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SUBMITTED BY VIJAY BHOJWANI
PROJECT GUIDE PROF. RAJWADE
BACHELOR OF MANAGEMENT STUDIES SEMESTER V (2009-10)
V.E.S. COLLEGE OF ARTS, SCIENCE & COMMERCE, SINDHI COLONY, CHEMBUR – 400071
UNIVERSITY OF MUMBAI
PROJECT ON ADVERTISING AFTER GLOBALISATION Submitted In Partial Fulfillment of the requirements For the Award of the Degree of Bachelor of Management By VIJAY BHOJWANI PROJECT GUIDE PROF. RAJWADE BACHELOR OF MANAGEMENT STUDIES SEMESTER V (2009-10) V.E.S. COLLEGE OF ARTS, SCIENCE & COMMERCE, SINDHI COLONY, CHEMBUR – 400071
I project on student of BMS – Semester V .
(2009-10) hereby declare that I have completed this
The information submitted is true & original to the best of my knowledge.
Student’s Signature Name of Student
C E R T I F I C A T E
This is to certify that successfully completed the project on of . of TYBMS has
under the guidance
Project Guide PROF. RAJWADE Course Co-ordinator Mrs. A. MARTINA
Dr. (Mrs) J. K. PHADNIS
I would like to express my gratitude towards Prof. Rajwade who guided me throughout the project of Advertising after Globlisation. This project helped me a lot in getting more knowledge and experience in the field of advertising.
“ADVERTISING” as we all know is a very small word, but it means in today’s competitive world. Advertising means giving a message to the consumers about a particular product. If the message is properly understood and received by the consumers, then only we can say that advertising done is worth something; otherwise it is just a waste of resources. Advertising is powerful medium of mass communication. It is useful for communicating advertising message in an agreeable and agreeable manner. In the communication process the message moves from the sender to the receiver i.e. from seller to the buyer. The final result of advertising as a communication process is the understanding of the message by the consumers. The need and importance of advertising is increasing day by day. Advertising helps us a lot in taking a proper decision about selecting a right product. As the development is taking place rapidly, the competition is also increasing a lot, hence, the demand for advertising is also increasing. All the companies want their product to be at the top in the market. So the companies spend a lot on advertising, marketing and promotion of their product. Companies spend crores of rupees on advertising. The pattern of advertising in this globalised world is changing very fast. Few factors which are responsible for the success of advertising is: 1) Celebrity Endorsements. 2) Creativity in Advertisement. 3) Innovative Advertisement. 4) Different Theme. Now a days the demand is for the creative advertising and in creative advertising VODAFONE is the best, as it advertise its products in an extra ordinary way as compare to other products. Advertising is really important and plays a vital role in increasing or decreasing sale of company. There are few mediums of advertising which are:
Print, T.V., Radio, and Hoardings.
All these advertising mediums are different from each other and the company is the one who selects the right medium for the right product. The medium selection is also important process, as it is the integral part in making an ad. Few companies which are excellent in advertising their product are: 1) Airtel 2) Cadbury 3) Vodafone 4) Virgin 5) Mc Donalds These companies know what the customer wants and they advertise according to the season, taste and liking of the consumers. They work according to the ongoing trend and the current scenario of the market. An advertisement should be very constructive and effective, than only the customers will think about buying a product of the particular company. The advertisement should leave an impact in the mind of the people and a positive impact. The impact of the advertisement should be positive on all the consumers, the advertisements should create a negative impact on anyone or any particular group of consumers may be children group, youngsters, adult or old aged group. If the impact of advertisement on consumers will be negative than it will directly affect the sale, reputation, goodwill and image of company in the market and in the minds of the people. Advertising has changed the life of the people, as they can select the best product amongst all the others in the market. Among all the types of medias broadcasting media is the media which is used most by the companies which includes television and radio which are most effective and creates more impact on the consumers as compare to other medias. Above all the main purpose of the advertising is to create an impact on the consumers, which is necessary for success of any advertisement and for the sale of that particular product in the market.
1) 2) 3) 4) 5) 6) 7) 8) 9) INTRODUCTION TO ADVERTISING GLOBALISATION AND ITS IMPACT ON BUSINESS MEDIAS IN ADVERTISING CELEBRITY ENDORSEMENTS CASE STUDY OF 2 PRODUCT GROUPS RECENT UPDATES ON ADVERTISING MAKING AN CONSTRUCTIVE OR EFFECTIVE AD IMPACT OF ADVERTISING CONCLUSION
INTRODUCTION TO ADVERTISING
Advertising plays a very important role in the present highly competitive and consumer-oriented marketing system. It is an essential supplement of modern large scale production and marketing. Advertising is necessary for giving information to consumers about the products, their features, uses and advantages. It is also useful for encouraging consumers to purchase specific products and also for sales promotion. Advertising is essential in the case of internal as well as global marketing. Similarly, it is necessary in the case of all types of products- old, well established and new. Many companies spend crores of rupees on advertising and publicity of their products. Advertising media such as newspapers, magazines, radio and T.V. earn substantial portion of their revenue through the advertisements. In the present business world, simply manufacturing superior quality goods at lower costs is not adequate. The goods produced need to be presented to potential buyers in an attractive manner so as to induce them to purchase by visiting retail shops. Advertising as a tool of communication is getting popularity in recent years. New techniques are being introduced to present the products in an agreeable manner to consumers. Advertising touches the lives of the people belonging to different age groupsfrom youngest to the oldest. Companies spent huge amounts to influence the preferences and behaviour patterns of consumers. Advertising as a subject under commerce discipline has a long history. However its form has changed considerably along with the expansion of business activities and the technological developments in the media of advertising. However, the basic objectives of advertising i.e. to provide information, to attract attention, to create awareness and to influence buying behaviours of consumers have remained stable over the long historical period. Advertising is a must not only in the business world but also in all other aspects of life. In today’s world advertising plays a very important and a vital role in selling and marketing of any type of goods or product it maybe durable or non-durable, perishable or non-perishable every product needs this effective power that is advertising for making 9
their a successful one and for gaining a edge over the other competitive products in the markets. Not only products but today even services are sold by taking the help of the advertisements like banks, insurance companies etc. all need advertising to promote their services. Advertising acts as an important marketing tool for presentation and promotion of ideas, goods and services. As the competition is getting more and more tougher in the market the products and services with similar target groups are spending more and more on advertising to gain more profit share as compare to other products and services in the market, hence the need of advertising is increasing day by day. In brief, advertising is an effective method of communication. It gives information to consumers about products and services and induces them to purchase. Buyers are persuaded to continue to buy the product. This leads to sales promotion with profit to the seller and satisfaction and welfare to consumers. Advertising can be of any type it can be: PRINT or HOARDINGS or VISUAL (T.V.) or RADIO
Example of a T.V. commercial of the Brand FEVICOL
DEFINITION OF ADVERTISING:
The term advertising originates from the Latin word advertere which means “to turn the mind towards”. The dictionary meaning of the term advertising is “to give public notices or to announce publicity”. This suggests that advertising acts as a marketing vehicle and is useful for drawing the attention of people towards a specific product/ service/ manufacturer. Advertising is an activity or a process while advertisement is a specific piece of communication appearing in press, radio or TV.
