacted by audience.

ADVERTISING BUDGE

Meaning

An advertising budget is an estimate of a company's promotional expenditures over a certain


time period. More importantly, it is the money a company is willing to set aside to
accomplish its marketing objectives. When creating an advertising budget, a company must
weigh the value of spending an advertising dollar against the value of that dollar as
recognized revenue.

The best advertising budgets—and campaigns—focus on customers' needs and solving their
problems, not company problems such as an overstock reduction.
Understanding an Advertising Budget
An advertising budget is part of a company's overall sales or marketing budget that can be
viewed as an investment in a company's growth. The best advertising budgets—and
campaigns—focus on customers' needs and solving their problems, not company problems
such as an overstock reduction.

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Special Considerations: Advertising Budget and Goals


Before deciding on a specific advertising budget, companies should make certain
determinations to ensure that the budget is in line with their promotional and marketing goals:

 Target consumer: Knowing the consumer and having their demographic profile can


help guide advertising spend.
 Type of media that is best for the target consumer: Mobile or internet advertising
—via social media—may be the answer, although traditional media, such as print,
television, and radio may be best for a given product, market, or target consumer.
 Right approach for the target consumer: Depending on the product or service,
consider if appealing to the consumer's emotions or intelligence is a suitable strategy.
 Expected profit from each dollar of advertising spending: This may be the most
important question to answer, as well as the most difficult.

FACTORS AFFECTING ADVERTISING BUDGET

Advertising budget:- Well advertising efforts of any brand are adversely affected by the
budget that it has to offer to make the advertising means work. The advertising budget is
what that determines the maximum number of ways, which a business can deploy for the
advertisement of its name and its products. This is what that makes it important for the
advertisers to learn each and everything about the factors that affect advertising
budget along with the features that characterize a successful advertising campaign and the
proper way to set up an effective budget.

Factors Affecting the Advertising Budget

1. Company’s Current Situation

The primary factor that affects the budget set by the company for advertising purposes is the
current situations that the brand is currently in and the problems that it is facing for the time
being. It is obvious that a business which started recently will have to focus a greater part of
its advertising budget to promote its products as compared to a company that’s already in the
market for a longer period of time.

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 On the other hand, competitive environments also have a great effect on the budgeting
policies and the strategies. Take it this way like a company that is surrounded by competitors
all the way round often needs to set its budget higher than those with a lower number of
competitors. In this case, advertising gives your promotional means a huge boost and makes
them stand apart. But then again, competitiveness of advertisements is the next hurdle for
most of the brands out there, so they need to push even harder to achieve what they want to
achieve.

2. Role of Advertising

In most of the companies, advertising is just meant to be a way to bring in more visitors and
drive more sales, but for some companies, it’s just like the primary way of gathering
customers for their products. In both cases, advertising is supposed to be a necessary expense.
This means that the advertisers are fully aware of the importance of advertising, but this
also uncovers that they want to keeps the costs of advertisements at their minimum, while on
the other hand optimizing them to gain as much as possible.

In some cases, advertising can be used to get out of the harsh environments until everything
cools down and returns to normal, but also in some cases, a company can put more emphasis
on advertising, than it does on anything else to keep its progress and reputation up all the
time.

3. Budgeting Method

Well! Definitely, budgeting method also belongs to the factors that affect advertising budget.
Since customers taste change with time and so do the trends. Thus, keeping an eye on those
changing trends and putting forward a method that counters those changes by varying the
advertising means can pay off later next time. Once, the advertisers get the feel of how to
tackle the changes, they will be able to make use of advertising means properly, which will
bring down the budget needed for advertisements to bring the same number of buyers or even
more with the same budget level.

 Among all of the methods, percentage-of-sales method is the most common one and involves
setting up a percentage of about 3-5% of the revenue of the current year as the budget for the
next year. This means the fluctuations in the number of sales will surely modify the budget.

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4. Affordability

It is quite natural for a small company that is able to generate 100,000$ on the yearly basis to
be able to afford a smaller advertising budget as compared to large multi-national companies
with revenue in millions. Large companies may not find it difficult to run international
campaigns for the promotion of their products. On the other hand, for smaller businesses,
allocating 2000-3000 $ for promotional purpose every year is really huge amount to spend
and is a difficult task to manage

Steps to Formulate an Advertising Budget Process

1. Determining the Potential of Competitors

If you want to be able to come up with an advertising budget strategy that is able to beat most
of your competitors’, you should be aware of what your competitor is doing, how much of
their revenue is spending on advertisement and how much potential competitors have to bring
the most out of these strategies. Moreover, knowing the means which rival is making use of,
will also let you know their strengths and weaknesses.

2. Setting up a Budgeting Method

If your business is already established, then going on with fixed price advertising will provide
you a stable way to sustain your position and to make further progress, just like a stepping
stone. But if your business is new, then objective based method will do better for you, since it
lets you focus your current objectives and helping you achieve them one by one. In this way,
your brand will be able to set up its feet firmly in the market.

3. Determining the Maximum Amount to Spend

In this step, objectives are set depending on how much the advertiser wants to spend, whether
their business is an established one or planning to step into the market. This part of the
process is somewhat complex one since it involves the hit and trial method and needs the
foresight of the advertisers to cross the barrier.

4. Exploring the Options

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It is quite a wise idea to test the depth of waters before diving in, since in this way if anything
bad ever happens, it won’t affect the budget that much. Furthermore, it will only open up the
way for you to test the effectiveness of your strategies.

Budget: 5 Methods

The following points highlight the top five methods of determining an advertising
budget listed by Joel Dean. The methods are: 1. The Percentage of Sales Approach 2.
The All-You-Can Afford Approach 3. The Return on Investment Approach 4. The
Objective and Task Approach 5. The Competitive Parity Approach.
Method 1. The Percentage of Sales Approach:
In this method, the sales value of the preceding year is first taken and then the expected sales
during the year in question are arrived at. Thereafter, some percentage of the expected sales is
considered and this is known as the percentage of sales approach.

This method was dominant in the past and even now it is widely used. It may be a fixed
percentage or a percentage that varies with conditions of sales. The method is simple in
calculation. In this method, a clear relationship exists between sales and advertising expenses.
By adopting this method advertisement war can be avoided.

In spite of these advantages, this method has little to justify it. This method does not provide
a logical basis for choosing the specific percentage except what has been done in the past or
what competitors are doing. It discourages experimenting with countercyclical promotion or
aggressive spending.

The aim of advertising is to increase the demand for the product and therefore it should be
viewed as the cause, not the result of sales. But this approach views advertising on the results
of sales. It leads to a budget set by the availability of funds rather than by market
opportunities.

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Method 2. The All-You-Can Afford Approach:


Under this approach, a company spends as much on advertising as it can afford. It can spend
for advertising as much as the funds permit. From the name itself, it is clear that the
affordable amount set aside for advertising is known as affordable method. This approach
appears to be more realistic, for all companies generally spend that much amount on
advertisements which they can afford, even though they may not say so.

As advertising outlays are growing out of all proportions in the modern business, this method
seems to provide a basis for many firms with regard to advertising outlet. Generally, a firm
has to take into account the financial constraints while resorting to advertisement schemes.

As Joel Dean rightly says, “The limit of what a company can afford ought to involve
ultimately the availability of outside funds. In this sense firm’s resources set a real limit
on advertising outlay. However, this limit may be above the limit set be marginal-return
criterion.”
This approach to spending on advertising sometimes proves uneconomical. The point upto
which a firm can afford to spend is a limiting point. If the increase in sales does not match the
expenditure on advertising, it is evident that this is not a wise or economical way of
determining the budget.

This approach is helpful in the following ways in determining the advertising budget:
(i) “It produces a fairly defensible cyclical timing of that part of advertising outlay that has
cumulative long-run efforts.”

(ii) This method is more suitable to the marginal firms.

(iii) This method sets a reasonable limit to the expenditure to be incurred on advertising.

However, the method has got some inherent weaknesses and they are the following:
(i) It is difficult to plan long-term marketing development.

(ii) The opportunities of advertising may be overlooked.

Method 3. The Return on Investment Approach:


This approach treats advertisement as a capital investment rather than as a more current
expenditure.

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Advertising has a two-fold effect:


(i) It increases current sales.

(ii) It builds up future goodwill.

An increase in current sales involves such decisions as the selection of the optimum rate of
output in order to maximise short run profits. The building up of goodwill for the future calls
for a selection of the pattern of investment which is expected to produce the best scale of
production, leading to the maximum long run profits.

This method emphasizes the relation between advertisement and sales. Sales are measured
with advertising and without advertising. The rate of return provides a basis for advertising
budgeting, as the available funds will have to be distributed among various kinds of internal
investment on the basis of prospective rate of return.

The limitation to the return on investment approach is that one cannot accurately judge the
rate of return as advertising investment.

It involves the following problems and they are:


(i) Problem of measuring the effect of advertisement accumulation as long run sales volume.

(ii) Problem of estimating the evaporation of the cumulative effects of advertising, and

(iii) Problem of distinguishing of investment advertising from outlays for immediate effect.

Method # 4. The Objective and Task Approach:


This method is also known as the research objective method. This method became prominent
during the war time. This method calls upon marketers to develop their promotion budgets by
defining their specific objectives, determining the tasks that must be performed to achieve
these objectives and estimating the cost of performing these tasks. The sum of these costs in
the proposed budget.

This approach is an improvement over the percentage of sales approach. But the fundamental
relationship between the objectives and the advertising media again depends upon the past
experience of the firm. In reality, tasks to be determined should be related to the objectives of
the firm and to the past records of the firm.

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This method has the following advantages:


(i) It requires management to spell out its assumption about the relationship between amount
spent, exposure level, trial rates and regular usage.

(ii) This method can be extended to highly promising experimental and marginal approaches.

(iii) With the help of this method a clear advertisement programme can be drawn.

There are inherent defects in this approach. The important problem of the method is to
measure the value of such objectives and to determine whether they are worth the cost of
attaining them. This method is also highly irrational.

Method # 5. The Competitive Parity Approach:


This approach is nothing but a variant of the percentage of sales approach. A firm sets its
budget solely depending upon the basis of competitors expenditure. The advertising cost is
decided on the basis of spending for advertising by the competitors in the same industry.

Two arguments are advanced for this method. One is that the competitors’ expenditures
represent the collective wisdom of the industry. The other is that it maintains a competitive
parity which helps to prevent promotion wars.

Joel Dean claims that this method is widely used. The defensive logic of large proportion of
advertising outlay aims at checking the inroads that might be made by competitors. The
money which an individual firm spends does not reveal how much it can afford to spend in
order to equate its marginal benefits with marginal costs. He finds that no correlation appears
to exist between the outlay and the size of the firm.

Further, Dean defends this approach on the ground that the advertising percentages of
competitors represent the combined wisdom of the industry. Another advantage of this
method is that it safeguards against advertising wars. The main advantages of the method are
simplicity and security of its use. For this a firm has to collect relevant data about
competitors. If it is quite easy for the firm then it is quite easy for it to follow its competitors.

The major problem in this method is that the firm has to identify itself with others in the
industry. Another problem is that it breeds complacency.

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MCQ UNIT I

1. Firm uses any existing brand to introduce in market as a new product, brand is classified as
a. brand extension
b. sub-brand
c. parent brand
d. product extension

2. Branding strategy is also called________________-


a. brand architecture
b. branding rate
c. brand earnings
d. brand responsiveness

3. When companies combine existing brand with new brands, brands are called
a. parent brand
b. product extension
c. brand extension
d. sub-brand

4. Parent brand if it is associated with multiple products in brand extension is called


a. product extension
b. sub-product
c. family brand
d. parent company

5.Brand which is result of extension in brand or sub-brand is classified as


a. brand extension
b. sub-brand

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c. parent brand
d. product extension

6.Activities carry by company to design and produce a differentiated container for particular
product is classified as
a. guarantees
b. warranties
c. labeling
d. packaging

1. Formal statement by manufacturer of product regarding its performance is classified as


a. guarantees
b. warranties
c. labeling
d. packaging

2. Labeling, packaging are associated with:


a. Price mix
b. Product mix
c. Place mix
d. Promotion mix

3. The goods which satisfy human wants directly are called:_______________


a. Consumer’s goods
b. Producers’ goods
c. Public goods
d. Intermediate goods
4. The satisfaction of human want is called:
a. Consumption
b. Production
c. Distribution
d. None of these
5. In 'stages of adoption process', customer decides to become regular user in
a. awareness stage

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b. interest stage
c. evaluation stage
d. adoption

6. According to research, there are four factors that influence consumer buyer behavior:
a. psychological, personal, social, CRM systems
b. cultural, organizational, personal, psychological
c. cultural, social, personal, psychological
d. none of the above

7. The psychological factors influencing consumer behavior are;


a. motivation, perception, learning, beliefs and attitudes
b. culture, subculture, social class
c. reference groups, family, roles and status
d. all of the above
8. The consumers' five steps of adopting a new product refer to which of the following?
a. Awareness, interest, evaluation, trial, adoption
b. Awareness, promotion, evaluation, trial, adoption
c. Adoption, interest, evaluation, trial promotion
d. Awareness, interest, cash cows, trial, adoption
15. Consumer behavior consists of which of the following activities?
a. Obtaining
b. Consuming
c. Disposition
d. All the above

9. Consumer behavior can be defined as:


a. a field of study focusing on marketing activities
b. a field of study focusing on consumer activities
c. a study of pricing
d. the study of decision rules
10. ______________refers to how consumers get rid of the product and packaging.
a. Purchase
b. Obtaining

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c. Consumption
d. Disposal
11. Successful organizations believe:
a. Consumers are influenced by the needs and wants of the organization.
b. Marketing is the process of transforming or changing an organization to have
what people will buy.
c. Marketing is not really important.
d. Marketing is the process of transforming consumer wants into the firm's product
offering.
12. Which of the following areas can be better understood by studying consumer behavior?
a. Consumer preferences for different advertisements
b. Financial decisions
c. Voting in elections
d. All the above
13. “Only the customer can fire us all” implies that:
a. Consumers determine which firms survive and which fail.
b. Customers can be manipulated into buying goods and services.
c. Customers are concerned only when prices go higher.
d. Firms should not bother with research as the customer is fickle.
14. Consumer product manufacturers study consumer behavior to influence:
a. brand choice
b. consumption
c. purchase
d. All of the above.
15. Consumer analysis should include___________:
a. consumer trends
b. communication methods to reach target markets
c. models to predict purchase and consumption patterns
d. It should include all of the above.
16. ____ is an understanding of consumers' expressed and unspoken needs.
a. Consumer analysis
b. Consumer insight
c. Consumer focus
d. None of the above.

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17. Customizing goods or services for individual customers in high volumes and at relatively
low costs is known as:

a. target marketing

b. mass customization

c. niche customization

d. niche marketing
18. --------------------helps to understands how consumers are influenced by their
environment.

a. Consumer behaviour

b. Motives

c. Perception
d. Learning.

19. Groups that have a direct or indirect influence on a person‘s attitudes or behaviour is
known as -------------------------1. Firm uses any existing brand to introduce in market as a
new product, brand is classified as
e. brand extension
f. sub-brand
g. parent brand
h. product extension

20. Branding strategy is also called________________-


e. brand architecture
f. branding rate
g. brand earnings
h. brand responsiveness

21. When companies combine existing brand with new brands, brands are called
e. parent brand
f. product extension

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g. brand extension
h. sub-brand

22. Parent brand if it is associated with multiple products in brand extension is called
e. product extension
f. sub-product
g. family brand
h. parent company

23. Brand which is result of extension in brand or sub-brand is classified as


e. brand extension
f. sub-brand
g. parent brand
h. product extension

24.Activities carry by company to design and produce a differentiated container for particular
product is classified as
e. guarantees
f. warranties
g. labeling
h. packaging

25. Formal statement by manufacturer of product regarding its performance is classified as


e. guarantees
f. warranties
g. labeling
h. packaging
26._______________which started a campaign for drivers to tie a red ribbon onto their
vehicles, signifying their commitment to safe, sober driving.
a. MADD
b. MADE
c. MASD
d. MDD

27.____________________is used primarily by nonprofit organizations, charity foundations,


public highway departments, and government agencies.
a. Social marketing

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b. Tele marketing
c. Viral marketing
d. Relationship marketing

28. _______________is a method of direct marketing in which a salesperson solicits


prospective customers to buy products or services, either over the phone or through a
subsequent face to face or Web conferencing appointment scheduled during the call.
a. Social marketing
b. Telemarketing
c. Viral marketing
d. Customer relation marketing

29. _____________ consists of handling incoming telephone calls—often generated by


broadcast advertising, direct mail, or catalogues—and taking orders for a wide range of
products.
a. Social marketing
b. Inbound Telemarketing
c. Viral marketing
d. Outbound telemarketing

30._______________is a facet of customer relationship management (CRM) that focuses on


customer loyalty and long-term customer engagement rather than shorter-term goals like
customer acquisition and individual sales.
a. Micromarketing. .
b. Relationship marketing
c. Niche marketing.
d. Outbound marketing

ANSWER THE FOLLOWING QUESTIONS

1. Advertisement impact consumers buying behaviour . Explain its elements

2. The most successful symbols allows consumers to identify its products of company. What
Are the types of advertising?

3. The outcomes of business and trading which reveals through its functions . Explain the
functions of advertising?

4. Consumers are the part of marketing activity, advertisement which attracts and impact
them. So Explain the impotent of advertising .

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5. Explain the criticism of advertising .

6. Differentiate between advertising and personal selling.

7. Define advertisement. Explain its advantages and disadvantages.

8. Critically Examine the advertisement which exploit consumers.

9. Differentiate between advertisement and publicity.

10. Advertisement which impact brand name thereby consumers make a decision to buy the
product. Differentiate between advertising and personal selling.

11. Define personal selling. Explain the different types of advertising.

12. What is publicity. Explain the types of publicity.

UNIT II
ADVETISING MEDIA PLANNING

Meaning & History


From Greek Μηδεια  (Medeia), possibly derived from μηδομαι (medomai) meaning "to think,
to plan". In Greek mythology Media was a sorceress from Colchis (modern Georgia) who
helped Jason gain the Golden Fleece. They were married, but eventually Jason left her for
another woman. For revenge Media slew Jason's new lover and also had her own children by
Jason killed.

FACTORS AFFECTING MEDIA SELECTION

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The Table of contents 2. Introduction of media 3. Various definition of media selection 4.


Media of advertising chart 5. Media selection 6. Factors affecting media selections 7.
Characteristics of important media 8.Conclusion 9. Review of topic 10. Bibliography

1.INTRODUCTION Selection of the most effective television shows, Radio, Programs,


Magazines, Newspapers and other media vehicles to convey a message to a target population
has always been more involved than simply selecting the set of media vehicles with the
lowest cost-per-thousand. Other factors to be considered include the editorial climate of the
vehicle, its prestige, the visual and / or audio qualities in relation to the requirements of the

2. product message interactions among vehicles, and the social environment in which the
audience reads or views the vehicles. Prior of the sixties these additional factors were
combined under the title “experienced judgment.” Cost-per-thousand estimates were adjust
by an agency’s “experienced judgment,” implying that all relevant factors were taken into
account in the ultimate media selection.

3. Various definition of media selection Communication channels through which news,


entertainment, education, data, or promotional messages are disseminated. Media includes
every broadcasting and narrowcasting medium such as newspapers, magazines, TV, radio,
billboards, direct mail, telephone, fax, and internet.

4. Data storage material divided into three broad categories according to the recording
method: (1) Magnetic, such as diskettes, disks, tapes,

(2) Optical, such as microfiche, and

(3) Magneto- Optical, such as CDs, and DVDs. In general, "media" refers to various means
of communication. For example, television, radio, and the newspaper are different types of
media. The term can also be used as a collective noun for the press or news reporting
agencies. In the computer world, "media" is also used as a collective noun, but refers to
different types of data storage options.

5. Media of advertising chart

MEDIA OF ADVERTISING PRINT MEDIA NEWSPAPER TRADE JOURNALS


TECHNICAL JOURNALS & PERIODICALS OUTDOOR OR MURAL POSTERS,
HOARDINGS SKY ADVERTISING ELECTRIC DISPLAY SANDWICH BOARD/MEN
ELECTRIC SIGNS DIRECT MAIL ADVERTISING BROADCAST MEADIA RADIO

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TELEVISION FILM SCREEN SLIDES TRANSIT RAILWAYS BUSES AEROPLANES


CAR CARDS SUBWAYS OTHER FORMS WINDOW DISPLAY POINT OF PURCHASE
MATERIAL EXHIBITIONS DIRECTORIES ADVERTISING SPECIALITIES
CIRCULAR/ SALES LETTERS PRISE LISTS CATALOGUES LEAFLETS ,
PAMPHLETS BROCHURES OTHER DIRECT MAIL

6. Media selection In making media decision, we have to consider the following factors : 1)
The financial allocation for advertising. 2) The nature of the product and the demand for it. 3)
The type of the prospects, their location and other characteristics. 4) The nature of
competition and the extent of coverage required. 5) Cost of media, co-operation and
promotional aids offered by media, media circulation.

7. Right media of advertisement will enable the advertiser to deliver the message
effectively to the intended markets or prospects.

Factors affecting media selections

1. Nature of product :- product to be advertised can be industrial product or consumer


product. Such product advertised in specific trade journals, magazines. consumer product
advertised through mass media television, newspaper and outdoor advertising etc. such
magazines circulation at in other countries ‘product form India’, ‘products finders’.

2. Nature of customers :- An appropriate media plan must consider the type of consumer.
Differ in their age-group, sex, income, personality, educational, attitude etc. consumer group
that is man, women, children, young, old, professional, businessman, literate, illiterate etc.
some of the consumer traits affecting media selection are discussed below. A. Age:-
advertising for kids products , television is the best media for communicating message. TV
add in cartoon, tv channels and for young

3. Magazines and for old television are good choice. B. level of education:- For highly
educated – in magazines, national newspaper, internet and television etc. For less educated –
local newspaper, languages, TV ,magazines etc. For illiterate – print media is not suitable.
Broadcast media is good choice. C. Number of customer:- For more customer - mass media,

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like television, newspaper. For less customer – direct mail, media, advertising on telephone
are suitable.

4. Distribution of product :- At the time of product distribution locally or regionally, then


media with local coverage like newspaper, cable network etc. it the product is national level,
then national dailies , level , TV channels will be suitable. 4. Advertising objectives :- The
main objective of every advertising is to get favorable response from customer and also for
get immediate results, for these fast media like newspaper will be considered. If for build
corporate goodwill and brand equity then magazines, television will be considered.

 5. Nature of message :- if advertising message is informative newspaper will be suitable. If


persuade consumer and potential consumer, emotional apple and rational apple for television
media will be suitable for advertising. At the time of schemes, discount, exchange, festival
offer. then posters, banners and newspaper are suitable. 6. Size of ad-budget :- If budget is
more then costly media, that is television, national dailies, popular magazines can be selected.
If budget is less

6. Then media like posters , banners, cable-network, local newspaper will be suitable.

7. Media used by competitors :- If advertiser does not consider competitors move regarding
media, then is possible that advertiser’s market share is taken by competitors. If the industry
leader is using TV as media at that time consider the same media. 8. Media – availability :-
sometimes specific space for advertisements is in print media is already book by other
advertiser and hence space not available. Sometimes it happens advertisement.

11. Media image :- some media image is better image in comparison with other media
vehicles. So media with good image should be selected. And we should not select media with
bed image.

12. Characteristics of important media 1. MURAL ADVERTISING :- Mural or outdoor


advertising has long life. It has a general and wide appeal. It can attract attention of numerous
people. It is good to remind prospects. An advertiser has ample scope to use his skill and art
in advertising.  However, outdoor advertising has certain limitations. It can not have a long
message. It is not useful in selective advertising or for specialised products.

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13. PRESS ADVERTISING :- Newspaper have a general and wide appeal. It is a very
common method of publicity. Newspaper are flexible and timely. Repeat advertising is
possible. Periodical change in size and contents is also easy. Selective advertising to some
extent is available. Effectiveness of advertising can be estimated by having keyed
advertisements. Newspaper offer promotional assistance. Coloured and attractive
advertisements are now available even in newspapers. They are the best source of market
information.  Newspaper are truly a way of life to most of the literate people. They have
short closing times.

14. However, newspaper have short span of life. Waste in advertising is considerable.
Illiteracy affects its utility. magazines and trade journals are other means of press publicity.
they are best for coloured and attractive advertisements. They have longer life, greater
retentive value as well as reference value. Selective appeal is possible.  They have limited
circulation. They have higher unit cost per contact.

15. FILM ADVERTISING :-It is a wide appeal. it can overcome language barriers. Audio-
visual (sound and sight) technique has maximum impact on audience. Sound and sight both
are employed for communicating our message. Repeat advertising is possible. However, both
cost of production as well as cost of distribution of slides and films are quite high. Selective
advertising is not possible. Effectiveness cannot be measured. Waste in film publicity can be
considerable.

16. RADIO ADVERTISIMENT :- Of all the media, radio has the shortest closing times :
radio use only an audio signal. The copy can be submitted up to air time. Announcement can
be made very quickly. It can secure dealer support. It has a very wide apple. It is suitable
even for illiterate people. Repeat message is quite common. Spoken word has greater impact
than written word. With the entry of FM radio programme ranging from all – talk to Indian
and western music, certain target markets can be easily approached. However, radio cannot
permit selective advertising. it cannot give detailed information. It has law memory value.
Radio has low listing level as it is often used as background for working, studying or some
other activity.

17. TELEVISION ADVERTISEMENT :- Television uses both video and audio signals. It
is a unique combination of vision, motion and sound. Products can be demonstrated and also

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described. We have best sales presentation. Television has all the advantages of radio,
namely, sound and explanation, plus the additional advantages of sight. It can appeal through
ear as well as eye. Product can be demonstrated with explanation. Television reaches the
audience almost like personal face-to-face contact.  Television combines all of the elements
of communication : (1) illustration, (2) music, (3) spoken words, (4)written words.

18. commercial ads by sponsors of T.V. series have shown creativity and innovation. For
global marketers it is a boon. 6. T.V. ADVERTISEMENT IN INDIA :-  T.V. is somewhat
expensive medium.  It takes permanence.  T.V. message must be seen and understood
immediately.  HEANCE, T.V. does not allow complicated messages. In India, by 2005 we
have round the clock coloured T.V. programmes with multichannels. Tailor-made T.V.
programmes can be made for each age-group or each market segment. T.V. has penetrated
even in rural India. T.V ads have very bright future. Tv ad appears many channels.

19. DIRECT MAIL :- Direct mail is any advertising sent by mail including sales letters,
folders, pamphlets, booklets, catalogues and the like. Direct mail is the most personal and
selective media. It reaches only the desired prospects. It has minimum waste in circulation.
The advertising copy can be very flexible. It has maximum possible personal features even
without personal contact. It can provide detailed information about the product or service,
creating lasting impression. Its effectiveness is measurable. it can be timed as per advertiser’s
will. It has maximum personal appeal.

however, direct mail is costly. We may not have proper mailing list. Receiver may consider
it as junk mail as it may not have entertainment value. It is not a good means of mass
communication. 8. 20. 20. ADVERTISING SPECIALITES :- These include a wide variety
of items, such as calendars, book, matches, pens, pencils, knives, key rings,
diaries,memopadvertisements, cigarette lighters, blotters, paper

weights, electronic clocks, purses, rainhats and so on. They are given to advertising targets
without cost or obligation. advertiser’s name, address, phone, number, and a short sales
message are

21. Imprinted on the item. The advertiser can choose from among 5000 specialties in the
market. Advertising specialties are reminder type of promotion. It is hoped that they will lead
to customer’s orders and re-orders. However, they have limited space available for sales
message. They are also costly.

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POINT-OF-PURCHASE ADVERTISING :- It really represents sales promotion devices. It


covers the display material used in advertising programme. Such point-of-purchase material
may include advertising on the package, window banners, shelf-talkers, merchandise tags,
package stuffers, information folders and booklets and such other displaying materials.
10.TRANSIT ADVERTISING :- It onsists of card advertising, which is located within buses,
railways, subways, and outside displays which appear on the fronts, sides, and backs of buses
or other public transport and transportation terminals. It is the lowest-cost media. It gives
geographic selectivity

And seasonal selectivity. It has high readership. It can reach pedestrians and traveling public.
Non-riders are not exposed to car-cards located inside the vehicle. Car-cards have small size,
and they can carry only short copy. Transit advertising is limited in quantity by the number of
public vehicles in operation.

In conclusion Most media may be used effectively for the attainment of different
objectives, also most objectives may be achieved through any of a verity of media.

Review of the topic Introduction of advertising Various definition of media selection Media
of advertising chart Media selection Characteristics of important media Conclusion
Bibliography

Choice of Advertising Media (9 Factors)

With a thorough study of each medium and vehicle, we are now poised for making vital
decision on the choice of an advertising media and media vehicle. In fact, medium or media
selection is unique decision to be made by every advertiser.

Actual selection of the best medium or media for particular advertiser will depend on
variables like specific situation or circumstances under which he is carrying on his business,
the market conditions, the marketing programme and the peculiarities of each medium of
advertising.

Strictly speaking, there is no one best medium/media for all similar units. What is “best” is
decided by unique individual circumstances. However, in general, the following factors
govern the choice of an advertising media.

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Factors Governing the Choice:


1. The nature of product:
A product that is needed by all will encourage mass media like print, broadcast, telecast,
outdoor and the like. A product needing demonstration warrants television and screen
advertising. Industrial products find favour of print media than broadcast media. Products like
cigarettes, wines and alcohols are never advertised on radio, television and screen.

2. Potential market:
The aim of every advertising effort is to carry on the ad message to the prospects
economically and effectively. This crucial task rests in identification of potential market for
the product in terms of the number of customers, geographic spread, income pattern, age
group, tastes, likes and dislikes and the like.

If the message is to reach the people with high income group, magazine is the best. If local
area is to be covered, newspaper and outdoor advertising are of much help. If illiterate folk is
to be approached, radio, television and cinema advertising are preferred.

3. The type of distribution strategy:


The advertising coverage and the distribution system that the company has developed have
direct correlation. Thus, there is no point in advertising a product if it is not available in these
outlets where he normally buys. Similarly, the advertiser need not use national media if not
supported by nationwide distribution network.

4. The advertising objectives:


Though the major objective of every company is to influence the consumer behaviour
favourably, the specific objectives may be to have local or regional or national coverage to
popularize a product or a service or the company to create primary or secondary demand to
achieve immediate or delayed action to maintain the secrets of the house.

If it wants immediate action, direct or specialty advertising fitting most. If national coverage
is needed, use television and news-paper with nationwide coverage.

5. The type of selling message:

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It is more of the advertising requirements that decide the appropriate choice. The advertisers
may be interested in appealing the prospects by colour advertisements. In that case,
magazine, film, television, bill- boards, bulletin boards serve the purpose.

If the timeliness is the greater concern, one should go in for news-paper, radio, posters. If
demonstration is needed there is nothing like television and screen media. If new product is to
be introduced, promotional advertising is most welcome.

6. The budget available:


A manufacturer may have a very colourful and bold plan of advertising. He may be dreaming
of advertising on a national television net-work and films. If budget does not allow, then he is
to be happy with a low budget media like his news-paper and outdoor advertising.

Instead of colour print in magazine, he may be forced to go in for black and white. Thus, it is
the resource constraints that decide the choice.

7. Competitive advertising:
A shrewd advertiser is one who studies carefully the moves of his competitor or competitors
as to the media selected and the pattern of expenditure portrayed. Meticulous evaluation of
media strategy and advertising budget paves way for better choice.

It is because, whenever a rival spends heavily on a particular medium or media and has been
successful, it is the outcome of his experience and tactics. However, blind copying should be
misleading and disastrous.

8. Media availability:
The problem of media availability is of much relevance because; all the required media may
not be available at the opportune time. This is particularly true in case of media like radio and
television; so is the case with screen medium. Thus, non-availability of a medium or a media
poses a new challenge to the media planners and the people advertising industry. It is
basically an external limit than the internal constraint.

9. Characteristics of media:
Media characteristics differ widely and these differences have deep bearing on the choice of
media vehicle.

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These characteristics are:


Coverage, Reach, Cost, Consumer confidence and ,

Frequency.

‘Coverage’ refers to the circulation or the speed of the message provided by the media
vehicle. Larger the coverage, greater the chances of message exposure to the audiences.
Advertisers prefer the media vehicles with largest coverage for the amount spent.

The vehicles like radio, television, news-papers, magazines and cinema are of this kind; on
the other hand, direct advertising and outdoor advertising are known for local coverage.
‘Reach’ is the vehicle’s access to different individuals or homes over a given period of time.

It refers to readership, listenership and viewership. It is the actual number reading than the
persons buying or owning these.

