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Special Study In MARKETING

TYBMS
SEMESTER V
Chapter 1
I. Introduction to Consumer Behaviour
As a consumer we are all unique and this uniqueness is reflected in the consumption
pattern and process of purchase. The study of consumer behaviour provides us with
reasons why consumers differ from one another in buying using products and
services. We receive stimuli from the environment and the specifics of the marketing
strategies of different products and services, and responds to these stimuli in terms
of either buying or not buying product. In between the stage of receiving the stimuli
and responding to it, the consumer goes through the process of making his decision.
Definition:
Some definitions for consumer behaviour
Consumer Behaviour is the decision process and physical activity individuals
engage in when evaluating, acquiring, using or disposing of goods and services
(Loudon and Della Bitta)
Consumer Behaviour reflects the totality of consumers decisions with respect to the
acquisition, usage and disposition of goods, services, time and ideas by (human)
decision making units (over time). (Jacob Jacoby)
Consumer behavior is the study of when, why, how, and where people do or do not
buy product. It blends elements from psychology,
sociology, social anthropology and economics. It attempts to understand the buyer
decision making process, both individually and in groups. It studies characteristics
of individual consumers such as demographics and behavioral variables in an
attempt to understand people's wants. It also tries to assess influences on
the consumer from groups such as family, friends, reference groups, and society in
general.

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II. Why Study Consumer Behavior?

In the highly specialized study of business management, business administration
or just management today, marketing management function plays a very critical
role. This is because this functional area of management (1) EARNS the revenue,
& (2) WORKS in the close proximity with the public or persons outside the
organisation. Controlling these two attributes to have the desired benefits are the
most difficult part of the management, because none of these two are within the
direct control of the marketers. This doesnt mean that the other functional areas are
not useful, but they are not DIRECTLY involved in the activities mentioned
above.
Similarly, within the study of Marketing Management, the Consumers or the
Customers play a very critical role as these are the people who finally BUY the
goods & services of the organisation, and the firm is always on the move to make
them buy so as to earn revenue.
Its crucial from both the points of view as given below:
From the customers point of view: Customers today are in a tough spot. Today, in
the highly developed & technologically advanced society, the customers have a great
deal of choices & options (and often very close & competing) to decide on.
They have the products of an extreme range of attributes (the 1st P - Product), they
have a wide range of cost and payment choices (the 2nd P - Price), they can order
them to be supplied to their door step or anywhere else (the 3rd P - Place), and
finally they are bombarded with more communications from more channels than
ever before (the 4th P - Promotion).
How can they possibly decide where to spend their time and money, and where they
should give their loyalty?
From the marketers point of view: The purpose of marketing is to sell more stuff to
more people more often for more money in order to make more profit. This is the
basic principle of requirement for the marketers in earlier days where aggressive
selling was the aim. Now it cant be achieved by force, aggression or plain alluring.
For the customers are today more informed, more knowledgeable, more demanding,
and more discerning. And above all there is no dearth of marketers to buy from. The
marketers have to earn them or win them over.
The global marketplace is a study in diversity, diversity among consumers,
producers, marketers, retailers, advertising media, cultures, and customs and of
course the individual or psychological behavior. However, despite prevailing

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diversity, there also are many similarities. The object of the study of consumer
behaviour is to provide conceptual and technical tools to enable the marketer to
apply them to marketing practice, both profit & non-profit.
The study of consumer behaviour (CB) is very important to the marketers because it
enables them to understand and predict buying behaviour of consumers in the
marketplace; it is concerned not only with what consumers buy, but also with why
they buy it, when and where and how they buy it, and how often they buy it, and
also how they consume it & dispose it. Consumer research is the methodology used
to study consumer behaviour; it takes place at every phase of the consumption
process: before the purchase, during the purchase, and after the purchase. Research
shows that two different buyers buying the same product may have done it for
different reasons; paid different prices, used in different ways, have different
emotional attachments towards the things and so on.
According to Professor Theodore Levitt of the Harvard Business School, the study
of Consumer Behaviour is one of the most important in business education, because
the purpose of a business is to create and keep customers. Customers are created and
maintained through marketing strategies. And the quality of marketing strategies
depends on knowing, serving, and influencing consumers. In other words, the
success of a business is to achieve organisational objectives, which can be done by
the above two methods. This suggests that the knowledge & information about
consumers is critical for developing successful marketing strategies because it
challenges the marketers to think about and analyse the relationship between the
consumers & marketers, and the consumer behaviour & the marketing strategy.
Consumer behaviour is interdisciplinary; that is, it is based on concepts and theories
about people that have been developed by scientists, philosophers & researchers in
such diverse disciplines as psychology, sociology, social psychology, cultural
anthropology, and economics. The main objective of the study of consumer
behaviour is to provide marketers with the knowledge and skills that are necessary to
carry out detailed consumer analyses which could be used for understanding markets
and developing marketing strategies. Thus, consumer behaviour researchers with
their skills for the naturalistic settings of the market are trying to make a major
contribution to our understanding of human thinking in general.
The study of consumer behaviour helps management understand consumers needs
so as to recognise the potential for the trend of development of change in consumer
requirements and new technology. And also to articulate the new thing in terms of
the consumers needs so that it will be accepted in the market well.

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The following are a few examples of the benefits of the study of consumer behaviour
derived by the different categories of people:
A marketing manager would like to know how consumer behaviour will help him to
design better marketing plans to get those plans accepted within the company.
In a non-profit service organisation, such as a hospital, an individual in the
marketing department would like to know the patients needs and how best to serve
those needs.
Universities & Colleges now recognise that they need to know about consumer
behaviour to aid in recruiting students. Marketing Admissions has become an
accepted term to mean marketing to potential students.
Consumer behaviour has become an integral part of strategic market planning. It is
also the basis of the approach to the concept of Holistic Marketing. (See the article
on HOLISTIC MARKETING written by the author). The belief that ethics and
social responsibility should also be integral components of every marketing decision
is embodied in a revised marketing concept the societal marketing concept which
calls on marketers to fulfil the needs of their target markets in ways that improve
society as a whole.
III. Research Perspectives on Consumer Behaviour:
IV. Decision Making Model:
2.1 Consumer Information Processing Model
Traditionally, consumer researchers have approached decision-making process from
a rational perspective. This dominant school of thought views consumers as being
cognitive (i.e., problem-solving) and, to some but a lesser degree, emotional.1
Such a view is reflected in the stage model of a typical buying process (often called
the consumer information processing model).

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Source: Adopted from Kotler (1997), Schiffman and Kanuk (1997), and Solomon
(1996). In this model, the consumer passes through five stages:
1. Problem recognition,
2. Information search,
3. Evaluation and selection of alternatives,
4. Decision implementation, and
5. Post purchase evaluation.

Step 1-Problem Recognition

A customer problem could be any state of deprivation, discomfort or wanting, both
physical and psychological e.g. Were out of milk and bread and Im hungry!
Realisation by customer that he/she needs to buy something to get back to normal

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state of comfort both physically and psychologically could be the recognition of

problem. e.g. Id better get to the store before it closes!
In this information-processing model, the consumer buying process begins when the
buyer recognizes a problem or need. For example, Deepak may realize that his best
suit doesnt look contemporary any more. Or, you may recognize that your personal
computer is not performing as well as you thought it should. These are the kinds of
problem that we as consumers encounter all the time. When we found out a
difference between the actual state and a desired state, a problem is recognized.
When we find a problem, we usually try to solve the problem. We, in other words,
recognize the need to solve the problem. But how? Stimuli for problem recognition
The different stimuli, which leads to the recognition of problems are:
Internal stimuli may include perceived states of physical or psychological
discomfort such as hunger or boredom
External stimuli may include marketplace information, e.g. the smell of freshly
baked bread
Primary versus secondary demand: Primary demand is for a product category
while secondary demand is for a specific brand within the category.
Step 2-Information Search
When a consumer discovers a problem, he/she is likely to search for more
information. You may simply pay more attention to product information of a
personal computer. You become more attentive to computer ads, computers
purchased by your friends, and peer conversations about computers. Or, you may
more actively seek information by visiting stores, talking to friends, or reading
computer magazines, among others. Through gathering information, the consumer
learns more about some brands that compete in the market and their features and
characteristics. Theoretically, there are set of brands available to you, but you will
become aware of only a subset of the brands (awareness set) in the market. Some of
these brands may satisfy your initial buying criteria, such as price and processing
speed (consideration set). As you proceed to more information search, only a few
will remain as strong candidates (choice set ).

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As illustrated in the diagram above, customers search for information about

alternative ways of solving their problems and they consider only a select subset of
brands.
Awareness set all brands that the customer is aware of
Evoked set all those brands that the customer remembers at decision-making
time
Consideration set those brands in the evoked set that the customer will
consider buying.

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Search Strategies
Search strategies are the patterns of information acquisition customers use to solve
their decision problems.
1. Routine extended and limited problem solving:
Routine no new information considered
Extended extensive search and deliberation
Limited limited time and effort invested
2. Systematic versus heuristic search:
Systematic comprehensive search and evaluation
Heuristic quick rules of thumb and shortcuts
3. Strategies to deal with missing information:
Interattribute inference value inferred from another attribute
Evaluative consistency missing attribute assumed to conform to overall
evaluation
Other-brand averaging use of average value from evaluation of attribute for
other brands.
Negative cue avoid option with missing information or assign it low or
negative value

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Amount of Search
The amount of time spent searching is determined by:
Perceived risk: performance, social, psychological, financial and obsolescence
risk
Involvement: perceived importance of product
Familiarity and expertise: based on previous information acquisition and
personal experience
Time pressure: customers increasingly time poor
Step 3-Evaluation and Selection of Alternatives
How does the consumer process competitive brand information and evaluate the
value of the brands? Unfortunately there is no single, simple evaluation process
applied by all consumers or by one consumer in all buying situations.
One dominant view, however, is to see the evaluation process as being cognitively
driven and rational. Under this view, a consumer is trying to solve the problem and
ultimately satisfying his/her need. In other words, he/she will look for problemsolving benefits from the product.
The consumer, then, looks for products with a certain set of attributes that deliver
the benefits. Thus, the consumer sees each product as a bundle of attributes with
different levels of ability of delivering the problem solving benefits to satisfy his/her
need. The distinctions among the need, benefits, and attributes are very important.
One useful way to organize the relationships among the three is a hierarchical one
(Figure 13.5).
Although simplified, Figure 13.5 is an example of how a bundle of attributes (i.e., a
product or, more specifically, personal computer) relates to your benefits and
underlying needs.
Models: The specific manner in which customers select one of the alternatives could
be either through:
1 Compensatory model
All attributes are evaluated with mental trade-off of perceived weaknesses and
strengths.
2 Non-compensatory models
Conjunctive minimum cut-offs set for relevant attributes
Disjunctive tradeoffs between aspects of choice alternatives made

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Lexicographic attributes are ranked in order of importance

Elimination by aspects attributes are rated in order of importance and cutoff
values defined
How and when models used
Two-stage choice process:
For important decisions might use non compensatory first and second
compensatory Rapid heuristics: Simple rules of thumb used for low-risk/
involvement decisions
Satisfying:
Selecting an acceptable alternative rather than searching for best alternative.

Step 4 Purchase Decision Implementation

To actually implement the purchase decision, however, a consumer needs to select
both specific items (brands) and specific outlets (where to buy) to resolve the
problems.
There are, in fact, three ways these decisions can be made:
1. simultaneously;
2. item first, outlet second; or
3. Outlet first, item second.
In many situations, consumers engage in a simultaneous selection process of stores
and brands. For example, in your personal computer case, you may select a set of
brands based on both the products technical features (attributes) and availability of
brands in the computer stores and mail-order catalogs you know well. It is also
possible; that you decide where to buy (e.g., Computer world in your neighborhood)
and then choose one or two brands the store carries. Once the brand and outlet have
been decided, the consumer moves on to the transaction (buying).

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Step 5-Post-purchase Evaluation

The type of preceding decision-making process directly influences post-purchase
evaluation processes. Directly relevant here is the level of purchase involvement of
the consumer. Purchase involvement is often referred to as the level of concern for
or interest in the purchase 2 situations and it determines how extensively the
consumer searches information in making a purchase decision. Although purchase
involvement is viewed as a continuum (from low to high), it is useful to consider
two extreme cases here. Suppose one buys a certain brand of product (e.g., Diet
Pepsi) as a matter of habit (habitual purchase). For him/her, buying a cola drink is a
very low purchase involvement situation, and he/she is not likely to search and
evaluate product information extensively. In such a case, the consumer would simply
purchase, consume and/or dispose of the product with very limited post-purchase
evaluation, and generally maintain a high level of repeat purchase motivation
(Figure 13.7).

However, if the purchase involvement is high and the consumer is involved in

extensive purchase decision making (e.g., personal computer), he/she is more likely
to be involved in more elaborate post-purchase evaluation often by questioning the
rightness of the decision: Did I make the right choice?
Should I have gone with other brand? This is a common reaction after making a
difficult, complex, relatively permanent decision. This type of doubt and anxiety is
referred to as post purchase cognitive dissonance (Figure 13.8).

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According to the research, the likelihood of experiencing this kind of dissonance and
the magnitude of it is a function of:
The degree of commitment or irrevocability of the decision,
The importance of the decision to the consumer,
The difficulty of choosing among the alternatives, and
The individuals tendency to experience anxiety.
Because dissonance is uncomfortable, the consumer may use one or more of the
following approaches to reduce it:
Increase the desirability of the brand purchased.
Decrease the desirability of rejected alternatives.
Decrease the importance of the purchase decision.
Reject the negative data on the brand purchased.
If the dissonance about the purchase is not reduced, the anxiety may transform into
dissatisfaction (general or specific).
Certainly, this negative experience leads to a new problem recognition (Figure 1),
and the consumer will engage in another problem solving process. The difference,
however, is that in the next round of process, memory of the previous negative
experience and dissatisfaction will be used as part of information.
Therefore, the probability for the unsatisfactory brand to be re-selected and
repurchased will be significantly lower than before.

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V. Factors affecting Consumer Behaviour (Psychological, Personal, Social,

Cultural).
Major Factors Influencing Buying Behavior
Figure 6-2 summarizes the factors influencing a consumer's buying behavior. We
will illustrate these influences for a hypothetical consumer named Linda Brown,
who is 35, married, and a regional sales manager in a leading chemical company.
She travels a lot and wants to acquire a laptop computer. She faces a great number of
brand choices: IBM, Apple, Dell, Compaq, and so on. Her choice will be influenced
by many cultural, social, personal, and psychological factors.

FIGURE 6-2 Factors Influencing Behavior

1. Cultural Factors
Cultural factors exert the broadest and deepest influence on consumer behavior. The
roles played by the buyer's culture, subculture, and social class are particularly
important.
a. Culture. Culture is the most fundamental determinant of a person's wants and
behavior. The growing child acquires a set of values, perceptions, preferences, and

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behaviors through his or her family and other key institutions. A child growing up in
the United States is exposed to the following values: achievement and success,
activity, efficiency and practicality, progress, material comfort, individualism,
freedom, external comfort, humanitarianism, and youthfulness.
b. Subculture. As we saw in the previous chapter, each culture consists of smaller
subcultures that provide more specific identification and socialization for its
members. Subcultures include nationalities, religions, racial groups, and
geographical regions. Many subcultures make up important market segments, and
marketers often design products and marketing programs tailored to their needs. (For
more on this topic, see the Marketing Insight titled "Marketing to Latinos, AfricanAmericans, and Seniors.") Linda Brown's buying behavior will be influenced by her
subculture identifications. They will influence her food preferences, clothing
choices, recreation, and career aspirations. She may come from a subculture that
places a high value on being an "educated person," and this helps explain her interest
in computers.
c. Social Class. Virtually all human societies exhibit social stratification.
Stratification sometimes takes the form of a caste system where the members of
different castes are reared for certain roles and cannot change their caste
membership. More frequently, stratification takes the form of social classes.
Social Classes are relatively homogeneous and enduring divisions in a society,
which are hierarchically ordered and whose members share similar values, interests,
and behavior.
Social classes do not reflect income alone but also other indicators such as
occupation, education, and area of residence. Social classes differ in their dress,
speech patterns, recreational preferences, and many other characteristics. Table 6-1
describes the seven social classes identified by social scientists.
2. Social Factors
In addition to cultural factors, a consumer's behavior is influenced by such social
factors as reference groups, family, and roles and statuses.
a. Reference Groups.
Many groups influence a person's behavior.
A person's Reference Groups consist of all the groups that have a direct (face-toface) or indirect influence on the person's attitudes or behavior. Groups having a
direct influence on a person are called Membership Groups.

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Some membership groups are primary groups, such as family, friends, neighbors,
and co-workers, with whom the person interacts fairly continuously and informally.
People also belong to secondary groups, such as religious, professional, and tradeunion groups, which tend to be more formal and require less continuous interaction.
People are significantly influenced by their reference groups in at least three ways.
Reference groups expose an individual to new behaviors and lifestyles. They also
influence the person's attitudes and self-concept. And they create pressures for
conformity that may affect the person's actual product and brand choices.
b. Family. The family is the most important consumer-buying organization in
society, and it has been researched extensively.5 Family members constitute the most
influential primary reference group. We can distinguish between two families in the
buyer's life. The family of orientation consists of one's parents and siblings. From
parents a person acquires an orientation toward religion, politics, and economics and
a sense of personal ambition, self-worth, and love.6 Even if the buyer no longer
interacts very much with his or her parents, the parents' influence on the buyer's
behavior can be significant. In countries where parents live with their grown
children, their influence can be substantial. A more direct influence on everyday
buying behavior is one's family of procreation--namely, one's spouse and children.
c. Roles and Statuses. A person participates in many groups throughout life--family,
clubs, organizations. The person's position in each group can be defined in terms of
role and status. A role consists of the activities that a person is expected to perform.
With her parents, Linda Brown plays the role of daughter; in her family, she plays
wife and mother; in her company, she plays sales manager. Each of Linda's roles will
influence some of her buying behavior.
Each role carries a status. A Supreme Court justice has more status than a sales
manager, and a sales manager has more status than an office clerk. People choose
products that communicate their role and status in society. Thus company presidents
often drive Mercedes, wear expensive suits, and drink Chivas Regal Scotch.
Marketers are aware of the status symbol potential of products and brands.
3. Personal Factors
A buyer's decisions are also influenced by personal characteristics. These include the
buyer's age and stage in the life cycle, occupation, economic circumstances,
lifestyle, and personality and self-concept.

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a. Age and Stage in the Life Cycle. People buy different goods and services over
their lifetime. They eat baby food in the early years, most foods in the growing and
mature years, and special diets in the later years. People's taste in clothes, furniture,
and recreation is also age related.
Consumption is also shaped by the family life cycle. Nine stages of the family life
cycle are listed in Table 6-2 on the next page, along with the financial situation and
typical product interests of each group. Marketers often choose life-cycle groups as
their target market. But it should be added that target households are not always
family based. Marketers are also targeting single households, gay households, and
cohabitor households.
b. Occupation. A person's occupation also influences his or her consumption
pattern. A blue-collar worker will buy work clothes, work shoes, and lunch boxes. A
company president will buy expensive suits, air travel, country club membership,
and a large sailboat. Marketers try to identify the occupational groups that have
above-average interest in their products and services. A company can even specialize
its products for certain occupational groups. Thus computer software companies will
design different computer software for brand managers, engineers, lawyers, and
physicians.
c. Economic Circumstances. Product choice is greatly affected by one's economic
circumstances. People's economic circumstances consist of their spendable income
(its level, stability, and time pattern), savings and assets (including the percentage
that is liquid), debts, borrowing power, and attitude toward spending versus saving.
Marketers of income-sensitive goods pay constant attention to trends in personal
income, savings, and interest rates. If economic indicators point to a recession,
marketers can take steps to redesign, reposition, and reprice their products so they
continue to offer value to target customers.
d. Lifestyle. People coming from the same subculture, social class, and occupation
may lead quite different lifestyles.
A person's Lifestyle is the person's pattern of living in the world as expressed in the
person's activities, interests, and opinions. Lifestyle portrays the "whole person"
interacting with his or her environment.
e. Personality and Self-Concept. Each person has a distinct personality that
influences his or her buying behavior.
By Personality, we mean a person's distinguishing psychological characteristics that
lead to relatively consistent and enduring responses to his or her environment.

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Personality is usually described in terms of such traits as self-confidence,

dominance, autonomy, deference, sociability, defensiveness, and adaptability.12
Personality can be a useful variable in analyzing consumer behavior, provided that
personality types can be classified accurately and that strong correlations exist
between certain personality types and product or brand choices. For example, a
computer company might discover that many prospects have high self-confidence,
dominance, and autonomy. This suggests designing computer advertisements to
appeal to these traits.
Related to personality is a person's self-concept (or self-image). Linda Brown may
see herself as highly accomplished and deserving the best, in which case she will
favor a computer that projects the same qualities. If the IBM laptop computer is
promoted and priced for those who want the best, then its brand image will match
her self-image. Marketers try to develop brand images that match the target market's
self-image.
It is possible that Linda's actual self-concept (how she views herself) differs from
her ideal self-concept (how she would like to view herself) and from her others-selfconcept (how she thinks others see her). Which self will she try to satisfy in
choosing a computer? Because it is difficult to answer this question, self-concept
theory has had a mixed record of success in predicting consumer responses to brand
images.13
4. Psychological Factors
A person's buying choices are influenced by four major psychological factors-motivation, perception, learning, and beliefs and attitudes.
a. Motivation. A person has many needs at any given time. Some needs are
biogenic; they arise from physiological states of tension such as hunger, thirst,
discomfort. Other needs are psychogenic; they arise from psychological states of
tension such as the need for recognition, esteem, or belonging. Most psychogenic
needs are not intense enough to motivate the person to act on them immediately. A
need becomes a motive when it is aroused to a sufficient level of intensity. A motive
is a need that is sufficiently pressing to drive the person to act. Satisfying the need
reduces the felt tension.
Psychologists have developed theories of human motivation. Three of the best
known--the theories of Sigmund Freud, Abraham Maslow, and Frederick Herzberg-carry quite different implications for consumer analysis and marketing strategy.

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Freud's Theory of Motivation. Freud assumed that the real psychological forces
shaping people's behavior are largely unconscious. Thus a person cannot fully
understand his or her own motivations. If Linda Brown wants to purchase a laptop
computer, she may describe her motive as wanting to work more efficiently when
traveling. At a deeper level, she may be purchasing a computer to impress others. At
a still deeper level, she may be buying the computer because it helps her feel smart
and sophisticated.14
Motivation researchers collect "in-depth interviews" with a few dozen consumers to
uncover deeper motives triggered by a product. They use various "projective
techniques" to throw the ego off guard--techniques such as word association,
sentence completion, picture interpretation, and role playing. Their research has
produced interesting and occasionally bizarre hypotheses: Consumers resist prunes
because prunes are wrinkled looking and remind people of old age, men smoke
cigars as an adult version of thumb sucking, and women prefer vegetable shortening
to animal fats because the latter arouse a sense of guilt over killing animals.
More recent practicing motivational researchers hold that each product is capable of
arousing a unique set of motives in consumers. For example, whisky can draw
someone who seeks social relaxation, or status, or fun. Therefore it is not surprising
that different whisky brands have specialized in one of these three different appeals.
Jan Callebaut calls this approach "motivational positioning."15
Maslow's Theory of Motivation. Abraham Maslow sought to explain why people are
driven by particular needs at particular times.16 Why does one person spend
considerable time and energy on personal safety and another on pursuing the high
opinion of others? Maslow's answer is that human needs are arranged in a hierarchy,
from the most pressing to the least pressing. In their order of importance, they are
physiological needs, safety needs, social needs, esteem needs, and self- actualization
needs (Figure 6-3). People will try to satisfy their most important needs first. When a
person succeeds in satisfying an important need, that need will cease being a current
motivator, and the person will try to satisfy the next-most-important need. For
example, a starving man (need 1) will not take an interest in the latest happenings in
the art world (need 5), nor in how he is viewed by others (need 3 or 4), nor even in
whether he is breathing clean air (need 2). But when he has enough food and water,
the next-most-important need will become salient.
b. Perception. A motivated person is ready to act. How the motivated person
actually acts is influenced by his or her perception of the situation.

