Rajagopal. Marketing Dynamics: Theory and Practice
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Marketing Dynamics: Theory and Practice
allocating advertising budget. Besides, while selecting advertising media the following factor
combinations have to be ensured by the advertising agency:
• Perfect match of media type to target markets
• Perfect match of media type to advertising objectives
• Match of media type to advertising budget, and
• Match of selected media to competing advertisements.
It is required to make substantial budgetary provisions in the media plan, if the advertising
have to be done in more than one media type. However, the relative weights of the media have to
be decided on the basis of analyzing the “efficiency indicators” for the media in particular. Companies
typically plan and execute their advertising through five strategic factors - developing the budget,
planning the advertising, copy development approval, execution, and monitoring response. Media
may be defined as those channels through which messages concerning a product or service are
transmitted to targets. The media available to advertisers are newspapers, magazines, television,
radio, outdoor advertising, transit advertising, direct mail and the Internet. The factors such as the
product or service itself, the target market, the extent and type of distribution the type of message to
be communicated, the budget and competitors’ advertising strategies influence selection of an
advertising medium. Except the advertising perspectives employed by the competition, information
on most of these factors is presumably available inside the company. It may be necessary to undertake
a marketing research project to find out what sorts of advertising strategies the competitors have
used in the past and what might be expected of them in the future.
Media selection calls for two managerial decisions- the selection of medium to be used and e
specific vehicles to be chosen within a given medium. The cost-per-thousand-contacts comparison
has traditionally been the most popular method of media selection but it has many limitations. This
method is based on measuring the impact of advertisement on contacts (persons) and the approach can
be highly misleading if one considers the way in which advertisers define the term exposure. According
to the media definition, exposure occurs as soon as an advertisement is inserted in the magazine but its
impact is never considered. This method also fails to consider editorial images and the impact power of
different channels of a medium. An alternative approach to media selection is matching of audience
and media characteristics to specify the target audience and match its characteristics to a particular
medium. This approach should be applied considering the following stages:
• Build a profile of consumers in reference to their location, accessibility and demographic
composition.
• Study media profiles for audience coverage, reach and frequency of viewing.
• Match consumer profiles to media profiles. The consumer characteristics for a product
should be matched to the audience characteristics of different media. This comparison
should lead to the preliminary selection of a medium, based primarily on its coverage in
terms of either readership or viewership.
• The preliminary selection should be examined further with regards to product and cost
considerations. Cost is one of the major concerns in media selections. Cost should be
balanced against the benefit expected from the campaign under consideration.
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• Finally, the total budget should be allocated to different media and to various media vehicles.
The final selection of a medium should maximize the achievement of media objectives.
To sum up, it may be stated that two types of information are required for media selection-
customer profile and media characteristics. The advertiser should build a consumer profile for his or
her product/market. Each medium, however, presents the information in a way that makes it look the
best. It is desirable, therefore, to validate the audience information supplied by media owners with
data from bureaus that audit various media. However, as money is committed to a selected medium,
it is ‘ desirable to review the medium’s viability against evaluation criteria.
Scheduling
An advertising planner has to decide scheduling of advertisements on media with reference to its
periodicity in a day, hour, month and year. During which hour of the day an advertisement should be
exposed on media has to be planned considering the human behavior of watching media and the
nature of product. An example may be mentioned of scheduling an advertisement of breakfast
foods during the breakfast hours on media, which would have an effective impact than releasing, it in
late height slot of the media. Scheduling the advertising in respect of media time, periodicity in month
and number of months in a year would be helpful in allocating resources in advertising budgeting
exercise for media buying. Scheduling should be done in width and length of media buying. The
advertising planner needs to develop a media time flowchart once the scheduling exercise is completed.
Although, media schedule plan is not a permanent document as some elements such as type of
merchandise, style of copy, media policy are subject to change without notice, the flow chart would
be the right guiding tool for planner.
DIRECT RESPONSE ADVERTISING
Media advertising largely attempts to generate indirect response of the merchandise or services
advertised. The direct response advertising includes mail-media advertising, catalogues,
departmental store’s advertising, yellow pages, handouts, and window displays.