For instance, one need not own a television set to have advertising message so also a news-
paper and a magazine. ‘Relative cost’ refers to the amount of money spent on using a
particular vehicle. It is one that involves inter vehicle and medium cost analysis and
comparison.

This cost is expressed with reference to the time and the space bought, in case of news-
papers, it is milline rate; in case of magazine, it is rate per thousand readers; in case of radio
and television, it is per thousand listeners or viewers per minute and ten seconds. ‘Consumer
confidence’ refers to the confidence placed in the medium by the consumers.

This consumer credibility of a vehicle is important because, credibility of advertising


message is depending on it. Speaking from this point of view, news-papers and magazines
enjoy high degree of credibility than radio and television commercials.

Outdoor medium is considered the least credible. ‘Frequency’ refers to the number of times
an audience is reached in a given period of time.

Limited frequency makes little or no impression on the target audience. Thus, news-papers,
television, radio and outdoor media are known for highest frequency while, magazine, screen,
display and direct advertising the lowest.

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In a nut-shell, the advertiser, to get the best results for the money spent and the efforts put in,
should consider all the above nine factors that govern selection of a medium or media and
media vehicle. Media selection is a matter of juggling, adjusting, tailoring, filling, revising
and reworking to match to his individual situation.

ROLE OF MEDIA IN ADVERTISING

The Role of Advertising in Media

 1Role of Advertising in Business Promotion


 2The Stages of the Advertising Spiral
 3Project Brand Awareness
 4What Is Scatter in Advertising?

In the 20th century, the media was dominated by print, radio, and television, attracting a
broad swath of the public, affording them the opportunity to read, listen, and watch the world
around them in a way that they previously had not been able to do. Beginning in 1989, the
World Wide Web, (W3C.org) was invented, and it devised a virtual medium of software laid
on top of the internet's physical wiring structure, which has since enabled the public to
message, tweet, send and receive emails, photos and videos; and to interact with user sites
such as Twitter, Facebook and many others.

Apart from imparting knowledge and connecting the world, media serves another role: It
spreads awareness about products and services, broadcasting the benefits of specific products
and services, via advertising.

The advertising industry is huge. Advertisers spent a grant total of $267 billion in 2016, much
of it from the rapidly growing companies in China like Alibaba. Procter and Gamble spent
more on advertising than any other company, a whopping $10.5 billion, followed closely by
the electronics company, Samsung, with expenses of $9.9 billion. Car companies like Ford
and General Motors, and consumer firms like Amazon were also among the big spenders.

Many companies spend a lot of money on advertising, relying on the various forms of media
out there to spread awareness about their products and increase their sales. Here is a
breakdown of the role of advertising in the media.

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Spreading Awareness Through Advertising

Advertisements alert people about new products and services in the market that could
potentially fulfill their needs or solve their problems. A typical advertisement will tell you
what the service or product is, where it can be bought, for how much, by whom, and why it
should be bought. This is possible through the power of the media to reach millions of people
at the same time.

Popularizing a Brand

Think of all the popular brands you know, such as Coca-Cola or McDonald’s. These brands
are where they are today because they utilized the phenomenon of advertising well. Through
constant republishing and replay to large groups of people, the media popularizes the brand.
Many people see it multiple times, and it sticks in their heads. Eventually, when they see it
out there, they will recognize it and are more likely to buy it.

Increasing Customer Demand

The target audience of advertisements is typically large, whether you’re advertising in social
media, print media, radio, or television. A well-crafted advertisement will convince the public
that they should buy the product or subscribe to the service being advertised. As a result,
whatever is already in the market becomes exhausted or oversubscribed, leading to an
increase in demand for the product or service.

Increased Company Profits

This one works for the same reasons as the previous one on demand. Advertisements are
usually displayed to large groups of people at the same time. This means that, even with a
low conversion rate, many people will end up buying your products eventually. If you
execute your advertisement well, you will get a good conversion rate and great sales.
Increased sales, of course, mean increased profits.

It all boils down to how well you do your advertisement. A badly executed ad will not do any
good for your company, no matter how many people see it. A well-executed ad, on the other
hand, can do wonders for your bottom line and turn your brand into a household name.
Ultimately, it can’t be denied that advertising in media is the fuel that drives global

TYPES OF MEDIA

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Meaning :

Media is the term we use to refer to different types of media that provide us with
important information and knowledge. Media has always been part of our society, even
when people used paintings and writings to share information. As time passed, people
came up with different modes to provide news to the public. Based on the type of
medium, their role may be different, but they all exist to communicate to the audience
and affect their perceptions. Today, we don’t have to travel oceans or wait for a pigeon
to get the latest news. Here, you’ll learn a lot about today’s media falling under three
main categories.

Different Types of Media

The goal of media is to convey an advertising message to the audience through the most
appropriate media channel for their product. 

In general, you can classify media in three main categories.

1. Print Media

This type of news media used to be the only way of delivering information to the public. For
the generations of the 80s and 90s, print media was the only media of entertain. People relied
on newspapers and magazines to learn everything, from recipes and entertainment news to
important information about the country or the world. Print media includes:

 Newspapers – printed and distributed on a daily or weekly basis. They include news
related to sports, politics, technology, science, local news, national news, international news,
birth notices, as well as entertainment news related to fashion, celebrities, and movies.
Today’s parents grew up with this type of printed media.

 Magazines – printed on a weekly, monthly, quarterly, or annual basis. It contains


information about finance, food, lifestyle, fashion, sports, etc.

 Books – focused on a particular topic or subject, giving the reader a chance to spread
their knowledge about their favorite topic.

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 Banners – used to advertise a company’s services and products, hung on easily-


noticed sights to attract people’s attention.

 Billboards – huge advertisements created with the help of computers. Their goal is to
attract people passing by.

 Brochures – a type of booklet that includes everything about one company – its
products, services, terms and conditions, contact details, address, etc. They are either
distributed with the newspapers, or hand over to people.

 Flyers – used mostly by small companies due to the low cost of advertising. They
contain the basic information about a company, their name, logo, service or product, and
contact information, and they are distributed in public areas. 

Broadcasting Media

BROAD CAST MEDIA

 includes videos, audios, or written content that provides important or entertaining


information shared by different methods:

 Television – in the past, there were a few channels sharing various types of content,
whereas now we have hundreds of TV channels to choose from. Each channel delivers a
different type of content, so you have a separate channel for news, drama, movies, sports,
animation, nature, travel, politics, cartoon, and religion. It’s the number one broadcasting
media due to its reach to the audience.

 Radio – uses radio waves to transmit entertaining, informative, and educative content
to the public. Due to its high reach to the audience, radio is widely used for advertising
products and services. Radio is one of the oldest means of entertainment, and today people
often hear it to find out the weather and traffic while commuting. 

 Movies – film, motion picture, screenplay, moving picture, or movie has world-wide
reachability. It’s the best type of mass media to promote cultures and spread social
awareness. Movies have always played a huge part in the entertainment world.

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Internet Media

Nowadays, we are relying on the Internet to get the news a lot more often than the traditional
news sources. Websites provide information in the form of video, text, and audio. We can
even choose the way we want to receive the news. Types of Internet media include:

 Social networks or websites – including Facebook, Instagram, Twitter, YouTube,


Tumblr, LinkedIn, Snapchat, Quora, Reddit, Pinterest, etc. They are user-friendly and widely
used by people around the world. Although we can find any news here, they may be
misleading because of the lack of regulations on the content shared.

 Online forums -  an online place where we can comment, message, or discuss a


particular topic. Forums allow us to share knowledge with other people with the same
interest. That’s why it’s regarded as the best platform to seek support and assistance.

 Podcast – a series of audios focused on a particular topic or theme. We can listen to


them on a computer or a mobile phone. It’s a platform that allows anyone to share their
knowledge and communicate with the world.

Conclusion

We use different types of media to find out news, learn new things, and entertain ourselves.
With the advance in technology, we can choose the type of media we want to use, no matter
the time or place. So, we can hear the radio while driving to work, we can watch our favorite
show on our phone, and we can find out any information and news on our laptop or mobile
device, thanks to the Internet. Who knows where technology can lead us in the future.

ELECTRONIC MEDIA

Electronic media is media that uses electromechanical device to access the content. This is


in similar to social media, which now-a-days are most often created electronically. Most new
media are in the form of digital media. Electronic media makes communication easy to
connect people from one end to other end by getting them together through media facilities.

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Before some years, people used perform cultural events in various forms like folk dance,
drama, folk events etc. and that media was used to communicate a message to large amounts
of people through print media, social media and later on by electronic media.

Electronic media is universal in most of the developed world. Electronic media devices have
made their place in modern life. As if now you can see there are many social media platform
but electronic media is growing in the wider range at it is been need of people now-a-days.

Advantages:

 Many areas people get educated through the media were they get to learn many things
form media about the politics, outside environment, etc.

 Media like television is a good source for the people to get updated through the
electronic media.

 Electronic media makes people aware of world-wide things.

 Greater opportunities you get through this media sitting at your place, this is an
advantage of media.

 Firstly people used to use radio for the news but as the generation changes the media
generation also changes to television and other electronic devices.

 Also through this electronic media you can get to see many cultural events going in
world.

 Elder citizen and children get more knowledge through this media.

 Many people get a chance to do their courier

Conclusion:

As you can see media has many advantages but it is up to the human at what limit media
should be used.

OUT DOOR ADVERTISEMENT

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What is the first thing that comes to mind when you think of outdoor advertising? For most
people, a picture of a big billboard along the highway or on a business building in the city
pops in to mind. But outdoor advertising is actually much more than these big, colourful
billboards. It can be, but is not limited to, phone booths, taxis, shopping centres, benches,
trains, buses and transit lines.

Outdoor or occasionally referred to as Out-Of-Home advertising, is communication with


people while they are out of their home. Nowadays people are spending more time away from
home and so outdoor advertising has the potential to reach active consumers. The benefits of
outdoor advertising are almost endless, but for time sake we have compiled a list that, in our
opinion, are the top 7 benefits of outdoor advertising.

OUTDOOR ADVERTISING IS HIGH IMPACT

Unlike other mediums, outdoor advertising does not need to be invited in. Outdoor
advertising is part of the environment, therefore cannot be turned off like television and radio.
The viewer has no control on whether they see it or not giving your campaign more impact
for a longer period of time than the viewer may expect.

IT DEMANDS ATTENTION.

Outdoor stands alone so it doesn’t have to compete with other ads like other mediums. Often
big in size, outdoor advertising makes itself very visible at both close and large distances.
They tend to also be creative and expressive which tends to gain more attention amongst
consumers.

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OUTDOOR ADVERTISING CAN BE VERY COST EFFECTIVE

Outdoor Media Association, performed a studied and found that outdoor advertising delivers
a high Return of Investment in all categories and the higher the budget spent on outdoor
advertising the larger the ROI.

IT HAS A HIGH REACH WITH A MASS AUDIENCE

This is a great marketing platform for brands or business that are trying to reach a broader
audience. Outdoor advertising is public and has access to consumers that can sometimes be
difficult to reach. Like younger users, busy business people and lower income consumers
may not have access to traditional mediums, so outdoor advertising is a great way to reach
them.

IT IMPACTS THE PATH-OF-PURCHASE

According to APN Outdoor, 70% of purchases are occurring outside of the main shopping
and retail centres. Location is everything when it comes to outdoor advertising because it
impacts across all stages of the Path-to-Purchase. Research collected by the UK’s Outdoor

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Media Centre (OMC) shows that outdoor advertising is the advertising medium most seen by
shoppers in ‘the last window of influence’ before shopping.

OUTDOOR IS AN ENGAGING MEDIUM

Unlike most mediums, outdoor is actually liked by consumers. Research from APN Outdoor,
found that 71% of Australians preferred buses with advertising than those without and that
36% stated outdoor advertising as a welcome distraction.

OUTDOOR ADVERTISING IS A TEAM PLAYER IN THE MARKETING


MIX

Outdoor advertising can and has been proven, to work best with other mediums. The impact
and reach of outdoor advertising is greater and can remind the consumer of the message
across other media.

Outdoor advertising can offer brands and companies a fresh and creative approach to
reaching consumers.  If you’re interested in one of the benefits listed above contact us today
and see hpw we can help you with your outdoor advertising. We would love to navigate your
journey through finding the appropriate and most effective outdoor advertising for you and
for your budget. 

The goal of this transit media, or, transit advertising, is simple: to promote your brand to the
millions of people who travel the country's streets and highways every day. You don't even
have to be someone who takes public transportation to be impacted - remember the ad you
saw sitting beside that bus at the red light? Transit media works whether you're traveling by
bus, car, or even walking on the sidewalk. Let's take a closer look at this longtime form of
advertising.

Transit Media

Meaning :

You probably have a pretty good idea already based on the opening of this lesson, but transit
media refers to advertising placed in, on, or around modes of public transportation: buses,

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subways, and taxis, as well as at bus, train, and subway stations. Transit media can be a great
way to reach a really diverse audience: families traveling to daycares, professionals heading
to work, tourists navigating a new town, or even students making their way to a local coffee
shop.

Like any form of advertising, transit media comes with some distinct advantages as well as
pitfalls to avoid. In the next section, we'll explore both sides of the transit media coin.

Advantages and Disadvantages of Transit Media

Whether or not transit media is a fit for your business may depend on how you rank its
benefits and drawbacks. Here's a few of each to help you decide.

Advantages

1. Price: There are hundreds of advertising options out there for your business, ranging from
free to quite expensive. Transit media falls on the lower end of the cost spectrum, ranging
from a few hundred to a few thousand dollars depending on placement and your market.

2. Exposure: Have you ever tried to turn off an advertisement on the side of the bus? Of
course not, because you can't. Transit media is always on and available where people are
known to be. It also helps that nearly all transit ads are available at eye level with large
graphics and text.

3. Targeting: If you're trying to reach a specific audience, targeted advertisements in transit


media can be a great way to deliver the right message at the right time. For example, if you
have a new product for young professionals, using transit advertising on subways where
young professionals are traveling back and forth to work could be a great fit.

4. Flexibility: Whether you need a small advertisement in a bus station or a ''moving


billboard'' traveling around town, transit media offers flexible options for every marketer.
Maybe you hit consumers with a one-two punch, by advertising in the subway station as well
as aboard the train, where commuters are sitting for 30 minutes to an hour or more.

5. Frequency: The key to driving home your message is being in a consumer's face at the
right time. When could be better than when a mom is headed to the grocery store and sees a
reminder of your product splashed on the side of a bus?

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The growing power of Transit Advertising


The advantages of transit advertising is that it can’t be turned off like a television,
delivers a varied audience, offers flexibility of ad size and location, and has longer shelf

Till now, OOH medium has mostly relied on static billboard advertising. It has flourished in the
past and became a mature market. On the other hand, digital innovation has taken place and
static billboards are getting replaced by LED billboards, which is still relatively new and
developing.

Beside these two, Transit Advertising is making its presence feel in the Out of Home
industry. Transit advertising is out-of-home media typically, attached or found on the outside
or inside of public transportation vehicles such as buses, subways, taxis, and trains or in the
common areas of transit terminals and stations.

A common misconception is that billboard advertising targets consumers better than transit
advertising, but it’s not the case. If executed well, transit advertising can deliver better results
as compared to static billboards. In fact billboards does not provide full market coverage or
the ability to reach at multiple locations. 

Haresh Nayak, Group MD, Posterscope South East Asia shares, “Both static and transit OOH
are effective in terms of brand awareness, equally important in their space, and usually works
best in combination. Ideally static is good for impact and transit is largely good for reach and
frequency.”

According to Rachana Lokhande, CO-CEO, Kinetic India, “Transit media is a high frequency
media and I feel it works best for a brand when it wants to drive footfalls to stores.”

She points out, “Every medium brings to life its own uniqueness to add value to the
campaign. To measure how effective a campaign is on any medium, we need to analyse how
strategically the campaign has been planned based on the objective of each brand.”

Earlier, brands tend to shy away from internal transit advertising because of the lack of
audience measurement data and perception of how potent it can be. Today, the situation is
slowly changing and advertisers are exploring ways to utilise the full potential of transit
advertising. Though, it has its own demerits like the time spent by the viewer on the ad is not

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much, lack of space as compared to billboards and one time communication, which
ultimately does not build a relation with the viewer.

But, advertisers are turning these shortcomings in the favour of transit advertising and
discovering new ways to attract viewers on the go. One such example is wrapping up the
entire metro train and buses. It immediately grabs the attention of travellers and helps the
brand communicate its message more effectively. 

Other advantages of Transit advertising is that it can’t be turned off like a television, delivers
a varied audience, offers flexibility of ad size and location and longer shelf life. People
usually spend up to 9-11 hours outdoors, leading to exponential growth of transit medium.

Sailesh Loni, Associate Vice- President, Laqshya Media Group believes, “Both the medium
are effective but transit as it congregates people at multi- locations, and demands high dwell
time from the audience yields better results. The main benefit of transit OOH is the
flexibility. You no longer have to buy the billboard space for a set long-term duration. In
moving OOH, content is fresh for a longer time and passers buy don't see the same creative
every time they pass by the board.”

Though, static billboards still represent more than half of the outdoor advertising inventory in
most markets. They have endured as a prime brand awareness medium.

We asked experts, in terms of innovation and experimentation, who is leading the way
between the two? Alok Gupta, Director, Graphisads said, “It purely depends on how the
creative agency visualises the medium and adapts. Static OOH still has the edge because of
the innovative adaptations available.”

Nayak describes, “Experimentation has innovation and you can ideally do good
experimentation when you are innovative.”
Loni defines, “Static allows a lot of innovation till date, but now authorities involved in
transit have started understanding the need of the hour, and slowly adapting to innovations.”

Moving OOH reaches to a large number of people in a short span of time. Brands have been
utilising money and time to get the desire results from Transit. It is great for areas, where

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static and digital OOH can’t reach out to people. Nayak tells, “Transit has great benefit of
reaching in media dark areas and also has benefit of creating a halo effect for the campaign.”

Noomi Mehta, Chairman and Managing Director, Selvel One opines, “The greatest advantage
Transit has is a captive audience. A controlled environment and sharper targeting are also
considered valuable benefits. But then the same advantages apply to Malls advertising which
cannot be bracketed as Transit.”

Tier II and III cities are gaining prominence as transit OOH reaches to spaces where static
and digital OOH face issues. It has given the OOH industry a fresh boost to reach out to
wider set of audiences.

Though, Gupta believes, Transit media is expensive than static or traditional OOH mediums.
“Consumer behaviour is not conducive to receptiveness as people are in a hurry. Target
audience it caters to is very limited compared to traditional media. I wonder why clients are
willing to pay Rs 700-800/- per square feet for metro stations, whereas outside media is
available at Rs 400-500/-per square feet (Delhi Metro vs city media options). Do brand
managers feel that consumer gets dropped at his home from metro? For all practical purposes
he has to go outdoors to reach the home, then why to settle for smaller target audience at
higher cost,” he said.

No medium eats any other medium, it’s the inability to adapt and serve the campaign
objective which kills, both medium are distinct have their own pros and cons.

“Static media formats help in building higher brand recall whereas, high frequency transit
helps in achieving more reach and delivering the finer brand messages to audiences. To make
any medium effective, it completely depends on how strategically it is being used to provide
efficient solutions to brands”, concludes Lokhande. 

DIRECT MAIL

The Power of Direct Mail in the Digital Age

For digital marketers, it ain’t all sunshine and rainbows. There are serious challenges
inherent to the digital landscape that nobody is talking about.

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Not long ago, advertisements were the end result of days, weeks, or even months of
painstaking research and creative work. Ingenious ads from Coca-Cola, Kodak,
McDonald’s, and even Marlboro cigarettes, for better or for worse, cemented many
iconic brands into our country’s DNA.

Back then, most advertisements were smart enough to appeal to the masses, but targeted
enough to drive sales within key demographics. And importantly, the advertisers
considered the medium as a key player in each campaign’s success.

If an advertisement ran in Time magazine, or rolled out on a hit radio program, it gained
instant credibility. The distribution channel provided inimitable authority – and it was
worth the price.

More Ads, Less Authority and Impact

Today, the advertising landscape has fundamentally changed. Advertisements now flash
before our eyes at blazing speeds. Each time we search, stream, watch, read, scroll,
click, or swipe, we are bombarded by advertisements. And on social media, where the
average person spends nearly two hours per day , ads are everywhere.

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According to recent reports, the average American consumer is exposed to thousands of


advertisements per day . In fact, it’s not unusual for the average consumer to see more
than three hundred advertisements, of various sorts, within the first waking hour each
day.
And while digital marketing experts can’t seem to agree on the exact number of ad
exposures per day, it doesn’t really matter. This is because, in order to maintain our
sanity, consumers have developed an autonomous mental screening process to ignore
advertisements. As a general rule of thumb, about two percent of advertisements garner
our valued attention each day. In other words, only about 100 out of every 5,000 ad
exposures have any meaningful impact on consumers.

In the digital age, trust and authority, once a staple of each advertising medium, is
fleeting at best. The primary channels we use to consume media, whether mainstream or

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social, have been so ravished by clickbait headlines and disinformation that consumers
no longer inherently trust them. Gone are the days when the news was the news.

On the web, anyone (or company) with controversial content, marketing chops, and
even a small marketing budget, can claw their way into the mix and make a profit. The
money flows at the expense of credibility, performance, and ultimately, the advertisers
behind it all.

Many digital marketers ignore these inherent issues because the data flow generated by
digital campaigns allows for campaign optimization and deep analysis. While true, even
with analytics, which are the lifeblood of digital marketers, the effectiveness of digital
advertising has been called into question.

Serious Trust Issues

Digital advertising in today’s landscape is perilous because of two key factors: Quality
and Saturation.

As reported by the Wall Street Journal  earlier this year, Facebook Inc. announced that it
had overestimated by up to 80% the average time people spent watching video ads on its
platform (for two years!) – sending shockwaves through the media and marketing
world. You can imagine how devastating that information was to some of the biggest
advertisers in the world, who allocated countless millions of marketing dollars towards
video content and promotion.
Secondly, there is a major increase in the sheer volume of low-quality content, most
embedded with advertisements, saturating the digital landscape. In essence, the
collective cache of content continues to grow, while ROI declines.

If quality drops, or an advertising channel becomes saturated with content of


questionable authority, advertisers become concerned. A key consideration for any
marketing campaign is the vehicle by which the message is communicated to an
audience. In many cases, advertisers do not consider channels that don’t have built-in or
credible reputations. The big agencies also prioritize authority and credibility.

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As the digital universe, rife with uncertainty and struggling to find maturity, continues
to evolve, advertisers are turning back to a timeless, if unlikely savior, in direct mail.

Yes, the great-smelling, world-building, and blissfully quiet printed medium that we all
secretly love.

Mailbox > Inbox

I first started to notice the shift to direct mail when I received a Christmas catalog from
Toys R’ Us in 2015. I have a two year old toddler at home, undoubtedly a data point in
their system, which triggered them to send me a magazine-style catalog at the dawn of
Q4. I vividly recall saying to myself, “This is cool, I remember looking for Nintendo
games in these things when I was a kid.” I ended up purchasing his tractor toys for
Christmas from them.
Shortly thereafter, my wife received a massive, yellow-pages-sized catalog from
Restoration Hardware, a purveyor of home furnishings, décor, and other textiles. It must
have weighed five pounds. Imagine if Amazon printed out their entire website, and
you’ll get an idea of just how substantial it was. And consequently, she wanted just
about everything they had to offer.

It wasn’t just catalogs either. I received, and redeemed, a plastic gift card offer for a
free pizza at a new chain that opened up in town. When I got to the restaurant, I saw
several other patrons holding the same offer in line.

On another occasion, our grocery store sent us a customized booklet of coupons. They
sent us only the coupons that they knew would get us back in the store, based on our
purchase history (so that’s what those rewards cards are really for).

It worked, we used them in-store that Saturday morning.

We also found our “window guy” from direct mail. Undoubtedly, that small business
made a few grand from the forty-cent postcard they sent.

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We joined a local gym too, because they mailed us an invite to try their built-in daycare
service. Parents love that type of stuff.

Then, in November, my doctor reminded me to get a flu shot through a direct mail
newsletter. I acted quickly, and stopped by his office before my flight to the INBOUND
marketing conference in Boston.

Notice a trend here?

It is my actual mailbox, not my inbox, which has been the catalyst for a dizzying
amount of spending.

People: Wired for Print

Local and national organizations, who advertise through direct mail, are much more
likely to convince consumers to part ways with their hard-earned cash.

But why is this the case?

Let’s start with raw, scientific data generated by folks much smarter than myself.

Last year, a Canadian neuromarketing firm conducted a sweeping study  for Canada Post
that compared the effects of paper marketing (direct mail pieces, in this case) to digital
media (email and display ads).
The firm used advanced eye-tracking and high-resolution EEG brain wave measurement
tools, along with conventional methods such as questionnaires, to gather data.

The study produced two major results:

1. Direct mail requires 21% less cognitive effort to process than digital media,
suggesting that it is both easier to understand and more memorable.

2. Overall effectiveness, referred to as the motivation-to-cognitive load ratio within


the study, showed that direct mail scored an average 1.31 compared to 0.87 for all

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digital channels. This is significant because, in this type of test, values greater than
1.0 are indicative of broad in-market success.
Further, consumers who received direct mail offers were able to recall the brand 75% of
the time. For consumers who received digital-only versions, the brand was remembered
only 44% of the time.

According to the Forbes evaluation  of this scientific research, “Science clearly shows
paper can be more impactful and memorable than digital.”
The Direct Marketing Association has also published research  in support of direct mail.
In fact, the latest edition of the DMA Response Rate Report states that direct mail offers
“strong return on marketing investment,” with an average ROI of 15% to 17%. They
also note that oversized mailers, such as postcards, have the best response rates, at up to
4.25%, with a targeted mailing list .
Those are the types of numbers that marketers dream about.

The Importance of Targeting

Marketing is about effective, persuasive communication, and direct mail is no


exception.

Success is based on a fundamental rule: Reach the right prospects, at the right time,
with the right offer.

Competitive research, along with an analysis of existing customer and prospect


databases, can yield valuable insight, and help advertisers build a persona for the ideal
prospect.

The lift provided through targeting the right prospects, or through using similar
audiences, can be substantial. As per the 2015 DMA Response Rate Report , the average
response rate using a house list is 3.7%, while the average for a prospect list is 1.0%. A
highly relevant offer, sent to the right audience, will typically drive up rates.
Here are three examples of direct mail offers, which were targeted to me, and motivated
me to transact.

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It doesn’t matter whether you’re a national brand or a small business. Direct mail
provides opportunity for all advertisers.

No Distractions

Here’s my take on why direct mail so easily parts us, as consumers, from our hard-
earned money.

Direct mail advertisements give people time to think. They provide new ideas with the
space to grow into the things we didn’t know we wanted. These ideas morph into our
must-have purchases.

With print advertisements, we’re not anticipating the next click.

There is no I-stared-at-a-screen-all-day eye strain. We’re not worried about battery-life.


We’re not bombarded with competing ads from half a dozen alternatives who bid for
our attention via algorithms.

We’re not interrupted by social media updates, text messages, and in-app notifications.

It’s quiet.

Perhaps most importantly, we are “forced” to consider each and every direct mail offer.
It doesn’t matter whether we throw it into the trash or quickly make a purchase. We
look at the offer and decide what to do with it.

The advertiser, much more easily, gets past our “mental wall”.

As a result, most people can tell you the names of dozens of local businesses that one
day they will rely on to choose a new restaurant, fix a plumbing leak, or bring their dead
lawn back to life.

That’s the power of direct mail in a digital world.

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About Neil Patel

He is the co-founder of NP Digital  and Subscribers . The Wall Street Journal calls him a
top influencer on the web, Forbes says he is one of the top 10 marketers, and
Entrepreneur Magazine says he created one of the 100 most brilliant companies. Neil is
a New York Times bestselling author and was recognized as a top 100 entrepreneur
under the age of 30 by President Obama and a top 100 entrepreneur under the age of 35
by the United Nations.

UNIT II MCQ

1. For making advertisement s more effective, the manufacturers improve


_____________and launch new products.

(1) Existing products


(2) Advertisement style
(3) Marketing channel
(4) Sponsors
(5) None of these
ANSWER: (1) Existing products

2. It is advisable to use ____________________ as a source of advertising.

(1) Social media


(2) Email

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(3) Radio
(4) Television
(5) Print
ANSWER: (4) Television

3. Selecting time, choosing media types, deciding on reach of frequency and media vehicle
for advertisements are part of

(1) Media strategy


(2) Media execution
(3) Selecting media
(4) Measuring communication
(5) None of these
ANSWER: (3) Selecting media

4. To introduce the new products to world of consumers is the main goal of


(1) Entertainment
(2) Advertising
(3) Boost the sales
(4) Online marketing
(5) None of these
ANSWER: (2) Advertising

5. Advertisement through radio was very popular till the middle of last century because of
_______________.

(1) Its effectiveness


(2) More popular than newspaper
(3) Mass reach
(4) Cost of advertisement
(5) None of these
ANSWER: (3) Mass reach

6. Advertising creates employment as it increases the volume of sales and


___________________________

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(1) Production
(2) Marketing
(3) Promotion
(4) Personal selling
(5) New products

ANSWER: (1) Production

7. Lower costs, greater global advertising coordination consistent worldwide image are the
______________________ of international marketing decision.

(1) Standardization drawbacks


(2) Advertisement regulations
(3) Standardization benefits
(4) Typical responses
(5) None of these

ANSWER: (3) Standardization benefits

8. The most popular form of advertising and it reaches to masses.

(1) Social media


(2) Email
(3) Radio
(4) Television
(5) Print

ANSWER: (5) Print

9. Advertising for __________________ is not allowed.

(1) Liquor
(2) Washing powder
(3) Cigarette

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(4) Cold cream


(5) Both 1 and 3

ANSWER: (5) Both 1 and 3

10.The best advertisement is

(1) By emails
(2) Print media
(3) Television
(4) A satisfied customer

(5) Radio
ANSWER: (4) A satisfied customer

11. Catalogues, magazines, newspaper and invitations to organization-sponsored events are


associated with the marketing mix activity of ___________________.

(1) Manufacture
(2) Production
(3) Promotion
(4) Development
(5) None of these
ANSWER: (3) Promotion

12. Advertisement is a type of ________________________.

(1) Outdoor marketing


(2) Indirect marketing
(3) Share marketing
(4) Transaction marketing
(5) Relationship marketing

ANSWER: (2) Indirect marketing

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13.With the popularity of satellites, phones, iPod etc. usage of ________________________


becomes ineffective but in remote areas it is considered as the fastest way to communicate
with masses.

(1) Social media


(2) Email
(3) Radio
(4) Television
(5) Print
ANSWER: (3) Radio

14. Advertising is a non-personal process but must be written or printed in words


________________________advertise and helps in the sale of the product.

(1) Salesman
(2) Sponsors
(3) Marketer
(4) Marketing manager
(5) None of these
ANSWER: (2) Sponsors

15. The advertisement of newspaper has a very short life span of

(1) One day


(2) One week
(3) One month
(4) One year
(5) None of these
ANSWER: (1) One day

16. Advertising is not flexible as the message is once fixed it can’t be altered again and again
according to the_____________.

(1) Advertiser
(2) Sponsor

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(3) Customer
(4) Marketer
(5) None of these

ANSWER: (3) Customer

17. From the perspective of sales, advertisements are required for

(1) Profit
(2) Loss
(3) Increasing sales
(4) Decreasing sales
(5) None of these

ANSWER: (3) Increasing sales

18. When a number of advertisements are published in the newspaper in series and in regular
intervals are called

(1) Monopoly in market


(2) Feedback mechanism
(3) Boosting the sales
(4) Teaser advertisements
(5) None of these

ANSWER: (4) Teaser advertisements

19. Advertising is generally criticized because the cost involved in making ads are
generally__________________

(1) High
(2) Low
(3) Medium
(4) Equal to the production
(5) None of these

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ANSWER: (1) High

20 ____________________ and loyalty programs are wonderful and cost effective way to
stay in touch with customers when customer database is used correctly.

(1) Social media


(2) Email
(3) Radio
(4) Television
(5) Print
ANSWER: (2) Email

21. “Through newspaper any firm can reach literate customers only”. It’s a

(1) Nothing related to illiterate customers


(2) Advantage of newspaper
(3) Drawback of newspaper
(4) No problem in such advertising
(5) None of these

ANSWER: (3) Drawback of newspaper

22. Levels of differentiation, market share, product lifecycle stage, correlating promotional
spending and brand sales are part of _________________________________ in advertising.