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Perception is the process by which an individual selects, organizes, and interprets

information inputs to create a meaningful picture of the world.18
Perception depends not only on the physical stimuli but also on the stimuli's relation
to the surrounding field and on conditions within the individual.
The key word in the definition of perception is "individual." Linda Brown might
perceive a fast-talking computer salesperson as aggressive and insincere. Another
shopper might perceive the same salesperson as intelligent and helpful. Why do
people perceive the same situation differently? People can emerge with different
perceptions of the same object because of three perceptual processes: selective
attention, selective distortion, and selective retention. As a result, people may not
necessarily see or hear the message that marketers want to send. Marketers must
therefore be careful to take these perceptual processes into account in designing their
marketing campaigns.
c. Learning. When people act, they learn.
Learning involves changes in an individual's behavior arising from experience.
Most human behavior is learned. Learning theorists believe that learning is produced
through the interplay of drives, stimuli, cues, responses, and reinforcement. A drive
is a strong internal stimulus impelling action. Presumably Linda Brown has a drive
toward self-actualization. Her drive becomes a motive when it is directed toward a
particular drive-reducing stimulus, in this case a computer. Linda's response to the
idea of buying a computer is conditioned by the surrounding cues. Cues are minor
stimuli that determine when, where, and how the person responds. Her husband's
support, seeing a computer in a friend's home, seeing computer ads and articles, and
hearing about a special sales price are all cues that can influence Linda's interest in
buying a computer.
d. Beliefs and Attitudes. Through doing and learning, people acquire beliefs and
attitudes. These in turn influence their buying behavior.
A Belief is a descriptive thought that a person holds about something.
1. Buyers ;
The Buying Process
To be successful, marketers have to go beyond the various influences on buyers and
develop an understanding of how consumers actually make their buying decisions.

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Specifically, marketers must identify who makes the buying decision, the types of
buying decisions, and the steps in the buying process.
Buying Roles
It is easy to identify the buyer for many products. Men normally choose their
shaving equipment, and women choose their pantyhose. But even here marketers
must be careful in making their targeting decisions, because buying roles change.
ICI, the giant British chemical company, discovered to its surprise that women made
60% of the decisions on the brand of household paint; ICI therefore decided to
advertise its DeLux brand to women.
We can distinguish five roles people might play in a buying decision:
Initiator: A person who first suggests the idea of buying the product or service
Influencer: A person whose view or advice influences the decision
Decider: A person who decides on any component of a buying decision--whether to
buy, what to buy, how to buy, or where to buy
Buyer: The person who makes the actual purchase
User: A person who consumes or uses the product or service
VI. Touch upon theories of Motivation (Maslows Hierarchy of Needs,
Mcllelands Theory).
a. Maslow's Hierarchy of Needs Theory
The Hierarchy of Needs theory is one of the four major content theories developed
by Ibrahim Maslow in the year 1943. This theory is based on the fact that it is the
unfulfilled needs that leads to motivate the individuals. It also provides an
understanding to why the needs of the individuals keep changing overtime and the
importance of identifying what each and every individual is after in terms of their
needs. This is because, it probably gives an insight to what exactly are the individual
needs that have to be met, in order to motivate them. Having said that,
Maslow identified five levels of needs which are basically the,
Self Actualization ( level 5 - highest level)
Self Esteem ( level 4 )
Social belonging & Love needs (level 3)
Safety ( level 2)
Physiology ( level 1)

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According to Maslow, these five levels of needs have to be satisfied if the

individuals are to be motivated. In other words, it is said to believe that motivation is
thus driven by the existence of these unsatisfied needs, meaning to say that unless
they have fulfilled their needs there are motivated to do so.
However, his idea was that in order to motivate the individuals the first higher level
of needs have to be satisfied before the next level of needs. And only once the lower
level of needs is satisfied the next level of needs will act as a motivator. For
example, a person who is dying of hunger will at first be motivated to fulfill his
hunger by earning wages/salaries.
But once his basic needs are satisfied, then this will no longer act as a motivator, but
thereafter it is only the second level of needs such as a good and safe working
environment etc that will lead to motivate him. To say, Maslow pointed out the fact
that satisfying the individual needs is a step by step process that should follow from
the lowest level to the highest level of needs and only satisfies one level of needs at
a time.

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Maslows Hierarchy of Needs

(Original five-stage model)

Self-actualisation
personal growth and fulfilment
Esteem needs
achievement, status, responsibility, reputation
Belongingness and Love needs
family, affection, relationships, work group, etc
Safety needs
protection, security, order, law, limits, stability, etc

Biological and Physiological needs

basic life needs - air, food, drink, shelter, warmth, sex, sleep, etc.

b. McClelland's 3 Needs Theory

The 3 Needs theory also known as the Acquired theory or the Learned theory, is
another content theory developed by McClelland around 1961. Like the other
content theories, this theory is also based on the needs of the individuals. In his
theory, what McClelland tries to explain is the fact that motivation of an individual
could basically result from three dominant needs. The three dominant needs
identified are,
The need for achievement
The need for power
The need for affiliation
According to McClelland, human motivation is thus dominated by these three needs.
In other words, some individuals will look for tasks that will help them to achieve

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something, paving way to motivate them. Likewise some others may need power
and some may look for affiliation. However, he also went into say that even though
all these needs are present in each and every individual, there is basically one need
that dominates the individuals when it comes to most people. For example, an
individual will want to achieve certain things, will want to maintain good relations
with others but at the same time, more than anything else they may want lead the
others in order to motivate them.
The need for Achievement
Having said that, the need for achievement basically means the extend to which an
individual wants to perform tasks that are difficult and indeed challenging. To say, in
order to motivate an individual with a need for achievement they probably have to
be given difficult and challenging tasks. They will basically go to achieve goals that
are challenging and realistic. In other words, what they really want is success and
positive feedback, avoids both the low-risk and high-risk situations, and prefer to
work alone rather than in a team with other high achievers. That way, they really
tend to be motivated if they happen to believe the tasks they are given to perform are
indeed challenging.
The need for power
Likewise, individuals with the need for power will basically want to lead the others.
This may be two types meaning to say personal and institutional. . In other words,
some individuals will look for personal power while the other may need for
institutional power. Individuals with a need for personal power will thus want to
direct and influence others. What actually mean by this is that, if they are not
allowed to lead the others then they probably will be de-motivated. Saying that,
individuals with a high need for institutional power wants to organize the efforts of
others for the success of the organization. For example, individuals with the need for
institutional power are more likely to be motivated if they are provided with status
oriented positions, managerial posts and leadership.
The need for Affiliation
And to say, individuals with the need for affiliation basically look for good, friendly
interpersonal relationships with others. In others words, they really want to feel like
that they are accepted by others and liked by others, they basically strive to maintain
good relationships by way of trust and understanding, they prefer cooperation more
than competition, As a result, individuals with a high need for affiliation do prefer to
work as a team and work in customer service environments which will lead to
motivate them.

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And finally, it should be said that all of the content theories are based on the fact that
in order to motivate the people their needs have to be satisfied or fulfilled. Individual
need do vary from one individual to another, and that is why it is important to
understand these theories properly in order to motivate the individuals effectively.

VII Understanding perception & Stages in perception, Beliefs, Attitudes:

Understanding perception & Stages in perception, Beliefs, Attitudes
Introduction
PERCEPTION
Perception is the process of selecting, organizing and interpreting information
inputs to produce meaning.
This means we chose what info we pay attention to, organize it and interpret it.
Information inputs are the sensations received through sight, taste, hearing, smell
and touch. Thus Perception is a mental process, whereby an individual selects data
or information from the environment, organizes it and then draws significance or
meaning from it.
We can say that it is the process by which an individual selects, organises and
interprets information received from the environment.
1 SensationAttending to an object/event with one of five senses
2 OrganisationCategorising by matching sensed stimulus with similar object in
memory, e.g. colour.
3. InterpretationAttaching meaning to stimulus, making judgments as to value
and liking, e.g. bitter taste.
People can emerge with different perceptions of the same object
because of three perceptual processes:
a. selective attention,
b. selective distortion and
c. selective retention.

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Selective Attention: People are exposed to a tremendous amount of daily stimuli:

the average person may be exposed to over 1500 ads a day. A person cannot possibly
attend to all of these; most stimuli will be screened out.
Selective attention means that marketers have to work hard to attract consumers
notice. Select inputs to be exposed to our awareness. More likely if it is linked to an
event, satisfies current needs, intensity of input changes (sharp price drop).
Selective Distortion: Even notice stimuli do not always come across in the way the
senders intended. Selective distortion is the tendency to twist information into
personal meanings and interpret information in a way that will fit our
preconceptions.
Unfortunately, there is not much that marketers can do about selective distortion.
Advertisers that use comparative advertisements (pitching one product against
another), have to be very careful that consumers do not distort the facts and perceive
that the
advertisement was for the competitor.
Selective retention: People will forget much that they learn but will tend to retain
information that supports their attitudes and beliefs. Because of selective retention,
we are likely to remember good points mentioned about competing products.
Selective retention explains why marketers use drama and repetition in sending
messages to their target market. Remember inputs that support beliefs, forgets those
that dont. Average supermarket shopper is exposed to 17,000 products in a shopping
visit lasting 30 minutes-60% of purchases are unplanned. Exposed to 1,500
advertisements per day. Cant be expected to be aware of all these inputs, and
certainly will not retain many.
The perceptual process Perception as top-down processing Attitudes

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ATTITUDES
An attitude describes a persons relatively consistent evaluations, feelings, and
tendencies toward an object or an idea. Attitudes put people into a frame of mind for
liking or disliking things and moving toward or away from them.
Our attitudes toward a firm and its products as consumers greatly influence the
success or failure of the firms marketing strategy.
Attitudes and attitude change are influenced by consumers personality and lifestyle.
Consumers screen information that conflicts with their attitudes. We distort
information to make it consistent and selectively retain information that reinforces
our attitudes, in other words, brand loyalty.
But, there is a difference between attitude and intention to buy (ability to buy).
Properties of Attitudes
We as individuals generally have attitudes that focus on objects, people or
institutions. Attitudes are also attached to mental categories. Mental orientations
towards concepts are generally referred to as values.
We can say that attitudes comprise of four components:

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A. Cognitive: Cognitions are our beliefs, theories, expectancies, cause and effect
beliefs, and perceptions relative to the focal object.
B. Affective: The affective component refers to our feeling with respect to the focal
object such as fear, liking, or anger.
C. Behavioral Intentions: Behavioral intentions are our goals, aspirations, and our
expected responses to the attitude object.
D. Evaluation: Evaluations are often considered the central component of attitudes.
Evaluations consist of the imputation of some degree of goodness or badness to an
attitude object.
When we speak of a positive or negative attitude toward an object, we are referring
to the evaluative component. Evaluations are function of cognitive, affect and
behavioral intentions of the object. It is most often the evaluation that is stored in
memory, often
without the corresponding cognitions and affect that were responsible for its
formation.
BELIEF
Through acting and learning, people acquire beliefs and attitudes, which in turn,
influence their buying behaviour.
A BELIEF is a descriptive thought that a person holds about something. A customer
may believe that Taj group of Hotels have the best facilities and most professional
staff of any hotel in the price range.
These beliefs may be based on real knowledge, opinion, or faith. They may or may
not carry an emotional charge. Marketers are interested in the beliefs that people
have about
specific products and services. Beliefs reinforce product and brand images.
People act on beliefs. If unfounded customer beliefs deter purchases marketers will
want to do a campaign to change them.
Unfounded consumer beliefs can severely affect the revenue and even the life of
hospitality and travel companies.

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Among these beliefs might be the following:

A particular hamburger chain served ground Halal meat.
A particular hotel served as Mafia headquarters.
A particular airline has poor maintenance.
A particular community has unhealthy and filthy living habits
VIII. Concept of age & Family Life Cycle (FLC), Occupation, Economic
Situation
What Is a Family?
A family is a group of two or more persons related by blood, marriage, or adoption
who reside together.
The nuclear family is the immediate group of father, mother, and child (ren) living
together. The extended family is the nuclear family, plus other relatives, such
as grandparents, uncles and aunts, cousins, and parents-in-law.
The family into which one is born is called the family of orientation, whereas the
one established by marriage is the family of procreation.
Family Life Cycles

Families pass through a series of stages that change them over time. This
process historically has been called the family life cycle (FLC). The concept may
need to be changed to household life cycle (HLC) or consumer life cycle (CLC) in
the future to reflect changes in society.
Family Life Cycle Characteristics
The traditional FLC describes family patterns as consumers marry, have children,
leave home, lose a spouse, and retire. The family lifecycle can be depicted
graphically by using a curve similar to that of the product lifecycle.
As household leaders enter their 30s and 40s, often their income levels increase
(because they begin to reach higher earning positions and two adults are working),
but so do their spending levels (especially if they have children).

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This decreases their disposable income during these life stages, making it more
difficult for them to save money or splurge on luxury items. Marketers use the
descriptions of these FLC stages when analyzing marketing and communication
strategies for products
and services, but they often add additional information about consumer markets to
analyze their needs, identify niches and develop consumer-specific marketing
strategies.
Marketers can add socioeconomic data (such as income, employment status,
financial well-being, and activities) to family life stages to improve predictions
about product choices and help explain further consumer activities.
The FLC helps explain how families change over time; whats more, modified with
market data, including individuals life stage, it is useful in identifying core
market targets.
Structural Variables Affecting

Age of the head of household or family

Marital status

Presence of children

Employment status
Functions of the family

Economic well-being

Emotional support

Suitable Family lifestyle,

Family-member socialization
Sociological Variables Affecting Families and households

Cohesion

Adaptability

Communication
Stages in family life cycle

Young Singles

Newly Married Couples

Full Nest I

Full Nest II

Full Nest III

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Married, No Kids
Older Singles
Emply Nest I
Empty Nest II
Solitary Survivor
Solitary Survivor
Retired Solitary Survivor

Table 7.2: Stages in the Family Life Cycle

Young Singles:
Young singles may live alone, with their nuclear families, or with friends, or they
may co-habitate with partners-translating into a wide range of how much disposable
income is spent on furniture, rent, food, and other living expenses in this stage.
Although earnings tend to be relatively low, these consumers usually dont have
many financial obligations and dont feel the need to save for their futures or
retirement. Many of them find themselves spending as much as they make on cars,
furnishings for first residences away from home, fashions, recreation, alcoholic
beverages, food away from home, vacations, and other products and services
involved in the dating game. Some of these singles may have young children,
forcing them to give up some discretionary spending for necessities such as day care
and baby products.

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Newly Married Couples

Newly married couples without children are usually better off financially than they
were when they were single, since they often have two incomes available to spend
on one household. These families tent to spend a substantial amount of their incomes
on cars, clothing, vacations, and other leisure activities. They also have the highest
purchase rate and highest average purchases of durable good (particularly furniture
and appliances) and appear to be more susceptible to advertising.
Full Nest I
With the arrival of the first child, parents being to change their roles in the family,
and decide if one parent will stay to care for the child or if they will both work and
buy daycare services. Either route usually leads to a decline in family disposable
income and a change in how the family spends its income. In this stage, families are
likely to move into their first home; purchases furniture and furnishings for the
child; buy a washer and dryer and home maintenance items; and purchase new items
such as baby food, cough medicine, vitamins, toys, sleds, and skates. These
requirements reduce families ability to save, and the husband and wife are often
dissatisfied with their financial position.
Full Nest II
In this stage, the youngest child has reached school age, the employed spouses
income has improved, and the other spouse often returns to part-or full-time work
outside the home. Consequently, the familys financial position usually improves,
but the family finds itself consuming more and in larger quantities. Consumption
patterns continue to be heavily influenced by the children, since the family tends to
buy large sized packages of food and cleaning suppliers, bicycles, music lessons,
clothing, sports equipment, and a computer. Discount department stores (such as
Costco and Sams Club) are popular with consumers in this stage.
Full Nest III
As the family grows older and parents enter their min-40s, their financial position
usually continues to improve because the primary wage earners income rises, the
second wage earner is receiving a higher salary, and the children earn spending an
education money from occasional and part-time employment.
The family typically replaces some worn pieces of furniture, purchases other
automobiles, buys some luxury appliances, and spends money on dental services
(braces) and education. Families also spend more on computers in this stage, buying
additional PCs fro their older children. Depending on where children go to college

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and how many are seeking higher education, the financial position of the family may
be tighter than other instances.
Married, No Kids
Couples who marry and do not have children are likely to have more disposable
income to spend on charities, travel, and entertainment than either couples with
children or singles in their age range. Not only do they have fewer expenses, these
couples are more likely to be dual-wage earners, making it easier for them to retire
earlier if they sav appropriately.
Older Singles
Single, ago 40 or older, may be Single Again (ending married status because of
divorce or death of a spouse) or Never Married (because they prefer to live
independently or because they co-habitate with partners), either group of which may
or may not have children living in the household. Single Again families often find
themselves struggling financially due to the high cost of divorce and the expense of
having to raise a family on one income. They often have to set up a new household
(usually not as big as their previous home); buy furnishings accordingly; pay
alimony and/or child support; and sometimes increase travel expenditures if the
children live in another city, state, or country.
They also pay for clothing and leisure activities conducive to meeting a future mate.
On the other hand, many Never Married Single households are well-off financially
since they never had to pay child-related costs and often live in smaller homes than
large families require. This group now has more available income to spend on travel
and leisure but feels the pressure to save for the future, since there is no second
income on which to rely as they get older.
Empty Nest I
At this stage, the family is most satisfied with its financial position. The children
have left home and are financially independent allowing the family to save more. In
this stage discretionary income is spent on what the couple wants rather than on
what the children need. Therefore, they spend on home improvements, luxury items,
vacations, sports utility vehicles, food away from home, travel, second homes (or
smaller but nicer homes than were needed to house large families), and product for
their grand children. These groups are also more educated than generations in the
past and are looking for education opportunities, including eco-tourism and
computer related skills.
Empty Nest II

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But this time, the income earners have retired, usually resulting in a reduction in
income and disposable income. Expenditures become health oriented, centering on
such items as medical appliances and health, sleep and digestion medicines. They
may also move to climates more suitable to their medical requirements.
But many of these families continue to be active and in good health, allowing them
to spend time traveling, exercising, and volunteering. Many continue working part
time to supplement their retirement and keep them socially involved.
Solitary Survivor
Solitary survivors be either employed or not employed. If the surviving spouse has
worked outside the home in the past, he or she usually continues employment or
goes back to work to live on earned income (rather than saving) and remain socially
active. Expenditures for clothing and food usually decline in this stage, with income
spent on health care, sickness care, and travel cleaning. Those who are not employed
are often on fixed incomes and may move in with friends to share housing expenses
and companionship, and some may choose to remarry.
Retired Solitary Survivor
Retired solitary survivors follow the same general consumption patterns as solitary
survivors; however, their income may not be as high. Depending on how much they
have been able to save throughout their lifetimes, they can afford to buy a wide
range of products. But for many, spending declines drastically due to lack of need
for many new products and higher medical expenses. These individuals have special
needs for attention, affection, and security based on their lifestyle choices.
When reviewing this information, think about how contemporary developments such
as divorce, smaller family size, and delayed age of marriage affect the consumption
activities of these stages. The family lifecycle can be depicted graphically by using a
curve similar to that of the product lifecycle. Figure 12.7 show shows how income,
on average, changes during life and how saving behavior affects income in latter
stages. As household leaders enter their 30s and 40s, often their income levels
increase (because they begin to reach higher earning positions and two adults are
working), but so do their spending levels (especially if they have children).
The FLC helps explain how families change over time; whats more, modified with
market data, including individuals life stage, it is useful in identifying core market
targets.

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IX. Understanding Personality & Self Concept:

Personality comes from the Greek word persona, meaning mask.
Personality is the supreme realization of the innate idiosyncrasy of a living being. It
is an act of high courage flung in the face of life, the absolute affirmation of all that
constitutes the individual, the most successful adaptation to the universal condition
of existence coupled with the greatest possible freedom for self-determination.
The word personality derives from the Latin word persona which means mask.
The study of personality can be understood as the study of masks that people wear.
These are the personas that people not only project and display, but also include the
inner parts of psychological experience, which we collectively call our self.
The Nature of Personality
In our study of personality, three distinct properties are of central importance:
a) Personality reflects individual differences.
b) Personality is consistent and enduring.
c) Personality can change.
Personality Reflects Individual Differences
1. An individuals personality is a unique combination of factors; no two individuals
are exactly alike.
2. Personality is a useful concept because it enables us to categorize consumers into
different groups on the basis of a single trait or a few traits.
Personality and Understanding
Consumer Diversity
Marketers are interested in understanding how personality influences consumption
behavior because such knowledge enables them to better understand consumers and
to segment and target those consumers who are likely to respond positively to their
product or service communications.
Consumer Innovativeness and Related Personality Traits
Marketing practitioners must learn all they can about consumer innovatorsthose
who are likely to try new products. Those innovators are often crucial to the success
of new products.
Personality traits have proved useful in differentiating between consumer innovators
and non-innovators.

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Personality traits include:

Consumer innovativeness.

Dogmatism.

Social character.

Need for uniqueness.

Optimum stimulation level.

Variety-novelty seeking.
1. Consumer Innovativeness: How receptive are consumers to new products, new
services, or new practices? Recent consumer research indicates a positive
relationship
between innovative use of the Internet and buying online.
2. Dogmatism: Dogmatism is a personality trait that measures the degree of rigidity
an individual displays toward the unfamiliar and toward information that is contrary
to their established beliefs. Consumers low in dogmatism is more likely to prefer
innovative products to established ones. Consumers high in dogmatism are more
accepting of authority- based ads for new products.
3. Social Character: Social character is a personality trait that ranges on a
continuum
from inner-directed to other-directed.
a. Inner-directed consumers tend to rely on their own inner
values or standards in evaluating new products and are innovators.
They also prefer ads stressing product features and
personal benefits.
b. Other-directed consumers tend to look to others for direction
and are not innovators. They prefer ads that feature social
environment and social acceptance.
4. Need for Uniqueness: These people avoid conformity are the ones who seek to be
unique.
5. Optimum Stimulation Level: Some people prefer a simple, uncluttered, and calm
existence, although others seem to prefer an environment crammed with novel,
complex, and unusual experiences. Persons with optimum stimulation levels (OSLs)
are willing
to take risks, to try new products, to be innovative, to seek purchase-related

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information, and to accept new retail facilities. The correspondence between an

individuals OSL and their actual circumstances has a direct relationship to the
amount of
stimulation individuals desire.
6. Variety-novelty seeking: If the two are equivalent, they tend to be satisfied. If
bored, they are under stimulated, and vice versa. There appear to be many different
types of variety seeking:
a. exploratory purchase behavior: (e.g., switching brands to experience new and
possibly better alternatives),
b. vicarious exploration: (e.g., where the consumer secures information about a
new or
different alternative and then contemplates or even daydreams about the option),
and use innovativeness (e.g., where the consumer uses an already adopted product in
a new or novel way).
c. The third form of variety or novelty seeking use
innovativeness is particularly relevant to technological. Consumers with high
variety seeking scores might also be attracted to brands that claim to have novel or
multiple uses or applications.
Marketers, up to a point, benefit from thinking in terms of offering additional
options to consumers seeking more product variety. Ultimately, marketers must walk
the fine line between offering consumers too little and too much choice.
Cognitive Personality Factors
Market researchers want to understand how cognitive personality influences
consumer behavior.
Two cognitive personality traits have been useful in understanding selected aspects
of consumer behavior.
They are:
a) Need for cognition.
b) Visualizers versus verbalizers.
a. Need for Cognition: This is the measurement of a persons craving for or
enjoyment of thinking. Consumers who are high in NC (need for cognition)
are more likely to be responsive to the part of an advertisement that is rich in
product-related information of description. They are also more responsive to
cool colors. Consumers who are relatively low in NC are more likely to be

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attracted to the background or peripheral aspects of an ad. They spend more

time on print content and have much stronger brand recall. Need for cognition
seems to play a role in an individuals use of the Internet.
b. Visualizers versus Verbalizers: Visualizers are consumers who prefer visual
information and products that stress the visual.Verbalizers are consumers
who prefer written or verbal information and products that stress the verbal.
This distinction helps marketers know whether to stress visual or written
elements in their ads.
Consumer Materialism
Materialism is a trait of people who feel their possessions are
essential to their identity.
They value acquiring and showing off possessions, they are self-centered and selfish,
they seek lifestyles full of possessions, and
their possessions do not give them greater happiness.
Fixated Consumption Behavior: Somewhere between being materialistic and being
compulsive is being fixated with regard to consuming or possessing.
Fixated consumers characteristics:
A deep (possibly: passionate) interest in a particular object or product
category.
A willingness to go to considerable lengths to secure additional examples of
the object or product category of interest.
The dedication of a considerable amount of discretionary time and money to
searching out the object or product.
This profile of the fixated consumer describes many collectors
or hobbyists (e.g., coin, stamp, antique collectors, vintage wristwatch, or fountain
pen collectors).
Compulsive Consumption Behavior: Compulsive consumption is in the realm of
abnormal behavior. Consumers who are compulsive have an addiction; in some
respects, they are out of control, and their actions may have damaging consequences
to them and those around them.
Self and Self-image: Self-images, or perceptions of self, are very closely
associated with personality in that individuals tend to buy products and services and
patronize retailers with images or personalities that closely correspond to their
own self-images.