Direct Mail Advertising
Direct marketing is an effective buyer-seller interactive system in which merchandise under
advertisement is brought close to buyer using one or more advertising styles, and the response is
measured in reference to location and volume of transactions. The mail-media advertising involves
promoting merchandise market by establishing contact with potential and existing consumers through
mail orders, publicity materials and telephone service. In this process, no personal selling is performed.
Direct mail advertising has many advantages. It attempts to build goodwill between seller and
buyers. Hence, mail advertising is often identified as productive advertising technique. The numerous
advantages of this system are listed below:
• It is highly selective
• This form of advertising is elastic as the retailer can add or delete the name of consumers
at his discretion
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• Wide variety of merchandise or service can be advertised to the same consumer
• Privacy on consumer preference/order can be maintained
• Market competition can be avoided instantly
• Direct mail advertising is personal and specific home delivery of goods and services can
be assured
• Performance of merchandise/service sales can be monitored and evaluated.
Despite many advantages of the direct mail advertising, there exist some demerits also. The
most commonly observed problem in mailing business orders is high expenditure involvement in
the process. The periodical up-dating of mailing list is major task in direct-mail advertising which
consumes large business time. Besides these disadvantages, sometime it becomes disinteresting
and irritable to the persons addressed and they feel offensive as the ‘copy’ of mail-order is not
matched with the profile of persons to whom it is sent.
Different types of mail-order advertising comprise comprehensive text and visual copy of
advertisement, which attempts to make the readership interesting. The various types of mail-
order advertising are as below:
• Business reply mail with pre-paid postage fee
• Information enclosures, circulars etc.
• Postal cards without order form
• Self-mailing folders, and
• Booklets and catalogues.
Mail-order advertising is a quantitative exercise and requires systematic processing of data.
Hence, computerization is the basic requirement to handle the data, in reference to classifying
consumers, sorting types of orders, record of compliance to orders and other functions.
Display Advertising
Window display is the most prominent style of direct response advertising as it establishes
ready information, product impression, and impulse of buying that helps in decision making. Display
advertising has many ways of performance - indoor and outdoor. The indoor display advertising
consists of showcase advertising and indoor displays in departmental stores. There are some
common kinds of indoor display of merchandise. They are:
• Display of merchandise in showcases of departmental stores with an abstract and
combination.
• Display of merchandise in decorative style in show case/window
• Display of prestige copy under simulated environment
• Display of merchandise on dummy theme display, and demonstration of use of merchandise
Outdoor display of merchandise or services may be done in the form of sign boards, commercial
hoardings, posters, neon signs, vehicle sign boards, train posters, electronic sign boards, balloons,
fibre optical billboard and other special effects. The merchandise advertising on vehicle is called
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transit advertising which carries message from place to place. It is a good way to reach specific
markets and can be tailored to the need of geographical market segmentation.
ADVERTISING CAMPAIGN
This strategy is adopted by advertisers when the merchandise or service has to ‘gate-crashed’ in
the market and marketed with horizontal expansion policy. Campaign advertising is primarily
concerned with achieving quick sales response in target markets through clearance advertising
and regular price-line advertising. Such campaigns are of short duration but possess similarity in
copy writing and continuity in releasing exposures. Hence, campaign is a series of advertisements
exposed in a given time at regular intervals in the same media, or medium. The advertising campaigns
are of natural and local level and have institutional patronage. The advertising campaigns are planned
in advance and are set orderly.
This approach is beneficial to gain regular consumers as well as occasional buyers, as a series
of advertisements leave an impression on the consumers and are early identifiable. It is observed
that such advertising campaigns not only build consumer strength but also bring prestige to retail
sales, institution and advertising agency. However, in planning advertising campaigns and putting it
through media care should be taken in its continuity, message dissemination and periodicity as in
absence of such regulation, the impact of campaign may not be achieved to the mark.
INSTITUTIONAL ADVERTISING
It is a form of public relations performed through communicating message to the target audience
directly related with the institution. It is not necessary that an institution developing advertising message
should strictly be of commercial nature. The strategy for institutional advertising needs to be selected
matching the objective of institution and clientele. For example a business company may develop
institutional advertisement for distributors in the employees of a company, an association of
medicos may release message of social health awareness, government can do so for generating
awareness of franchising during elections and so on. Institutional advertising involves non-personal
mass-media communication by an identified institution to accomplish its goals. There are various
type of institutional advertising practices observed, of which some major kinds are released through
the following messages:-
• Social awareness about civil rights, health, population etc.