(1) Objective of advertising


(2) Models of advertising
(3) Evaluation of advertising
(4) Developing strategy
(5) None of these
ANSWER: (4) Developing strategy

23. Advertising involves dissemination of information about a produce, service to induce


people to take actions beneficial to

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(1) Advertiser
(2) Sponsor
(3) Marketing manager
(4) Firm
(5) Retailer

ANSWER: (1) Advertiser

24. Which of the following is the most popular print media available to advertiser?

(1) Magazine
(2) Pamphlet
(3) Emails
(4) Newspaper
(5) None of these
ANSWER: (4) Newspaper

25. Direct mail advertising is suitable in case of

(1) Retailer
(2) Wholesaler
(3) Personal selling
(4) Share broker
(5) None of these
ANSWER: (4) Share broker

 Answer the following Questions:

1.What do you mean by media selection? Identify the factors affecting media selection.
2.Examine the factors governing the choices of Advertising media.
3.Evaluate the role of media in advertising.
4. What is media? Explain the different types of media.
5. What is electronic media > Explain its advantages.
6. What is outdoor advertisement. Explain its impact to the consumers.

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7. What is transit media? Explain its advantages.


8. The growing power of transit media. Explain.
9.Explain the power of media in digital age.
10. Write a note of Mail box – Inbox.
11. Explain the important of targeting.
12. Media which impacting business activity in present Era. Evaluate.

Unit III: Advertising Copy and Layout

Advertising copy- Meaning, Definition, Types, Essential qualities of advertisement copy,


Models of advertising copy- AIDA, DAGMAR, Advertising layout- Meaning, Elements,
Qualities of good advertisement layout, Advertising appeal- Meaning, Types of advertising
appeals

Advertisement Copy: Attributes and Types of Advertisement Copies

According to the UK advertising guru, David Ogilvy, ‘people do read lengthy advertisements
if they are skillfully written’. The most significant part of the copy is the headline, and
sometimes even a small shift in the text brings magnanimous results. A short ad copy is the
most popular in consumer-product advertising, or an artful, indigenous lengthy ad copy may
work wonders too. An advertisement copy is mostly a result of extensive advertising and
consumer research designed by professional copywriter’s employees by advertising agencies.
Drafting an ad copy demands skill and effort. An ad copy involves a complete investigation
of the target audience. There is a substantial effort that goes into making an ad copy.
Companies outsource their ad campaigns. The advertisement industry flourishes when they
succeed in delivering the advertisement just like its copy.

ESSENTIALS OF A GOOD ADVERTISEMENT COPY


An ad copy is made of various principles, all of which are integrated into a few lines of the
copy that the advertisers are allowed to engage. It combines search engine optimisation with
marketing strategies and is used in all kinds of advertisements, not only pay per click and
contextual ads. The essentials of a good ad copy are as follows:

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1. Credibility-
 An ad copy must focus on the credibility or the reliability of the ad. The copywriters should
essentially flaunt an element of reliability in the ad so that the consumers are convinced to go
ahead with the product. The credibility of an advertisement is the extent of honesty in the ad
message. Misleading and misinterpreted ads harm the reputation of the selling house.

2. Attention-
 The keywords, punch lines or phrases that seize the attention of the potential consumers or
some component in the ad that attracts the target audience is essential in a good advertising
copy.

3. Assurance of benefit– 
An advertisement copy must contain some promise of the benefits that the product offers if
the consumer purchases and uses the product.

4. Brief and clear- 


An ad copy must be brief and clear, i.e. it must be to the point. It doesn’t mean that the copy
must omit the important elements of the ad. A clear copy is easy and quick to be read by the
readers. It is self-explanatory, definite, and precise. Clarity makes way for interpretation.

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5. Apt and conforming- 


The copy must be apt and must match the needs of the prospects. A copywriter has to use the
most suitable USP. Every ad copy must meet the conforming standards and rules acceptable
to the advertising media and the laws of the land. A copy that offends the morality challenges
religious beliefs of the people is not welcomed by any media.
Types Of Advertising Copy
Technique or formula of presentation of an ad is the way in which a message is presented.
Various types of advertisement copies are formulated to inform, inspire, influence, affect,
engrave, and inscribe the mindset of the reader. Certain elements are significant in a copy like
the attention, conviction, sentiment, instinct, and education.

The advertisement copies can be divided into six main types:

 Human interest ad copy


 Educational ad copy
 Reason why? ad copy
 Institutional ad copy
 Suggestive ad copy
 Expository ad copy

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Human Interest Copy


Human interest copy entices the emotions and senses of its prospective customers rather than
the intellect and judgment. This advertisement copy defines the product to people instead of
sticking to facts. Human Interest copy gets to selling part indirectly or reluctantly. It focuses
on people’s undying interest in themselves, their families and friends. The most important
forms of Human Interest Copy are- humorous copy, fear copy, predicament copy, and story
copy.

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HUMOROUS COPY
Humorous ad copy is a copy which is designed to make the reader laugh. This copy brings
about a smile on the readers face.

FEAR COPY
Fear ad copy arouses a sense of fear in the reader to save their lives or to protect themselves
from something. It creates interest among its consumers by instilling a sense of fear in them.
Fear advertisement copies must be designed carefully as it may carry an unpleasant
association on the viewer’s mind concerning the product.

STORY COPY
In a story copy, a story is narrated in a very interesting way to develop interest amongst its
prospects. Customer experiences can also be narrated in the form of a story.

PREDICAMENT COPY
In a predicament copy, the copy provides a dramatic explanation about the product. This copy
explains all the advantages and benefits of using the product. The predicament copy usually
takes over the other three forms of the advertisement copy.

Reason Why Copy

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A Reason Why advertising copy offers reasons as to why the consumers are expected to buy
the product of a particular brand. The reason why copy appeals directly to the intellect or the
judgment of an individual than the emotions. It tries to explain the product qualities and
benefits by giving evidence in the forms of testimonials, guarantees, customer experiences,
and so on.

The approach of this copy explains reasons to readers as to why the advertised product has to
be purchased. The format of this copy states a fact about a product or a service in the headline
and then explaining why the fact is true in its further text. This form of advertising works
better in print than on media, because broadcasting an ad has a limitation with respect to time.
There are good chances of the viewer missing the headline or the reasons why the headline
claims to be the truth.

Educational Ad Copy
An educational ad copy attempts to inform, update and prompts its clients to buy a product by
educating the prospective customers. It is designed to educate the public about the attributes
of the product. Introductory ad copies are usually created in this way. It is the responsibility
of every manufacturer to educate the prospects regarding the product and endure a warm
welcome amongst its clients. Such an ad copy signifies the benefits and special features of the
product.

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Institutional Ad Copy
Institutional copy doesn’t sell its goods and services. Institutional ad copy aims at promoting
the selling house. It focuses to build a strong reputation for the selling house. The main
objective of this type of ad copy is to create, maintain, and increase the goodwill through its
philosophy, objectives and policies so that the prospective customers register it in their
minds. Institutional copy invites the target customers to the selling outlet. It is also called as
prestige or corporate advertising.

Example:

Suggestive Copy
A suggestive copy suggests or attempts to convey the message to the readers directly or
indirectly and prompts them to purchase the product. Suggestive ad copy works best when
the reader is confused regarding the quality of the product and is juggling with decision
making regarding his purchase.

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Expository Copy
Expository copy conflicts with the Suggestive copy. An Expository copy doesn’t conceal
anything about the product but instead exposes the facts that are clear and apt. It describes the
product features, uses, merits, operation and benefits of the products or services. Even a swift
glance registers quickly in the consumer’s mind and is quite easy to remember or pick up.

Writing an ad copy is an art of putting in the words or the elements that create a strong desire
to possess the product wherein the product features satiate the consumers desire to possess
the product. It is the ability to eliminate the surplus and substitute it with the essential
elements without jeopardising the meaning.

Action is the essential end goal of any advertisement copy, which is to receive some reaction
from the target audience for the advertisement. It could be just about visiting the page of the
brand on the net, enquiring or filling a form or the actual purchase itself.

Advertisement Copy is the soul of an advertisement. An advertisement copy is all the


written or spoken matter in an advertisement expressed in words or sentences and
figures designed to convey the desired message to the target consumers.

In print media, an advertisement copy is made-up of head-line, sub-headlines, body of the


copy, illustration logo-type, slogan and the brand name. Strictly speaking, written content of
an ad copy is the product of the collective efforts of copy-writers, artists and the layout-men.

Copy writer and artist must collaborate to provide an advertisement though copy writing
precedes or succeeds the art- work and the layout.
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Essentials of effective copy:


Whether a copy is effective or ineffective is a matter of personal judgment. It is really very
difficult to judge as its evaluation is purely subjective and perceptive. However, a good or
effective copy is one that succeeds in reaching the target consumers to create favourable
attitudes towards the product and the producers, impelling an action on the part of consumer
to buy.

A good advertisement copy has the following attributes:


1. It is brief:
Brevity is the soul of wit. Most readers are interested in shorter advertisements. Being brief is
not dropping words or chopping sentences. It is the meticulous work of eliminating and
substituting the words without jeopardizing the meaning. It cuts to the core; it is to the point
to cover all.

2. It is clear:
A clear copy is one which is easily and quickly read and grasped by the readers. It is
unambiguous and self- explaining. It is one that clicks fast. Clarity gives clue to
interpretation. The manner in which a copy is interpreted is dependent on factors like local
traditions habits, customs and nationality. Clarity is adjusted to these points.

3. It is apt:
A copy is apt that matches to the needs and counts of the prospects. Writing an apt copy is the
art of putting in the words that create strong desire to possess the product where the product
features or the qualities satisfy the consumers’ desire to possess. Copy writer is to place
himself in the position of a customer to make it apt. He is to use the most suitable USP.

4. It is personal:
A personal copy is specific where generality is dismissed to do away with ambiguity. A
personalised copy is centred on the prospect. It presents something of interest to the prospect.
It is an individualised appeal copy. It is written from ‘prospect’ to ‘product’ rather than
‘product’ to ‘prospect’. The copy has ‘you attitude’.

5. It is honest:

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Credibility or believability of an advertisement message is decided by the extent of honesty.


An ad to be good must be truthful. Misleading and mis-presented facts made in the copy only
damage the reputation of selling house.

One of the surest ways of winning the hearts of the consumers is to be honest. ‘Honesty’,
here, implies ‘commercial honesty’ and not the ‘judicial’.

6. It is conforming:
Every ad copy is to conform to standards, rules and regulations acceptable to the advertising
media and the laws of the land. Anywhere in the world, no copy is acceptable to any media
that offends the morality, declines decency and ravages religious susceptibilities of people.

That is why; we have not come across ads on cigarettes and alcohols on radio and television.
No advertiser can violate the provisions of the Act of Names and Emblems, Drugs Acts of
1940, 50, and 54.

The types of advertisement copies:


As told earlier, method or style of presentation is to do with the way in which the message is
presented. It speaks of the different types of advertising copies to arrest, inform, impress and
impel the reader; certain elements are to be present in a copy such as attention, suggestion,
meaning, conviction, sentiment, education and instinct.

These copies are classified in a number of ways. However, the most practical one is to
classify into six types as:
1. Institutional. 2. Reason why? 3. Human interest.

4. Educational. 5. Suggestive and 6. Expository.

1. Institutional Copy:
Institutional Copy neither sells nor the products neither the service but the name of the
business house. The aim is to build the sound edifice of reputation for the selling house. It
seeks to build goodwill through its philosophy, objectives, and policies towards public so that
the prospects remember it.

2. Reason Why Copy:

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Reason Why Copy offers reasons as to why the customer is expected to buy a product or
service of the advertiser. It appeals straight to the intellect or the judgment of an individual
than emotion or impulses. It attempts to prove the product superiority by means of evidences
in the forms of performance test, records, testimonials, guarantees and the like.

3. Human Interest Copy:


Human Interest Copy appeals to the emotional and the senses than intellect and the judgment,
sympathy, affection, love, fear, humour, curiosity and other emotional appeals are used to the
sense of sight, touch, taste, smell and hearing.

It tells about the product in relation to the people instead of conforming to the facts about the
products. It takes several forms of which four are very significant namely, ‘fear’, ‘humorous’,
‘story’ and ‘predicament’ copy.

4. Suggestive Copy:
Suggestive Copy tries to suggest or pinpoint or convey the message of the advertiser directly
or indirectly to the readers. Much is left to the reader to infer the ad message. Like a poem,
suggestive language is freely used where the hidden meaning is to be picked by the readers.
Such copy can be ‘direct’ or ‘indirect’ suggestive copy. The first tells directly about the
products or services of the company while the latter does indirectly.

5. Expository Copy:
Expository Copy is open copy that exposes unlike suggestive copy. It is so open that the facts
are given in very simple and clear way so that there is no need for interpretation. The
information given is so clear and concise that hardly it taxes the reader’s brain. It makes
possible effortless grasp and act.

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THE 5 MAJOR COMPONENTS TO GOOD ADVERTISING COPY:

FINDING THE RIGHT WORDS!

There are 5 major components to good advertising copy: (The order of these is essential to
success)

1. Command Attention

2. Showcase Benefits of Products/Services

3. Prove the Benefits

4. Persuade People to Embrace the Benefits

5, Call to Action

Advertising is sales in print. So, you need to think about the unique benefits your
products/services offer and showcase that in a persuasive way. You need to emphasize
results, not features.
Let’s take a minute to talk about each of these components:

1. Command Attention: 

This is usually accomplished with the headline. You need an attention-getter that makes
people want to know more about your products/services. The best headlines give a
vivid portrayal of the benefits or show how a problem can be avoided with your
products/services. The headline is the advertisement for the advertisement.

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2. Showcase Benefits: 

You have to showcase the benefits of your products and services and, more importantly,
show how they will solve or prevent a problem. They need to know what’s in it for
them. Include useful, factual and clear information to show precisely what the benefits
are and how they are going to help the customer.

3. Offer Proof: 

This is where you prove what the advertisement is offering. You need to establish you
have a method to deliver. Consider information that establishes credibility and past
performance.

4. Persuade: 

You need to add compelling reasons for your potential customers to purchase your
products/services. Use a hard sell approach and create scarcity. This will enact your
potential customers to feel like they have to act now. Which leads into the last
component.

5. Call to Action: 

You need to compel your potential customers to DO something. They need to check out
your site, sign up for your newsletter, purchase your products, contact you about
services…something.  Offer a freebie-a booklet, sample, product, bonus, demo, consult,
limited time price…the list goes on. There are lots of ways to get potential customers
excited about ordering and help them feel like they are getting an amazing deal.
Good advertisements include all of these components and are not complete without any of
them. You can sit down and think through any one of these components, then figure out how
to best place them together for the most effectiveness. We can help you with this too. Try
our FREE test drive to learn how to put together great advertisements from some of the best
in the business.
 

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AIADA

AIDA is an acronym that stands for Attention or Awareness, Interest, Desire and Action. The


AIDA model is widely used in marketing and advertising to describe the steps or stages that
occur from the time when a consumer first becomes aware of a product or brand through to
when the consumer trials a product or makes a purchase decision. Given that many
consumers become aware of brands via advertising or marketing communications, the AIDA
model helps to explain how an advertisement or marketing communications message engages
and involves consumers in brand choice. In essence, the AIDA model proposes that
advertising messages need to accomplish a number of tasks in order to move the consumer
through a series of sequential steps from brand awareness through to action (purchase and
consumption).

The AIDA model is one of the longest serving models used in advertising, having been
developed in the late nineteenth century. Since its first appearance in the marketing and
advertising literature, the model has been modified and expanded to account for the advent of
new advertising media and communications platforms. A number of modified alternative
models are in current use. During the past 100 years, the model has undergone many
refinements and extensions, such that today there are many variants in circulation. Thus, the
simple AIDA model is now one of a class of models, collectively known as hierarchical
models or hierarchy of effects models.

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THA AIDA MODEL

The AIDA model is just one of a class of models known as hierarchy of effects models
or hierarchical models, all of which imply that consumers move through a series of steps or
stages when they make purchase decisions. These models are linear, sequential models built
on an assumption that consumers move through a series of cognitive (thinking) and affective
(feeling) stages culminating in a behavioural stage (doing e.g. purchase or trial) stage.[1]

The steps proposed by the AIDA model are as follows:[2][3]

 Attention – The consumer becomes aware of a category, product or brand


(usually through advertising)

 Interest – The consumer becomes interested by learning about brand benefits


& how the brand fits with lifestyle

 Desire – The consumer develops a favorable disposition towards the


brand

 Action – The consumer forms a purchase intention, shops around,


engages in trial or makes a purchase

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Some of the contemporary variants of the model replace attention with awareness. The


common thread among all hierarchical models is that advertising operates as a stimulus
(S) and the purchase decision is a response (R). In other words, the AIDA model is an
applied stimulus-response model. A number of hierarchical models can be found in the
literature including Lavidge's hierarchy of effects, DAGMAR and variants of AIDA.
Hierarchical models have dominated advertising theory,[4] and, of these models, the
AIDA model is one of the most widely applied.[5]

As consumers move through the hierarchy of effects they pass through both a cognitive
processing stage and an affective processing stage before any action occurs. Thus the
hierarchy of effects models all include Cognition (C)- Affect (A)- Behaviour (B) as the
core steps in the underlying behavioral sequence.[6] Some texts refer to this sequence as
Learning → Feeling → Doing or C-A-B (cognitive -affective-behavioral) models.

Cognition (Awareness/learning) → Affect (Feeling/ interest/ desire) → Behavior


(Action e.g. purchase/ trial/ consumption/ usage/ sharing information)[7]

The purchase funnel illustrates the relative number of prospective purchasers over
time

The basic AIDA model is one of the longest serving hierarchical models, having been
in use for more than a century. Using a hierarchical system, such as AIDA, provides
the marketer with a detailed understanding of how target audiences change over time,
and provides insights as to which types of advertising messages are likely to be more
effective at different junctures. Moving from step to step, the total number of
prospects diminishes. This phenomenon is sometimes described as a "purchase
funnel". A relatively large number of potential purchasers become aware of a product
or brand, then a smaller subset becomes interested, with only a relatively small
proportion moving through to the actual purchase. This effect is also known as a
"customer funnel", "marketing funnel", or "sales funnel".[8]

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The model is also used extensively in selling and advertising. According to the
original model, "the steps to be taken by the seller at each stage are as follows:

Stage I. Secure attention.


Stage II. Hold attention Through Interest.
Stage III. Arouse Desire.
Stage IV. Create Confidence and Belief.
Stage V. Secure Decision and Action.
Stage VI. Create Satisfaction

Criticisms
A major deficiency of the AIDA model and other hierarchical models is the absence
of post-purchase effects such as satisfaction, consumption, repeat patronage behaviour
and other post-purchase behavioural intentions such as referrals or participating in the
preparation of online product reviews.[10] Other criticisms include the model's reliance
on a linear nature, hierarchical sequence. In empirical studies, the model has been
found to be a poor predictor of actual consumer behaviour.[11] In addition, an extensive
review of the literature surrounding advertising effects, carried out by Vakratsas and
Ambler found little empirical support for the hierarchical models.
Another important criticism of the hierarchical models include their reliance on the
concept of a linear, hierarchical response process.[13] Indeed, some research suggests
that consumers process promotional information via dual pathways, namely both
cognitive (thinking) and affective (feeling) simultaneously.[14] This insight has led to
the development of a class of alternative models, known as integrative models.[15]
Variants
In order to redress some of the model's deficiencies, a number of contemporary
hierarchical have modified or expanded the basic AIDA model. Some of these include
post purchase stages, while other variants feature adaptations designed to
accommodate the role of new, digital and interactive media, including social media
and brand communities. However, all follow the basic sequence which includes
Cognition- Affect- Behaviour.[16]

Selected variants of AIDA:

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Basic AIDA Model: Awareness → Interest → Desire → Action[17]


Lavidge et al's Hierarchy of Effects: Awareness → Knowledge → Liking →
Preference → Conviction → Purchase[18]
McGuire's model: Presentation → Attention → Comprehension → Yielding →
Retention → Behavior.[19]
Modified AIDA Model: Awareness → Interest → Conviction → Desire → Action
(purchase or consumption)[20]
AIDAS Model: Attention → Interest → Desire → Action → Satisfaction [21]
AISDALSLove model: Awareness → Interest → Search → Desire → Action →
Like/dislike → Share → Love/Hate[22]
Origins
The term, AIDA and the overall approach are commonly attributed to American
advertising and sales pioneer, E. St. Elmo Lewis.[23] In one of his publications on
advertising, Lewis postulated at least three principles to which an advertisement
should conform:
The mission of an advertisement is to attract a reader, so that he will look at the
advertisement and start to read it; then to interest him, so that he will continue to
read it; then to convince him, so that when he has read it he will believe it. If an
advertisement contains these three qualities of success, it is a successful
advertisement.[24]
According to F. G. Coolsen, "Lewis developed his discussion of copy principles on
the formula that good copy should attract attention, awaken interest, and create
conviction."[25] In fact, the formula with three steps appeared anonymously in the
February 9, 1898, issue of Printers' Ink: "The mission of an advertisement is to sell
goods. To do this, it must attract attention, of course; but attracting attention is only an
auxiliary detail. The announcement should contain matter which will interest and
convince after the attention has been attracted" (p. 50).
On January 6, 1910 Lewis gave a talk in Rochester on the topic "Is there a science
back of advertising?" in which he said:
I can remember with what a feeling of resigned and kindly tolerance some of the old
advertising men hear a writer say, 'All advertising must attract attention, maintain
interest, arouse desire, get action.' Even that primitive attempt to place advertising
art under tribute to formula aroused the ire of the anointed ones of ten years ago, and

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we had to undergo a good deal of more or less good-natured chaffing. But we don't
hear so much about that sort of thing now; some of the "upstart youngsters" of ten
years ago are now getting big salaries making that simple formula work.

The importance of attracting the attention of the reader as the first step in copy writing
was recognized early in the advertising literature as is shown by the Handbook for
Advertisers and Guide to Advertising:

The first words are always printed in capitals, to catch the eye, and it is important
that they should be such as will be likely to arrest the attention of those to whom they
are addressed, and induced them to read further

A precursor to Lewis was Joseph Addison Richards (1859–1928), an advertising


agent from New York City who succeeded his father in the direction of one of the
oldest advertising agencies in the United States. In 1893, Richards wrote an
advertisement for his business containing virtually all steps from the AIDA model,
but without hierarchically ordering the individual elements:

How to attract attention to what is said in your advertisement; how to hold it until the
news is told; how to inspire confidence in the truth of what you are saying; how to
whet the appetite for further information; how to make that information reinforce the
first impression and lead to a purchase; how to do all these, – Ah, that's telling,
business news telling, and that's my business.[28]

Between December 1899 and February 1900, the Bissell Carpet Sweeper


Company organized a contest for the best written advertisement. Fred Macey,
chairman of the Fred Macey Co. in Grand Rapids (Michigan), who was considered an
advertising expert at that time, was assigned the task to examine the submissions to
the company. In arriving at a decision, he considered inter alia each advertisement in
the following respect:

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1st The advertisement must receive "Attention," 2d. Having attention it must create
"Interest," 3d. Having the reader's interest it must create "Desire to Buy," 4th.
Having created the desire to buy it should help "Decision".[29]

The first published instance of the general concept, however, was in an article by
Frank Hutchinson Dukesmith (1866–1935) in 1904. Dukesmith's four steps were
attention, interest, desire, and conviction.[30] The first instance of the AIDA acronym
was in an article by C. P. Russell in 1921 where he wrote:

An easy way to remember this formula is to call in the “law of association,” which is
the old reliable among memory aids. It is to be noted that, reading downward, the
first letters of these words spell the opera “Aida.” When you start a letter, then, say
“Aida” to yourself and you won’t go far wrong, at least as far as the form of your
letter is concerned.[31]

The model's usefulness was not confined solely to advertising. The basic principles of
the AIDA model were widely adopted by sales representatives who used the steps to
prepare effective sales presentations following the publication, in 1911, of Arthur
Sheldon's book, Successful Selling.[32] To the original model, Sheldon
added satisfaction to stress the importance of repeat patronage.

AIDA is a linchpin of the Promotional part of the 4Ps of the Marketing mix, the mix
itself being a key component of the model connecting customer needs through the
organisation to the marketing decisions.[33]
Theoretical developments in hierarchy of effects models.
The marketing and advertising literature has spawned a number of hierarchical
models.[34] In a survey of more than 250 papers, Vakratsas and Ambler (1999) found
little empirical support for any of the hierarchies of effects.[35] In spite of that
criticism, some authors have argued that hierarchical models continue to dominate
theory, especially in the area of marketing communications and advertising.[36]
All hierarchy of effects models exhibit several common characteristics. Firstly, they
are all linear, sequential models built on an assumption that consumers move through
a series of steps or stages involving cognitive, affective and behavioral responses that

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culminate in a purchase.[37] Secondly, all hierarchy of effects models can be reduced to


three broad stages - Cognitive→ Affective (emotions)→Behavioral (CAB).[38]
Three broad stages implicit in all hierarchy of effects models:[39]
Cognition (Awareness or learning)

Affect (Feeling, interest or desire)

Behavior (Action)
Recent modifications of the AIDA model have expanded the number of steps.
[40]
 Some of these modifications have been designed to accommodate theoretical
developments, by including customer satisfaction (e.g. the AIDAS model)[41] while
other alternative models seek to accommodate changes in the external environment
such as the rise of social media (e.g. the AISDALSLove model).[42]
In the AISDALSLove model,[43] new phases are 'Search' (after Interest), the phase
when consumers actively searching information about brand/ product, 'Like/dislike'
(after Action) as one of elements in the post-purchase phase, then continued with
'Share' (consumers will share their experiences about brand to other consumers) and
the last is 'Love/hate' (a deep feeling towards branded product, that can become the
long-term effect of advertising) which new elements such as Search, Like/dislike
(evaluation), Share and Love/hate as long-term effects have also been added. Finally,
S – 'Satisfaction' – is added to suggest the likelihood that a customer might become a
repeat customer, provide positive referrals or engage in other brand advocacy
behaviors following purchase.
Other theorists, including Christian Betancur (2014)[44] and Rossiter and Percy (1985)
[45]
 have proposed that need recognition should be included as the initial stage of any
hierarchical model. Betancur, for example, has proposed a more complete process:
NAITDASE model (in Spanish: NAICDASE). Betancur's model begins with the
identification of a Need (the consumer's perception of an opportunity or a problem).
Following the Attention and Interest stages, consumers form feelings of Trust (i.e.,
Confidence). Without trust, customers are unlikely to move forward towards the
Desire and Action stages of the process. Purchase is not the end stage in this model, as
this is not the goal of the client; therefore, the final two stages are the Satisfaction of
previously identified and agreed needs and the Evaluation by the customer about the

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whole process. If positive, it will repurchase and recommend to others (Customer's


loyalty).
In Betancur's model, trust is a key element in the purchase process, and must be
achieved through important elements including:
1. Business and personal image (including superior brand support).
2. Empathy with this customer.
3. Professionalism (knowledge of the product and master of the whole process from
the point of view of the customer).
4. Ethics without exceptions.
5.Competitive Superiority (to solve the needs and requirements of this customer).
6. Commitment during the process and toward the customer satisfaction.
7. Trust (or Confidence) is the glue that bonds society and makes solid and reliable
relations of each one other.

AIDA sales funnel


 

description:

In 1898, the American advertising and sales pioneer, E. St. Elmo Lewis developed a practical
sales tool using the latest Scientific Management insights. He created his AIDA funnel model
on customer studies in the US life insurance market to explain the mechanisms of personal
selling. Lewis held that the most successful salespeople followed a hierarchical, four layer
process using the four cognitive phases that buyers follow when accepting a new idea or
purchasing a new product.
 
The AIDA model describes the basic process by which people become motivated to act on a
purchase and is based on external stimuli from sales representatives. This motivation to make
a purchase depends on:

1. AWARENESS of the existence of a product or service;


2. INTEREST in paying attention to the product's benefits;
3. DESIRE for the product.
 

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Lewis held that the fourth stage or mental state, ACTION, was a natural result of moving
through the first three stages -- that desire leads to action, i.e.

1. Are you talking to me?


2. Why are you talking to me?
3. Good idea, but do I really need it?
4. What will I have to do to get it?
 
In 1911, Sheldon extended the model with a fifth phase, 'permanent Satisfaction' to stress the
importance of repeat sales. In the following decades, the AIDA model served to study how
advertising affects consumers and was the basis for numerous motivational driven consumer
behaviour research models such as ACAIP, ACCA, and CAB.
 
The AIDA funnel model was to be used as the backbone for structuring an organisation's
sales. The sales funnel helps sales personnel to better target a client by basing their actions on
the client's position in the funnel. Salespeople should seek different sales objectives for their
suspects, their prospects and their customers. The aggregated information from the sales
funnel allows a firm to construct an overview across sales representatives and departments
and to deliver better structured sales forecasts.
The AIDA model allowed salespersons and managers to monitor their personal sales
activity progress. Structuring the organisation's sales funnel according to the AIDA
model's four hierarchical layers permits the insertion of quantitative conversion rates.

The model demonstrated to sales people that timing is important in sales processes since
the mental state of prospective buyers changes over time. The buyer requires different
information from the sales person at each state to be able to move to the next phase.

The model formed the basis for measuring the effect of advertising. It is the foundation
for what became known in consumer behaviour research as the 'hierarchy of effect'
models.

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cons:

The model takes the view that the sales person rather than the buyer has the most
control in the interaction. Later research showed that buying and selling are the same
process whose outcome is determined by the total sales process rather than the actions
and traits of the individual actors.

The model can be applied too strictly: its goal is to stimulate the buying action from
potential buyers, not to lead them through five stages at all costs. AIDA as a blue print
for a sales presentation requires the salesperson to talk disproportionally to keep
feedback from the potential buyer from disrupting the flow of the sales process.

The key for successful AIDA implementation is to understand the state of the prospect.
This requires skill and experience on the side of the sales person.

Later research showed that buyers change their mental state in a more dynamic,
complex way than sequentially.

DAGMAR
Meaning

DAGMAR (defining advertising goals for measured advertising results) is a marketing model


used to establish clear objectives for an advertising campaign and measure its success. The
DAGMAR model was introduced by Russell Colley in a 1961 report to the Association of
National Advertisers and was expanded upon in 1995 in a book by Solomon Dutka.

 The DAGMAR model defines the four steps of an effective advertising campaign as
causing awareness, comprehension, conviction, and action.
 The model stresses defining the segment of the market that the campaign seeks to
reach.
 The model also requires an evaluation of the campaign's success against a pre-set
benchmark.

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Understanding DAGMAR
The DAGMAR approach advocates a marketing campaign that guides the consumer through
four phases: Awareness, comprehension, conviction, and action. That path has become
known by its acronym as the ACCA formula. The four steps of the campaign are as follows:

 Generating awareness of the brand among consumers


 Increasing comprehension of the product and its benefits
 Convincing consumers that they need the product
 Persuading consumers to buy it

The DAGMAR method contains two goals. The first is to develop a communication task that
accomplishes those specific ACCA steps. The second is to make sure that the success of
those goals can be measured against a baseline.

The DAGMAR method stresses that advertising is about communication.


Colley believed that effective advertising seeks to communicate rather than sell. He specified
four basic requirements for evaluating the effectiveness of an advertising campaign: 

 Be concrete and measurable


 Define the target audience or market
 Identify the benchmark and the degree of change expected
 Specify a period during which to accomplish the objective

Special Considerations for DAGMAR 


The target market is the subset of consumers who have the highest likelihood of purchasing
the product. The target market may be narrow or broad. It may be women in general or young
professional single women who live in urban areas.

Identification of a target market can include demographic, geographic, and psychographic


segmentation. Target markets can be separated into primary and secondary groups. Primary
markets are the initial focus of a campaign and, hopefully, the first customers to buy and use

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the new product. Secondary markets are the larger population that may buy the product once
the brand becomes established.

After identifying the target market, the company establishes the message it wants to
communicate in its advertising campaign.

DAGMAR Approach: Definition, Advantages, Examples


DAGMAR is a marketing expression that stands for “Defining Advertising Goals
for Measured Advertising Results”. It is a marketing tool to compute the results of an
advertising campaign. DAGMAR attempts to guide customers through ACCA model.
According to this approach, every purchase encounters four steps; Awareness,
Comprehension, Conviction, and Action. DAGMAR method is an established technique of
creating effective advertising.

