CONTENTS

 TYPES OF CONSUMERS
 FACTORS INFLUENCING
CONSUMER BEHAVIOR
 CONSUMER DECISION MAKING
PROCESS
 CONDUCTING MARKETING
RESEARCH
 PROMOTION MIX
 ADVERTISING
 PUBLIC RELATIONS
 PUBLICITY
 SALES PROMOTION
 PERSONAL SELLING
Customers are the reason you have a business. If you had no customers, you would have no
business very soon. But what type of customers are there and how can you sell to them?

There are seven types of customers. Each one has unique traits, but it is important to note that
your customers can be a combination of these seven types of customers.

1. Loyal customer

This is your most important customer. They have bought your product and keep coming back for
more. They share information about your product through word-of-mouth and social media
platforms. You can boost their joy for your product by making them brand ambassadors. You
should also give them a platform where they can share their joy for the product. You should
also learn from your loyal customers’ experience with your product and make sure you don’t
mess up with them. If you do mess up then you should make it up to them in a positive way.

2. Need-based customer

These customers buy your product because they have a need and know that your product will
satisfy it. They know what they are looking for and you will struggle to upsell to them. They don’t
want to be involved in chitchat. You can move these customers to loyal customers by giving
them excellent personal interactions with your staff. They need to be served quickly. Normally
this customer will come into your store saying “Show me where your drills are”.

3. Impulsive customer

This type of customer usually buys based on feelings. They want to feel good about their
purchase. You can upsell to them and they will usually take it if you have made them feel good
about the purchase. When they are ready to make a purchase you need to make the checking-
out stage easy, whether it is online or in a retail store. They should also have access to quick
concise help if they have a question.

4. New customer

Your customer has made a purchase. Now what? It is important to make them successful in
using your product. This means that the instructions manuals should be well designed. If you
are selling a service, you should have a proper user on-boarding system which works
seamlessly. You should also have all the ways your customer can contact you easily accessible.

5. Potential customer

This customer may not have a need for your product or is still in the early stages of researching
the product they want to buy. You need to nurture this customer and warm them up to your
product. You can do this by giving them accurate and relevant information. You also need to
show them the value of your product. There should also be people near them who are willing to
answer their questions if they are in your retail store or you should have your social media icons
and contact us page easily visible on your website.

6. Discount customer

“What discount do you offer?” may be the first words you will hear from this customer. They are
more interested in the price of the product then they are, necessarily, interested in the product
you are selling. Because for the majority of the time they are only using your product for the
discount, they will easily move on to another company if they offer your customer a better deal.
They won’t react to upselling. If you do want to change these customers to loyal customers, you
should offer them added value and explain to them clearly how your deal works.

7. Wandering customers

These are customers who come into your store to kill a bit of time before meeting up with a
friend or going to a movie. They may ask you random questions about the things you sell. You
can change this customer into a new customer by offering them accurate answers to the
questions they ask and being professional with them.

Major Factors Influencing Consumer Behavior

Consumer behavior is influenced by many different factors. A marketer should try to understand
the factors that influence consumer behavior. Here are 5 major factors that influence consumer
behavior:

1. Psychological Factors

2. Social Factors

3. Cultural Factors

4. Personal Factors

5. Economic Factors

1. Psychological Factors

Human psychology is a major determinant of consumer behavior. These factors are difficult to
measure but are powerful enough to influence a buying decision.

Some of the important psychological factors are:

i. Motivation

When a person is motivated enough, it influences the buying behaviour of the person. A person
has many needs such as the social needs, basic needs, security needs, esteem needs and self-
actualization needs. Out of all these needs, the basic needs and security needs take a position
above all other needs. Hence basic needs and security needs have the power to motivate a
consumer to buy products and services.

ii. Perception

Consumer perception is a major factor that influences consumer behavior. Customer

perception is a process where a customer collects information about a product and interprets
the information to make a meaningful image about a particular product.

When a customer sees advertisements, promotions, customer reviews, social media feedback,
etc. relating to a product, they develop an impression about the product. Hence consumer
perception becomes a great influence on the buying decision of consumers.

iii. Learning

When a person buys a product, he/she gets to learn something more about the product.
Learning comes over a period of time through experience. A consumer’s learning depends on
skills and knowledge. While a skill can be gained through practice, knowledge can be acquired
only through experience.

Learning can be either conditional or cognitive. In conditional learning the consumer is exposed
to a situation repeatedly, thereby making a consumer to develop a response towards it.

Whereas in cognitive learning, the consumer will apply his knowledge and skills to find
satisfaction and a solution from the product that he buys.

iv. Attitudes and Beliefs

Consumers have certain attitude and beliefs which influence the buying decisions of a
consumer. Based on this attitude, the consumer behaves in a particular way towards a product.
This attitude plays a significant role in defining the brand image of a product. Hence, the
marketers try hard to understand the attitude of a consumer to design their marketing
campaigns.