According to the American Marketing Association advertising is defined as “Any paid form of non –personal presentation and promotion of ideas, goods or services by an identified sponsor”. According to David Potter “The only institution we have for instilling new needs, for training to act as consumer for altering men’s values and thus for hastening their adjustment to potential abundance is advertising. This definition suggests that advertising is an institution which makes people aware of their needs and makes them vigilant consumers. Advertising also provides better understanding of life and brings their adjustment with potential abundance of goods and services. According to Dunn and Barbon “Advertising is paid, non-personal communication through various media by business firms, non-profit organizations and individuals who are in some way identified in the advertising message and who hope to inform or persuade members of a particular audience.” This definition suggests that the advertiser identifies himself in the advertisement and the purpose of advertising is to inform and to persuade people of a specific type.
FEATURES OF ADVERTISING:
1. Advertising provides information: The basic purpose of advertising is to provide information about products, goods, services or ideas to perspective buyers. The details of products such as features, uses, prices, benefits, other instructions to be followed while using the product are given in the advertisements. 2. Advertising is a paid form of communication: Advertising may be in any convenient form such as sign, symbol, slogan, Illustration or message. 3. Advertising is a non-personal presentation: Advertising is non-personal in character as against salesmanship which is personal (face to face communication) in character. In Advertising, the message is given to all and not to one specific individual. e.g. T.V., radio, etc. 4. Advertising is an art, science and profession: It is an art as it needs creativity for raising its effectiveness. It is treated as science as it has its principles, rules, etc. Advertising is now treated as profession with its professional bodies and code of conduct for members. 5. Creativity-the essence of Advertising: Advertising is a method of presenting a product in an artistic, attractive and agreeable manner. This is possible through the element of creativity which is the essence of Advertising of the present period.
Advertising is for persuasion: Advertising is not only for giving information but also for appealing people to buy a specific product. It aims at persuasion of potential customers.
7. Advertising is target oriented: It is possible to make intensive Advertising by selecting a specific market or specific segment of consumers for the purpose of Advertising. This selection of specific market is called target market. 8. Advertising is an important element in marketing mix: Advertising supports the sales promotion efforts of the manufacturer. It can make positive contribution in sales promotion provided other elements in the marketing mix are reasonably favorable. Brand plays an important role in promoting the product or the company, let the advertisement be the best if it won’t have a particular it won’t work out in the market. ROLE OF BRAND:
GROWTH OF ADVERTISING IN INDIA:
Advertising as we understand today has its origin in the early historical period. It has made steady progress over centuries. Its need or importance is growing along with the growth and expansion of business activities. Many significant changes have taken place during the process of evolution of advertising. Like other countries, advertising has a long history in India. However, advertising was officially recognized as a medium of mass communication only in the 18th century. The first newspaper “BENGAL GAZETTE” was published in India in 1780. By 1786, there were four weekly newspapers and monthly magazines published in Calcutta. Advertising on radio started in India in 1950’s. Advertising on radio proved to be a powerful medium useful for creating new markets.
Commercial Broadcasting has informed and entertained people for more than 40 years. In 1928, two advertising agencies were started in India. They include the national advertising service started by J.Jain and J.W. Tompson (Now HTA). The importance of advertising started increasing only after the Second World War. The Association of Advertising Agencies of India (AAAI) was established in 1945. The Audit Bureau of Circulation (ABC) was started in 1948. T.V. started in India in September 1959. In addition to DD Metro now we also many other channels on television like Zee T.V., STAR PLUS, COLORS, ETC. cable T.V. and many more such channels for advertising purpose. Introduction of satellite T.V. has made a revolution in the advertising field in India. The progress of advertising in terms of quality, creativity and coverage is extremely fasten India since 1950 due to the introduction of new advertising media. Ample of scope is available for advertising due to industrial growth.
ACTIVE PARTICIPANTS IN ADVERTISING:
Advertising is a type of collective activity which needs the support and participation of certain individuals or organizations. They are called active participants in advertising. Such participants are called: 1) Advertisers 2) Advertising agency 3) Audience 4) Advertising media and finally 5) The government authorities
1) Advertisers: Advertisers are the individuals/firms/organizations which desire to advertise their products or services. They support the whole advertising process as they provide finance by paying the advertising charges. They initiate entire advertising process. It is the advertiser who takes broad decisions about advertising. He decides the
advertising budget, select the audience, media and agency for the purpose of advertising. He is the key participant in the entire advertising activity.
2) Advertising agencies: An advertiser can implement his advertising plan directly through his own sales or advertising department or may transfer the entire responsibility of advertising to a specialized professional agency called advertising agency. These agencies provide expert services to their clients that is advertisers. They prepare advertising plan and execute them the same on behalf of their client. An advertiser can transfer his botheration about advertising to such advertising agency. Such agencies charge commission of 15% from media owners on the media bills. Such agencies offer benefit of their skills and experience to their clients. HTA, Lintas mudra, Everest, O and M are some leading advertising agencies operating in India. 3) Audience: Advertising is for giving message about goods or services to readers, viewers or listeners. They constitute the audience. It is for their information and guidance that advertisements are given. An advertiser desires to cover his target audience/market for promoting sales. Efforts are also made to make advertisements attractive and agreeable to the audience. Moreover, waste in advertising is possible when the advertising message is not received or accepted by audience.
