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“OUTDOOR ADVERTISING IN INDIA”
PROJECT REPORT SUBMITTED TOWARDS PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENT
(Approved by AICTE, Govt. of India) (Equivalent to MBA) ACADEMIC SESSION 2009-11
SUBMITTTED TO:DR. TAPAN KUMAR NAYAK AREA CHAIRPERSON, ECONOMICS.
SUBMITTED BY:NIKHIL KUMAR GARG (BM-09123) NIKHIL SINGH (BM-09124) NIMISHA GUPTA (BM-09125) NITESH KUMAR (BM-09127)
C-238, BULANDSHAHR ROAD, GHAZIABAD -201009 INSTITUTE OF MANAGEMENT STUDIES
This is to certify that Mr. Nikhil Kumar Garg(BM-09123), Mr. Nikhil Singh(BM-09124), Nimisha Gupta(BM-09125), Nitesh Kumar(BM-09127) have completed their project titled “Outdoor advertizing in India” under my guidance with full honesty and integrity and submitted towards partial fulfillment of Post graduate diploma in management at IMS Ghaziabad.
Dr. Tapan Kumar Nayak (Area Chairperson of Economics)
We hereby declare that the work which is being presented in the report entitled “ OUTDOOR ADVERTISING IN INDIA“ in partial fulfillment of the requirement of the award of the post graduate diploma in management and submitted in the INSTITUTE OF MANAGEMENT STUDIES, GHAZIABAD is an authentic record of our own work carried out during a period from Jan 18, 2010 to March 20, 2010 under the supervision of Dr. Tapan Kumar Nayak, Area chairperson of Economics INSTITUTE OF MANAGEMENT STUDIES GHAZIABAD. The matter presented in this report has not been submitted by us in the award of any other degree or diploma of this or any other institute.
CANDIDATE’S NAME AND SIGNATURE :NIKHIL KUMAR GARG(BM-09123) NIKHIL SINGH (BM-09124) NIMISHA GUPTA(BM-09125) NITESH KUMAR(BM-09127)
No task whatever big or small can be completed without proper guidance and encouragement. It gives us a great pleasure to our deep sense of gratitude and reverence to every person who created a congenial atmosphere for successful completion of this project. We would like to express our gratitude and profound thanks to Dr. TAPAN KUMAR NAYAK, AREA CHAIRPERSON, and faculty of Institute of Management Studies, Ghaziabad to give us a chance to get an industrial exposure.
We thank each and everyone who are involved in this report completion without which it would not have been possible for us to complete this project.
In India now a days, competition in every field of business is very high and companies are trying to attract maximum number of customers. For this, companies are using various modes of advertizing and searching for newer ways which effect much more customer. This led to the development of various forms of advertizing and outdoor advertizing is one of them. Purpose- In these papers, we are trying to study various medium of outdoor advertizing and also various other types of advertizing and their effect on various customers to understand customers need to attract more and more customers. Method used- The primary as well as secondary data for the studies. For primary data, a questionnaire has been prepared and customers having various perceptions were asked to fulfill it. Secondary data is collected from web resources and books. Various statistical tools like graphical method and chi-square test for our research purpose and analysis of data has been used. Findings- Various modes of advertizing are equally important and outdoor advertizing is one of them. It helps in boosting sales and attracting more and more customers and company must focus on outdoor advertizing as it can reach more and more number of peoples than other modes of advertizing.
TABLE OF CONTENTS
S.No. 1. 2. 3. 3. 4. 4.1 4.2 4.3 5. 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 6. 7. 8. 9. 10. 11. 12. 13. TOPIC Introduction Justification of the study Literature review Research objectives Advertizing basics History of advertizing Definition of advertizing Importance of advertizing Outdoor advertizing Factors affecting outdoor advertizing Kinds of outdoor advertizing Classification and types of advertizing Measuring advertizing effectiveness Methods of measuring advertizing effectiveness Communication effects of advertisement Factors affecting advertizing Impact of advertizing Research methodology Findings Summary Conclusion Recommendation Suggestions References Annexure PAGE NO. 7 9 10 11 12 12 15 18 20 20 21 30 38 40 44 49 49 55 71 72 73 74 76 77 77
It has been wrongly assumed that the advertising function is of recent origin. Evidences suggest that the Romans practiced advertising; but the earliest indication of its use in this country dates back to the middle Ages, when the use of the surname indicated a man’s occupation. The next stage in the evolution of advertising was the use of signs as a visual expression of the tradesman’s function and a means of locating the source of goods. This method is still in common use. The seller in primitive times relied upon his loud voice to attract attention and inform consumers of the availability of his services. If there were many competitors, he relied upon his own personal magnetism to attract attention to his merchandise. Often it became necessary for him to resort to persuasion to pinpoint the advantages of his products. Thus, the seller was doing the complete promotion job himself. Development of retail stores, made the traders to be more concerned about attracting business. Informing customers of the availability of supplies was highly important. Some types of outside promotion were necessary. Signs on stores and in prominent places around the city and notices in printed matters were sometimes used. When customers were finally attracted to the store and satisfied with the service at least once, they were still subjected to competitive influences; therefore, the merchant’s signs and advertisements reminded customers of the continuing availability of his services. Sometimes traders would talk to present and former customers in the streets, or join social organizations in order to have continuing contacts with present and potential customers. As the markets grew larger and the number of customers increased, the importance of attracting them also grew. Increasing reliance was placed on advertising methods of informing about the availability of the products. These advertising methods were more economical in reaching large numbers of consumers. While these advertising methods were useful for informing and reminding and reminding, they could not do the whole promotional job. They were used only to reach each consumer personally. The merchant still used personal persuasion once the customers were attracted to his store. 7
The invention of hand press increased the potentialities of advertising. By Shakespeare’s times, posters had made their appearance, and assumed the function of fostering demand for existing products. Another important event was the emergence of the pamphlet as an advertising medium. The early examples of these pamphlets disclose their sponsorship by companies want to generate goodwill for their activities. The low cost of posters and handbills encouraged a number of publishers to experiment with other methods.
The present study has focused on effect of outdoor advertising on consumer perception and their attitude towards different products and services. It has been observed through various researches, that the mode of advertising used like print media i.e. magazines and newspaper; electronic media i.e. television and radio; outdoor advertising i.e. billboards, hoardings, electronic displays plays an important role in determining the buying behavior of consumers . Outdoor advertising has been focused and compared with the other types of media to make the comparison on the basis of effectiveness. Outdoor media is developing and taking shape in best marketing promotion activities. Also studying the perception and consumer attitudes regarding different advertising media will provide an insight to further future development.
REVIEW OF LITERATURE
Kotler,(1994)- According to a research concentrating on the advertisers viewpoint, advertisement is an important tool which companies use to directly persuade buyers and public . Being a key element in the marketing process, advertisements face many challenges in reaching the audience. Krugman, 1975- One of the main obstacles is the low audience involvement . In most forms of communication, the audience least make some effort to pay attention or appear to be doing so. The adverts are meant for the audience to watch but unfortunately the audience is likely to take active steps in avoiding them. The advertiser therefore have problem of making loomed perhaps generally evasive audience pay attention to what is going on or at least enough to get basic selling message The challenge gets more difficult in a multiracial country such as Malaysia. Bonnex,(1975)- The existence of the advertisement rooted in Malaysia dated back to the 1971 as claimed by in his thesis. His theory is even supported by the Honourable Minister Tan Sri Gazali’s speech in 1971(Bernama, 1971). Advertising agencies fuel the basic needs of a company to plan, strategise and introduce their product in the market. It is one of the basis of the supply chain and many advertising agencies are involved in this business in Malaysia. Aaker and Mayers, 1975 As known for decades, advertisement is one of the main strategies in marketing either a product or service. It can be defined as “An Advert that does not create a buying response, or at least produce a desire to want to know more is not an advert” (Quinn, 1985). Porter (1980). The value chain is a systematic approach in examining the development of competitive advantage. It was introduced by one of the pioneer in the ICT and business industry Potter also explains the sources of cost reduction and differentiation within a firm. Potter treats every firm as a collection of activities carried out to develop, strategically market, deliver and maintain its products or services.
To study types of advertisements.
To study effectiveness of advertisements i.e. on sales, profitability.
To study electronic media, print consumers outdoor media. different the perception of towards the advertisement i.e. media and
To find the ways to make it more effective.