2. Social Factors

Humans are social beings and they live around many people who influence their buying
behavior. Human try to imitate other humans and also wish to be socially accepted in the
society. Hence their buying behavior is influenced by other people around them. These factors
are considered as social factors. Some of the social factors are:

i. Family

Family plays a significant role in shaping the buying behavior of a person. A person develops
preferences from his childhood by watching family buy products and continues to buy the same
products even when they grow up.

ii. Reference Groups

Reference group is a group of people with whom a person associates himself. Generally, all the
people in the reference group have common buying behavior and influence each other.

iii. Roles and status

A person is influenced by the role that he holds in the society. If a person is in a high position,
his buying behavior will be influenced largely by his status. A person who is a Chief Executive
Officer in a company will buy according to his status while a staff or an employee of the same
company will have different buying pattern.
3. Cultural factors

A group of people are associated with a set of values and ideologies that belong to a particular
community. When a person comes from a particular community, his/her behavior is highly
influenced by the culture relating to that particular community. Some of the cultural factors are:

i. Culture

Cultural Factors have strong influence on consumer buyer behavior. Cultural Factors include
the basic values, needs, wants, preferences, perceptions, and behaviors that are observed and
learned by a consumer from their near family members and other important people around
them.

ii. Subculture

Within a cultural group, there exists many subcultures. These subcultural groups share the
same set of beliefs and values. Subcultures can consist of people from different religion, caste,
geographies and nationalities. These subcultures by itself form a customer segment.

iii. Social Class

Each and every society across the globe has form of social class. The social class is not just
determined by the income, but also other factors such as the occupation, family background,
education and residence location. Social class is important to predict the consumer behavior.

4. Personal Factors

Factors that are personal to the consumers influence their buying behavior. These personal
factors differ from person to person, thereby producing different perceptions and consumer
behavior.

Some of the personal factors are:

i. Age

Age is a major factor that influences buying behavior. The buying choices of youth differ from
that of middle-aged people. Elderly people have a totally different buying behavior. Teenagers
will be more interested in buying colorful clothes and beauty products. Middle-aged are focused
on house, property and vehicle for the family.

ii. Income

Income has the ability to influence the buying behavior of a person. Higher income gives higher
purchasing power to consumers. When a consumer has higher disposable income, it gives
more opportunity for the consumer to spend on luxurious products. Whereas low-income or
middle-income group consumers spend most of their income on basic needs such as groceries
and clothes.

iii. Occupation

Occupation of a consumer influences the buying behavior. A person tends to buy things that are
appropriate to this/her profession. For example, a doctor would buy clothes according to this
profession while a professor will have different buying pattern.

iv. Lifestyle

Lifestyle is an attitude, and a way in which an individual stay in the society. The buying behavior
is highly influenced by the lifestyle of a consumer. For example when a consumer leads a
healthy lifestyle, then the products he buys will relate to healthy alternatives to junk food.

5. Economic Factors

The consumer buying habits and decisions greatly depend on the economic situation of a
country or a market. When a nation is prosperous, the economy is strong, which leads to the
greater money supply in the market and higher purchasing power for consumers. When
consumers experience a positive economic environment, they are more confident to spend on
buying products.

Whereas, a weak economy reflects a struggling market that is impacted by unemployment and
lower purchasing power.

Economic factors bear a significant influence on the buying decision of a consumer. Some of
the important economic factors are:

i. Personal Income

When a person has a higher disposable income, the purchasing power increases
simultaneously. Disposable income refers to the money that is left after spending towards the
basic needs of a person.

When there is an increase in disposable income, it leads to higher expenditure on various items.
But when the disposable income reduces, parallelly the spending on multiple items also
reduced.

ii. Family Income

Family income is the total income from all the members of a family. When more people are
earning in the family, there is more income available for shopping basic needs and luxuries.
Higher family income influences the people in the family to buy more. When there is a surplus
income available for the family, the tendency is to buy more luxury items which otherwise a
person might not have been able to buy.
iii. Consumer Credit

When a consumer is offered easy credit to purchase goods, it promotes higher spending.
Sellers are making it easy for the consumers to avail credit in the form of credit cards, easy
installments, bank loans, hire purchase, and many such other credit options. When there is
higher credit available to consumers, the purchase of comfort and luxury items increases.

iv. Liquid Assets

Consumers who have liquid assets tend to spend more on comfort and luxuries. Liquid assets
are those assets, which can be converted into cash very easily. Cash in hand, bank savings and
securities are some examples of liquid assets. When a consumer has higher liquid assets, it
gives him more confidence to buy luxury goods.

v. Savings

A consumer is highly influenced by the amount of savings he/she wishes to set aside from his
income. If a consumer decided to save more, then his expenditure on buying reduces. Whereas
if a consumer is interested in saving more, then most of his income will go towards buying
products.

Consumer Buying Behavior

Purchase Process

Introduction

What influences consumers to purchase products or services? The consumer buying process is
a complex matter as many internal and external factors have an impact on the buying decisions
of consumers.

Consumers do not spend much time thinking about the purchase of low value products which
are bought on impulse. Manufacturers of such products will need to implement strategies that
encourage consumers to buy on impulse from them instead of their competitors e.g. attractive
packaging. When consumers purchase high value products or non impulse products, they often
go through a set process. This process is discussed below.

On the next page there is a discussion of what influences consumer buying behavior and the
different types of buying behavior.
The diagram below maps out the consumer purchase process from when the consumer
recognises that they have a reason to make a purchase through to after the purchase

Problem Or Need Recognition

How do you decide which particular product or service to purchase? It could be that your Blu-
Ray DVD player stops working and you now have to look for a new one; otherwise you will not
be able to play your Blu-Ray films so you have a problem or a new need. This is the first step in
the consumer buying process.

