Preface

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

INDEX
Sr No Topic Pg. No.
1 International Marketing: A global marketplace 4
2 Advertising and its milestones 5
3 Advertising plan 7
4 Consumer and Market analysis 8
5 Marketing Plan 9
6 Advertising communication system 10
7 Media strategy & tactics 11
8 International Advertising concept 12
9 Brand ambassadors 14
10 Impact of advertising on sales: Hero Honda 18
11 Agencies 19
12 Fact file 20
13 Advertising expenditure 21
14 Top 10 advertising companies 22
15 Factors affecting advertising 23
International Marketing: A Global Marketplace
Trade is increasingly global in scope today. There are several reasons for this. One
significant reason is technological—because of improved transportation and
communication opportunities today, trade is now more practical. Thus, 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. In part to accommodate these
realities, 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, and
trade organizations such as the World Trade Organization
(WTO), North American Free Trade Agreement (NAFTA), and the European
Union (EU).
Some forces in international trade.
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,
for example, so once the demand for a product (say, VCRs) is in the decline in these
markets, an increasing market potential might exist in other countries (e.g., Europe and
the rest of Asia). Internalization/transaction costs refers to the fact that developing
certain very large scale projects, such as an automobile intended for the World market,
may entail such large costs that these must be spread over several countries.
Advertising
Advertising is a persuasive communication attempt to change or reinforce
ones’ prior attitude that is predictable of future behavior.
Historical Milestones In Advertising
Advertising goes back to the very beginnings of recorded history. Archaeologists
working in the countries around the Mediterranean sea have dug up signs announcing
various events and offers. An early form of advertising was the town crier. Another early
advertising form was the mark that trades people placed on their goods, such as
pottery. As the person’s reputation spread by word of mouth, buyers began to look for
his special mark, just as trademarks and brand names are used today. As production
became more centralized and markets became more distant, the mark became more
important. The turning point in the history of advertising came in he year 1450 when
Johann Gutenberg invented the printing press. Advertising no longer had to produce
extra copies of a sign by hand. The first printed advertisement in the English language
appeared in 1478. In 1622, advertising got a big boost with the launching of the first
English newspaper, The Weekly News. Advertising had its greatest growth in the United
States. Ben Franklin has been called the father of American advertising because his
Gazette, first published in 1729,had the largest circulation and advertising volume of
any paper in colonial America. The invention of radio and, later, television created two
more amazing media for the spread of advertising.

Advertising's Two Important Virtues

 You have complete control. Unlike public relations efforts, you
determine exactly where, when and how often your message will appear, how it will
look, and what it will say. You can target your audience more readily and aim at very
specific geographic areas.
 You can be consistent, presenting your company's image and sales

message repeatedly to build awareness and trust. A distinctive identity will eventually
become clearly associated with your company, like McDonald's golden arches.
Customers will recognize you quickly and easily - in ads, mailers, packaging or signs - if
you present yourself consistently.
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
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,
competitive, facilitating agency, and social legal, 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, pricing, public relation, and
promotion. The advertising manager also needs to know the major areas of his or her
planning and decision-making responsibilities.
There are three areas of major importance:

 Objective And Target Selection,

 Consideration,

 Message Strategy And Tactics,

 Media Strategy And Tactics.

Consumer and Market Analysis

A situation analysis often begins by looking at the aggregate market for the
product, service, or cause being advertised: the size of the market, its growth rate,
seasonality, geographical distribution; the possible existence of different segments; and
trends in all of these aggregate market characteristics.
Competitive Analysis
Advertising planning and decision-making are heavily affected by competition and
the competitive situation the advertiser faces. Competition is such a pervasive factor
that it will occur as a consideration in all phases of the advertising planning and
decision-making process. A type of market structure analysis that involves the
development of perceptual maps of a market, for example, attempts to locate the
relative perceptual positions of competitive brands.
 Situation analysis should usually include an analysis of what current share the
brand now has, what shares its competitors have, trends in these shares, reasons for
these trends, what share of a market is possible for the brand, and from which
competitors an increase in share will come. The planner also has to be aware of the
relative strengths and weaknesses financial, production, and marketing of the different
competing companies, and the history of competitive moves and objectives in the
product category.
The Marketing Plan
Advertising planning and decision making take place in the context of an overall
marketing plan. The marketing plan includes planning, implementation, and control
functions for the total corporation or a particular decision-making unit or product line.
The marketing plan will include a statement of marketing objectives and will spell out
particular strategies and tactics to reach those objectives. The marketing objectives
should identify the segments to be served by the organization and how it is going to
serve them. The needs and wants of consumers on which the firm will concentrate,
such as the needs of working men and women for easily prepared meals, are identified
and analyzed in a marketing plan.
There are several marketing tools that can be used to help an organization
achieve its marketing objectives. Most people are familiar with the “4 Ps” the marketing
mix which includes product, price, place, and promotion. A marketing plan formulates
the strategy and tactics for each of these.