HISTORY OF ADVERTISEMENT
Archaeologists have found evidence of advertising dating back to the 3000s BC, among the Babylonians. One of the first known methods of advertising was the outdoor display1. Archaeologists have uncovered many such signs, notably in the ruins of ancient Rome and Pompeii. An outdoor advertisement excavated in Rome offers property for rent, and one found painted on a wall in Pompeii calls the attention of travelers to a tavern situated in another town. In medieval times word-of-mouth praise of products gave rise to a simple but effective form of advertising, the use of so-called town criers. The criers were citizens who read public notices aloud and were also employed by merchants to shout the praises of their wares. Later they became familiar figures on the streets of colonial American settlements. The town criers were forerunners of the modern announcer who delivers radio and television commercials. Although graphic forms of advertising appeared early in history, printed advertising made little headway until the invention of the movable-type printing press by German printer Johannes Gutenberg about 1450. This invention made the mass distribution of posters and circulars possible. The first advertisement in English appeared in 1472 in the form of a handbill announcing a prayer book for sale. Two hundred years later, the first newspaper ad was published offering a reward for the return of 12 stolen horses. In the American colonies, the Boston News-Letter, the first regularly published newspaper in America, began carrying ads in 1704, and about 25 years later Benjamin Franklin made ads more readable by using large headlines. In the United States, the advertising profession began in Philadelphia, Pennsylvania, in 1841 when Volney B. Palmer set up shop as an advertising agent, the forerunner of the advertising agency. Agents contracted with newspapers for large amounts of advertising space at discount rates and then resold the space to advertisers at a higher rate. The ads themselves were created by the advertisers. In 1869 Francis Ayer bought out Palmer and founded N. W. Ayer &
an eye-catching sign painted on the wall of a building 12
Son, an agency that still exists today. Ayer transformed the standard agent practice by billing advertisers exactly what he paid to publishers plus an agreed upon commission. Soon Ayer was not only selling space but was also conducting market research and writing the advertising copy. Advertising agencies initially focused on print. But the introduction of radio created a new opportunity and by the end of the 1920s, advertising had established itself in radio to such an extent that advertisers were producing many of their own programs. The early 1930s ushered in dozens of radio dramatic series that were known as soap operas because they were sponsored by soap companies. Television had been introduced in 1940, but because of the high cost of TV sets and the lack of programming, it was not immediately embraced. As the American economy soared in the 1950s, so did the sale of TV sets and the advertising that paid for the popular new shows. Soon TV far surpassed radio as an advertising medium. The tone of the advertising was also changing. No longer did advertising simply present the product benefit. Instead it began to create a product image. Bill Bernbach, founder of Doyle Dane Bernbach in New York City; Leo Burnett, founder of the Leo Burnett agency in Chicago, Illinois; and David Ogilvy, founder of Ogilvy & Mather in New York City, all came to prominence in the late 1950s and 1960s and led what has been called the 'creative revolution.' Bernbach's agency captured the spirit of the new age. Bernbach believed that advertising had to be creative and artistic or it would bore people. He also believed that good advertising began with respect for the public's intelligence. The ads his agency created were understated, sophisticated, and witty. For example, when Bernbach's agency picked up the account for the Henry S. Levy Bakery in Brooklyn, a borough of New York City, the agency created an ad that entertained New Yorkers and provided fodder for many conversations. The ad showed a Native American eating a slice of the bakery's rye bread with the headline, 'You don't have to be Jewish to love Levy's.' But it was the advertising for Volkswagen that made the agency's reputation.
At a time when American cars were getting bigger and bigger and the advertising for them trumpeted that bigger was better, Doyle Dane Bernbach created a magazine ad that showed a small picture of the Volkswagen Beetle surrounded by a sea of white space with the headline, 'think small.' An equally unconventional ad carried the headline 'lemon' beneath a photo of an apparently flawed Volkswagen. The ad's copy explained that 'this Volkswagen missed the boat. The chrome strip on the glove compartment is blemished and must be replaced…We pluck the lemons; you get the plums.' In an era of hype and bombast, the Volkswagen ads stood out because they admitted failure in a witty way and gave facts in a believable manner that underlined the car's strengths. This wit together with a conversational and believable style was a hallmark of the advertising created by Doyle Dane Bernbach and that style became highly influential. The creative foundation established by Bernbach and others has been critical to the success of contemporary advertising. The introduction of the TV remote control and access to hundreds of cable channels mean that today advertising must interest and entertain consumers or else they will simply use the remote to change the channel. New digital devices even threaten to make it possible to edit out commercials. The development of interactive television, combining the functions of a computer with access to high-speed transmission over cable lines or optical fibers, will likely enable consumers to select from a vast video library. Consumers will be able to determine not only when they watch something, but also, to a greater extent than ever before, what they will watch. Some industry observers believe that as consumers gain greater control over their viewing activities, they will find it easier to avoid advertising.
DEFINITION OF ADVERTISING
The word advertising originates from a Latin word advertise, which means to turn to. The dictionary meaning of the term is “to give public notice or to announce publicly”. Advertising may be defined as the process of buying sponsor-identified media space or time in order to promote a product or an idea. The American Marketing Association, Chicago, has defined advertising as “any form of nonpersonal presentation or promotion of ideas, goods or services, by an identified sponsor.” What Advertisement Is? Advertisement is a mass communicating of information intended to persuade buyers to by products with a view to maximizing a company’s profits. The elements of advertising are: (i) It is a mass communication reaching a large group of consumers. (ii) It makes mass production possible. (iii) It is non-personal communication, for it is not delivered by an actual person, nor is it addressed to a specific person. (iv) It is a commercial communication because it is used to help assure the advertiser of a long business life with profitable sales. (v) Advertising can be economical, for it reaches large groups of people. This keeps the cost per message low. (vi) The communication is speedy, permitting an advertiser to speak to millions of buyers in a matter of a few hours. (vii) Advertising is identified communication. The advertiser signs his name to his advertisement for the purpose of publicizing his identity.
What is Included in Advertising? (i) The information in an advertisement should benefit the buyers. It should give them a more satisfactory expenditure of their rupees. (ii) It should suggest better solutions to their problems. (iii) The content of the advertisement is within the control of the advertiser, not the medium. (iv) Advertising without persuasion is ineffective. The advertisement that fails to influence anyone, either immediately or in the future, is a waste of money. (v) The function of advertising is to increase the profitable sales volume. That is, advertising expenses should not increase disproportionately. Advertising includes the following forms of messages: The messages carried in Newspapers and magazines; On radio and television broadcasts; Circular of all kinds, (whether distributed by mail, by person, thorough tradesmen, or by Dealer help materials, Window display and counter – display materials and efforts; Store signs, motion pictures used for advertising, Novelties bearing advertising messages and Signature of the advertiser, Label stags and other literature accompanying the merchandise.
inserts in packages);
What is excluded from Advertising? Advertising is not an exact science. An advertiser’s circumstances are never identical with those of another; he cannot predict with accuracy what results his future advertising efforts will produce. (i) Advertising is not a game, because if advertising is done properly, both the buyer and the seller benefit from it. (ii) Advertising is not a toy. Advertiser cannot afford to play with advertising. Advertising funds come from sales revenue and must be used to increase sales revenue. (iii) Advertisements are not designed to deceive. The desire and hope for repeat sales insures a high degree of honesty in advertising. 16
The activities excluded from advertising are: The offering of premiums to stimulate the sale of products; The use of exhibitions and demonstrations at fairs, show and conventions; The use of samples and activities, involving news releases and the activities of personal The payment of advertising allowances which are not used for advertising; The entertainment of customers
Advertising Objectives Each advertisement is a specific communication that must be effective, not just for one customer, but for many target buyers. This means that specific objectives should be set for each particular advertisement campaign. Advertising is a form of promotion and like a promotion; the objectives of advertising should be specific. This requires that the target consumers should be specifically identified and that the effect which advertising is intended to have upon the consumer should be clearly indicated. The objectives of advertising were traditionally stated in terms of direct sales. Now, it is to view advertising as having communication objectives that seek to inform persuade and remind potential customers of the worth of the product. Advertising seeks to condition the consumer so that he/she may have a favourable reaction to the promotional message. Advertising objectives serve as guidelines for the planning and implementation of the entire advertising programme. The basic objectives of an advertising programme may be listed as below: (i) To stimulate sales amongst present, former and future consumers. It involves a decision regarding the media, e.g., TV rather than print ; (ii) To communicate with consumers. This involves decision regarding copy ; (iii) To retain the loyalty of present and former consumers. Advertising may be used to reassure buyers that they have made the best purchase, thus building loyalty to the brand name or the firm.
