UNIT1

Learning outcomes:
To understand the basics of advertising and the role it plays in marketing mix.
Also students will learn place and role of Advertising in Integrated Marketing,
Communications and positioning decisions

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Marketing is a process—a series of actions or methods that take place
sequentially—aimed at satisfying customer needs profitably.
This process includes developing products, pricing them strategically, making
them available to customers through a distribution network, and promoting
them through sales and advertising activities.
4Ps (marketing mix):
product, pricing, place (distribution)
& promotion (communication)

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The American Marketing Association (AMA), which represents marketing professionals in
the United States and Canada, defines marketing as
“the process of planning and executing the conception, pricing, promotion, and distribution
of ideas, goods, and services to create exchanges that satisfy individual and organizational
objectives.”
Effective marketing requires that managers recognize the interdependence of such
activities as sales and promotion and how they can be combined to develop a marketing
program.

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AMA adopted a revised definition of marketing in 2007, which is as follows:
Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering and exchanging offerings that have value for customers, clients, partners, and
society at large.
This revised definition is viewed as being more reflective of the role of nonmarketers
to the marketing process. It also recognizes the important role marketing plays in the
process of creating, communicating and delivering value to customers, as well as
society at large.
Today, most markets are seeking more than just a one-time exchange or transaction
with customers. The focus of market-driven companies is on developing and sustaining
relationships with their customers.
Successful companies recognize that creating, communicating, and delivering value to
their customers is extremely important.

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Nearly everyone in the modern world is influenced to some
degree by advertising and other forms of promotion.
Organizations in both the private and public sectors have learned
that the ability to communicate effectively and efficiently with
their target audiences is critical to their success.
Advertising and other types of promotional messages are used to
sell products and services as well as to promote causes, market
political candidates, and deal with societal problems such as
alcohol and drug abuse.
Consumers are finding it increasingly difficult to avoid the efforts
of marketers, who are constantly searching for new ways to
communicate with them.

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INTEGRATED MARKETING COMMUNICATIONS
The primary forms of marketing communications include traditional mass media
advertising (TV, magazines, etc.); online advertising (Web sites, opt-in e-mail
messages, text messaging, and so on); sales promotions (such as samples, coupons,
rebates, and premium items); store signage and point-of-purchase communications;
direct-mail literature; marketing-oriented public relations and publicity releases;
sponsorships of events and causes; presentations by salespeople; and various
collateral forms of communication devices.
(Collectively, these communication tools and media constitute what traditionally has
been termed the promotion component of the marketing mix.)

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The Evolution of IMC
During the 1980s, many companies began taking a broader perspective of
marketing communication and seeing the need for a more strategic integration of
their promotional tools.
The decade was characterized by the rapid development of areas such as sales
promotion, direct marketing, and public relations, which began challenging
advertising’s role as the dominant form of marketing communication.
These firms began moving toward the process of integrated marketing
communications (IMC), which involves coordinating the various promotional elements
and other marketing activities that communicate with a firm’s customers.10 As
marketers embraced the concept of integrated marketing communications, they
began asking their ad agencies to coordinate the use of a variety of promotional
tools rather than relying primarily on media advertising.

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Marketing communicators in their various capacities (as advertisers, sales promotion
specialists, salespeople, public relations professionals, etc.) develop and deliver
messages regarding different types of marketing topics: products, services, stores,
events, and even people.
Although these terms capture different forms of marketing foci, one term will suffice as
a summary means for describing all forms of marketing focus. That term is brand. The
coca cola is a brand. So are Red Bull, Tata , McDonald’s, Levi’s, Motorola, Sony, Intel,
Microsoft, MasterCard, Amazon.com, Kodak, IBM, Dell, Honda, Mercedes-Benz, and
the list goes on.
The point that deserves particular emphasis is that most marketing communications
occurs at the brand level.

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Integrated marketing communications, or simply IMC, is the philosophy and practice of
carefully coordinating a brand’s sundry marketing communications elements.
IMC is a communications process that entails the planning, creation, integration, and
implementation of diverse forms of marcom (advertisements, sales promotions, publicity
releases, events, etc.) that are delivered over time to a brand’s targeted customers and
prospects.
The goal of IMC is ultimately to influence or directly affect the behavior of the targeted
audience. IMC considers all touch points, or sources of contact, that a customer/prospect has
with the brand as potential delivery channels for messages and makes use of all
communications methods that are relevant to customers/prospects.
IMC requires that all of a brand’s communication media deliver a consistent message. The IMC
process further necessitates that the customer/prospect is the starting point for determining the
types of messages and media that will serve best to inform, persuade, and induce action.