Information Search

So we have a problem, our Blu-Ray player no longer works and we need to buy a new one.
What is the solution? Go out and purchase a new one, but which brand? Shall we buy the same
brand as the one that broke down? Or stay clear of that just in case the new player experiences
the same problems as the old one? Consumer often go on an information search to help them
choose their product. Sources of information include family, friends, retail staff and in this digital
age the internet. The internet contains information about products (specifications), product
reviews and online product forums. Information search may involve a visit to a retail store to
view products that the consumer is interested in purchasing. In our example the consumer is on
an information search to solve an immediate problem; they intend to make a purchase at the
end of the process. Consumers also acquire and store information for future purchases. Firms
will take such consumers into account when designing their marketing strategies, in the hope
that when such a consumer is ready to buy they will use the "stored" information about their
product into account and buy their products.
Evaluation of different purchase options

So what Blu-Ray DVD player do we purchase? Will it be a Sony, Toshiba or Samsung player?
Consumers often create a point system in their minds where products are scored based on how
many of their features appeal to them. So for one customer, brand may be more important then
price and for another customer product appearance may be important. In the case of a DVD
player consumers may be reviewing sound and picture quality. An evaluation system is
particularly useful when there is a large number of options. Marketing strategies will try and
influence this stage of the process by highlighting product features that they think will appeal to
consumers. Appealing product features will be emphasised on product packaging, promotional
materials and the manufacturer's websites.

Purchase Decision

After the evaluation process consumers will select the product they would like to purchase.
Once product may be a clear winner or the consumer may have to re- prioritise their criteria to
help them select a product. The job of the seller is to ensure that the purchase process is simple
and effective. Even at this stage the purchaser could change their mind and select a competitor
product or cancel the purchase altogether. A long queue, impolite sales staff or complicated
sales process can all dissuade consumers from buying. Even if a consumer buys on this
occasion a negative buying experience could stop them buying in the future. Therefore sellers
need to make the buying process as simple and enjoyable as possible to safeguard this and
future purchases.

Post Purchase Behaviour

Ever have doubts about the product after you purchased it? Research shows that this feeling is
a common post purchase behaviour. Manufacturers of products clearly want purchasers to feel
proud of their purchase, so that they will purchase from them again and recommend them to
family and friends. It is therefore just as important for manufacturer's promotions to reassure
purchasers, as it is for them to attract new customers. Promotions should make purchasers feel
that they have bought their product from a strong and reputable organisation with "good"
products.

Factors Influencing Consumer Buying Behaviour

Introduction

Consumer behaviour is affected by many uncontrollable factors. Just think, what influences you
before you buy a product or service? Your friends, your upbringing, your culture, the media, a
role model or influences from certain groups?
Culture

Culture is one factor that influences behaviour. Simply culture is defined as our attitudes and
beliefs. But how are these attitudes and beliefs developed? As an individual growing up, a child
is influenced by their parents, brothers, sister and other family member who may teach them
what is wrong or right. They learn about their religion and culture, which helps them develop
these opinions, attitudes and beliefs (AIO) . These factors will influence their purchase
behaviour however other factors like groups of friends, or people they look up to may influence
their choices of purchasing a particular product or service. Reference groups are particular
groups of people some people may look up towards to that have an impact on consumer
behaviour. So they can be a singer like the Lady Gaga or your immediate family members.
Opinion leaders are those people that you look up to because your respect their views and
judgments and these views may influence consumer decisions. So it maybe a friend who works
with the IT trade who may influence your decision on what computer to buy. The economical
environment also has an impact on consumer behaviour; do consumers have a secure job and
a regular income to spend on goods? Marketing and advertising obviously influence consumers
in trying to evoke them to purchase a particular product or service.

Social Status

People's social status will also impact their behaviour. What is their role within society? Are they
Actors? Doctors? Office worker? and mothers and fathers also? Clearly being parents affects
your buying habits depending on the age of the children, the type of job may mean you need to
purchase formal clothes, the income which is earned has an impact. The lifestyle of someone
who earns £250000 would clearly be different from someone who earns £25000. Also
characters have an influence on buying decision. Whether the person is extrovert (out going and
spends on entertainment) or introvert (keeps to themselves and purchases via online or mail
order) again has an impact on the types of purchases made.

Maslow’s Hierarchy of Needs

Abraham Maslow's Hierarchy of Needs theory explores the factors behind human achievement
and sets out the answer in the form of a hierarchy. The diagram below shows each of the 5
needs in Maslow's Hierachy Of Needs
Maslow suggests individuals first need to satisfy basic physiological needs such as shelter
hunger and thirst. When these have been met, they move up to the next stage of the hierarchy;
safety needs, where the priority is things like job security and knowing that you have a regular
income. Safety is followed by social needs such as love and belonging. Things that influence
self esteem are next in the hierarchy; status, recognition, job title and even wearing branded
clothing make up self esteem needs as they imply a certain status. The last stage is self
actualisation or the point where an individual believes they have met their potential and all of
their needs have been met. But how does Maslow's concept help an organisation trying to
market a product or service?

Well as we have established earlier within this website, marketing is about meeting needs and
providing benefits, so the task involves marketing products that meet the needs of your target
market. For example supermarkets sell value brands to meet the physiological needs of hunger
and thirst whilst luxury retailer Harrods develops products and services for those who have met
their esteem needs and are at the top of Maslow's Hierarchy of Needs Model.

Types of Buying Behaviour.

There are four types of buying behaviour.

1. Complex buying behaviour is where the individual purchases a high value brand and
seeks a lot of information before the purchase is made.