(iv) To increase support. Advertising impliedly bolsters the morale of the sales force and of distributors, wholesalers, and retailers, ; it thus contributes to enthusiasts and confidence attitude in the organizational. : (v) To project an image. Advertising is used to promote an overall image of respect and trust for an organization. This message is aimed not only at consumers, but also at the government, shareholders, and the general public.
IMPORTANCE OF ADVERTIZING
Generally, advertising is a relatively low-cost method of conveying selling messages to numerous prospective customers. It can secure leads for salesmen and middlemen by convincing readers to request more information and by identifying outlets handling the product. It can force middlemen to stock the product by building consumer interest. It can help train dealers salesmen in product uses and applications. It can build dealer and consumer confidence in the company and its products by building familiarity. Advertising is to stimulate market demand. While sometimes advertising alone may succeed in achieving buyer acceptance, preference, or even demand for the product, it is seldom solely relied upon. Advertising is efficiently used with at least one other sales method, such as personal selling or point-of-purchase display, to directly move customers to buying action. Advertising has become increasingly important to business enterprises –both large and small. Outlay on advertising certainly is the voucher. Non-business enterprises have also recognized the importance of advertising. The attempt by army recruitment is bases on a substantial advertising campaign, stressing the advantages of a military career. The health department popularizes family planning through advertising Labour organizations have also used advertising to make their viewpoints known to the public at large. Advertising assumes real economic importance too. Advertising strategies that increase the number of units sold stimulate economies in the production process. The production cost per unit of output is lowered. It in turn leads to lower prices. Lower consumer prices then allow these products to become available to more people. Similarly, the price of newspapers, professional sports, radio and TV programmes, and the like might be prohibitive without advertising.
In short, advertising pays for many of the enjoyable entertainment and educational aspects of contemporary life. Advertising has become an important factor in the campaigns to achieve such societal-oriented objectives such as the discontinuance of smoking, family planning, physical fitness, and the elimination of drug abuse. Though in India, advertising was accepted as a potent and recognized means of promotion only 25 years ago, its growing productive capacity and output necessitates the finding of consumers and advertising plays an important role in this process. Advertising helps to increase mass marketing while helping the consumer to choose from amongst the variety of products offered for his selection. In India, advertising as a profession is in its infancy. Because of this fact, there is a tremendous scope for development so that it may be productively used for the benefit of producers, traders, consumers, and the country’s economy.
Any advertising done outdoors that publicizes your business's products and services. Outdoor advertising includes various types of promotional displays, from highway billboards to transit posters and arena placement, all geared towards communicating a message to the public. The message might be to buy a product, take a trip, vote for a politician, or give to a charity. It might even be a public service announcement. According to the Outdoor Advertising Association of America, Inc. (OAAA), businesses spent $5.8 billion dollars on outdoor advertising in 2004, a figure expected to rise again in 2005.
FACTORS AFFECTING OUTDOOR ADVERTISING
1. Modern urban lifestyles 2. Technological advancements 3. Boom in the real estate and infrastructure a) Malls b) Buildings c) Flyovers d) Toll roads e) Metro trains 4. Rise in consumerism a) Consumer awareness b) Purchase options c) Buying power 5. Growth in rural markets 6. Saturation of other medias
KINDS OF OUTDOOR ADVERTISING
1. BILLBOARDS a) Front lit
b) Back lit
2. Bus stops
3. Metro stations
4. Auto panel
5. Train advertisement
6. Mobile van
8. Wall paintings
CLASSIFICATION AND TYPES OF ADVERTISING
1. Product – Related Advertising A. Pioneering Advertising B. Competitive Advertising C. Retentive Advertising 2. Public Service Advertising 3. Functional Classification A. Advertising Based on Demand Influence Level. A. Primary Demand (Stimulation) B. Selective Demand (Stimulation) B. Institutional Advertising C. Product Advertising A. Informative Product Advertising B. Persuasive Product Advertising C. Reminder-Oriented Product Advertising 4. Advertising based on Product Life Cycle A. Consumer Advertising B. Industrial Advertising 5. Trade Advertising A. Retail Advertising B. Wholesale Advertising 6. Advertising Based on Area of operation A. National advertising B. Local advertising C. Regional advertising 7. Advertising According to Medium Utilized
1. Product – Related Advertising It is concerned with conveying information about and selling a product or service. Product advertising is of three types, viz., A. Pioneering Advertising B. Competitive Advertising C. Retentive Advertising A. Pioneering Advertising: This type of advertising is used in the introductory stages in the life cycle of a product. It is concerned with developing a “primary” demand. It conveys information about, and selling a product category rather than a specific brand. For example, the initial advertisement for black – and – white television and color television. Such advertisements appeal to the consumer’s emotions and rational motives. B. Competitive Advertising: It is useful when the product has reached the market-growth and especially the marketmaturity stage. It stimulates “selective” demand. It seeks to sell a specific brand rather than a general product category. It is of two types: A. Direct Type: It seeks to stimulate immediate buying action. B. Indirect Type: It attempts to pinpoint the virtues of the product in the expectation that the consumer’s action will be affected by it when he is ready to buy. Example: Airline advertising. Air India attempts to bid for the consumer’s patronage either immediately - direct actionin which case, it provides prices, time tables and phone numbers on which the customer may call for reservations; or eventually – indirect action – when it suggests that you mention Air India’s name when talking to your travel agent.
C. Retentive Advertising: This may be useful when the product has achieved a favourable status in the market – that is, maturity or declining stage. Generally in such times, the advertiser wants to keep his product’s name before the public. A much softer selling approach is used, or only the name may be mentioned in “reminder” type advertising. 2. Public Service Advertising This is directed at the social welfare of a community or a nation. The effectiveness of product service advertisements may be measured in terms of the goodwill they generate in favour of the sponsoring organization. Advertisements on not mixing drinking and driving are a good example of public service advertising. In this type of advertising, the objective is to put across a message intended to change attitudes or behaviour and benefit the public at large. 3. Functional Classification Advertising may be classified according to the functions which it is intended to fulfil. (i) Advertising may be used to stimulate either the primary demand or the selective demand. (ii) It may promote either the brand or the firm selling that brand. (iii) It may try to cause indirect action or direct action. i. Advertising Based on Demand Influence Level. A. Primary Demand Stimulation Primary demand is demand for the product or service rather than for a particular brand. It is intended to affect the demand for a type of product, and not the brand of that product. Some advertise to stimulate primary demand. When a product is new, primary demand stimulation is appropriate. At this time, the marketer must inform consumers of the existence of the new item and convince them of the benefits flowing from its use. When primary demand has been stimulated and competitors have entered the market, the advertising strategy may be to stimulate the selective demand.
B. Selective Demand Stimulation This demand is for a particular brand such as Charminar cigarettes, Surf detergent powder, or Vimal fabrics. To establish a differential advantage and to acquire an acceptable sort of market, selective demand advertising is attempted. It is not to stimulate the demand for the product or service. The advertiser attempts to differentiate his brand and to increase the total amount of consumption of that product. Competitive advertising stimulates selective demand. It may be of either the direct or the indirect type. ii. Institutional Advertising Institutional Advertising may be formative, persuasive or reminder oriented in character. Institutional advertising is used extensively during periods of product shortages in order to keep the name of the company before the public. It aims at building for a firm a Positive public image in the eyes of shareholders, employees, suppliers, legislators, or the general public. This sells only the name and prestige of the company. This type of advertising is used frequently by large companies whose products are well known. HMT or DCM, for example, does considerable institutional advertising of its name, emphasizing the quality and research behind its products. Institutional advertisements are at consumers or focus them upon other groups, such as voters, government officials, suppliers, financial institutions, etc. If it is effective, the target groups will respond with goodwill towards, and confidence in the sponsor. It is also a useful method or introducing sales persons and new product to consumers. It does not attempt to sell a particular product; it benefits the organization as a whole. It notifies the consumers that the company is a responsible business entity and is patriotic; that its management takes ecologically responsible action, is an affair- motive action employer, supports the socialistic pattern of society or provides employment opportunities in the community. When Indian Oil advertisements describe the company’s general activities, such as public service work, this may be referred to as institutional advertising because it is intended to build an overall favorable attitude towards the company and its family of products. HMT once told the story of the small-scale industries supplying it with component parts, thus indicating how it aided the development of ancillary industries. 33
iii. Product Advertising Most advertising is product advertising, designed to promote the sale or reputation of a particular product or service that the organization sells. Indane’s Cooking Gas is a case in point. The marketer may use such promotion to generate exposure attention, comprehension, attitude change or action for an offering. It deals with the non-personal selling of a particular good or service. It is of three types as follows:A. Informative Product Advertising B. Persuasive Product Advertising C. Reminder-Oriented Product Advertising A. Informative Product Advertising: This form of advertising tends to characterize the promotion of any new type of product to develop an initial demand. It is usually done in the introductory stages of the product life cycle. It was the original approach to advertising. B. Persuasive Product Advertising: Persuasive product advertising is to develop demand for a particular product or brand. It is a type of promotion used in the growth period and, to some extent, in the maturity period of the product life cycle. C. Reminder-Oriented Product Advertising: The goal of this type of advertising is to reinforce previous promotional activity by keeping the brand name in front of the public. It is used in the maturity period as well as throughout the declining phase of the product life cycle. 4. Advertising based on Product Life Cycle A. Consumer Advertising B. Industrial Advertising
A. Consumer Advertising Most of the consumer goods producers engage in consumer product advertising. Marketers of pharmaceuticals, cosmetics, scooters, detergents and soaps, cigarettes and alcoholic beverages are examples. Baring a few, all these products are all package goods that the consumer will often buy during the year. There is a heavy competition among the advertisers to establish an advantage for their particular brand.