4) Advertising Media :
Advertising media act as a connecting link between the advertiser and the audience. The media act as a channel of communication for giving message to two or more media for advertising purpose. Newspaper, magazine, radio and T.V. are some popular advertising media and are used extensively by advertisers. In India T.V. advertising is popular but is equally costly. The advertising agency guides their clients in the selection of convenient advertising media that is media planning. 5) Government Authorities: Government authorities act as a one important participant in the advertising field. Government acts as a supervisory authority in the field of advertising. It makes rules and regulations as regards that use of media for advertising purpose. Some advertising media such as radio and T.V. operate directly under the control of central government.
GLOBALISATION AND ITS IMPACT ON ADVERTISING.
Globalisation is the process by which the people of the world are unified into a single society and function together. Globalization is often used to refer to economic globalization: the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. This process is usually recognized as being driven by a combination of economic, technological, socio cultural, political and biological factors. The term can also refer to the transnational dissemination of ideas, languages, or popular culture. The term "globalization" has been used in the social sciences since the 1960s; however, the term did not achieve widespread use until the later half of the 1980s. An early description of globalization was penned by the American entrepreneur-turnedminister Charles Taze Russell who coined the term 'corporate giants' in 1897. Since its popularization by economists and journalists in the 1980s and 1990s, the concept of globalization has inspired numerous competing definitions and interpretations. The United Nations ESCWA has written that globalization "is a widely-used term that can be defined in a number of different ways. When used in an economic context, it refers to the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labour...although considerable barriers remain to the flow of labour...Globalization is not a new phenomenon. It began in the late nineteenth century, but its spread slowed during the period from the start of the First World War until the third quarter of the twentieth century. This slowdown can be attributed to the inwardlooking policies pursued by a number of countries in order to protect their respective industries.. however, the pace of globalization picked up rapidly during the fourth quarter of the twentieth century..."
Saskia Sassen writes that "a good part of globalization consists of an enormous variety of micro-processes that begin to denationalize what had been constructed as national whether policies, capital, political subjectivities, urban spaces, temporal frames, or any other of a variety of dynamics and domains." Impact of Globalization, both theoretically and practically, can be observed in different economic, social, cultural, political, finance, and technological dimensions of the world. Globalization brought about a new world order and is gradually reaching new heights, integrating all the fields to form a cohesive network. The Impact of Globalization has crossed the economy to influence all phases of human life challenging their national and individual particularities. Globalization impact has touched all political, cultural, economic, and ideological dimensions. With the onset of the western democratic system the Impact of Globalization on politics is visible. In economic globalization the impact ranges from production, consumption, commercial exchange, and distribution. In the cultural domain, globalization had its impact on the imagination, idealism, theories, thought process, and practices of humankind However, the Impact of Globalization had the best possible results on the Information and Communication system. This globalization of information is observed with the globalized telecommunications and information technologies operating in today's world. For instance, the satellite TV channels, cellular phones, broadband, Internet, and so forth. All these have successfully transformed the world into a global village. The globalization of information is also proved from the usage of the most popular language, English, in the Internet. Moreover, there is the diminished use of paper with the spread of the new globalized information technology. Today, at present only few international news agencies dominate the total information system, such as, the Associated Press and the United Press of USA, Reuters of Great Britain, and Agence France Presse of France. Another Impact of Globalization is in the field of Science, with the introduction of new fresh attempts in scientific research and capabilities of invention. In this, the nations like the United States of America, the European Union, and Japan have reached heights. This globalization of science leads to the fusion of scientific data and rules to form a uniform network of database.
The Impact of the Globalization of economy, politics, information, and technology, results in the globalization of culture. The present day TV channels, movies and advertisements are open to all parts of the world imparting modern education. This again transforms the values, ethics, religion, and thought processes of the mankind as a whole. The best outcome of the globalized culture is the evaluation and improvement in the status of women. Another significant change is the demand for equal rights by the emerging "third gender" in today's world. According to them against global human right system, there should be division of humankind into three genders along with the males and females.
The Impact of Globalization on culture is also observed in the discussions held at the World Intellectual Property Organization, in which the Americans requested the original bearer of all types of intellectual items, like books, songs, scripts, to give up their copyrights for large private groups. However, this was countered by the European Union countries and on the other hand accepted by Great Britain. Again, France, one of the European countries, got engaged in a movement for the grant of cultural exclusiveness in the fields of audio-visual and cinematic production.
IMPORTANCE OF ADVERTISING IN GLOBALISED WORLD:
The importance of advertising is well accepted in globalisation. Its constructive and positive role in promoting business and in offering better life and welfare to consumers and the society at large is universally accepted. In modern business, advertising is a must due to large sale production, market competition and need to attract consumers through information and persuasion. Advertising is a medium of mass communication. It enables sellers to communicate with the prospective buyers regarding various details of goods and services. It is a basic tool of marketing. It helps all the 4 elements in the marketing mix and raises their capacity to satisfy consumers and there by promotes sales. Advertising is not simply for catching consumers or exploiting them in one or the other. It has to play a more positive and constructive role. It has to make business more useful for meeting needs of consumers and raising their welfare. Advertising facilitates large scale marketing and higher profits to manufacturers and traders. In addition, it provides information and education to consumers and promotes their welfare. These are the areas advertising plays a positive role. Advertising acts as a bridge or line of communication between manufacturers and traders on the one hand and consumers or buyers on the other hand. Advertising is for the benefit of both the parties and not for the benefit of one party at the cost of other. It helps advertiser to give better service and satisfaction to consumers along with expansion of business and earning more profit. This suggests that advertising has to play a wider role of social and economic significance and not merely as tool of sales promotion. Advertising facilitates large scale production and distribution for meeting the needs of consumers or the society at large. This role of advertising needs to be noted in the right spirit by the advertisers, advertising agencies and advertising professionals. Such understanding will raise the level of advertising and
may remove certain unethical practices in the field of advertising. Even the criticism of advertising will be limited if the constructive role of advertising is appreciated correctly by all those concerned with the field of advertising. The role of advertising can be studied by referring to its advantages in different areas. For e.g., advertising acts as a medium of communication with the consumers. It educates guides and persuades them in the right direction. It is also important to note that advertising widens market and facilitates large scale production of goods and services. In addition, advertising creates employment opportunities in the field of advertising and in other fields also (production, distribution of goods and services). It facilitates the process of economic growth and globalization of business. Finally, advertising raises the standard of living of people. It encourages market competition which again leads to product innovation, improvement in the quality and more benefits and satisfaction to consumers. All such benefits indicate the importance and the positive role of advertising. Advertising offers advantages or special benefits to different social groups such as consumers, traders, producer, retailers and advertising media. Such benefits also suggest the importance and constructive role of advertising in modern business. All these things proves the importance and a great need of advertising in globalised market.