HISTORY
DAGMAR is an advertising model proposed by Russell Colley in 1961. Russell Colley
advocated that effective advertising seeks to communicate rather than to sell. Advertisers
discover whether their message conveyed enough information and understanding of a product
to their consumers and also its respective benefits from clear objectives.
The DAGMAR Model

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1. AWARENESS
 Awareness of the existence of a product or a service is needful before the purchase
behaviour is expected. The fundamental task of advertising activity is to improve the
consumer awareness of the product.
 Once the consumer awareness has been provided to the target audience, it should not
be forsaken. The target audience tends to get distracted by other competing messages if
they are ignored.
 Awareness has to be created, developed, refined and maintained according to the
characteristics of the market and the scenario of the organization at any given point of
time.
 The objective is to create awareness about the product amongst the target audience.
2. COMPREHENSION
 Awareness on its own is not sufficient to stimulate a purchase. Information and
understanding about the product and the organisation are essential. This can be achieved
by providing information about the brand features.
 Example: In an attempt to persuade people to budge for a new toothpaste brand, it
may be necessary to compare the product with other toothpaste brands, and provide an
additional usage benefit, such as more effective than other toothpaste because it contains
salt or that this particular toothpaste is a vegetarian toothpaste, which will, in turn, attract
more customers.
 The objective is to provide all the information about the product.
3. CONVICTION

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 Conviction is the next step where the customer evaluates different products and plans
to buy the product. At this stage, a sense of conviction is established, and by creating
interests and preferences, customers are convinced that a certain product should be tried
at the next purchase.
 At this step, the job of the advertising activity is to mould the audience’s beliefs and
persuade them to buy it. This is often achieved through messages that convey the
superiority of the products over the others by flaunting the rewards or incentives for
using the product.
 Example: Thumbs up featured the incentive of social acceptance as “grown up”. It
implied that those who preferred other soft drinks were kids.
 The objective is to create a positive mental disposition to buy a product.
4. ACTION
 This is the final step which involves the final purchase of the product. The objective is
to motivate the customer to buy the product.

ADVANTAGES OF DAGMAR APPROACH

A major contribution of Colley’s DAGMAR approach was a specification of what constitutes


a good objective.

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According to Russell Colley, there are various advantages of well-founded objectives. These
are:

 Be concrete and measurable


 Have a well-defined target audience or market
 Identify the benchmark and the degree of change
 Specify a timeframe to accomplish the objective
TARGET AUDIENCE
 DAGMAR claims the target audience is well defined. A group of potential customers,
who have the highest likelihood of purchasing the product, is the target market.
Identifying the target market includes the process of demographic, geographic, and
psychological segmentation. Target markets can be segmented
into Primary and secondary groups.
 Primary markets are the main target audience, on whom the marketing efforts are
mainly focused.

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 Secondary markets are the target audience on whom the marketing efforts will focus
after the primary market goals are achieved. After identifying the target audience, the
organization devises objectives for advertising and later the objectives for
communication.
CONCRETE AND MEASURABLE
 The objective of communication should be a precise and clear statement of whatever
message the advertiser wants to communicate to the target audience.
 The specification must include all the details and descriptions of the measurement
procedure.
SPECIFIED TIMEFRAME AND BENCHMARKS
 A good objective has a specified time frame, during which the objective is to be
achieved. Understanding the specifications enables advertisers to define goals that will
yield the best result.
 Setting a specific timeframe assures effective evaluation of results. The timeframe
should be realistic to prohibit skewed results from static marketing.
 Creating the benchmark is essential for an appropriate measurement of the
effectiveness of the advertisement.
WRITTEN GOAL
 The goal should be committed on a paper. When the goals are clearly written, basic
shortfalls and flaws are exposed, it becomes eventually easy to determine whether the
goal contains the crucial aspects of the DAGMAR approach.
OBJECTIVES OF DAGMAR APPROACH
 Persuade a prospect to visit the showroom.
 Growth in market share.
 Improve sales turnover.
 Perform complete selling function.
 Advertise a special reason to buy.
 Stimulate impulse sales.
 Remind people to buy.
 Create awareness about the product and brand existence.
 Create favourable emotional disposition towards the product.
 Impart information regarding benefits and distinctive features of the product.
 Combat and offset competitive claims.
 Correct false impressions, wrong information and other hindrances to sales.

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 Aid sales force with sales promotion and selling activities and boost their morale.
 Establish brand recognition and acceptance.
EXAMPLE OF DAGMAR APPROACH
Let’s suppose that an ABC company wants to evaluate the effectiveness of marketing
campaign for its latest product launched. The company starts evaluating the commercial that
is designed to persuade potential consumers through the four stages of the buying process:

1. In the AWARENESS stage, company ABC spreads awareness among the consumers


about its new product launched in the market.
2. In the COMPREHENSION stage, company ABC portrays to its consumers the
features and distinctiveness of the new product and reminds the consumers of the
company ABC’s logo and brand name.
3. In the CONVICTION stage, company ABC attaches the consumer emotionally to the
new product so that the consumer establishes an emotional preference for the company
ABC’s brand.
4. In the ACTION stage, company ABC makes sales.
Company ABC then evaluates the success of the marketing effort using DAGMAR. The
company measures that how fast the customer processed through the four stages of the
purchase and how many sales were generated. In cases where the customer is distracted and
deviated from buying the product, and the company doesn’t meet sales goals, the company
needs to change its ad campaign.

Advertising is strongly associated with economic cycles across major world economies. The
DAGMAR method is a long-established method of creating effective advertising. The idea
behind the method is to “communicate rather than sell”.

ADVERTISEMENT LAYOUT

Meaning:

Layout may be defined as the arrangement of the various elements of advertising such as
illustration, text matter, product and name of the company. A good advertisement is a
combination of both copy and art.

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Elements of an Advertising Layout

An advertising copy is the means by which the advertiser’s ideas are given expression to in a
message to readers. Regardless of its length and brevity copy refers to all the reading matters
of an advertisement, including the headline, sub-headlines, text or body, and the name of the
firm or the standard initials of the advertiser. As we have seen that advertising has so many
immediate purposes but its ultimate goal is to stimulate sales. As a reader turns the pages of
a magazine or newspaper, he notices so many advertisements but a great variation in copy.
Some copy may be so sticking that the reader takes immediate action and rush to the nearest
dealer to purchase it while there may be some other copy or copies that he does not like or it
does not click to his mind. The first copy conforms to the requisites of a good advertisement
copy. A copywriter must take pains in making up a sound advertisement copy containing its
various components i.e. headlines, subhead lines, illustrations etc. The following are the
main components of an advertisement copy:

1. Background: The background for the advertisements should be somewhat catchy and


colorful. The arrangement of background differs from medium to medium and advertisement
to advertisement. In short, background should be suitable for the contents of the
advertisement.

2. Border: It is defined as the frame of the advertisement. Border is employed to impart the
reading atmosphere. The border may be light or heavy, obvious, plain or fanciful. The border
may also contain a logo.

3. Caption: It refers to the subtitle. But in most of the advertisement it is converted into
heading or sub-heading.

4. Coupon: Coupon is that part of the advertisement which is intended for the convenience of
the prospective customer in communicating with the advertiser. The coupon must contain the
name and full postal address of the firm followed by the offer. The offer should be brief and
clear. There should be space for name and address of the prospective customer. The usual
shape of the coupon is triangular or rectangular.

5. Decoration: Advertisement decoration is the ornament of the advertisement. This is done


to emphasis the advertisement message.

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6. Heading: The heading or headline is defined as the title of the advertisement. The words in
the heading should be short.

7. Illustration: Illustrations are the part of layout that pictures the basic theme of the
advertisement. It has the power to capture the attention of the reader. The advertisements
become richer by the use of illustrations.

8. Mascot: It is known as the trade character or trade figure. It is an illustration of either a


real or an imaginary figure or personality given in the advertisement.

9. Name Plate (logo): The name plate or name block is the signature of the advertiser. It
represents the personality of the company and its product.

10. Price: It is another part of layout. The price of the product should be featured clearly. The
price is usually taken in the concluding lines of the copy.

11. Product: It refers to the representation of the product offered for sale. A very popular
practice is to show the product in use with illustrations.

12. Slogan: Slogan is a sales argument. The arrangement of slogan in the layout is


determined by the importance of its relation to the advertising message.

13. Space: Space refers to the entire space left in the space hired by the advertiser. This
depends on the design of the copy.

14. Subheading: It is a secondary heading. It is given to support the heading or to pick out
the various selling points given in the text.

15. Text: Text or body of the advertisement refers to the general reading matter. It is the
subject matter of the copy. It should be neither too wide nor too narrow.

16Trade mark: It is a word or design by which a product is defined. If the trade, marks are
registered it can be included in the layout.

QUALITIES OF GOOD ADVERTISEMENT LAYOUT

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1. Efficient space utilization


Real estate costs are rising by the day. An ideal layout should utilize the available space in an
effective way. Wastage of space should be avoided at all costs. The arrangement of
equipment, service points and workers should be done in such a way that space is properly
utilized.

2. Flexibility
Manufacturing operations are dynamic in nature. There is continuous innovation in types of
products manufactured as well as in equipment, techniques and processes of production.
Therefore the layout should be designed in such a way that the layout is flexible enough to
adapt to changes.

3. Accessibility
Manufacturing, maintenance and servicing facilities should be easily accessible without any
hindrance. To achieve this purpose, there must be sufficient space between equipment so that
raw materials, machines and men are able to move freely from one place to another.

4. Economy in handling
The layout should facilitate economies in handling materials, work-in-progress and finished
stock. Handling should be reduced by the optimal use of hoists, chutes, trucks lifts, conveyors
etc.

5. Minimum movement
The layout should be so designed that there is, minimum movement of men and machines.
Movements should be direct as far as possible. Indirect handling of materials would
unnecessarily add to the cost without any value addition. Therefore indirect handling should
be avoided as far as possible.

6. Ensuring Co-ordination
A good layout would be able to co-ordinate all operations. The layout should be designed
taking into account the inter-relationships between various equipment, departments and
personnel. It is therefore important that while planning the layout the complete picture of the
organization is considered.

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7. Visibility
Work should be arranged in such a way that there is no problem in supervision, co-ordination
and control. Raw materials, work in progress and finished goods should have specific storage
points and must be visible at all times. This would reduce the problem of pilferage, theft etc.

8. Reduced discomfort
The layout should be designed in a way that there is minimum discomfort to the workers. It
should provide for proper lighting, ventilation and reduce the impact of heat, noise,
vibrations, dust, fumes, odours etc.
9. Adherence to statutory regulations
The layout should adhere to the regulations of the Factories Act with regard to health, safety
and welfare of employees. Adherence to the above regulations would minimize accidents,
reduce absenteeism due to sickness contributing to improved productivity.

10. Preservation of materials and equipment


The layout should contain safeguards against fire, moisture, theft and general deterioration of
equipment and materials. There should be adequate and safe storage locations. There should
be provision for storing inflammable materials separately and in a safe manner.

ADVERTISEMENT APPEAL 

Meaning

An advertising appeal refers to the approach used to attract the attention of consumers and/or
to influence their feelings toward the product, service, or cause. It's something that moves
people, speaks to their wants or need, and excites their interest

TYPES OF ADVERTISING APPEAL

Advertising appeals are different techniques and strategies that are used to attract customers.
Usually, advertising appeals provide evidence or provoke an emotional response that helps to
convince the target audience to buy a certain product or service. Marketing experts group

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them into different categories but the most common appeals are emotions, logic, and
popularity.

Some of the most common strategies used in advertising appeal to basic human needs. An ad
may titillate your taste buds by showing you a delicious slice of pizza or it can try to resonate
with your personal beliefs and values. 

 Appeal to emotion

 Personal appeal

 Social appeal

 Appeal to popularity

 Appeal to authority

 Appeal to logic

 Appeal to humor

 Appeal to fear

 Sex appeal

The spectrum is very wide, so it’s best to go through different types of advertising appeals
one by one. They make very interesting case studies. Each case is illustrated with an email
example.

Appeal to Emotion

Although people like to perceive themselves as rational beings, their reality is mainly shaped
by social interactions, emotions, customs, and culture. 

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We want to satisfy our personal needs and achieve our personal goals but, at the same time,
we must also take care of various roles imposed on us by society. The general trend is that
people want to constantly improve the quality of their life and prevent bad things from
happening. All of these desires and fears can be used in your advertising materials and
communication strategy. Appeal to emotion to win your customers over and persuade them to
buy.

Emotional advertising takes into consideration emotions linked to personal and social needs.
Reaching consumers by appealing to their emotions is one of the most effective and
persuasive advertising techniques. Some of the common ad themes appeal to feelings and
values such as love, happiness, family, friendship, need for fame, respect, and recognition.

Personal Appeal

By addressing the most private psychological needs we can make a powerful connection with
our customers. Personal appeals frequently used in advertising include feelings and emotions
such as love, friendship, happiness, or security.

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This sphere is, by definition, intimate so it’s important to be careful – you can either strike a
chord or a false note. Let’s take a look at an email ad by Casper.

Type of advertising appeal: Appeal to emotion – love and belonging  

A picture of a couple spooning in bed is nothing out of the ordinary. Quite the opposite – the
situation is very relatable and instantly brings to mind a sense of comfort, security, and
emotional attachment.

This Pixel smart phone ad also shows a situation which is appealing because of the emotional
connection. In this case, it’s the love between the father and the child. Family is one of the
most common themes present in the world of advertising. It is immediately associated with
strong emotional bonds, happiness, responsibility, traditional values, and safety.

Middle-class families are great as marketing target groups because they statistically consume
more than those who choose alternative lifestyles or remain single. Depicting families in
advertising materials is also easier since they are a relatively uniform group with many shared
experiences.

Using family-themed iconography in your ads can instantly connect you with your customers
– in point of fact, it is a blend between personal appeal and social appeal. Families are both
basic building blocks of society and groups of people bonded by emotional relationships and
mutual responsibilities. They are the largest consumer group that can be addressed with a
single image or situation such as a family dinner, picnic, or a bike ride.

Social Appeal

Social needs are linked with our public image and the ways we interact with others. While
personal appeal tries to address individual and intimate needs, social appeal focuses on
somebody’s position within particular social groups and society as a whole. Social appeals
used in advertising connect with customers by using motives such as status, fame,
recognition, or respect.

Tip: If you want to get closer to your customers or audience, try a live chat tool on your
website. It’s one of the easiest and fastest way to understand who your clients are and what
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are their needs. Try a free tool like Tidio (it gives you unlimited messages and a powerful
visitor tracking panel).

This email ad by Uber advocates values embraced by modern society. At the same time, it
appeals to members of different minority groups and addresses their need for recognition and
safety.

As opposed to previous examples, it does not put emphasis on personal relationships between
individuals but interactions and attitudes that happen in a particular social context.

Here is a different email ad example that uses social appeal: 

The email sent by YouTube depicts a group of creative people. It targets artists, signers,
photographers, and all other YouTubers who share their works online through their YouTube
channel. This ad will appeal to people who – at least partially – build their identity around
their social roles as artists and performers.

The previous social appeal example was concerned with ethnic identity and security. Here we
can observe an approach which grabs the attention of the email recipients by acknowledging
their creative efforts and by providing means to satisfy their need of connecting with their
audience.

Appeal to Popularity

The easiest way to convince somebody to buy a product or service is to prove that everyone
else has done it already. Once something becomes a widely recognized phenomenon or a
trend, it becomes obvious that it has to have some merits – otherwise it wouldn’t be so
popular. Right?

This is sometimes referred to as the bandwagon effect. The more popular something
becomes, the more people buy into it and, consequently, it becomes even more popular. This
can become an important asset and a key point of your marketing strategy.

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Not only does this email appeal to customers’ need for recognition but also it reassures them
that they’ve made the right choice. The popularity of this website serves as a testimony to its
high quality and ability to create a “passionate and creative” user base.

This type of social proof backed by numbers can be an ace up your company’s sleeve in your
next email campaign. The bandwagon appeal is just like the snowball effect – it starts
slowly but later on it accelerates and grows in significance. An average consumer believes
that products that are popular among other consumers are bound to be good. 

When it comes to popularity, you can either use the collective endorsement of your customers
or get a celebrity. The end result is very similar. Things become acknowledged and noticed
when they are backed up by a famous person or thousands of not-so-famous persons.

It is a fragment of the Master class email campaign that encourages customers to take part in
the Master class poker course. This email ad appeals to the popularity of Daniel Negrean, a
professional poker player. Instead of listing, for instance, the numbers of people who’ve
already decided to enrol, we get a piece of information about the successes of the poker
champion.   

Appeal to Authority

Appealing to authority is very different from getting a celebrity endorsement. Sometimes


these types of advertising appeals overlap, but in some fields, experts and top professionals
are not easily recognizable. The value of their expertise, however, is appreciated.

The Plum Guide has its own team of architects, interior designers, and other professionals
who give their “stamp of approval” to every apartment you can book on their website. This
advertisement reveals what happens behind the scenes to reassure their customers that what
they get was meticulously tested and reviewed by a “razor-sharp eye”.

The picture strengthens the message of the ad. Every element of Plum’s apartments gets
under the careful examination. They are not just ordinary interior designers, but “home
critics” who approach the apartments like they were works of art.
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Appeal to Logic

If you don’t know how to reach your customers’ hearts and emotions, you can still try to
convince their brains. Appeal to facts, calculable benefits, and statistics to encourage the
recipients of your email ads.

Here is a fragment of an advertising email by Lyft which appeals to logic (and math skills).

Logical fallacies are very popular in advertising. However, being honest and bringing hard
logic to the equation of your marketing formula can do wonders for your sales. Modern
buyers try to make rational decisions so it is good to talk the language of tangible benefits.

Appeal to Humour

The more engaged your customers get, the easier it is to convince them to buy. If you can
make them smile, you are in a great position to sell. The bad news is that jokes tend to be
funny only once. The good news is that when it comes to your email marketing campaigns
once is enough! 

This J. Crew Factory email is awesome on many levels. It brings everybody back to an
experience that they went through at least once in their lifetime. Wrapping some presents is
next to impossible and it is usually being done at the very last minute. 

In retrospect, this is a kind of memory which is at the same time funny, nostalgic, and a little
bit humiliating. J. Crew Factory email taps into that feeling and makes it even more reason to
buy a gift card instead of a regular gift.

Appeal to Fear

Scaring your customers into buying things is not a good advertising strategy (unless it is
Halloween and you want to use some relevant imagery). Fear is usually used only combined
with one of the other advertising appeals. An introduction may be scary, but something funny
and calming is used as the punch line of an ad.

The most common fears involve some kind of loss – of health, wealth, safety, beauty, or
opportunity. However, the ads that approach these issues tend to briefly introduce the
problem and focus on the solution and positive aspects.

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Here is a good example of an email ad that uses fear as its advertising appeal.

The motive of lost opportunity is very frequent in advertising. One of the most common fears
of the 21st century is the fear of missing out (FOMO). FOMO is the anxiety linked with the
feeling that the lives of others are full of joy and great opportunities that we are left out of.
Here is an example of FOMO in action:

This ad is very simple and intriguing. The big eyes seem very attentive and make the design
memorable. Customers don’t know what to expect but they are assured that it is going to be
something they’ll love. It would be a shame to miss it, wouldn’t it? While the ads announce
something new and exciting, the main advertising appeal it uses is actually the fear of missing
out.

Scarcity appeal is another example of appeals that are based on consumer’s fears. Campaigns
that introduce product availability counters are supposed to instil the fear of not being able to
make use of a limited offer. Appeal to scarcity is employed to encourage consumers to buy a
product or service right away. 

Sex Appeal

The relationship between sex and advertising is a long and complicated one. The attitude
towards using sex appeal in marketing has been changing throughout the decades but it
remains a very controversial subject. On the one hand, it objectifies women and men, on the
other, sexual imagery can be very effective and it can be, paradoxically, used to draw
attention to serious social problems.

One of the famous Diesel campaigns used a slogan: “Sex Sells *Unfortunately We Sell
Jeans”. Unfortunately, sex still sells jeans like crazy, yet escessive use of sex appeal in ads is
frowned upon.

Some industries, especially the ones connected with fashion and cosmetics can get away with
showing sexually titillating images. Idealised bodies and sensual poses and sexual gestures
are part of their traditional advertising strategies and they appeal to their consumer base.

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There’s a fine line between what’s considered classy and vulgar. Therefore, using sex appeal
in your email ads may not be the best solution unless your products or services are relevant
– a new line of perfume or clothes may use this type of advertising appeal and increase your
sales, but the racier it gets, the more criticism it will attract.

Because sex appeal can instantly grab attention, sexual imagery is often used to raise
awareness about important social issues, health risks, or environmental problems. It is easier
to persuade audiences to take action or think about an issue when a message is conveyed
through visuals and words that are shocking, engaging, or provocative.

UNIT III MCQ

1._________________ is helpful in promotion the businesses people and big industrialists are
promoting their goods and services through networking sites like Face book, Twitter etc.

(1) Social media


(2) Email
(3) Radio
(4) Television
(5) Print
ANSWER: (1) Social media

2. _______________________ ignores large differences in cultures, demographics, and


economics of international marketing decision.

(1) Standardization drawbacks


(2) Advertisement regulations
(3) Standardization benefits
(4) Typical responses
(5) None of these
ANSWER: (1) Standardization drawbacks

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3. Pioneer advertising, consumer advertising and product advertising are

(1) Objective of advertising


(2) Types of advertising
(3) Marketing decisions in advertising
(4) Evaluating advertising
(5) None of these

ANSWER: (2) Types of advertising

4. Drama, exhibitions, fair are effective means of

(1) Personal selling


(2) Advertisements
(3) Sales territory
(4) Entertainment
(5) None of these

ANSWER: (4) Entertainment

5. _________________ in advertisement means of providing complete information about the


product and its uses to the society.

(1) Legal environment


(2) Awareness
(3) Interest
(4) Personal selling
(5) Educative

ANSWER: (5) Educative

6. Comparing past sales and advertisement, trying for new experiments, measuring sale
difficulties are

(1) Objective of advertising

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(2) Models of advertising


(3) Evaluation of advertising
(4) Developing strategy
(5) None of these

ANSWER: (3) Evaluation of advertising

7. In advertisements we generally see a warning for cigarettes that “Smoking is Injurious to


health”. It’s an example of

(1) Advertising
(2) Monopoly in market
(3) Legal environment
(4) Entertainment
(5) None of these

ANSWER: (3) Legal environment

8. Selecting style, tone, words for making ads are part of

(1) Message strategy


(2) Message execution
(3) Selecting media
(4) Measuring communication
(5) None of these

ANSWER: (2) Message execution

9. Through ads customer used to take their purchasing decision in advance, in this way
advertisement help in

(1) Online marketing


(2) Customer decision
(3) Personal selling

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(4) Convenient purchasing


(5) None of these

ANSWER: (4) Convenient purchasing

10. “Think globally, act locally” is a global advertising strategies and local advertising
programs under ______________________ of international marketing decision.

(1) Standardization drawbacks


(2) Advertisement regulations
(3) Standardization benefits
(4) Typical responses
(5) None of these

ANSWER: (4) Typical responses

11. Sandwich Board Advertisements is not suitable for the products like

(1) Burger
(2) Pizza
(3) Cold drink
(4) Pizza
(5) Potato chips

ANSWER: (3) Cold drink

12. A particular growing of customers assigned to a salesman for his sales activity is called

(1) Marketing territory


(2) Sales territory
(3) Advertisement territory
(4) Promotion territory
(5) None of these

ANSWER: (2) Sales territory

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13. Digital marketing is same as

(1) Marketing through emails


(2) Marketing on Facebook
(3) Marketing on Twitter
(4) Online ads
(5) All of the above

ANSWER: (5) All of the above

14. “Advertising is any paid form of non-personal presentation and promotion of ideas, goods
and services by an identified person”. Who stated this?

(1) Australian marketing Association


(2) European marketing Association
(3) China marketing Association
(4) American marketing Association
(5) Indian marketing Association

ANSWER: (4) American marketing Association

15. Advertising influences the mind of the consumers by creating desire and taste for

(1) Old products


(2) Same products
(3) New products
(4) Different products
(5) None of these

ANSWER: (3) New products

16. Magazines add credibility to the message because of the reputation in the eyes of

(1) Marketing manager

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(2) Salesman
(3) Retailers
(4) Consumers
(5) Wholesalers
ANSWER: (4) Consumers

17. Creating innovative and new ideas, identifying customers benefit, selecting specific
appeals for advertisements are the part of

(1) Message strategy


(2) Message execution
(3) Selecting media
(4) Measuring communication
(5) None of these

ANSWER: (1) Message strategy

18. Advertising gives benefits to society of large people. At the same time it adds to cost,
undermine social values, creating monopoly and encourage______________________.

(1) Sale of products


(2) Sale of interior products
(3) Sale of old products
(4) Sale of large products
(5) None of these
ANSWER: (2) Sale of interior products

19. Advertisement is a mass communication. It addresses to masses and it’s a form of


____________________________ communication.

(1) Personal
(2) Non personal
(3) Direct
(4) Indirect
(5) None of these

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ANSWER: (2) Non personal

20. Advertisement provides information regarding product, or idea in non-personal forms, as


no face to face contact is involved between _________________________.

(1) Marketer and retailer


(2) Jobber and wholesaler
(3) Buyer and customer
(4) Market manager and salesman
(5) None of these
ANSWER: (3) Buyer and customer

21. It is difficult to evaluate the impact of advertising message as there is no immediate and
accurate _______________.

(1) Legal environment


(2) Feedback mechanism
(3) Convenient purchasing
(4) Educative
(5) None of these
ANSWER: (2) Feedback mechanism

22.__________________ is the most recent and effective medium of advertisement.

(1) Newspaper
(2) Magazine
(3) Television
(4) Emails
(5) Radio

23. What is meant by the phrase CSR?

A Corporate Social Responsibility

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B Company Social Responsibility

C Corporate Society Responsibility

D Company Society Responsibility

Answer: Corporate Social Responsibility

24. What does Milton Friedman believe to be the sole responsibility of business?

A The only social responsibility of business is to its shareholders

B Managers should act in ways that balance the interest of society and shareholders

Che primary responsibility organizations have is to its employees

D The primary responsibility organizations have is to its stakeholders

Answer: The only social responsibility of business is to its shareholders

25.  What is the enlightened self-interest model of CSR?

A That it is in an organization's own best interest to put itself first rather than its ethics

B That it is in an organization's best interest to consider what a shareholder would want

C That it is in an organization's own best interest to act in an ethical way

D That it is in an organization's own best interest to follow the legislation and abide by the
law

Answer: That it is in an organization's own best interest to act in an ethical way

ANSWER THE FOLLOWING QUESTIONS

1. Illustrate the essentials of good advertising copy (Understanding)

2. Summarise the different types of advertisement copy.

3. Identify the essentials of effective advertisement copy.

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4. Explain the major components of good advertisement copy.

5. What is the contribution of AIDA how it is used in marketing. Expalain.

6. What is DAGMAR Explain the special consideration for DAGMAR.

7. Apply the approaches of DAGMAR and explain how it could be useful and
advertisement.

8. Evaluate the advantages of DAGMAR approaches.(skill

9. Classify the models of DAGMAR. (analyse)

10. Examine the objectives of DAGMAR (Analyse)

11. Evaluate the elements of advertising layout. (skill)

12. Bring out the qualities of good advertisement layout.

13. Discover the types of advertisement appeal.

Unit IV: Advertising Agency 8 Hrs


Advertising agency- Meaning, Definition, Functions, Types of advertising agency,
Organisation structure of an advertising agency, Agency compensation –Meaning, Types,
Client turnover- Meaning, Reasons for client turnover, measuring effectiveness of advertising
– Meaning, need for measuring effectiveness of advertising, Methods for measuring
effectiveness of advertising

UNIT IV ADVERTISING AGENCY

According to American Association of Advertising Agency an advertising agency is one –


i. Which is an independent organization.
ii. Which is composed of creative and business people.

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iii. Who develop, prepare and place advertisements in media.


iv. Which is for sellers seeking to find customers for their goods and services.

Philip Kotler opines that “Advertising agency is a marketing service firm that assists its
clients in planning, preparing, implementing and evaluating various activities of advertising
campaign.”
Another view expressed by Rozer and Borton is that “Advertising agency is a group of
persons who have a specialization in advertising. It includes ad copywriters, ad designers,
media selectors and advisors for various advertising issues”.

From the above definitions, the common features can be identified as:

1. Advertising agency is an independent business organization.


2. Agency provides services to its clients who are searching customers for their goods and
services.
3. Agency employs the experts, researchers etc.
4. Agency performs the functions like planning, implementation of campaign, research,
follow up advertisement, measuring effectiveness of various media for its clients.
5. It charges fees, service charges and commission from its clients.

It is emphasized that an advertising agency is an independent business organization


independently owned, and not owned by advertisers or media or suppliers—which brings to
the clients’ problems an outside objective point of view made more valuable by experience
with other clients’ sales problems in other fields. It is independent of the clients so as to be
always an advocate of advertising (seeking to apply advertising to help clients grow and
prosper); it is independent of media and suppliers so as to be unbiased in serving its clients
(the sellers of goods and services).

FUNCTIONS OF ADVERTISING AGENCY

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TYPES OF ADVERTISING AGENCY

.
Full-Service Ad Agency

A full-service advertising agency offers a comprehensive range of services that address both
the traditional and digital marketing aspects of a business. Full-service ad agencies are made
up of a team of experts, and they’re a one-stop shop of services:

 Ad Campaigns
 Strategic Planning
 TV Ads
 Social Media Management
 Content Creation
 Web Development
 Radio Commercials
 SEO
 Graphic Design
 Lead Nurturing

When to use: A full-service ad agency is appropriate if your business needs the full-stack of
marketing. They’ll be able to deliver results through a TV ad as well as a social media
campaign. Because their marketing activities are so comprehensive, you’ll also want an
internal hire who can devote a lot of their time to working with this agency.

Traditional Ad Agency

Traditional ad agencies primarily work with traditional forms of media, such as newspapers,
television commercials, radio, and print.

When to use: Traditional ad agencies are best suited towards companies who are trying to
reach a local audience. A strategic direct mail campaign for a local restaurant or a billboard
promoting the opening day of a new museum can be an effective use of traditional forms of
media.

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Digital Ad Agency

A digital advertising agency specializes in all things online. They probably have familiarity
with traditional media, but their primary focus lies in the digital sphere, including:

 Search Engine Optimization (SEO)


 Social Media Marketing
 Website Design and Development
 Lead Generation
 Email Marketing
 Account Based Marketing
 Marketing Automation

When to use: Digital ad agencies are the best fit for companies trying to reach a very specific
audience because digital marketing platforms allows for advanced targeting capabilities and
wide reach. Digital ad agencies are also a good fit for companies looking to improve their
online presence and generate more leads through their website. Digital marketing agencies
tend to have a mix of graphic designers, web developers, copywriters, ad specialists,
photographers, and videographers.

Social Media Ad Agency

Social media ad agencies focus on one thing and one thing only: social media. They are a
team of content creators and ad optimizers that will max out your social channels. They may
focus on many social channels or be experts in a single channel, such as LinkedIn. Because of
recent social media algorithm changes that resulted in a drop-off in organic reach, expect
social media ad agencies need to charge a budget for ad spend.

When to use: Social media agencies are a good fit for companies who are looking to
accomplish a single goal, such as selling skateboards, through social media platforms. These
marketing agencies usually have a creative team, a content team, and might even have
photographers and videographers.
Public Relations Ad Agency

Public relations, or PR, agencies serve to improve and manage the public image of a
company and its employees. PR agencies are often used for enterprise-level companies and

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CEOs, focusing on getting the company or the CEO featured in the news, on industry
websites, and in the community.

When to use: PR agencies are best for organizations looking to improve the public’s
awareness of the brand or their public image. PR agencies are especially important for brands
that are frequently in the public view because they help manage the public’s impression of
the organization or its leader.

Branding Ad Agency

Branding agencies specialize in, you guessed it, branding. They’ll usually conduct thorough
market research to better understand the competitive landscape and offer a range of services
that include logo design, brand name development, creative identities, and signage.

When to use: A branding agency is best if you are considering or planning an organizational
rebrand, or are interested in seeing how your current brand is perceived in the market.

Creative Ad Agency

Creative agencies focus on the design and graphics of a brand, but outsource the strategy and
execution to other marketing partners. They usually excel in logo design, print marketing,
letterheads, billboards, and business cards.

When to use: These types of agencies are well suited for organizations who need to create a
cohesive look and feel of their brand or who need to create some new marketing collateral.

Media Buying Ad Agency

Media buying ad agencies focus on media planning and media buying, and they usually tailor
their services to a specific channel. They identify a time frame, recommend a budget, and
establish markets for reaching the target audience.

When to use: Media buying agencies are great for organizations looking to only use a single
channel. These agencies may have a creative team in-house, but they are typically most
effective when paired with a creative ad agency.

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Common Mistakes to Look for When Choosing An Ad Agency

Great – now you’ve determined what kind of agency will work best for you. Next comes the
evaluation process, which can be long, arduous, and anything but crystal clear.

There are a few red flags to keep an eye out for while you’re assessing vendors.

Ad Agency that Follows a Streamlined Approach

Although ad agencies service a wide variety of industries, many don’t offer originality or
distinction. They create a streamlined approach to make their work easier without considering
what’s best for their clients’ business.

When a company requests individualized treatment, some ad agencies will awkwardly


respond, “Sorry, we don’t do that for any of our clients. We’ve always done marketing this
way, so you’ll have to accept our method and trust our marketing process.”