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THE PLACE AND ROLE OF ADVERTISING IN INTEGRATED
MARKETING COMMUNICATIONS AND POSITIONING
DECISIONS
The Payoff from IMC: The Value of Synergy
By closely integrating multiple communication tools and media, brand managers achieve
synergy—that is, multiple methods in combination with one another yield more positive
communication results than do the tools used individually.
This value of synergy was illustrated in a study of Levi Strauss’ Dockers brand of khaki pants.
Using sophisticated analytical techniques, researchers determined that the use of both TV and
print advertisements produced a synergistic effect on sales of pants that was significantly
additional to the individual effects of each advertising medium.
Another study demonstrated that TV and online advertising used in conjunction produced positive
synergistic effects that were additional to each medium’s individual effects. TV and online
advertising used together produced more attention, more positive thoughts, and higher message
credibility than did either medium alone.

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FIVE KEY FEATURES OF IMC
1. Start with the customer or prospect.
2. Use any form of relevant contact or touch point.
3. Speak with a single voice
4. Build relationships.
5. Affect behavior

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Marketing communicators draw meaning from the culturally constituted and transfer
that meaning to consumer goods.
Advertising is an especially important instrument of meaning transfer.

Advertising works as a potential method of meaning transfer by bringing the

consumer good and a representation of the culturally constituted world together
within the frame of a particular advertisement.... The known properties of the
culturally constituted world thus come to reside in the unknown properties of the
consumer good and the transfer of meaning from world to [consumer] good is
accomplished.
Stated alternatively, this account says that advertisers (as well as practitioners in
other marcom capacities) can leverage meaning, or associations, for their brands by
connecting them with other objects that already possess well-known meaning.

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 MARKETING FOCUSES ON EXCHANGE
The AMA definition recognizes that exchange is a central concept in
marketing. For exchange to occur, there must be two or more parties with
something of value to one another, a desire and ability to give up that
something to the other party, and a way to communicate with each other.
Advertising and promotion play an important role in the exchange process
by informing consumers of an organization’s product or service and
convincing them of its ability to satisfy their needs or wants.

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Advertising is defined as any paid form of non personal
communication about an organization, product, service, or
idea by an identified sponsor.

The paid aspect of this definition reflects the fact that the space or time for an advertising
message generally must be bought. An occasional exception to this is the public service
announcement (PSA), whose advertising space or time is donated by the media.

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FUNCTIONS OF ADVERTISING
To identify products and differentiate them from
others. (branding)
To communicate information.
To induce consumers to try new products and to
suggest reuse. (new and repeated consumers)
To stimulate the distribution.
To build brand awareness, preference and loyalty.
To lower the cost of sales. (For the cost of reaching just one
prospect through personal selling, companies can reach
thousands of people through media advertising.)
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ADVERTISING OBJECTIVES
An objective can be defined as "something toward which efforts are put achieve it.
Every organization should have objectives to provide a framework for action. Now,
for advertising the objective is whatever the advertiser wants to achieve through the
advertisements.
Good objectives provide the advertiser with guidance and direction for the
development of the campaign.
Further the objective helps in evaluating the actual performance of the advertising
whether it has been achieved or not.

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The objectives are divided generally in two groups and these direct and indirect
action
objectives.
1. Direct-action objectives are when efforts are put and results are achieved. These
are easily measured in terms sales, profits, number of customers attracted etc.
2. Indirect action objectives are when efforts are put but the result is not direct or
immediate. The effect is in long run. When advertising is made to develop image of
the company, changing consumers’ behaviour and developing public- corporate
relations is called indirect action objectives.
No immediate effect can be attributed to such ads in most situations. In other words,
the evaluation process for ads with indirect-action (communication) objectives is much
more subjective than is the case for the sales or action-oriented advertising effort.
ADVERTSING OBJECTIVES SHOULD BE OPERATIONAL

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(A) TO CREATE BRAND AWARENESS

The first objective of advertising is to create awareness among customers regarding

the products or services the company offers for them first time.
The customers are not knowing about the new product or service has been launched
by the company.
At that time the advertisement is given with the objective to inform them regarding
the efforts of the company. This objective is only to create awareness of the
prospects.
For example, when a company introduces its new model of a car first time and
interested to inform customers regarding this.