B. Industrial Advertising Industrial executives have little confidence in advertising. They rely on this form of promotion merely out of fear that their competitors may benefit if they stop their advertising efforts. The task of the industrial advertiser is complicated by the multiple buying influence characteristics like, the derived demand, etc. The objectives vary according to the firm and the situation. They are: To inform, To bring in orders, To induce inquiries, To get the advertiser’s name on the buyer’s list of sources, To provide support for the salesman, To reduce selling costs, To help get items in the news column of a publication, To establish recognition for the firm or its product, To motivate distributors, To recognition for the firm or its products, To motivate distributors, to create or change a company’s image, To create or change a buyer’s attitude, and The basic appeals tend to increase the rupee profits of the buyer or help in achieving his non-monetary objectives. Trade journals are the media most generally used followed by catalogues, direct mail communication, exhibits, and general management publications. Advertising agencies are much less useful in industrial advertising.
5. Trade Advertising A. Retail Advertising B. Wholesale Advertising
A. Retail Advertising This may be defined as “covering all advertising by the stores that sell goods directly to the consuming public. It includes, also advertising by establishments that sell services to the public, such as beauty shops, petrol pumps and banks.” Advertising agencies are rarely used. The store personnel are usually given this responsibility as an added task to be performed, together with their normal functions. The result is that advertising is often relegated to a secondary position in a retail store. One aspect of retail advertising is co-operative advertising. It refers to advertising costs between retailers and manufacturers. From the retailer’s point of view, cooperative advertising permits a store to secure additional advertising that would not otherwise have been available. B. Wholesale Advertising Wholesalers are, generally, not advertising minded, either for themselves or for their suppliers. They would benefit from adopting some of the image-making techniques used by retailers – the need for developing an overall promotional strategy. They also need to make a greater use of supplier promotion materials and programs in a way advantageous to them. 6. Advertising based on Area of Operation It is classified as follow: A. National Advertising B. Regional Advertising C. Local Advertising
A. National advertising It is practiced by many firms in our country. It encourages the consumer to buy their product wherever they are sold. Most national advertisements concentrate on the overall image and desirability of the product. The famous national advertisers are: Hindustan Levers DCM ITC Jay Engineering TISCO B. Regional advertising It is geographical alternative for organizations. For example, Amrit Vanaspati based in Rajpura claims to be the leading hydrogenated oil producer in the Punjab. But, until recently, it mainly confined itself to one of the vegetable oil brands distribution to Malihabad district (in U.P. near Lucknow).
C. Local advertising It is generally done by retailers rather than manufacturers. These advertisements save the customer time and money by passing along specific information about products, prices, location, and so on. Retailer advertisements usually provide specific goods sales during weekends in various sectors. 7. Advertising According to Medium The most common classification of advertising is by the medium used. For example: TV, radio, magazine, outdoor, business periodical, newspaper and direct mail advertising. This classification is so common in use that it is mentioned here only for the sake of completeness.
Measuring Advertising Effectiveness
All advertising efforts are directed mainly towards the achievement of business,
marketing and advertising objectives i.e., to increase the sales turnover and thus to market the maximum profit. The advertiser spends lakhs of rupees in to this advertising activity. In the background of all these efforts, is an attempt to attract the customer towards the product through advertising. As soon as the advertising campaign is over, a need is generally arisen to measure the effectiveness of the campaign. Whether, it has achieved the desired results i.e. desired sales profitability or results in terms the change in customer’ behaviour in favour of the company’s product which will naturally, affect the future sale of the product. In order to measure the effectiveness of advertising copy, two types of tests pre tests and post tests- can be undertaken. Pre tests are generally conducted in the beginning of the creation process or at the end of creation process or production stage. There are several pre and post tests techniques to measure the effectiveness of the advertising copy. The effectiveness of advertising in a particular media may also be measured in any of the following ways – (a) By giving different addresses to different media, (b) Different newspapers may be selected for advertisements of different departments, (c) Coupon blank etc. May be provided with the advertisement or (d) Enquiry from consumers should mention the name of the source of information. The technique is known as keying the advertising. Thus in measuring the effectiveness of advertising we include measuring of the effectiveness of advertising campaign, advertising copy and the effectiveness of individual media. This chapter deals these three problems.
Importance of measuring the Effectiveness of Advertising (1) It acts as a Safety measure
Testing effectiveness of advertising helps in finding out ineffective advertisement and advertising campaigns. It facilitates timely adjustments in advertising to make advertising consumer oriented and result oriented. Thus waste of money in faulty advertising can be avoided.
(2) Provides feedback for remedial measures
Testing effectiveness of advertising provides useful information to the advertisers to take remedial steps against ineffective advertisements.
(3) Avoids possible failure
Advertisers are not sure of results of advertising from a particular advertising campaign. Evaluating advertising effectives helps in estimating the results in order to avoid complete loss.
(4) To justify the Investment in Advertising
The expenditure on advertisement is considered to be an investment. The investment in advertising is a marketing investment and its objectives should be spelt out clearly indicating the results expected from the campaign. The rate and size of return should be determined in advance. If the expected rate of return is achieved in terms of additional profits, the advertisement can be considered as effective one.
(5) To know the communication Effect
The effectiveness of the advertisement can be measured in terms of their communication effects on the target consumers or audience. The main purpose of advertising is communicated the general public, and existing and prospective consumers, various information about the product and the company. It is therefore desirable to seek post measurements of advertising in order to determine whether advertisement have been seen or heard or in other words whether they have communicated the theme, message or appeal of the advertising.
(6) Compare two markets
Under this procedure, advertising is published in test markets and results are contrasted with other. Markets – so called control markets – which have had the regular advertising program. The measurements made to determine results may be measurements of change in sales, change in consumer attitudes, changes in dealer display and so on depending upon the objectives sought by the advertiser. 39
METHODS OF MEASURING ADVERTISING EFFECTIVENESS
Advertising is aimed at improving the sales volume of a concern so its effectiveness can be evaluated by its impact on sales. Most of the managers believe that the advertisement directly affects the sales volume and hence they evaluate the effectiveness of the advertising campaign by the increase in the sales volume. There may be two types measures (i) (ii) Direct measures: and Indirect measures:-
(1) Direct Measures of Advertising Effectiveness Under direct measures, a relationship between advertising and sales is established. A comparison of sales of two periods or two periods or two markets may be done and the corresponding changes may be noted. The following are some of the methods that are generally used in measuring that advertising effects. (a) Historical Sales Method Some insights into the effectiveness of past advertising may be obtained by measuring the relationship between the advertising expenditure and the total sales of the product. A multiple regression analysis of advertising expenditure and sales over several time periods may be calculated. It would show how the changes in advertising expenditure have corresponding changes in sales volume. This technique estimates the contribution that advertising has made to explaining in a co relational manner rather than a casual sales, the variation in sales over the time periods covered in the study (b) Experimental Control The other measure of advertising effectiveness is the method of experimental control where a casual relationship between advertising and sales is established. This method is quite expensive when related to other advertising effectiveness measures yet it is possible to isolate advertising contribution to sales. Moreover this can be done as a pre-test to aid advertising in choosing between alternative creative designs. Media schedules expenditure levels or some combination of these advertising decision areas. One experimental approach to measuring the sales effectiveness of advertising is test marketing.