This is a major red flag.


Marketing is far more art than science. There is no magic formula. There is no
guaranteed blueprint. What worked last year may not work today, and what worked this
week may not work next. The same strategy that worked for an optics company may not
work for a large parts manufacturer.

We believe each client should have an individualized approach that caters to their specific
business goals.

Ad Agency that Focuses on a Single-Channel Campaign

Some ad agencies are only comfortable with what they know. If they have experience with
traditional marketing – print advertisements, TV commercials, and radio ads – they limit
themselves to that single avenue. Likewise, some digital marketing agencies might
discourage traditional marketing, calling it old-fashioned or outdated, and end up missing out
on valuable audience reach and marketing opportunities.

A successful marketing campaign uses a multi-channel approach to reach sales prospects


wherever they may be. Multi-channel campaigns often include a healthy mix of two or more

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of the following: social media marketing, website work, email or traditional mail marketing,
online or traditional sponsored ad work, content marketing, and more.
The advantages of capitalizing on multiple channels include:

 Reach a wider audience


 Increase brand awareness via multiple avenues
 Target potential customers where they are
 Increase sales opportunities
 Create a cohesive marketing strategy
 Eliminate missing gaps in marketing reach

A traditional campaign shouldn’t compete with digital marketing. Instead, these two
campaign strategies are both well-traveled roads that lead in the same direction – to
marketing success. Traditional and digital marketing campaigns work together to further the
company’s specific goals and outline success by reaching customers online, watching TV, in
the car, and out of the home.

Ad Agency that Doesn’t Offer Proper Reporting

When it comes to marketing, we aren’t the first to admit that reporting can be difficult.

Marketing is meant to change actions. But in order to change someone’s actions, you
first have to change their beliefs, and in order to change their beliefs, you have to get
their attention.

Actions may be measurable (someone filled out a form on your website), but beliefs and
attention are far harder to measure. That’s why we look at metrics such as overall traffic,
SEO, and click-through rates; these metrics can give us an educated guess about beliefs and
attention. For example, if you have more overall website traffic and new users than you did at
the same time last year, your agency is getting the attention of more folks.

THE ORGANISATION STRUCTURE OF AN AGENCY

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The organizational structure of an advertising agency consists of the same basic elements,
regardless of the firm's size. An account services team manages client relationships, the
creative team develops the advertisements and media specialists select the media outlets that
will run the ads. A senior management team takes responsibility for the agency’s business
and financial operations.

Agency Management

The senior management team may consist of a chief executive and finance director in a small
agency. A larger agency may have a management team, including a chief executive and
finance director, together with directors responsible for each of the firm’s departments. If an
agency belongs to a large group of companies, a member of the management team takes
responsibility for relationships with the board of the holding company.

Account Services

The account services team deals with clients and coordinates the work of the agency's
creative and media teams. A large agency might have three levels of account management:
account director, account executive and assistant account executive. Account directors, who
report to the agency’s management team, supervise the work of account executives and take
responsibility for a group of accounts. They may also maintain a close relationship with the
agency’s most important clients. Account executives and assistant account executives report
to account directors and manage the day-to-day operations on their accounts.

Account Planning

Account planners research the needs and preferences of the target market for a product or
service. They use their findings to develop an advertising strategy and prepare a brief for the
creative team that's working on an advertising campaign. In smaller agencies, account
planning may be part of the responsibility of an account executive. Larger agencies may
appoint a specialist as a member of the account management team.

Media

The media department is responsible for planning where and when advertisements will
appear and buying space or time in newspapers, magazines, radio, television, digital media
and outdoor media, such as poster sites and billboards. In small agencies, one person may
combine the planning and buying roles. Larger agencies have a media department headed by

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a media director who supervises the work of a team of planners and buyers. The media team
may include specialists in print, broadcast or digital media.

Creative Services

The creative services team consists of copywriters and designers, known as art directors, who
work together to develop concepts for advertisements. In larger agencies, a creative director
manages teams working on different accounts. Smaller agencies may only appoint a creative
director who works with freelance writers.

Production

Larger agencies have a production department responsible for managing advertising


campaigns. They set schedules and manage campaign budgets, coordinating the work of the
creative and media departments. The production team also interacts with external suppliers
working on advertising campaigns, such as printers, photographers and video production
companies. In smaller agencies, account executives or creative directors take responsibility
for project management.

AGENCY COMPENSATION

Meaning:

Under this compensation method, the client agrees to pay the agency a fee based on the
costs of its work plus some agreed-on profit margin. This system requires the agency to keep
detailed records of costs incurred in working on a client's account.

The agency’s compensation level depends upon how well they meet the predetermined
performance goals for its clients such as sales or market share.

Agency agencies may be compensated in a variety of ways including:

TYPES

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Commissions from Media

The agency is compensated based on the time or space it purchases for its client.

The commission has traditionally been 15% (16 2/3% for outdoor) but now is often
negotiated downward.

Many advertisers have moved to a negotiated commission system that takes the form of
reduced percentage rates, variable commission rates and minimum and maximum
compensation rates.

Fixed-Fee method

The agency charges a basic monthly fee for all of its services and credits to the client any
media commissions earned.

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Under a fee-commission combination, the media commissions received by the agency are
credited against the fee. If commissions are less than the agreed-on fee, the client must make
up the difference.

Cost-Plus Agreement

Under this compensation method, the client agrees to pay the agency a fee based on the costs
of its work plus some agreed-on profit margin.

This system requires the agency to keep detailed records of costs incurred in working on a
client’s account.

Incentive-Based Compensation

This type of Advertising Agency Compensation Methods is becoming more prevalent as


marketers strive to make their agencies more accountable and reduce costs.

 Value-Based Compensation

Agencies are guaranteed only recouped costs, with any profit coming only in certain agreed-
upon targets are met.

Percentage Charges

When agencies purchase services from other outside agencies they typically add a percentage
in the form of a markup charge as their compensation.

CLIENT TURNOVER

Customer turnover, or churn rate, is the percentage of an organization's customer base


lost during a given period of time- usually a month or annual basis. A bad churn right
can be very damaging to revenue and profitability.
It’s nearly impossible to reduce Customer Turnover without understanding which
customers are leaving and why. TTEC identifies and addresses at-risk customers to
improve customer retention through a data-driven, personalized approach.

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For example, we use predictive analytics to help brands identify customers at risk of
churn and implement steps to stop those customers from leaving. We then engage the
customer with the right personalized message at the right time to increase brand
satisfaction.

REASONS FOR CLIENT TURN OVER

Depending on the nature of your business and your number of clients, the impact of having
just one leave can be devastating. Regardless of how much your business has riding on each
of your clients, it’s in your best interest to maximize your retention rates to hold on to them
all.

1. Budget

Sometimes, a business simply runs out of money, or is forced to cut optional services, to
allow a bigger budget for something more important. This is a hard scenario to address, but
you do have a few options here -- the most effective being your coming up with a
compromise that allows the client to pay less for a smaller range of services.

In this case, you’re still taking a loss, but you’ll retain the client -- and that's the important
thing

2. Value 

If the client doesn’t see an objective value, or ROI, in your products and services, he or she
isn't going to stick around. It isn’t this person's job to calculate and prove that ROI; it’s yours.
So, take the time to show your client the value you provide.

Do that regularly if you want to secure your client's positive impressions of you.

3. Trust

Trust is a huge factor for retention of clients; if they feel that you aren’t being honest or
straightforward, they’ll question your value and withdraw their patronage. There’s only one

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way to prevent that departure, and that’s to be as honest and direct as possible, consistently
and from the beginning of the relationship.

Be honest and direct, even when "the truth" is hard to express.

4. Politics

Occasionally, you’ll run into a problem where one person in your client’s business is excited
and happy with your relationship, but a higher-up decision-maker questions it. Internal
politics can ruin a relationship through no fault of your own.

5. Apathy 

When customers review the services they have (and yours are among them), an emotional
response will keep them loyal to your brand. A lack of emotion, however, will make them
question why they’re paying for you. So, fight against apathy by including more positive
feelings in your everyday exchanges.

Offer small surprises and personal touches.

6. Personnel 

Your client may grow attached to a particular account manager or staff member on your
team. In the event of turnover or a promotion, the resulting change in personnel may prompt
that client to leave.

The best way to address this is to mitigate turnover and train your employees as consistently
as possible to reduce volatility under such circumstances.

7. Failure 

If you drop the ball on a major project or flat-out screw up, your client may take that as a sign
to leave. Reduce this possibility by admitting to your mistakes openly.

Work  hard to make up for any damages you might have caused in the process.

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8. Neglect 

Clients require regular attention to feel that their business is appreciated and that it adds
strength to the integrity of their partnership with you. If you aren’t being proactive enough
with communication, or aren’t including enough personal touches, clients may feel as though
you’ve abandoned them. 

Work hard to stay top of mind.

9. Needs 

Sometimes, clients need change. They may no longer require your services, or may hire an
in-house employee to cover what you previously supplied. And, unfortunately, there’s no
easy way out of this one. You can’t change your clients' needs.

All you can do is try to offer them new options for services in line with their new vision,
goals  and structure.

10. Competition

 Be honest: You aren’t the only supplier in town, and there are competitors who may offer a
similar service for a lower price, or a better one for the same price. If a client catches wind of
a competitor who outprices or outperforms you, you may lose that business. Therefore, it’s in
your best interest to do proactive competitive research and get ahead of these possible
departures.

Identify your weaknesses, knowing how you stack up to the competition, and
eliminate weaknesses even as you ensure that you're being the best at your strengths.

Clients won’t leave you without a good reason, especially in higher-value partnerships. You
owe it to your business to understand the psychology behind a potential client departure, and
to work proactively to start mitigating the risks in any at-risk area you identify.

MEASURING EFFECTIVENESS OF ADVERTISING

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The managerial responsibility in the area of advertising does not come to an end with the
execution of an advertising programme. Any sound managerial effort is finally interested in
goal attainment and, therefore, always ready to evaluate the results.

Evaluation of advertising or advertising effectiveness refers to the managerial exercise aimed


at relating the advertising results to the established standard of performance and objectives so
as to assess the real value of the advertising performance.

This evolution exercise is also known as advertising research. It is an attempt to know


whether the message designed properly has reached the greatest number of prospects at the
least practical cost.

It is an attempt to measure whether the time, talent and the treasure invested in the creative
activity has resulted in attaining the goals of profit maximization to the advertiser and
satisfaction to the consumers at large.

What is to be measured?
It is quite obvious that in the area of ad effectiveness evaluation, the advertiser is to measure
the ad effectiveness.

However, it is not clear as to what is ‘ad effectiveness’?

Ad effectiveness evaluation is a research activity and by its very nature, it is to establish the
cause and effect relation between the efforts and the results. This ad effectiveness is to be
seen in five areas namely, markets, motives, messages, media and overall results.

In each area, one is to look in for the advertising ability and the achievements in the light of
preset objectives. Advertising testing is indispensable because, it enables to get down to the
facts, to decide on spending to guard against the mistaken notion that you have to keep in
touch with latest trends, to separate wheat from the chaff, the sheep from goats, the winning
ideas from the duds, to multiply the results from the rupee investments so made.

When to test?
Testing of ad effectiveness is possible at any stage of advertising process. It can be done
before the advertising campaign begins or during its run or after the campaign is fully run.

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Pre-testing gives the maximum safety as much is not lost; concurrent testing makes him to
lose little more as the advertising process has advanced.

Post-testing results in maximum loss if it fails as the whole show is over and he gets the post-
mortem report, as to what has happened. Nothing is certain unless and until, we are sure
about the accuracy and reliability of feed-back that the advertiser gets from such research.

How to test?
Fortunately, the advertising has wide range of testing techniques or the methods to choose for
evaluation purpose. What methods or techniques he is going to use is dependent on when he
is going to measure the ad effectiveness.

Accordingly, there can be three sets of methods to meet his needs namely, pre-testing,
concurrent testing and post-testing methods.

I. Pre-testing methods:
1. Check-list test:
A check-list is a list of good qualities to be possessed by an effective advertisement. A typical
check- list provides rating scale or basis for ranking the ads in terms of the characteristics.

These characteristics may be honesty, attention getting, readability, reliability, convincing


ability, selling ability and the like. The ad that gets highest score is considered as the best.

2. Opinion test:
Opinion test or consumer jury test is one that obtains the preference of a sample group of
typical prospective consumers of the product or the service for an ad or part of it. The
members of the jury rate the ads as to their head-lines, themes, illustrations, slogans, by direct
comparison.

Getting preference from a juror is better than getting it from a member of general public or an
ad expert.

Jury’s preference is arrived at by seeking answers to the questions as to which ad was seen
first?

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Which was most convincing?

Which was most interesting? And so on.

Accordingly, the top ranking ad gets selected.

3. Dummy magazine and port-folio test:


Dummy magazines are used to pre-test the ads under conditions of approximation resembling
normal exposure. A dummy magazine contains standard editorial material, control ads that
have been already tested and the ads to be tested. The sample households receive these
magazines and the interviews are conducted to determine recall scores.

Port-folio test is like that of dummy magazine test except that the test ads are placed in a
folder that contains control ads. The respondents are given these folders for their reading and
reactions. The test scores are determined in the interview. The ad with highest score is taken
as the best.

4. Inquiry test:
It involves running two or more ads on a limited scale to determine which is most effective in
terms of maximum inquiries for the offers made. These inquiry tests are used exclusively to
test copy appeals, copies, illustrations, and other components.

Any of these elements may be checked. The point that is to be checked is changed and all
other components are unaltered, to get the score.

5. Mechanical tests:
These mechanical tests are objective in nature unlike the one already explained. These help in
provide good measures as to how respondent are eyes and emotions reaching a given
advertisement.

The most widely used mechanical devices are:


1. Eye Movement Camera

2. Perceptoscope

3. Psycho-galvanometer and

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4. Tachistoscope.

II. Concurrent Testing Methods:


1. Co-incidental surveys:
This is called as coincidental telephone method also whereby a sample of households is
selected, calls are made during the time programme broadcast, the respondents are asked
whether their radio or television is on, and if so, to what station or programme it is tuned?
The results of the survey are used to determine the share of response for the advertisement or
the programme.

2. Consumer diaries:
This method involves giving the families selected in advance of diary or individual diaries to
the members of the family. The selected families and individual respondents are asked to
record the details about the programme they listen or view. The diaries are collected
periodically to determine the scores.

3. Mechanical devices:
The mechanical devices used to measure the ad differences concurrently are more common to
broadcast media.

These are:
1. Audio meters

2. Psychogalvanometer

3. Tachistoscope and

4. Truck Electronic Unit.

4. Traffic counts:
Traffic counts are of special applicability to outdoor advertising. One can get good deal of
information through traffic counts. This counting is done by independent organisations may
be private or public. This work is also undertaken by advertising agencies. For instance, how
many automobiles and other vehicles were exposed to a bulletin board or a poster or a wall
painting and how many times? Can be determined.

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III. Post-testing methods:


1. Inquiry tests:
It is controlled experiment conducted in the field. In inquiry test, the number of consumer
inquiries produced by an advertising copy or the medium is considered as to the measure of
its communication effectiveness.

Therefore, the number of inquiries is the test of effectiveness which can be produced only
when the ad copy or the medium succeeds in attracting and retaining reader or viewer
attention. To encourage inquiries, the advertiser offers to send something complimentary to
the reader or the viewer, if he replies.

2. Split-run test:
A split-run test is a technique that makes possible testing of two or more ads in the same
position, publication, issued with a guarantee of each ad reaching a comparable group of
readers. It is an improvement over the inquiry test in that the ad copy is split into elements
like appeal layout headline and so on. Here also, the readers are encouraged to reply the
inquiries to the keyed or the given address.

3. Recognition tests:
Recognition is a matter of identifying something as having seen or heard before. It is based
on the memory of the respondent. It attempts to measure the ad effectiveness by determining
the number of respondents who have read or seen the ads before. To arrive at the results,
readership or listenership surveys are conducted.

4. Recall tests:
Recalling is more demanding than recognizing as a test of memory. It involves respondents to
answer as to what they have read, seen or heard without allowing them to look at or listen to
the ad while they are answering.

There are several variations of this test. One such test is Triple Association Test which is
designed to test copy themes or the slogans and reveals the extent to which they have
remembered.

5. Sales tests:

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Sales tests represent controlled experiment under which actual field conditions than the
simulated are faced. It attempts to establish a direct relationship between one or more
variables and sales of a product or service. It facilitates testing of one ad against another and
one medium against another.

To sum-up, ad effectiveness testing is a must to avoid costly mistakes, to select the best
alternative from the apparently equal alternatives, to resolve the differences of opinion and to
add to the store of knowledge having deep bearing on advertising effectiveness and
efficiency. Ad effectiveness testing can be at three levels namely, prior to, during and after
the release of an ad.

There are many methods to choose. The final results depend on the validity, reliability and
the relevance of each method employed. Testing, if done in good faith, can payout its costs
and rich dividends too.

METHODS OF MEASURING ADVERTISING EFFECTIVENESS:

With all of the advertising mediums to choose from, there’s no one way to measure


effectiveness; there are thousands.
When are you supposed to find the time to siphon through all of those methods?

Each of the following professionals have their own preferred methods for how they track the
success of their campaigns, digital and traditional. What better way to learn than from the
experts?

1. Create custom conversions

“Let's talk about the most significant platform: Facebook. The best way to measure ROI is by
utilizing custom conversions.

Custom conversions allow you to create rules for events. When you create these rules, you
can precisely measure customer actions. For example, you can filter all events to measure just
purchases of ABC product over $100. You can also use them to optimize ad delivery and
reach people who are most likely to take the desired action.”

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2. Cost per new customer

“The main metric that we use to track our advertising, whether it's for search ads or for social
media ads, is the total cost per new customer acquired.

We calculate it as the total cost of the advertisement divided by new customers brought in
through the advertisement.

While it is a very basic measurement, we're able to make the calculation quickly, and there's
no way to cheat the metric. We then compare the cost per new customer acquired to the total
revenue per new customer acquired. If the cost per new customer acquired is less than the
revenue they brought in then we know we will make a positive return on that ad.

We tend to run ads for as long as the return is positive.”

3. Compare reality to predictions

“As the CEO of a digital marketing agency, I mostly use social media to run advertisements.
Social media platforms offer several tools to measure the performance of your advertisements
such as estimated results for your objective and an estimate of people it will reach. But for
me, I measure my advertisement performance by comparing the actual results with the values
predicted by social media monitoring software.

For example, if my aim of advertising is to increase awareness of a service or product, I


measure the number of people the advertisement reaches with the amount of reach estimated
by social media tools. If the reach estimated and the actual reach has only a slight difference
then my advertisements are performing well. If not, I make some changes and try to minimize
the gap of the estimated results and the actual results as much as possible."

4. Teamwork makes the dream work

“UTM tags are key to measuring your digital marketing campaigns. UTM tags allow you to
track the effectiveness of your paid and organic social campaigns in Google Analytics. In
addition, setting up Facebook Attribution modeling allows you to measure the effectiveness
of your campaigns across multiple devices, publishers and channels.

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Using Google Analytics attribution modeling also allows you to assign a value to the
channels and touchpoints that had an influence in helping to assist in a sales conversion.

Therefore, the combination of UTM tags, Facebook and Google Analytics attribution
modeling provides today's digital marketers with accurate tools to help track every penny
spent in a digital marketing campaign across channels and devices.”

5. Know which metrics connect to your objectives

“The good thing about social media ads is that they provide you with key analytics that you
can use to determine whether your ads are hitting key performance indicators.

For example, with Facebook and Instagram ads, the most important metrics that you want to
consider to determine whether your ads are successful and depending on your campaign
objectives are the following:

CTR (click through rate)


How many people are clicking on your ads in comparison to how many people have seen
your ads? If this metric is too low, it means that your ad is underperforming.

CPC (cost per click)


What is the cost you are paying for someone to click on your link? This amount is calculated
by looking at the amount you have spent on one campaign divided by the number of people
that have clicked on your ad. If this figure is too high, it means that your ad is
underperforming.

CPL (cost per lead)


When your campaign objective is lead generation, this is the cost that you are paying to
acquire a lead. As a business, you need to understand how many leads you will need to
generate in order to acquire a client and then what the value of that client is. From this
understanding, you will be able to work out what is a sensible cost per lead. This can help
you keep your costs to a minimum as well as ensure that you generate a good return on
investment (ROI).

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CPA (cost per acquisition)


If your campaign objective is a sale, this is the cost that you are paying to acquire a client or
make a sale. This number should be well under the amount that you make in revenue to
ensure that you generate a good ROI. You may also see other metrics like CPP (cost per
purchase) or CPS (cost per sale) which are essentially the same thing: how much you are
paying to get a purchase or sale in comparison to the revenue that you make when the
purchase or sale is made.

Once you understand your key metrics and you know your numbers, it is very easy to
measure the success of your advertising if you are using Facebook or Instagram ads.”

6. Track a unique code

“We have used magazines previously to aid the advertisement of some of our higher value
properties, as research has shown us that our target market reads certain publications.

In the advertisements listed, we will put a unique coupon code for people to use if/when they
visit the website. In addition, when people call in, all reps are obliged to ask where the caller
saw the property advertised; any relating to the magazine are added to the tracking sheet
which is uploaded to the inquiry and sales database daily. Our reps are extra vigilant on
asking for the source when we currently have magazine ads live.”

7. ROI for the win

“No matter the medium, the success of your advertising depends on two metrics: ROI on
spend vs revenue attributed, and/or brand awareness and engagement. I say and/or because
rarely should your organization run a single campaign to achieve both of those goals. They're
completely separate and require different approaches to succeed.

ROI
In order to effectively measure ROI, every advertisement needs to have tracking associated
with it. Billboards need a specific phone number or webpage associated with the ad, social
media and other digital ads need to have tracking links, etc. Before the campaign starts, you
need clear goals and a clear timeline, because without expectations it is impossible to
measure success.
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Measuring Awareness
This one is a little harder to determine. One way to approach this is to do some back-of-the-
napkin math to determine how much an engagement or new set of eyes on your brand is
worth in terms of dollars. If you can establish that, you're back to simply measuring ROI of
revenue attributed to an ad.

Advertising is all about testing and reviewing, so if you're not going back to test the success
of your campaigns you're just shooting in the dark.”

8. ROI takes the L

“Trying to measure ROI in this scenario isn’t worth your effort because you’ll never get close
to accurate. Why? Two main reasons:

1. You usually won’t be able to capture the realities associated with the true costs that enable
an ad, or the other touchpoints that may have had an influence. The cost of an ad is not
simply the cost per click. How much did that landing page cost you? The article they viewed
two months prior? How about the case study they viewed after the ad? How about the cost of
winning that last project so that you had a case study in the first place? How about the trade
show that person saw your company at last year? How many impacts are these various
touchpoints having, and how many people are you dividing the cost by?

2. Even at a superficial level, if you’re in the B2B services realm, you likely care about
lifetime customer value (LCV), which is generally pretty straightforward to measure in
hindsight, but often super challenging to predict ahead of time. On top of that, LCV doesn’t
cover many factors that determine the true value of a new customer.

UNIT IV MCQ

1. What does the importance of ethical behaviour, integrity and trust call into question?

A The extent to which managers should attempt to change the underlying beliefs and values
of individual followers

B Who does what

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C What we do next

D None of these

Answer: The extent to which managers should attempt to change the underlying beliefs and
values of individual followers

2. Which of the following would most effectively act as the primary objective of a business
organisation?
A To make a profit

B To procure resources

C To communicate with shareholders

D To mediate between the organisation and the environment

Answer: To make a profit

3.Which of the following does the term Corporate Social Responsibility relate to?

A Ethical conduct

B Environmental practice

C Community investment

D All of the above

Answer: All of the above

4. What is Ethics to do with?

A The wider community

B Business

C Right and wrong

D Nothing

Answer: Right and wrong

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5. Which legislation relates to the concept of business ethics?

A Freedom of Information Act

B Food Act

C Building regulations

D All of these

Answer: Freedom of Information Act

6. A stakeholder orientation includes all of the following activities except:

A Generating Data About Stakeholder Groups

B Assessing The Firm's Effects On Stakeholder Groups

C Distributing Stakeholder Information Throughout The Firm

D Minimizing The Influence Of Stakeholder Information On The Firm

Answer: Minimizing The Influence Of Stakeholder Information On The Firm

7. A (n) ________ is a problem, situation, or opportunity requiring an individual, group, or


organization to choose among several actions that must be evaluated as right or wrong.

A Crisis

B Ethical Issue

C Indictment

D Fraud

8. What type of justice exists if employees are being open, honest, and truthful in their
communications at work?

A Procedural

B Distributive

C Ethical

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D Interactional

Answer: Interactional

9. Better access to certain markets, differentiation of products, and the sale of pollution-
control technology are ways in which better environmental performance can:

A Increase Revenue

B Increase Costs

C Decrease Revenue

D Decrease Costs

Answer: Increase Revenue

10. Atmospheric issues include all of the following except:

A Acid Rain

B Global Warming

C Air Pollution

D Water Quantity

Answer: Water Quantity

11. Most companies begin the process of establishing organizational ethics programs by
developing:

A Ethics Training Programs

B Codes Of Conduct

C Ethics Enforcement Mechanisms

D Hidden Agendas

Answer: Codes Of Conduct

12.  When a firm charges different prices to different groups of customers, it may be accused
of:

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A Cultural Relativism

B Money Laundering

C Facilitating Payments

D Price Discrimination

Answer: Cultural Relativism

13. Successful global initiatives addressing standards for business must begin and end with:

A the role of corporate governance and shareholder power in corporate decision making

B social activism

C the implementation of standardized ethics programs

D the consolidation of economic and environmental efforts

Answer: the role of corporate governance and shareholder power in corporate decision
making

14. The social economy partnership philosophy emphasizes:

A Cooperation And Assistance

B Profit Maximization

C Competition

D Restricting Resources And Support

Answer: Cooperation And Assistance

15. Which of the following is a problem presented by ethics audits?

A They may be used to reallocate resources

B They identify practices that need improvement

C Selecting auditors may be difficult

D They may pinpoint problems with stakeholder relationships

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Answer: Selecting auditors may be difficult

16. The first step in the auditing process should be to secure the commitment of:

A Employees

B Top Executives And Directors

C Stockholders

D Customers

Answer: Top Executives And Directors

17. ____________ refers to a strategic process involving stakeholder assessment to create


long-term relationships with customers, while maintaining, supporting, and enhancing the
natural environment.

A Eco-strategy

B Green marketing

C Superfund reauthorization

D Recycle and reprocess management

Answer: Green marketing

18. The hand-of-government refers to the

A Ability Of The Government To Interfere In Business Negotiations

B Role Of Corporations To Be Profitable Within The Law

C Effect Of National Politics On Business Decisions

D Impact Of Changing Government Regulations

Answer: Role Of Corporations To Be Profitable Within The Law

19. An organisation's obligation to act to protect and improve society's welfare as well as its
own interests is referred to as

A Organisational Social Responsibility

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B Organisational Social Responsiveness

C Corporate Obligation

D Business Ethics

Answer: Organisational Social Responsibility

20. Managerial ethics can be characterised by all of the following levels except

A Immoral Management

B Amoral Management

C Demoral Management

D Moral Management

Answer: Demoral Management

21. Which of the following is not one the underlying principles of the corporate governance
Combined Code of Practice?

A Openness

B Integrity

C Accountability

D acceptability

Answer: acceptability

22. A company may become insolvent if it

A has negative working capital

B cannot meet its budgeted level of profit

C makes a loss

D cannot pay creditors in full after realisation of its assets

Answer: cannot pay creditors in full after realisation of its assets

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23. Fraudulent trading may be

A a civil offence committed by any employee

B a criminal offence committed only by directors of a limited company

C a civil and a criminal offence committed only by directors of a limited company

D a civil and a criminal offence committed by any employee

Answer: a civil and a criminal offence committed by any employee

24. Disqualification of directors may result from breaches under the

A Sale of Goods Act 1979

B Financial Services Act 1986

C Companies Act 2006 and Insolvency Act 1986

D Health and Safety at Work Act 1974

Answer: Companies Act 2006 and Insolvency Act 1986

25. Directors may not be disqualified for

A continuing to trade when the company is insolvent

B persistent breaches of company legislation

C paying inadequate attention to the company finances

D being convicted of drunken driving

Answer: being convicted of drunken driving

ANSWER THE FOLLOWING QUESTIONS 8 MARKS

1. What is advertising agency and explain its features.

2. Explain the types Advertising agency (understanding)

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3. Examine the common mistakes occurs while changing advertisement agency.


(analysing)

4.Identify the different organisation structure of an agency. (applying)

5. What is agency compensation? Outline the types of agency. (understanding)

6. What is client turnover? Identify the reasons for client turnover. (apply)

7. How advertisement tools can be measured? illustrate with suitable examples.


(remembering).

8. Write a note on Pre testing method.

9. Write note on a) Concurent testing b) Post testing method

10. Write note on Post testing method.

Unit V: Ethical Issues in Advertising 8 Hrs


Introduction, Suggestions for controlling unsocial and unethical advertising, Advertising
standards council of India (ASCI) - Introduction, Objectives of ASCI, Misleading advertising
– Advertising to children, Product endorsements, Stereotyping, Cultural religious and racial
sensitivity in advertising.

UNIT – V ETHICAL ISSUES IN ADVERTISING

INTRODUCTION
Human beings create a number of different worlds. One of the worlds that human beings have
created is the world of money, trade, commodities and exchange. To an outsider, this often
feels like a world full of beauty and ugliness in equal proportions – messy, flashy, exotic and
sometimes even scary. Advertisers are often so engrossed with the nitty-gritty of the

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profession and dealing with as well as outsmarting competition, that they are unable to
observe and comprehend this phenomenon.

The business arena can be viewed as the world of buyers and sellers, producers and
consumers, bosses and workers, a world of money. It is in effect nothing less than an
ontological category – A Way of Being. It is not accidental to who we are, but rather, it
defines the way we relate to each other as well as to the world around us. However, we must
realise that it is not the be-all and end-all, and that there are other ways of Being; the most
fundamental of these being Ethics.

As per Geoffrey Klempner, Ethics is defined by an “I-thou” relationship as follows:

“When I engage another person in moral dialogue, there are not two parallel processes
of practical deliberation going on, his and mine, but only one. “

This is in clear contrast with the case of a dialogue between traders or politicians, where each
is privately deliberating as to how to gain the upper hand. In the former case, one is already
committed to the practical consequences of agreement, and of doing the action which by the
combined light of both the parties’ valuational perspective, is seen as the thing to be done.

SUGGESIONS TO CONTROLLING UNSOCIAL AND UNETHICAL


ADVERTISING

Year on year, roughly 70% of the complaints the Advertising Standards Authority (ASA)
receives relate to misleading advertising, proving that this is an issue that consumers take
seriously and that all marketers should be mindful of.

Here are our top tips to help you avoid the most common mistakes:

1. Don’t omit key information

All relevant information, including significant conditions to an offer, should be made clear


in the ad itself. These should be stated close, or clearly linked, to the main claim. Significant
conditions will vary depending on the circumstances, and we have further guidance
on Promotional Marketing if you’re looking for more detail.

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2. Make sure your pricing is clear

Pricing should relate to the product advertised, and include all non-optional charges (such


as VAT and booking fees). We recently produced new guidance for secondary
ticket providers and updated our guidance for the travel sector, and we have specific
guidance for other sectors too, but the main principles apply across all sectors.  Also, don't
forget about delivery charges.

3. Don't exaggerate the capability or performance of a product

Advertising is all about presenting a product in the best possible light, but don’t over-claim in
a way that’s likely to mislead.  Obvious exaggerations that the average consumer is unlikely
to take literally (and that are unlikely to mislead) are allowed though.

4. Ensure any qualifications are clear

Qualifying text (small print or footnotes) can be used to clarify a claim in an ad, but don’t
use it to hide important information or in a way that misleadingly contradicts the headline
claim. For example, it's often contradictory to claim "X% Off Everything!*" and then qualify
this with "*exclusions apply".

5. Have the evidence to back up your claims

Remember that before you run an ad, you should hold adequate evidence to support all
objective claims or those that are capable of objective substantiation, bearing in mind the
impression consumers are likely to take from the ad. The level of evidence that is required
will depend on the type of claim being made and the product in question. For example, for
some health, beauty or slimming claims robust clinical trials may be required.

6. Be careful of claims in product names

Remember that all ad content, including your company or product names can count as
potential claims. If your product name implies an unproven effect or benefit, this could be
problematic – even if it appears in a pack shot.

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Take a look at Section 3 for a more detailed look at the rules surrounding misleading
advertising, which cover things like the use of testimonials and comparisons.  These rules
apply to all marketing, but some sectors/claims have their own specific rules that you might
need to think about as well - such as environmental claims, weight control and
slimming and food supplements and associated health or nutrition claims.