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(B) TO REMIND THE CUSTOMERS

When the advertiser gives advertisement second time or repeatedly its objective is
not to
inform first time to create awareness but to remind regarding the first advertisement.
Further, when the company is interested to inform its existing customers regarding its
products or services already existing in market is to remind the customers. They should
not forget the offers of the advertisers. This helps in keeping update knowledge of
the customers regarding products availability in the markets. Most of the companies
are giving advertisement with this objective in market competitive situation.

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(C) TO PERSUADE CUSTOMERS

The advertiser is giving advertisements with the interest to remind them repeatedly so
that it would become difficult for them to avoid advertisement.
One day sooner or later they have to pay attention and agree for the products of
the company. The efforts are to make them agree for buying the products of the
company. The objective is to persuade them for the desired action.
Only thing is that if time taken by the customer to get persuade is longer than it
maybe costly for the advertiser due to repeated advertisements for longer period.

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(D) TO RETAIN EXISTING CUSTOMERS

Another objective of advertising is to retain the existing customers.

The company is interested to keep its existing customers regarding products
attributes, new changes, improvements etc.
They should continue with their products and should not change over to the products
of their competitors.
It is very easy to lose a customer but difficult to retain a customer.

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(E) TO NEUTRALIZE COMPETITION

In markets the companies are facing stiff competition in most of the areas.
It has become very difficult for them to carry out their business effectively and
efficiently. It is a matter of survival, growth, stablise and excel in their business. Every
competitor is putting sincere efforts to taken the advantage.
For fighting this situation the advertisers are giving advertisements with the objectives
to keep them in the race in the market. Therefore, the objective of advertising given is
to neutralize competition effect.
From the situation of the market, it has been observed that the objectives of
the companies are not same all the times. These vary from time to time. But
the objectives are out of the above mentioned objectives individually or in
combination.
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New customers from other brands
New customers from other categories
Increasing Share of Requirement(SOR)Not preferred brand preferred bands
Increasing brand loyalty
 Increasing usage
Reinforcing existing beliefs
Enhance brand comprehension
Brand Image and personality

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INDIAN ADVERTISING INDUSTRY
Indian advertising industry was at Rs 68,475 crore by the end of 2019, and is
expected to grow by 10.9% to reach Rs 75,952 crore by the end of 2020. It is
expected to grow at 11.83% CAGR to reach a market size of Rs 133,921 crore by
2025.

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The report forecast that spends on TV is expected to grow at 10% in 2020, and its
share will remain steady while that on Print media is expected to grow at 3% with
this share declining to 27% from current 29%.
Digital advertising in 2019 witnessed a 26% increase over 2018 to reach Rs 13,683
crore, even as overall advertising witnessed a sober 9.4% growth, as per the latest
report by the Dentsu Aegis Network.

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The report pointed out that digital continues to grow and will grow at 27% in the
current year to reach Rs 17,377 crore by the end of 2020 and cross Rs 50,000 crore
mark by the end of 2025, growing at a CAGR of 27.4%.The biggest spenders on
digital media are BFSI (42%), consumer durables (38%) and E-commerce (37%).

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SUCCESS OF A BRAND
Niche markets
Strong product positioning
Unique brand identity
Strong brand reputation

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MARKETING AND PROMOTIONS PROCESS MODEL

Opportunity Identifying Product Promotion

analysis markets decisions to final
Promotional buyer
decisions
Pricing • Advertising
decisions • Direct
Competitive Market marketing
analysis segmentation Ultimate
• Interactive consumer
marketing Internet/
Channel-of- Interactive • Consumers
• Sales
distribution promotion • Businesses
decisions
Target • Publicity
Selecting a and public
marketing Promotion
target market relations
• Personal to trade
selling

