Impact Of Advert ising On International Ma rke ting




This report on ‘Impact of Advertising’ is prepared in fulfillment of presentation in the International Marketing subject.

We present this report to Prof. Gayatri Bhoir who has helped us in understanding this subject through a practical approach. She has guided us through the preparation of this project and for this we are grateful to her. We have prepared this report after a thorough research and analysis of the topic. We would like to thank all those who helped us make this project report worthwhile.


GROUP MEMBERS 1 2 3 4 5 Ibhrahim Khan Devashree Korlekar Prabhawati Kuckian Siddhraj Masali Shailesh Maurya 125 126 127 128 129 6 Abhishek Mishra 130 4 .

Topic No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 International Marketing: A global marketplace Advertising and its milestones Advertising plan Consumer and Market analysis Marketing Plan Advertising communication system Media strategy & tactics International Advertising concept Brand ambassadors Impact of advertising on sales: Hero Honda Agencies Fact file Advertising expenditure Top 10 advertising companies Factors affecting advertising Pg. No. In part to accommodate these realities. Thus. and trade organizations such as the World Trade Organization 5 .INDEX Sr. countries in the last several decades have taken increasing steps to promote global trade through agreements such as the General Treaty on Trade and Tariffs. There are several reasons for this. One significant reason is technological—because of improved transportation and communication opportunities today. 4 5 7 8 9 10 11 12 14 18 19 20 21 22 23 International Marketing: A Global Marketplace Trade is increasingly global in scope today. consumers and businesses now have access to the very best products from many different countries. Increasingly rapid technology lifecycles also increases the competition among countries as to who can produce the newest in technology. trade is now more practical.

may entail such large costs that these must be spread over several countries. just as trademarks and brand names are used today. for example. Archaeologists working in the countries around the Mediterranean sea have dug up signs announcing various events and offers.(WTO).g. As the person’s reputation spread by word of mouth.. Europe and the rest of Asia). As production became more centralized and markets became more distant. buyers began to look for his special mark. Advertising Advertising is a persuasive communication attempt to change or reinforce ones’ prior attitude that is predictable of future behavior. Some forces in international trade. An early form of advertising was the town crier. Historical Milestones In Advertising Advertising goes back to the very beginnings of recorded history. such as pottery. VCRs) is in the decline in these markets. such as an automobile intended for the World market. North American Free Trade Agreement (NAFTA). so once the demand for a product (say. Trade between countries is beneficial because these countries differ in their relative economic strengths—some have more advanced technology and some have lower costs. Products tend to be adopted more quickly in the United States and Japan. Internalization/transaction costs refers to the fact that developing certain very large scale projects. and the European Union (EU). the mark became 6 . Another early advertising form was the mark that trades people placed on their goods. an increasing market potential might exist in other countries (e.

Ben Franklin has been called the father of American advertising because his Gazette.more important. The first printed advertisement in the English language appeared in 1478. In 1622. Advertising no longer had to produce extra copies of a sign by hand. 7 . The turning point in the history of advertising came in he year 1450 when Johann Gutenberg invented the printing press. first published in 1729. The invention of radio and. advertising got a big boost with the launching of the first English newspaper. later. Advertising had its greatest growth in the United States. television created two more amazing media for the spread of advertising. The Weekly News.had the largest circulation and advertising volume of any paper in colonial America.

Customers will recognize you quickly and easily . What Advertising Can Do For Your Business  Remind customers and prospects about the benefits of your product or service  Establish and maintain your distinct identity  Enhance your reputation  Encourage existing customers to buy more of what you sell  Attract new customers and replace lost ones  Slowly build sales to boost your bottom line  Promote business to customers. investors 8 . you determine exactly where. You can target your audience more readily and aim at very specific geographic areas. when and how often your message will appear. how it will look.Advertising's Two Important Virtues  You have complete control. Unlike public relations efforts. A distinctive identity will eventually become clearly associated with your company.if you present yourself consistently. like McDonald's golden arches.  You can be consistent. and what it will say. packaging or signs . mailers. presenting your company's image and sales message repeatedly to build awareness and ads.

and global factors that will affect decision making and the development of the plan. It is vital that the advertising plan be developed so as to mesh with and support the various components of the marketing and communications mix such as personal selling.  Media Strategy And Tactics. There are three areas of major importance:  Objective And Target Selection. 9 .  Consideration. facilitating agency. and promotion. The advertising manager also needs to know the major areas of his or her planning and decision-making responsibilities.Advertising Plan The manager needs to engage in situation analysis with respect to the market conditions that are operating at the time and to assess the consumer/market. pricing. and social legal. public relation.  Message Strategy And Tactics. competitive.