2. Habitual buying behaviour is where the individual buys a product out of habit e.g. a
daily newspaper, sugar or salt.
 3. Variety seeking buying behaviour is where the individual likes to shop around and
experiment with different products. So an individual may shop around for different
breakfast cereals because he/she wants variety in the mornings!

4. Dissonance reducing buying behaviour is when buyers are highly involved with the
purchase of the product, because the purchase is expensive or infrequent. There is little
difference between existing brands an example would be buying a diamond ring, as
people believe there is little difference between diamond brand manufacturers.

Summary

There are five stages in the consumer purchase process

 Problem/Need Recognition

 Information search

 Evaluation of purchases

 Purchase decision

 Post purchase behaviour

Culture and social status has a big impact on consumer purchasing behaviour and product
development should take these into account. Marketers should also be aware of Maslow's
Hierarchy of needs theory during product selection, market segmentation, and marketing
campaign planning.

Consumer Decision Making Process

The consumer decision-making process can seem mysterious, but all consumers go through
basic steps when making a purchase to determine what products and services will best fit their
needs.

Think about your own thought process when buying something––especially when it’s something
big, like a car. You consider what you need, research, and compare your options before taking
the plunge. Afterwards, you often wonder if you made the right call.

If you work in sales or marketing, make more of an impact by putting yourself in the customer’s
shoes and reviewing the steps in the consumer decision-making process.

Steps in the consumer decision process

Generally speaking, the consumer decision-making process involves five basic steps. Start to
understand the unique decision process of your customers with this decision flowchart template.
1. Problem recognition

The first step of the consumer decision-making process is recognizing the need for a service or
product. Need recognition, whether prompted internally or externally, results in the same
response: a want. Once consumers recognize a want, they need to gather information to
understand how they can fulfill that want, which leads to step 2.

But how can you influence consumers at this stage? Since internal stimulus comes from within
and includes basic impulses like hunger or a change in lifestyle, focus your sales and marketing
efforts on external stimulus.

Develop a comprehensive brand campaign to build brand awareness and recognition––you

want consumers to know you and trust you. Most importantly, you want them to feel like they
have a problem only you can solve.

Example: Winter is coming. This particular customer has several light jackets, but she’ll need a
heavy-duty winter coat if she’s going to survive the snow and lower temperatures.
2. Information search

When researching their options, consumers again rely on internal and external factors, as well
as past interactions with a product or brand, both positive and negative. In the information
stage, they may browse through options at a physical location or consult online resources, such
as Google or customer reviews.

Your job as a brand is to give the potential customer access to the information they want, with
the hopes that they decide to purchase your product or service. Create a funnel and plan out the
types of content that people will need. Present yourself as a trustworthy source of knowledge
and information.

Another important strategy is word of mouth––since consumers trust each other more than they
do businesses, make sure to include consumer-generated content, like customer reviews or
video testimonials, on your website.
Example: The customer searches “women’s winter coats” on Google to see what options are
out there. When she sees someone with a cute coat, she asks them where they bought it and
what they think of that brand.

3. Alternatives evaluation

At this point in the consumer decision-making process, prospective buyers have developed
criteria for what they want in a product. Now they weigh their prospective choices against
comparable alternatives.

Alternatives may present themselves in the form of lower prices, additional product benefits,
product availability, or something as personal as color or style options. Your marketing material
should be geared towards convincing consumers that your product is superior to other
alternatives. Be ready to overcome any objections––e.g., in sales calls, know your competitors
so you can answer questions and compare benefits.

Example: The customer compares a few brands that she likes. She knows that she wants a
brightly colored coat that will complement the rest of her wardrobe, and though she would rather
spend less money, she also wants to find a coat made from sustainable materials.

4. Purchase decision

This is the moment the consumer has been waiting for: the actual purchase. Once they have
gathered all the facts, including feedback from previous customers, consumers should arrive at
a logical conclusion on the product or service to purchase.

If you’ve done your job correctly, the consumer will recognize that your product is the best
option and decide to purchase.

Example: The customer finds a pink winter coat that’s on sale for 20% off. After confirming that
the brand uses sustainable materials and asking friends for their feedback, she orders the coat
online.

5. Post-purchase evaluation

This part of the consumer decision-making process involves reflection from both the consumer
and the seller. As a seller, you should try to gauge the following:

 Did the purchase meet the need the consumer identified?

 Is the customer happy with the purchase?

 How can you continue to engage with this customer?

Remember, it’s your job to ensure your customer continues to have a positive experience with
your product. Post-purchase engagement could include follow-up emails, discount coupons, and
newsletters to entice the customer to make an additional purchase. You want to gain life-long
customers, and in an age where anyone can leave an online review, it’s more important than
ever to keep customers happy.

Conducting Marketing Research

What is market research?

Market research involves learning about your:

 customers

 competitors

 industry

Why research your market

Market research is essential for starting and running a successful business. It gives your
business direction and helps you stay on top of what your customers want.

Market research is useful to assess:

 the viability of a business or product idea

 whether you can grow into a new market or location

 industry or economic influences

You can also use your findings to:

 start a new business

 write or update your marketing plan

 measure the success of your marketing plan

How to do market research

To run a successful business, you need to learn about your customers, your competitors and
your industry.
Market research involves asking the right questions, in the right way, to the right people. This
gives your business directions and helps you stay on top of what your customers want, and how
much they're willing to pay for it.