Effects of globalization
Globalization has various aspects which affect the world in several different ways such as: • Industrial - emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies. Particularly movement of material and goods between and within national boundaries. • Financial - emergence of worldwide financial markets and better access to external financing for borrowers. As these worldwide structures grew more quickly than any transnational regulatory regime, the instability of the global financial infrastructure dramatically increased, as evidenced by the financial crises of late 2008. • Economic - realization of a global common market, based on the freedom of exchange of goods and capital. The interconnectedness of these markets, however meant that an economic collapse in any one given country could not be contained. • Political - some use "globalization" to mean the creation of a world government which regulates the relationships among governments and guarantees the rights arising from social and economic globalization. Politically, the United States has enjoyed a position of power among the world powers; in part because of its strong and wealthy economy. With the influence of globalization and with the help of The United States’ own economy, the People's Republic of China has experienced some tremendous growth within the past decade. If China continues to grow at the rate projected by the trends, then it is very likely that in the next twenty years, there will be a major reallocation of power among the world leaders. China will have enough wealth, industry, and technology to rival the United States for the position of leading world power.
Informational - increase in information flows between geographically remote locations. Arguably this is a technological change with the advent of fibre optic communications, satellites, and increased availability of telephone and Internet.
Language - the most popular language is English. • • • About 35% of the world's mail, telexes, and cables are in English. Approximately 40% of the world's radio programs are in English. About 50% of all Internet traffic uses English.
Competition - Survival in the new global business market calls for improved productivity and increased competition. Due to the market becoming worldwide, companies in various industries have to upgrade their products and use technology skillfully in order to face increased competition.
Ecological - the advent of global environmental challenges that might be solved with international cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species. Since many factories are built in developing countries with less environmental regulation, globalism and free trade may increase pollution. On the other hand, economic development historically required a "dirty" industrial stage, and it is argued that developing countries should not, via regulation, be prohibited from increasing their standard of living. • Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities which embodies cultural diffusion, the desire to increase one's standard of living and enjoy foreign products and ideas, adopt new technology and practices, and participate in a "world culture". Some bemoan the resulting consumerism and loss of languages. Also see Transformation of culture.
We all read newspaper and business magazines about globalisation on business. It has changed India `s economy and improved our lifestyle. There is no doubt that India is a growing economy and main credit goes to its software revolution . But do we all know 24
that most R&D centers are in US not in India IT software industry still work as a facilitator for developed conutry `s business and daily life . All indian brains are in US/UK/Europe and work for them to improve their technology. In India if we talk about bangalore or guragon we have potholes roads , poor street lights and improper parking facility near big corporate houses . Our Government dont consider providing proper infrastructure facility . I believe its corporate social respnisiblity to provide good infrastructure facility to its employess and clients.
That every successive administration in the last decade has eventually succumbed to the pressures of globalization suggests that regardless of how different political formations package their policies in advance of the elections, there is a powerful and very vocal lobby for globalization in India. This is because for some sections of Indian society and the Indian diaspora, globalization has come as something of a bonanza. NRIs look forward to new business opportunities in a globalized India. English-language (or even local language) media outlets who expect globalization to increase advertizing revenues have also been eager supporters of globalization. (A recent Economic Times survey of the nation's top CEO's indicated that most major India businesses anticipated considerably higher allocations for marketing and advertizing campaigns in order to survive in the globalized Indian economy. Some estimate that the advertizing industry has been one of the fastest growing industries in India - growing as much as 25-30% in some years.) Another outcome of globalization has been a huge increase in salaries of senior managers, accountants, lawyers and public-relations personnel working for MNCs or their local competitors. For the IT-literate, job opportunities have been plentiful, and there are also opportunities to live and earn abroad. For the English-speaking upper middle-class, this has come as a boon. With greater access to disposable income, the seduction of consumerism becomes hard to resist, and the demand for unrestricted globalization inevitably follows the attraction for new and ever more advanced consumer goods. This new and more prosperous class of Indian consumers associates India's progress with the availability of the latest automobile models and consumer goods. The local availability of imported European cosmetics and fashions, imported drinks and
confectioneries - these have all become important to those who have sufficient disposable income to purchase such items. Globalization has other champions too. Importers have a strong financial interest in a globalized economy. But so do exporters dependent on imported parts and machinery. Industrialists with interests in ports, shipping, international warehousing and other aspects of international trade and commerce may also see globalization as beneficial to their sectors of the economy. Indian industrialists who have so far failed to invest in research and development and are losing the battle for market share are also becoming amenable to globalization in the fond hope of partnering with an MNC that will enable them to stabilize or expand their sinking business ventures. Although these sections of society are in numerical terms a very small minority in the country, they are able to wield considerable authority on account of their financial clout. Their voices are far more likely to be heard in the Indian media, and they are much more likely to be able to influence important political decisions in the country. Because of their familiarity with English, and privileged access to major media outlets and institutions of higher learning, they are taken to be more credible, and are thus able to exercise tremendous influence on public policy. But it should be noted that the interests of a particular section of Indians need not match the real interests of all other sections of Indian society. Other sections of society may benefit only to the extent that a fraction of this new prosperity trickles down to them. Some may not benefit at all, while some may even be adversely affected. In addition, globalization may have hidden consequences that may negatively impact the quality of life even of those prospering through globalization. But the greatest danger posed by unrestricted globalization is that it may exacerbate the problems of nagging poverty and uneven development, and create grave infra-structural mismatches. It is already evident that the Indian economy has become more dependent on imports which has brought with it constant pressure on the value of the Rupee, leading to recursive bouts of high inflation. And rather than expand India's manufacturing strength and develop new capabilities and technological development in India, globalization may in fact put India at a global disadvantage in key sectors of
modern industry leading to an economy that is always chasing scientific and technological advances that occur in other nations.