Competition is such a pervasive factor that it will occur as a consideration in all phases of the advertising planning and decision-making process. 10 . seasonality. trends in these shares.Consumer and Market Analysis A situation analysis often begins by looking at the aggregate market for the product. and the history of competitive moves and objectives in the product category. and trends in all of these aggregate market characteristics. what shares its competitors have. what share of a market is possible for the brand. the possible existence of different segments. A type of market structure analysis that involves the development of perceptual maps of a market. The planner also has to be aware of the relative strengths and weaknesses financial. for example. and from which competitors an increase in share will come. attempts to locate the relative perceptual positions of competitive brands. reasons for these trends. or cause being advertised: the size of the market. and marketing of the different competing companies. its growth rate. geographical distribution. service. Competitive Analysis Advertising planning and decision-making are heavily affected by competition and the competitive situation the advertiser faces. Situation analysis should usually include an analysis of what current share the brand now has. production.

and promotion. and control functions for the total corporation or a particular decision-making unit or product line. place. There are several marketing tools that can be used to help an organization achieve its marketing objectives. A marketing plan formulates the strategy and tactics for each of these. are identified and analyzed in a marketing plan. 11 . Most people are familiar with the “4 Ps” the marketing mix which includes product.The Marketing Plan Advertising planning and decision making take place in the context of an overall marketing plan. The marketing plan includes planning. The needs and wants of consumers on which the firm will concentrate. The marketing objectives should identify the segments to be served by the organization and how it is going to serve them. The marketing plan will include a statement of marketing objectives and will spell out particular strategies and tactics to reach those objectives. implementation. price. such as the needs of working men and women for easily prepared meals.

An advertising message can have a variety of effects upon the receiver. the receiver will sometimes become a source of information by talking to friends or associates. It can  Create awareness  Communicate information about attributes and benefits  Develop or change an image or personality  Associate a brand with feelings and emotions  Create group norms  Precipitate behavior 12 . a communication channel. a message. and a receiver. In addition. This type of communication is termed word-of-mouth communication. and it involves social interactions between two or more people and the important ideas of group influence and the diffusion of information.Advertising Communication System Advertising communication always involves a perception process and four of the elements shown in the model: the source.

the soundest rules involve beginning with a detailed specification of what a corporation is attempting to accomplish with advertising. brand personality. First. Once the content of the campaign has been decided. decisions must be made on the best and most effective ways to communicate that content.Message Strategy and Tactics The actual development of an advertising campaign involves several distinct steps. Media Strategy Although there are many rules of thumb often used to decide how much money to spend on advertising. the advertising manager must decide what the advertising is meant to communicate by way of benefits. and the resources necessary. or action content. It is only when the job to be done is well specified that the amount and nature of the effort the amount of money to be invested in advertising can be really determined 13 . feeling.

be viewed as a communication process that takes place in multiple cultures that differ in terms of values. Target audiences differ from country to country in terms of how they perceive or interpret symbols or stimuli. cultural barriers may hamper effective transmission of the message and result in miscommunication. respond to humor or emotional appeals. International advertising can. The Communication Process The process of communication in international markets involves a number of steps. The sum total of these activities constitutes a worldwide industry that is growing in importance. At each stage in the process. How the advertising function is organized also varies. the advertiser determines the appropriate message for the target audience. Next. communication styles.International advertising It entails dissemination of a commercial message to target audiences in more than one country. therefore. the message is encoded so that it will be clearly understood in different cultural contexts. First. and consumption patterns. International advertising is also a business activity involving advertisers and the advertising agencies that create ads and buy media in different countries. and propagates certain values worldwide. International advertising is also a major force that both reflects social values. 14 . The message is then sent through media channels to the audience who then decodes and reacts to the message. as well as in levels of literacy and languages spoken.

the message relates to a specific product or service marketed by the firm. i. 15 . advertising copy and make the media placement. the firm will use the services of an advertising agency to determine the appropriate message.e. In some cases the advertising message relates to the firm and its activities. In either case. In other cases.International Advertising as a Business Practice International advertising can also be viewed as a business activity through which a firm attempts to inform target audiences in multiple countries about itself and its product or service offerings. its corporate image.

. pens. scooters. biscuits. corporate India does not want to sell anything to the consumer without using either a movie star or a sports hero.. paints. of late. suiting. It appears that. diamonds. chocolates. cars. tyres. when Cadbury India wanted to restore in the its consumer's chocolate confidence brands following the high-pitch worms controversy. hair oil. the company appointed Amitabh Bachchan for the job. watches. insurance packages. So. photo films . 16 . The list could goes on.Brand Ambassadors: their effect on International Marketing and advertising Soft drinks. footwear. This in itself is an important advertising strategy for majority of the companies.

