DISSERTATION On USE OF ADVERTISEMENTS FOR SMALL AND MEDIUM ENTERPRISES By NIKHIL BANSAL A3914710022 BBA-M&S [2010-13]

Under the Supervision of Mrs. Bhawna Gupta Professor Amity School of Business

AMITY SCHOOL OF BUSINESS AMITY UNIVERSITY UTTAR PRADESH

Acknowledgment
This Project Report is a result of efforts, time and skills contributed by a number of people. I would like to take this opportunity to thank all of those who have worked towards successful completion of this project report.

I must acknowledge my deep gratitude to my faculty guide, Mr. Dharmendra Pandey Professor, Amity School of Business; for his valuable guidance, corrective criticism and unflinching moral support during the tenure of the project.

Thanks are also due to all those whose writings and data I have drawn upon in the preparation of the report. I would also like to thank all my colleagues at the campus for taking out time and helping me make this project.

Lastly, must not forget to thank my family and all friends for their constant support and understanding during the work.

DECLARATION

I, Nikhil Bansal S/O Anil Kumar Bansal hereby declare that this dissertation represents my original piece of work and has not been copied from anywhere. I am aware that in case of non-compliance, Amity School of Business is entitled to cancel the report.

Place : Date :

Signature of Student Name of the Student Enrollment No.

Table of Contents

Sr. No. 1.

Content Introduction (i) MSMEs Unique features (ii) SMEs in India (iii) Top 10 SMEs as per CRISIL Ratings (iv) What is advertising? (v) Importance of Advertising (vi) Functions and role of advertising (vii) Regulation for advertising in India

2.

Methodology (i) Statement of Problem (ii) Objectives of the study (iii)Research Design

3. 4. 5.

Findings Value of Internet for SMEs TV Advertising (i) What makes TV advertising an option for SMEs? (ii) TV Advertising usage by SMEs in India (iii)TV advertising platforms

6. 7. 8. 9. 10.

Transaction based advertising tailored for the SME segment Print Media Advertising for SMEs Limitations Conclusion Appendix

Introduction
MSMEs UNIQUE FEATURES MSME sector employs about 60.00 million persons spread over 26.1 million enterprises. In terms of value, the sector accounts for about 45% of the manufacturing output and around 40% of the total export of the country. The sector contributes 8% to GDP, which is expected to raise to level of 10%. Banks exposure under MSE sector has shown significant growth during the financial year 2010-11 and 2011-12 precisely, the sector grew by 59.72% and 33.56% respectively. Definition of MSME sector: A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh; A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore; and A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.

SMEs IN INDIA

With the advent of planned economy from 1951 and the subsequent industrial policy followed by Government of India, both planners and Government earmarked a special role for small-scale industries and medium scale industries in the Indian economy. Due protection was accorded to both sectors, and particularly for small scale industries from 1951 to 1991, till the nation adopted a policy of liberalization and globalization.

Certain products were reserved for small-scale units for a long time, though this list of products is decreasing due to change in industrial policies and climate.

SMEs always represented the model of socio-economic policies of Government of India which emphasized judicious use of foreign exchange for import of capital goods and inputs; labour intensive mode of production; employment generation; non concentration of diffusion of economic power in the hands of few (as in the case of big houses); discouraging monopolistic practices of production and marketing; and finally effective contribution to foreign exchange earning of the nation with low importintensive operations. It was also coupled with the policy of de-concentration of industrial activities in few geographical centers.