MNCs and 'transparency' and 'ethical practices'
MNCs are Multi National Companies. MNCs is one of the most booming and profitable and beneficial sector for the guest country as well as for the host country and also for the people associated with a multi national company. There are many famous, popular and successful MNCs running and earning profits in India some of those are: 1) Mc Donalds 2) Monginis 3) Baskin 31 Robbins 4) Ford 5) Dominoz 6) Pizza HUT etc. As the number of MNCs are going on increasing the need for the advertising also increases a lot as these companies need to establish in the host country, to do a successful business and also beat their other multinational competitor as well as the in house competitor(from country’s origin). This shows that how much useful and important is advertising in this competitive world. Arguments favoring globalization have often centered on how multinationals practice 'transparency' in their business dealings and are more 'ethical' than their Indian counterparts. Although rarely substantiated with any thing other than anecdotal testimonies, such praise for the MNCs is common in the Indian media. Yet, there are numerous instances where multinationals have not only displayed a lack of ethics and 'transparency' but have actually broken the law. Consider an October 2, 1998 report in the
Hindu titled: Large-scale tax evasion by MNCs unearthed. The author of that report, Sujay Mehdudia wrote: "Income-Tax officials have alleged that these companies evade taxes with impunity as the tax laws of the country are 'inadequate and ineffective' to deal with such cases." He wrote of multinational giants flouting tax laws knowing very well that they could not be arrested or criminally prosecuted against under the Indian legal system and could get away by paying the tax dues when caught. Violations were neither rare nor exceptional, since all the companies surveyed or scrutinized by the Income-Tax authorities in the recent past had shown a tendency to violate the law of the land. The article quoted a high-ranking tax officer as saying: "Had the violations taken place in some other country, not only would criminal proceedings have been launched but the people responsible for it would have been put behind bars." The author concluded his article with the statement: "In the recent past, cases of TDS evasion by some Japanese and South Korean firms operating in India have come to the notice of the authorities, highlighting a ``certain intention'' on the part of these companies to dupe the Government." A more recent Hindustan Times report (May 12 2000) was more specific - it began with the headline: Rs 2100 crore tax evasion by MNCs. Minister of State for Finance V Dhananjaya Kumar in a written reply to a question posed in the Lok Sabha had provided data that indicated that MNCs had evaded Rs 1433.89 crores on income tax, Rs 143.80 crore on central excise duty as well as Rs 535.05 crore on account of import duty payable during last three years. Sony was identified as the biggest evader, and charged with evading over 450 crores. SEDCO Forex International Drilling Co, Swiss-Swedish major Asia Brown Baveri, Hyundai Motors, Johnson & Johnson, Siemens, LG, Hawlet Packard and Philips were others implicated in cheating on import duties. Several MNCs had not paid enough central excise duties - including stock market darlings like Hindustan Lever, Procter and Gamble and Nestle. EID Parry, Gillette, Pepsi, Bayer, Novaritis and Carrier Aircon were also named as violators. Asia Satellite Telecom, Sabre Inc, Lucent Technologies, Nokia, Caribjet inc and Allied Signal group had been cited for serious income tax violations. Amadeus Marketing, American Airlines, British Airways, Pan Amsat, Motorola, Ashurst Morris Crisp, Reuters and ABN Amro were also in the list of companies to have evaded income tax.
Transfers Globalization and Technology
Take the argument that globalization brings in new technology. On a selective basis, globalization indeed brings in new technology and opposition to globalization is not tantamount to becoming technologically isolated from the rest of the world. But today, almost no advocate of globalization is calling for selectivity. For instance, CocaCola and Pepsi were welcomed into the country even though they offered little in terms of new technology. The same can be said of advertising companies and manufacturers of consumer non-durable goods like soap, detergent, toothpaste, cereals etc. As the world is getting technologically more powerful the need of marketing and advertising is also increasing. The more the technology will prosper the more will be there the need of advertisements. As the technology will rise it also needs to be in use for the consumers, and so the consumers need to be aware of it, and to make the consumers aware of the recent and current technology there is the need of advertising to sell that technology. And although there has been significant investment in the manufacture of automobiles and consumer goods, the capital equipment and the assembly lines for their production is imported. Little of the design and development work takes place in India. And in many instances, all that happens is the local assembly of knocked-down kits. So far, globalization in India has not been tantamount to an all-around technological upgradation of Indian design and manufacturing. Some offer a counter-argument for unrestricted globalization arguing that only if India liberalizes unconditionally will India be able to attract high technology and capital
investment in the areas it really wants. In other words, if we let the Cokes and Pepsis of the world to come in, the INTELs, the AMDs, and the CISCOs will follow. But the experience of the last decade belies such claims. While it is true that INTEL, AMD and CISCO have all invested in India, the sum total of their investments has been minuscule in relation to their other investments abroad. And rather than bring in new technology to India, they are actually sucking out technology from India.
MEDIAS IN ADVERTISING
Advertising is basically for giving information about products and services to consumers. For a layman, all advertising belongs to one category. However, it is not so. Advertising can be classified into different categories on the basis of area coverage, audience, media, and functions and so on. Product advertising, service advertising, financial advertising and so on are also the types of advertising though the basic purpose of all types is identical that is information and persuasion of consumers. Advertising is a form of communication that typically attempts to persuade potential customers to purchase or to consume more of a particular brand of product or service. Every major medium is used to deliver these messages, including television, radio, cinema, magazines, newspapers, video games, the Internet, carrier bags and billboards. Advertising is often placed by an advertising agency on behalf of a company or other organization.