(i) Before-after with Control Group Design This classic design uses several test and control cities in this design two types of cities are selected. Cities in which advertising campaigns are affected may be named as test cities and other cities may be called central cities. First of all, the normal sales level is calculated for both type of cities prior to advertising campaign, and then the advertising campaign is presented to the test cities and not the central cities. The effect of advertising campaign, can then, be measured by subtracting the amount of post campaign figure of sale from the pre campaign sale figures in test cities (ii) Multivariable Experimental Designs While the experimental design discussed above yields a reasonably accurate estimate of the effects of the advertising on sales, it is not successful in explaining the success or failure of the campaign itself. Multivariable designs Produce these explanations and are, therefore used by some very large firm because of their diagnostic value.The power of this multivariable factorial design is explained by G.H.Brown, former Fords Director of Marketing Research. For any single medium, eight possible geographic areas have been exposed and eight have not been exposed. Thus, in this experimental model it is possible to evaluate how each individual medium behaves alone and in all possible to evaluate how each individual medium behaves alone and in all possible combinations with other media. (2) Indirect Measures As it is very difficult to measure the direct effect of advertising on company’s profits or sales, most firms rely heavily on indirect measures. These measures do not evaluate the effects of advertisements directing on sales or profits but all other factors such as customer awareness or attitude or customer recall of advertising message affect the sales or profits or goals of the business indirectly. Despite the uncertainties about the relationship between the intermediate effects of advertising and the ultimate results, there is no other alternative but to use indirect measures. The most commonly used measures are – (i) Exposure to Advertisement In order to be effective, the advertisement must gain exposure. The management is concerned about the number of target audiences who see or hear the organization message set in the advertisement. Without exposure, advertisement is bound to failure. Marketers or advertisers may obtain an idea of exposure generated by the medium by examining its circulation or 41
audience data which reveal the number of copies of the magazine, newspaper or journal sold the number of persons passing the billboards or riding in transit facilities, or the number of persons living in the televiewing or radio listening area, and the number of persons switching on their T.V. and radio sets at various points of time. This number can be estimated by interviewing the numbers of the audience for different media. (ii) Attention or Recall of Advertising Message Content This is one of the widely used measures of advertising results. Under this measure, a recall of the message content among a specified group or groups or prospective customers is measured within 24 hours of the exposure of the advertisement. Attention value is the chief quality of the advertising copy the advertisements cannot be said to be effective unless they attract the attention of the target consumers. There are two methods for evaluating the attention getting value of the advertisements. One is pre-test and the other is post-test. In a pre-test evaluation, the consumers are asked to indicate the extent to which they recognise or recall the advertisement, they have already seen. This test is conducted in the laboratory setting. Here consumers read, hear or listen to the advertisement and then researchers ask question regarding the advertisement just to test the recall and then evaluate it. In post-test method, the consumers are asked questions about the indication of recognition or recall after the advertisement has been run. These measures assume that customers can recall or recognize what they have viewed or listened to. Various mechanical devices are being used in the western countries which provide indices of attention such as eye-camera etc. (iii) Brand Awareness The marketers who rely heavily on advertising often appraise its effectiveness by measuring the customer’s awareness about the particular product or brand. The assumption of this type of measure is that there is a direct relationship between the advertisements and the awareness. This type of measure is also subject to the same criticisms as is applicable to direct measures of effectiveness (sales measures because awareness is also not the direct result of the advertisements. It is also affected by many other factors. But, for new products, changes in awareness can often be attributed to the influence of advertising.
(iv) Comprehension Consumers generally use advertisements as a means of obtaining information about the product, brand or the manufacturer. They cannot be informed unless they comprehend the message (grasp the message mentally and understand it fully). Various tests for valuating comprehension are available – One is recall tests – an indicator of comprehension because it is evident that consumers recall what they comprehend. Another measure of the variable is to ask questions about subjects how much they have comprehended a message they have recently heard or seen. One may employ somewhat imprecise test of the comprehension of a newspaper and radio advertisement. One may ask typical target consumers from time to time such questions like ‘what did you think of our new commercial?’ and ‘Did it get the message across’? The answers of these questions will provide sufficient insight into advertising decision making. (v) Attitude Change Since advertising is considered to be one way of influencing the state of the mind of the audience towards a product, service or organisation, the results are very often measured in terms of attitudes among groups exposed to advertising communication. Several measures are used ranging from asking the questions about willingness to buy the likelihood of buying to the measurement of the extent to which specific attributes (such as modern or new) are associated with a product. (vi) Action One objective of advertisement may be assumed to be to stimulate action or behavior. The action or intention to take an action may be measured on the intention to buy measuring instrument. Under this type of measure, consumers are asked to respond why they are interested in purchasing the product or brand. One type of action that advertisers attempt to induce is buying behavior. The assumption is that if an increase in sales follows a decrease in advertising expenditure, the change in sales levels are good indicators of the effectiveness of advertising. Logic suggests that measurement of sales is preferable to other measurements. Thus, these above measures (direct or indirect) are used to evaluate the effectiveness of advertisements. It seems from the analysis of the above methods of measuring effectiveness that directly or indirectly changes in sales or profits are taken as the measuring rod of the effectiveness of the advertising. 43
COMMUNICATION EFFECTS OF ADVERTISEMENT
The management should attempt to evaluate the effectiveness of the advertising campaign if the firm’s advertising goals are to be achieved and the ad effectiveness is to be increased. By regular evaluation of the effectiveness, the short comings and the plus points would be revealed and the management would be able to improve the campaign by negating the shortcomings and retaining the favorable point. For this purpose, it is very necessary to know how advertising affects the buyer’s behaviors. But this is very difficult task because measurements are imperfect and imprecise. The effectiveness of advertising can be measured by the extent, it to which it achieves the objectives set for it. If it succeeds in attaining the objectives. Advertising can be said to be effective otherwise it will be a waste of money and time. In this sense, advertising can be recognized as a business activity like other activities. In a very real sense the integrity of promotional activities rests on how well those activities work. An advertising budget that is spent on some poorly defined task or on undefined tasks may be regarded as an economic waste as compared to that spent to achieve the well defined objectives for which the results can be measured. Any social institution upon which a significant portion of our total productive efforts is expanded should be able to point to its specific accomplishment. Indeed, it is a source of discomfort that specific results of advertising activities have not always been subject to precise measurement. Both practitioners and critics feel that promotional activities should only be accepted as socio – economic – institution with full right and privileges “when the means exist to prove that advertising super are productive rupees’ It is undoubtedly a source of embarrassment that we cannot exactly measure the effectiveness of advertising in definitive terms. The exact result of advertisement expenditure is very difficult to predict because.(a) The reaction of consumer – buyers to the advertising efforts cannot be known in advance. (b) The reaction of competitors in the field cannot be guessed in anticipation and (c) The unexpected events (such as change in social and economic environment and the government policies etc.) cannot be accurately anticipated. Such events may influence the results of the advertising efforts. If we take a hypothetical case of a retailer who contract to spent 44
Rs.5000 on advertisement with a local newspaper for a special sales even. The advertisement is seen and the response is much greater than it is anticipated. What caused the success of sale? They message theme colors etc., of the advertisement or the low prices quoted during the sale of the superior quality of the product or absence of competition in the market on the day or the favorable. Weather conditions or the goodwill of the firm etc. The overwhelming success of the sale is the joint result of all the above variables and it is quite impossible to isolate the role of any one variable. It is so because the cause and effect – relationship cannot be established in advance when a multitude of variable impinge upon a particular event. It is entirely possible that a poor advertising support may push up the sale because everything else falls into its proper place or the reverse may be possible. But it does not mean that that we cannot measure the effects of particulars advertising effort. The advertising executives are much concerned about the assessment of the effectiveness of the advertising efforts. For this purpose, the management needs answers to such questions as: was the advertising campaign really successful in attaining the advertising goals? Were our T.V. commercials as good as those of our competitors? Will the print advertisement, which we have designed, make consumers aware of our new product? To get answers of these questions, various tests of effectiveness (Pre- tests and post – tests ) are deeded to determine whether proposed advertisement should be used, and if they are not satisfactory how they might be improved, and whether on going campaign should be stopped continued or changed. Pre- tests are conducted before exposing target consumers to the advertisements and post tests after consumers have been exposed to them. As indicated earlier, the advertisers are interested in knowing what they are getting for their advertising rupees, So they test the proposed advertisement with pre test and measure the actual results with a post test. In the past, protesting was done by the advertising agencies but now the advertisers have been taking an increasingly active role in protesting process. Pre test may be done either before an advertisement has been designed or executed after it is ready for public distribution or at both points. During protesting there is often research on three vital questions:(i) Do consumers feel that the advertisement communicates something desirable about the product? (ii) Does the message have an exclusive appeal that differentiates the product from that of the competitors? 45
(iii) Is the advertisement believable? Although a lot of money is spent on protesting yet the advertisers like to confirm the results by post testing of their promotional campaigns due to the following reasons:(i) There is a need produce more effective advertising by retaining the good and removing the bad. (ii) The advertising executives can prove to the satisfaction of the management that a higher advertising budget will benefit the firm. (iii) There is a need for measuring the results to determine the level of expenditure that is most promising. Most research focuses on the communication effect rather than sales effect because it is a long run process. In the short run, however sales may be slight and important but in the long run its effects ob brands and companies may be of great importance. Indirectly it will affect the sales in the long run, by changing the consumer awareness and attitude. The advertisers are therefore, concerned with their impact on consumer awareness and attitude. The communication effect on sales may be presented in the following figure:Communication Effect on Sales Awareness ↓ Attitude ↓ Trial ↓ Satisfaction ↓ Purchases or repurchase Awareness builds a favorable or at least a curious attitude towards the product which leads to experimentation. If consumer is satisfied with the trial he may decide to purchase the product. There are many critical and unresolved issues in determining how to test the communication effects of advertising. Among these are:-
(1) Exposure Conditions – Should advertising be tested under realistic conditions or under more controlled laboratory conditions? (2) Execution – Protesting a finished advertisement as an expensive and time consuming. Does protesting a preliminary execution produce accurate and useful data? (3) Quality Vs. Quantity Data- Quantitative data are the easiest and the almost precise measurement. But qualitative data collected through interviews may provide information that short answer questions never can. Many types of advertising tests are conducted (different methods of pre tests and post – test are given in question number) In T.V. commercials are tested by inviting a group of people to the studio to view a program. The audience is then surveyed about the commercials. Print advertisements are tested through dummy magazine portfolio tests.