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Such concepts as one or multiple selves, self-image, and the notion of the extended
self are explored by consumer behavior researchers.
Four aspects of self-image are:
1. Actual self-image how consumers see themselves.
2. Ideal self-image how consumers would like to see themselves.
3. Social self-image how consumers feel others see them.
4. Ideal social self-image how consumers would like others to
see them. Some marketers have identified a fifth and sixth self-image.
5. Expected self-image how consumers expect to see themselves
at some specified future time.
6. Ought-to self traits or characteristics that an individual
believes it is his or her duty or obligation to possess.
In different contexts consumers might select different self- images
to guide behavior. The concept of self-image has strategic implications for
marketers. Marketers can segment their markets on the basis of relevant
consumer self-images and then position their products or stores as symbols for such
self-images.
X. Lifestyle Identification- Attitudes, Opinions, Interests (AIO statements)
Lifestyle can be viewed as a unique pattern of living which influences and is
reflected by ones consumption behavior. Therefore, the way in which marketers
facilitate the expression of an individuals lifestyle is by providing customers with
parts of a potential variety form, they as artists of their own lifestyles can pick and
choose to develop the composition that for the time seems best.
Many products today are lifestyle products that they portray a style of life sought by
potential users Nevertheless, the basic premise underlying lifestyle research is that
the more marketers understand their customers, the more effectively they can
communicate and market to them.
The technique of Lifestyle Segmentation:
Lifestyle segmentation research measures
1. How people spend their time engaging in activities,
2. What is of most interest or importance to them in their immediate
surroundings, and

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3. Their opinions and views about themselves and the world around them.
Together, these three areas are generally referred to as Activities,
Interests, and Opinions, or simply AIOs.
Lifestyle is a term which can have at least three different meanings:
1. The values that a person expresses with reference to a limited number of basic
dimensions (freedom, justice, equality, etc.).
2. A group or cluster of attitudes, opinions, interests and activities.
In this case the investigator usually includes a theoretical mixture of very different
concepts which are supposed to serve as a basis for classifying or segmenting a
population. The segmentation should in its turn be possible to use in marketing
products or influencing habits. As an example, see a recent review of how the
tobacco industry
uses consumer segmentation in order to increase sales (Ling & Glantz, 2002).
3. Actual patterns of behavior, e.g., lifestyles characterized by substance abuse or
an
active leisure time involving sports, work in political organizations, etc.
XI. Types of Buying Behaviour and Consumer Involvement:
There are four typical types of buying behaviour based on the type of products that
intends to be purchased.
1. Complex buying behaviour is where the individual purchases a high value brand
and seeks a lot of information before the purchase is made.
2. Habitual buying behaviour is where the individual buys a product out of habit
e.g. a daily newspaper, sugar or salt.
3. Variety seeking buying behaviour is where the individual likes to shop around
and experiment with different products. So an individual may shop around for
different breakfast cereals because he/she wants variety in the mornings!
4. Dissonance reducing buying behaviour is when buyer are highly involved with
the purchase of the product, because the purchase is expensive or infrequent.
There is little difference between existing brands an example would be buying a
diamond ring, there is perceived little difference between existing diamond brand
manufacturers.

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Consumer involvement: Some consumers are characterized as being more involved

in products and shopping than others. A consumer who is highly involved with a
product would be interested in knowing a lot about it before purchasing. Hence he
reads brochures thoroughly, compares brands and models available at different
outlets, asks questions, and looks for recommendations. Thus consumer involvement
can be defined as heightened state of awareness that motivates consumers to seek
out, attend to, and think about product information prior to purchase.
CAUSESOF CONSUMER INVOLVEMENT: The factors that influences consumer
involvement include personal, product and situational.
Personal Factors: Self-concept, needs and values are the three personal factors that
influence the extent of consumer involvement in a product or service. The more
product image, the value symbolism inherent in it and the needs it serves are fitting
together with the consumer self- image, values and needs, the more likely the
consumer is to feel involved in it.
Celebrities for example share a certain self- image, certain values, and certain needs.
They tend to use products and services that reflect their life style. They get highly
involved in purchasing prestigious products like designer wear, imported cars, health
care products etc.
Product Factors: The consumer involvement grows as the level of perceived risk
in the purchase of a good or service increases. It is likely that consumers will feel
more involved in the purchase of their house than in the purchase of tooth paste, it is
a much riskier purchase. Product differentiation affects involvement. The
involvement increases as the number of alternatives that they have to choose from
increases. This may be due to the fact that consumers feel variety which means
greater risk. The pleasure one gets by using a product or service can also influence
involvement. Some products are a greater source of pleasure to the consumer than
others. Tea and coffee have a high level of hedonic (pleasure) value compared to, say
household cleaners. Hence the involvement is high. Involvement increases when a
product gains public attention. Any product that is socially visible or that is
consumed in public, demands high involvement. For example, involvement in the
purchase of car is more than the purchase of household items.
Situational Factors: The situation in which the product is brought or used can
generate emotional involvement. The reason for purchase or purchase occasion
affects involvement.

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For example, buying a pair of socks for yourself is far less involved than buying a
gift for a close friend. Social pressure can significantly increase involvement. One is
likely to be more self conscious about the products and brands one looks at when
shopping with friends than when shopping alone. The need to make a fast decision
also influences involvement. A consumer who needs a new refrigerator and sees a
one- day- only sale at an appliances retailer does not have the time to shop around
and compare different brands and prices. The eminence of the decision heightens
involvement. The involvement is high when the decision is irrevocable, for example
when the retailer does not accept return or exchange on the sale items. Thus
involvement may be from outside the individual, as with situational involvement or
from with in the individual as with enduring involvement. It can be induced by a
host of personal-product-and situation related factors, many of which can be
controlled by the marketer. It affects the ways in which consumers see, process, and
send information to others.
TYPESOF INVOLVEMENT: The two types of involvement are:
A) Situation
B) Enduring
Involvement has various facets of consumer behaviour such as search for
information, information processing, and information transmission. Situational
Involvement Situational involvement is temporary and refers to emotional feelings
of a consumer, experiences in a particular situation when one thinks of a specific
product.
A. Situational Involvement: Situational involvement is temporary and refers to
emotional feelings of a consumer, experiences in a particular situation when
one thinks of a specific product.
B. Enduring Involvement: Enduring involvement is persistent over time and
refers to feelings experienced toward a product category across different
situations. For example, holiday- makers renting a resort for their trip are
highly involved in their choice, but their involvement is temporary. Whereas
involvement of a person whose hobby is bike racing endures overtime and
affects his responses in any situation related to pre-purchase, purchase and
post- purchase of sport bikes. It is observed that involvement is triggered by
special situation in the case of holiday makers, but in the second case, in
comes from, and is a part of the consumer. The contrast between situational

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and enduring involvement is important. When marketers measure involvement

they examine the extent to which it can be induced by the product or selling
situation. After noticing the type of involvement they are facing, marketers
work to control products or selling situations.
EFFECTSOF CONSUMER INVOLVEMENT: Involvement with the product
makes consumers process product-related information more readily. This
information is processed thoroughly, hence, it is retained for a longtime. Because of
this the consumers become emotionally high and tend to engage in extended
problem solving and word- of-mouth communications.
These result into three categories: search for information, processing information,
and information transmission. Customers who are highly involved tend to search for
information and shop around more when compared with low involvement
customers. For example, the customer who is highly involved with cars and thinks
about buying it is likely to gather information. He sees for alternative models to
figure the advantages and disadvantages of each. The more they are involved, the
more they learn about the alternatives with in that category. To gather the
information they use various sources.
MODELSOF CONSUMER INVOLVEMENT: There are four prominent models
of consumer behaviour based on involvement which help marketers in making
strategic decision particularly in marketing communication related strategies.
The four models are as follows.
1. Low Involvement Learning Model
2. Learn-Feel-Do Hierarchy model
3. Level of Message Processing Model
4. Product versus Brand Involvement Model
1. Low Involvement Learning: Model Low Involvement products are those
which are at low risk, perhaps by virtue of being inexpensive, and repeatedly
used by consumers. Marketers try to sell the products without changing the
attitudes of consumers. New product beliefs replace old brand perceptions.
Marketers achieve lowinvolvement learning through proper positioning. For
example, writing pen with the uninterrupted flow, and tooth paste with
mouth wash positioning attracts new consumers.

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2. Learn-2. Feel-Do Hierarchy Model: Buying decisions vary according to the

way there are taken. Some decisions are taken with lot of thinking; others are
taken with great feelings. Some are made through force of habit and others are
made consciously. The learn-feel-do hierarchy is simple matrix that attributes
consumer choice to information (learn), attitude (feel), and behaviour (do)
issues. The matrix has four quadrants, each specifying a major marketing
communication goal to be informative, to be effective, to be habit forming, or
promote self-satisfaction. Thinking and feeling are shown as a continuum some decisions involve one or the other and many involve elements of both.
High and low importance is also represented as a continuum.
High Involvement / High Thinking: Purchases in first quadrant require more
information, both because of the importance of the product to the consumer and
thinking issues related to the purchases. Major purchases such as cars, houses and
other expensive and infrequently buying items come under this category. The
strategy model is learn-feel-do. Marketers have to furnish full information to get
consumer acceptance of the product.
High Involvement / High Feeling: The purchase decisions in second quadrant
involve less of information than feeling. Typical purchases tied to self-esteemjewelry, apparel, cosmetics and accessories come under this category. The
strategy model is feel-learn- do. To encourage purchases marketers must
approach customers with emotion and appeal.
Low Involvement / Low Feeling: The purchases in this quadrant are motivated
primarily by the need to satisfy personal tastes, many of which are influenced by
self-image. Products like news paper, soft drinks, Liquor etc., fall under this
category. Group influences often lead to the purchase of these items. The strategy
model is do-feel-learn. It helps marketers to promote products through reference
groups and other social factors.
Low Involvement / Low Thinking: It involves less in thinking and more of
habitual buying. Products like stationery, groceries, food etc., fall under this
category. Over a period of time any product can fall in this segment. The role of
information is to differentiate any point of difference from competitors. Brand
loyalty may result simply from the habit. The strategy model is do-learn-feel. It
suggests that marketers induce trial through various sales promotion techniques.

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3. Level of Message Processing Model: Consumer attention to advertisements

or any other marketing communication depends on four levels of consumer
involvement: Pre- attention, focal attention, comprehension and elaboration.
Each calls for different level of message processing. Pre-attention demands
only limited message processing - the consumer only identifies the product.
Focal attention involves basic information as product name on use. In
comprehension level the message is analysed, through elaboration the content
of the message is integrated with other information that helps to build attitude
towards the product. It is suggested that marketers make advertisements which
can induce elaboration.
4. Product versus Brand Involvement Model: Sometimes consumer is involved
with the product category but may not be necessarily involved with the
particular brand or vice versa. For example, house wives know more about
kitchen ware but may not know the details of various brands. According to the
consumer involvement in either product or particular brand, consumer types
can be divided into four categories as described below. Brand Loyals: These
consumers are highly involved with both the product category and with
particular brand. For example, cigarette smokers and paper readers fall in this
category.
Information Seekers: These buyers are involved more with product category but
may not have preferred brand. They are likely to see information to decide a
particular brand. For examples, air-conditioners and washing machine buyers fall
under this category.
Routine Brand Buyers: These consumers are not highly involved with the
product category but may be involved with the particular brand with in that
category. They have low emotional attachment with the product category.and tied
mainly with their brand. For example users of particular brand of soap for years,
regular visitors to particular restaurant fall in this category. Brand Switching:
Consumers in this category have no emotional attachment either with product
category or any brand with in it. They typically respond to price. For example
stationery items, fashion products come under this category
XII. Stages in Adoption process/ Diffusion of Innovation
Adoption Process: The focus of adoption process is the stages through which an
individual consumer passes although arriving at a decision to try or not to try or to
continue using or to discontinue using a new product.

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What exactly is adoption of innovation?

Customer acceptance of the innovation for continued use! We can thus define the
adoption process as the mental process through which an individual passes from first
hearing an innovation to final adoption. (Philip Kotler).
Stages in the adoption process:
Usually we have seen that the consumer moves through five stages in arriving at a
decision to purchase or reject a new product:
Awareness
Interest
Evaluation
Trial
Adoption

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Diffusion of Innovation
The Diffusion Process: Now let us try to understand how the diffusion process takes
place. The diffusion process Spreading of an innovations acceptance and use
through a population. Diffusion is the process by which the acceptance of an
innovation (a new product, a new service, new idea or new practice) is spread by
communication (mass media, salespeople, or informal conversations) to members of
a social system (a target
market) over a period of time.
The four basic elements of this process are:
1. The Innovation: Various approaches which have been taken to define a new
product or a new service include:
a. Firm-oriented definitions: A firm oriented approach treats the newness of a
product from the perspective of the company producing or marketing it. When the
product is new to the firm it is considered to be new.
b. Product oriented definitions: Product-oriented approach focuses on the features
inherent in the product itself and on the effects these features are likely to have on
consumers established usage patterns.
Three types of product innovations could be:
Continuous innovation having the least disruptive influence on established patterns
involving the introduction of a modified product, rather than a totally new product.
E.g., latest version of Microsoft Office; dynamically continuous innovation which
may involve the creation of a new product or the modification of an existing product
e.g., disposable diapers, CD players; discontinuous innovations requiring consumers
to adopt new behavior patterns e.g., TV, fax machines, Internet
c. Market oriented definitions: Judges the newness of a product in terms of how
much exposure consumers have to the new product. The definitions could be:
(a). A product id considered new if it has been purchased by a relatively small
(fixed) percentage of the potential market.
(b). A product is considered new if it has been on he market for a relatively short
(specified) period of time. d. Consumer oriented definitions: A new product is any
product that a potential consumer judges to be new.
Influence of Product Characteristics on diffusion
What are the product characteristics that influence diffusion?

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The most important of them are:

A. Relative Advantage: The degree to which potential customers perceive a new
product as superior to existing substitutes is its relative advantage. E.g., fax machine
B. Compatibility: The degree to which potential consumers feel new product is
consistent with their persistent with their present needs, values, and practices is a
measure of its compatibility. E.g., CD players
C. Complexity: The degree to which a new product is difficult to understand or use,
affects product acceptance.
D. Triability: Refers to the degree to which a new product is capable of being on a
limited basis.
E. Operability: Or Communicability is the ease with which products benefits or
attributes can be observed, imagined, or described to potential consumers.

2. The channels of Communication: How quickly an innovation spreads through a

market depends to a great extent on communications between the marketer and
consumers, as well as communication among consumers i.e., word-of-mouth
communication.

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Thus this communication will include two types of communication:

a. Communication between marketers and consumers
b. Communication among consumers i.e., word of mouth.
Consumer information sources fall into four categories:
Personal sources: Family, friends, neighbors, and acquaintances.
Commercial sources: sales people, advertising, sales promotion techniques.
Public sources: Mass media, consumer rating organisations
Experimental sources: Demonstration, handling samples.
Depending on the innovation or new product, and the prospective customers, the
firms try to adopt a cost effective way of communicating with them.
3. The Social System: The diffusion of a new product usually takes place in a social
setting frequently referred to as a social system. In our case, the terms market
segment and target segment may be more relevant than the term social system used
in diffusion research. A social system is a physical, social, or cultural environment to
which people belong and within which they function. For example, for new hybrid
seed rice, the social system might consist of all farmers in a number of local villages.
The key point to remember is that a social systems orientation is the climate in
which marketers must operate to gain acceptance for their new products. For
example, in recent years, the
World has experienced a decline in the demand for red meat. The growing interest in
health and fitness through the nation has created a climate in which red meat is
considered too high in fat and calorie content. At the same time, the consumption of
chicken and fish has increased, because these foods satisfy the prevailing nutritional
values of a great number of consumers.
4. Time: Time pervades the study of diffusion in three distinct but interrelated ways:
a. The amount of purchase time: Purchase time refers to the amount of time that
elapses between consumers initial awareness of a new product or service and the
point at which they purchase or reject it. For instance, when the concept of Home
Land super market was introduced by Asha Chavan in Pune, apart from offering a
variety of quality products, also give an unconditional guarantee of replacement or
refund, home delivery of all, even single item telephonic orders at no extra cost. And
beyond business, Homeland also offers free services like phone, electricity, credit
card and cell phone bill payments.

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b. The identification of adopter categories: The concept of adopter categories

involves a classification scheme that indicates where a consumer stands in relation
to other consumers in terms of time. Five adopter categories are frequently used viz.,
innovators, early adopters, early majority, late majority, and laggards.

As depicted in figure 12.2 above adopter categories are generally depicted as taking
on the characteristics of a normal distribution i.e., a bell-shaped curve that describes
the total population that ultimately adopts a product.
Now let us look at the characteristics of each of these categories. Figure 12.3 below
describes just the same.

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Chapter II
Communication Process With Reference To Advertising

I. Definition of communication: we can define communication as a systemic

process in which people interact with and through symbols to create and interpret
meanings.
II. Models of Communication / Traditional Response Hierarchy Models- AIDA,
Hierarchy of Effects, Innovation Adoption, information processing.
A commonality shared by all elements of the promotional mix is that their function
is to communicate. Thus, it is important that advertising and promotional planners
have an understanding of the communication process.
Communication has been variously defined as the passing of information, the
exchange of ideas, or the process of establishing a commonness or oneness of
thought between a sender and a receiver.
COMMUNICATION OBJECTIVES
Often when we think of advertising, we just think of great ads that make us laugh or
engage us in some manner. We tend to judge ads by these simple criteria. However, a
far more powerful way to look at advertising is by understanding that advertising is a
communication task, with specific communication objectives, and therefore we need
to understand how communication works.
The starting point is an audit of all the potential interactions target customers may
have with the product and the company.

For example, someone interested in

purchasing a new computer would talk to others, see television ads, read articles,
look for information on the intranet, and observe computers in a store. The marketer
needs to assess which experiences and impressions will have the most influence at

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each stage of the buying process. This understanding will help marketers allocate
their communication budget more efficiently. To communicate effectively, marketers
need to understand the fundamental elements underlying effective communication.
On the basis of the communication importance, there were eminent personalities
who made the communication models, which help a marketer to understand, how
he should go about communicating his product to the target audience.
All these communication models are centered on the three stages of the buying
behaviour of consumers.
The three stages are:
Cognitive Stage
The cognitive component deals with cognition, or knowledge; it is the power of
knowing, perceiving or conceiving ideas about the product. It is dealing with the
basic information that a consumer needs to know. A customer needs to be exposed to
the product and understand its usage before he actually purchases it.
The Three Stages

Cognitive
Affective

Affective Stage
The

effective

component

deals

with

the

Behaviour

affections/emotions. For example, feelings of likes or

dislike towards objects are dealt on the effective plane. It is at this stage that the
consumer will either have preference or liking towards the product or he will
develop a dislike. This stage shows his attitude towards the product, whether he is
for or against the product.

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Behaviour Stage
This is the stage when the consumer, after having the knowledge and developing the
liking or disliking towards the product, will ultimately lead into a purchase of the
product or rejection of the product. He would first try the product and develop
loyalty towards it or he is completely convinced that the product is good and would
purchase the product.
Hence there are many models, which are based on these three stages, which is
explained in the next chapter.

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MODELS BASED ON THE THREE STAGES OF BUYING BEHAVIOUR

Stages

AIDA
Model

Cognitive
Stage

Hierarchy
effects Model

of Innovation
Adoption
Model

Communications
Model
Exposure

Awareness
Reception
Attention

Awareness
Knowledge

Affective
Stage

Cognitive
response

Liking
Interest

Interest

Attitude

Evaluation

Intention

Preference
Desire

Conviction

Behaviour
stage
Trial
Action

Behaviour

Purchase
Adoption

AIDA MODEL
The AIDA model was presented by Elmo Lewis to
explain how personal selling works. It shows a set of

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stair-step stages, which describe the process leading a potential customer to

purchase. The stages, Attention, Interest, Desire, and Action, form a linear
hierarchy. It demonstrates that consumers must be aware of a products existence, be
interested enough to pay attention to the products features/benefits, and have a
desire to benefit from the products offerings. Action, the fourth stage, would come
as a natural result of movement through the first three stages. Although this idea was
rudimentary, it led to the later emerging field of consumer behavior research.

Hierarchy of Effects Model

DAGMAR attacks the basic hierarchy model, which postulates a set of steps of
awareness, comprehension, and attitude leading to action. The counterargument is
that it is possible that action may precede awareness. Example: The foreign
chocolates, which are bought by people from the departmental stores, are not
advertised, but still people buy them. It is later that the advertising for the
product is done, or sometimes it is not done at all. Another example would be
that action is preceded the attitude formation and comprehension with the
impulse purchase of a low involvement product.

III. Integrated Marketing Communication:

Integrated Marketing Communications (IMC) is a system of management and
integration of marketing-communications elements advertising, publicity, sales
promotions, sponsorship marketing and point-of-purchase communications with
the result that all elements adhere to the same message.

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The intentional coordination of every communication from a firm to a target

customer to convey a consistent and complete message
Def: IMC is the development of an Integrated Comprehensive Marketing
Communication (Promotion) Plan that links the marketing function with the
communication function to deliver Effective Marketing Messages capable of (1)
informing, (2) convincing and (3) persuading people to buy.
The goal of Integrated Marketing Communication (IMC) is to produce a unified
promotional message that has the customer as its focus. All promotional activity
such as media advertising, sales promotion, personal selling sponsorships, and
public relations are geared to deliver a consistent uniform message.
The Need for Integrated Marketing Communications
Integrated marketing communication is the integration by the company of
its communication channels to deliver a clear, consistent, and compelling
message about the organization and its brands.
Integrated marketing communication calls for recognizing all contact points
(brand contact) where the customer may encounter the company and its
brands.
Customers don't distinguish between message sources the way marketers do. In the
consumer's mind, advertising messages from different media and different
promotional approaches all become part of a single message about the company.
Conflicting messages from these different sources can result in confused company
images and brand positions.
Companies often fail to integrate their various communications channels. Massmedia advertisements say one thing, a price promotion sends a different signal, a
product label creates still another message, company sales literature says something
altogether different, and the company's website seems out of sync with everything
else. The problem is that these communications often come from different company
sources.
Under the concept of integrated marketing communications, the company carefully
integrates and coordinates its many communications channels to deliver a clear,
consistent, and compelling message about the organization and its brands.
IMC calls for recognizing all contact points where the customer may encounter the
company, its products, and its brands. Each brand contact will deliver a message--

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whether good, bad, or indifferent. The company must strive to deliver a consistent
and positive message with each contact.