.ADVERTISING STANDARDS COUNCIL OF INDIA (ASCI)

In India, as in several advanced economies, there is only one body for Self-Regulation in
Advertising – the ASCI, which is concerned with safeguarding the interests of consumers
whilst monitoring/guiding the commercial communications of Practitioners in Advertising on
behalf of advertisers, for advertisements carried by the Media, in their endeavours to
influence buying decisions of the Consuming Public.:

The Advertising Standards Council of India (ASCI) established in 1985 is a voluntary self-
regulatory council, registered as a not-for-profit Company under section 25 of the Indian Cos.
Act with the objective of ensuring that all advertising should be legal, decent, honest and
truthful along with a sense of social responsibility to the consumer and to the rules of fair
competition.

The sponsors of the ASCI, who are its principal members, are firms of considerable repute
within industries in India, which comprise of advertisers, media, and advertising agencies and
other professional or ancillary services connected with advertising practice. The ASCI is not
a Government body, nor does it formulate rules for the public or for the relevant industries.

It has adopted a Code for Self-Regulation in Advertising. It is a commitment to honest


advertising and to fair competition in the market-place. It stands for the protection of the
legitimate interests of consumers and all concerned with advertising – advertisers, media,
advertising agencies and others who help in the creation or placement of advertisements. As
the Code becomes increasingly accepted and observed pro-actively, three things will begin to
happen.

i. Fewer false, misleading claims

ii. Fewer unfair advertisements

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iii. Increasing respectability

This only means more freedom for an agency to practise their craft or carry on their business
effectively. As a member of ASCI, one can mould the course of Self-Regulation and
participate in the protection of healthy, effective advertising. One can have a say, through the
Board of Governors, in the further development of the Code and future appointments to the
Consumer Complaints Council (CCC). Membership of the ASCI (open only to Firms) entitles
one to appoint nominee to discharge one’s function as a member, including standing for
election to the Board of Governors and voting at general meetings.

ASCI encourages the public to complain against advertisements which they consider to be
false, misleading, offensive or unfair. All of these complaints are evaluated by an
independent Consumer Complaints Council (CCC).

Objectives of ASCI:
The main objects to be pursued by the Company on its incorporation are:

To monitor administer and promote standards of advertising practices in India with a view to.

1. Ensuring the truthfulness and honesty of representations and claims made through
advertising and safeguarding against misleading advertising.

2. Ensuring that Advertising is not offensive to generally accepted norms and standards of
public decency.

3. Safeguarding against the indiscriminate use of advertising for the promotion of products or
services, which are generally regarded as hazardous to society or to individuals or which are
unacceptable to society as a whole.

4. Ensuring that advertisements observe fairness in competition and the canons of generally
accepted competitive behaviour.

5. To codify adopt and from time to time modify the code of advertising practices in India
and implement, administer and promote and publicize such a code.

6. To provide facilities and machinery in the form of one or more Consumer Complaints
Councils having such composition and with such powers as may be prescribed from time to

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time to examine complaints against advertisements in terms of the Code of Advertising


practices and report thereon.

7. To give wide publicity to the Code and seek adherence to it of as many as possible of those
engaged in advertising.

viii. To print and publish pamphlets, leaflets, circulars or other literature or material that may
be considered desirable for the promotion of or carrying out of the objects of the Company
and disseminate it through any medium of communication.

Consumer Complaints Council:


The Board of Governors shall appoint Consumer Complaints Council, the number of
members of which shall not be more than twenty one. Out of these 21 members, 12 are from
civil society and nine from advertising practitioners. The CCC decides upon the complaints
within a period of 4 to 6 weeks.

The Consumer Complaints Council shall examine and investigate the complaints received
from the consumers and the general public, including the members of the Company,
regarding any breach of the Code of Conduct and/or advertising ethics and recommend the
action to be taken in that regards.

Power of the Consumer Complaints Council:


i. Each Council shall be entitled to receive complaints from the Board of Governors, the
Consumers, the general public and members of the Company.

ii. Each Council shall enquire, investigate and decide upon the complaints received by it
within the framework of the Code of Conduct adopted by the Company.

iii. All the decisions of each Council shall be by simple majority, in writing and may specify
the action to be taken in respect of the offending advertisement.

ASCI propagates its Code and a sense of responsibility for its observance amongst
advertisers, advertising agencies and others connected with the creation of advertisements,
and the media.

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ASCI encourages the public to COMPLAIN against advertisements with which they may be
unhappy for any reason and ensures that each complaint receives a prompt and objective
consideration by an impartial committee Consumer Complaints Council (CCC) which takes
into account the view point of the advertiser, and an appropriate decision is communicated to
all concerned. ASCI endeavours to achieve compliance with its decisions through reasoned
persuasion and the power of public opinion.

The Role and Functioning of the ASCI & its Consumer Complaints Council (CCC) in dealing
with complaints received from consumers and industry, against ads which are considered as
false, misleading, indecent, illegal, leading to unsafe practices, or unfair to competition, and
consequently in contravention of the ASCI code for self-regulation in advertising.

If an ad is to be reviewed for its likely impact on the sensibilities of individual viewers of TV,
or readers of press publications, it is required to convey to the advertiser concerned, the
substantial issues raised in the complaint, in the exact context of the specific ad, as conveyed
by the perception of the complainant, and to elicit the appropriate response by way of
comments from the advertiser.

Only then will the CCC of the ASCI, be in a position to deliberate meaningfully on the issues
involved, and to arrive at a fair and objective conclusion, which would stand the scrutiny of
all concerned with the right to freedom of expression, and the freedom of consumers to
choose the products /services made available to them in the marketplace.

For this it is required to have a clearly readable copy or clipping of the ad under complaint,
with full particulars of name and date of publication, or a printout of an ad or promotion on a
website or in case of a T.V. Commercial (TVC), the channel, date and time or programme of
airing, and a description of the contents of the TVC, along with a hard copy of the complete
complaint preferably signed by the complainant.

The ASCI receives and processes complaints against ads, from a cross section of consumers,
the general public and Industry, in the interests of all those who rely on advertising as a
commercial communication, and this covers individuals, practitioners in advertising,
advertiser firms, media, ad agencies, and ancillary services connected with advertising. As a
policy ASCI does not disclose the identity of the complainant to the advertiser.

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In the case of complaints which were upheld by the CCC during the past year, over 80% of
such ads have been withdrawn or modified appropriately by the advertisers or ad agencies
involved, and the concerned media have also confirmed that they would not carry such
offending ads/TVC.

ASCI’s Mission:
ASCI has one overarching goal- to maintain and enhance the public’s confidence in
advertising. ASCI seeks to ensure that advertisements conform to its Code for Self-
Regulation which requires advertisements to be:

i. Truthful and fair to consumers and competitors.

ii. Within the bounds of generally accepted standards of public decency and propriety.

iii. Not used indiscriminately for the promotion of products, hazardous or harmful to society
or to individuals particularly minors, to a degree unacceptable to society at large.

The Advertising Standards Council of India (ASCI) became more powerful after a recent
Government notification in The Gazette of India: Extraordinary {Part II – sec. 3(i)}, on 2
August 2006 by which TV commercials must abide by the Advertising Standards Council of
India (ASCI) code. The amendment made in Cable Television ‘Networks (Amendment)
Rules, 2006 now states that “(9) No advertisement which violates the Code for Self-
Regulation in Advertising, as adopted by the Advertising Standards Council of India (ASCI),
Mumbai for public exhibition in India, from time to time, shall be carried in the cable
service”. Since recent statistics (source:
http://www.indiantelevision.com/mam/headlines/y2k6/ aug/augmam52.htm) suggest that in
as many as 85 per cent of the complaints were upheld against TV advertisement. ASCI has
now sought the support of the associations concerned such as Indian Broadcasting
Foundation (IBF) to persuade TV channels to adhere to ASCI’s code as well as implement
the decisions of its CCC in this regard. Many of the advertisers/channels have confirmed In
writing to have forthwith complied with the decisions of CCC, either by withdrawing or
modifying appropriately the subject advertisements.

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Creating a false or misleading impression

Businesses are not allowed to make statements that are incorrect or likely to create a false
impression.

This rule applies to their advertising, their product packaging, and any information provided
to you by their staff or online shopping services. It also applies to any statements made by
businesses in the media or online, such as testimonials on their websites or social media
pages.

For example, businesses cannot make false claims about:

 the quality, style, model or history of a product or service


 whether the goods are new
 the sponsorship, performance characteristics, accessories, benefits or use of products
and services
 the availability of repair facilities or spare parts
 the need for the goods or services
 any exclusions on the goods and services.

It makes no difference whether the business intended to mislead you or not. If the overall
impression left by a business’s advertisement, promotion, quotation, statement or other
representation creates a misleading impression in your mind—such as to the price, value or
the quality of any goods and services—then the behaviour is likely to breach the law.

There is one exception to this rule. Sometimes businesses may use wildly exaggerated or
vague claims about a product or service that no one could possibly treat seriously or find
misleading. For example, a restaurant claims they have the ‘best steaks on earth’. These types
of claims are known as ‘puffery’ and are not considered misleading.

Examples of false or misleading claims

Some examples of business behaviour that might be misleading are:

 a mobile phone provider signs you up to a contract without telling you that there is no
coverage in your region

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 a real estate agent misinforms you about the characteristics of a property by


advertising 'beachfront lots' that are not on the beach
 a jewellery store advertises that a watch 'was' $200 and is 'now' $100 when the store
never sold the watch for $200
 a business predicts the health benefits of a therapeutic device or health product but has
no evidence that such benefits can be attained
 a transport company uses a picture of aeroplanes to give you the impression that it
takes freight by air, when it actually sends it by road
 a company misrepresents the possible profits of a work-at-home scheme, or other
business opportunity.

False or misleading advertising

These are some of the most common types of false or misleading advertising reported to the
ACCC.

1. Fine print and qualifications

It is common practice for advertisements to include some information in fine print. This
information must not contradict the overall message of the advertisement. For example, if an
advertisement states that a product is ‘free’ but the fine print indicates some payment must be
made, the advertisement is likely to be misleading.

2. Comparative advertising

Some advertisements or sales material may compare products or services to others on the
market. These comparisons may relate to factors such as price, quality, range or volume.

Comparative advertising can be misleading if the comparison is inaccurate or does not


appropriately compare products.

3. Bait advertising

Bait advertising takes place when an advertisement promotes certain (usually ‘sale’) prices on
products that are not available or available only in very limited quantities. It is not misleading
if the business is upfront in a highly visible, clear and specific manner about the particular
product ‘on sale’ being in short supply or on sale for a limited time.

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4.Environmental (‘green’) claims

Environmental claims may appear on small household products such as nappies, toilet paper,
cleaners and detergents through to major white goods and appliances. They may include
statements about environmental sustainability, recycling, energy and water efficiency or
impact on animals and the natural environment, for example 'green', 'environmentally safe' or
'fully recycled'.

Businesses making these claims must be able to substantiate them.

ADVERTISING TO CHILDREN

About advertising and children


Children experience advertising in many forms – on TV, YouTube, apps, radio, billboards,
magazines, newspapers, movies, the internet, advergames, text messages, social media and
more.

And advertising works on children. For example, the more TV a child watches, the more toys
that child is likely to want and ask for.

This is why it’s important for children to learn that advertisements are trying to make you
buy something. Advertisements are trying to influence the way you think or change your
mind about something. And advertisers always aim to make their products look good,
perhaps even better than they really are.

Advertising affects children in different ways. How children handle advertising can depend
on several things, including their age, knowledge and experience. You can help your children
learn how to handle the influence of advertising by giving them opportunities to question and
talk about what they see in the media. This is an important life skill for children.

Young children and advertising


At 0-2 years, children can’t tell the difference between advertising and actual programs.

And at 3-6 years, children:

 can identify advertisements and distinguish them from programs on TV

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 might not be able to distinguish between entertainment and advertising on YouTube –


for example, unboxing videos that combine play with toy promotion might be
confusing for them
 might not understand that advertisements are trying to sell something
 tend to think of advertisements as being entertaining or helpful announcements
 won’t generally be critical of the claims that advertisers make.

You can limit the effects of advertising on your young child by limiting the amount of
commercial TV or YouTube she watches.

If your child has a favourite program on commercial TV, consider subscribing to a streaming
service, so your child can watch it without advertisements. You could also consider paying a
bit more to avoid advertisements on YouTube or to get ad-free versions of apps.

Primary school-age children and advertising


At 7-11 years, children:

 can understand that advertisements are trying to sell them something


 can remember advertising messages
 can recognise some persuasive techniques like advertisements overstating how good
products are
 don’t always want to question what advertisements are doing
 might not always understand that products aren’t as good as advertisements say they
are, or that advertisers might not be telling them any of the bad points.

To limit the effects of advertising on school-age children, the most important thing you can
do is talk about advertisements and encourage children to think about what they’re trying to
do.

It’s a good idea to focus on the advertisements that your child sees most often. For example,
you can get your child to develop a questioning attitude towards advertisers’ claims by asking
him to think about what’s being advertised. That is, what’s the product in this advertisement?
What is it for? Who is it for?

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You can also ask your child about the strategies that are being used to sell a particular
product. This can help your child work out how an advertisement makes a product look good.

Here are some questions to help children start thinking:

 Does the advertisement make you feel something – for example, happiness, the desire
to belong, or fear?
 Does the advertisement pay popular celebrities or sports stars to promote the product?
 Does the advertisement link an idea with the product – for example, does the ad make
children seem more grown up when they use the product?
 Is the advertisement promoting the product by giving you something for free – for
example, do you get a toy if you buy a kids’ meal from a fast food chain?

This will help make the point that you can’t believe everything you see on TV, online or on
social media – especially what you see in advertisements.

Teenagers and advertising


At 12-13 years, children:

 can usually understand the purpose of advertising, and can use advertised information
to decide what they want
 might not understand how advertising makes things more expensive
 might not recognise tricky product placement strategies
 might not know that clicking an advertisement on social media sends data to the
makers of the advertisement.

Over 14 years, children:

 might understand how the marketplace works and might be sceptical about
advertisers’ claims
 might not know that social media platforms like Instagram, Facebook, YouTube and
Snapchat collect user data, which they use to target advertising to users
 might not have the skills to make judgments about political advertisements,
particularly during election campaigns.

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You can limit the effects of advertising on teenagers by talking about the way
advertisements work to sell ideas as well as products. For example, some advertisements link
products with the ‘perfect’ life the people in the ads seem to have.

Older children can also start thinking about the subtle impacts of advertising. For example,
you could encourage your child to think about how advertisements influence ideas about
what girls, boys, women and men should look like, wear, do, eat and drink. Or you could get
your child thinking about political advertising and how it works on people’s attitudes towards
things like prosperity, fairness and so on.

Here are some questions to get older children and teenagers thinking:

 How real is the lifestyle being advertised? Do you know anyone who lives like that?
 Are the foods and drinks in advertisements healthy choices? Why aren’t vegies and
fruit advertised like burgers?
 What do advertisements say about gender, families, body shape and cultural
diversity? Do they reflect real life?
 How does the information you post about yourself on social media influence the kinds
of advertisements you see on social media?

Older children also need to learn about ‘the small print’. For example, a phone contract is not
‘only’ $25 a month – there’s also an ongoing commitment.

When you talk with your child about advertising, your goal is to help her work out the
difference between products and the strategies that are used to sell them. You can also help
her learn the difference between advertising messages and other media messages that are
designed to entertain, inform or educate.

Spotting common advertising strategies


Here’s a list of common advertising strategies. You could make a game out of spotting the
strategies with your child.

 The bribe: you get a free toy when you buy a product and you’re encouraged to
collect them all – for example, toys packaged with takeaway meals and small toys in
cereal packets.
 The game: you can play a game and win a prize if you buy a product.

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 The big claim or promise: a product tastes excellent, or it’s the best in the world. Or
a product will bring you fun and excitement and make your life better – for example,
you’ll have more friends or be able to run faster.
 The appeal to emotions: the advertisement tugs at your heart strings or makes you
afraid for your safety.
 The super-person: popular or famous people promote a product to make you think
you can be just like them if you have the product too.
 The cartoon character: a cartoon character you know and like tells you about a
product to make it more attractive.
 The special effects: filming tricks like close-ups, soft lighting and artificial sets make
a product look larger or better than it really is.
 The repeat: showing the same thing over and over makes you remember and
recognise a product.
 The music: catchy tunes or popular songs make you like an advertisement – and the
product it advertises – more.
 The joke: laughing makes you like an advertisement – and the product it advertises –
more.
 The story: the advertisement tells an interesting story so you want to keep watching.

PRODUCT ENDORSEMENT

Definition: Product Endorsement

When a product is recommended or its virtues are being stated by a celebrity in a written or
public statement or by a professional group, it is called product endorsement. Authoritive
figure endorsing a product is the key element of the marketing campaign and the business
advertisement. In order to generate brand awareness and significant sales revenues
endorsement is an extremely effective marketing tool.

 Product
 Product Adaptation
 Product Bundle
 Product Concept
 Product Development

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In order to promote its products or services brand use celebrities thus involving a lot of
complexities such as regulatory , commercial and legal considerations which will decide how
the brand can use the celebrity for promotion of the product. Many points are negotiated
before signing the celebrity. Consumers still gets fascinated by the idea of using the product
that is being used by someone wealthy or famous, whom they trust and idolises. By buying
the product the customers becomes affiliated to that person. But these are very costly for
example many stars participated in charity endorsement using the product endorsement as
public relations campaign.

The product endorsement doesn’t guarantee that the product will be good but it means that
the company was successful to work on its public relations connections by involving big
names along with its brand. Hand written testimonials are used for endorsements, stating
about how the product changed their lives. In modern times such testimonials are written by
excerpts, which are found printed on the product packaging directly. In order to create a
visual connection between the endorser and the product, companies also use photographs of
famous people on their products. For example sports stars appearing in the pack of health
drinks.

ADVANTAGES AND DISADVANTAGES OF PRODUCT ENDORSEMENT

If you watch any television at all, then you’ve seen a product endorsement. These
endorsements usually take the form of a commercial, where a celebrity, an industry
professional, or someone who is similar to the targeted demographic pitches the item to the
people watching.

You’ll find product endorsements on social media, in magazines, and any other place where
advertising is allowed.

Do product endorsements generate better sales? They do, because people want to feel like
they are close to their favorite celebrities or brands that understand their needs. With a
product endorsement come a few disadvantages that must be considered as well.

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Just ask Subway about Jared Fogle.

Here are some of the key product endorsement advantages and disadvantages to consider
before starting this type of marketing campaign.

List of Product Endorsement Advantages

1. Product endorsements help your brand be able to stand out.


A product endorsement gives you a chance to differentiate your company and brand message
from what your competitors are doing. Including someone who is well-known in an
advertisement may also improve consumer ad recall, which allows you to stay at the top of
their mind more often. That trait means your product becomes the first choice if a consumer
feels like they need it.

2. It may open up new markets for your business.


A celebrity endorsement gives you the opportunity to reach out to a different set of
demographics and new markets with the products that you offer. One classic example of this
benefit is Nike. Before they partnered with Michael Jordan, the sportswear brand was
primarily a track and tennis brand. After their partnership, the company grew so much that it
has been able to reach into other sports as well. They recently signed runner Justin Gallegos,
who has cerebral palsy, to create and promote another new line of products.

3. A solid product endorsement can build brand credibility.


People feel an attachment to their favorite celebrities. When they see people to whom they
can relate, it makes them feel like the business or brand message understands their needs.
Even if the product isn’t used, there is a trust built with the endorsement which means the
consumer would purchase it if they have the need. Endorsements also reassure customers that
the quality of a product will meet their expectations.

4. It creates a brand trigger for consumers.


When a well-known name is endorsing products or services, it creates a trigger in the mind of
the consumer. Every time they see that person somewhere, there is a chance that they’ll think
of the product being pitched. What is unique about this advantage is that even a fictional
character can become the trigger if a consumer sees something similar in real life. What

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would you associate with a gecko? GEICO Insurance. What about a duck? AFLAC, of
course. As long as the endorsement is memorable in a positive way, the trigger is set for the
consumer.

5. Endorsements give your brand personality.


GEICO Insurance has created humorous advertisements for years. When you see their
advertisement, you know that there is the potential to have a laugh. That humorous
personality creates a stronger connection to the message that is being shared: that you can
save up to 15% on your car insurance by switching to them. When you have someone
endorse your products or services, even if it is with a fictional character, then you have an
opportunity to establish a brand personality. That personality becomes another relationship
building tool that can be used to improve loyalty, message retention, and consumer sales.

6. It speeds up the time required to establish a market footprint.


When there is a recognizable celebrity, someone who would be considered an A-List person,
then you can speed up the process of bringing a new product to the market. It’s like having a
friend recommend a new restaurant for you. Because they enjoyed it, you have confidence
that your experience will be the same. That message is relayed through the endorsement,
which encourages consumers to purchase the product if they have the need.

7. It creates a higher retention rate for future customers.


When you have a proper endorsement pitching your goods or services, the customers that do
convert for you come at a 40% higher retention rate compared to a standard advertisement. If
your endorsement is through an influencer, then the rates are even higher. You get to
piggyback onto the loyalty that consumers have with the endorsement with your brand, which
encourages repeat buys in a way that is difficult to generate with other forms of marketing.

List of Product Endorsement Disadvantages

1. Endorsements become associated with the brand image.


Nike may have scored some positive energy with the signing of Justin Gallegos, but it was
not the case when they re-signed Colin Kaepernick to a deal that runs through 2028.
Kaepernick is seen as the face of the NFL kneeling protests during the U.S. national anthem,
which some have interpreted as a sign of disrespect. In response to Nike signing Kaepernick

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to a product endorsement deal, many people took to social media to show how they were
destroying shoes, socks, and other apparel they already owned.

2. The image of an endorsement changes over time.


Subway knows full well how the image of an endorsement personality changes over time.
Jared Fogle attributed significant weight loss to eating Subway sandwiches every day. For 15
years, he endorsed the brand, often with other celebrities, promoting the healthy alternative of
a sandwich for fast food. Then he plead guilty in August 2015 to possessing child
pornography and traveling to pay for sex with children. Unit counts are down 7%, traffic
counts are down 25%, and domestic sales systems declined by $200 million while their
competitors saw gains of $540 million.

3. It is expensive to hire people to endorse products.


PepsiCo once signed Beyonce to a 10-year endorsement contract that was worth $50 million.
Under Armour signed Stephen Curry to an endorsement deal that is worth about $4 million
per year through 2024. Derrick Rose once signed a 13-year contract with Adidas for $185
million, which was the largest endorsement deal in sports history in 2012. If you want to put
a famous face with your product to pitch it, there is going to be a cost associated with it that
some businesses may not be able to afford.

4. The endorsement may one day eclipse the product.


There are times when an advertisement, an endorsement, or even a celebrity may overcome
the brand message that is being offered to consumers. This occurs when the endorser takes
more time or space in the advertisement from the product or service that is being promoted.
PepsiCo encountered this issue in 2017 when they hired Kendall Jenner to serve as a “bridge”
between protestors by offering a police officer a can of soda. Instead of promoting the
beverage, what was promoted was the message of the ad, which drove consumers away.

5. It may create overexposure opportunities for the brand.


Celebrities don’t support just one business or brand. Multiple companies pay for this type of
marketing service, often within the same industry. Signing the same celebrity to offer a
similar pitch may cause the credibility of the endorser to suffer. Instead of paying attention to
the advertisement, the viewer is focused on the what and why behind the actions of the
endorsement.

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Shaquille O’Neal is an example of this: Sports Illustrated put together a list of the Top 50
Shaq Endorsements, with many of them occurring after he retired from professional
basketball.

6. A good endorsement can’t fix a bad product.


Endorsements are based on the idea that the product being pitched is a good one. If your
product quality is lacking, then even the best endorsement won’t be able to save your
business from the fallout which will occur. The same could be said about poor customer
service. If your brand is not helpful or fails to help troubleshoot issues that consumers may
have, then you’ll be out the cost of the endorsement and still be dealing with negative
reviews.

7. Not every endorsement is a good endorsement.


Even if we were to look through the history of product endorsements through rose-colored
glasses to ignore glaring issues (Bill Cosby and Jell-O, for example, with what we know
now), there are times when endorsements just don’t make sense. If your business is going to
pay for an endorsement, it must be through a spokesperson who reflects the message and
vision which your company promotes.

In 1989, PepsiCo paid Madonna $5 million to use her song “Like a Prayer” in a commercial
featuring the beverage. They played the advertisement during The Cosby Show, so about 250
million people saw it. The only problem was that in the music video for the song, Madonna
dances around a burning cross and witnesses a rape. Not exactly family-friendly fare.

8. You need to have more than an endorsement to stand out.


If you watch any television at all, then you’ve seen a product endorsement. These
endorsements usually take the form of a commercial, where a celebrity, an industry
professional, or someone who is similar to the targeted demographic pitches the item to the
people watching.

9. It may generate temporary inquiries only.


When you have an endorsement which involves a celebrity, then you’ll create a surge of
interest for your goods or services. Much of this traffic will be temporary. People will start to
research your offer. They’ll look to see what values are being proposed. Many of the

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prospects which come around during the traffic surge will not result in a sale. Even worse,
you might speak with others about the endorsement only to discover that no one knows who
they are. You must be prepared to face temporary inquiries and treat them as authentic. If
you’re unprepared, the brand experience will be negative and that is what will be discussed.

10. A brand endorsement is not reflective of brand expertise.


Many consumers assume that if someone is endorsing your brand, then they are experts.
They’ll ask questions of the endorser, especially if you have brought in an influencer to make
the pitch, instead of asking you. Since an influencer (or celebrity) is focuses on their
economic benefits more than their personal knowledge of what they’re pitching, an awkward
conversation you know nothing about could create a devastating negative result.

These product endorsement advantages and disadvantages show that a well-maintained


relationship with a celebrity or important figure can boost attention, sales, and loyalty. If the
image of the endorsement changes, then the results can be catastrophic. Even with proper
vetting, it can be difficult to predict human behavior. That is why any relationship like this
should be approached with caution, especially from a small business perspective.

You’ll find product endorsements on social media, in magazines, and any other place where
advertising is allowed.

Do product endorsements generate better sales? They do, because people want to feel like
they are close to their favorite celebrities or brands that understand their needs. With a
product endorsement come a few disadvantages that must be considered as well.

STEREOTYPING

A stereotype is a mistaken idea or belief many people have about a thing or group that is
based upon how they look on the outside, which may be untrue or only partly
true. Stereotyping people is a type of prejudice because what is on the outside is a small part
of who a person is.

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PERSON CENTER COMMUNICATION

Consequences of Ageism
The stereotyping of an older adult is dehumanizing and objectifying. Often—as a
consequence of stereotyping—the older person is no longer seen as a unique human being,
but instead is viewed more like a ludicrous caricature formed of the bits and pieces of
collective fears, ignorance, distortions, exaggerations, and sweeping overgeneralizations.
An older adult, once objectified, can more easily be denied rights and opportunities. Viewing
people as objects increases the probability they may be mistreated and/or suffer abuse. Ageist
beliefs can significantly interfere with a provider’s ability to communicate effectively and
respectfully. Touhy and Jett (2011) provide this example:
If the nurse believes that all older people have memory problems, or are unable to learn or
process information, he or she will be less likely to engage in conversation, provide
appropriate health information, or treat the person with respect and dignity (p. 82).

Implicit Theories Shape Intergroup Relations


For a long while, stereotyping has been characterized as a relatively inevitable consequence
of the need for cognitive simplicity, of intergroup competition, and of the societal prevalence
of negative representations of certain groups (e.g., Devine, 1989; Guimond, 2000; LeVine &
Campbell, 1972; Pettigrew, 1958; Wigboldus, Sherman, Franzese, & van Knippenberg,
2004). But the research reviewed in this chapter shows that stereotyping is not necessarily a
given. Meaning systems characterized by the belief that people are fixed create fertile ground
for stereotypes to emerge and flourish and imbue stereotypes with power and validity.
However, meaning systems characterized by a belief in malleability and dynamism are much
less conducive to stereotyping. In fact, for those with malleability beliefs, stereotyping holds
little cognitive appeal and information that violates stereotypes becomes more attractive
(Plaks et al., 2001). These findings force us to reconsider the nature of stereotyping.
Stereotyping is not simply a reflection of a human need for cognitive simplicity, of a drive to
denigrate, or of societal representations, but a consequence of people's beliefs about the value
of traits and labels and their motivation to protect these beliefs.

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This theoretical insight has important practical consequences. It suggests that interventions
that create long-lasting beliefs in the malleability of people—interventions modeled on those
to create beliefs about the malleability of intelligence—may be highly effective in curtailing
the development and maintenance of stereotypes. It also suggests that existing interventions,
such as counter-stereotypic training (e.g., Kawakami, Dovidio, & van Kamp, 2007), may not
have the desired impact for many people. An intervention that exposes participants to
counter-stereotypic exemplars may not change stereotyping among entity theorists, who do
not readily attend to or remember counter-stereotypic information (Plaks et al., 2001). It is
important not only to target the content of stereotypes but also to simultaneously target the
meaning systems that sustain them. An intervention that fosters a malleable belief while also
presenting counter-stereotypic information may be especially powerful in reducing
stereotyping.

Equity and Justice in Developmental Science: Implications for Young People, Families,
and Communities

 Developmental Changes in Intergroup Attitudes


Children show evidence of stereotyping and prejudice towards many social groups by 4 years
of age (Doosje et al., 2011; Raabe & Beelmann, 2011). Most contemporary theoretical
models posit that intergroup attitudes are the result of interactions between the organismic
characteristics (e.g., cognitive constraints and proclivities) that children bring to their social
worlds and the contexts in which they are embedded. For instance, Bigler and Liben
(2006) suggest that children look to adults for cues about which dimensions of human
variation are important. According to developmental intergroup theory, the presence of social
category labeling and the explicit and implicit sorting of individuals along particular
dimensions (e.g., race and gender) renders some social categories psychologically salient and,
in turn, leads children to categorize groups on those particular dimensions. These
categorizations develop into stereotypes and prejudices as a result of internally driven (e.g.,
essentialist thought) and externally driven (detecting group-attribute links in the environment)
processes. Importantly, age-related increases in the sophistication and flexibility of children's
cognitive skills generally produce reductions in children's social stereotyping and prejudice
(Bigler & Liben, 2006). However, relatively little is known about how the process of
friendship formation intersections with children's cognitive abilities and intergroup attitudes.

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It may be that younger children are less able than older children to construct a self-identity
that includes outgroup members, even as they form outgroup friendships. Indeed, young
children lack hierarchical and multiple classification abilities, which may prevent them from
viewing themselves as sharing a superordinate identity with outgroup members (e.g., males
and female are both humans) or as having traits or skills that are associated with both
ingroups and outgroups (e.g., liking both dolls and trucks). Conversely, it is possible that
young children's cognitive limitations are facilitative of some cross-group friendships. For
example, preschool children tend to center on some particular dimension (e.g., color) of
stimuli and have difficulty turning their attention to alternative dimensions (e.g., shape). It is
possible that children center on one particular dimension of their peers (e.g., gender),
undermining their attention to other categories. Thus, for example, two boys of differing
ethnicities may be more likely to become friends in earlier than later childhood.