When you undertake market research, you can use your findings in two ways:

 Start a new business and write your marketing plan.

 Measure the success of your current marketing plan.

Market research involves asking the right questions, in the right way, to the right people.

Follow these 5 steps to research your market:

1. Define your research objective

The first step in the market research process is to define your research objectives. Ask yourself:

 What is the key information you would like your research to uncover?

 What do you want to know about your customers or your market?

By defining your research aims, you'll be able to keep your research focused and effective.

For example, you might want to decide whether to launch a new product or service. Your
research process would then be to assess whether the market will accept your new product or
service, and how much they'll be willing to pay for it.

2. Develop your research questions

Once you've identified an objective, come up with a list of research questions for your market,
customers and competitors. For example:

Questions for your market:

 What are your market's key demographics (for example, as age and gender)?

 If you're starting a new business or product, how will your entrance affect the market and
customers?

 Does the region where you operate have a stable economy?

Questions for your customers:

 Who are your target customers and how do they behave?

 Where are they located?

  What's the profile of an ideal customer for your business?

Questions for your competitors:

 What's the profile of a typical competitor for your business?

 What are your competitors' main strengths?

 What are your competitors' main weaknesses?

3. Gather your research

There are 2 types of data collection, and both are based on asking questions:

 Qualitative information is more investigative and involves a fewer number of

respondents (focus groups and in-depth interviews).

 Quantitative information is used to draw specific conclusions and involves a large

number of respondents (surveys and questionnaires).

Ways to conduct research

Some common methods for data collection include:

 telephone polling

 mailed questionnaires

 online surveys

 personal interviews

You can conduct a simple 'yes or no' survey over the phone, but might need a face-to-face
meeting to understand personal choices such as colour preferences.

There are some cheap ways to conduct online surveys, such as:

 SurveyMonkey, or

 by creating forms using Google Docs

4. Interpret your findings

This step is about organising your results and interpreting your findings. Basically, what have
you discovered?
Keep your research objectives front-of-mind when organising and grouping your data. Look for
ways you can improve your data organisation – this will make it easier to come to a conclusion
down the track.

Here are some tips for data organisation:

 Identify any major trends – consider using lists, tables, diagrams and mind-maps to
organise your data.

 Use your marketing plan to analyse your data to determine strengths, weaknesses,
opportunities and threats (SWOT). You can do a SWOT analysis as part of your
business plan.

One of the most important steps in the market research process is interpreting your findings.
What is the research telling you? By answering this question, you'll be able to understand what
the research has uncovered.

5. Draw conclusions and make decisions

Once you have your findings, ask:

 What do your findings mean for your business?

 What are you going to do about it?

Any conclusions you reach should align with your research objectives and your goals for your
business.

Review all the data collected:

 Ensure there aren't any gaps in your data.

 Examine the major trends or problems in your industry or market.

 Analyse any strengths, weaknesses, opportunities and threats.

 Use your research to decide on the tactics that will make up your marketing mix.

Promotion Mix

The term ‘promotional mix’ is used to refer to the combination of different kinds of promotional
tools used by a firm to advertise and sell its products.
The main promotional tools or activities which make up promotion mix are personal selling,
advertising, publicity and sales promotion. These are also known as elements of promotion mix.

Philip Kotler opines, “A company’s total marketing communication mix also called promotion mix
consists of specific blends of advertising, personal selling, sales promotion, public relations and
direct marketing tools that the company use to pursue its advertising and marketing objectives.”

The concept of promotional mix assumes that there is a variety of means for communicating
with consumers. Promotional mix refers to the combination of various types and amounts of
various forms of promotion used by a marketer.

The final selection of them depends upon the jobs assigned to promotion and the environment
in which they are performed.

Advertising

What Is Advertising?

Advertising is the action of calling public attention to an offering through paid announcements by
an identified sponsor.

According to Kotler –

Advertising is any paid form of non-personal presentation & promotion of ideas, goods, or
services by an identified sponsor.

According to the Advertising Association of the UK –

Advertising is any communication, usually paid-for, specifically intended to inform and/or

influence one or more people.

Simply, advertising is a process of developing a paid communication message intended to

inform people about something or to influence them to buy, try, or do something.

Characteristics Of Advertising

 Paid Form: Advertising requires the advertiser (also called sponsor) to pay to create an
advertising message, buy advertising media slot, and monitor advertising efforts.

 Tool For Promotion: Advertising is an element of the promotion mix of an organisation.

 One Way Communication: Advertising is a one-way communication where brands

communicate to the customers through different mediums.
  Personal Or Non-Personal: Advertising can be non-personal as in the case of TV,
radio, or newspaper advertisements, or highly personal as in the case of social media
and other cookie-based advertisements.

Types Of Advertising

Advertising activities can be categorised into above the line, below the line, and through the line
advertising according to their level of penetration.

 Above the line advertising include activities that are largely non-targeted and have a
wide reach. Examples of above the line advertising are TV, radio, & newspaper
advertisements.

 Below the line advertising include conversion focused activities which are directed
towards a specific target group. Examples of below the line advertising are billboards,
sponsorships, in-store advertising, etc.

 Through the line advertising include activities which involve the use of both ATL &
BTL strategies simultaneously. These are directed towards brand building and
conversions and make use of targeted (personalised) advertisement strategies.
Examples of through the line advertising are cookie based advertising, digital marketing
strategies, etc.