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Reasons for the Growing Importance of IMC

Several shifts in the advertising and media industry have caused IMC to develop into
a primary strategy for marketers:
1. From media advertising to multiple forms of communication.
2. From mass media to more specialized (niche) media, which are centered
around specific target audiences.
3. From a manufacturer-dominated market to a retailer-dominated, consumercontrolled market.
4. From general-focus advertising and marketing to data-based marketing.
5. From low agency accountability to greater agency accountability, particularly
in advertising.
6. From traditional compensation to performance-based compensation (increased
sales or benefits to the company).
7. From limited Internet access to 24/7 Internet availability and access to goods
and services.
8. its brilliant

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Advantages of IMC:
The benefits of IMC include:

Increased brand recognition

Increased brand credibility

The opportunity to nurture customer relationships

Increased profitability

Increased competitive advantage

IMC is by no means easy to achieve, it requires careful research and planning, your
message needs to be consistent, consolidated and clear to stand a better chance of
cutting through the noise of over 500 other commercial messages customers
receive every day.

Managing the Marketing Communication Process

Integrated marketing communications- the intentional coordination of every
communication from a firm to a target customer to convey a consistent and complete
message
Major objectives of marketing communications
Five basic features must be included in IMC
1) Start with the customer or prospect
2) Use relevant forms of contact
3) Achieve synergy
4) Build relationships
5) Affect behavior

Five key features of IMC:

Start with the customer or prospect. Then work back to the brand
communicator to determine the most appropriate messages and media for

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informing, persuading and inducing customers and prospects to act favorably

toward the communicators brand.
Use any form of relevant contact. The term contact is any message medium
capable of reaching target customers and presenting the brand in a favorable
light.
Achieve synergy. Speak with a single voice.
Build relationships. A relationship is an enduring link between a brand and its
customers.
Affect behavior. Move people to action.

Key changes in Marketing Communications [MarCom] practice resulting from the

IMC thrust:
1. Reduced dependence on mass-media advertising
2. Increased reliance on highly targeted communication methods. [direct
mail, special-interest magazines, cable TV, event sponsorships and email messaging (permission or opt-in e-mailing)]
3. Expanded efforts to assess communications return on investment.

Components of the IMC

1. Advertising is non-personal communication that is paid for by an identified
sponsor, and involves either mass communication via newspaper, magazines,
radio, television and other media (e.g., billboards or bus stop signage) or
direct-to-consumer communication via postal or electronic mail.
2. PUBLIC RELATIONS: A public is any group that has an actual or potential
interest in or impact on a companys ability to achieve its objectives. Public
relations (PR) involve a variety of programs designed to promote or protect a
companys image or its individual products. What is the role and impact of
public relations? Public relations has often been treated as a minor element in
the promotion mix, but the wise company takes concrete steps to manage
successful relations with its key publics. Most companies have a publicrelations department that monitors the attitudes of the organizations publics
and distributes information and communications to build of the goodwill. The
best PR departments spend time counseling top management to adopt positive

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programs and to eliminate questionable practice so that negative publicity

does not arise in the first place.
Public relations are used to promote products, people, places, ideas, activities,
organizations, and even nations. Public relations can have a strong impact on
public awareness at a much lower cost than advertising can. The company does
not pay for the space or time in the media. Rather, it pays for a staff to develop
and circulate information and to manage events. If the company develops an
interesting story, it could be picked up by several different media, having the
same effect as advertising that would cost millions of dollars. And it would have
more credibility than advertising.
Public Relations perform the following five functions:
a. Press relations: Presenting news and information about the
organization in the most positive light.
b. Product publicity: Sponsoring efforts to publicize specific products.
c. Corporate communication: Promoting understanding of the
organization through internal and external communications.
d. Lobbying: Dealing with legislators and government officials to promote
or defeat legislation and regulation.
e. Counseling: Advertising management about public issues and company
positions and image during good times and crises
3. PERSONAL SELLING: Personal selling is paid personal communication
that attempts to inform customers and persuade them to purchase products or
services.
You would agree that it is the personal selling process that allows marketers the
greatest freedom to adjust a message to satisfy customers information needs.
Personal selling allows the marketer or seller to communicate directly with the
prospect or customer and listen to his or her concerns, answer specific questions,
provide additional information, inform, persuade, and possibly even recommend
other products or services.
It would be interesting for you to know that personal selling is one of the oldest
forms of promotion. It involves the use of a sales force to support a push strategy
(encouraging intermediaries to buy the product) or a pull strategy (where the role of
the sales force may be limited to supporting retailers and providing after-sales
service).

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Let us look at how personal selling facilitates marketers:a. The greatest freedom to adjust a message to satisfy customers
informational needs, dynamic.
b. Most precision, enabling marketers to focus on most promising leads.
vs. advertising, publicity and sales promotion
c. Give more information
d. Two way flow of information, interactivity.
e. Discover the strengths and weaknesses of new products and pass this
information on to the marketing department.
f. Highest cost. Businesses spend more on personal selling than on any
other form of promotional mix.
g. Goals range from
h. finding prospects
i. convincing prospects to buy
j. Keeping customers satisfiedhelp them pass the word along.
4. DIRECT MARKETING has been defined by the Institute of Direct
Marketing as:
The planned recording, analysis and tracking of customer behavior to develop a
relational
marketing strategies.
Direct marketing Direct connections with carefully targeted individual consumers to
both obtain an immediate response and cultivate lasting customer relationships;
Direct communications with carefully targeted individual consumers to obtain an
immediate response.
Direct marketing is the use of consumer-direct (CD) channels to reach and deliver
goods and services to customers without using marketing middlemen. What does
direct marketing channels include ? You must have also received direct mails or
might have been approached by telemarketers !
These channels include direct mail, catalogs, telemarketing, interactive TV, kiosks,
Web sites, and mobile include direct mail, catalogs, telemarketing, interactive TV,
kiosks, Web sites, and mobile devices. Direct marketing is one of the fastest growing
avenues for service customers.
Direct marketers seek a measurable response, typically a customer order. This is
sometimes called direct-order marketing. Today, many direct marketers use direct

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marketing to build along-term relationship with the customer ( customer relationship

marketing). They send birthday card, information materials, or small premiums to
select customers. Airlines, hotels, and other businesses build strong customer
relationships through frequency award programs and club programs.
5. SALES PROMOTIONS: A good definition of sales promotion would be as
follows:
An activity designed to boost the sales of a product or service. It may include an
advertising campaign, increased PR activity, a free-sample campaign, offering free
gifts or trading stamps, arranging demonstrations or exhibitions, setting up
competitions with attractive prizes, temporary price reductions, door-to-door calling,
telemarketing, personal letters on other methods.
Sales promotion - Short-term incentives to encourage the purchase or sale of a
product or service.
You would agree that more than any other element of the promotional mix, sales
promotion is about action. It is about stimulating customers to buy a product. It is
not designed to be informative a role which advertising is much better suited to.
Sales promotion consists of short-term incentives to encourage purchase or sales of a
product or service., whereas advertising and personal selling offer reasons to buy a
product or service, sales promotion offers reasons to buy now.
You would find it interesting to note:
a. Sales promotion is commonly referred to as Below the Line promotion.
b. Advertising and personal selling Sales promotion can be directed at:
c. The ultimate consumer (a pull strategy encouraging purchase)
d. The distribution channel (a push strategy encouraging the channels to stock
the product).
This is usually known as selling into the trade

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IV. Objectives for IMC with Special Reference to DAGMAR Objectives

Importance / value of objectives,
Promotion Objective, Communication Objectives, Sales Objectives
DAGMAR

ADVERTISING OBJECTIVES
With realistic goals for advertising, you can satisfy both those who are investing in
the advertising and those who are creating it.
Almost every person involved with advertising wants to measure their advertisings
results. Those who pay the bills want to know the return on their investment, and
those creating the advertising want to demonstrate that their work is effective.
Research efforts on the part of advertisers, ad agencies, and the media have helped
quantify the results of advertising. But most continue to face basic questions such as:
Does your Advertising work? How hard does it work? What specifically does it do
for your business? Should I increase, maintain, or decrease spending? Whats the
best message I can put in my advertising?
There are no easy answers to these questions. Solutions are a mixture of science and
art.
Marketing versus Advertising
Failure sometimes occurs even before the process starts because companies are
confused by the apparent similarity between the purpose of advertising and
marketing. Both are meant to encourage consumers to purchase products and
services, however, there is a fundamental difference between the two. Advertising is

Page 67 of 193

only one part of the marketing process, and its job is to deliver messages that have a
psychological effect on the consumer. While marketing, which also includes
functions such as public relations, promotion, sales, packaging, and pricing, has the
more inclusive job of moving products and services from the seller to the buyer.
Companies when asked about advertising objectives almost always reply with
marketing objectives. If they have a formal marketing plan, the advertising
objectives are typically statements like: to increase sales, or to expand market share.
These are too broad and general, making it almost impossible to measure success.
More specific objectives such as increase sales by 15%, or expand market share by
5% arent much better because they are marketing goals, not advertising goals.
Advertising cannot achieve marketing goals all by itself. If a company wants to
measure the results of its advertising, it has to be more specific in the definition of
what it expects to accomplish through the use of advertising.
The Job of Advertising
What part of the total marketing goal can we expect advertising to achieve? Since
advertising is a communications tool, we must assign it a communications task. Its
job is to deliver a message that is designed to stimulate specific consumer behavior.
The message you want advertising to deliver must be specific. Keep in mind that at
this stage you are defining what needs to be said, not how to say ityoure not
trying to write a headline. With a specific communications task that can be
performed by advertising, independent of other marketing efforts, you can measure
your advertisings success.

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SETTING THE ADVERTISING OBJECTIVES:

The advertising objectives must flow from prior decisions on target market,
market positioning, and marketing mix.
The advertising objectives can be classified according to whether their aim is to
Informative advertising: it is heavily used in the pioneering stage of a product
category, where the aim is to build primary demand.
For example: Ujala, where the ad talks about how different it is from the age old
neel by talking about its solution contents and showing how different your
clothes look when washed with Ujala.
Persuasive advertising: it is generally used when the product is in the
competitive stage, where the companys objective is to build selective demand for
a particular brand.
For example: Whirlpool ice magic positions itself as being a quick ice maker
and was the first one of its kind to use this as a marketing platform.

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Reminder advertising: it is very important to use these when the product is in

the maturity stage. They are intended to remind people to purchase your brand.
For example: Thums up, Coke, Pepsi ads all these ads no more are shown to
create awareness or persuasion because people are already aware of their
presence and already have chosen the brand of their choice. These are just
reminder ads to keep the brand or the company fresh in the minds of the
consumers or have the brand top of mind.
Market
MarketAnalysis
Analysis

Consumer
ConsumerAnalysis
Analysis

Competitive
CompetitiveAnalysis
Analysis

Brand
Brand

Organizational
OrganizationalRealities
Realities

Reinforcement advertising: It seeks to ensure the buyers that they have made
the right choice by purchasing your brand.
For Example: Hamara Bajaj advertisements make the owner of the two wheelers
of Bajaj proud of their possession by giving it a patriotic positioning.
Advertising
Marketing
Advertising in
in the
the
MarketingPlan
Plan
Marketing
Marketing Plan:
Plan: The
The
Companys
Marketing
Companys overall
overall marketing
marketing
MarketingObjectives
Objectives
plan
Sales
Objectives
plan determines
determines promotional
promotional
Sales Objectives
objectives
objectives and
and from
from these
these
objectives,
objectives, advertising
advertising
Where
does
advertising objectives fall in the marketing plan
objectives
are
objectives are derived.
derived.
Promotion
Promotion objectives
objectives specify
specify
what
is
to
be
accomplished
what is to be accomplished
Advertising
AdvertisingObjectives
Objectives
and
and where
where advertising
advertising fits
fits in.
in.
The
The next
next step
step isis to
to set
set
specific
ad
objectives
specific ad objectives and
and
goals.
goals.
Advertising
AdvertisingStrategy
Strategy

Advertising
AdvertisingTactics
Tactics
Promotions
Promotions

Creative
CreativeStrategy
Strategy

Media
MediaStrategy
Strategy

Page 70 of 193

NEED FOR ADVERTISING OBJECTIVES

One of the reasons many companies fail to set specific objectives for their
advertising and promotional programs are that they fail to recognize the value of
doing so. There are several important reasons for setting advertising and promotional
objectives:
Direction: Advertisement objectives are essential because it helps the
marketer to know in advance what they want to achieve and to ensure that they are
proceeding in the right direction. Pin pointing the ad objectives also helps in making
ones goals real and not imaginary, so that effective ad programmes can be
developed for meeting the objectives .it also guides and controls decision-making in
each area and at each stage
Communication: Objectives provide a communication platform for the
client, the advertising agency account executive help coordinate the creative team
members and the efforts of copywriters, media specialists, media buyers and
professionals involved advertising research. The advertising programme must also
be coordinated with other promotion mix elements within the company. In fact many
problems may be avoided if all the concerned parties have written objectives to
guide their actions and serve as a common base for discussing related issues
Planning and Decision MakingSpecific objectives can be useful as a
guide or criterion for decision-making. Advertising and promotion planners are often
faced with a number of strategic and tactical options in areas such as creative, media,
budgeting and sales promotion. Choices among these options should be made on the
basis of how well a strategy or tactic matches the promotional objective.

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Measurement and Evaluation of ResultsA very important reason for

setting specific objectives is that they provide a benchmark or standard against
which success or failure of the campaign can be measured. When specific objectives
are set it becomes easier for management to measure what has been accomplished by
the campaign
Two Distinct Schools Of Thought
What should be or what could be the objectives for advertising? A controversy
around this question is still running hot in the ad world. One school holds that ad has
to necessarily bring in more sales and therefore ad objectives should certainly
include sales growth.
The second and diametrically opposite view is that ad is essentially a
communication task and it should have only communication goals, or goals
intended to shape the awareness and attitudes of consumers

Advertising
Objectives

Sales Oriented
Objectives

Communication
Oriented Objectives

Each of these objectives is explained in detail in the subsequent chapters.

SALES AS AN ADVERTISING OBJECTIVE

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Many marketing managers view their advertising and promotional programs

from a sales perspective and argue that sales or some related measure such as market
share is the only meaningful goal for advertising and thus should be the basis for
setting objectives. They take the position that the basic reason a firm spends money
on advertising and promotion is to sell its products or services. Thus they argue that
any money spent on advertising should produce measurable sales results.
Example:
There are many companies of low involvement products like
confectionery and sweets whose advertising objective would be solely of sales.
However over the time even these companies have realized that sales cannot be
the sole objective of advertising, ad building a brand and establishing a
favourable attitude towards the brand is also important.
Drawback of using sales as the only objective of advertising
Sales are a convenient and really attractive advertising objective for many
managers, but except for Direct Action Advertising, they are usually unsuitable for
most advertising. In todays increasingly competitive market conditions, marketing
and brand managers are often under pressure to show sales results and their
perspective is short term in evaluating advertising. They look for quick fix solutions
for declining sales, ignoring the dangers of linking advertising directly with sales
Incase of sales as the advertising objective, it would be quite simple to
evaluate the results of the ad campaign. Sales objective however may not be
operational in certain cases because advertising is just one factor among many
others that influence sales, to identify the contribution of advertising alone may

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really be difficult. Other factors that may have significant effect on sales are product
features, price, distribution, personal selling, publicity, packaging, competitors
moves, and changing buyer needs.
Example
APPLE computers advertised their iMAC in some selected print media
vehicles in India; the ads were very successful and did in fact draw many
potential buyers to dealerships. However in good number of cases the matter
ended there. The problem was not with the ads, the campaign was very
successful attracting and creating product liking but the price and nonavailability of peripherals discouraged them. It would be unfair to measure the
success of ads themselves by the number of Apple computers sold to home
users.
The time lag between audience exposure to an ad and when that ad may lead
to an actual sale could be quite long because majority of the ads usually produce
sales effect after a long period of time.
Sales as an advertising objective, offer little guidance to creative and media
people working on the account. They need some direction regarding what kind of ad
message the company hopes to communicate, who will be the target audience and
what specific response from the audience is desired.
Thus advertising objectives that emphasize sales are usually not very
operational because they provide little practical guidance for decision makers. No
one argues the desirability of a sales increase, but which campaign will generate

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such an increase? If an objective does not contribute useful criteria on which to base
subsequent decision, it cannot fulfill its basic functions.
Again increased sales is not a specific goal it is only a wish for the future.
What percentage increase is the company looking at? By which date? Where are
these increased sales going to come from? How are they going to be achieved? The
lucidity of these answers will influence the effectiveness of the companys
advertising objectives.
Where Sales Objectives for advertising can be applied
In spite of problems that sales objectives pose, there are certain situations
when sales objectives can be appropriate.
Direct Action Advertising: Some direct action advertising attempts to induce
quick response from the members of the target audience, such as ads offering some
kind of incentive, or ads announcing contests, or encouraging prospects to place
orders on phone or through internet. In such cases evaluation is based on sales
results.
Sales Promotion Programs: Many sales promotion programs have sales
objectives since their goal is often to generate trial or short-term sales increases

Example

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Many companies have the Scratch and Win offers, which are usually
advertised on television. One such company was VIM bar, which had a scratch
and Win offer for about two months.
Incase of companies where advertising plays a dominant role in the marketing
programme and other elements are relatively stable, sales oriented objectives are
used.
There are again many sales oriented objectives, which a particular
company can have. They are given in the following table.

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Types of Sales Oriented Objectives

Type of Sale Media
Increase
Policy

Creative Content

Example

Existing Products
Existing
Maintain
Suggest new uses for
Product
to insertions in your
product,
or
Existing users current
reasons
for
more
media
frequent use, building
on existing contacts
and goodwill
Existing
Consider
Explain
the
basic
Product
to new media benefits
of
your
New users
product, and your
company record, to
people unaware of
them.
Existing
Consider
Comparison campaigns
Product
to competitors pointing
out
the
users of rival media
advantages
of
the
products
patterns
product over rival
Brand
brands and of changing
switching
established
buying
habits
New Products
New Products Maintain
Explain basic benefits,
to
Existing insertions in building on existing
Customers
current
contacts and goodwill
media

New Products Consider

to New Users new media

Explain
benefits
product,

the
of
and

DETTOL
Antiseptic
advertised
on
the
different usage of the
product, like for washing
babys
clothes,
for
shaving, etc.
PHILIPS,
ONIDA
launched their colour
television sets in rural
markets and had related
advertisements for it.
FAIREVER advertised
to switch the Fair &
Lovely users to its
product.

LAKME
introducing
new
products
like
Sunscreen
lotion,
Moisturizer with Peach
Flavour, Winter Cream
Lotion with Strawberry
ingredients, etc.
basic FA
and
NIVEA
your introducing products for
your men.

Page 77 of 193

New Products Consider

to Competitors competitors
Customers
media
patterns

company record in
other fields
Explain basic benefits PEPSI AHA aimed at
and
overcome advertising itself in bars
established goodwill.
in order to switch the
alcohol drinkers to use
Pepsi Aha instead of
Thumbs Up as their
mixer in the drink.

DAGMAR
In 1961, Russel H. Colley wrote a book under the sponsorship of the Association of
National Advertisers called Defining Advertising Goals for Measured Advertising
Results. The book introduced what has become known as the DAGMAR approach
to advertising planning and included a precise method for selecting and quantifying
goals and for using those goals to measure performance.
DAGMAR approach can be summarized as Defining Advertising Goals. An
advertising goal is a specific communication task to be accomplished among a
defined audience in a given period of time.
In DAGMAR the communication task is based on the model of communication
process
DAGMAR has changed the way advertising objectives were created and the way
that advertising results were measured. It introduced the concept of communication
objectives like awareness, comprehension, image, and attitude. The point was made
that such goals are more appropriate for advertising than in some measure like sales,
which can have multiple causes.

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DAGMAR also focused attention upon measurement, encouraging people to create

objectives so specific and operational that they can be measured.

Unawareness/Awareness

Comprehension

Conviction

Action

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Characteristics of Objectives: a major contribution of DAGMAR was Colleys

specification of what constitutes a good objective. Four requirements or
characteristics of good objectives were noted
Concrete and measurablethe communications task or objective should be a precise
statement of what appeal or message the advertiser wants to communicate to the
target audience. Furthermore the specification should include a description of the
measurement procedure
Target audience a key tenet to DAGMAR is that the target audience be well
defined. For example if the goal was to increase awareness, it is essential to know
the target audience precisely. The benchmark measure cannot be developed without
a specification of the target segment
Benchmark and degree of change soughtanother important part of setting
objectives is having benchmark measures to determine where the target audience
stands at the beginning of the campaign with respect to various communication
response variables such as awareness, knowledge, attitudes, image, etc. The
objectives should also specify how much change or movement is being sought such
as increase in awareness levels, creation of favorable attitudes or number of
consumers intending to purchase the brand, etc. a benchmark is also a prerequisite to

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the ultimate measurement of results, an essential part of any planning program and
DAGMAR in particular.
Specified time perioda final characteristic of good objectives is the specification
of the time period during which the objective is to be accomplished, e.g. 6months, 1
year etc. The time period should be appropriate for the communication objective as
simple tasks such as increasing awareness levels can be accomplished much faster
than a complex goal such as repositioning a brand. All parties involved will
understand that the results will be available for evaluating the campaign, which
could lead to a contraction, expansion or change in the current effort. With a time
period specified a survey to generate a set if measures can be planned and
anticipated.
Written Goal - finally goals should be committed to paper. When the goals are
clearly written, basic shortcomings and misunderstandings become exposed and it
becomes easy to determine whether the goal contains the crucial aspects of the
DAGMAR approach.
Limitations of DAGMARThere are certain problems and limitations to
DAGMAR, which should be discussed. These include:
Measurement problems: With the adoption of DAGMAR model, the measurement
becomes a problem. The marketers question that what should they actually measure?
Is it attitude, awareness or brand comprehension?
Example: The VIP Feelings advertisements for ladies undergarments could be
successful changing the attitude towards the brand VIP that was associated to be a
mans wear, or it could be successful in creating awareness that VIP has started a

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new line of product for ladies too. Evaluating and measuring this form one single
advertisement is difficult.
Noise in the system: DAGMAR assumes that the awareness and liking of the brand
can be achieved through advertising alone. But the underlying fact is that there are
many other variables such as competitive promotion, unplanned publicity, word of
mouth, simple discussion with peers, new paper articles etc all create awareness of
the brand. Thus there are many other elements other than advertising in the hierarchy
chain that create awareness. Example: Tupperware is famous in Indian cities. It
has happened only through personal selling and networking. Advertising has
had no role in it.
Inhibiting great idea: The more defined and concrete objective of the client brief, the
less creative the advertisement will be, as a result, the effectiveness of the
advertisement is reduced. Example: A campaign with all music and warm human
visuals is be loved by everybody but it would fail to meet the companys
standard. Thus a wonderful campaign would be evaluated on wrong criteria.
Ad Agency Structure, Functions & Evaluation:
Definition of advertising, Features and Functions of Advertising
Definition of Ad agency
Structure of Ad Agency
Functions of Ad Agency

Definition of Advertising:

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The American Marketing Association defines advertising as Advertising is

defined as any paid form of non-personal communication about an organization,
product, service, or idea by an identified sponsor.
Functions of Advertising
As a form of mass communication, advertising delivers relevant messages to
target audiences and by changing mental states, it can perform a number of
functions. Advertising moves consumers from being unaware of a product or
service to finally purchasing it. An ad is considered effective if it propels the
consumer a step further in this process. This is how the function of advertising is
viewed.
The different functions of advertising are viewed as follows:
1. STIMULATES DEMAND By informing consumers about the availability of a
product in the market, advertising stimulates latent needs, and reinforces the
aroused needs. There is a general agreement that advertising has some effect on
aggregate consumption.
2. STRENGTHENS OTHER PROMOTION MIX ELEMENTS Advertising
does the pre selling of the product and makes the job of the sales people easier.
Advertising reaches a relatively large audience and makes them favourably
predisposed. Ads carry the sales, promotional messages and often produce quick
sales response.
3. DEVELOPS BRAND PREFERENCE Consistent and persuasive advertising
often induces brand trial or purchase. When the product delivers the promised
quality, service and value, it creates satisfied customers who become instrumental

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in spreading a favourable word-of-mouth. Satisfied customers also develop brand

preference which gets reinforced by repeated ads. Products with strong brand
franchise offer some protection against the competition. Retailers develop
confidence and do not hesitate in stocking strong brands. Brand loyal customers
are an important asset for the company and are less likely to be influenced by
competitive moves.
4. CUTS COSTS Advertising may be instrumental in cutting down production
and selling costs. Increasing unit sales decrease unit costs. Selling costs also may
decrease because there could be fewer wasted calls and less strain on sales
people.
5. LOWERS PRICES In any market based and competitive economy, when unit
cost of a product goes down, there are external and internal pressures which
compel companies to lower prices to the advantage of consumers. This often
leads to deeper market penetration
6. COMPETITIVE WEAPON Advertising by itself and coupled with other
promotion mix elements, may prove to be an extremely potent weapon to counter
competitive moves. Advertising has an established role in creating brand
personality and image. It helps differentiate a companys offer in a manner that
the product may be considered as something with unique value having a definite
identity of its own
ADVERTISING AGENCY
An advertising agency is an independent organization that provides one or
more specialized advertising and promotion related services to assist companies in
developing, preparing and executing their advertising and other promotional
programmes.