It can be observed that by and large, SMEs in India met the expectations of the Government in this respect. SMEs developed in a manner, which made it possible for them to achieve the following objectives: High contribution to domestic production Significant export earnings Low investment requirements Operational flexibility Location wise mobility Low intensive imports Capacities to develop appropriate indigenous technology Import substitution Contribution towards defense production Technology oriented industries Competitiveness in domestic and export markets At the same time one has to understand the limitations of SMEs, which are: Low Capital base Concentration of functions in one / two persons Inadequate exposure to international environment Inability to face impact of WTO regime Inadequate contribution towards R & D Lack of professionalism

In spite of these limitations, the SMEs have made significant contribution towards technological development and exports. SMEs have been established in almost all-major sectors in the Indian industry such as: Food Processing Agricultural Inputs Chemicals & Pharmaceuticals Engineering; Electricals; Electronics Electro-medical equipment Textiles and Garments Leather and leather goods Meat products Bio-engineering Sports goods Plastics products Computer Software, etc.

As a result of globalization and liberalization, coupled with WTO regime, Indian SMEs have been passing through a transitional period. With slowing down of economy in India and abroad, particularly USA and European Union and enhanced competition from China and a few low cost centers of production from abroad many units have been facing a tough time.

OVER 40% SMEs USE THE INTERNET FOR ADVERTISING

SMEs from services, manufacturing and export vertical are the most active in online advertising with over 65% using search engine marketing

Indian SMEs are reaping the benefits of using the Internet medium to grow their businesses. This was revealed by a study conducted by Google India to understand usage patterns and importance of online medium amongst the SMEs in India. According to the study, over 57 percent SMEs said that they now use their website as a sales channel and get direct business leads from their website.

While accessing email is the number one purpose for using the Internet, a majority of SMEs (71 percent) also use the Internet to search for vendors and suppliers and about 40 percent of them use the Internet to create online listings and advertise online. In terms of mediums used to advertise, traditional media like newspaper ads and outdoor ads still lead the advertising spends for SMEs, but Internet is emerging as one of the fastest growing medium for advertising with 58 percent of SMEs with websites using the Internet to generate business leads.

Amongst the SMEs who have an online presence, 56 percent of them feel that the Internet is a cost effective medium as compared to traditional advertising medium like print and television and 79 percent of SMEs believe that Internet advertising can provide greater reach.

A closer analysis of the marketing spends of the SMEs reveals that SMEs with marketing spends between `25 lakh and `70 lakh per annum tend to spend higher on the online medium and rely less on traditional media like print and television. But

majority of the spends (43 percent) comes from SMEs who spend between `12 lakh and `25 lakh on advertising on a annual basis, reflecting the low cost benefit of Internet advertising. While the absolute number of SMEs with an online presence is very low compared to actual businesses in India, were pleasantly startled to see increasing understanding amongst Indian SMEs to use the web for business growth. In the last two years we have seen a significant increase in the number of businesses that have started to advertise online. But with over 35 million SMEs in the country, we have a long way to go. Google India is working on a number of programs to educate more SMEs on how they can get online and use the Internet as a primary sales channel, said Sridhar Seshadri Head of Online Sales Google India. Small and Medium Enterprises are one of the key growth drivers for Google India. We undertook this study in order to understand the perception of these businesses towards online marketing as well as to identify online advertising solutions that work for them, he added.

Among all the SMEs surveyed, SMEs from insurance, technology B2B, IT hardware, and travel & tourism spend around 30-45 percent on online marketing. Annual average online spends are high among SMEs from media & entertainment, gems & jewellery and apparel. Additionally, banner/display advertising and email marketing are the most popular form of Internet advertising and 30 percent SMEs use search engine advertising to market their product and services.

Top 10 SMEs as per CRISIL ratings

Sr. No

Name

City

Rating Assigned

Date Assigned*

Constitution

1 2 3 4 5 6 7 8 9

A T E Enterprises Pvt. Ltd. Aacess Cranes Aacess Equipments Aarvi Encon Private Limited Abharan Jewellers Abhiraj Engicon Private Limited Acer Engineers Private Limited Adesh Welfare Society Adithya Agro Allied Oils Private Limited Aditya Consumer Marketing Private Limited

Mumbai Hyderabad Hyderabad Mumbai Udupi Pune Hyderabad Muktsar Eluru

SME 2 SME 3 SME 3 SME 1 SME 2 SME 4 SME 3 SME 3 SME 4

05-Oct-11 22-Feb-12 22-Feb-12 19-Dec-11 07-Mar-12 15-Mar-12 15-Mar-12 10-Nov-11 03-Nov-11

Private Limited Others Others Private Limited Partnership Firm Private Limited Private Limited Others Private Limited

10

Patna

SME 2

22-Feb-12

Private Limited

What is advertising?