Compunction Effectiveness Vs Sales Effectiveness It is easier to assess the communication effect of advertising than the sales effect. Many firms try to measure the effectiveness of advertising in terms of sales results but this practice is always misleading. Since, the effect is the result of so many variables, a distinct effect of advertising on sales cannot be correctly measured, Although there may be some exceptions. For example direct mail advertising can effectively be measured by the inquiries received. But in many situations the exact relationship between advertising activity and sales cannot be established satisfactorily. We can correctly assume that some sales will occur even though there is no advertising or little advertising or conversely there will be no increase in sales after the point of saturation is reached or it may be that sales will show a decreasing trend at this point in spite of large amount of expenditure on advertising is done. It is so because advertising is no the only variable that effect the sales. Thus, we may conduct that sales effect of advertising is difficult to measure because a number of variables affect the quantum of tales and the contribution of advertisement cannot be measured separately unless all other variables are presumed to be constant. This situation is quite hypothetical and almost nonexistent. Added to this is the fact that advertisement itself is made of a variety of variables such as media, messages, colours, page or time of the day, locations, the size of the headline and the appeals used. Thus even if the advertising variable is separated this would still not answer the question about the effectiveness of the individual components of the advertising campaign. So advertisers try to measure the communication effect of the advertising. Suitability In small business firms where the marketing research resources are limited advertising managers may decide on less expensive and less relevant measures. The big business house, which has more access to research, may decide on the more relevant and expensive measures.
Factors Affecting Advertising
The final external factor in the planning framework concerns environmental factor social, legal, and global. Law forbids deceptive advertising. One solution is to create brand advertising that is vague and contains little specific information. However, such an approach can result not only in ineffective advertising; by it can lessen the social value of advertising by reducing the amount for useful information that it provides to society. Thus, and advertiser who attempts to provide specific, relevant information must be well aware of advertising regulation. Even more difficult consideration for people involved in the advertising effort is broad social and economic issues. Another concern is that advertising, especially when it is more irritating than entertaining, is an intrusion into an already excessively polluted environment. A whole set of rules is emerging to cover advertising directed at children, and advertising for products such as alcohol and cigarettes, and the use of environmental and health claims in advertising. Thus advertising has a tremendous impact on international marketing and the two concepts therefore go hand in hand and are dependent on each other.
IMPACT OF ADVERTISEMENT
Advertising has an important effect on a country’s economy, society, culture, and political system. This is especially true in the United States where the advertising industry plays such a prominent role. 1. Economic Impact Most economists believe that advertising has a positive impact on the economy because it stimulates demand for products and services, strengthening the economy by promoting the sale of goods and services. Manufacturers know that advertising can help sell a new product quickly, enabling them to recoup the costs of developing new products. By stimulating the development of new products, advertising helps increase competition. Many economists believe that increased competition leads to lower prices, thereby benefiting consumers and the economy as a whole. These economists also argue that by interesting consumers in purchasing goods, advertising enables manufacturers and others to sell their products in larger quantities. The increased volume of sales enables companies to produce individual units at lower costs and therefore, sell them at a lower price. Advertising thus benefits consumers by helping lower prices. Other economists, however, believe that advertising is wasteful. They argue that the cost of advertising adds to the cost of goods and that most advertising simply encourages consumers to buy one brand rather than another. According to this view, advertising simply moves sales from one company to another, rather than increasing sales overall and thereby benefiting the economy as a whole.
2. Social Impact Advertising can have wide-ranging repercussions on a society. Some critics suggest that advertising promotes a materialistic way of life by leading people to believe that happiness is achieved by purchasing products. They argue that advertising creates a consumer culture in which buying exciting new products becomes the foundation of the society's values, pleasures, and goals. Other critics express concern over the way advertising has affected women and racial minority groups. Ads in the 1950s depicted women primarily as decoration or sex objects. Although millions of women worked outside the home in the 1960s, ads continued to focus on their role as homemakers. Whether owing to the feminist movement or to women's increasing economic power, after the 1960s it became more common to see women depicted in professional roles. However, many ads today still emphasize a woman’s sexuality. The way advertising has depicted racial minorities has also been harmful. Prior to 1960, African Americans were usually shown in a subordinate position. Due to the influence of the civil rights movement, however, advertisers by the 1980s had begun to depict African Americans as students, professionals, or business people. However, many African American organizations and community activists continue to object to the way that alcohol and tobacco companies have seemingly targeted low-income minority communities with a heavy preponderance of outdoor advertising for their products. As ads have begun to more fully reflect the lives of women and African Americans in the United States, increasing attention has been paid to the way in which advertising shows other ethnic groups, including Hispanics, Asians, Native Americans, and Eastern Europeans. There is still considerable debate over how advertising influences public perception of gender and of particular ethnic groups. Advertising has a major social impact by helping sustain mass communications media and making them relatively inexpensive, if not free, to the public. Newspapers, magazines, radio, and broadcast television all receive their primary income from 51
advertising. Without advertising, many of these forms of mass communication might not exist to the extent that they do today, or they might be considerably more expensive, offer less variety, or even be subject to government control through subsidies. In-depth news programs, a diversity of magazines, and free entertainment might no longer be widely available. At the same time, however, some critics warn that because advertising plays such a major economic role, it may exercise undue influence on the news media and thereby curtail the free flow of information in a free society. Reporters and editors, for example, may be hesitant to develop a news story that criticizes a major advertiser. As a result, society might not be alerted to harmful or potentially harmful conduct by the advertiser. Most members of the news media deny that pressure from an advertiser prevents them from pursuing news stories involving that advertiser, but some members of the media acknowledge that they might not be inclined to investigate an issue aggressively if it threatened to offend a major advertiser. Advertisers may affect media programming in other ways, too, critics charge. For example, companies that sponsor TV programs prefer relatively wholesome, noncontroversial programming to avoid offending a mass audience. This preference causes TV networks to emphasize this type of programming. The result is that society may be denied the benefits of being able to view challenging or highly original entertainment programs or news programs on controversial issues. Because advertisers are especially interested in attracting the 18 to 34 year olds who account for most consumer spending, television shows are often developed with this audience in mind. If the ratings show that a program is not attracting large audiences, particularly among 18 to 34 year olds, advertisers often withdraw support, which causes a program to be canceled. As a result, shows that are more likely to interest and to be of value to older audiences are not produced. The impact of television on young children has received much attention. Research suggests that children see television advertising as just another form of programming and react uncritically to its messages, which makes them especially vulnerable to advertising. 52