Creative Director. McCann-Erickson. Thus it proved beneficial for international marketing of the product. The success that the Aamir Khan commercial brought Coca-Cola is universally acknowledged.' PepsiCo brought Shah Rukh Khan and Sachin Tendulkar together once again in a television commercial which drew references to the `safety' of the product indirectly. While Aamir Khan led the Coke fightback as an ingenious and fastidious Bengali who finally gets convinced of the product's `purity. and the ad has been exported to foreign markets as well. both soft drink majors put out high-profile damage control ad films featuring their best and most expensive celebrities. 17 . A creation National of Prasoon Joshi. when the even more controversial pesticide issue shook up Coca-Cola and PepsiCo and resulted in much negative press.Last year.

The Tata Group has some of India's most famous personalities from the sports and entertainment fields endorsing its products and services. and the 18 .

Sania Mirza. Highest Earning Celebrities 1. Sourav Ganguly and Irfan Pathan. Narain Karthikeyan 4. Aamir Khan 6.Sania Mirza 19 . Naseeruddin Shah and Aamir Khan who have greatly contributed to the success if Tata’s products and services. Amitabh Bachchan 2. Aishwarya Rai 7. Sachin Tendulkar 3.Tata brand like Narain Karthikeyan. Saif Ali Khan 9. Rahul Dravid 8. Saurav Ganguly 10. Shahrukh Khan 5.

The cumulative sales of the company for the period April 2003 . 20 . a notable jump from 14.052 units sales achieved during the corresponding period last year (April 2002-January 2005).27. This reflects a growth of 17% in the cumulative sales of the company owing to its advertising strategies.73.January 2004 are 16.Impact Of Advertising On Sales HERO HONDA Sales Performance Dec'04 Domestic Exports 225250 5501 Dec'05 238822 6282 Apr'04Dec'04 1892540 43441 Apr'05Dec'05 2155479 72815 The Hero Honda Company achieved a solid growth of 35% as compared with sales recorded during January 2005.421 motorcycles.

reputation. Cagley and Roberts found that the people factor” tends to dominate in agency selection.Facilitating Agencies Another external factor involves the agencies that facilitate advertising and provide the means to advertise. A national advertiser. on the other hand. the advertiser basically needs to know what kind of facilitating agencies exist and the nature of the services they can provide. integrity. mutual understanding. each serving one or more brands in a product line made up of several products. is done without the services of an advertising agency or a research supplier. much local advertising. Many advertising decisions involve choices among facilitating agency alternatives. interpersonal compatibility. What advertising agency should be chosen? What media should be used? What copy-testing supplier will be best for our particular situation? Concerning the question for agency selection. and synergism were very important. for example. may have under contract many different agencies and research suppliers. From a situation analysis viewpoint. for example. Characteristics such as the quality of personnel. 21 . From a planning viewpoint.

 US-based advertising agencies and their subsidiaries are responsible for most of the advertising throughout the world.  China is the next largest advertising market and is also growing rapidly.  The largest agency group. most other agency networks generate the majority of their revenues outside their home country. Of the ten largest advertising agency groups. the Japanese agency. Omnicom. is made up of two large US-based agencies. seven are headquartered in the US. the British agency holding company. although WPP.  With the exception of Dentsu. and one each in the UK. France and Japan.Fact file  The majority of large advertising agencies are headquartered in the US. 22 . places over $37 billion of advertising for its clients around the world and derives half its revenue from outside the US.

7 Percent 50 15 9 9 4 4 3 2 2 2 100 23 . Korea Total: Expenditures (millions) 117. Germany France Brazil Italy Australia Canada S.3 235.3 9.5 5.4 5.2 5.S.8 7. 1997 Advertising Country U.K.7 20. Japan U.Advertising Expenditure The Table below shows advertising spending in the top ten global ad markets.7 8.0 35.8 20.

766 9.024 11.294 1.S Advertising As A Recent (Millions $) Of Sales 1 2 3 4 5 6 7 8 9 10 Philip Morris Procter & Gamble General Motors Sears RJR Nabisco Grand Metropolitan Eastman Kodak McDonald’s Pepsi Co Kellogg 2.7 24.Top 10 Advertising companies.4 2. Rank Company Total U.507 1.9% 12.211 10.251 12.8 1.551 2.045 815 774 736 728 712 683 20.805 91.4 6.1 6.4 24.380 10.1 7.3 6.866 11.058 1.S Advertising (Millions $) Total Sales U.7 24 .260 50.635 3.

and advertiser who attempts to provide specific. and global. Another concern is that advertising.Factors Affecting Advertising The final external factor in the planning framework concerns environmental factor social. Even more difficult consideration for people involved in the advertising effort is broad social and economic issues. especially when it is more irritating than entertaining. One solution is to create brand advertising that is vague and contains little specific information. Thus advertising has a tremendous impact on international marketing and the two concepts therefore go hand in hand and are dependent on each other. is an intrusion into an already excessively polluted environment. legal. relevant information must be well aware of advertising regulation. 25 . and advertising for products such as alcohol and cigarettes. A whole set of rules is emerging to cover advertising directed at children. Law forbids deceptive advertising. by it can lessen the social value of advertising by reducing the amount for useful information that it provides to society. However. such an approach can result not only in ineffective advertising. and the use of environmental and health claims in advertising. Thus.