Advertising Communication System

Advertising communication always involves a perception process and four of the
elements shown in the model: the source, a message, a communication channel, and a
receiver. In addition, the receiver will sometimes become a source of information by
talking to friends or associates. 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.
An advertising message can have a variety of effects upon the receiver. 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

Message Strategy and Tactics

The actual development of an advertising campaign involves several distinct
steps. First, the advertising manager must decide what the advertising is meant to
communicate by way of benefits, feeling, brand personality, or action content. Once the
content of the campaign has been decided, decisions must be made on the best and
most effective ways to communicate that content.
Media Strategy
Although there are many rules of thumb often used to decide how much
money to spend on advertising, the soundest rules involve beginning with a detailed
specification of what a corporation is attempting to accomplish with advertising, and the
resources necessary. 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
International advertising
It entails dissemination of a commercial message to target audiences in more
than one country. Target audiences differ from country to country in terms of how they
perceive or interpret symbols or stimuli, respond to humor or emotional appeals, as well
as in levels of literacy and languages spoken. How the advertising function is organized
also varies.
International advertising can, therefore, be viewed as a communication
process that takes place in multiple cultures that differ in terms of values,
communication styles, 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. The sum total of these activities constitutes a
worldwide industry that is growing in importance. International advertising is also a
major force that both reflects social values, and propagates certain values worldwide.
The Communication Process
The process of communication in international markets involves a number of
steps. First, the advertiser determines the appropriate message for the target audience.
Next, the message is encoded so that it will be clearly understood in different cultural
contexts. The message is then sent through media channels to the audience who then
decodes and reacts to the message. At each stage in the process, cultural barriers may
hamper effective transmission of the message and result in miscommunication.

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. In some cases the advertising message
relates to the firm and its activities, i.e. its corporate image. In other cases, the message
relates to a specific product or service marketed by the firm. In either case, the firm will
use the services of an advertising agency to determine the appropriate message,
advertising copy and make the media placement
Brand Ambassadors: their effect on International Marketing and
advertising
Soft drinks, chocolates, biscuits, paints, cars, tyres, scooters, suiting, footwear,
watches, pens, hair oil, insurance packages, diamonds, photo films ... The list could
goes on. It appears that, of late, corporate India does not want to sell anything to the
consumer without using either a movie star or a sports hero .

This in itself is an important advertising strategy for majority of

the companies.
So, when Cadbury India wanted to restore the consumer's confidence in its chocolate
brands following the high-pitch worms controversy, the company appointed Amitabh
Bachchan for the job.
Last year, when the even more controversial pesticide issue shook up
Coca-Cola and PepsiCo and resulted in much negative press, both soft drink
majors put out high-profile damage control ad films featuring their best and
most expensive celebrities.
While Aamir Khan led the Coke fightback as an ingenious and fastidious Bengali
who finally gets convinced of the product's `purity,' 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.
The success that the Aamir Khan commercial brought Coca-Cola is
universally acknowledged. A creation of Prasoon Joshi, National Creative Director,
McCann-Erickson, and the ad has been exported to foreign markets as well. Thus it
proved beneficial for international marketing of the product.

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

Tata brand like Narain Karthikeyan, Sourav Ganguly and Irfan Pathan, Sania Mirza,
Naseeruddin Shah and Aamir Khan who have greatly contributed to the success if
Tata’s products and services.
Highest Earning Celebrities

1. Amitabh Bachchan 2. Sachin Tendulkar 3. Narain Karthikeyan

4. Shahrukh Khan 5. Aamir Khan 6. Aishwarya Rai 7. Rahul Dravid 8. Saif Ali Khan

9. Saurav Ganguly 10.Sania Mirza

Impact Of Advertising On Sales
HERO HONDA
Sales Performance
Dec'04 Dec'05 Apr'04- Dec'04 Apr'05-Dec'05

Domestic 225250 238822 1892540 2155479

Exports 5501 6282 43441 72815
The Hero Honda Company achieved a solid growth of 35% as compared
with sales recorded during January 2005.
The cumulative sales of the company for the period April 2003 - January 2004 are
16,73,421 motorcycles, a notable jump from 14,27,052 units sales achieved during the
corresponding period last year (April 2002-January 2005). This reflects a growth of 17%
in the cumulative sales of the company owing to its advertising strategies.

Top 10 Advertising companies.

Rank Company Total U.S Total U.S Advertising
Advertisin (Millions $) Sales (Millions $) As A Recent Of Sales

1 Philip Morris 2,058 20,866 9.9%

2 Procter & Gamble 1.507 11,805 12.8
3 General Motors 1,294 91,260 1.4
4 Sears 1,045 50,251 2.1
5 RJR Nabisco 815 12,635 6.4
6 Grand Metropolitan 774 3,211 24.1
7 Eastman Kodak 736 10,024 7.3
8 McDonald’s 728 11,380 6.4
9 Pepsi Co 712 10,551 6.7
10 Kellogg 683 2,766 24.7

Objective:
•

Change what people expect of the brand from performance and

winning to possibility and creative self-expression
Target Audience:
•

Young people -- open, ready and willing to have fun

•

Active-minded 16 - 22 year olds during summer vacation

How Magazines Were Used:
•
Speaking to the target, drawing them in with rich, 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 consumer