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Types of advertising agencies:

There are basically four types of ad agencies. They are
1. In-house agencies
2. Creative boutiques
3. Media buying agencies
4. Full service agencies

1. In- house agencies: Some companies, in an effort to reduce costs and maintain
greater control over agency activities, have set up their own advertising agencies
internally. An in-house agency is an ad agency set up, owned and operated by the
advertiser. Many companies use in-house agencies exclusively; others combine
in-house efforts with those of outside agencies.
A major reason for using in-house agency is to reduce advertising and
promotional costs. Companies with very large advertising budgets pay a
substantial amount to outside agencies in the form of media commissions. With
an internal structure, these commissions go to the in-house ad agency. An inhouse ad agency can also provide related work such as sales presentations and
sales force material, package design, and public relations at a lower cost than the
outside agencies.
Saving money is not the only reason companies use in-house ad agencies.
Time savings, bad experience with outside agencies, and the increased
knowledge and understanding of the market that come from working advertising
and promotion for the product or service day by day are also reasons. Companies

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can also maintain a tighter control over the process and more easily coordinate
promotions with the firms overall marketing programmes.
Opponents of the in-house agencies say that they can give the advertiser
neither the experience nor the objectivity of the outside agency and nor the range
of services. They argue that the outside agencies have a more specialized staff
and attract the best creative staff. Also flexibility is higher since if the company is
not satisfied with the agency it can be dismissed, whereas changes in an in-house
agency could be slower and more disruptive.
Thus we can summarize by saying that
Ad agency
In house
agency

Advantages
Cost saving
More control
Increased coordination

Disadvantages
Less experience
Less objectivity
Less flexibility

Examples of in-house agencies in India are:

1. Levers - Lintas (previously)
2. Videocon Confidence
3. Reliance - Mudra

2. Creative boutiques: Creative boutique is an agency that provides only creative

services. These specialized companies have developed in response to some
clients desires to use only the creative talent of an outside provider while
maintaining the other functions internally.
The client may seek outside creative talent for two reasons:
a. Because he wants an extra creative effort
b. May be because its own employees of the in-house agency or the agency that
he has appointed do not have sufficient skills in this regard.

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The full-service agencies also sub-contract work creative boutiques when they
are very busy or want to avoid adding full time employees to their pay roll.
Creative boutiques are usually found by members of the creative departments of
full service agencies who leave the firm and take with them clients who want to
retain their creative talents. These boutiques generally perform creative function
on a fee basis.
Examples of creative boutiques are:
1. RMG David
2. Vyas Gianetti Creatives
3. Chlorophyll
3. Media buying agencies: Media buying agencies are independent companies that
specialize in the buying of media, particularly radio and television. The task of
purchasing advertising media has grown more complex as specialized media
proliferate, so media buying services have found a niche by specializing in the
analysis and purchase of the advertising time and space. Agencies and clients
generally develop their own media plans and then hire the buying services to
execute them.
Some media buying agencies do help advertisers plan their media strategies.
Because media buying agencies purchase such large amounts of time and space,
they receive large discounts and can save the small agenys or clients money on
media buying. Media buying agencies are paid a fee or commission for their
work.
Examples of media buying agencies are:
1.

Mindshare

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2.

Initiative Media (LOWE)

3.

Zenith Media (Bates, Saatchi & Saatchi)

4.

Optimedia (Publicis)

5.

Starcom (Leo Burnett)

6.

Fulcrum (HTA)

4. Full service agency: The function of an advertising agency is to see to it that

its clients advertising leads to greater profits in the long run than could be
achieved without the ad agency. Most such agencies are large in size and offer
their clients a full range of services in the area of marketing, communications and
promotions. These include planning, creating and producing the advertisement,
media selection and research. Other services offered include strategic marketing
planning, sales training, package design, sales promotion, event management,
trade shows, publicity and public relations.
The full service agency is composed of various departments; each is responsible
to provide required inputs to perform various functions to serve the client. The
various departments can be seen in the following diagram:

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Structure of an ad agency

Account
Service

Account
Planning

Media

Planning

Buying

Creative

Production

Finance&
Accounting

Copy

Arts

Account service department: The account service, or the account management

department, is the link between the ad agency and its clients. Depending upon the
size of the account and its advertising budget one or two account executives serve
as liason to the client. The account executives job requires high degree of
diplomacy and tact as misunderstanding may lead to loss of an account. The
account executive is mainly responsible to gain knowledge about the clients
business, profit goals, marketing problems and advertising objectives.
The account executive is responsible for getting approved the media
schedules, budgets and rough ads or story boards from the client. The next task is
to make sure that the agency personnel produce the advertising to the clients

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satisfaction. The biggest role of the account executive is keeping the agency
ahead of the client through follow-up and communications.
Media department: The responsibility of the agencys media department is to
develop a media plan to reach the target audience effectively in a cost effective
manner. The staff analyses, selects and contracts for media time or space that will
be used to deliver the ad message. This is one of the most important decisions
since a significantly large part of the clients money is spent on the media time
and/or space. The media department has acquired increasing importance in an
agencys business as large advertisers seem to be more inclined to consolidate
media buying with one or few agencies thereby saving money and improving
media efficiency.
Creative department: To a large extent, the success of an ad agency depends
upon the creative department responsible for the creation and execution of the
advertisements. The creative specialists are known as copywriters. They are the
ones who conceive ideas for the ads and write the headlines, subheads and the
body copy. They are also involved in deciding the basic theme of the advertising
campaign, and often they do prepare the rough layout of the print ad or the
commercial story board. Creation of an ad is the responsibility of the copywriters
and the art department decides how the ad should look.
Production department: After the completion and approval of the copy and the
illustrations the ad is sent to the production department. Generally agencies do
not actually produce the finished ads; instead they hire printers, photographers,
engravers, typographers and others to complete the finished ad. For the

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production of the approved TV commercial, the production department may

supervise the casting of actors to appear in the ad, the setting for scenes and
selecting an independent production studio. The production department
sometimes hires an outside director to transform the creative concept to a
commercial.
Finance and accounting department: An advertising agency is in the business
of providing services and must be managed that way. Thus, it has to perform
various functions such as accounting, finance, human resources etc. it must also
attempt to generate new business. Also this department is important since bulk of
the agencys income approx. 65% goes as salary and benefits to the employees.

Advertising Budget
Definition of Advertising Budget
Definition of Advertising Appropritation
Methods of Budgeting /Advertising Budgeting Methods

DECIDING ON THE ADVERTISING BUDGET

Budget is the financial statement of income and expenditure for a given period of
time. Therefore, advertising budget is also a statement of expenditure on various

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advertising activities and of the income generated from advertising in the same
period.
Advertising has a carryover effect that lasts beyond the current period. Although
advertising is treated as a current expense, part of it is really an investment that
builds up an intangible asset called brand equity.
This treatment of advertising reduces the companys reported profit and therefore
limits the number of new product launches a company can undertake in any one
year.
The following are the factors that are considered while setting the advertising
budget:
1. Organizational objectives: Advertising budget depends on the objectives, which
the firm desires to achieve. There are various objectives behind advertising
campaign. Some of the objectives are noted below:
a) To introduce new products through advertising campaign.
b) To develop consumer loyalty and create market reputation.
c) To fight market competition effectively
d) To promote sales and earn more profit
e) To create brand awareness
f) To encourage dealers to stock the product.
2. Type of product to be marketed: Advertising budget will be more for consumer
items like textiles, cosmetics, soaps etc. due to severe market competition and wider

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area coverage. In class of industrial products, the budgeted amount will be less due
to limited competition.
3. Stage in the product life cycle: new products typically receive large advertising
budgets to build awareness and to gain consumers trial.
4. Market share and consumer base: the brands having a high market share
usually require less advertising expenditure whereas for products whose brand needs
to be built, requires larger advertising expenditure.
5. Competition and clutter: In todays competitive market, where there are a large
number of competitors, a brand must advertise heavily to be heard.
6. Advertising frequency: the number of repetitions that need to be made to put
across the brand message to consumers has an important impact on the advertising
budget.
7. Product substitutability: brands in the commodity class require heavy
advertising to establish a different image. For example, cigarettes, beer, soft drinks.
Also advertising is important when the brand can offer unique physical benefits or
features.
8. Expenditure of the previous year
9. Media used
10. Availability of finance
11.. Size of the market
12. Quality of the advertising campaign

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Methods of estimating budget:

Traditional Method of setting budget:
1. Affordable Method:
It is also referred as all-you-can-affordmethod.The firm determines the amount to
be spend in various areas such as production% operations. Then it allocates whats
left to advertising& promotion, considering this to be the amount it can afford. The
logic for this approach stands from we cant hurt this method.
2) Arbitrary Allocation:
Is a method for establishing a budget in which virtually no theoretical basis is
considered & the budgetary amount is often is often decided by the strategic
managers,i.e the budget is determined by the mgt solely on the basis of what is felt
to be necessary.
3) Percentage of sales method:
Perhaps the most commonly used method for budget setting particularly in large
firms is the % of sales method in which advtg & promotional budget is based on
sales of the product. Management determines the amount by either 1) taking the %
of a sales routine. Assigning a fixed amount of the unit product cost to promotion &
multiplying this amt by the nos of unit sold.
Percentage of sales method: contd
2) A variation of % of sales method is % of projected future sales as a base.
This method also use4s either a straight % of projected sales or a unit cost
projection.
One advantage of using future sales as a base is that the budget is not based on last
years sales.
As the market changes,mgt must consider the effect of this changes on sales into
next years forecast rather than relying on past data.

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The resulting budget is more likely to reflect current conditions & be more
appropriate.
Advantages of % of sales method:
1) It is financially safe & expanding within reasonable limits as it basis spending on
the past year sales.
2. It is simple, straight forward & easy to implement
3. It is generally stable
Disadvantages of % of sales:
1. It treats advtg as an expense associated with making a sale rather than an
investment
2. It does not allow for changes in strategy either internally or from competitors. An
aggressive company may wish to allocate more budgets to advtg& promotions, a
strategy that is not possible with % of sales method.
3. May lead to severe misappropriation of funds.Succesful products may have excess
budgets.
4. Competitive Parity:
In this method, managers establish budget amount by matching the competitions %
of sales expenditure.
The argument is that setting budgets in this fashion takes advantage of collective
wisdom of the industry.
It also takes competition into consideration which leads to stability in the market
place by minimizing marketing warfare. If companies know that competitors are
unlikely to match theirs increases in promotional spending, they are less likely to
take an aggressive posture to attempt to gain market share.
This minimizes unusual or unrealistic advertising expenditure.
Disadvantages Competitive Parity

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1. It ignores the fact that advertising and promotions are designed to accomplish
specific objective by addressing certain problems& objectives.
2. It assumes that because firms have similar expenditure that program will be
equally effective.
3. There is no guarantee that competitors will continue to be passive about their
existing strategies
4. Finally competitive parity may not avoid promotional wars.
5. Return on Investment:
In this method, advertising & promotions are considered investments like plant &
equipments.
Thus, the budgetary appropriation leads to certain returns.
While this method looks good on paper, the reality is that it is rarely possible to
access the returns provided by the promotional efforts at least as long as sales
continues to be the basis for evaluation. It remains a difficult method to employ.
6. Object & Task Method:
It uses the build-up approaches consisting of 3 steps:
Defining the communication objectives to be accomplished.
Determining the specific strategies & tasks needed to attain them
Estimating the cost associate with performance of this strategies & cost. The total
budget is based on the accumulation of this cost.
This process involves several steps:
Isolate objective: When promotional planning model is presented, a company have
two sets of objectives to be accomplished. (a) Marketing objective for the product.
(b) Communication objectives. After the former are established, the tasks involve
determining what specific communication objectives will be designed to accomplish
this goal. Communication objective must be specific, attainable & measurable as
well as time limit.

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1. Determine tasks required

2. Estimate required expenditure
3. Monitor
4. Revaluate objectives
7. Quantitative Models:
This method employs computers stimulation models involving statistical techniques,
such as multiple-regression analysis to determine the relative contribution of the
advertising budget to sales.
8. Marginal Analysis:
As advtg/ promotional expenditure increases, sales & gross margin also increase to a
point, then they level off.
Using this theory to establish its budget, a firm would continue to spend
advertising/promotional budget as long as the marginal revenues created by these
expenditures exceed the incremental advertising /promotional costs.
If the sum of advertising/promotional budget exceeded the revenues they generated,
one will conclude the appropriations were too high and scale down the budget.

Chapter: III
Types of Media & Media Planning:
THE CONCEPT OF ADVERTISING MEDIA

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The range of advertising media is so wide that it is not possible to attempt a

definition other than in the broadest terms. An advertising medium is any means by
which an advertiser may decide to spend the money he has allocated to advertising.
IMPORTANCE OF MEDIA IN ADVERTISING
Effective advertising refers to informing the public about the right product at the
right time through the right medium. Conveying a right message through a wrong
medium at the wrong time would definitely a waste of resources. For e.g. cigarette
advertising. The target market for this is man in the age group of 25-60 years. The
advertiser would consider placing ads in magazine having a predominantly male
readership. Advertising in magazines having a predominantly female readership
would be mostly wasteful for this product. It may be true that rarely does any
magazine have a 100 % male readership. Therefore, the right media selection is the
crux of the success of the entire advertising campaign.
The effectiveness of a well-designed advertising message depends upon when &
where it is realised. There are time &place decisions. In short we may say that
the success of advertising depends upon the right selection of media, the timely
release of the advertisement message, its frequency and continuity, and the place of
its release.
To get the most out of the advertising rupees sent, the primary concern of the
advertiser is media selection. The cost of buying space or time is weighed against the
number of audience secured by such advertising. Media ability covers such
qualitative values as audience characteristics, editorial personality, and contribution
to advertising effectiveness; above all it refers to media image capable of
enhancing the perception and communication value of a given message. For e.g.

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channel A and channel B deliver the same message and the same extension of
advertising exposure to the same audience; but if say, channel A has a better
reputation for honesty and good editorials, the advertisement in this may receive a
higher perception and communication among its audience than if it is inserted in
channel B.
The specific positioning of the ad in the newspaper improves demographic
selectivity. For women products, the fashion page or the food page may be more
desirable, whereas for mens products, many advertisers specify the sports page.
Many newspaper offer split run facilities. The split run is a process by which
alternate copies of the same newspaper are printed with different ads for the same
product. Normally, the location of ads in both the editions is the same. The
newspapers do charge extra for this split-run service.
Media Terminology
Media Planning - the process of deciding how to most effectively get your
marketing communications seen by your target audience.
Media Planner - the person at the advertising agency who develops and
executes your media plan.
Media Plan - the document or flowchart which details the tactics used to
accomplish your media objectives.
Broadcast Media - Either radio or television network or local station
broadcasts.
Print Media - Publications such as newspapers and magazines.
Media Vehicle - The specific message carrier, such as the Washington Post or
60 Minutes.

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Coverage - The potential audience that might receive the message through the
the vehicle.
Reach - The actual number of individual audience members reached at least
once by the vehicle in a given period of time.
Frequency - The number of times the receiver is exposed to vehicle in a
specific time period.
Gross Rating Points (GRPs) - the total weight of a specific media schedule,
computed by multiplying the reach, expressed as a percentage of the
population, by the average frequency. GRP is the combined measure of reach
and frequency indicating the weight of a media plan. The more GRPs, the
more weight a plan has. GRP is a unit of audience measurement, commonly
used in the audio-visual media, based on reach or coverage of an ad. A single
GRP, usually, represents 1 per cent of the total audience in a given region.
Brand Development Index: To determine BDI, a markets brand sales
percentage is divided by the total population percentage of that market
multiplied by 100. The brand development index (BDI) measures the sales
strength of a brand in a particular area.
BDI = Percentage of brands total all India sales in the market x 100
Percentage of total Indian population in the market
This index enables a media planner to allocate the media budget by setting his
priorities.
Category Development Index: To determine CDI, a markets category sales
percentage is divided by the total population percentage of that market and
multiplied by 100.

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It measures the sales potential of product category. Thus it takes into account the
potential of all competitors selling the same category.
CDI = Percentage of product categorys total all India sales

x 100

Percentage of total Indian Population in the market

TRP (Target Rating Point): A unit of TV audience measurement based on
coverage. A single TRP represents 1 per cent of the targeted viewers in any
particular region.
Cost per thousand (CPM) is one yard-stick to compare the costs of different
media. It is the cost of reaching a thousand persons.
CPP /CPR/ CPRP: The cost of reaching one percent of the target population.
CPP is calculated by dividing the cost of the schedule by the gross rating
points. National and regional advertising buyers frequently use this cost
efficiency measure, since it can be applied across all media.
Coverage: The percentage of target groups reached through various medium

TYPES OF MEDIA
The media are classified into two categories:
Above-the-line media: press, TV, outdoor, posters, cinema and radio. The
recognized agencies get commission from these media.

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Below the line media: those who do not give commission to the ad agency.
Examples are direct mail, exhibitions and sales literature.
MEDIA CLASSES/VEHICLES
Print media:
Newspapers:
a) daily
b) Sunday
c) weekend supplement
Magazines:
(a) Consumer magazines: general interest or special interest.
(b) Business publications: trade publications, institutional publications, etc.

Electronic media:
Radio: RADIO MIRCHI, RADIO CITY, ETC.
TELEVISION: channels like ZEE, AAJ TAK, STAR NEWS, etc.
Narrow cast media: video and cable TV, cinema, ad films.

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Outdoor media:
Transit advertising media
Other media:
Specialty media: t-shirts, caps,etc.
Direct marketing.
Direct advertising: direct mail.

DETAILED ANALYSIS OF EACH MEDIA VEHICLE

PRINT MEDIA
Advertising in the print media is the oldest and largest in terms of advertising billing.
More than 50% of the space is devoted to the print ads. The print media has two
sources of income:
a) Circulation and subscription and
b) Advertising revenue.
Newspapers
There are several type of newspapers:
a) Daily
b) Weekly
c) Special interest
d) Evening, etc.
Newspapers can also be classified as regional, local, national, etc.

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Each newspaper has its target audience. For example ECONOMIC TIMES targets
businessmen and the student community, INDIAN EXPRESS targets people who
want quality news, MID-DAY targets people with funky attitude, etc.
The marketers need to identify various target audiences and then use it as a medium
of communication.
Advantages Of Newspaper Advertising:
Local advertising possible: Newspapers have a lot of ads which are local and help
the companies to communicate with the local people. Only a few ads are national.
E.g. in the Mumbai edition of TOINS there are a lot of local ads like MARS
RESTAURANT, IMS CLASSES, etc.
Inexpensive medium when used selectively.
Wider reach in the future: due to the increasing literacy levels in INDIA, people
have started reading newspapers. This is a good sign and the marketers would find it
easy to reach wider audience. For instance TOINS has become the largest circulating
English newspaper in the world. This would lead to a larger audience.
System of tabloid inserts are gaining popularity. A multi page tabloid is inserted
in the newspapers and then is distributed by the news agencies along with the
dailies. Although the newspapers charge a fee, the fee is very nominal.
Reinforcement medium: the ads that appear in television hardly lasts for about 45
seconds. The brand features can be reinforced on the minds of the people through
print ads. This is because when the people read newspapers they tend to look at the

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advertise very keenly. Thus they start building opinions about the brand. For
instance, the LG microwave ads were first shown on the television which was then
followed in the media.

Disadvantages Of Newspaper Advertising

Short life span: it only when the reader is reading the newspaper does he have a
look at the advertisement carefully. But after the newspaper is read then the person
tends to remember very little about the ad.
Quality of paper used: if the quality of the paper used is of bad quality then the
print ad appears in bad shape. This would downgrade the quality of the ad. Using
better quality paper can solve this. But the cost might increase. Some of the local
language dailies use very bad quality of paper.
Strategically awkward positions: sometimes the ad is not positioned in an area
which is highly visible. Such ads go unnoticed. If you try to put it is a strategic
position then your costs may increase.
ROP BASIS : sometimes the advertisement is placed on run-of-paper basis, which
means that the newspaper has the right to place the ad according to its own
discretion.
Informal reading: newspapers are generally read casually. They are read in a hurry.
People might skip over an advertisement.

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Clutter problem: sometimes the newspaper is so full of ads that the notice ability is
very low. In such a case the ad losses its value.
Magazines
Most magazines are weekly or fortnightly or monthly. They are in many ways
different from newspapers. The major difference being the class of people catered to.
While newspapers cater to the mass, magazines have a niche audience. For example
TOINS is circulated to 10 lakh people daily , while a magazine like BUSINESS
WORLD has an audience that has interest in knowing about the current business
happenings. A newspaper is read daily or on the day it appears while the magazine is
read over a long period of time.

Classes of magazines:
One classification is on the basis of size. Magazine may be of pocket size, standard
size, etc.
Another basis of classification is the type of readership. i.e. biz magazines, sports
magazines, etc.
Then comes the classification on the basis of frequency of publication. They are
weekly, fortnightly, monthly, etc.
Magazines could be information providers like INDIA TODAY, CSR, etc. or it could
be leisure type like SPORTSTAR, FILMFARE, etc.
Advantages of magazine advertising:
Attention of the readers: as the magazine is read over a period of week, fortnight,
etc. they tend to attract the attention of the readers. They are read not at one sitting
but at various time intervals. Therefore the reader tends to look at the ad frequently.

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Quality of paper: the quality of paper that is used in magazines is very good and the
ad looks very attracting. The colour and art is clearly reproduced.
Good supplement to TV: magazines reach special target groups which is not
possible only through TV ads. It provides more information to the interested
audience.
High growth rate of special interest magazines have led to a spurt in the ads
appearing in the magazines.
Disadvantages of magazine advertising
Time limitation: for the ad to appear in the magazine the ad has to be planned in
advance which is very time consuming. Also high costs are involved for creating a
creative print ad.
Not suitable for small scale sector: the businessmen who dont have large
businesses and those who concentrate on local markets find the magazine as an
unprofitable medium to advertise. It is only suitable for those businesses that have a
nationwide network and reach.
ELECTRONIC MEDIA
Television:
Television was introduced in India on September 15,1959. Previously only Delhi had
TV transmission center but later the centers spread across India. Now a days more

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and more companies prefer to advertise on television because it creates a visual

appeal and also television enables demonstrative effect. It is because of television
that the MNCs have been successful. After LPG the reach of television has increased
tremendously. It has changed the way the rural people perceive things. The rural
people have also started using the new tech products and this has really led to the
growth in the GDP.
Characteristics of commercial TV:
a) TV is a home and a family medium.
b) Viewing TV is effortless.
c) National channels like DD enable to reach national audiences while
international channels like STAR enable to reach global audiences.
d) The viewers can closely associate with the product.
Advantages Of Television Advertising:
TV has immense effect: no other medium can compete with TV when it comes to
effective presentation. It attracts the attention of the viewers very easily. It also
arouses interest. Audio as well as visual appeal.
Role model advantage: here the advertisers have celebrities as endorsers. These
celebs are role models of the youth and the youth always ape to be like them. To
associate them with the brand means that the youth will be tempted to buy that
brand. E.g. in case of FIAT PALIO it has become a hit car because of SACHINS
image.