A commercial that airs multiple times in a day has a better chance of reaching the listener than a commercial that only airs a few times in a week. These five keys help increase your chances of having a successful radio ad campaign. Target Audience Just like with every ad one create. Frequency of Ads A radio commercial needs to air multiple times before it sinks in with the listener.Five Keys to Radio Advertising Success Radio is an affordable ad medium that can reach a mass audience. Listen to each one to help identify your own target audience. Make a list of the radio stations in your market. Advertising a teen clothing store on the same station doesn't. Running your commercial once a week for a month isn't going to be enough. you must know ones target audience. What kind of listeners will be tuning in and are they a potential customer for your product or service? Radio stations also offer programs you'll want to know more about before you buy. Frequency refers to how many times your ad airs in a short amount of time. 26 . Advertising your western gear store on a country station makes sense.

27 . Your copy isn't relying on any visuals so it's vital you capture the listener's attention from the start. Research shows it takes a few times before the consumer actually gets what your company is all about. that doesn't mean one should just slap something together. It's vital your ad stands out and conveys your message repeatedly. However. The copy needs to be crystal clear and not muddied by trying to be cutesy in your pitch. Frequency is the key so make sure your ad hits the mark and will get the consumer's attention the first time. production is simpler for a radio commercial.Producing A Commercial Unlike television commercials.

7 billion corporation in a remarkably short 23 years.Advertising Legends 1) A G Krishnamurthy Ex Chairman & Managing Director Mudra Communications A G Krishnamurthy is the Captain who steered his agency from a Rs. 35 lakh company to a Rs. But little is known of his considerable contribution in the agency’s creative reputation doubling up as copywriter/art director and quite often even as creative director 28 .

Brendan Pereira has been imparting knowledge to a wide audience over his 40 years in the business of art. London. 2) Brendan Pereira Chairman & Creative Director From his palette of skills. His work with agencies in London and a stint as Brand Manager at Beecham’s International. he was one of the major shareholders who founded Chaitra Advertising. advertising design and communications. created a firm base for the task of leading Aiyars Advertising in Bombay as Creative Director. and one of the first in the industry to be elected to the Board in that capacity. and led it on to produce some of the outstanding work of that era. As Deputy Managing and Creative Director. for a range of consumer products. 29 . Vimal Suitings & Sarees etc.Brands: Rasna.

he published his first book “Changing Faces” in 1999. 30 .Spreading his talent.

 Studios mark the beginning of advertising created in India (as opposed to imported from England) Newspaper studios train the first generation of visualisers & illustrators  Major advertisers: Retailers like Spencer's. Army & Navy and Whiteaway & Laidlaw  Marketing promotions: Retailers' catalogues provided early example  Ads appear in newspapers in the form of lists of the latest merchandise from England  Patent medicines: The first brand as we know them today were a category of advertisers 31 .Indian Advertising Industry  Concrete advertising  Ads appear for the first time in print in Hickey's Bengal advertising history begins with classified Gazette. India's first newspaper (weekly).

inspiring copy Results: • Product sell through strong. basketball was prime success story complete sell through at urban and athletic specialty retailers Positive feedback from retailers and consumers • 32 .Case study: Knockout shoes Agency: Weiden & Kennedy Objective: • Change what people expect of the brand from performance and winning to possibility and creative self-expression Target Audience: • • Young people -.22 year olds during summer vacation How Magazines Were Used: • Speaking to the drawing them in with rich. ready and willing to have fun Active-minded 16 .

Advertising Campaign Break-Through 1) Volkswagen The Volkswagen campaign of the 1960’s is considered a huge breakthrough in the history of advertising. 2) Marlboro Marlboro Cigarettes The Marlboro Man smoking cigarettes has come to be one of the biggest icons of advertising. However. Now.” 33 . During this time. Volkswagen advertising broke through the clutter by creating ads based upon the same principle that drew drivers of Volkswagens in the first place: simplicity. honesty. the auto industry tended focus on the beauty and engineering stretch of the vehicle. uniqueness and humor. The handsome and suave person made smoking cigarettes look “cool. the brand continues to stand out with maximum creativity.

34 . Top Advertising Agencies in India  Mammoth Graphic Communications  Accord Advertising  FCB-Ulka Advertising Ltd.It has demonstrated the powerful impact the industry has on consumers.  Glare Advertising  Marketing Consultants & Agencies Limited  Mudra Communications Pvt. Ltd.

Bibliography Websites: Books referred: 35 .

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