Advertising is a non-personal form of promotion that is delivered through selected media outlets that, under most circumstances, require the marketer to pay for message placement. Advertising has long been viewed as a method of mass promotion in that a single message can reach a large number of people. But, this mass promotion approach presents problems since many exposed to an advertising message may not be within the marketers target market, and thus, may be an inefficient use of p romotional funds. However, this is changing as new advertising technologies and the emergence of new media outlets offer more options for targeted advertising.

Advertising also has a history of being considered a one-way form of marketing communication where the message receiver (i.e., target market) is not in position to immediately respond to the message (e.g., seek more information). Some of the popular modes of advertising are: Television Print Radio Internet

Importance of Advertising

Spending on advertising is huge. One often quoted statistic by market research firm Zenith Optimedia estimates that worldwide spending on advertising exceeds (US) $400 billion. This level of spending supports thousands of companies and millions of jobs. In fact, in many countries most media outlets, such as television, radio and newspapers, would not be in business without revenue generated through the sale of advertising.

While worldwide advertising is an important contributor to economic growth, individual marketing organizations differ on the role advertising plays. For some organizations little advertising may be done, instead promotional money is spent on other promotion options such a personal selling through a sales team. For some smaller companies advertising may consist of occasional advertisement and on a very small scale, such as placing small ads in the classified section of a local newspaper.

But most organizations, large and small, that rely on marketing to create customer interest are engaged in consistent use of advertising to help meet marketing objectives. This includes regularly developing advertising campaigns, which involve a series of decisions for planning, creating, delivering and evaluating an advertising effort. We will cover advertising campaigns in greater detail in our next tutorial

Functions and role of Advertising

Research conducted by Frank Jefkins (1982), answers in a simple yet convincing way thequestion aS to, why do we advertise? He explains: either, we have something we want to sell or someone else has something we want to buy. Alternatively, we may want to give something away, seek an exchange or invite donors or gifts. Therefore, we advertise to make known our offer or need. Admittedly, Jefkins answer focuses on new or novel offers or needs, but why do already established companies such as Coca-Cola advertise? Conclusively, it is best to note that the roles that advertising plays are many and varied but may in one way or the other be categorized into three broad areas

To inform, To persuade, To sell.

REGULATIONS FOR ADVERTISING INDUSTRY IN INDIA

Advertising voluntary

Standards organization

Council of

of

India the

is

self

regulatory industry.

advertising

The Role and Functioning of the ASCI & its CCC in dealing with Complaints received from Consumers and Industry, against Advertisements which are considered as False, Misleading, Indecent, Illegal, leading to Unsafe practices, or Unfair to competition, and consequently in contravention of the ASCI Code for Self-Regulation in Advertising. The main objects to be pursued by the Company on its incorporation are To monitor administer and promote standards of advertising practices in India with a view to ensuring the truthfulness and honesty of representations and claims made through advertising and safeguarding against misleading advertising.

ensuring that Advertising is not offensive to generally accepted norms and standards of public decency.

safeguarding against the indiscriminate use of advertising for the promotion of products or services which are generally regarded as hazardous to society or to individuals or which are unacceptable to society as a whole.

ensuring that advertisements observe fairness in competition and the canons of generally accepted competitive behavior

Methodology

(i)

Statement of Problem

Use of Advertisements for Small and Medium Enterprises

Through my dissertation I would like to research about the usefulness of advertisements for Small and Medium enterprises. I would also like to do a detailed study of the various campaigns if any carried out by these SMEs.