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Reaches vast audience: the LPG era has led to a boom in television sales resulting
into high penetration levels. Even the smallest retailer watches TV and he may be
lured to stock a particular product.
Creation of AIDA: advertising in TV attracts Attention that creates an Interest and
Desire that can lead to Action in the form of final purchase.
Demonstration effect: advertising helps companies to show the demo effect so that
people know the uses of the product. This is useful to companies who are into white
goods business. E.g. the washing machine ads generally demonstrate as to how to
use the machine.
Creative use of environment: sometimes the sponsored program can be
effectively used to produce a commercial. E.g: KSBKBT. In KSBKBT the
company KOPRAN PHARMACEUTICALS advertised the brand SMYLE by
having SMRITI MALHOTRA (TULSI) as brand endorser.

Demerits of TV advertising :
Time consuming to produce an ad: it is very time consuming to produce a TV ad.
The company has to hire a production company. After this is done there is a long
procedure of selecting the models, the location of shoot, etc. Therefore if not rightly
produced the ad looks crude.
TV ads alone do not suffice: in order to make the campaign successful TV ads have
to be supported with other media like print or radio.

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TV ads should have high frequency: this is because by the time an ad for other
product appears the viewer forgets the ad for a particular brand. So it is necessary to
penetrate the minds of the viewer and create brand awareness.
Immobile medium: radio and other print media is portable and can be carried
anywhere. TV is fixed and impossible to carry places. It can penetrate only those
places where there is a TV.
Difficult to gain inquiries: the problem is that the television ads last only for a few
seconds. So it is difficult for the viewer to know about the product in that moment of
time. It is difficult for him to note the inquiry number in a spate of a second. For eg:
very few people remember the ASIAN PAINTS help line number.
Costly affair: it is very costly for producing a TV ad. Professionals have to be hired
and they charge high fees. The COLA giants pay more than a 10 million rupees to its
celebrities.
Statutory controls: the TV ads have to adhere to the I&B rules. Surrogate
advertisements have been banned. The ads of liquor companies have been banned.
Also some ads like the CLOSE-UP ad having MARC ROBINSON created furore.

Radio
Till recently, the importance of radio was not realized in a country like India. In fact
Radio as a medium has far greater importance than TV. It is the real mass medium.

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Radio is very easy to use and does not require technical abilities. It is the least cost
form of communication. Radio was the medium that helped in spreading the
messages of various freedom fighters during independence. 90% of the rural India
has access to Radio.
Advantages of radio advertising:
Largest reach: 90% of India has access to Radio which is unmatched by any other
media. Radio is not only the medium of hearing news but also is a source of
entertainment and advertising for the rural masses.
Low cost medium of communication: radio is the least cost medium and it helps to
reach mass audience with various backgrounds. Also radio ads can be produced
quickly.
Low literacy rates mean that the people hardly read newspapers and radio is the only
medium that they can understand. They cant afford a TV set. Therefore radio is the
most popular.
Disadvantages of radio advertising:
Misunderstanding: sometimes there might be a misconception regarding the radio
ad as it is only heard. In television the chances of such misconception is less as it is
audio as well as visual.
RJ needs training: it is very important that the Radio Jockey is trained enough to
deliver the ad. Sometimes the voice really matters. If the voice is irritating then there
is a chance that the campaign may flop.

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No proper research available: no proper research has been available on the area of
radio listening. So there could be a problem for the marketers in the sense that they
might advertise on wrong channel at a wrong time.
OUTDOOR AND TRANSIT MEDIA
Outdoor advertising is the oldest form of advertising. The modern outdoor media
include outdoor advertising in several form such as posters, billboards, hoarding,
roadside signs, highway advertising; and transit advertising placed on vehicles and
rail, bus and air terminals.

Advantages of outdoor media:

1) The outdoor offers long life.
2) It offers geographic selectivity. The marketer can vary the ad message
according to the particular segment of the market. The ads can be local,
regional, national and even international.
3) The advertiser can incorporate the names and addresses of his local
dealers or agents at the bottom of the poster. These dealer imprint strips are
called snipes.
4) The outdoor ads offer impact. Shoppers are exposed to last minute reminder
by the stores when they drive down the lane where the store is located. Since

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the display is huge it creates an impact on the prospective consumer.

SHOPPERS STOP generally follows this type of advertising.
5) Outdoor ad allows displaying the slogan, product name and logo properly
which are an integral part of the product.

Disadvantages of outdoor media:

1. Outdoor advertising when employed on a national basis proves to be
expensive.
2. Outdoor advertising is not selective in the sense that once the outdoor
ad is put it is seen even by people who are not the target audience.
3. Blind spot is the most dangerous thing marketers fear. The term is used
to refer to a campaign that is sustained for a long time. The audience
gets bored seeing at the same hoardings. As in the case of FROOTI the
DIGEN VERMA campaign bored the people. AMUL is one of the
companies that constantly innovates.
Advantages of transit advertising:
1. Low cost medium.
2. It offers a sure exposure and repetitiveness
3. Reaches a large population
4. One of the recent examples of transit advertising is the PRIYA GOLD biscuit
ads behind the BEST bus tickets.
Disadvantages:
1. Cannot reach the rich urbanites that move about in their own automobiles.
2. Direct marketing, cinema and miscellaneous media

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3. Direct marketing is defined as any activity whereby you reach your prospect
or customer directly as an individual or they respond to you directly.
4. Advertising can initiate a sale but it is only through DM that the sale is finally
made. DM also helps in maintaining customer relationships.
5. One time communication does not built a relationship. We have to get married
to our customers. This is possible largely due to DM. DM is affordable only
when the margins in the business can afford the cost of sustained contact. DM
helps in long term.
6. There is a huge opportunity for DM in India. DM

may exploit new

technologies like E-mail, TV, etc. For DM to be successful the customer

database has to be really good. The pharmaceutical industry is most
acquainted with this type of marketing.
Cinema advertising is when the ads are shown in the movie theatres before the start
of the movie, interval and at the end.
The following are the merits of cinema advertising:
Cinema ensures captive audience: the people coming into cinema halls come with
their own wish and their enthusiasm to see a movie is very high. they are very
engrossed into the screen as soon as they arrive.
Cinema is ideal media for niche marketing: the advertiser an reach the audience of
his choice.
Economical: the cost is very negligible.
What must media planners considered before they begin

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Criteria Considered in the Development of Media Plans

1. The media mix
A combination of media types is known as the media mix. No advertiser can rely
only on one medium to reach his audience. Even a small advertiser having a small
media budget has thousands of media from which to choose. A typical media mix for
consumer products, such as a soft drink, will include television, outdoor, POP and
even the print media. this combination plays a crucial role in reaching the maximum
number of consumers at the minimum cost.
2. Target market coverage
The media mix has to reach the target consumer. It the advertiser wants to reach men
between 25 and 55 who are professional, the Economic Times will be obviously a
more appropriate choice than Femina. But sometimes matching consumer profiles
with media characteristics becomes a lot more difficult. For example : Media
planners will find it difficult to decide which kind of households can be reached by
the Hindi feature film TV slot v/s the 9 Oclock serial slot. A thorough analysis of
the target market will help in making this match and will reduce wastage of media
expenditure.
1. Geographic coverage:
The coverage of every medium is limited by area. Coverage may be limited, as with
a national newspaper to a national basis. Within this lies another limitation, as in a
national paper may also have a strong degree of coverage in some areas and lighter
degree in others. Coverage may also be limited as with a television or radio station
to a specified region. Within this it is further influenced by fluctuating factors like
signal strength, booster transmitters or pattern of relay services. This factor is
important not only to small regional advertisers but also to national advertisers
whose sales patterns and resistance varies from region to region.

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2. Scheduling
A decision must be made about how long an advertisement campaign should be run
on one media. There is a cumulative advantage from continuity, as a greater
audience will be reached in Terms of both frequency and coverage by advertisements
continually placed in one medium. The same medium will have some new audience
3. Reach versus frequency
Frequency refers to the number of times the advertiser reaches the same person,
while reach refers to the total number of people covered. The greater the frequency
with which you reach the same person through media selection, smaller the reach
will be and vice versa (assuming a limitation in the size of the budget). An
advertiser will need to know the quantitative data about media audience in order to
make more accurate frequency and reach decisions.
4. Creative aspects and mood
Creative considerations such as the quality of reproduction, the colour effect, special
effects, have to be considered. The medium must be appropriate for the ad message.
For example: The ads for ice cream would be reproduced better in colour and
therefore black and white newsprint is not appropriate. Media decisions have to be
made in consultation with the creative team that has actually produced the ad. Within
the medium selected, decisions related to unit buying, is also influenced by the
creative team.
5. Flexibility
The ability of the media to adapt to changing and specific needs of advertisers is
flexibility. Certain media allows such flexibility with respect to the advertised
message, the geographical coverage and the ad budget For

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8. Budget considerations
A choice of media will depend to a large extent upon the size of the advertising
budget. Certain media types may be too expensive for the funds available. For
example: the cost of national transmission over Doordarshan may be too high for an
advertiser. The cost of maintaining a neon sign cannot be afforded by small budget
advertisers.

ELEMENTS OF MEDIA
Evaluation of a particular medium for inclusion in a campaign rests upon what it
contributes to the cumulative effect.
Any medium comprises of 4 elements.
1) Character
2) Atmosphere
3) Reach and frequency
4) Cost
In addition to this, we should also realize that the value contributed by the
medium also depends upon the size of the advertisement or length of the
commercial and the position of the advertisement.
By the word character, we mean the objective characteristics of the medium; type
of coverage, seasonal implications etc. By atmosphere we mean the effect on the
mind or emotions of the mood and circumstances in which the advertisement in the
medium is perceived by the audience. We shall now see these two elements in detail.
The Media Planning Steps? Or Media Planning Process

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There are 5 steps in the Media planning process:

1) Market analysis
2) Media objectives
3) Media strategies
4) Media Mix
5) Budget and Media Buying
Step one: Market analysis
Activities involved in developing the Market analysis:
a) Situation analysis
b) Marketing strategy analysis
c) Creative strategy analysis
Step 2: Setting media objectives:
Purpose: To translate marketing objectives and strategies into goals that media can
accomplish.
Setting media objective is the second step in media planning. Media objectives are in
harmony with the advertising and the marketing plans. Thus while launching a new
product or repositioning an existing product, there are specific objectives which will
guide our media decisions. These objectives must be measurable. It facilitates
Co-ordination and evaluation once the campaign is over.
Specifying Media Objectives
What proportion of the population should be reached with advertising
message during specified period (reach).

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How frequently should audience be exposed to message during this period

(frequency)
How much total advertising is needed to accomplish reach and frequency
objectives (weight)
How should the advertising budget be allocated over time (continuity)
How close to the time of purchase should the target audience be exposed to
the advertising message (recency)
What is the most economically justifiable way to accomplish objectives (cost)
Step 3: Media Strategy
Media strategy is the way we seek to realize our media objectives. When formulated
correctly, it enables an advertiser to rise above the clutter of ads, and stand out in the
competition.
Media strategy expects media planners to be creative in using the media. The use of
the media should complement and supplement each other. The ad should be
consistent with the editorial environment of the media. The placement should be
strategic. The medias creative potential is fully used.
The ad should provoke readers to look at it more than once. It should be engaging
enough, say incorporation of a crossword puzzle in the copy of the ad. We can use
non-traditional media like a Tamasha show or a magic-show. Media can be used to
build credibility.
Factors Influencing Media Strategy
a) Target Market Profile
b) Nature of the Message

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c) Geographic Market Priorities

d) Timing of Advertising
e) Reach/Frequency/Continuity
Step four: Selecting Media Mix
Media mix means the advertising strategy encompasses the use of more than one
type of advertising media to get its message across the target audience.
A combination of media types is known as the media mix. No advertiser can rely
only on one medium to reach his audience.
Step five: Budget Allocation and Media Buying
Budget Allocations: classifies spending my medium, region, and time of year
Media Buying
Occurs once plan is approved
Buyers work with media representatives to negotiate final prices for the various
activities
Media Scheduling

Media scheduling decisions are the decisions about the timing, continuity and
size of the ads. We have to see when to advertise, for how long, and for
what time period. We have to see the size and placement of our ad.

Timing: Advertising message can be timed in four ways depending upon our
objectives

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I. To time the message in such a way that the customers are most interested
in buying that type of a product, e.g., fridges in summer, soft drinks in
summer, woolens in winter, gift items during Deepavali.
II. To time the message in such a way that it stimulates demand in the lean
period, e.g., ice creams in winter, holiday resorts in monsoons.
III. To time in such a way that it by-pass competitive campaigns, e.g., Pepsi
commercials are to be aired when there are no Coke commercials.
IV. To time in such a way that the message is carried by the media when the
audience is receptive to it, e.g., household products in the afternoon slot of
TV when housewives watch TV.
The importance of time element must be understood in the purchase behavior
of the customer by doing suitable research.
Most Organizations Use One of These Three Scheduling Strategies
Three Scheduling Methods
1. Continuity: When an ad is run in the media for a long period without any gap,
we are using continuity scheduling. It is used for those products, which are
in demand round the years. The ads are in the form of reminder.

2. Alternative to continuity is fighting where advertising runs for some period and
then there is a gap, and again it runs for some period. The interval between
two advertising runs comes after a flight. The message can be schedule to
correspond to peak purchasing periods or at a time when the audience is
most receptive.

When we have a media mix alternative flights are adjusted in such a way in
different media that overall continuity is achieved.

3. Pulsing is another option.

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It represents a consistent low-level advertising activity, and addition of pulse to

make a high-level of advertising during certain periods. A pulse is a period
of intense advertising activity. The pulses can occur at the start while
launching a new product. There can a promotional pulse of one shot, e.g.,
financial advertising of a companys issue. Bursting is a technique for
scheduling TV ads. Here the commercial is repeated on the same channel
time and again to reinforce the message for a short period.

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DECIDING ON THE MEDIA

After choosing the message, the advertisers next task is to choose media to carry it.
Media selection involves finding the most effective media to deliver the desired
number of exposures to the target audience.
Rate: the number of different persons or households exposed to a particular media
schedule at least once during a specified time period.
Frequency: the number of times within the specified time period that an average
person or household is exposed to the message.
Impact: the qualitative value, of an exposure through a given medium.

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The media planner has to figure out, within the given budget, the most effective
combination of reach, frequency, and impact. Reach is most important when
launching new products, extensions of well known brands, or infrequently purchased
brands, or going after an undefined target market. Frequency is most important
where there are strong competitors, a complex story to tell, higher consumer
resistance, or a frequent purchase cycle.
Choosing among major media types
The media planner has to know the capacity of the various media types to deliver
reach, frequency, and impact. He should also evaluate the major advertising media
along with their cost, advantages, and limitations.
The media planners make choice among media categories by considering the
variables such as which the target audience is and what are their media habits, the
product to be advertised, the message to be conveyed, and the cost involved in all
this.
Selecting specific vehicles:
Deciding on media timing: in choosing the media, the advertiser faces macro
scheduling problem and a micro scheduling problem. The macro scheduling problem
involves scheduling the advertising in relation to seasons and their business cycle.
The micro scheduling problem calls for allocating advertising expenditures within a
short period to obtain maximum impact. The most effective pattern depends upon
the communication objectives, in relation to the nature of the product, target
customers, distribution channels, and other marketing factors.
The timing pattern should consider three factors:

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Buyer turnover: it expresses the rate at which new buyers enter the market, the
higher this rate the more continuous the advertising should be
Purchase frequency: it is the number of times during the period the average buyer
buys the product; the higher the purchase frequency, the more continuous the
advertising should be
Forgetting rate: it is the rate at which the buyer forgets the brand; the higher this
rate, the more continuous the advertising should be.
Deciding on the geographical location: a company has to decide how to allocate its
advertising budget over space as well as over time.
National buys: when it places ads on national TV networks or in nationality
circulated magazines.
Spot buys: when it buys TV time in just a few markets or in regional editions of
magazines.
Local buys: when it advertises in the local newspapers, radio, or outdoor sites.

Measuring The Effectiveness of Advertising

Testing Process for advertising effectiveness
Tests for measuring effectiveness of advertising
Essentials for effective testing of advertisements.

EVALUATING ADVERTISING EFFECTIVENESS

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Good planning and control of advertising depends on measures of advertising

effectiveness. Most of the money is spent by agencies on pre-testing ads, and much
less is spent on evaluating their effectiveness. Most advertisers try to measure the
communication effect of an ad that is, its potential effect on awareness, knowledge,
or preference. They would also like to measure the ads sales effect.
There are two ways of measuring advertising effectives. They are:
A. Pre-testing
B. Post-testing

A. Pre-testing: This is the test of the copy before it is given to the media.
The purpose of pre-testing is as follows:
1. To spot errors in the copy
2. To make communication more effective
3. To design the ad better
4. To reduce wastage in advertising
5. To ensure that the money is spent prudently.

How you Pre-test the ad copy.

Following are the different methods for firstly, pre-testing of print a Following
are the different methods for firstly, pre-testing of print ads:
1. Checklist method:
Within this we have certain issues like readability or audibility. It is a simple and a
speedy process. You could ask questions like:
Is the copy based on the briefing?
Is it interesting?

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Is it interactive?
Is the story line complete and fluid in its completion?
Are there pauses and breaks while reading?
Does it end interestingly?
Was it able to hold the attention?
There are quite a number of other questions that you could possibly have. The
method is however suitable only for the body text and not for any other element.
2. Consumer jury test:
Here the ranking of the advertisements are done by a group of people called the
jurors.
a) The order of merit:
The point system is given to an average of 4-5 copies that they are given to rank.
The order of merit is the one, which determine which is the best advertisement by
the jurors and which has been rated as the worst. The points given by the jurors are
then added together to determine which is the ad, which has got the maximum
points. This is the one that is the chosen one.
b) Paired comparison.
In a Paired Comparison at a time two ad copies are compared. It is one-to-one
comparison amongst test ads. More than six ad copies can also be compared by this
method.
Every single ad is compared with all others, but only two (a pair) is considered at
one period of time. Sources are recorded on cards. They are summed up. The winner
gets the highest score.

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The other ads are rated according to their scores after summation. It is easier
technique than order of merits. Till ten copies, there is good accuracy; which later
decreases. The number of comparisons one is required to make with the help of the
following formula:
3. Portfolio test:
Here some dummy ads are mixed with regular ads. They are then put in a portfolio.
The consumer samples each advertisements and judges, which is the best one. In
case the selected ad is the dummy one, then the regular ad is changed or modified in
the manner of the dummy ad.

4. Mock magazine test:

This is very similar to the portfolio test, however the ads are put in an actual
magazine and is exposed to the consumer. The recall test is then taken to adjudge
which is the best ad.
5. Perceptual Meaning Studies (PMS):
It is a method that is uses time exposure to test the ads. Tachistoscope is an
instrument that may be used in this test. The respondent sees the ad for a predetermined time, and then is subjected to a recall test-product, brand illustration and
the main copy.
Where the pre-testing for the broadcasting ads are concerned, we have the
following types:
1. Trailer tests:

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A real life like shopping environment is created to measure consumer behavior. One
group is given coupons to purchase selective brands, and the other group is not given
the coupons. The redemption rate of the coupons may give an idea about the
effectiveness of the test ads.
2. Theatre test:
A set of captive audience is sent a questionnaire. Later they are sent free ads to view
the test ads in a theatre and then again are administered a questionnaire. It assesses
product, brand and the ad theme. The greatest advantage of theater tests is the
control over the context in which the ad appears.
Because of this, it is possible to attribute the recall to the test ad rather than
uncontrolled variation that plague the traditional tests. The downside with theater
tests is that it is a forced exposure method, which tends to make the processing of
the ad more artificial.
3. Live telecast tests:
Here the inaccuracies of artificial testing environment are not encountered. Ads are
put on air either by narrow casting or live telecasting. These ads are test ads, and not
the regular ads. Later, viewers are interviewed to know their reactions.
4. In-home projection tests: A movie projector screens the ads in the setting of the
consumers home. He is then questioned before and after the exposure. We can then
assess the strong and the weak points of the ads.
5. Clutter test

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Commercials are shown with non competing control ads to determine attitude shifts
and detect weaknesses. In this Method of pretesting commercials are grouped with
noncompetitive control commercials and shown to prospective customers to measure
their effectiveness in gaining attention, increasing brand awareness and
comprehension, and causing attitude shifts

B. Post-testing:
This is the testing, which is done after the ad copy has come out in the media and
the audience has seen the advertisement.
Post-testing typically involves interviewing readers to determine how many
remember seeing a particular ad, if they read it, and what they remember about it.
Post-testing measures the following factors:
Has the advertisement campaign result in sales?
Has it created memorability for the brand name?
Has it created positive image and a favorable attitude towards the company
and the brand?
How much advertising is necessary on a continued basis, to sustain the same
level of consumers interest in the brand?
Are the consumers convinced that the brand is superior of competitors

Post testing methods:

Few of the methods of this type of tests are:
1. Recall tests: In this type of tests the individuals are asked to answer about the
ads entirely on the basis of their memory. It could be aided recall, where they

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are given few cues to help them recall and unaided recall, which of course is
based on memory alone.
2. Recognition test: These are also known as readership tests, whereby it is seen
whether they buy the product upon seeing the ads. Importantly, the individual
has to qualify as the reader of that particular issue.
3. Triple association test: Here the respondent is given certain cues wherein he
can relate to a certain brand. For example Thanda Matlab, if the answer is
coca cola, then it is correct. And if the respondent is able to connect the
product with the company then it is a triple association.
4. Sales effect tests: They measure the various stages of buyer awareness,
preference, buying intention and actual purchase in relation to actual
advertising effort.
5. Sales results tests: The additional sales generated by the ads are recorded. It
is difficult however to correlate an increase in sales to advertising alone.
6. Enquires test: These are couponed ads of consumer durables. They invite
consumers to send back the coupon to seek a demo or more details. The
number of enquires determine the effectiveness of the ads.
7. Attitude test: Attitudes show our predisposition towards objects, ideas,
people and places. They indicate overall feelings. The change in attitude as a
result of advertising is assessed. The assumption is that a favorable attitude
towards a product will lead to a purchase. Most ads are designed either to
reinforce or change the existing attitudes.

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Chapter: 4
Brand and Branding Strategy Development
Definition of Brand and Brand Positioning
Positioning Strategies
Guidelines for effective positioning
Brand Image Definition, Strategy for Brand Image Development
What is a brand?
A brand is a distinguishing name and/or a symbol (logo, packaging, trademark) that
identifies the goods and/or services, and that serves to differentiate those goods
and/or services from those of their competitors. Therefore, a brand signals to a
customer the source of the product and/or service.
Kellers Definition:
A product, but one that adds other dimensions that differentiate it in
some way from other products designed to satisfy the same need.
Rational and tangible
Symbolic, emotional and intangible
The psychological response to a brand can be as important as the
physiological response.
A brand is the sum of the expectations that a customer or stakeholder has
when purchasing a product or dealing with an organization.
Source: Robert P. Woyzbun. Branding for the Rest of Us.
In essence, a brand is an expectation or a promise waiting to be fulfilled.
Brands are shorthand for trust.
What is branding?

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Branding is identifying or creating, and then exploiting, sustainable

competitive advantage.
Source: Ron Gossen and Alicia Gresham, PhD. Branding as the Foundation
of Sustainable Competitive Advantage.
Successful branding is based on the concept of singularity.
Singularity creates the idea that there is no one or nothing else in the
marketplace quite like your product, or service. Branding is a marketingbased business strategy and philosophy that has the ultimate objective of
building goodwill for and supporting the raison dtre of a product, service
or enterprise.
Branding differentiates your brand from the competition.
What is brand equity?
Brand equity is a set of assets linked to a brands name and symbol that adds
to the value provided by the product and/or service by a company to its
customers.
What is brand personality?
Based on the premise that brands can have personalities in much the same
way as humans, Brand Personality describes brands in terms of human
characteristics. Brand personality is seen as a valuable factor in increasing
brand engagement and brand attachment, in much the same way as people
relate and bind to other people. Much of the work in the area of brand
personality is based on translated theories of human personality and using
similar measures of personality attributes and factors.