Through a looking glass, darkly: Using mechanisms of mind perception to identify accuracy,
overconfidence, and underappreciated means for improvement

Behavioral inference
The tools of egocentrism and stereotyping enable mental state inferences in a wide range of
contexts when little or nothing is known about another target, and even when the target is not
physically present. But mental state inferences are also made when considerably more about
another person is known, such as in an ongoing social interaction where another's behavior
can be observed directly. A person's behavior can then serve a powerful source of
information by working backward from the behavior observed to the inferred mental states
that caused the behavior. Everything from choices to nonverbal expressions to spoken
language is scrutinized to ascertain intentions, desires, beliefs, and ultimately another
person's stable dispositions and personality.
Decades of research in social and cognitive psychology has identified the sophisticated
process people go through to infer personal attributes from observed behavior, including
mental states (Epley & Waytz, 2010; Gilbert, 1998; Heider, 1958; Jones, 1979). This
information is so influential that the other inferential tools of egocentric projection and
stereotyping are quickly set aside when personal behavioral cues are present. In one well-
known experiment, for instance, white participants watching a white or a black person being
interviewed showed evidence of making stereotypic inferences after watching the interview

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for 15 s, but showed no evidence of stereotypic inferences after watching the video for
12 min (Kunda, Davies, Adams, & Spencer, 2002). The more individuating behavioral
evidence a person has to rely on, the less people rely on more indirect tools of mental state
inference as a guide.
Using behavior as a cue to mental states makes perfectly rational sense, because there is often
a close correspondence between mental states and actions, either because cognitive activity
causes action, because people infer their own mental states from their observed behavior
(Bem, 1972), or because a highly correlated neural mechanism causes both behavior and
corresponding cognitive activity (Wegner, 2002). Developing a theory of mind as one ages
involves learning the sophisticated correspondence between mind and behavior so that the
latter serves as a reliable inferential cue to the former. Of primary importance in behavioral
inference is developing an understanding of intentionality. A person who harms you on
purpose is operating with a very different set of desires, beliefs, or personal dispositions than
a person who harms you by accident. Recognizing intentions in others is among the first
mental state inferences to develop in children, emerging before 18 months of age, followed
by a recognition of desires and preferences, beliefs (including false beliefs), and stable traits
and dispositions (Saxe, Carey, & Kanwisher, 2004; Woodward, 1998). This same hierarchy
seems to characterize the process of mental state inferences in adults as well, with people
being faster and more likely to make inferences about others' intentions than about others'
desires and preferences, which in turn are made faster and more reliably than inferences
about others' beliefs, which in turn are made faster and more reliably than inferences about
others' stable personality traits (Malle & Holbrook, 2012).
More important for accuracy than the speed with which people leap from actions to intentions
is the simplicity with which they do so. Although there is a complicated relation between
actions and underlying intentions, mental states inferences tend to assume an overly simple
correspondence between the two. People are generally presumed to say what they believe,
choose what they want, and act as they please, with observers only subsequently correcting
these automatic correspondent inferences when it is presumed necessary (Gilbert & Malone,
1995). This “correspondence bias” can lead to mistaken inferences, however, when the link
between behavior and mental states or capacities is more complicated. A person who reads
politically conservative answers to questions from a script has told you nothing about his or
her political attitudes, and yet observers nevertheless infer that a person instructed to give
conservative responses has more conservative beliefs than a person instructed to read liberal
responses (Gilbert & Jones, 1986). A person who votes for a political candidate is presumed

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to like the candidate, even if the vote is actually driven by dislike of the opposing candidate
(Miller & Nelson, 2002). And a person randomly given a chance to ask challenging general
knowledge questions, such as the host of game show, is perceived to be more thoughtful and
knowledgeable by observers than a person who is randomly assigned to answer those
challenging questions, even though behavior is dictated almost entirely by the roles the
people were randomly assigned to (Ross, Amabile, & Steinmetz, 1977). Actors who
experience being “typecast” are well familiar with the mistaken consequences of the
correspondence bias. Even when you know an actor is reading from a script, it is hard not to
infer that they believe, feel, think, and want what they are instructed to say.
The strength of these correspondent inferences is moderated somewhat by people's sensitivity
to the power of a person's situational context to create a more complicated relation between
their minds and their actions. People living in interdependent cultures, for instance, seem
somewhat less likely to infer that a person's attitudes correspond to observed behavior (Choi
& Nisbett, 1998). And religious traditions, like Protestantism, that focus more on the
correspondence between belief and behavior tend to show stronger evidence of the
correspondence bias (Li et al., 2012). Overall, the correspondence bias can produce error in
mental state inferences because it presumes a more simplistic relation between behavior and
minds than actually exists (Epley, 2014).
If people tend to infer mental states fairly directly from the behavioral cues they observe, then
variability in the accuracy of mental state inferences can also come from the diagnosticity of
the cues being observed. These cues can include both nonverbal behavioral cues, such as
facial or bodily expressions, and verbal cues, including both the semantic content of language
and the paralinguistic cues included in voice. A large literature attests to the speed and
reliability with which people draw inferences from nonverbal behavioral cues, such as eye
movements to infer truthfulness (DeSteno et al., 2012; Wesselmann, Cardoso, Slater, &
Williams, 2012), facial appearance to infer trustworthiness or intellectual competence
(Todorov et al., 2015), and facial expressions to infer emotional experience and intentions
(Baron-Cohen, Jolliffe, Mortimore, & Robertson, 1997; Ekman & Friesen, 1971). These
evaluations tend to yield a high degree of consistency across judges even with very brief
exposures (Bar, Neta, & Linz, 2006; Willis & Todorov, 2006), meaning that they can even
predict decisions based on consensus at better than chance levels, including political elections
(Todorov, Mandisodza, Goren, & Hall, 2005) and teaching evaluations (Ambady &
Rosenthal, 1993). They do not, however, appear to provide an especially accurate sense of
another's mind. In one experiment, people were unable to detect at better-than-chance levels

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whether a tennis player had just won or lost an important match based on evaluations of the
face alone (Aviezer, Trope, & Todorov, 2012). In another experiment, participants were less
accurate predicting a conversation partner's thoughts and feelings after talking in a lighted
room compared to a dark room, suggesting that the ability to perceive bodily cues actually
reduced accuracy compared to focusing on the voice alone (Kraus, 2017).
Indeed, direct tests of accuracy derived from verbal versus nonverbal cues consistently
indicate that a person's mind is most clearly communicated through their voice (Hall &
Schmid Mast, 2007; Ickes, 2003; Kruger et al., 2005; Mehrabian & Wiener, 1967). People are
more accurate predicting another person's thoughts and feelings, for instance, when they
listen to the two people interacting than when they simply watch two people interact (Zaki,
Bolger, & Ochsner, 2009). Lies are more accurately detected over voice than in text alone, or
when only perceiving body language (Bond & DePaulo, 2006). This is perhaps not surprising
given that a person's voice is the tool human beings have evolved to communicate the
contents of their minds to others (Pinker & Bloom, 1990). Even paralinguistic cues in speech
may signal mental activity in a relatively honest way that nonverbal behavioral cues cannot
match. Pauses in speech, for instance, may reflect conscious thinking. A rising tone may
reflect enthusiasm. Variance in pitch—intonation—may reflect the process of thinking as it's
happening. Indeed, several experiments have found that other people seem more mindful—
more capable of thinking, reasoning, and experiencing emotion—when perceivers hear what
a person has to say compared to reading the very same semantic content. In one experiment
we conducted, potential job candidates were perceived to be more thoughtful, rational, and
employable when potential employers listened to the job candidate's “elevator pitch”
compared to when they read a transcript of the same pitch or read the candidate's written
pitch (Schroeder & Epley, 2015). In another, citizens who voted for an opposing political
candidate were perceived to be more mindful—more thoughtful, reasonable, and rational—
when people heard the voter explain his or her decision compared to when they read a
transcript of the same content or read the citizen's written explanation of their vote
(Schroeder, Kardas, & Epley, 2017).
In sum, another person's behavior can potentially provide an accurate window into his or her
mind. Assuming a more simplistic relation between mind and behavior, and failing to
differentiate relatively more versus less accurate behavioral cues to mental experience, can
again help to explain both systematic accuracy and error in mental state inferences.

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Attentional Processes in Social Perception

Stereotype Strength
The results from the AT and stereotyping studies demonstrated, among other things, that
minority group stereotypes carry more weight than majority group stereotypes. The attributes
that characterized the minority groups were given greater weight in categorizing ambiguous
targets than were the attributes that characterized the majority groups. Specifically, a target
possessing the perfect predictors of both the majority and minority groups (PC + PR) was
most commonly categorized as a member of the minority group despite the greater frequency
of majority group members. Thus, minority stereotypes had greater predictive power than
majority stereotypes. It is commonly observed that the most prominent stereotypes in a given
society are those that describe minority rather than majority groups. The current results
suggest one possible basis for that observation: To distinguish minority groups from majority
groups, particular attention is paid to those attributes that permit differentiation of the
minority group. In effect, a stronger link may be formed between the minority group and its
typical features than between a majority group and its typical features.
The differential strength of majority and minority group stereotypes has additional
implications for stereotyping, which Sacchi (2015) explored in his research. For example, if
minority group stereotypes are stronger than majority group stereotypes, then it makes sense
that minority stereotypes would be more resistant to change than majority group stereotypes.
Extensive research shows that people engage in strategies to maintain group stereotypes, even
in the face of disconfirming evidence. For example, people may attempt to explain away
stereotype-disconfirming behaviors by making situational attributions for those behaviors. If
a group member performs a stereotype-inconsistent behavior, perceivers may attribute that
behavior to external, situational factors rather than to stable, dispositional characteristics of
the group (Bodenhausen & Wyer, 1985). In addition, group members displaying stereotype-
incongruent behavior may be subtyped as unrepresentative of the group (Crocker, Hannah, &
Weber, 1983). Subtyping, or “fencing off” atypical group members from the rest of the
group, limits the generalization of stereotype-disconfirming information to perceptions of the
entire group (Kunda & Oleson, 1995; Maurer, Park, & Rothbart, 1995; Park, Wolsko, &
Judd, 2001; Weber & Crocker, 1983).
The research conducted by Sacchi (2015) provides evidence that minority group stereotypes
are more resistant to change than majority group stereotypes. After completing the standard

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learning phase, participants were asked to make trait ratings about the groups and then were
presented with information about 10 new members of each group. Of the 10 new members of
each group, 5 behaved in a way that confirmed the newly formed stereotype of their group
and 5 behaved in a way that disconfirmed that stereotype. Subsequently, participants were
asked to again make trait ratings of the groups. Results showed that minority group
stereotypes changed less in response to the five disconfirming group members than did
majority group stereotypes, another indication of the relative strength of minority vs majority
group stereotypes. Moreover, participants rated stereotype-disconfirming minority group
members as less typical of their groups than disconfirming majority group members. This
finding is consistent with the idea that perceivers subtype disconfirming minority group
members more than disconfirming majority group members. Another measure in the study
assessed the degree to which participants made situational rather than dispositional
attributions for incongruent behaviors, but no differences were observed based on group size.
However, this null finding may be explained by the order in which the measures were
presented. The items that assessed behavior attribution always came after the items assessing
group typicality. Given that participants displayed the expected effect of subtyping on the
typicality ratings, it is possible that they were no longer differentially motivated to explain
away the stereotype-incongruent behavior of minority targets.
Another implication of stereotype strength is the development of essentialist beliefs about
social groups. Essentialism is the idea that an entity such as a social group possesses innate,
biologically rooted qualities. People who hold essentialist beliefs about social groups believe
that differences between groups are relatively fixed, that social categories are clearly
separated and mutually exclusive, and that a person's characteristics can be inferred based on
their group membership (Rothbart & Taylor, 1992). Research shows that essentialist beliefs
are related to greater stereotyping and prejudice (Bastian & Haslam, 2006; Haslam,
Rothschild, & Ernst, 2002; Keller, 2005; Levy, Stroessner, & Dweck, 1998), and that those
who hold such beliefs are less likely to change their stereotypic beliefs (Bastian & Haslam,
2007). Thus, there is a relation between essentialist beliefs and stereotype strength.
Accordingly, people should be more likely to develop essentialist beliefs about minority
groups compared to majority groups.
Sacchi (2015) tested the relation between group size and essentialist beliefs. After learning
about a majority and minority group, participants were asked to complete a scale measuring
the extent to which each group was seen as having a stable, underlying essence (Bastian &
Haslam, 2008). Results showed that: (1) The minority group was perceived as having

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more discrete boundaries than the majority group (e.g., Everyone is either a certain type of
person or they are not); (2) The traits describing members of the minority group were
perceived as more informative than the traits describing members of the majority group (e.g.,
When getting to know a person it is possible to get a picture of the kind of person they are
very quickly); and (3) The traits describing the minority group were perceived as having
a biological basis to a greater extent than the traits describing the majority group (e.g., The
kind of person someone is can be largely attributed to their genetic inheritance). However,
participants perceived majority group traits to be just as fixed (i.e., resistant to change) as
minority group traits. Overall, the results indicate that minority groups, even novel groups
about which we have minimal information, are perceived as having greater essence, and this
may be one reason why minority group stereotypes are stronger than majority group
stereotypes.

Summary and conclusion


A number of the women cautioned against stereotyping, but they were nevertheless able to
identify gendered patterns across a broad spectrum of behaviours. The women gave us many
concrete examples of different behaviours between men and women working in similar
positions, with women sometimes being uncertain as to how to behave in some work
situations. Being female was, or had been, both a help and a hindrance though, in the main,
the women felt it had either made no difference or had helped. Nevertheless, a lack of
confidence or assertiveness in the earlier parts of their careers had been a hindrance for some.
Relevant professional experience, height, having had children, colour and lack of a degree
were also raised as possible problems.

Intergroup Perception and Cognition

 Relations Between Implicit Identification, Stereotyping, and Prejudice


Most people typically assume that identification, stereotyping, and prejudice are related.
Specifically, one might predicate that the more you identify with an outgroup, the less you
would associate negative characteristics with its members (e.g., hostile, lazy, untrustworthy),
and the more you would like them (Allport, 1954). However, empirical evidence in support
of these relations has been mixed. In particular, as noted earlier, the relation between
stereotyping and prejudice has been found to be of only moderate strength. For example,
when examining both implicit and explicit indices of prejudice and stereotyping, Dovidio,

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Brigham, Johnson, and Gaertner (1996) found a correlation of r = 0.25. When only focusing
on indices of implicit stereotyping and prejudice, this relation did not strengthen, r = 0.19.
More recently, using IATs that more directly dissociated valence associations from stereotype
concepts, the correlation between implicit prejudice and stereotyping was even
weaker, r = 0.06 (Amodio & Devine, 2006)—a pattern consistent with the idea that these two
implicit intergroup processes are rooted in different underlying cognitive and neural systems
(Amodio et al., 2003; Amodio & Ratner, 2011).
In contrast, there is some evidence for a causal link between self-outgroup associations and
stereotyping and prejudice, respectively. With regard to the relation between identification
and implicit prejudice, for example, perspective-taking strategies, such as imagining a day in
the life of a target individual (Galinksy & Moskowitz, 2000; Galinsky, Ku, & Wang, 2005) or
imagining the victim's feelings while watching a series of incidents of racial discrimination,
have been found to increase self-other overlap and also decrease negative outgroup attitudes.
Likewise, increasing self-outgroup overlap with practice in associating the self with a group
that included Blacks can reduce implicit prejudice (Woodcock & Monteith, 2013).
Recent research related to training in approaching outgroup members has also provided
evidence for a close link between self-outgroup associations and implicit prejudice. Using
multiple methods of approaching social categories and several ways of measuring outgroup
identification, we (Phills, Kawakami, et al., 2011; Phills, Santelli, Kawakami, Struthers, &
Higgins, 2011) provided converging evidence that training in approaching social categories
can increase self-outgroup associations. Specifically, training participants either to move
a joystick toward or away from themselves in reference to a particular category, such as
Blacks or Whites (Kawakami, Phills, et al., 2007), or to move circles representing the self and
a target category closer together or farther apart (Aron, Aron, & Smollan, 1992), resulted in
reduced bias in self-outgroup associations on an IAT and in brain activity. Furthermore, we
found that increased associations between the self and Blacks, in turn, lowered implicit
prejudice. These findings suggest that one reason why approach orientations increase positive
attitudes is because they foster identification with the target.
With regard to the link between identification and implicit stereotyping, the evidence for a
causal relation is mixed. Whereas research on perspective taking indicates that increasing
self-other overlap can also reduce outgroup stereotyping (Galinksy & Moskowitz, 2000;
Galinsky et al., 2005), research on the conditioning of self-outgroup links does not
(Woodcock & Monteith, 2013).

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Although research, as noted earlier, has found evidence for the impact of changes in outgroup
identification on prejudice, other work has examined whether this relation is bidirectional by
investigating the impact of prejudice on outgroup identification (Phills, Kawakami,
Krusemark, & Nyguen, under review). Previous theorizing provides some justification for the
possibility that intergroup attitudes may cause identification (Cialdini & Richardson, 1980;
Kelley & Thibaut, 1978). In particular, because we believe that simply connecting ourselves
with favorable ingroups will make us look more favorable (Cialdini et al., 1976; Snyder,
Lassegard, & Ford, 1986), we may try to associate with high status or valued others. One way
to improve self-outgroup associations, therefore, may be to use evaluative conditioning to
increase the positivity of outgroups.
In two studies, we (Phills et al., under review) found that after training in associating positive
concepts with Blacks, non-Black participants showed less negative implicit attitudes toward
Blacks. Although this basic evaluative conditioning effect on racial attitudes is well
established (Lai et al., 2014; Olson & Fazio, 2006), we also found that evaluative
conditioning increased the strength of associations between the self and Blacks. Furthermore,
mediation analyses provided consistent evidence for a close causal link between changes in
implicit prejudice and changes in outgroup identification.
Together, these findings are consistent with the balanced identity theory (BIT; Cvencek,
Greenwald, & Meltzoff, 2012; Greenwald et al., 2002), which purports a causal relation
between attitudes and identification. Much like classic consistency theories in social
psychology (Festinger, 1957; Gawronski & Strack, 2012), this model proposes that identities,
attitudes, and self-esteem coordinate to maintain affective–cognitive consistency and that the
interrelations among these constructs constrain each other. In particular, the BIT suggests that
an association between two concepts should strengthen when both concepts are associated
with the same third concept. Because we typically maintain strong associations between the
self and good (self-esteem; Bosson, Swann, & Pennebaker, 2000; Zhang & Chan, 2009),
increasing associations between a stigmatized outgroup (e.g., Blacks) and good (attitudes),
such as in the Phills et al. research (under review), should and does increase associations
between the outgroup and the self (identities). Likewise, increasing associations between
stigmatized outgroups and the self, such as in the Phills, Kawakami, et al. research (2011),
should and does increase associations between the stigmatized outgroup and good (attitudes).
Together, these findings provide evidence for a causal, bidirectional link between implicit
group identification and attitudes.

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In summary, a broad literature implicates the spontaneous activation of category-based


knowledge once a person is construed as a member of a social group. Furthermore, these
activations have been shown to have wide-ranging implications for how we respond to
outgroups. In the next section, we will explore some of these downstream consequences.

Managing and Escaping Stereotypes and Obstacles

What is Problematic About Stereotypes and Biases?


We often do not know we are stereotyping people or showing our bias. When we have an
unsettled feeling walking by a group of youth from a different culture or race, we may not be
aware. When we would rather work for a man than a woman, we may not know why. When
we ask certain people questions in an interview that we would not ask others, we may be
blind to the fact that this is problematic. When we speak excessively loud to a blind person,
we have perceptions and biases about their disability, which may be inaccurate.
Often we are experiencing our own stereotypes and acting based on our biases. We may not
know or be aware that we are behaving differently than we would toward someone in the
majority or someone in a group we are accustomed to dealing with. We may change our body
language, our mode of speaking, how far or close we sit or stand near the person, or even our
eye contact may fluctuate. If we are uncomfortable with someone, we stand further away; we
smile less, we may laugh a little less, are less friendly, or appear less comfortable.

Stereotypes and biases serve to unfairly and often unintentionally distance people, while
negatively affecting them, our relationships with them, or their job status or success.

Confronting prejudice and discrimination: Historical influences and contemporary


approaches
Robyn K. Mallett, Margo J. Monteith, in Confronting Prejudice and Discrimination, 2019
The second development in the study of stereotyping and prejudice that spurred confrontation
research was investigations of the self-confrontation of bias. Arising from the increased
recognition of subtle, implicit intergroup biases that the social cognition approach inspired
(Monteith, Woodcock, & Gulker, 2013), this line of work started with Devine’s
(1989) seminal research that likened prejudice reduction to the “breaking of a bad habit.”
Devine argued that people could be truly committed to egalitarian values but still rely on
well-learned, automatically activated stereotypic and prejudiced associations when

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responding. Therefore, Devine argued that people must learn to replace their biased responses
resulting from automatic processing with less biased responses—made possible with more
deliberate, controlled processing—just as people do when breaking other bad habits. Building
from this research, Devine et al. demonstrated that people who believed they should respond
without bias but who recognized that they would respond with bias (e.g., White people
responding toward Black people) experience feelings of guilt and disappointment with
themselves (e.g., Devine, Monteith, Zuwerink, & Elliot, 1991; Monteith & Mark, 2005). In
other words, awareness of prejudice-related discrepancies gives rise to negative self-directed
affect. Moreover, when self-confrontation occurs (i.e., people recognize their prejudice-
related discrepancies), negative self-directed affect and a variety of other motivational and
learning mechanisms are triggered that facilitate the inhibition and replacement of biased
responses in the future (e.g., Burns, Monteith, & Parker, 2017; Monteith, 1993).

Experimental Studies of Media Stereotyping Effects


V Implications for new media and future directions
Much of the existing experimental work on media stereotyping has been conducted in the
context of “traditional” media formats. However, no longer are audiences restricted to “old”
media resources such as network and cable television, print media such as magazines and
newspapers, and radio. They now have access to new media such as blog spaces, mobile
phones, social networks such as Facebook and Twitter, video games, as well as Internet video
streaming sites such as Netflix, YouTube, or Hulu. The advancement of interactive, digital,
global, and personalized media presents new opportunities for scholars to test whether
existing media stereotyping theories hold true in these contexts and also to use these formats
for methodological advances in experimental research.
In extensive reviews, Metzger (2009) and Chaffee and Metzger (2001) highlight what media
scholars posit are difficulties surrounding the theoretical and methodological concerns of new
media. Theoretically, the greater availability and dissemination of information across new
media contexts, mediums, populations, and points in time is likely to bring about challenges
to current areas of media effects studies. In an increasingly user-driven new media context,
audience members are more selective and less likely to grow up in a commonly shared
symbolic environment that cultivates stereotype formation. However, a counterpoint to this
new media concern follows that cultivation is still likely to take place; instead of an aggregate
idea of how groups of people interact, the audience is able to tailor its media in such a way as
to cultivate its own understanding of how groups engage with one another.

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The media “audience” member has been conceptualized as being restricted to what is
presented by media outlets and to take this information at face value. Alternatively, media
“users” in the current media contexts are interactive individuals who exercise greater
authority when deciding what type of messaging they will allow themselves to be exposed to.
The interactivity of media lends itself to greater audience agency so that audiences are able to
alter the media content in which they are engaging. Users are able to mitigate and manipulate
the information provided via media outlets while also having the ability to broadcast
information to other audiences via indirect (e.g., Facebook newsfeeds) or direct (e.g., blog
postings) means. However, mere selectivity and interactivity might be different from
exercising media literacy skills that critically examine the messages that they are presented
with, their meanings, and their purposes.
While theoretical implications of new media contexts develop, methodological considerations
focus on developing research designs that accommodate the various ways that audiences
interact with media content. To examine media stereotypes and their effects in such new
media as social media sites, chat rooms, video games, and virtual worlds such as Second Life,
experimentalists have to become familiar with manipulating stimuli materials and setting up
treatment conditions in these contexts. Media scholars are also increasingly recruiting
samples using social media such as Facebook and administering their experiments using
online, computer-based tools such as Medialab, Survey Monkey, Qualtrics, and Mechanical
Turk. Often, these tools are administered in lab-based contexts but also sent as links to
participants to be completed on their laptops and mobile devices. Given that there are
variations in experimental settings, it is important for researchers to control for when and
how experiments are administered to participants.

The shifting media cultural scenario means that stereotypes are much more subtle and covert
than ever before. With the emergence of the post-feminist and post-racial era, media scholars
are particularly interested in studying the effects of media stereotypes on symbolic,
ambivalent, and modern prejudices. In line with this shift in media representations, computer-
based tools such as the IAT and lexical decision tasks offer new avenues to go beyond
traditional paper-and-pencil measures of explicit stereotype endorsement. They allow
researchers to measure implicit, subtle, and aversive forms of prejudices rather than old-
fashioned blatant prejudice. These tools capture automatic stereotypes that operate without
participants’ conscious awareness, even though they might be malleable to situational

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cues such as counter-stereotypic media exemplars (Banaji & Hardin, 1996; Blair, 2002;
Devine, 1989; Ramasubramanian, 2007).
Media stereotyping research tends to largely focus on racial/ethnic stereotypes within U.S.
contexts. Future research should examine these topics in other cultural contexts and also on
other group affiliations, such as sexual orientation, body size, and social class. Experimenters
should go beyond student samples to more generalizable audience populations to increase the
ecological validity of their findings. In addition to examining the detrimental effects of media
stereotypes on majority and minority group members, researchers should also focus on
understanding the role of positive counter-stereotypical media exemplars and media literacy
strategies for developing media-based strategies for prejudice reduction.

Including more complex designs such as pre–post or Solomon four-group design would allow
for greater control and more confidence in findings. Researchers should explore longitudinal
designs that allow for multiple exposures to media content to track dynamic audience
reactions over time. Through the use of sophisticated tools such as structural equation
modeling, media scholars interested in cause–effect inferences should focus more on building
causal chains of relationships to explain the key variables that moderate and mediate the
relationship between media stereotypes and audience attitudes. Future research should focus
on the length of effects to explain the conditions under which effects last only for a few
minutes versus those that last for much longer.

In conclusion, evolving epistemological notions of media, different conceptualizations of


mhedia effects (e.g., the cultivation hypothesis), and the development of sophisticated
statistical procedures have the potential to lead to significant theoretical and methodological
advances in experimental research on media stereotyping. New models, vocabularies, and
theories of media effects research are being developed to theorize interactive, transnational,
and new digital media experiences. Research on media stereotyping is shifting in its emphasis
from whether media stereotypes exist to how they influence audiences. In other words, there
is a move from media stereotyping effects to processes. For all these reasons, the future holds
much promise and excitement in terms of experimental research on media stereotyping
processes.

Unit V: Ethical Issues in Advertising 8 Hrs


Introduction, Suggestions for controlling unsocial and unethical advertising, Advertising
standards council of India (ASCI) - Introduction, Objectives of ASCI, Misleading advertising

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– Advertising to children, Product endorsements, Stereotyping, Cultural religious and racial


sensitivity in advertising.
UNIT V MCQ

1. Which of the following actions will not help directors to protect themselves
from non-compliance with their obligations and responsibilities?
A keeping themselves fully informed about company affairs

B ensuring that regular management accounts are prepared by the company

C seeking professional help

D including a disclaimer clause in their service contracts

Answer: including a disclaimer clause in their service contracts

2. The OECD argues that corporate governance problems arise because:

A Ownership and control is separated

B Managers always act in their own self interest

C Profit maximization is the main objective of organizations

D Stakeholders have differing levels of power

Answer: Ownership and control is separated

3. Co-ording to Cadbury (2002), corporate governance is an issue of power and:

A Rights

B Accountability

C Profit

D Appropriability

Answer: Accountability

4. A director of a limited company may not be liable for wrongful trading if he or she

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A took every step to minimise the potential loss to creditors

B increased the valuation of its inventories to cover any potential shortfall

C introduced into the balance sheet an asset based on a valuation of its brands sufficient to
meet any shortfall

D brought in some expected sales from next year into the current year

Answer: took every step to minimise the potential loss to creditors

5. Directors’ responsibilities are unlikely to include.

A a fiduciary duty

B a duty to keep proper accounting records

C a duty to propose high dividends for shareholders

D a duty of care

Answer: a duty to propose high dividends for shareholders

6.  External audit of the accounts of a limited company is required

A Because It Is Demanded By The Company’s Bankers

B By The Companies Act 2006

C At The Discretion Of The Shareholders

D To Detect Fraud

Answer: By The Companies Act 2006

7. The view that business exists at society's pleasure and businesses should meet public
expectations of social responsibility is the

A iron law of responsibility argument

B enlightened self-interest argument

C capacity argument

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D anti-freeloader argument

Answer: enlightened self-interest argument

8.  In a ______________ organization, decision making is delegated as far down the chain of
command as possible.

A Decentralized

B Creative

C Flexible

D the consolidation of economic and environmental efforts

Answer: Centralized

9. Which of the following is NOT one of the primary elements of a strong organizational
compliance program?

A A written code of conduct

B An ethics officer

C Significant financial expenditures

D A formal ethics training program

Answer: Significant financial expenditures

10. Codes of conduct and codes of ethics

A Are Formal Statements That Describe What An Organization Expects Of Its Employees

B Become Necessary Only After A Company Has Been In Legal Trouble

C Are Designed For Top Executives And Managers, Not Regular Employees

D Rarely Become An Effective Component Of The Ethics And Compliance Program

Answer: Are Formal Statements That Describe What An Organization Expects Of Its
Employees

11.  Which of the following is not a driver of responsible competitiveness?

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A Policy drivers

B Development drivers

C Business action

D Social enablers

Answer: Development drivers

12. The ability to interpret and adapt successfully to different national, organizational, and
professional cultures is called:

A National Competitiveness

B Global Development

C Cultural Intelligence

D Stakeholder Sensitivity

Answer: Cultural Intelligence

13. For referent power to be effective, what must exist between individuals in the
relationship?

A Antipathy

B Rivalry

C History

D Empathy

Answer: Empathy

14. To be successful, business ethics training programs need to:

A focus on personal opinions of employees

B be limited to upper executives

C educate employees on formal ethical frameworks and models of ethical decision making

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D promote the use of emotions in making tough ethical decisions

Answer: educate employees on formal ethical frameworks and models of ethical decision
making

Video Player is loading.

15. A high-commitment approach to environmental issues may include all of the following
except:

A Risk Analysis

B Stakeholder Analysis

C Green-Washing

D Strategic Sustainability Auditing

Answer: Green-Washing

16. Stakeholders are considered more important to an organization when:

A they can make use of their power on the organization

B they do not emphasize the urgency of their issues

C their issues are not legitimate

D they can express themselves articulately

Answer: they can make use of their power on the organization

17. The ________ dimension of social responsibility refers to a business's societal


contribution of time, money, and other resources.

A Ethical

B Philanthropic

C Volunteerism

D Strategic

Answer: Philanthropic

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18. The four types of social responsibility include:

A Legal, Philanthropic, Economic, And Ethical

B Ethical, Moral, Social, And Economic

C Philanthropic, Justice, Economic, And Ethical

D Legal, Moral, Ethical, And Economic

Answer: Legal, Philanthropic, Economic, And Ethical

19.  Which of the following is an example of an area where business ethics apply?

A Conduct of international operations

B Nowhere

C In the personal life of staff

D None of the above

Answer: Conduct of international operations

20. Who are organisational stakeholders?

A Government

B Employees

C Customers

D All of the above

Answer: All of the above

21. What is green washing?

A Transforming products to be more ethical

B Making a product appear more ethical that it really is

C Converting the company to green production methods

D Convincing customers to buy ethically

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Answer: Making a product appear more ethical that it really is

22. What is triple bottom line?

A An accounting tool that looks at the impact on people, planet and profits

B A management strategy which states all the attention should be on profits

C An accounting tool that looks at cost, profit and loss

D A management strategy which focuses on corporate social responsibility

Answer: An accounting tool that looks at the impact on people, planet and profits

23. Why do alternative organizations run differently from conventional shareholder led
approach?

A They do not have shareholders

B They are run in non-hierarchical ways which aim to provide a positive impact on society
rather than to make profit

C They priorities corporate social responsibility

D They aim to give money to charities and good causes

Answer: They are run in non-hierarchical ways which aim to provide a positive impact on
society rather than to make profit

24. What does and Ethical Foundation for an organisation embody?

A The structure, operational and conduct of the activities of the organization

B The basic principles which govern the external and internal relations of the organization

C Neither of the above

D All of these

Answer: The basic principles which govern the external and internal relations of the
organization

25. A ________ _________ sets out the purpose and general direction for the organisation?

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A Mission statement

B Purpose statement

C Vision

D Profit statement

Answer: Mission statement

26. What is the purpose of a balanced scorecard?

A To measure contribution of people to business growth

B To combine a range of qualitative and quantitative indicators of performance

C To relate business performance to customer satisfaction

D All of the above

Answer: To combine a range of qualitative and quantitative indicators of performance

27. What, according to Adam Smith, is the best way to promote collective interest?

A Through government making decisions about what is in the public interest

B Through everyone working together to support each other

C Through everyone working on their own self-interest

D Through individuals forgoing their personal interest for the good of the collective

Answer: Through everyone working on their own self-interest

THE ANSWER FOLLOWING QUESTIONS 8 MARKS

UNIT – V

1. Critically examine contain the unethical and unsocial Advertisement. (Skill)

2. Demonstrate the objectives of Advertising Council of India (Understanding)

3. write note on Consumer Complaint Council (CCC) (understanding)

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4. Examine the mission of Advertising Council of India (ASCI). (Analysing)

5.Bring out and Defend the false misleading Impressive of Advertisement. (Skill)

6.Demonstrate the spotting common advertisement strategies. (Understanding)

7. Give a note on The involvement of children and its Effectiveness in the advertisement

(Understanding)

8. What is product endorsement? Bring out its effects as marketing tool. (Analysing)

9. What is product Endorsement? Explain its advantages and disadvantages. (skill)

10. What is stereo typing person centre communication. Explain the Implicit theory of

Intergroup Relationship.