Types of advertising: Media
Commercial advertising media can include wall paintings, billboards, street furniture components, printed flyers and rack cards, radio, cinema and television adverts, web banners, mobile telephone screens, shopping cart, skywriting, bus stop benches, human billboards, magazines, newspapers, town criers, sides of buses, banners attached to or sides of airplanes ("logo jets"), in-flight advertisements on seatback tray tables or overhead storage bins, taxicab doors, roof mounts and passenger screens, musical stage shows, subway platforms and trains, elastic bands on disposable diapers, stickers on
apples in supermarkets, shopping cart handles , the opening section of streaming audio and video, posters, and the backs of event tickets and supermarket receipts. Any place an "identified" sponsor pays to deliver their message through a medium is advertising.
In print media the advertising message is printed on paper. Newspaper and magazines are two important print media used extensively for advertising purpose. Even direct mail advertising can be classified as print media. This media has now acquired more importance due to increase in the number and pages of newspapers and magazines and also due to improvement in the quality of paper and printing technology used for communicating advertising message. Print media are useful for indoor advertising. Print media is the most widely used medium of advertisement used by corporate, households, manufactures, wholesalers, banks, financial institutions, automobile industry and many more. This medium of advertisement gives the advertiser the flexibility to select his target audience, his area of advertisement, his budget and the timings the ads have to be placed.
OUTDOOR ADVERTISING MEDIA:
Along with print media, outdoor advertising media is also quite famous. They include posters, billboards, wall and skywriting, hoardings, vehicle advertising, neon signs and so on. These medias attract the attention of people when they are moving outdoor for different purposes. Outdoor media are now made attractive and appealing by using new techniques.
Hoardings: This form of advertisement is popular in metropolitan cities like Mumbai where the flow of traffic is heavy and the number of people traveling is countless. Since the traveling time of a person in the vehicle is lot the person is ought to see this form of advertisement
which is placed on the tops of the buildings in a very attractive form. The ads cannot be unseen and shall catch your eye once you pass besides it.
Mobile Billboards are truck- or blimp-mounted billboards or digital screens. These can be dedicated vehicles built solely for carrying advertisements along routes pre selected by clients, or they can be specially-equipped cargo trucks. The billboards are often lighted; some being backlit, and others employing spotlights. Some billboard displays are static, while others change; for example, continuously or periodically rotating among a set of advertisements. Mobile displays are used for various situations in metropolitan areas throughout the world, including: Target advertising, One-day, and long-term campaigns, Conventions, Sporting events, Store openings and similar promotional events, Big advertisements from smaller companies, Others.
BRODCASTING MEDIA: In this, the advertising message is announced through the advertising medium used. Radio and T.V. are two examples of broadcasting media which now operates throughout the day. T.V. as an advertising medium is more attractive and popular as compare to radio. This is because T.V. is audio-visual medium while radio is only audio medium. Broadcasting media are too costly but their coverage is also wide.
The TV commercial is generally considered the most effective mass-market advertising format, as is reflected by the high prices TV networks charge for commercial airtime during popular TV events. The annual Super Bowl football game in the United States is known as the most prominent advertising event on television..
The majority of television commercials features a song or jingle that listeners soon relate to the product. Virtual advertisements may be inserted into regular television programming through computer graphics.
This type of advertising focuses upon using celebrity power, fame, money, popularity to gain recognition for their products and promote specific stores or products. Advertisers often advertise their products, for example, when celebrities share their favourite products or wear clothes by specific brands or designers. Celebrities are often involved in advertising campaigns such as television or print adverts to advertise specific or general products. Increasingly, other media are overtaking television because of a shift towards consumer's usage of the Internet as well as devices such as T.V. Advertising on the World Wide Web is a recent phenomenon. Prices of Web-based advertising space are dependent on the "relevance" of the surrounding web content and the traffic that the website receives. E-mail advertising is another recent phenomenon. Unsolicited bulk E-mail advertising is known as "spam".
"A sign of a celebrity is that his name is often worth more than his services.” - Daniel J Boorstin
The motive behind total branding may be decocted as an attempt to amalgamate diverse activities to win customer preference. Apropos to this context, the topic “Impact of celebrity endorsement on overall brand”, is a significant one. The crescendo of celebrities endorsing brands has been steadily increasing over the past years. Marketers overtly acknowledge the power of celebrities in influencing consumer-purchasing 34
decisions. It is a ubiquitously accepted fact that celebrity endorsement can bestow special attributes upon a product that it may have lacked otherwise. But everything is not hunkydory; celebrities are after all mere mortals made of flesh and blood like us. If a celebrity can aggrandize the merits of a brand, he or she can also exacerbate the image of a brand. “Any brand can get a celebrity. That is easy. But getting a celebrity consistent with the right brand, to the right degree, at the right time, for the right purpose and in the right way... that is not easy.”
Celebrity endorsements are impelled by virtue of the following motives:
• • • • • •
Instant Brand Awareness and Recall. Celebrity values define, and refresh the brand image. Celebrities add new dimensions to the brand image. Instant credibility or aspiration PR coverage. Lack of ideas. Convincing clients
The scope of a celebrity on the incumbent brand:
Simply stating, a brand is a differentiated product and helps in identifying your product and making it stand out due to its name, design, style, symbol, color combination, or usually a mix of all these. Before we can scrutinize the effects of celebrity endorsement on the overall brand, we have to ferret the implicit nuances that act as sources of strong brand images or values:
Experience of use: This encapsulates familiarity and proven reliability.
User associations: Brands acquire images from the type of people who are seen using them. Images of prestige or success are imbibed when brands are associated with glamorous personalities.