• Promotion of a public service
• Generating awareness about innovation, achievement, new facts of development
• Improved or added market value of products
• Employees, welfare and image of institution
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• Placement advertisements with profile of company’s achievements.
• Opening debate on controversial issues.
Institutional advertising thus, can be of commercial and non-commercial nature. Functionally,
institutional advertising can be classified into two categories - image advertising and advocacy
advertising. Image advertising is designed to mobilize opinion about the institution and create an
image through its merits. So, it can be stated that an image advertising exhibits the human face of
an advertiser. Image advertising is of four types and they are:
• Institution identification advertisements
• Goodwill advertisements
• Civil rights and responsibilities advertisements
• Public service advertisements.
Such advertisements are non-argumentative and non-controversial as most of the themes are
of public interest such as, population control, crime prevention, water, food and energy conservation,
campaign against drug abuse and the like. On the contrary, advocacy advertising attempts to
highlight contemporary arguments directed either at specific general clients like political activists,
consumer groups, media and government agencies. Advocacy advertising consists of following
forms:
• Ideological advertisement, which is principle oriented and attempts to highlight the ethics
of an institution.
• Defense advertisement which argues to protect the image of the institution against
contemporary controversies.
• Reply bound advertisements seeking responses to the issues highlighted in the advertisement.
• Position taking advertisement emphasising the viewpoint of an institute of issue thereof
with strong argument to seek public acceptance or referendum.
• All recruitment advertisement asking interested persons to present their views in support
of the ethics of institutions in view to strengthen its logic prior to their joining position
in the institute.
An advocacy advertising has an advantage of exhibiting message under controlled situation of
advertiser which helps in dealing with complex issues through corporate focus. An institution can
plan a series of advertisements as campaign supporting its views and building image simultaneously
among the clientele group. Institutional advertisements are generally released on multi-media
and cover substantially larger segment of target audience.
ADVERTISING APPROPRIATION
Advertising appropriation is an essential management approach to control the advertising expenditure
and gain optimum response at reasonable level of investment. The common method of appropriation
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will be on the basis of the net sales per annum. The advertising appropriation can also be done on the
change of turnover of the company over the previous year. This method is also known as returns on
investment of the company in a given time. The advertising activity can be appropriated on the basis
of developing an advertisement, campaign, direct advertising, buyer-seller relationship and image
building. The advertising budget, which is the principal tool of appropriation, consists of the expenditure
related to the selected category of goods and services and media for advertising. The advertising
expenditure needs to be appropriated also in reference to different sales regions in respect of goods
and services, media and consumer preference. The expenditure variables in production of advertising
include the insertion charges of the commissioned media, art work, mechanical production, talent,
non-media promotion expenditure like point of purchase sale promotion, displays, exhibits etc. Besides
the client service charges of the advertising agency, administrative costs and overheads also need to
be considered in advertising appropriation.
ADVERTISING RESEARCH
Advertising research is a prerequisite for developing advertisement as well as assessment of
effectiveness of the advertisement. It is necessary to understand thoroughly, the product profile in
terms of its physical properties and composition to enable to develop a meaningful and factual copy.
The organizational profile needs to be understood clearly for linking the product with the organization
and its brand. It is a must to conduct buyer behavior survey to know the perceptions of the viewers
and the potential response. The advertisement pre-testing results also needs to be analyzed and used
for modifying the copy and presentation style.
Media effectiveness may be studied for any advertisement by conducting the veiwership survey,
media vehicle response, advertisement scheduling results, frequency and reach assessment and the
impact of the previous advertisement. The effectiveness of any advertisement can be measured at
two different levels – pre-insertion and post-insertion of the advertisement in the media. The concept
of the advertisement can be measured in a pre-testing campaign, by viewing or presenting to sample
viewers and getting free association of the consumers and merchants while developing the same.