Objectives of the study:

a) Determine the usefulness of Advertisements for SMEs b) List the top SMEs as per Crisil ratings. c) Identify different advertising platforms available for SMEs

(ii)

Research Design:

Type of Research: Primary Research

Data Collection Tools: Journals E books Research Papers Survey (Questionnaire) Observation

Findings
Following are the results of the survey conducted by me to determine the usefulness of advertisements for SMEs; the questionnaires have been filled by employees working in different SMEs.

Q1.) Do you feel the need to advertise for your company?

Need
9 8 7 6 5 4 3 2 1 0 Yes No Maybe Need

As it is evident from the above graph, majority of the employees working in a SME feel that there is a need to advertise, however, a lesser majority opposes this belief.

Q2.) If yes, what is the preferred media for advertisements?

Preferred Media
6 5 4 3 2 1 0 Television Radio Print Internet

Preferred Media

The most preferred media is internet as we all know that today each and every enterprise however small it is, does have its presence in the cyber world as it is the most effective medium to reach a larger audience. Print and Television are also considered to be useful mediums. Radio is a little behind in the race but nevertheless we can never underestimate the impact it can have.

Q3.) How useful will advertisements be for your company?

Usefulness
6 5 4 3 2 1 0 Very Useful Moderate Useless

Usefulness

Most of the respondents feel that advertising is a very useful medium as it helps them reach a wider audience, few of them consider the usefulness to be moderate and a very negligible part of the respondents feel that it is useless.

Q4.) How much on an average should your company spend on advertisements in case they decide to advertise?

Cost Effectiveness
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 upto 10,00,000 10,00,000 20,00,000 20,00,000 30,00,000 more than 30,00,000 Cost Effectiveness

This graph exhibits the amount that people feel should be spent on AD campaigns, a similar majority exists for the brackets of less than 10,00,000 and more than 30,00,000 a negligible majority falls within the bracket of 10,00,000- 20,00,000, whereas no one come in the bracket of 20,00,000- 30,00,000

Purpose of an advertisement:
These are some of the purposes for advertisements as quoted by the people who were questioned via the questionnaire: Publicity

Marketing of product

To increase awareness about your company With a modern media driven society combined with multiple formats for mass communication, the influence of advertising is remarkably strong today.

Its an art of convincing people to spend money they dont have for something they dont need. Highlighting you Brand Image

To reach to all the people in the country mostly to Tier 3 cities to make them aware of the company. To promote our security homeland products, otherwise our company is well known in the market. (Aditya InfoTech)

Value of Internet for Small and Medium Enterprises

In multiple countries small and medium enterprises (SMEs) that have engaged actively with consumers on the Internet have experienced three-year sales growth rates up to 22 percentage points higher than those of companies with low or no Internet presence, according to the 'Internet Economy in the G-20' report by the Boston Consulting Group. While SMEs constitute 17 percent of India's GDP they are responsible for 25 percent of private-sector employment. Almost all the high and medium web SMEs added jobs during the last three years but 17 percent of low- or no-web companies did not, says the report.Given that the SMEs have such a track record of job creation, policies that encourage more of these companies to develop an online presence could help address the lingering unemployment that currently plagues developing countries. But the report finds that a surprising number of SMEs have not grasped the power of the Internet to build their businesses- or have ventured only to a very limited extent. Half of SMEs in India cited local business culture a significant barrier keeping SMEs from engaging more broadly or deeply online. While most of the hurdles need to be overcome by SMEs themselves, policy makers should take note that two in five SMEs cited access issues and government regulations as impediments to internet adoption. 33 percent of the people in India are willing to give up sex and 70 percent willing to give up alcohol for a year instead of the internet. The most powerful advantage of the Internet for the SMEs is an improved level of customer interaction which is achieved by exploiting the participatory nature of today's internet. Nearly two-thirds of High Web SMEs are moving quickly to match their customer's engagement in social networks.