Belief in efficiency: Ranking from consumer associations, newspaper editorials etc. Brand appearance: Design of brand offers clues to quality and affects preferences. Manufacturer’s name & reputation: A prominent brand name (Sony,Kellogg’s,Bajaj,Tata) transfers positive associations
The celebrity’s role is the most explicit and profound in incarnating user associations among the above-mentioned points. To comprehend this, let us analyze the multiplier effect formula for a successful brand: S=P* D*AV --the multiplier effect Where S is a successful brand, P is an effective product. D is Distinctive Identity and AV is Added values. The realm of the celebrity’s impact is confined to bestow a distinctive identity and provide AV to the brand; the celebrity does not have the power to improve or debilitate the efficiency and features of the core product. Thus, we are gradually approaching an evident proposition claiming, “The health of a brand can definitely be improved up to some extent by celebrity endorsement. But one has to remember that endorsing a celebrity is a means to an end and not an end in itself.” An appropriately used celebrity can prove to be a massively powerful tool that magnifies the effects of a campaign. But the aura of cautiousness should always be there. The fact to be emphasised is that celebrities alone do not guarantee success, as consumers nowadays understand advertising. They know what advertising is and how it works.
People realize that celebrities are being paid a lot of money for endorsements and this knowledge makes them cynical about celebrity endorsements.
Compatibility of the celebrity’s persona with the overall brand image
A celebrity is used to impart credibility and aspirational values to a brand, but the celebrity needs to match the product. A good brand campaign idea and an intrinsic link between the celebrity and the message are musts for a successful campaign. Celebrities are no doubt good at generating attention, recall and positive attitudes towards advertising provided that they are supporting a good idea and there is an explicit fit between them and the brand. On the other hand, they are rendered useless when it comes to the actual efficiency of the core product, creating positive attitudes to brands, purchase intentions and actual sales.
SONAM KAPOOR ENDORSING LOREAL
Certain parameters that postulate compatibility between the celebrity and brand image
• • •
Celebrity’s fit with the brand image. Celebrity—Target audience match Celebrity associated values.
• • • • • • • • • •
Costs of acquiring the celebrity. Celebrity—Product match. Celebrity controversy risk. Celebrity popularity. Celebrity availability. Celebrity physical attractiveness. Celebrity credibility. Celebrity prior endorsements. Whether celebrity is a brand user. Celebrity profession.
Successful celebrity endorsements for a brand- An Indian perspective
The latter part of the '80s saw the burgeoning of a new trend in India– brands started being endorsed by celebrities. Hindi film and TV stars as well as sportspersons were roped in to endorse prominent brands. Advertisements, featuring stars like Tabassum (Prestige pressure cookers), Jalal Agha (Pan Parag), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar (Dinesh Suitings) became common. Probably, the first ad to cash in on star power in a strategic, long-term, mission statement kind of way was Lux soap. This brand has, perhaps as a result of this, been among the top three in the country for much of its lifetime. In recent times, we had the ShahRukh - Santro campaign with the objective of mitigating the impediment that an unknown Korean brand faced in the Indian market. The objective was to garner faster brand recognition, association and emotional unity with the target group. Star power in India can be gauged by the successful endorsement done by Sharukh for three honchos- Pepsi, Clinic All Clear and Santro. Similarly, when S Kumars used Hrithik Roshan, then the hottest advertising icon for their launch advertising for Tamarind, they reckoned they spent 40 - 50 per cent less on media due to the sheer impact of using Hrithik. Ad recall was as high as 70 per cent, and even the normally conservative trade got interested.
In the Indian context, it would not be presumptuous to state that celebrity endorsements can aggrandize the overall brand. We have numerous examples exemplifying this claim. A standard example here is Coke, which, till recently, didn't use stars at all internationally. In fact, India was a first for them. The result was a ubiquitously appealing Aamir cheekily stating Thanda matlab Coca Cola. The recall value for Nakshatra advertising is only due to the sensuous Aishwarya. The Parker pen brand, which by itself commands equity, used Amitabh Bachchan to revitalize the brand in India. According to Pooja Jain, Director, Luxor Writing Instruments Ltd (LWIL), post Bachchan, Parker's sales have increased by about 30 per cent. India is one country, which has always idolized the stars of the celluloid world. Therefore it makes tremendous sense for a brand to procure a celebrity for its endorsement. In India there is an exponential potential for a celebrity endorsement to be perceived as genuinely relevant, thereby motivating consumers to go in for the product. This would especially prove true if the endorser and the category are a natural lifestyle fit like sportspersons and footwear, Kapil-Sachin and Boost or film stars and beauty products.
Some Global Examples:
Globally, firms have been juxtaposing their brands and themselves with celebrity endorsers. Some successful ongoing global endorsements are as follows:
Celebrity endorsements have been the bedrock of Pepsi's advertising. Over the years, Pepsi has used and continues to use a number of celebrities for general market and targeted advertising, including Shaquille O'Neal, Mary J. Blige, Wyclef Jean, and Busta Rhymes, who did a targeted campaign for their Mountain Dew product.
George Foreman for Meineke. He has also sold more than 10 million Lean Mean Fat-- Reducing Grilling Machines since signing with the manufacturing company. James Earl Jones for Verizon and CNN.
Nike golf balls, since the company signed Tiger Woods in 1996, have seen a $50 million revenue growth. Nike's golf line grossed more than $250 million in annual sales. In 2000 he renegotiated a five-year contract estimated at $125 million.
Other successful endorsements like Nike—Michael Jordan, Dunlop—John McEnroe, Adidas—Prince Naseem Hamed, and so on. Venus Williams, tennis player and Wimbledon champion has signed a five-year $40 million contract with sportswear manufacturer Reebok International Inc.
Advantages of a celebrity endorsing a Brand
Brands have been leveraging celebrity appeal for a long time. Across categories, whether in products or services, more and more brands are banking on the mass appeal of celebrities. As soon as a new face ascends the popularity charts, advertisers queue up to have it splashed all over. Witness the spectacular rise of Sania Mirza and Irfan Pathan in endorsements in a matter of a few months. The accruement of celebrity endorsements can be justified by the following advantages that are bestowed on the overall brand:
Establishment of Credibility: Approval of a brand by a star fosters a sense of trust for that brand among the target audience- this is especially true in case of new products. We had the Shah Rukh-Santro campaign. At launch, Shah Rukh Khan endorsed Santro and this ensured that brand awareness was created in a market, which did not even know the brand.