There is also concern about the way in which adolescent girls respond to advertising that features beautiful, thin models. Research indicates that many adolescent girls are unduly influenced by this standard of beauty, become dissatisfied with their own bodies, and may develop eating disorders in pursuit of a thin figure. New research suggests that adolescent boys are also being influenced by advertising images of bulked-up, buffed bodies. As a result, many become dissatisfied with their own body image, devote large amounts of time to weightlifting, and may even take drugs that have harmful side effects in order to develop more muscle. Those over the age of 60 are thought to be less influenced by advertising, but some elderly people no longer process messages as easily as younger people, making them more susceptible to questionable advertising claims. 3. Political Impact Advertising is now a major component of political campaigns and therefore has a big influence on the democratic process itself. In 1998 more than $467 million was spent on election campaigns in the United States. That amount of spending placed political advertising in the ranks of the country’s 30 leading advertisers that year. Political advertising is a relatively new development in U.S. history. Advertising professionals did not become involved in electoral campaigns until the 1950s. But since then, political advertising has grown in sophistication and complexity. Political advertising enables candidates to convey their positions on important issues and to acquaint voters with their accomplishments and personalities. Television advertising is especially effective for candidates running for national or statewide office because it can reach so many people at once. Candidates can also use advertising to respond effectively to the charges of their opponents. Various campaign finance reform proposals, however, have tried to address the impact of television advertising on political campaigning. Because of the high cost of television ads, the costs of political campaigns have skyrocketed, making it necessary for candidates to raise money continually, even after they have been elected to office. Critics say this factor jeopardizes the democratic process by making elected officials beholden to 53
wealthy contributors and by making it more likely that only the wealthy will run for office. Some reform proposals have called for free airtime, but television and radio networks have resisted this idea. Critics of political advertising also charge that the 30-second television spot has become more important to a political campaign than a thorough discussion of the issues. As a result, voters are bombarded with image advertising rather than being acquainted with the candidate’s positions. They contend that this practice is harmful to good government. Issues are simplified, and candidates are “packaged and sold” much like a consumer product, thereby distorting the political process. 4. Cultural Impact Advertising can affect cultural values. Some advertising messages, for example, encourage aggressive individualism, which may clash with the traditional cultural values of a country where the collective or group is emphasized over the individual or humility or modesty is preferred to aggressiveness. With the globalization of the world economy, multinational corporations often use the same advertising to sell to consumers around the world. Some critics argue that advertising messages are thus helping to break down distinct cultural differences and traditional values, causing the world to become increasingly homogeneous. Many advertising campaigns, however, have universal appeal, overriding cultural differences, or they contribute to culture in a positive way. Humor in advertising has made many ad campaigns widely popular, in some cases achieving the status of folklore or taking on new life in another arena. For example, a popular ad campaign for a fastfood chain with the slogan “Where’s the beef?” became part of the 1980 Democratic presidential primary campaign between Gary Hart and Walter Mondale. The ad ridiculed a competitor by depicting a small hamburger patty dwarfed by a huge bun. During a primary debate one of the candidates used the ad slogan to suggest that his opponent’s campaign lacked substance.
Research Design Data Source Research Instrument Sample design Sample size Sample location : Descriptive : Primary data : Secondary data : Questionnaire : Simple random design : 100 : Delhi : NCR Sample element : Students : House hold : Professional
RESEARCH METHODOLOGY Chi-Square Test
Chi-square is a statistical test commonly used to compare observed data with data we would expect to obtain according to a specific hypothesis. For example, if, according to Mendel's laws, you expected 10 of 20 offspring from a cross to be male and the actual observed number was 8 males, then you might want to know about the "goodness to fit" between the observed and expected. Were the deviations (differences between observed and expected) the result of chance, or were they due to other factors. How much deviation can occur before you, the investigator, must conclude that something other than chance is at work, causing the observed to differ from the expected. The chi-square test is always testing what scientists call the null hypothesis, which states that there is no significant difference between the expected and observed result The formula for calculating chi-square ( χ2) is: χ2= (o-e)2/e That is, chi-square is the sum of the squared difference between observed (o) and the expected (e) data (or the deviation, d), divided by the expected data in all possible categories. Step-by-Step Procedure for Testing Your Hypothesis and Calculating Chi-Square 1. State the hypothesis being tested and the predicted results. Gather the data by conducting the proper experiment (or, if working genetics problems, use the data provided in the problem). 2. Determine the expected numbers for each observational class. Remember to use numbers, not percentages. Chi-square should not be calculated if the expected value in any category is less than 5. 3. Calculate 2 using the formula. Complete all calculations to three significant digits. Round off your answer to two significant digits. 4. Use the chi-square distribution table to determine significance of the value. Determine degrees of freedom and locate the value in the appropriate column. Locate the value closest to your calculated on that degrees of freedom df row. Move up the column to determine the p value.
5. State your conclusion in terms of your hypothesis. If the p value for the calculated is p > 0.05, accept your hypothesis. 'The deviation is small enough that chance alone accounts for it. A p value of 0.6, for example, means that there is a 60% probability that any deviation from expected is due to chance only. This is within the range of acceptable deviation. If the p value for the calculated is p < 0.05, reject your hypothesis, and conclude that some factor other than chance is operating for the deviation to be so great. For example, a p value of 0.01 means that there is only a 1% chance that this deviation is due to chance alone. Therefore, other factors must be involved. The chi-square test will be used to test for the "goodness to fit" between observed and expected data from several laboratory investigations.
ANALYSIS OF DATA COLLECTION
In order to present the report with a pragmatic approach along with the theoretical aspect some primary and secondary data is collected so as to present our report with facts and figures.
The primary data has been collected by preparing a questionnaire, which was circulated over hundred persons. They have been asked questions regarding the different kind of media affecting their choices regarding the different products. A specimen of the questionnaire is attached.
The secondary data is also of utmost importance. It helps in the in depth analysis of the organization. Various facts and figures have been gathered through different websites & portals. A list of all those referral websites is mentioned later in the report in references.
Sampling Unit is the total number of samples differed in different locality. Sl. No. 1. 2. 3. Classes Students Professionals Household Total No. of Classes 33 34 33 100
Data have been collected through the survey method while surveys have been conducted in one city: i) ii) Delhi NCR
The data collected was both from the primary and secondary source. The primary data was collected through questionnaires and was collected personally. The secondary data was collected through books, magazines, and websites. All the area had segmented according the population of this area. We have considered 100 as sample size.
Aim- To find out is there a relationship between the occupation of the customer and mode of advertising media affecting their perception with regards to different products. Following is the information collected from the primary source . Type of media⇒ Occupation of people⇓ Student Professional Household Total Outdoor media Print media Electronic media
10 10 5 25
8 9 10 27
2 1 45 48
20 20 60 100
Step 1: H0: There is no significant difference (or no relationship) between the people occupation and the mode of advertising media affecting their perception. HA: There is significant difference( or relationship) between the people occupation and the mode of advertising media affecting their perception. Step 2: Level of significance α considered in this analysis is 5% α=0.05. Step3: Calculation for the expected frequency We use formula (Row total*column total)/Grand total E11=R1C1/N=(25*20)/100=5, E12=(R1C2)/N=(27*20)100=5.4 E13=(R1c3)/N=(48*20)/100=9.6 EE21=(R2C1)/N=(27*20)100=5.4 E22=(R2c2)/N=(48*20)/100=9.6 E23=(R2C3)/N=(25*20)/100=5, E31=(R3C1)/N=(60*25)/100=15 E32=(R3C2)/N=(27*60)/100=16.2 E33=(R3C3)/N=(48*60)/100=28.8 Step 4: Test statistic for testing H0 is: ℵ^2=∑(0i-Ei)^2/Ei
Observed frequency Oi 10 8 2 10 9 1 5 10 15
`Expected Frequency Ei 5 5.4 9.6 5 5.4 9.6 15 6 28.8
(Oi- Ei)^2 25 6.76 57.76 25 12.96 73.96 100 16 262.44
( Oi-Ei)^2/ Ei 5 1.25 6.01 5 2.4 7.70 6.66 2.66 9.1125 ℵ^2 =45.79
Step 5: Statistic follows a chi-square distribution. So (r=no. of rows c= no. columns) Degree of freedom df=(r-1)(c-1) = (3-1)(3-1) = 2*2= 4. Tabulated value at 4 degree of freedom and 0.05 level of significance. D(4,0.05)= 9.488 Step6: ℵ^2 cal > ℵ^ tab. The decision rule is to reject the null hypothesis if the calculated value of the ℵ^2 comes to be greater than the tabulated value of the ℵ^2 and to accept it otherwise. In this case we reject null hypothesis. Thus accept the HA, Step:7 Conclusion: There is a significant difference between the people occupation and mode of media affecting their perception regarding different products. Hence People with different occupation are affected differently by different kinds of media i..e Print media ,electronic media and Outdoor media
1. From where do you get information about the new product?
Answers Television & other electronic media Newspapers and Magazines Outdoor advertizing (billboards and hoardings) No. of respondents 48 27 25
A large size of population is influenced by Television and Newspapers.