Social network penetration among internet users in India over 85 percent developing markets are going straight to social adopting social networking quickly as they come online. As per the three year historical sales growth figures in India, High web SMEs are seen to be growing 6 percent faster than their low or no-web counterparts. The report also showed that all of the High Web SMEs in India intensely use the internet for setting up their website, online advertising, social networking and ecommerce and a majority also uses it for blogging, recruitment and paying their suppliers. "Around the world, SMEs that embrace the Internet are growing faster and adding more jobs than those that don't. By encouraging businesses to turn to the Internet, countries can improve their competitiveness and growth prospects," said Paul Zwillenberg, a BCG partner and co author of the report. At a time when 33 percent of the people in India are willing to give up a sex and 70 percent willing to give up alcohol for a year instead of the internet, its impact is unquestionably clear. It is up to the SMEs to leverage this trend and rein in their profits.

TV advertising
What makes TV advertising an option for SMEs now?
To attain success in any business, creating brand awareness is an important process and it can be carried out effectively with advertising. It helps increase the selling power of products and services. As the penetration of TV is quite high in India, advertising on TV as a marketing tool could be used by any type of business efficiently to its advantage. With the emergence of cable and regional television, it is possible for any small business to benefit from TV advertising just like the large corporations. The industry is booming, new cable stations are coming up every year along with the growing requirement of advertising to attract consumers. As TV advertising is becoming competitive, many stations are providing affordable packages to the small businesses. SMEs need to understand that TV advertising is powerful and it can help any business attain instant credibility. It has potential to position the small businesses in the same league of MNCs, which enhances the visibility factor. In India, there are many regional SME brands engaged in different sectors like pharma, FMCG, steel, cement, beverages, household appliances and dairy products. It is often found that the regional SMEs enjoy better understanding of the domestic needs as compared to the big brands. Hence, the advertising need for SMEs is bigger as they have better capability to cater in regard to cost, quality and specific needs of their marketplace. TV advertising makes it possible for the small businesses to convert more potential buyers into paying customers.

TV advertising usage by SMEs in India

The usage of TV advertising platform by SMEs is still at a nascent stage as high marketing costs often hinders their brand building process. Regional TV advertising comes handy here to position the company in local regions. Reports suggest that on an

average, hours watched per viewer per week in case of TV stands at 36, while in case of online the figure is close to 10. It clearly shows that TVs popularity continues to grow despite the presence of online video content. TV holds the title of the largest mass medium used for advertising for over 60 years and that designation is still retained by it while Internet has also picked up on popularity. Television is a significant part of a media plan due to its pervasiveness, effect and targeting abilities.

TV advertising platforms in India

As Indian SMEs are slowly adopting the concept of TV advertising, there are firms offering solutions to help the small enterprises. One such company is Bangalore-based advertising player Amagi Media Labs that realised the needs of SMEs and developed a unique platform for these units to advertise their brands. Currently, Amagi has over 700-SME customers on board and its 'Smart TV Advertising platform' helps small businesses to advertise by spending a not-so high amount. In an interview to SME News about the growing need of TV advertisements among the SMEs, KA Srinivasan, cofounder, Amagi Media Labs, said, We are seeing an increased shift towards TV for SMEs - television has always been perceived as expensive medium by most SMEs - but with success stories of the likes of Fevicol, Lion dates, Ghari Detergent, we are seeing a fundamental mindset change. This has been further aided by increasing availability of targeted content (more niche channels coming up targeting specific demographics, language or regions) as well as new platform options like Amagi which provide zero-spillage TV by targeting on national TV channels.