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The brand personality is simply the human characteristics associated with a

given brand.
--Marlboros Marlboro Man has a rugged, maverick personality.
--Jaguar has an upper-crust, elegant personality.
--The Red Cross has a caring, responsive personality.
Brand Image
Images evoked by exposure to a named brand
Like brand personality, brand image is not something you have or you don't! A
brand is unlikely to have one brand image, but several, though one or two may
predominate. The key in brand image research is to identify or develop the
most powerful images and reinforce them through subsequent brand
communications.
The term "brand image" gained popularity as evidence began to grow that the
feelings and images associated with a brand were powerful purchase
influencers, though brand recognition, recall and brand identity. It is based on
the proposition that consumers buy not only a product (commodity), but also
the image associations of the product, such as power, wealth, sophistication,
and most importantly identification and association with other users of the
brand.
Brand images are usually evoked by asking consumers the first words/images
that come to their mind when a certain brand is mentioned (sometimes called
"top of mind"). When responses are highly variable, non-forthcoming, or refer
to non-image attributes such as cost, it is an indicator of a weak brand image.

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The image basically expresses a way of a consumer thinks about the brand and the
feelings the brand arouses when the consumer thinks about it. On the basis of these
characteristics, which the consumer associates with the brand, the company can
build a competitive advantage for its brand.
What sort of image should our brand have?
Before answering this question it is important to take into account several factors
and market circumstances: company goals, consumer wishes and expectations, trade
groups and several other groups. A company builds its brand image through trade
communication with its consumers. That is how a company informs the consumer of
what the brand represents what its values are, what the company is offering or
guaranteeing the consumer, what its advantages are, its qualities etc. The consumers
interpret all obtained information and form a subjective perception of the brand or its
image

Why research the brand image?

Understanding a brand image is of key importance to long-term management of a
brand. It is also important how the consumers formed the brand and what kind of
relationship was formed with the brand - what the brand means to them and how
they have accepted it. Understanding the relationship between consumers and brands
can help a company control its successful brand positioning and the efficiency of
advertising.
How do we research the image?

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The brand image is formed in the long-term and represents a non-conscious and
untouchable area, which needs to be researched using projective researching
methods that help the consumer to overcome certain obstacles and limitations as
well helping him to be inspired in the world of brand names. The consumer does
therefore not only focus on the brand, but mainly on his experience with it and on its
usual users. He focuses on the opportunities, which are most suitable for the specific
brand and what sort of image the brand presents etc.
We are able to research and describe the brand from various perspectives. We obtain
many different associations, ideas, benefits and people whom the consumer in some
way connects to brands, which need to be suitably and correctly interpreted. It is
important to define the key characteristics and values, which are connected to a
specific brand by the consumer. Relevant findings show results of long-term
management of a brand and represent key dimensions on which the competitive
advantage of a brand is based

Brand Attributes
When used in a market research context, "Attributes" are simply properties of
a given product, brand, service, advertisement or any object of interest.
Much brand and market research is targeted at understanding the most
significant and powerful attributes of a product/service/brand or
product/service/brand class.
A product, service, or brand can have many attributes including cost, value for
money, prestige, taste, usability, liking ("affect") and a wide range of image or
personality attributes. To use one very common example, the car or
"automobile" brand class can sometimes include attributes such as prestige,

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cost, reliability, exclusivity, availability, type (e.g. sporty, family, luxury) and
country of origin.
Usually a client wishes to measure their product or brand as perceived by
target markets along several attributes they see important to the brand. If they
are in a competitive market, they also sometimes need to know how they rate
against competing offerings.
Brand fatigue:
Brand fatigue hits most companies when they become complacent, arrogant and
start milking their brands for all they are worth. Do not do it beyond a certain limit.
All greatest and best recognized brands tend to be long-lived. The best brands would
fall off their perches if they werent nurtured. The Brands-anti-wrinkle formula is
the understanding of the changing consumer mind and reformulating brand strategies
from time to time while retaining the age-old ethical values.
The biggest challenge to a brand is to help it remain as relevant to its customers as it
was yesterday.

Brand positioning:
Positioning places a brand in the consumer mindset, which enables the consumer,
recognize brands distinctly as separate offerings. The key idea in positioning
strategy is that the consumer must have a clear idea of what your brand stands for in
the product category, and that a brand cannot be sharply and distinctly positioned if
it tries to be everything to everyone.

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Such positioning is achieved mostly through a brand's marketing communications,

although its distribution, pricing, packaging, and actual product features also can
play major roles. It is often said that positioning is not what you do to the product,
but what you do to the consumer's mind, through various communications.

When a new brand appears in the market, the consumer gets acquainted with it
and starts collecting information about it. On the basis of this information the
consumer creates an opinion of the brand and establishes a brand image. For a
stable market position of a brand, consumer awareness of the new brand on
the market is not sufficient. The consumer must prefer a brand and have a
positive assessment of it as well as considering it in its purchasing decisions.
The target position means deciding on the target image of a brand and how the
consumers should compare it to other competitive brands.
Seven approaches to positioning strategy:
(1) Using product characteristics or customer benefits (Daag jayga per raang nahin
jayga Surf excel)
(2) The price-quality approach. {Isse sasta aur accha kahin nahin)
(3) The use or applications approach ( Glycodin, Vicks)
(4) The product-user approach ( Santro, smart, intelligent, handsome)
(5) The product-class approach (Manikchand Unche log unche pasand)
(6) The cultural symbol approach ( Videocon, the indian multinational, desh ki
dadkan, Hero honda, Tata Namak Desh ka namak)
(7) The competitor approach.( Rin _ Tide)

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Guidelines for effective positioning:

Ries and Trout have distilled the essence of positioning into the following four
GUIDELINES / principles:
1. A company must establish a positioning in the minds of its targeted customers.
2. The position should be singular, providing one simple and consistent message.
3. The position must set a company apart form its competitors
4. A company cannot be all things to all people it must focus its efforts.
The principles, which are discussed above, are applicable to any type of organization
that competes for customers like National postal services compete with private
courier companies; public and nonprofit hospitals compete with each other and with
private health care providers etc. for all the organizations, understanding the concept
of positioning is the key to developing an effective competitive posture. I hope this
is clear to you that the concept is certainly not limited to services, but its origins was
in packaged goods marketing-but it offers valuable insights by forcing service
managers to analyse their firms existing offerings.
Just suppose any XYZ Soap Company says that their soap has fragrance, is
antiseptic, has moisturizer will make you fair and is not expensive, you as a
customer come across with such a company, them what will be your reaction. How
will you position such soap in your mind, with so many other brands already there in
the market? Dont you think, it is a difficult task for you to position such a company
in your mind as they are trying to position themselves on to different attributes,
which are mostly found in different soaps? The problem is with the company as they
are trying to increase the number of claims for their brand; which will lead to risk of
disbelief and a loss of clear positioning.

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If you are able to solve positioning problems enables the company to solve the
marketing mix problem
Role of Public relation in developing corporate Image
Corporate image:
The image which is conjured up by mention of a company's name. This can be
positive or negative, weak or strong, and it is argued by some that it is the sole
purpose of any public relations campaign.
A corporate image refers to how a corporation is perceived. It is a generally accepted
image of what a company "stands for". The creation of a corporate image is an
exercise in perception management. It is created primarily by marketing experts who
use public relations and other forms of promotion to suggest a mental picture to the
public. Typically, a corporate image is designed to be appealing to the public, so that

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the company can spark an interest among consumers, create share of mind, generate
brand equity, and thus facilitate product sales.
A corporation's image is not solely created by the company: Other contributors to a
company's image could include news media, journalists, labour unions,
environmental organizations, and other NGOs.
Corporations are not the only form of organization that create these types of images.
Governments,

charitable

organizations,

criminal

organizations,

religious

organizations, political organizations, and educational organizations all tend to have

a unique image, an image that is partially deliberate and partially accidental,
partially self-created and partially exogenous.
Corporate image and product positioning
A corporate image should be consistent with the positioning of the company's
product, product line, or brand. Any incongruency between the overall corporate
image and the positions of individual product offerings will be confusing to potential
customers and will tend to reduce sales revenue. For example, an oil company that
has the image of being environmentally unfriendly will not be successful selling
products that they try to position as "green". A company in such a situation should
either: withdraw from the "green market", invest in promotional activities that will
recast their corporate image in a greener hue, and/or follow a more environmentally
friendly path. A good overall corporate image can be seen as the sum of all the
images associated with the firm's individual product positions.
The corporate name and logo must also be consistent with the overall corporate
image. If you wish to craft a scientific/technical/innovative corporate image you

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would not call your company Mystic Sunchild, nor would you use a logo like the
NBC peacock.
Likewise with advertising themes and distribution partners; they must also be
consistent with your overall corporate image. If, for example, you wish to create a
luxury/high-end corporate image, you should not distribute your products through
Walmart nor use slapstick advertising themes.
A successful corporate image must also be believable. That is, the image must be
relatively close to your actual behaviours to be credible.

Basic principles of corporate PR

Corporate public relations seek to project the image and identity of the organization.
Based on the facts and figures as well as on the subjective impressions and
feelings ,image itself is a product of public mind .in order to project the identity of
the organization , the PR needs to know both facts that people know as well as the
impressions that they carry about the organization . Therefore corporate PR manages
the reputation of the organization.
Corporate image and identity needs constant bolstering as the process is dynamic. In
its efforts to gain commitment the PR makes commitment the PR makes a
comprehensive communication plan and gets into the act of managing the strategic
asset
Today business and industry have new bottom-line public acceptance, therefore PR
has to respond with a communication policy whose bottom line is credibility. In this

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connection the corporate PR practices must meet the generally accepted standards of
public approval.
The following are a few essential guidelines of corporate public relations.
1. Corporate public relations are a share responsibility and therefore must be
truthful and believable.
2. As a caring entity and a good citizen ,PR believes that corporate public
relations programmes is an investment in the image building of the
organization.
3. PR is never open to and responsive to public concern
4. PR recognizes that ones own views is subjective and never influence the
organization to take corporate convictions for reality.
5. In terms of corporate communication PR thinks of sharing with the
community the values which it uploads and for which it wants to be known.
6. corporate communication is a faith and a commitment which under no
circumstances can be compromised
7. corporate PR always believes and therefore never subscribes to any crash
communication plan
8. Finally PR maintains excellent communication relationships both at the
corporate and at the unit levels with the internal as well as the external
publics.
Image and Identity:
As organization transmits messages to the publics on a sustained basis. It is the
reception of the message which goes to create the intended image. Corporate
communication is the process that translates an identity into an image.

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In brief corporate image refers to the image that a company has acquired with the
public whereas corporate identity refers to the image a company strives to achieve,
in order to build a reputation with its public.
In this context every company needs a mission. This mission should be the
framework for business and all its activities. The mission is the glue that holds the
company together. Here, the PR and its communication strategies come into focus. If
the objectives and mission of the organization have to be accomplished, the
corporate body must communicate short-term goals, long range objectives and even
the total mission of the organization.
Inadequate communications results in an ambiguous corporate image .it may lead to
a breakdown in co-ordination and elements in an organization.
PR role in image and identity
PR attempts to create the desired image by its involvements in all the factors of
corporate identification programmes .
The following is the check list for image communication factors for the
corporate PR .
1. Name of the organizations divisions and subsidiaries.
2. The logo factor symbols in use.
3. Advertising and promotion.
4. company publications including annual reports and house journals
5. company assets well maintained office production units
6. company packaging labels and tags
7. company signs at public places offices and production units

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8. Company stationery forms letterheads, cards etc.

Positioning and Brand Image

In the process of marketing a product, two fundamental aspects must be considered.
These are positioning and brand image.
Advertisers must consider how they will position the product. Positioning is "what
the product does, and who it is for". The same product could be positioned several
ways.

For example, consider the

positioning of a new cereal called "Start".

Depending on the merits of the product, I could position this cereal to senior citizens
because it contains high energy compounds that could allow seniors to partake in
more activities.

I could also position this same cereal as a children's breakfast

cereal because the name is synonymous with the high energy level of children. The
positioning of any product will determine your target audience.
A second consideration is the brand image of the product.

Image means

"personality" and every product has a personality. Many things go into developing a
brand image including the name of the product, the packaging, the price and the
style of its advertising .
Consider cigarettes. Every smoker prefers a particular brand of cigarette. Has the
consumer tried every brand of cigarette before choosing a particular brand.

Non

likely! Each brand of cigarettes has a different image which appeals to different
people. Marlboro's image appeals particularly to men who identify with adventure

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and thrill seeking. Marlboro sponsors many car races which promote the image of
the brand through association. Virginia Slims is positioned as a product used by
independent, successful young women and Camel cigarettes, with the Joe Camel
cartoon character, presents a brand image of perhaps slight rebellion or naughtiness,
yet "coolness" and is a favorite brand among young smokers.
Once again, it should be evident that, advertising, like all forms of media is a
constructed message containing an ideology. How you interpret this information and
how well you understand the "persuasion techniques" of such ads may make the
difference between smoking or not smoking, choosing one brand over another, or
simply buying or not buying.

Sales Promotion
Definition, Sales Promotion Tools for Consumers
and Dealers, Importance of Sales Promotion
Sales promotion has been defined as:
1. a direct inducement that offers distribution or the ultimate consumers with
the primary objective of creating an immediate sale.
2. Marketing communication activities, other than advertising, personal selling,
and public relations, in which a short-term incentive motivates a purchase.
3. Sales Promotion is a Marketing Discipline that Utilizes a Variety of
Incentive Techniques to Structure Sales-Related Programs Targeted to
Consumers, Trade, and/or Sales Levels that Generate a Specific, Measurable
Action or Response for a Product or Service.

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Important aspects of Sales promotion

1. Extra incentives is the key element in sales promotion
2. Sales promotion is essentially an acceleration tool designed to speed up the setting
process & maximize sales volume.
3. It can be targeted to different parties in the marketing channel.

Objectives of Sales Promotion

1. Obtaining Trial & repurchase
One of the most important uses of SP is to encourage consumers to try a new
product or service tools have become an important part of new brand introduction
strategy. The labels of initial price can be increased through sampling, coupons &
refund orders. The success of a new brand depends not only on getting initial trial
but also on inducing a reasonable percentage of people who try the brand to
repurchase it & establish on-going purchase pattern.
2. Increasing consumption of an established brand:
SP can generate some new interest in an established brand to help increase sales or
defend market share against competitors. One way to increase product consumption

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Is by identifying new users for the brand. Another strategy for increasing sales of an
established brand is to use promotion that attracts new users of the product category
or users of a competitive brand. Eg. VIM Bar challenge.
3. Defending current customers:
A company can use SP techniques in several ways to retain its customer base. One
way to load them with the product, taking them out of the market for some time.
Special price promotions, coupons or bonus packs can encourage consumers to stock
up on the brand.
4. Targeting specific market segment:
Many marketers are finding that SP tools such as contests& sweepstakes, events,
coupons & sampling are very effective ways to reach specific geographic,
demographic, psychographic& ethnic markets. SP programs can also be targeted
through specific users-status groups such as non-users or light users v/s heavy users.
5. Enhancing Integrating Marketing communication & building Brand Equity:
Final objective is to enhance or support the integrated marketing communication
efforts for a brand or a company. Building brand equity & image has traditionally
done by advertising.
However, SP techniques such as contest & sweep-stakes or premium offers are often
used to draw attention to an advertising and increased involvement with the message
& product or service & help build relationship with consumers. Eg. Dunkin donuts

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How Sales Promotion Works

Marketers use two basic sales promotion strategies:
Push strategies
Pull strategies
Most sales promotion programs include both push and pull strategies, using both
consumer and trade promotions.
Push Strategy calls for using the
sales force and trade promotion.
Pull Strategy calls for spending on advertising and sales promotion to
build consumer demand.
Push strategy is appropriate with low brand awareness in a category and
brand choice is made in store. Can be an impulse purchase and product
benefits are understood.
Pull strategy works best with high brand awareness and loyalty, or high
involvement in category and customers look for product differences.

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Reasons for the Growth of Sales Promotion

Reasons for the increase in sales promotion

1. The growing power of retailers:
The power shift in market place from manufacturing to retailers.
a. Advent of optical checkout scanners
b. Consolidation of grocery store industry
c. Evolution of private labels.
2. Declining Brand Loyalty:
3. Increased promotional sensitivity: Marketers are making greater use of sales
promotion into marketing programs because consumers respond favorably to the
incentive. (a) An obvious reason for consumers increased sensitivity to Sales
promotion offers is that they SAVE MONEY .(b) Another reason is that many
purchase decisions are made at the POP by consumers who are increasingly
becoming price sensitive and facing too many choices.

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4. Brand Proliferation: A major aspect of many firms marketing strategies over the
past decade has been the development of new products.
5. Fragmentation of the Consumer markets: As the consumer becomes more
fragmented & Traditional mass media- based advertising becoming less effective,
marketers are turning to more segmented & highly targeted approaches.
Many companies are tailoring their promotional efforts to specific regional markets:
Eg.Bajaj Alliance offer to WIAA.
Whirlpool concentrating on women
6. Short-term Focus: Brand managers use S P routinely, not only to introduce new
products or defend against competition but also to meet quarterly or yearly sales &
market share goals.
7. Increased Accountability: Results from SP programs are generally easier to
measure than those from advertising. Many companies are demanding measurable,
accountable ways to relate promotional expenditures to sales & profitability.
8. Gaining a competitive advantage: Many companies are turning to sales
promotion to gain or maintain a competitive advantage. A major development in
recent years is the use of account-specific marketing (also referred to as
comarketing) whereby a marketer collaborates with customizes promotions for
individual retailers.
9. Clutter: The increasing problem of advertising clutter has lead to the need to use
consumer promotions as a way of attracting attention and interest to advertising.
Sales promotion offers such as coupons, contests and sweepstakes are often used to
attract attention to ads and increase consumers involvement with a marketers IMC
program.

Promotion Strategies
Promotion Can:
1. Offer an immediate inducement,
2. Cause customers to try a product,
3. Persuade customers to buy again,
4. Introduce a new product or build a brand over time.
5. Promotion Cant:
6. Create an image for a brand,

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7. Compensate for a lack of advertising,

8. Do much to compensate for a negative image,
9. Reverse a sales decline.

Important aspects of Sales promotion

1. Extra incentives is the key element in sales promotion
2. Sales promotion is essentially an acceleration tool designed to speed up the
setting process & maximize sales volume.
3. It can be targeted to different parties in the marketing channel.
Concerns about the Increased Role of Sales Promotion
It is very important to note that the increased use of sales promotion is coming at the
expense of media advertising. This has led to concern that the increased use of sales
promotion is having a negative effect on brand equity.
Brand equity refers to a type of intangible asset of added value or goodwill those
results from the favorable image or differentiation that a brand has achieved.
Another term used synonymously with brand equity is consumer franchise. There
are many examples of situations where a companys have hurt the brand equity of
their products by placing more emphasis on consumer and trade promotions than
advertising. The book discusses how Heinz allocated most of its marketing budget to
trade promotion during the early to mid 90s, which hurt the brand equity of many of
its brands.
Sales Promotion
Two types of Sales Promotion:
1. Consumer oriented sales promotion:
It includes sampling, couponing, premium, contest & sweepstakes, refund, rebate,
bonus packs, price-offs, frequency programs & event marketing.
2. Trade-oriented sales promotion:
It include dealer contests& incentives, trade allowances, pop displays, sales training
programs design to motivate distributors & retailers to carry a product & make an
extra effort to push it to their customer.

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Generally, there are 3 modes of Sales Promotion

Consumer oriented
Trade oriented

Sales force oriented

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Consumer oriented sales promotion

Consumer-Oriented Sales Promotion is directed at customers. The incentives
directly goes to the buyers.
Objectives of Consumer-Oriented Sales Promotion
1. Obtaining trial and repurchase
2. Increasing consumption of an established brand
3. Defending current customers
4. Targeting a specific market
5. Enhancing advertising and marketing efforts

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Trade oriented sales Promotions

Trade oriented sales promotion is directed at wholesalers and retailers and represents
50% of the total promotional spending.
Four goals of a trade promotion are:
Stimulate in-store merchandising or other trade support,
Manipulate levels of inventory held by wholesalers and retailers,
Expand product distribution to new areas of the country or new classes
of trade,
Create a high level of excitement about the product among those
responsible for its sale.

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Goals of a trade promotion are:

1. Stimulate in-store merchandising or other trade support,
2. Manipulate levels of inventory held by wholesalers and retailers,
3. Expand product distribution to new areas of the country or new classes of
trade,

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4. Create a high level of excitement about the product among those responsible
for its sale.
5. Obtain distribution for new products
6. Maintain trade support for established brands
7. Encourage retailers to display established brands
8. Build retail inventories
Problem with trade allowance
1. Forward buying
2. Diverting

Tools of sales promotions:

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Types of Consumer oriented sales promotion

1. Sampling:
Samples. A sample is a free product given to customers to encourage trial.
- Samples may be offered via online coupons, direct mail, or in stores.
- Samples are the most expensive sales promotion technique

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2. Coupons
A coupon reduces the retail price of a particular product by a stated amount at the
time of purchase.
- These coupons may be worth anywhere from a few paisa to a few rupees
- They are made available to customers through newspapers, magazines, direct mail,
online, and in shelf dispensers in the store.
- Coupons may also offer free merchandise, either with or without an additional
purchase of the product..

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Advantages of Coupons
1. Offers price reduction only to consumers who are price sensitive
2. Does not rely on retailers cooperation
3. Generates trial of a new brand
4. Encourages non-users to try an established brand or users to repeat use

4. Refunds, Rebates and Premiums

A premium is a gift that a producer offers the customer in return for using its
product.
Premiums differ from samples and free product in that these often do not consist of
the actual product, though there is often some connection.
For example, a cellphone manufacturer may offer access to free downloadable
ringtones for those purchasing a cellphone.

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5. Contests and Sweepstakes

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A contest is an event in which two or more individuals or teams compete against

each other, often for a prize or similar incentive. To contest, in law, is to disagree
with a civil or criminal legal charge in court

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Advantages of Sweepstakes and Contests

1. Effective way of getting the consumer to become involved with the brand by
making the promotion product relevant
2. Generate interest in or excitement over a brand and attracting attention to
advertising
3. Effective way of dealing with specific marketing problems
Disadvantages of Contests and Sweepstakes
1. May overshadow the ad or brand
2. May detract from brand franchise or image
3. Legal problems and administration
4. Presence of professionals or hobbyists who may submit entries and detract
from effectiveness
6. Bonus packs
Bonus packs offer the consumer an extra amount of a product at the regular price by
providing larger containers or extra units. Bonus packs result in a lower cost per unit
for the consumer and provide extra values as well as more product for the money. It
can also be defensive maneuver against a competitors promotion or introduction of
new brand.

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7. Price-off
Price-off deals are offered right on the packaged through specially marked price
packs. Typically price-offs range from 10 to 25 percent off the regular price with the
reduction coming from manufacturer margin not retailers. It ensure that discount
reaches consumers.
8. Frequency Programs
Companies introduced continuity programs that offer consumers, the opportunity to
accumulate points for continuing to purchase their brands or service; the points can
be redeemed for gifts and prizes.
9. Event marketing
Event marketing is a type of promotion where a company or brand is linked to an
event or where a themed activity is developed for the purpose of creating
experiences for consumers and promoting a product or service. Marketers often do
event marketing by associating their product with some popular activity such as a
sporting event, concert, fair, or festivals. However marketers create their own event,
to use for promotional purposes.