Positioning Resellers
through
marketing
strategies Purchase

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Effective Segmentation
1. Measurable
2. Substantial
3. Accessible
4. Differentiable
5. Actionable

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This model is a framework for analyzing how promotion fits into an organization’s marketing
strategy and programs. The model consists of four major components,
Marketing strategy and Analysis
 Target Marketing Process
 Marketing Planning Program Development (includes the promotional mix)
 Target Market
The marketing process begins with the development of a marketing strategy and analysis,
during which the company decides the product or service areas and particular markets
where it wants to compete.
The company must then coordinate the various elements of the marketing mix into a cohesive
marketing program that will reach the target market effectively. Note that the promotion
program is directed to both the ultimate consumer and the “trade” members or resellers that
distribute the company’s products.

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BASES FOR SEGMENTATION

Psychographic Demographic

Customer
Characteristics

Socioeconomic Geographic

Behavior Outlet Type

Buying
Usage Situation

Awareness Benefits
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There are a number of methods that are available for segmenting markets. These methods can be broken
into two broad categories based on customer characteristics and aspects of the buying situation.
Segmentation based on customer characteristics includes:
 Geographic segmentation divides markets by geographic locations such as nations, states, regions, or cities.
 Demographic segmentation divides markets based on demographic variables such as gender, age,
education, race, and life stage.
 Socioeconomic segmentation divides markets based on socioeconomic variables such as income, education,
and occupation.
 Psychographic segmentation divides markets based on personality values or lifestyle. SRI’s VALS 2 is a
popular approach to lifestyle segmentation
Segmentation based on the buying situation includes:
 Behavioral segmentation divides a market into groups according to their level of involvement with and
purchase behavior toward a product or service.
 Outlet types segments a market based on the type of store where a product is sold, such as convenience,
supermarket, mass merchandiser, specialty
 Benefit segmentation divides markets on the basis of the specific benefits or outcomes consumers want from
a product or service.
 Awareness segmentation is based on the product knowledge of the consumer.
 Usage segmentation classifies customers based on their level of use of a product or service.

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MARKET POSITIONING
Fitting the product or service to one or more segments of the broad market in such a
way as to set it apart from the competition

Positioning is an important part of the strategic marketing process. To create a

position for a product or service, positioning gurus Al Ries and Jack Trout suggest that
marketers consider the six basic questions.

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DEVELOPING A POSITIONING STRATEGY
What position do we
have now?

Does our creative

What position do we
strategy
want to own?
match it?

The
Position
Do we have the
From whom must we
tenacity to stay with
win this position?
it?

Do we have the
money to do the job?

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POSITIONING STRATEGIES
Attributes and Benefits?

Price or Quality?

Use or Application?

How should Product Class?

we position?
Product User?

Competitor?

Cultural Symbols?
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DEVELOPING AND COMMUNICATING A POSITIONING STRATEGY
Positioning According to Ries and Trout
Strengthen own current position
Grab an unoccupied position
De-position
Re-position
Product ladders
Positioning According to Treacy and Wiersema
Value disciplines
Product leader
Operationally excellent firm
Customer intimate firm

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DEVELOPING AND COMMUNICATING
A POSITIONING STRATEGY
Treacy and Wiersema propose that a business should follow four rules for success
1. Become best at one of the three value disciplines.
2. Achieve an adequate performance level in the other two disciplines.
3. Keep improving one’s superior position in the chosen discipline so as not to lose out
to a competitor.
4. Keep becoming more adequate in the other two disciplines, because competitors
keep raising customers’ expectations.

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POSITIONING: HOW MANY IDEAS TO
PROMOTE?
Unique selling proposition
Four major positioning errors
1. Under positioning-Nano
2. Over positioning-Idea, aqua sure
3. Confused positioning-Airtel payments bank, Idea Cellular TVC(honey-bunny)ad
4. Doubtful positioning-FAIR AND HANDSOME

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DEVELOPING A POSITIONING PLATFORM
1. Identify the competitors

2. Assess perceptions of them

3. Determine their positions

4. Analyze consumer preferences

5. Make the positioning decision

6. Monitor the position

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MAKING THE POSITIONING DECISION
Is the current position Is the segmentation
strategy working? strategy appropriate?

The
Checklist

Are there sufficient

How strong is the
resources to communicate
competition?
the position?

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