Advertising activities can also be categorised into 5 types based on the advertising medium
used. These types of advertisements are:

 Print Advertising: Newspaper, magazines, & brochure advertisements, etc.

 Broadcast Advertising: Television and radio advertisements.

 Outdoor Advertising: Hoardings, banners, flags, wraps, etc.

 Digital Advertising: Advertisements displayed over the internet and digital devices.

 Product/Brand Integration: Product placements in entertainment media like TV show,

YouTube video, etc.

What Are The Objectives Of Advertising?

There are 3 main objectives of advertising – to inform about the brand or offering, to persuade
to buy or perform a task and to remind and reinforce the brand message.
To Inform

Advertisements are used to increase brand awareness and brand exposure in the target market.
Informing potential customers about the brand and its products is the first step towards attaining
business goals.

To Persuade

Persuading customers to perform a particular task is a prominent objective of advertising. The

tasks may involve buying or trying the products and services offered, forming a brand image,
developing a favourable attitude towards the brand etc.

To Remind

Another objective of advertising is to reinforce the brand message and to reassure the existing
and potential customers about the brand vision. Advertising helps the brand to maintain top of
mind awareness and to avoid competitors stealing the customers. This also helps in the word of
mouth marketing.

Other objectives of advertising are subsets of these three objectives. These subsets are:

 Brand Building

 Increasing Sales

 Creating Demand

 Engagement

 Expanding Customer Base

 Changing Customers’ attitudes, etc.

Importance Of Advertising

To The Customers

 Convenience: Targeted informative advertisements make the customer’s decision

making process easier as they get to know what suits their requirements and budget.

 Awareness: Advertising educates the customers about different products available in

the market and their features. This knowledge helps customers compare different
products and choose the best product for them.
  Better Quality: Only brands advertise themselves and their products. There are no
advertisements for unbranded products. This ensures better quality to the customers as
no brand wants to waste money on false advertising.

To The Business

 Awareness: Advertising increases the brand and product awareness among the people
belonging to the target market.

 Brand Image: Clever advertising helps the business to form the desired brand image
and brand personality in the minds of the customers.

 Product Differentiation: Advertising helps the business to differentiate its product from
those of competitors’ and communicate its features and advantages to the target
audience.

 Increases Goodwill: Advertising reiterates brand vision and increases the goodwill of
the brand among its customers.

 Value For Money: Advertising delivers the message to a wide audience and tends to be
value for money when compared to other elements of the promotion mix.

Advantages Of Advertising

 Reduces Per-Unit Cost: The wide appeal of advertisements increases the demand for
the product which benefits the organisation as it capitalises on the economies of scale.

 Helps In Brand Building: Advertisements work effectively in brand building. Brands

who advertise are preferred over those which doesn’t.

 Helps In Launching New Product: Launching a new product is easy when it is backed
by an advertisement.

 Boosts Up Existing Customers’ Confidence In The Brand: Advertisements boosts up

existing customers’ confidence in the brand as they get a feeling of pride when they see
an advertisement of the product or the brand they use.

 Helps In Reducing Customer Turnover: Strategic advertisements for new offers and
better service helps reduce customer turnover.

 Attracts New Customers: Attractive advertisements help the brand in gaining new
customers and expanding the business.
  Educates The Customers: Advertisements inform the customers about different
products existing in the market and also educates them in what they should look for in
an apt product.

Disadvantages Of Advertising

 Increases The Costs: Advertising is an expense to the business and is added to the
cost of the product. This cost is eventually borne by the end consumer.

 Confuses The Buyer: Too many advertisements with similar claims often confuses the
buyer in what to buy and should he buy the product or not.

 Is Sometimes Misleading: Some advertisements use smart strategies to mislead the

customers.

 Only For Big Businesses: Advertising is a costly affair and only big businesses can
afford it. This makes small businesses out of competition with big businesses who get to
enjoy a monopoly in the market.

 Encourages The Sale Of Inferior Products: Effective advertisements even lead to the
sale of inferior products which aren’t good for the consumers.

Public Relations

Public image makes up 63% of the value of most companies today. When there’s a mishap or
when the company’s reputation breaks down, it affects the company’s entire corporate
existence and its affiliates. It takes around 4 to 7 years to overcome a negative reputation.
Hence it has become important for a company to invest in good public relations strategies to
maintain a beneficial relationship with the public.

What Is Public Relations?

Public relations is a strategic communication process companies, individuals, and organisations

use to build mutually beneficial relationships with the public.

A public relations specialist drafts a specialised communication plan and uses media and other
direct and indirect mediums to create and maintain a positive brand image and a strong
relationship with the target audience.

In simple terms, public relations is a strategised process of managing the release and spread of
organisation-related information to the public to maintain a favourable reputation of the
organisation and its brands. This process focuses on –

 What information should be released,

  How it should be drafted,

 How it should be released, and

 What media should be used to release the information (usually earned or free media is
used for the same).

What Is The Objective Of Public Relations?

The main objective of public relations is to maintain a positive reputation of the brand and
maintain a strategic relationship with the public, prospective customers, partners, investors,
employees and other stakeholders which leads to a positive image of the brand and makes it
seem honest, successful, important, and relevant.

Functions Of Public Relations

Public relations is different from advertising. Public relations agencies don’t buy ads, they don’t
write stories for reporters, and they don’t focus on attractive paid promotions. The main role of
public relations is to promote the brand by using editorial content appearing in magazines,
newspapers, news channels, websites, blogs, and TV programs.