Various types of Trade oriented sales promotions:

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1. Trade Allowances:
Used by manufacturers to reward wholesalers and retailers for performing activities
in support of the manufacturers brand. These temporary price reductions are
intended to be passed on, in whole or in part, to the end customer. Thus,
intermediaries can elect to have a higher margin per unit or higher volume sales.
Major Forms of Trade Allowances
a. Buying Allowances: Typically when a manufacturer to get its new brand
accepted by retailers. Deals offered periodically to trade that permit wholesalers and
retailers to deduct a fixed amount from the invoice
b. Promotional Allowances: Retailers receive slotting allowances for featuring the
manufacturers brand in advertisements or for providing special displays.
c. Slotting Allowances: The fees manufacturers pay retailers for access to the slot,
or location. Its is the practice of manufacturers paying retailers for shelf space.

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2. Point-of-Purchase Displays
Point-of-purchase advertising displays and trade shows are sales promotions directed
to the trade markets. The point of purchase (P-O-P) is an ideal time to communicate
with consumers. Accordingly, anything that a consumer is exposed to at the point of
purchase can perform an important communications function. A variety of P-O-P
materials -- signs, displays, and various in-store media -- are used to attract
consumers' attention to particular products and brands, provide information, affect
perceptions, and ultimately influence shopping behavior.

3. Sales Training Programs: Customise training program arrange by the

manufacturer for the dealers and wholesalers.

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4. Trade Shows and contests: A temporary forum for sellers of a product category
to exhibit and demonstrate their wares to present and prospective buyers. Sales
Contests - are used to increase sales over a determined period of time by awarding
prizes for those sales staff/representatives that attain stated goals. Important issues to
consider are what incentives work best for each sales person and what specific goals
will be obtained.
Functions of trade shows:
Servicing present customers
Identifying prospects
Introducing new or modified products
Gathering information about competitors new products
Taking product orders
Enhancing the companys image

5. Sponsorships and Event Marketing

Event marketing describes the marketing practice in which a brand is linked to an
event to create experiences for customers and associate the brand personality with a
certain lifestyle. A sponsorship occurs when a company sponsors a sports event or
concert, or supports a charity with its resources. It is attempting to increase the
perceived value of the sponsors brand in the consumer's mind. Blimps, balloons,
and inflatable are used at many events.

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6. Specialty Advertising: advertising and promotions medium that utilizes useful or

decorative articles to transmit to a target audience an organizations identification
and promotional message.
Specialty advertising objective:
Promote new store openings
Introduce new brands
Motivate salespeople
Establish new accounts
Develop traffic for trade shows
Improve customer relations
Activate inactive accounts

5. Cooperative Advertising: An arrangement between a manufacturer and

reseller whereby the manufacturer pays for all or some of the advertising costs
undertaken by the reseller.
Why is Co-op Advertising Used?
Manufacturers can achieve advertising support on a local-market basis

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Provide them with a way to associate their products in the consumers mind
with specific retail outlets
Stimulates greater retailer buying and merchandising support
Enables manufacturers to have access to local media with lower rates

The Internet
Importance of the Internet as a tool of IMC
Internet marketing is the marketing of products and services using the Internet as its
medium. Lower costs of dissemination of information and a global audience are its
main advantages. Internet marketing also encompasses digital customer data
management and electronic customer relationship management (ECRM), which are
widely used in businesses today.
The importance of Internet marketing strategies has increased with the growth and
importance of the Internet. Most established companies are vying online space today
and seek to adopt web marketing strategies to increase traffic to their company's
homepage. Internet marketing helps add potential customers and the number of
quality leads to your website as well. In fact, most organizations can adopt Internet
marketing and advertising strategies to generate better business.
According to the findings of the 2010 Digital Influence Index, by Fleishman-Hillard
International Communications with Harris Interactive, when it comes to driving

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consumer decisions about a range of products and services, the Internet is by far the
most influential media channel.
Internet technology has significantly influenced people's living and the way business
is done. It has opened every business available for the whole world
With the use of Internet and websites, customers can easily find a service or product
by the use of search engine like MSN, Yahoo or Google since these search engines
give Web Page results. Hence, people find convenience in using the internet through
search engines because they don't have to personally go to the office to inquire about
a product or business.
By the use of internet as a marketing tool potential clients are reached. Most
corporates have websites to promote their products and services. As a result of this,
sales and profits are increased.
Through the use of websites, corporate may present their works and achievements to
prove that their firm has a reputable tract record. In this way a prospect client can
now see what the companies have to offer to them and how it is compared to
competitors brands. Many companies use websites to have that marketing edge by
other competitors in their category. This is the very reason why they keep growing.
Internet marketing & internet advertising has never been better. It requires customers
to use newer technologies rather than traditional media. It differs from magazine
advertisements, where the goal is to appeal to the projected demographic of the
periodical, but rather the advertiser has knowledge of the target audiencepeople
who engage in certain activities (e. Internet marketing, also referred to as imarketing, web-marketing, online-marketing, Search Engine Marketing (SEM) or eMarketing, is the marketing of products or services over the Internet.
Nowadays, internet marketing is sometimes considered to have a broader scope
because it not only refers to the Internet, e-mail, and wireless media, but it includes
management of digital customer data and electronic customer relationship
management (ECRM) systems.

Internet marketing is associated with several business models:

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e-commerce this is where goods are sold directly to consumers (B2C) or

businesses (B2B)
lead-based websites an organization that generates value by acquiring sales
leads from its website
affiliate marketing the process in which a product or service developed by
one entity (e-commerce business, single person, or a combination) is sold by
other active sellers for a share of profits. The entity of the product may
provide some marketing material (sales letter, affiliate link, tracking facility)
However, the vast majority of affiliate marketing relationships come from ecommerce businesses that offer affiliate programs.
local internet marketing through which a small company utilizes the Internet
to find and nurture relationships, which are to be used for real-world
advantage. Local internet marketing uses tools such as social media
marketing, local directory listing, and targeted online sales promotions.
blackhat marketing this is a form of internet marketing which employs
deceptive, abusive, or less than truthful methods to drive web traffic to a
website or affiliate marketing offer. This method sometimes includes spam,
cloaking within search engine result pages, or routing users to pages they
didn't initially request.

One-to-one approach
The targeted user is typically browsing the Internet alone therefore the marketing
messages can reach them personally. This approach is used in search marketing,
where the advertisements are based on search engine keywords entered by the
users.And now with the advent of Web 2.0 tools, many users can interconnect as
"peers."
Appeal to specific interests
Internet marketing and geo marketing places an emphasis on marketing that appeals
to a specific behaviour or interest, rather than reaching out to a broadly defined
demographic. "On- and Off-line" marketers typically segment their markets
according to age group, gender, geography, and other general factors. Marketers
have the luxury of targeting by activity and geolocation. For example, a kayak
company can post advertisements on kayaking and canoeing websites with the full
knowledge that the audience has a related interest.
Internet marketing differs from magazine advertisements, where the goal is to appeal
to the projected demographic of the periodical, but rather the advertiser has

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knowledge of the target audiencepeople who engage in certain activities (e.g.,

uploading pictures, contributing to blogs) so the company does not rely on the
expectation that a certain group of people will be interested in its new product or
service.
Geo-targeting
Geo targeting (in internet marketing) and geo marketing are the methods of
determining the geolocation (the physical location) of a website visitor with
geolocation software, and delivering different content to that visitor based on his or
her location, such as country, region/state, city, metro code/zip code, organization,
Internet Protocol (IP) address, ISP or other criteria.
Advantages
Internet marketing is relatively inexpensive when compared to the ratio of cost
against the reach of the target audience. Companies can reach a wide audience for a
small fraction of traditional advertising budgets. The nature of the medium allows
consumers to research and purchase products and services at their own convenience.
Therefore, businesses have the advantage of appealing to consumers in a medium
that can bring results quickly. The strategy and overall effectiveness of marketing
campaigns depend on business goals and cost-volume-profit (CVP) analysis.
Internet marketers also have the advantage of measuring statistics easily and
inexpensively. Nearly all aspects of an Internet marketing campaign can be traced,
measured, and tested. The advertisers can use a variety of methods: pay per
impression, pay per click, pay per play, or pay per action. Therefore, marketers can
determine which messages or offerings are more appealing to the audience. The
results of campaigns can be measured and tracked immediately because online
marketing initiatives usually require users to click on an advertisement, visit a
website, and perform a targeted action. Such measurement cannot be achieved
through billboard advertising, where an individual will at best be interested, then
decide to obtain more information at a later time.
Because exposure, response, and overall efficiency of Internet media are easier to
track than traditional off-line mediathrough the use of web analytics for instance
Internet marketing can offer a greater sense of accountability for advertisers.
Marketers and their clients are becoming aware of the need to measure the
collaborative effects of marketing (i.e., how the Internet affects in-store sales) rather
than siloing each advertising medium. The effects of multichannel marketing can be
difficult to determine, but are an important part of ascertaining the value of media

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campaigns. So finally Internet Marketing refers the online marketing which are
related to email and wireless marketing method.
Limitations
From the buyer's perspective, the inability of shoppers to touch, smell, taste or "try
on" tangible goods before making an online purchase can be limiting. However,
there is an industry standard for e-commerce vendors to reassure customers by
having liberal return policies as well as providing in-store pick-up services.

Direct Marketing
Definition, Role of Direct Marketing in IMC ,
Tools of Direct Marketing
What is Direct Marketing?
Direct marketing is a channel free approach to distribution and/or marketing
communications. So a company may have a strategy of dealing with its customers
'directly,' for example banks (such as CityBank) or computer manufacturers (such as
Dell). There are no channel intermediaries i.e. distributors, retailers or wholesalers.
Therefore - 'direct' in the sense that the deal is done directly between the
manufacturer and the customer.
As mentioned above, 'direct' also in the sense that marketing communications are
targeted at consumers by the manufacturers. For example, a brand that uses channels
of distribution would target marketing communications at wholesalers/distributors,
retailers, and consumers, or a blend of all three. On the other hand, a direct
marketing company could focus upon communicating directly with its customers.
Direct marketing and direct mail are often confused - although direct mail is a direct
marketing tool.

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There are a number of direct marketing tools other than direct mail. These include
(and are by no means limited to):
Catalogues.
Telemarketing
Vending Machines
Print Media (inviting direct response)
Broadcast Media (inviting direct response)
Television and Cable (Home shopping networks)
The Internet
Fax, Video, and other media

Inserts in newspapers and magazines.

Customer care lines.

Coupons.

Door drops.

TV and radio adverts with free phone numbers or per-minute-charging.

...and finally - and most importantly - The Internet and New Media.

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The Internet and New Media (e.g. mobile phones or PDA's) are perfect for direct
marketing. Consumers have never had so many sources of supply, and suppliers
have never had access to so many markets. There is even room for niche marketers for example Scottish salmon could ordered online, packed and chilled, and sent to
customers in any part of the world by courier.
Many companies use direct marketing, and a current example of its use, as part of a
business model, is the way in which it is used by low-cost airlines. There is no
intermediary or agent, customers book tickets directly with the airlines over The
Internet. Airlines capture data that can be used for marketing research or a loyalty
scheme. Information can be processed quickly, and then categorised into complex
relational databases.
Then, for example, special offers or new flights destinations can be communicated
directly to customers using e-mail campaigns. Data is not only collected on markets
and segments, but also on individuals and their individual buyer behaviour.
Companies such as Amazon are wholesalers of books (i.e. they do not write or
publish them) - so they use Customer Relationship Management and marketing
communications targeted directly at individual customers - which is another, slightly
different example of direct marketing.

Page 182 of 193

Direct marketing is a sometimes controversial sales method by which advertisers

approach potential customers directly with products or services. The most common
forms of direct marketing are telephone sales, solicited or unsolicited emails,
catalogs, leaflets, brochures and coupons. Successful direct marketing also involves
compiling and maintaining a large database of personal information about potential
customers and clients. These databases are often sold or shared with other direct
marketing companies.
For many companies or service providers with a specific market, the traditional
forms of advertising (radio, newspapers, television, etc.) may not be the best use of
their promotional budgets. For example, a company which sells a hair loss
prevention product would have to find a radio station whose format appealed to
older male listeners who might be experiencing this problem. There would be no
guarantee that this group would be listening to that particular station at the exact
time the company's ads were broadcast.
Money spent on a radio spot (or television commercial or newspaper ad) may or may
not reach the type of consumer who would be interested in a hair restoring product.
This is where direct marketing becomes very appealing. Instead of investing in a
scattershot means of advertising, companies with a specific type of potential
customer can send out literature directly to a list of pre-screened individuals.
Direct marketing firms may also keep email addresses of those who match a certain
age group or income level or special interest. Manufacturers of a new dog shampoo
might benefit from having the phone numbers and mailing addresses of pet store
owners or dog show participants. Direct marketing works best when the recipients
accept the fact that their personal information might be used for this purpose. Some

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customers prefer to receive targeted catalogs which offer more variety than a general
mailing.
Direct marketing does have some negative aspects, however. Many people are
unaware of how the personal information they include on an order form or survey
may be used for targeted advertising later. One prevailing philosophy in direct
mailing circles is the idea that if a customer orders a swimsuit from a clothing
catalog, he or she might naturally be interested in swimming pool supplies or
exercise equipment as well. This could lead to direct marketing overload, as
potential customers and clients become overwhelmed with catalogs, unsolicited
emails and unwanted phone calls. There is also the concern that personal information
collected by legitimate direct marketing agencies could be purchased by
unscrupulous or shady companies for the express purpose of fraud.
Many direct marketing companies belong to self-policing associations which
actively discourage fraudulent or invasive use of their databases. Legitimate direct
marketing firms should also offer methods by which individuals can 'opt out' of
these lists by request. Direct marketing agencies must respect the do-not-call list
maintained by government agencies. Customers also have the right to unsubscribe to
unsolicited catalogs and to block bulk emails from their in-boxes. Direct marketing
can be a very cost-effective sales tool for specialized companies, as long as it is used
properly and sparingly.

Personal Selling
Definition, Role /Importance of Personal Selling,
Relationship Marketing.
What is Direct Marketing?

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Direct marketing is a channel free approach to distribution and/or marketing

communications. So a company may have a strategy of dealing with its customers
'directly,' for example banks (such as CityBank) or computer manufacturers (such as
Dell). There are no channel intermediaries i.e. distributors, retailers or wholesalers.
Therefore - 'direct' in the sense that the deal is done directly between the
manufacturer and the customer.
As mentioned above, 'direct' also in the sense that marketing communications are
targeted at consumers by the manufacturers. For example, a brand that uses channels
of distribution would target marketing communications at wholesalers/distributors,
retailers, and consumers, or a blend of all three. On the other hand, a direct
marketing company could focus upon communicating directly with its customers.
Direct marketing and direct mail are often confused - although direct mail is a direct
marketing tool.
There are a number of direct marketing media other than direct mail. These include
(and are by no means limited to):

Inserts in newspapers and magazines.

Customer care lines.

Catalogues.

Coupons.

Door drops.

TV and radio adverts with free phone numbers or per-minute-charging.

...and finally - and most importantly - The Internet and New Media.

Page 185 of 193

The Internet and New Media (e.g. mobile phones or PDA's) are perfect for direct
marketing. Consumers have never had so many sources of supply, and suppliers
have never had access to so many markets. There is even room for niche marketers for example Scottish salmon could ordered online, packed and chilled, and sent to
customers in any part of the world by courier.
Many companies use direct marketing, and a current example of its use, as part of a
business model, is the way in which it is used by low-cost airlines. There is no
intermediary or agent, customers book tickets directly with the airlines over The
Internet. Airlines capture data that can be used for marketing research or a loyalty
scheme. Information can be processed quickly, and then categorised into complex
relational databases.
Then, for example, special offers or new flights destinations can be communicated
directly to customers using e-mail campaigns. Data is not only collected on markets
and segments, but also on individuals and their individual buyer behaviour.
Companies such as Amazon are wholesalers of books (i.e. they do not write or
publish them) - so they use Customer Relationship Management and marketing
communications targeted directly at individual customers - which is another, slightly
different example of direct marketing.

Page 186 of 193

Direct marketing is a sometimes controversial sales method by which advertisers

approach potential customers directly with products or services. The most common
forms of direct marketing are telephone sales, solicited or unsolicited emails,
catalogs, leaflets, brochures and coupons. Successful direct marketing also involves
compiling and maintaining a large database of personal information about potential
customers and clients. These databases are often sold or shared with other direct
marketing companies.
For many companies or service providers with a specific market, the traditional
forms of advertising (radio, newspapers, television, etc.) may not be the best use of
their promotional budgets. For example, a company which sells a hair loss
prevention product would have to find a radio station whose format appealed to
older male listeners who might be experiencing this problem. There would be no
guarantee that this group would be listening to that particular station at the exact
time the company's ads were broadcast.
Money spent on a radio spot (or television commercial or newspaper ad) may or may
not reach the type of consumer who would be interested in a hair restoring product.
This is where direct marketing becomes very appealing. Instead of investing in a
scattershot means of advertising, companies with a specific type of potential
customer can send out literature directly to a list of pre-screened individuals.
Direct marketing firms may also keep email addresses of those who match a certain
age group or income level or special interest. Manufacturers of a new dog shampoo
might benefit from having the phone numbers and mailing addresses of pet store
owners or dog show participants. Direct marketing works best when the recipients
accept the fact that their personal information might be used for this purpose. Some

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customers prefer to receive targeted catalogs which offer more variety than a general
mailing.
Direct marketing does have some negative aspects, however. Many people are
unaware of how the personal information they include on an order form or survey
may be used for targeted advertising later. One prevailing philosophy in direct
mailing circles is the idea that if a customer orders a swimsuit from a clothing
catalog, he or she might naturally be interested in swimming pool supplies or
exercise equipment as well. This could lead to direct marketing overload, as
potential customers and clients become overwhelmed with catalogs, unsolicited
emails and unwanted phone calls. There is also the concern that personal information
collected by legitimate direct marketing agencies could be purchased by
unscrupulous or shady companies for the express purpose of fraud.
Many direct marketing companies belong to self-policing associations which
actively discourage fraudulent or invasive use of their databases. Legitimate direct
marketing firms should also offer methods by which individuals can 'opt out' of
these lists by request. Direct marketing agencies must respect the do-not-call list
maintained by government agencies. Customers also have the right to unsubscribe to
unsolicited catalogs and to block bulk emails from their in-boxes. Direct marketing
can be a very cost-effective sales tool for specialized companies, as long as it is used
properly and sparingly.

Personal Selling
Definition, Role /Importance of Personal Selling,
Relationship Marketing.
Personal selling can be defined as follows:

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Personal selling is oral communication with potential buyers of a product with the
intention of making a sale. The personal selling may focus initially on developing a
relationship with the potential buyer, but will always ultimately end with an attempt
to "close the sale"
Personal selling is one of the oldest forms of promotion. It involves the use of a
sales force to support a push strategy (encouraging intermediaries to buy the
product) or a pull strategy (where the role of the sales force may be limited to
supporting retailers and providing after-sales service).
What are the main roles of the sales force?
Kotler describes six main activities of a sales force:
(1) Prospecting - trying to find new customers
(2) Communicating - with existing and potential customers about the product range
(3) Selling - contact with the customer, answering questions and trying to close the
sale
(4) Servicing - providing support and service to the customer in the period up to
delivery and also post-sale
(5) Information gathering - obtaining information about the market to feedback
into the marketing planning process
(6) Allocating - in times of product shortage, the sales force may have the power to
decide

how

available

stocks

are

allocated

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what are the advantages of using personal selling as a means of promotion?

Personal selling is a face-to-face activity; customers therefore obtain a relatively
high degree of personal attention
The sales message can be customised to meet the needs of the customer
The two-way nature of the sales process allows the sales team to respond directly
and promptly to customer questions and concerns
Personal selling is a good way of getting across large amounts of technical or other
complex product information
The face-to-face sales meeting gives the sales force chance to demonstrate the
product
Frequent meetings between sales force and customer provide an opportunity to
build good long-term relationships
Given that there are many advantages to personal selling, why do more businesses
not maintain a direct sales force?
Main disadvantages of using personal selling
The main disadvantage of personal selling is the cost of employing a sales force.
Sales people are expensive. In addition to the basic pay package, a business needs to
provide incentives to achieve sales (typically this is based on commission and/or
bonus arrangements) and the equipment to make sales calls (car, travel and
subsistence costs, mobile phone etc).

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In addition, a sales person can only call on one customer at a time. This is not a costeffective way of reaching a large audience.
Relationship Marketing:
Relationship Marketing refers to interest in providing a more satisfying exchange.
This approach attempts to transcend the simple purchase-exchange process with a
customer to make more meaningful and richer contact by providing a more holistic,
personalized purchase, and uses the experience to create stronger ties.
According to Liam Alvey, relationship marketing can be applied when there are
competitive product alternatives for customers to choose from; and when there is an
ongoing and periodic desire for the product or service.
Relationship Marketing was first defined as a form of marketing developed from
direct response marketing campaigns which emphasizes customer retention and
satisfaction, rather than a dominant focus on sales transactions.
As a practice, Relationship Marketing differs from other forms of marketing in that
it recognizes the long term value of customer relationships and extends
communication beyond intrusive advertising and sales promotional messages.
With the growth of the internet and mobile platforms, Relationship Marketing has
continued to evolve and move forward as technology opens more collaborative and
social communication channels. This includes tools for managing relationships with
customers that goes beyond simple demographic and customer service data.
Relationship Marketing extends to include Inbound marketing efforts (a combination
of search optimization and Strategic Content), PR, Social Media and Application
Development.

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Just like Customer relationship management (CRM), Relationship Marketing is a

broadly recognized, widely-implemented strategy for managing and nurturing a
companys interactions with clients and sales prospects. It also involves using
technology to, organize, synchronize business processes (principally sales and
marketing activities) and most importantly, automate those marketing and
communication activities on concrete marketing sequences that could run in
autopilot (also known as marketing sequences).
The overall goals are to find, attract, and win new clients, nurture and retain those
the company already has, entice former clients back into the fold, and reduce the
costs of marketing and client service. Once simply a label for a category of software
tools, today, it generally denotes a company-wide business strategy embracing all
client-facing departments and even beyond. When an implementation is effective,
people, processes, and technology work in synergy to increase profitability, and
reduce operational costs.
E- Commerce
The Internet has created a new economic ecosystem, the e-commerce marketplace,
and it has become the virtual main street of the world. Providing a quick and
convenient way of exchanging goods and services both regionally and globally, ecommerce has boomed. Today, e-commerce has grown into a huge industry with
with consumer-driven (B2C) online transactions impacting industries from travel
services to consumer electronics, from books and media distribution to sports &
fitness.
Electronic commerce, commonly known as e-commerce or eCommerce, or ebusiness consists of the buying and selling of products or services over electronic

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systems such as the Internet and other computer networks. The amount of trade
conducted electronically has grown extraordinarily with widespread Internet usage.
The use of commerce is conducted in this way, spurring and drawing on innovations
in electronic funds transfer, supply chain management, Internet marketing, online
transaction processing, electronic data interchange (EDI), inventory management
systems, and automated data collection systems. Modern electronic commerce
typically uses the World Wide Web at least at some point in the transaction's
lifecycle, although it can encompass a wider range of technologies such as e-mail as
well.
A large percentage of electronic commerce is conducted entirely electronically for
virtual items such as access to premium content on a website, but most electronic
commerce involves the transportation of physical items in some way. Online
retailers are sometimes known as e-tailers and online retail is sometimes known as etail. Almost all big retailers have electronic commerce presence on the World Wide
Web.
Electronic commerce that is conducted between businesses is referred to as businessto-business or B2B. B2B can be open to all interested parties (e.g. commodity
exchange) or limited to specific, pre-qualified participants (private electronic
market).
Electronic commerce that is conducted between businesses and consumers, on the
other hand, is referred to as business-to-consumer or B2C. This is the type of
electronic commerce conducted by companies such as Amazon.com.

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Online shopping is a form of electronic commerce where the buyer is directly online
to the seller's computer usually via the internet. There is no intermediary service.
The sale and purchase transaction is completed electronically and interactively in
real-time such as Amazon.com for new books. If an intermediary is present, then the
sale and purchase transaction is called electronic commerce such as eBay.com.
Electronic commerce is generally considered to be the sales aspect of e-business. It
also consists of the exchange of data to facilitate the financing and payment aspects
of the business transactions.