The specific and non-specific themes may be tested with specially identified viewers. The reach and
status of the media is to be assessed before insertion of the advertisement. The copy research can be
assessed using the following approaches:
• Consumer Jury
• Matched samples
• Portfolio test or message recall efficiency
• Storyboard test or image retention through video clipping
• Other mechanical devices.
Assessment of the effectiveness of the advertisement in the post-insertion stage needs to be
done on the basis of audience exposure, attitude and change.
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Table 6.7 Advertising Research: Dimensions to Understand
Advertiser’s What is to be Method of Research Advertiser’s
Area decision measured measurement goal goal
Motivation What to say Consumer Unstructured Low cost New appeals
Research behaviour Focus Group research
Copy How to say Credibility of Pre-testing Significant Good recall of
Research message and Mailing data sets advertisement
recall questionnaire
Visual How to show Response to Video Ranking High Impact
Research visuals Devices
Media Where to Media Viewership Ranking Best Ad-
Research show effectiveness survey Media Recall
Public Target Level of Personal Represen Optimum
Opinion audience/ impact interviews -tative groups impact
consumers
Operations Economics of Financial Statistical Advertising Satisfactory
Research advertising effectiveness tests appropriation client service
and revenue
generation
in attitude and turnover effect in terms of sales volume. The controlled field experiments may also be
conducted to assess the attention on the advertisement, comprehensiveness of the message, technical
execution of the advertisement and the overall impact. The programming of the advertising research
is exhibited in the Table 6.7.
EFFECTIVENESS IN ADVERTISING
Print advertising tends to work more slowly than television or radio, typically. Therefore, an especially
long period of time (or an especially heavy media schedule) is required to fully evaluate the total
effects of print advertising. Advertising for new products is more effective than advertising for
established products. It’s easier to create effective advertising for new products, in other words, than
it is for established products. The inherent “news value” of new products is the principal reason new
product advertising is more effective. Given the greater effectiveness of new product advertising,
one of the most common marketing mistakes is failure to take advantage of this inherent advantage
(i.e., to under-spend on introductory advertising for new products).
Persistently high advertising failure rate results primarily from lack of an accurate feedback
mechanism, a lack of testing and evaluation. If an agency doesn’t know when it is advertising is bad
or why it’s bad, how the agency can possibly improve it is advertising. Marketing research can
provide this feedback, but it is too expensive for the typical advertisement or commercial. The
degree of sales effectiveness can vary greatly from one commercial to the next. One commercial
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might be several times more effective than another. This indicates that the quality of advertising
tends to be more important than the quantity of advertising. Nevertheless, the quantity of advertising
(i.e., the media weight) must achieve a threshold level for the advertising to have any positive effects.
Limited telephone tracking research (and this can be done with small budgets) can monitor the
cumulative effects of advertising upon awareness, brand image, and consumer attitudes, and is one
of the simplest and most effective ways to make sure that advertising is doing its job. Message recall
is a positive factor, but its importance should not be overstated. Brand registration, however, is
always important (as opposed to message/element recall). If consumers don’t remember the brand
name, the effectiveness of the advertising is correspondingly reduced. Failure to register the brand
name is one of the most common weaknesses of the commercials.
Advertising effectiveness cannot be determined by any one measure, such as persuasion or
recall. Recall is a good measure for some commercials, but not for others. Persuasion scores don’t
work very well for brands with high market shares, and cannot be relied upon for brands in poorly
defined product categories. Purchase intent works reasonably well for new products, but poorly for
established products. A large number of important variables must be examined to judge the potential
effectiveness of advertising. The commercials on AM/FM radio can be as effective or more than
effective television commercials on the basis of sales return per dollar of media. Typically, radio
production budgets are much less than television and radio commercials are rarely submitted to the
rigors of marketing research evaluation.