2. Which form of advertisement do you like more?
Answers Still image Moving image
No. of respondents 28 72
People are more affected by advertisement with moving image.
3. For you advertisement is a source of :
Information Entertainment No. of respondents 62 38
More number of people consider advertisement as a source of information rather than a source of entertainment.
4. Does entertaining advertisement affect your opinion about the product?
Answers Yes No
No. of respondents
Entertaining advertisement does not affect the opinion of customer about the product
5. Does information provided in advertisement affects your opinion about the product?
Answers Yes No No. of respondents 87 13
Information provided in the advertisement affect very much on the opinion of consumers about the product.
6. Does language used in advertisement affects your opinion about the product?
Answers Yes No No. of respondents 63 37
Language used in the advertisement affects a lot on the opinion of consumers about the product.
7. Does presence of any celebrity in the advertisement affects your opinion about the product?
Answers Yes No No. of respondents 69 31
Presence of any celebrity affects on the opinion of consumers about the product.
8. Does intensity of the advertisement affects your opinion about the product?
Answers Yes No No. of respondents 52 48
The effect of intensity is very powerful on the opinion of consumers about the product.
9. Does presence of social issues in the advertisement affects your opinion about the product?
Answers Yes No No. of respondents 59 41
Presence of social issues in advertisements affects very much on the opinion of consumers about the product.
10. Do you think advertisement helps in increasing sales of any product?
Answers Yes No No. of respondents 87 13
Advertisement helps very much in increasing the sales of any product.
Advertisements with moving image are more effective than advertisement with still image. Information provided in the advertisement has more influence on consumer’s perception about the product.
Language used in the advertisement also plays important role in increasing effectiveness of an advertisement. Intensity of advertisement affects the perception of consumers towards the product and leads them for its purchase.
Social issues included in advertisement affects the perception of high age group people. National advertisement has more influence on consumer’s perception about the product instead of local advertisement. Advertisement increases the sales of any product.
Advertising may be defined as the process of buying sponsor-identified media space or time in order to promote a product or an idea. The American Marketing Association, Chicago, has defined advertising as “any form of nonpersonal presentation or promotion of ideas, goods or services, by an identified sponsor.” Advertising focuses on mass production and mass communication along with the niche markets and specialized markets . Advertising includes the following forms of messages: The messages carried in Newspapers and magazines; On radio and television broadcasts; Circular of all kinds, (whether distributed by mail, by person, thorough tradesmen, or by
inserts in packages); Dealer help materials, Window display and counter – display materials and efforts; Store signs, motion pictures used for advertising, Novelties bearing advertising messages and Signature of the advertiser, Label stags and other literature accompanying the merchandise. Advertising seeks to condition the consumer so that he/she may have a favorable reaction to the promotional message. Advertising objectives serve as guidelines for the planning and implementation of the entire advertising program.
Each advertisement is a specific communication that must be effective, not just for one customer, but for many target buyers. This means that specific objectives should be set for each particular advertisement campaign. Advertising is a form of promotion and like a promotion; the objectives of advertising should be specific. This requires that the target consumers should be specifically identified and that the effect which advertising is intended to have upon the consumer should be clearly indicated. The objectives of advertising were traditionally stated in terms of direct sales. Now, it is to view advertising as having communication objectives that seek to inform persuade and remind potential customers of the worth of the product. 72
CHI-SQUARE reveals that all the determinants are not internally equal they are significantly different from one another. Similarly, all the parameters are not internally equal they are significantly different from one another. In order to measure the effectiveness of advertising, which approach (communication effectiveness or sales effectiveness), is more suitable? Two factors are to be considered in deciding the approach. They are 1. Relevance of advertising objectives on the overall performance objectives: Generally advertising managers would like to know the role of advertisements on the overall performance of the business firm i.e., return on investment and on profitability. A sale is a determining factor of company performance. 2. Difficulty and cost of obtaining data needed to evaluate effectiveness: Generally communication measures are easy to follow than sales effectiveness measures. If the measures of advertising are more relevant they will be difficult and costly. If it is less difficult and cheap the measures will not be more relevant. Therefore, the advertising manager has to make a balance between these two approaches.
The marketing researcher has to face certain difficulties while he carries out the research work. He knows the limitation beforehand, uncontrollable and others are controllable. Some important limitations, which are faced by researchers as follows: -
Sample size restricted to 100 only which was very less according total population.
The responses given by respondents were not always accurate because the respondents gave the response according to their understanding.
Survey is a time consuming process but the time to collect the data for research was very less.
Sometimes the respondents are not willing to fill the the resultant may not be correct.
questionnaire and hence
Marketing researchers studies the behavior that is rational. Very often, they do not express their feeling correctly what they think. In such cases their habitual, practice, preferences cannot be assessed correctly.
Advertisement should be made with keeping the determinants of effectiveness in mind. Advertisement should be according to the product and its suitability with different age groups. To make advertisement more effective all the determinants of effectiveness should be taken care of.
Investment in advertisement should be made with great care of media of advertisement and type of advertisement. Advertisers should develop new and more effective ways of advertisement.
Books 1. Mohan M, (1989), Advertising Management : concept and cases, Tata Mc Grawhill, India. 2. Kotler Philip,(2000), Marketing Management, The millennium edition, Printice hall, India. 3. Kapferer J. , (2009) Strategic Brand Management , Kogan page India Pvt. Ltd. 4. Strategic Brand Management – Kapferer 5. Gupta S.L (2005), Advertising and Sales Promotion Management, Excel Books, New Delhi. Internet 1. http://books.google.com/books?id=t-yoHkKZ9ZsC&q=marketing&dq=marketing&cd=1 2. http://books.google.com/books?id=wAMsaLJoykYC&dq=marketing&cd=3
We are doing a research project as part of our curriculum on “ A Study on Effect of various modes of Advertisement on Consumers”. For this we require you to please fill this questionnaire.
Name: ………………………………................................. Sex: Age: a. Below 20 b. 20 to 30 c. 30 to 40 d. Above 40 Occupation: a. Student c. House hold [ [ ] ] ] ] b. Business class [ d. Service class [ [ [ [ [ ] ] ] ] a. Male [ ] b. Female [ ]
1. From where do you get information about the new product? a. Television c. Outdoor advertizing d. Internet e. Peers (friends/family) [ [ [ [ ] ] ] ] ] ] b. Newspapers and Magazines [
2. Which form of Outdoor advertisement do you like more? a. Still image (Banners and hoardings) [ b. Moving image (Visual display board) [ ] 77
3. For you advertisement is a source of a. Information b. Entertainment a. Yes b. No a. Yes b. No a. Yes b. No product? a. Yes b. No a. Yes b. No product? a. Yes b. No a. Yes b. No [ [ [ [ ] ] ] ] [ [ [ [ ] ] ] ] [ [ [ [ [ [ [ [ ] ] ] ] ] ] ] ]
4. Does an entertaining advertisement influences your opinion about the product?
5. Does information provided in advertisement affects your opinion about the product?
6. Does language used in advertisement affects your opinion about the product?
7. Does presence of any celebrity in the advertisement affects your opinion about the
8. Does intensity of the advertisement affects your opinion about the product?
9. Does presence of social issues in the advertisement affects your opinion about the
10. Do you think advertisement helps in increasing sales of any product?