Ensured Attention: Celebrities ensure attention of the target group by breaking the clutter of advertisements and making the ad and the brand more noticeable. PR coverage : is another reason for using celebrities. Managers perceive celebrities as topical, which create high PR coverage. A good example of integrated celebrity campaigns is one of the World’s leading pop groups, the Spice Girls, who have not only appeared in advertisements for Pepsi, but also in product launching and PR events. Indeed, celebrity-company marriages are covered by most media from television to newspapers (e.g. The Spice Girls and Pepsi)
Higher degree of recall: People tend to commensurate the personalities of the celebrity with the brand thereby increasing the recall value. Golf champion Tiger Woods has endorsed American Express, Rolex, and Nike. Actress Catherine ZetaJones is used by T-Mobile and Elizabeth Arden. 007 Pierce Brosnan promotes Omega, BMW, and Noreico.
Associative Benefit: A celebrity’s preference for a brand gives out a persuasive message - because the celebrity is benefiting from the brand, the consumer will also benefit.
Mitigating a tarnished image: Cadbury India wanted to restore the consumer's confidence in its chocolate brands following the high-pitch worms controversy; so 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 fight back 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.
Psychographic Connect: Celebrities are loved and adored by their fans and advertisers use stars to capitalize on these feelings to sway the fans towards their brand.
Demographic Connect: Different stars appeal differently to various demographic segments (age, gender, class, geography etc.). Mass Appeal: Some stars have a universal appeal and therefore prove to be a good bet to generate interest among the masses. Rejuvenating a stagnant brand: With the objective of infusing fresh life into the stagnant chyawanprash category and staving off competition from various brands, Dabur India roped in Bachchan for an estimated Rs. 8 crore.
Celebrity endorsement can sometimes compensate for lack of innovative ideas.
Disadvantages of a celebrity endorsing a brand:
The celebrity approach has a few serious risks: 1. The reputation of the celebrity may derogate after he/she has endorsed the product: Pepsi Cola's suffered with three tarnished celebrities - Mike Tyson, Madonna, and Michael Jackson. Since the behaviour of the celebrities reflects on the brand, celebrity endorsers may at times become liabilities to the brands they endorse. 2. The vampire effect: This terminology pertains to the issue of a celebrity overshadowing the brand. If there is no congruency between the celebrity and the brand, then the audience will remember the celebrity and not the brand. Examples are the campaigns of Dawn French—Cable Association and Leonard Rossiter— Cinzano. Both of these campaigns were aborted due to celebrities getting in the way of effective communication. Another example could be the Castrol commercial featuring Rahul Dravid. 3. Inconsistency in the professional popularity of the celebrity: The celebrity may lose his or her popularity due to some lapse in professional performances. For example, when Tendulkar went through a prolonged lean patch recently, the inevitable question that cropped up in corporate circles - is he actually worth it? The 2003 Cricket World Cup also threw up the Shane Warne incident, which caught Pepsi off guard. With the Australian cricketer testing positive for consuming banned substances and his subsequent withdrawal from the event, bang in the middle of the event, PepsiCo - the presenting sponsor of the World Cup 2003 - found itself on an uneasy wicket 4. Multi brand endorsements by the same celebrity would lead to overexposure : The novelty of a celebrity endorsement gets diluted if he does too many advertisements. This may be termed as commoditisation of celebrities, who are willing to endorse anything for big bucks. Example, MRF was among the early sponsors of Tendulkar with its logo emblazoned on his bat. But now Tendulkar endorses a myriad brands and the novelty of the Tendulkar-MRF campaign has scaled down.
5. Celebrities endorsing one brand and using another (competitor): Sainsbury’s encountered a problem with Catherina Zeta Jones, whom the company used for its recipe advertisements, when she was caught shopping in Tesco. A similar case happened with Britney Spears who endorsed one cola brand and was repeatedly caught drinking another brand of cola on tape. 6. Mismatch between the celebrity and the image of the brand: Celebrities manifest a certain persona for the audience. It is of paramount importance that there is an egalitarian congruency between the persona of the celebrity and the image of the brand. Each celebrity portrays a broad range of meanings, involving a specific personality and lifestyle. Madonna, for example, is perceived as a tough, intense and modern women associated with the lower middle class. The personality of Pierce Brosnan is best characterized as the perfect gentlemen, whereas Jennifer Aniston has the image of the ‘good girl from next door’.
In India, Bollywood and sport personalities like Amitabh Bachchan, Shahrukh Khan, Fardeen Khan, Saif Ali Khan, Sachin Tendulkar, Saurav Ganguly, Virender Sehwag and Bhaichung Bhutia rule the mind-space and airwaves. It is interesting to see Amitabh ‘touching’ our hearts with Nerolac; making a fervent pitch for peace in the public service message released after the Gujarat riots; playing the matrix for Reid & Taylor; doting grandfather in the new Cadbury’s commercial, and so on. As an endorser, he fulfills all the FRED objectives, namely, Familiarity (target market is aware of him, finds him friendly, likeable and trustworthy); Relevance (which says that there should be a link between the endorser and the product as well between the endorser and the audience); Esteem (the polio endorsement, for example, is successful as the masses see him as a credible name-face-voice); Differentiation (in all his projections, he is seen to be one among the masses, and yet he towers above them. He is different). His appeal is universal, lesser mortals merely cater to specific niches…
So, which celebrity should one go with? Who should be the spokesperson for your product? Who caters to which niche? Does it always happen by trial and error? Should a corporate organisation pay for individual research to find logical fits for their needs/brands? US has a popular index, called the Q score, that summarises various perceptions and feelings that consumers have in the form of ‘likeability’ measurements. It measures familiarity and appeal of performers, characters, personalities, etc. So, how about developing an index in India that would aid companies in reaching out to their respective audiences? The index could be classified on the basis of demographics, psychographics, and geographical demarcations. It would have to be relevant to advertisers and brand managers (who have used any of the known celebrities as endorsers; they could check out the measurable value addition), representatives from respective fraternities/domains, peers, media, etc.
KATRINA KAIF ENDORSING KODAK CAMERA The c
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