11. Give a Note on Intergroup Perception and Cognition (understanding)

12. What is stereo typing? Explain the obstacles of Stereo typing.

13. What is problematic about stereo typing and Biases.

14. Give a Note on stereo typing Effects (understanding)

QUESTION BANK

PROF NELSON PEREIRA

BBA VI SEMESTER ADVERTISING MARKETING 2020

MCQ UNIT I

1. Formal statement by manufacturer of product regarding its performance is classified as


i. guarantees

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j. warranties
k. labeling
l. packaging

2, Labeling, packaging are associated with:


e. Price mix
f. Product mix
g. Place mix
h. Promotion mix

3. The goods which satisfy human wants directly are called:_______________


i. Consumer’s goods
j. Producers’ goods
k. Public goods
l. Intermediate goods

4. The satisfaction of human want is called:


e. Consumption
f. Production
g. Distribution
h. None of these
5. In 'stages of adoption process', customer decides to become regular user in
e. awareness stage
f. interest stage
g. evaluation stage
h. adoption

6. According to research, there are four factors that influence consumer buyer behavior:
e. psychological, personal, social, CRM systems
f. cultural, organizational, personal, psychological
g. cultural, social, personal, psychological
h. none of the above

7. The psychological factors influencing consumer behavior are;

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m. motivation, perception, learning, beliefs and attitudes


n. culture, subculture, social class
o. reference groups, family, roles and status
p. all of the above

8. The consumers' five steps of adopting a new product refer to which of the following?
e. Awareness, interest, evaluation, trial, adoption
f. Awareness, promotion, evaluation, trial, adoption
g. Adoption, interest, evaluation, trial promotion
h. Awareness, interest, cash cows, trial, adoption
9. Consumer behavior consists of which of the following activities?
e. Obtaining
f. Consuming
g. Disposition
h. All the above

10. Consumer behavior can be defined as:


q. a field of study focusing on marketing activities
r. a field of study focusing on consumer activities
s. a study of pricing
t. the study of decision rules

11. ______________refers to how consumers get rid of the product and packaging.

u. Purchase
v. Obtaining
w. Consumption
x. Disposal

12. Successful organizations believe:


y. Consumers are influenced by the needs and wants of the organization.
z. Marketing is the process of transforming or changing an organization to have
what people will buy.
aa. Marketing is not really important.

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bb. Marketing is the process of transforming consumer wants into the firm's product
offering.

13. Which of the following areas can be better understood by studying consumer behavior?
cc. Consumer preferences for different advertisements
dd. Financial decisions
ee. Voting in elections
ff. All the above

14. “Only the customer can fire us all” implies that:


gg. Consumers determine which firms survive and which fail.
hh. Customers can be manipulated into buying goods and services.
ii. Customers are concerned only when prices go higher.
jj. Firms should not bother with research as the customer is fickle.

15. Consumer product manufacturers study consumer behavior to influence:


kk. brand choice
ll. consumption
mm. purchase
nn. All of the above.

16. Consumer analysis should include___________:


oo. consumer trends
pp. communication methods to reach target markets
qq. models to predict purchase and consumption patterns
rr. It should include all of the above.

17. ____ is an understanding of consumers' expressed and unspoken needs.


ss. Consumer analysis
tt. Consumer insight
uu. Consumer focus
vv. None of the above.

18. Customizing goods or services for individual customers in high volumes and at relatively
low costs is known as:

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ww. target marketing

xx. mass customization

yy. niche customization

zz. niche marketing


19. --------------------helps to understands how consumers are influenced by their
environment.

a. Consumer behaviour

b. Motives

c. Perception
d. Learning.

20. Groups that have a direct or indirect influence on a person‘s attitudes or behaviour is
known as -------------------------1. Firm uses any existing brand to introduce in market as a
new product, brand is classified as
i. brand extension
j. sub-brand
k. parent brand
l. product extension

21. Branding strategy is also called________________-


i. brand architecture
j. branding rate
k. brand earnings
l. brand responsiveness

22. When companies combine existing brand with new brands, brands are called
i. parent brand
j. product extension
k. brand extension
l. sub-brand

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23. Parent brand if it is associated with multiple products in brand extension is called
i. product extension
j. sub-product
k. family brand
l. parent company

24. Brand which is result of extension in brand or sub-brand is classified as


i. brand extension
j. sub-brand
k. parent brand
l. product extension

25.Activities carry by company to design and produce a differentiated container for particular
product is classified as
i. guarantees
j. warranties
k. labeling
l. packaging

26. Formal statement by manufacturer of product regarding its performance is classified as


m. guarantees
n. warranties
o. labelling
p. packaging
27._______________which started a campaign for drivers to tie a red ribbon onto their
vehicles, signifying their commitment to safe, sober driving.
e. MADD
f. MADE
g. MASD
h. MDD

28.____________________is used primarily by nonprofit organizations, charity foundations,


public highway departments, and government agencies.
e. Social marketing
f. Tele marketing
g. Viral marketing
h. Relationship marketing

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29. _______________is a method of direct marketing in which a salesperson solicits


prospective customers to buy products or services, either over the phone or through a
subsequent face to face or Web conferencing appointment scheduled during the call.
e. Social marketing
f. Telemarketing
g. Viral marketing
h. Customer relation marketing

30. _____________ consists of handling incoming telephone calls—often generated by


broadcast advertising, direct mail, or catalogues—and taking orders for a wide range of
products.
e. Social marketing
f. Inbound Telemarketing
g. Viral marketing
h. Outbound telemarketing

ANSWER THE FOLLOWING QUESTIONS

1. Advertisement impact consumers buying behaviour . Explain its elements(skill)

2. The most successful symbols allows consumers to identify its products of company. What
Are the types of advertising? (Understanding)

3. The outcomes of business and trading which reveals through its functions . Explain the
functions of advertising?(skill)

4. Consumers are the part of marketing activity, advertisement which attracts and impact
them. So Explain the impotent functions of advertising .(understanding)

5. Explain the criticism of advertising .(skill)

6. Differentiate between advertising and personal selling.(skill)

7. Define advertisement. Explain its advantages and disadvantages.(understanding)

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8. Critically Examine the advertisement which exploit consumers.(analysing)

9. Differentiate between advertisement and publicity.(analysing)

10. Advertisement which impact brand name thereby consumers make a decision to buy the
product. Differentiate between advertising and personal selling.(skill)

11. Define personal selling. Identify the different types of advertising.(applying)

12. What is publicity. Identify the types of publicity. (applying)

Unit II MCQ

1. For making advertisement s more effective, the manufacturers improve


_____________and launch new products.

(1) Existing products


(2) Advertisement style
(3) Marketing channel
(4) Sponsors
(5) None of these
ANSWER: (1) Existing products

2. It is advisable to use ____________________ as a source of advertising.

(1) Social media


(2) Email
(3) Radio
(4) Television
(5) Print
ANSWER: (4) Television

3. Selecting time, choosing media types, deciding on reach of frequency and media vehicle
for advertisements are part of

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(1) Media strategy


(2) Media execution
(3) Selecting media
(4) Measuring communication
(5) None of these
ANSWER: (3) Selecting media

4. To introduce the new products to world of consumers is the main goal of


(1) Entertainment
(2) Advertising
(3) Boost the sales
(4) Online marketing
(5) None of these
ANSWER: (2) Advertising

5. Advertisement through radio was very popular till the middle of last century because of
_______________.

(1) Its effectiveness


(2) More popular than newspaper
(3) Mass reach
(4) Cost of advertisement
(5) None of these
ANSWER: (3) Mass reach

6. Advertising creates employment as it increases the volume of sales and


___________________________

(1) Production
(2) Marketing
(3) Promotion
(4) Personal selling
(5) New products

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ANSWER: (1) Production

7. Lower costs, greater global advertising coordination consistent worldwide image are the
______________________ of international marketing decision.

(1) Standardization drawbacks


(2) Advertisement regulations
(3) Standardization benefits
(4) Typical responses
(5) None of these

ANSWER: (3) Standardization benefits

8. The most popular form of advertising and it reaches to masses.

(1) Social media


(2) Email
(3) Radio
(4) Television
(5) Print

ANSWER: (5) Print

9. Advertising for __________________ is not allowed.

(1) Liquor
(2) Washing powder
(3) Cigarette
(4) Cold cream
(5) Both 1 and 3

ANSWER: (5) Both 1 and 3

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10.The best advertisement is

(1) By emails
(2) Print media
(3) Television
(4) A satisfied customer

(5) Radio
ANSWER: (4) A satisfied customer

11. Catalogues, magazines, newspaper and invitations to organization-sponsored events are


associated with the marketing mix activity of ___________________.

(1) Manufacture
(2) Production
(3) Promotion
(4) Development
(5) None of these
ANSWER: (3) Promotion

12. Advertisement is a type of ________________________.

(1) Outdoor marketing


(2) Indirect marketing
(3) Share marketing
(4) Transaction marketing
(5) Relationship marketing

ANSWER: (2) Indirect marketing

13.With the popularity of satellites, phones, iPod etc. usage of ________________________


becomes ineffective but in remote areas it is considered as the fastest way to communicate
with masses.

(1) Social media


(2) Email

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(3) Radio
(4) Television
(5) Print
ANSWER: (3) Radio

14. Advertising is a non-personal process but must be written or printed in words


________________________advertise and helps in the sale of the product.

(1) Salesman
(2) Sponsors
(3) Marketer
(4) Marketing manager
(5) None of these
ANSWER: (2) Sponsors

15. The advertisement of newspaper has a very short life span of

(1) One day


(2) One week
(3) One month
(4) One year
(5) None of these
ANSWER: (1) One day

16. Advertising is not flexible as the message is once fixed it can’t be altered again and again
according to the_____________.

(1) Advertiser
(2) Sponsor
(3) Customer
(4) Marketer
(5) None of these

ANSWER: (3) Customer

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17. From the perspective of sales, advertisements are required for

(1) Profit
(2) Loss
(3) Increasing sales
(4) Decreasing sales
(5) None of these

ANSWER: (3) Increasing sales

18. When a number of advertisements are published in the newspaper in series and in regular
intervals are called

(1) Monopoly in market


(2) Feedback mechanism
(3) Boosting the sales
(4) Teaser advertisements
(5) None of these

ANSWER: (4) Teaser advertisements

19. Advertising is generally criticized because the cost involved in making ads are
generally__________________

(1) High
(2) Low
(3) Medium
(4) Equal to the production
(5) None of these

ANSWER: (1) High

20 ____________________ and loyalty programs are wonderful and cost effective way to
stay in touch with customers when customer database is used correctly.

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(1) Social media


(2) Email
(3) Radio
(4) Television
(5) Print
ANSWER: (2) Email

21. “Through newspaper any firm can reach literate customers only”. It’s a

(1) Nothing related to illiterate customers


(2) Advantage of newspaper
(3) Drawback of newspaper
(4) No problem in such advertising
(5) None of these

ANSWER: (3) Drawback of newspaper

22. Levels of differentiation, market share, product lifecycle stage, correlating promotional
spending and brand sales are part of _________________________________ in advertising.

(1) Objective of advertising


(2) Models of advertising
(3) Evaluation of advertising
(4) Developing strategy
(5) None of these
ANSWER: (4) Developing strategy

23. Advertising involves dissemination of information about a produce, service to induce


people to take actions beneficial to

(1) Advertiser
(2) Sponsor
(3) Marketing manager
(4) Firm
(5) Retailer

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ANSWER: (1) Advertiser

24. Which of the following is the most popular print media available to advertiser?

(1) Magazine
(2) Pamphlet
(3) Emails
(4) Newspaper
(5) None of these
ANSWmmER: (4) Newspaper

25. Direct mail advertising is suitable in case of

(1) Retailer
(2) Wholesaler
(3) Personal selling
(4) Share broker
(5) None of these
ANSWER: (4) Share broker

26. ____________________is used primarily by nonprofit organizations, charity foundations,


public highway departments, and government agencies.
a. Social marketing
b. Tele marketing
c. Viral marketing
d. Relationship marketing

27. _______________is a method of direct marketing in which a salesperson solicits


prospective customers to buy products or services, either over the phone or through a
subsequent face to face or Web conferencing appointment scheduled during the call.
a. Social marketing
b. Telemarketing
c. Viral marketing
d. Customer relation marketing

28. _____________ consists of handling incoming telephone calls—often generated by


broadcast advertising, direct mail, or catalogues—and taking orders for a wide range of
products.
a. Social marketing
b. Inbound Telemarketing
c. Viral marketing

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d. Outbound telemarketing

8 Marks Questions

1.What do you mean by media selection? Identify the factors affecting media selection(apply)
2.Examine the factors governing the choices of Advertising media.(analysing)
3.Evaluate the role of media in advertising.(Skill)
4. What is media? Explain the different types of media.(skill)
5. What is electronic media > Identify its advantages.(apply)
6. What is outdoor advertisement. Examine its impact to the consumers.(analysing)
7. What is transit media? categorise its advantages.(analysing)
8. The growing power of transit media in advertising. Explain. (understanding)
9.Explain the power of media in digital age. (understanding)
10. Write a note of Mail box – Inbox. (understanding)
11. Explain the important of targeting in advertising. Understanding)
12. Media which impacting business activity in present Era. Evaluate. (skill)

UNIT III MCQ

1._________________ is helpful in promotion the businesses people and big industrialists are
promoting their goods and services through networking sites like Face book, Twitter etc.

(1) Social media


(2) Email
(3) Radio
(4) Television
(5) Print
ANSWER: (1) Social media

2. _______________________ ignores large differences in cultures, demographics, and


economics of international marketing decision.

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(1) Standardization drawbacks


(2) Advertisement regulations
(3) Standardization benefits
(4) Typical responses
(5) None of these
ANSWER: (1) Standardization drawbacks

3. Pioneer advertising, consumer advertising and product advertising are

(1) Objective of advertising


(2) Types of advertising
(3) Marketing decisions in advertising
(4) Evaluating advertising
(5) None of these

ANSWER: (2) Types of advertising

4. Drama, exhibitions, fair are effective means of

(1) Personal selling


(2) Advertisements
(3) Sales territory
(4) Entertainment
(5) None of these

ANSWER: (4) Entertainment

5. _________________ in advertisement means of providing complete information about the


product and its uses to the society.

(1) Legal environment


(2) Awareness
(3) Interest
(4) Personal selling

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(5) Educative

ANSWER: (5) Educative

6. Comparing past sales and advertisement, trying for new experiments, measuring sale
difficulties are

(1) Objective of advertising


(2) Models of advertising
(3) Evaluation of advertising
(4) Developing strategy
(5) None of these

ANSWER: (3) Evaluation of advertising

7. In advertisements we generally see a warning for cigarettes that “Smoking is Injurious to


health”. It’s an example of

(1) Advertising
(2) Monopoly in market
(3) Legal environment
(4) Entertainment
(5) None of these

ANSWER: (3) Legal environment

8. Selecting style, tone, words for making ads are part of

(1) Message strategy


(2) Message execution
(3) Selecting media
(4) Measuring communication
(5) None of these

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ANSWER: (2) Message execution

9. Through ads customer used to take their purchasing decision in advance, in this way
advertisement help in

(1) Online marketing


(2) Customer decision
(3) Personal selling
(4) Convenient purchasing
(5) None of these

ANSWER: (4) Convenient purchasing

10. “Think globally, act locally” is a global advertising strategies and local advertising
programs under ______________________ of international marketing decision.

(1) Standardization drawbacks


(2) Advertisement regulations
(3) Standardization benefits
(4) Typical responses
(5) None of these

ANSWER: (4) Typical responses

11. Sandwich Board Advertisements is not suitable for the products like

(1) Burger
(2) Pizza
(3) Cold drink
(4) Pizza
(5) Potato chips

ANSWER: (3) Cold drink

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12. A particular growing of customers assigned to a salesman for his sales activity is called

(1) Marketing territory


(2) Sales territory
(3) Advertisement territory
(4) Promotion territory
(5) None of these

ANSWER: (2) Sales territory

13. Digital marketing is same as

(1) Marketing through emails


(2) Marketing on Facebook
(3) Marketing on Twitter
(4) Online ads
(5) All of the above

ANSWER: (5) All of the above

14. “Advertising is any paid form of non-personal presentation and promotion of ideas, goods
and services by an identified person”. Who stated this?

(1) Australian marketing Association


(2) European marketing Association
(3) China marketing Association
(4) American marketing Association
(5) Indian marketing Association

ANSWER: (4) American marketing Association

15. Advertising influences the mind of the consumers by creating desire and taste for

(1) Old products


(2) Same products

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(3) New products


(4) Different products
(5) None of these

ANSWER: (3) New products

16. Magazines add credibility to the message because of the reputation in the eyes of

(1) Marketing manager


(2) Salesman
(3) Retailers
(4) Consumers
(5) Wholesalers
ANSWER: (4) Consumers

17. Creating innovative and new ideas, identifying customers benefit, selecting specific
appeals for advertisements are the part of

(1) Message strategy


(2) Message execution
(3) Selecting media
(4) Measuring communication
(5) None of these

ANSWER: (1) Message strategy

18. Advertising gives benefits to society of large people. At the same time it adds to cost,
undermine social values, creating monopoly and encourage______________________.

(1) Sale of products


(2) Sale of interior products
(3) Sale of old products
(4) Sale of large products

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(5) None of these


ANSWER: (2) Sale of interior products

19. Advertisement is a mass communication. It addresses to masses and it’s a form of


____________________________ communication.

(1) Personal
(2) Non personal
(3) Direct
(4) Indirect
(5) None of these

ANSWER: (2) Non personal

20. Advertisement provides information regarding product, or idea in non-personal forms, as


no face to face contact is involved between _________________________.

(1) Marketer and retailer


(2) Jobber and wholesaler
(3) Buyer and customer
(4) Market manager and salesman
(5) None of these
ANSWER: (3) Buyer and customer

21. It is difficult to evaluate the impact of advertising message as there is no immediate and
accurate _______________.

(1) Legal environment


(2) Feedback mechanism
(3) Convenient purchasing
(4) Educative
(5) None of these
ANSWER: (2) Feedback mechanism

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22.__________________ is the most recent and effective medium of advertisement.

(1) Newspaper
(2) Magazine
(3) Television
(4) Emails
(5) Radio

23. What is meant by the phrase CSR?

A Corporate Social Responsibility

B Company Social Responsibility

C Corporate Society Responsibility

D Company Society Responsibility

Answer: Corporate Social Responsibility

24. What does Milton Friedman believe to be the sole responsibility of business?

A The only social responsibility of business is to its shareholders

B Managers should act in ways that balance the interest of society and shareholders

Che primary responsibility organizations have is to its employees

D The primary responsibility organizations have is to its stakeholders

Answer: The only social responsibility of business is to its shareholders

25.  What is the enlightened self-interest model of CSR?

A That it is in an organization's own best interest to put itself first rather than its ethics

B That it is in an organization's best interest to consider what a shareholder would want

C That it is in an organization's own best interest to act in an ethical way

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D That it is in an organization's own best interest to follow the legislation and abide by the
law

Answer: That it is in an organization's own best interest to act in an ethical way

ANSWER THE FOLLOWING QUESTIONS

1. Illustrate the essentials of good advertising copy (Understanding)

2. Summarise the different types of advertisement copy. (Understanding)

3. Identify the essentials of effective advertisement copy.(applying)

4. Explain the major components of good advertisement copy. (Understanding)

5. What is the contribution of AIDA how it is used in marketing. Explain.(underst)

6. What is DAGMAR? Explain the special consideration for DAGMAR.(knowledge)

7. Apply the approaches of DAGMAR and explain how it could be useful and
advertisement.(understanding)

8. Evaluate the advantages of DAGMAR approaches.(skill

9. Classify the models of DAGMAR. (analyse)

10. Examine the objectives of DAGMAR (Analyse)

11. Evaluate the elements of advertising layout. (skill)

12. Bring out the qualities of good advertisement layout.(knowledge)

13. Discover the types of advertisement appeal. (application)

UNIT IV MCQ

1. What does the importance of ethical behaviour, integrity and trust call into question?

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A The extent to which managers should attempt to change the underlying beliefs and values
of individual followers

B Who does what

C What we do next

D None of these

Answer: The extent to which managers should attempt to change the underlying beliefs and
values of individual followers

2. Which of the following would most effectively act as the primary objective of a business
organisation?
A To make a profit

B To procure resources

C To communicate with shareholders

D To mediate between the organisation and the environment

Answer: To make a profit

3.Which of the following does the term Corporate Social Responsibility relate to?

A Ethical conduct

B Environmental practice

C Community investment

D All of the above

Answer: All of the above

4. What is Ethics to do with?

A The wider community

B Business

C Right and wrong

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D Nothing

Answer: Right and wrong

5. Which legislation relates to the concept of business ethics?

A Freedom of Information Act

B Food Act

C Building regulations

D All of these

Answer: Freedom of Information Act

6. A stakeholder orientation includes all of the following activities except:

A Generating Data About Stakeholder Groups

B Assessing The Firm's Effects On Stakeholder Groups

C Distributing Stakeholder Information Throughout The Firm

D Minimizing The Influence Of Stakeholder Information On The Firm

Answer: Minimizing The Influence Of Stakeholder Information On The Firm

7. A (n) ________ is a problem, situation, or opportunity requiring an individual, group, or


organization to choose among several actions that must be evaluated as right or wrong.

A Crisis

B Ethical Issue

C Indictment

D Fraud

8. What type of justice exists if employees are being open, honest, and truthful in their
communications at work?

A Procedural

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B Distributive

C Ethical

D Interactional

Answer: Interactional

9. Better access to certain markets, differentiation of products, and the sale of pollution-
control technology are ways in which better environmental performance can:

A Increase Revenue

B Increase Costs

C Decrease Revenue

D Decrease Costs

Answer: Increase Revenue

10. Atmospheric issues include all of the following except:

A Acid Rain

B Global Warming

C Air Pollution

D Water Quantity

Answer: Water Quantity

11. Most companies begin the process of establishing organizational ethics programs by
developing:

A Ethics Training Programs

B Codes Of Conduct

C Ethics Enforcement Mechanisms

D Hidden Agendas

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Answer: Codes Of Conduct

12.  When a firm charges different prices to different groups of customers, it may be accused
of:

A Cultural Relativism

B Money Laundering

C Facilitating Payments

D Price Discrimination

Answer: Cultural Relativism

13. Successful global initiatives addressing standards for business must begin and end with:

A the role of corporate governance and shareholder power in corporate decision making

B social activism

C the implementation of standardized ethics programs

D the consolidation of economic and environmental efforts

Answer: the role of corporate governance and shareholder power in corporate decision
making

14. The social economy partnership philosophy emphasizes:

A Cooperation And Assistance

B Profit Maximization

C Competition

D Restricting Resources And Support

Answer: Cooperation And Assistance

15. Which of the following is a problem presented by ethics audits?

A They may be used to reallocate resources

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B They identify practices that need improvement

C Selecting auditors may be difficult

D They may pinpoint problems with stakeholder relationships

Answer: Selecting auditors may be difficult

16. The first step in the auditing process should be to secure the commitment of:

A Employees

B Top Executives And Directors

C Stockholders

D Customers

Answer: Top Executives And Directors

17. ____________ refers to a strategic process involving stakeholder assessment to create


long-term relationships with customers, while maintaining, supporting, and enhancing the
natural environment.

A Eco-strategy

B Green marketing

C Superfund reauthorization

D Recycle and reprocess management

Answer: Green marketing

18. The hand-of-government refers to the

A Ability Of The Government To Interfere In Business Negotiations

B Role Of Corporations To Be Profitable Within The Law

C Effect Of National Politics On Business Decisions

D Impact Of Changing Government Regulations

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Answer: Role Of Corporations To Be Profitable Within The Law

19. An organisation's obligation to act to protect and improve society's welfare as well as its
own interests is referred to as

A Organisational Social Responsibility

B Organisational Social Responsiveness

C Corporate Obligation

D Business Ethics

Answer: Organisational Social Responsibility

20. Managerial ethics can be characterised by all of the following levels except

A Immoral Management

B Amoral Management

C Demoral Management

D Moral Management

Answer: Demoral Management

21. Which of the following is not one the underlying principles of the corporate governance
Combined Code of Practice?

A Openness

B Integrity

C Accountability

D acceptability

Answer: acceptability

22. A company may become insolvent if it

A has negative working capital

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B cannot meet its budgeted level of profit

C makes a loss

D cannot pay creditors in full after realisation of its assets

Answer: cannot pay creditors in full after realisation of its assets

23. Fraudulent trading may be

A a civil offence committed by any employee

B a criminal offence committed only by directors of a limited company

C a civil and a criminal offence committed only by directors of a limited company

D a civil and a criminal offence committed by any employee

Answer: a civil and a criminal offence committed by any employee

24. Disqualification of directors may result from breaches under the

A Sale of Goods Act 1979

B Financial Services Act 1986

C Companies Act 2006 and Insolvency Act 1986

D Health and Safety at Work Act 1974

Answer: Companies Act 2006 and Insolvency Act 1986

25. Directors may not be disqualified for

A continuing to trade when the company is insolvent

B persistent breaches of company legislation

C paying inadequate attention to the company finances

D being convicted of drunken driving

Answer: being convicted of drunken driving

ANSWER THE FOLLOWING QUESTIONS 8 MARKS

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1. What is advertising agency and explain its features.

2. Explain the types Advertising agency (understanding)

3. Examine the common mistakes occurs while changing advertisement agency.


(analysing)

4.Identify the different organisation structure of an agency. (applying)

5. What is agency compensation? Outline the types of agency. (understanding)

6. What is client turnover? Identify the reasons for client turnover. (apply)

7. How advertisement tools can be measured? illustrate with suitable examples.


(remembering).

8. Write a note on Pre testing method.

9. Write note on a) Concurent testing b) Post testing method

10. Write note on Post testing method.

UNIT V MCQ

1. Which of the following actions will not help directors to protect themselves
from non-compliance with their obligations and responsibilities?
A keeping themselves fully informed about company affairs

B ensuring that regular management accounts are prepared by the company

C seeking professional help

D including a disclaimer clause in their service contracts

Answer: including a disclaimer clause in their service contracts

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2. The OECD argues that corporate governance problems arise because:

A Ownership and control is separated

B Managers always act in their own self interest

C Profit maximization is the main objective of organizations

D Stakeholders have differing levels of power

Answer: Ownership and control is separated

3. Co-ording to Cadbury (2002), corporate governance is an issue of power and:

A Rights

B Accountability

C Profit

D Appropriability

Answer: Accountability

4. A director of a limited company may not be liable for wrongful trading if he or she

A took every step to minimise the potential loss to creditors

B increased the valuation of its inventories to cover any potential shortfall

C introduced into the balance sheet an asset based on a valuation of its brands sufficient to
meet any shortfall

D brought in some expected sales from next year into the current year

Answer: took every step to minimise the potential loss to creditors

5. Directors’ responsibilities are unlikely to include.

A a fiduciary duty

B a duty to keep proper accounting records

C a duty to propose high dividends for shareholders

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D a duty of care

Answer: a duty to propose high dividends for shareholders

6.  External audit of the accounts of a limited company is required

A Because It Is Demanded By The Company’s Bankers

B By The Companies Act 2006

C At The Discretion Of The Shareholders

D To Detect Fraud

Answer: By The Companies Act 2006

7. The view that business exists at society's pleasure and businesses should meet public
expectations of social responsibility is the

A iron law of responsibility argument

B enlightened self-interest argument

C capacity argument

D anti-freeloader argument

Answer: enlightened self-interest argument

8.  In a ______________ organization, decision making is delegated as far down the chain of
command as possible.

A Decentralized

B Creative

C Flexible

D the consolidation of economic and environmental efforts

Answer: Centralized

9. Which of the following is NOT one of the primary elements of a strong organizational
compliance program?

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A A written code of conduct

B An ethics officer

C Significant financial expenditures

D A formal ethics training program

Answer: Significant financial expenditures

10. Codes of conduct and codes of ethics

A Are Formal Statements That Describe What An Organization Expects Of Its Employees

B Become Necessary Only After A Company Has Been In Legal Trouble

C Are Designed For Top Executives And Managers, Not Regular Employees

D Rarely Become An Effective Component Of The Ethics And Compliance Program

Answer: Are Formal Statements That Describe What An Organization Expects Of Its
Employees

11.  Which of the following is not a driver of responsible competitiveness?

A Policy drivers

B Development drivers

C Business action

D Social enablers

Answer: Development drivers

12. The ability to interpret and adapt successfully to different national, organizational, and
professional cultures is called:

A National Competitiveness

B Global Development

C Cultural Intelligence

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D Stakeholder Sensitivity

Answer: Cultural Intelligence

13. For referent power to be effective, what must exist between individuals in the
relationship?

A Antipathy

B Rivalry

C History

D Empathy

Answer: Empathy

14. To be successful, business ethics training programs need to:

A focus on personal opinions of employees

B be limited to upper executives

C educate employees on formal ethical frameworks and models of ethical decision making

D promote the use of emotions in making tough ethical decisions

Answer: educate employees on formal ethical frameworks and models of ethical decision
making

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15. A high-commitment approach to environmental issues may include all of the following
except:

A Risk Analysis

B Stakeholder Analysis

C Green-Washing

D Strategic Sustainability Auditing

Answer: Green-Washing

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16. Stakeholders are considered more important to an organization when:

A they can make use of their power on the organization

B they do not emphasize the urgency of their issues

C their issues are not legitimate

D they can express themselves articulately

Answer: they can make use of their power on the organization

17. The ________ dimension of social responsibility refers to a business's societal


contribution of time, money, and other resources.

A Ethical

B Philanthropic

C Volunteerism

D Strategic

Answer: Philanthropic

18. The four types of social responsibility include:

A Legal, Philanthropic, Economic, And Ethical

B Ethical, Moral, Social, And Economic

C Philanthropic, Justice, Economic, And Ethical

D Legal, Moral, Ethical, And Economic

Answer: Legal, Philanthropic, Economic, And Ethical

19.  Which of the following is an example of an area where business ethics apply?

A Conduct of international operations

B Nowhere

C In the personal life of staff

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D None of the above

Answer: Conduct of international operations

20. Who are organisational stakeholders?

A Government

B Employees

C Customers

D All of the above

Answer: All of the above

21. What is green washing?

A Transforming products to be more ethical

B Making a product appear more ethical that it really is

C Converting the company to green production methods

D Convincing customers to buy ethically

Answer: Making a product appear more ethical that it really is

22. What is triple bottom line?

A An accounting tool that looks at the impact on people, planet and profits

B A management strategy which states all the attention should be on profits

C An accounting tool that looks at cost, profit and loss

D A management strategy which focuses on corporate social responsibility

Answer: An accounting tool that looks at the impact on people, planet and profits

23. Why do alternative organizations run differently from conventional shareholder led
approach?

A They do not have shareholders

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B They are run in non-hierarchical ways which aim to provide a positive impact on society
rather than to make profit

C They priorities corporate social responsibility

D They aim to give money to charities and good causes

Answer: They are run in non-hierarchical ways which aim to provide a positive impact on
society rather than to make profit

24. What does and Ethical Foundation for an organisation embody?

A The structure, operational and conduct of the activities of the organization

B The basic principles which govern the external and internal relations of the organization

C Neither of the above

D All of these

Answer: The basic principles which govern the external and internal relations of the
organization

25. A ________ _________ sets out the purpose and general direction for the organisation?

A Mission statement

B Purpose statement

C Vision

D Profit statement

Answer: Mission statement

26. What is the purpose of a balanced scorecard?

A To measure contribution of people to business growth

B To combine a range of qualitative and quantitative indicators of performance

C To relate business performance to customer satisfaction

D All of the above

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Answer: To combine a range of qualitative and quantitative indicators of performance

27. What, according to Adam Smith, is the best way to promote collective interest?

A Through government making decisions about what is in the public interest

B Through everyone working together to support each other

C Through everyone working on their own self-interest

D Through individuals forgoing their personal interest for the good of the collective

Answer: Through everyone working on their own self-interest

THE ANSWER FOLLOWING QUESTIONS 8 MARKS

UNIT – V

1. Critically examine the contained unethical and unsocial of Advertisement. (Skill)

2. Demonstrate the objectives of Advertising Council of India (Understanding)

3. write note on Consumer Complaint Council (CCC) (understanding)

4. Examine the mission of Advertising Council of India (ASCI). (Analysing)

5.Bring out and Defend the false misleading Impressive of Advertisement. (Skill)

6.Demonstrate the spotting common advertisement strategies. (Understanding)

7. Give a note on The involvement of children and its Effectiveness in the advertisement

(Understanding)

8. What is product endorsement? Bring out its effects as marketing tool. (Analysing)

9. What is product Endorsement? Explain its advantages and disadvantages. (skill)

10. What is stereo typing person centre communication. Explain the Implicit theory of

Intergroup Relationship.

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11. Give a Note on Intergroup Perception and Cognition (understanding)

12. What is stereo typing? Explain the obstacles of Stereo typing.

13. What is problematic about stereo typing and Biases.

14. Give a Note on stereo typing Effects (understanding)

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