Using earned or free media for promotion has its own benefits as information on these mediums
aren’t bought. It has a third-party validation and hence isn’t viewed with scepticism by the public.

The functions of public relations managers and public relations agencies include:

1. Anticipating, analysing, and interpreting the public opinion and attitudes of the public
towards the brand and drafting strategies which use free or earned media to influence
them.

2. Drafting strategies to support the brand’s every campaign and new move through
editorial content.

3. Writing and distributing press releases.

4. Speechwriting.

5. Planning and executing special public outreach and media relations events.

6. Writing content for the web (internal and external websites).

7. Developing a crisis public relations strategy.

8. Handling the social media presence of the brand and responding to public reviews on
social media websites.
 9. Counselling the employees of the organisation with regard to policies, course of action,
organisation’s responsibility and their responsibility.

10. Dealing with government and legislative agencies on behalf of the organisation.

11. Dealing with public groups and other organisations with regard to social and other
policies of the organisation and legislation of the government.

12. Handling investor relations.

Types Of Public Relations

According to the functions of the public relations department/agencies, public relations can be
divided into 7 types. These are:

 Media Relations: Establishing a good relationship with the media organisations and
acting as their content source.

 Investor Relations: Handling investors events, releasing financial reports and

regulatory filings, and handling investors, analysts and media queries and complaints.

 Government Relations: Representing the brand to the government with regard to the
fulfilment of policies like corporate social responsibility, fair competition, consumer
protection, employee protection, etc.

 Community Relations: Handling the social aspect of the brand and establishing a
positive reputation in the social niche like environment protection, education, etc.

 Internal Relations: Counselling the employees of the organisation with regard to

policies, course of action, organisation’s responsibility and their responsibility.
Cooperating with them during special product launches and events.

 Customer Relations: Handling relationships with the target market and lead
consumers. Conducting market research to know more about interests, attitudes, and
priorities of the customers and crafting strategies to influence the same using earned
media.

 Marketing Communications: Supporting marketing efforts relating to product launch,

special campaigns, brand awareness, image, and positioning.

Public Relations Examples

PR stunts or strategies range from donating to an affected community to running a brand

activation stunt in a mall. Some of the examples of successful public relations campaigns are:
Google’s Fight Ebola Campaign

The outbreak of the Ebola virus in 2014 was critical as it was spread among many countries and
took many lives. Google, to help the people in need and to build up a positive brand image,
started a donation campaign where it pledged to give $2 for every $1 donated to the cause
through its website.

The public relations strategy attracted the media attention and resulted to be a huge success as
Google raised $7.5 million.

Paramount Pictures The Ring Publicity Stunt

Paramount Pictures, to promote its new horror franchise, The Ring, and to get more user
attention, took a step forward and planned a publicity stunt where the protagonist haunted the
people in a real-life scenario.

The film’s most iconic scene of Samara crawling out of the TV set was recreated in a TV
showroom where the protagonist came crawling out of the hidden compartment behind a TV
screen and scared people.

Advantages Of Public Relations

 Credibility: Public trusts the message coming from a trusted third party more than the
advertised content.

 Reach: A good public relations strategy can attract many news outlets, exposing the
content to a large audience. Moreover, this medium can help the company utilise certain
organic touchpoints that are hard to capitalise on otherwise.

 Cost effectiveness: Public relations is a cost effective technique to reach large

audience as compared to paid promotion.

 Better Communication: Public relations help the company to communicate more

information to the public than other forms of communication media.

Disadvantages Of Public Relations

 No Direct Control: Unlike paid media, there isn’t a direct control over the content
distributed through the earned media. This is the biggest risk of investing in public
relations.

 Hard To Measure Success: It is really hard to measure and evaluate the effectiveness
of a PR campaign.
  No Guaranteed Results: Publishing of a press release isn’t guaranteed as the brand
doesn’t pay for it. The media outlet publishes it only if it feels that it’ll attract its target
audience.

Importance Of Public Relations

With over 63% of the value of most companies dependent on their public image, public relations
has become a very important topic today for numerous reasons:

Builds Up The Brand Image

The brand image gets a boost when the target customers get to know about it through a third-
party media outlet. A good public relations strategy help the brand builds up its image in the way
it wants to.

It’s Opportunistic

Public relations strategies make the brand capitalise on the opportunities. Google was in the
news for donating to Ebola, Coca-Cola did a PR stunt against obesity.

These opportunities even attract many influencers to share the brand story to their followers.

Promote Brand Values

PR is used to send out positive messages which are in line with the brand’s value and its image.
This builds up the brand’s reputation.

Strengthen Community Relations

PR strategies are used to convey that the brand is as much part of society as the target
audience. This builds up a strong relationship of the brand with the public.

Public Relations vs Marketing vs Advertising

Public relations deals in communicating expertly drafted messages using non-paid/earned

media to build mutually beneficial relationships with the public.

Advertising, on the other hand, is a paid communication message intended to inform people
about something or to influence them to buy or try something.

Marketing is the umbrella under which all the divisions dealing with creating, communicating,
delivering, and exchanging dwells. That is, PR is the subset of marketing. Everything a PR
department does is determined by the marketing goals set by the organisation.
 Public Relations Advertising Marketing

Public relations is a
Marketing refers to
marketing tool of Advertising is the action
activities a company
communicating expertly of calling public
undertakes to create,
drafted messages using attention to an idea,
Definition communicate promote,
non-paid/earned media to good, or service through
deliver, and exchange the
build mutually beneficial paid announcements by
offerings that have value
relationships with the an identified sponsor.
for the customers.
public.