Reports suggest that the regional SMEs developed brand campaigns on multiple National TV channels with the help of Amagi platform at the low budget of just Rs 2 lakh per month. Amagi said that over 500 advertisers across the country benefited by using the platform and it is available across MAS Financial Services Ltd, a retail financing organisation and also a client of Amagi, said that this platform has helped in effective branding of the company. Saumil Pandya, vice president, MAS Financial Services Ltd, said, Amagis Smart TV Advertising platform is a boon for regional brands like us. I can now get the best of both worlds - national TV and local rates. Coupled with Amagis creative services, this platform ha s helped me get both branding and response at a reasonable budget.

Advantages
(i)

Large Reach: Television offers the largest possible reach. Virtually al Indian home contains one or more television sets, and TV viewing occupies around 40% of average leisure time. In-fact TV can provide blanket coverage of a market.

(ii)

Powerful Impact: TV is the most powerful and popular medium as it has the ability to combine vision and voice, music and motion, sound and light and also colour, it creates a lasting impact on the human memory.

(iii)

Higher Frequency: TV is high frequency medium. It allows the advertiser to spread messages into the minds of prospects through constant repetition.

(iv)

Low per Head Cost: Millions of people watch the same popular programme at the same time and as such per head cost of TV messages is comparatively low.

(v)

Product Demonstrations: Products demonstrations are possible on the TV and the audience can be convinced about the goodness of the product.

(vi)

Product Introduction: TV plays a vital role in introducing new products to the target audience.

Disadvantages
(i)

Expensive: TV advertising is a costly affair as a 10 seconds advertisement at prime time on the national network cost about Rs. 1 lakh for every exposure and as such small clients can not afford the luxury of TV advertising.

(ii)

Lacks Flexibility: TV advertising lack flexibility in that last minute changes may prove very expensive.

(iii)

Clutter: TV advertising suffers from high level of clutter. One often comes across over 30 to 40 advertisements at a time before a popular serial and such spot advertisements get lost in a chain of advertisements.

(iv)

Short Life: TV advertisements suffer from short life. Once the advertisements appear 10 seconds or so and then it is gone forever, unless and until it is repeated again.

Radio

Radio is a major media. It provides wide coverage. But it lacks visual impact. The message is only heard in a fleeting manner. In recent years, listeners interest in radio has revived to a great extent because of the advent of FM channel which has more contemporary, youthful and entertaining content. Radio reaches to more than 90% of the Indian area & 97% of the Indian population. The programmes are broadcast in over 24 languages. By an estimate there are over 15 crore radio sets in India. There are 178 radio stations spread all across the country and 298 transmitters. Primary Channel The emphasis is on social welfare and development rather than on entertainment. Vividh Bharti It covers 30 radio stations and it is primarily an entertainment channel covering larger towns.

Advantages
(i)

Flexibility: Advertisement on Radio is rapid and flexible in the sense that effective commercial can be produced in a matter of hours to adapt to the changing market price and advertising is not hampered by production delays.

(ii)

Local Language: Local radio stations in India can effective use of local languages to convey the advertising messages.

(iii)

Target Market Medium: With a wide variety of format and audience choices, the advertisers can reach just the type of people who are the best prospects.

(iv)

Low Advertising Cost: This makes radio an excellent choice for low budget advertiser. Besides production of radio commercials is easy and inexpensive.

(v)

Mobility: Radio is extremely mobile. It follows the listerner to any place he goes.

Disadvantages (1) Short Life: The life of radio advertising is restricted to a few seconds. Message can not be preserved unlike press advertising. (2) Clutter: Radio suffers from extreme commercial clutter. An advertisement is surrounded by a sea of other commercials crying out for attention. (3) Lacks Visual Elements: Radio advertising lacks visual impact such as products where visual demonstration is very much required can not be advertised through radio.