WEB ADVERTISING AND PROMOTION
Internet is the fastest growing medium in the 90’s with 25 million users and with an average estimated
growth of 10-20% per month. It has great potential as an advertising medium. Its feedback and
interaction possibilities enable advertisers and Internet users to customize and differentiate the
advertisement to meet the user’s own requirements. Internet advertising is becoming part of some
companies’ marketing strategy. However, it requires new strategies and thinking. The benefits of
Internet advertising are its ability to cover all promotional objectives from awareness to action by
leveraging all 5 elements in the promotion mix. Online advertising has been increasingly booming and
had reached about $ 2 billion in 1998. Internet advertising offers a variety of advantages. It offers an
exceptional ability to target specific customers. Besides, it blurs the division between content and
advertising, which the traditional media regard as sacred. If the money is right, many online publishers
are willing to strike whatever sort of partnerships an advertiser might want. The Internet is also a
highly selective, cost effective media with greater measurability than any other media. Despite higher
global reach Internet is not a local mainstream media yet. Traditional advertising is consumed passively,
yet on the Internet, the users have to actively select an advertisement. These changes the way
advertisers generate and re-train customers. To persuade visitors to revisit and spend time on the
web site the advertisers must fulfill real customer needs on continuous basis. This requires clear
objectives and targeting. Informative quality content, advertisement with interesting entertainment or
direct sales possibilities can add value to the customer. Internet implementation requires understanding,
commitment and resource allocation from corporate management to operate successfully. The
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marketing department should be responsible in conjunction with advice from a competent advertising
agency for Internet strategy development and implementation.
Interactive Internet could be the solution to advertisers’ requirements. But new advertising
strategies are needed in this medium. The Internet is a two-way interpersonal communication flow.
The key distinguishing features are the interpersonal feedback and this interaction process provides
relevant customer information in order to serve them more effectively in the future. Users can also
interact with the Internet medium itself through machine interactivity. As compared to traditional
media the user is fully in charge of the information pull. Internet is a hybrid medium that can combine
all the three identified communication strategies including mass communication, interpersonal
communication and machine interactivity communication. Internet allows advertisers to utilize all the
five elements in the promotion mix. It therefore, provides the means of covering all promotional
objectives from awareness to action.
Internet advertising will increase and become easier to measure, and the gap between this new
precise, interactive marketing capability and conventional “fuzzy” passive media will widen. The
following reasons are advanced for the growing popularity of Internet advertising:
• Web presents great advertising opportunities for marketers because of its continuing
growth, its user demographics, its effectiveness, and its cost competitiveness.
• Overall Web population is reaching critical mass. Marketers pursuing certain segments
of the population are finding the Internet increasingly useful.
• Internet is reasonably good at achieving standard advertising objectives, such as shaping
attitudes. However, it also has capabilities that the traditional media cannot match. Features
that make the Internet a superior medium include its ability to address, its interactivity,
and its scope for customization.
• In terms of advertising economics, the Internet can already compete with existing media,
both in response as measured by click-through and in exposure as measured by cost per
thousand. Moreover the economics of internet provide better effects when a target
consumer segment is defined.
• Like traditional media, the Internet needs consistent matrices and auditing in order to gain
broad acceptance from marketers. Both are emerging slowly, driven by old players such
as Nielsen and new ones such as Web Track.
• Advertisers and agencies cannot afford to produce a different advertisement and negotiate
a different price for every site. Standards for size, position, content, and pricing are needed
for positioning an advertisement.
Success Factors
Advertiser must assess what he wants to achieve through an Internet presence. Initially this
calls for an evaluation of how well the advertisers’ target audience and product portfolio suit the
Internet. Companies targeting well educated, innovative, affluent males or students have great potential
for success as their segments are found highly represented on the Internet. Products and services
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with high information intensity and high buyer involvement are also found suitable for Internet promotion
due to its ability to carry large customized information at low costs. Mail order companies can also
take advantage of Internet purchase facilitation. Low product fit or low audience fit companies can
still take advantage of building or reinforcing a brand image or getting a learning experience with
interactive media. Traditional advertising is consumed passively. On the Internet, users have to do
something actively to select an advertisement. This alters the way advertisers generate and retrain
customers. Banner ads, malls, search engines, word-of-mouth combined with use of conventional
media can generate visitors to a web site. Since, users are in charge of the navigation, advertisers
must persuade users to revisit and spend time on the web site by fulfilling real customer needs. This
requires clear objectives and targeting to add value on a continuous basis while retaining the user.
Informative quality content, innovative advertisement or direct sales possibilities can add value to the
user’s site visit. Internet advertising demands management understanding and commitment for success.
Management must determine Internet objectives and strategies to allocate efficient resources such
as capital, equipment and people.