Company/Brand growth
Driven by Relationship driven Communication driven
driven

Communication Two-way One-way Two-way

To communicate to the
To build a favourable target audience about a Identify and cater to the
Importance relationship with the certain offering, action, customers’ needs to
target audience. work, or other brand- survive and thrive.
related information

Publicity

What is Publicity?

Publicity is the phenomenon of increased awareness and coverage about a person, product or a
service through media leading to increased or decreased sales and revenue depending upon
the effect on the potential customers. It is mostly a way to project your company or a brand in
front of the potential customer in a planned and structured manner but publicity can be
unplanned also and may lead to expected or unexpected outcomes. Publicity generally gives
the authority of an independent voice. It may turn helpful in increasing the sales from the
potential customers. Publicity is not restricted to products or services only but can be attributed
to politics, entertainment, arts, artists, documentaries etc.

The cost associated with publicity is usually less as compared to the other marketing activities
like promotion and advertising which cost sums of money for the people. Public relations is the
field which organizes the process of publicity in a controlled way.
Publicity Categories

Publicity can be both positive as well as negative.

Positive

If a publicity event reinforces and improves the brand image, it can be termed as positive
publicity. Positive publicity events are mostly planned and works in favor of the product or
service.

Negative

If it causes loss to the organization through increased coverage and awareness, it can be
termed as negative. Negative publicity can be a result of some news or event which didn't result
in expected outcome. Many times, if a person or company are in news for wrong reasons, the
other brands and products associated with them can suffer.

Other way to look at publicity is :

Planned Publicity

Publicists and PR teams plan proper publicity partnerships and tie ups through interviews,
product placements, campaigns etc.

Unplanned Publicity

Sometimes publicity can happen without the company planning the same. It can be triggered
through some news article or something said in an interview. These days with social media,
there is a lot of information available and many a times we hear that a certain thing has gone
viral. There can be multiple triggers leading to publicity of a person, company or an event.
These again can be positive or negative.

Types of Publicity

Publicity can be of different types depending on the channels and methods used. Below are the
few types:

1. News

News coverage can help a brand a lot in increasing awareness.

2. Press Release

A press release published across various channels can again help in publicity.
PR departments of organizations normally do timely press releases to inform about various
offerings by a company.

3. Product Release

New Product Release is an opportunity for an organization to do publicity. We see a lot of stalls
in exhibitions and trade events where people can see the brand or the product and form an
impression.

If they like it, they may buy it. In the modern world, people can create buzz on the social media
through posts and pictures.

4. Emergency

In an emergency event, a company can use its product offering for publicity but they should be
careful as being an emergency event it is very critical for the product to be beneficial to the
public else can result in negative publicity for the organization.

5. Conferences

Conferences can be used for publicity by organizations on some particular theme or topic.
Conferences can be good way to do publicity given it gets good news coverage along with it.

6. Events

Events like conferences are used by companies to do Publicity around a product or a service.

7. Offers

Various offers can be floated to publicize product or a service.

8. Social Media

With the rise in internet and smart phones, social media has become one of the most obvious
platforms for publicity. Companies may do a planned publicity event or there can be many
instances of publicity done by fans and followers. It may again be positive or negative.
Importance of Publicity

Publicity is quite important in gaining awareness about a product, service or a person. It is

similar to marketing but the difference is that marketing focuses on selling but it is only about
awareness. It can prove to be very critical in success of brands especially in the initial phase of
launch. We see lot of publicity happening during early days of a brand or a product.

Advantages of Publicity

1. The cost of publicity is very less i.e. coming from an unsolicited newspaper or through social
media doesn’t cost anything to the company.
2. It ensures credibility as the consumers expect a significant level of bias or exaggeration in the
advertisements a company produces about its services or products. However, third-party
sources, such as blogs, online reviews and magazines are often considered less biased. This is
specifically true with trusted sources, such as longstanding publication houses or well-regarded
professional reviewers. Publicity from non-affiliated parties can often seem more trustworthy in
the eyes of your targeted customers.

3. Consistent publicity helps a company strengthen its brand as it gives a company a way to
prove its customers its worth.

4. Innovation is very important in increasing your reach and building loyalty among the
customers. If good reviews start coming up for a brand it often build the other public relations
companies interested in the company.

5. It open doors for more opportunities and help build relationships with more number of high
net worth companies.

6. It helps you go viral. Ads don’t go viral on their own publicity help them. Word of mouth is a
successful tool that drives more business for a company.

Disadvantages of Publicity

1. Damage brand equity in long term because of bad publicity. It is applicable for companies
with health hazards and safety issues.

2. Brand association will be damaged as changing the customer’s perception is very difficult.

3. Loss of trust

Publicity Examples

1. When new movies are about to be released, we see a rise of publicity in the news about the
movie and the star cast. There is a lot of social media activity by the movie cast and crew. The
objective is to do publicity of the movie so that more people are aware of the release and watch
the movie.

2. When a new car is launched in the market, we see the car in various trade events and
exhibitions available for test drive. This is also a way through which publicity is done as this may
lead to increased activity on social media about the car which is good for the brand.

Hence, this concludes the definition of Publicity along with its overview.
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