Transaction-based advertising tailored for the SME segment

A new concept called transaction-based advertising is replacing the traditional retail advertising to cater to Small and Medium Enterprises (SMEs) that have small advertising budgets. Transaction-based advertising is a kind of stage through which a company can get advertisements, brochures and logos designed for a budget that they can afford. This is catching up with SMEs who have low advertising funds and cannot afford to hire a full-fledged advertising agency to do the designing. With see-saw market conditions, SMEs are finding it hard to pay for brand building and advertising. We have a very low advertising budget. We use mostly working media such as social networking sites and word of mouth to spread the message, said Ms Uma Reddy, Chief Executive, Hitech Magnetics. With increasing competition, advertising has become more of a necessity than an option, say SME sector veterans. Advertising is the need of the hour, but our advertising budget is on the lower side. Getting an advertisement designed and published in a newspaper costs a lot of money, said Mr Sundar Nadimpalli, Founder, Nudzine. The company produces child safety belts for two-wheelers. We have been using the transaction based advertising platform to get some flyers designed. It has worked well for us, said Mr Nadimpalli.

Expensive proposition
Traditional advertising through agencies can be quite expensive for SMEs and would mean paying the agency every month for carrying out advertising campaigns.

Due to this, the transaction-based advertising model is now catching up, said Mr Manik Kinra, Founder and CEO, Jade Magnet, a platform that implements the concept of transaction-based advertising. Over the past 20 months, more than 500 SMEs have used this model for creating advertisements. Every day, two new SMEs register with us, he said (This article was published in the Business Line print edition dated October 5, 2011)

Print Media Advertising for SMEs

In the mid 1990's print media advertising was the main advertising media on the schedule for SME's around the world - how things have changed. Today, media advertising is driven by enhancements to technology and the need for advertisers to reach their target audiences in the places where they are looking for information. It seems that Internet Advertising is the fastest growing format of the moment, but print media advertising still has a very firm place in most ad schedules.

One of the main reasons it still works is the fact that people tend to be very much away from work when they are reading information and looking at adverts in print. If we look at magazine advertisements, their main advantage is the fact that a very directed audience is seeing them. This is of huge benefit to the advertiser and magazine advertising gives them the space to take potential customers when they are at their most relaxed.

This is also true for newspaper advertising, although there is probably a significantly higher amount of wastage in terms of matching the ad content to the type of reader. Now you can see why suppliers of mobile phones and car companies advertise in newspapers - most of the target audience is relevant to the products or services shown in the advert.

Another area to consider for print is yellow pages and other directories. Some directories are now very targeted and the advantage to this format is that people are actually looking for adverts. The other thing to consider is cost and an annual price for an eighth page in a directory can be very reasonable.

Limitations

Lack of data on advertising campaigns run by SMEs The report is limited to SMEs in India The target audience for difference products was not interviewed separately. This is because of the wide range of the products and also time constraint. Hence the views of the target audience about the effectiveness of different advertising media are not reflected in the report.

.Accuracy of the secondary data: pieces of data which have been picked from various sites can be slightly inaccurate and there is no source to check this data.

1.

Newspapers

Among the print media, newspapers have become most popular. They command high
readership. Today, reading newspaper everyday is a habitual activity for the educated people all over the world. In India there are around 400 daily newspapers in almost all the languages with a total circulation of around 3 crores.

Advantages
(i)

Large Reach: The vast majority of households subscribe to one or more local newspapers. In some communities, it is possible to reach over 90% of households with a single newspaper.

(ii)

High Frequency: The advertising agencies have the ability to expose advertisements day after day.

(iii)

Geography Selectivity: Newspapers serve a well-defined geographic area and the advertiser can effectively reach to his target audience.

(iv)

Low Cost per Thousand (CPT): Newspapers offer a cost-effective way to reach large number of people.

(v)

Low Production Cost: Newspapers advertisements are inexpensive to create and reproduce.

(vi)

Quick Turnaround Times: Newspapers can accept advertisements on very short notice, which makes it a good medium for timely and topical promotions.

Disadvantage
(i)

Short Message Life: The newspaper which is reach each morning is discarded the same evening, along with advertisements.

(ii)

Limited Coverage of Certain Groups: Although newspapers have wide coverage, certain groups are not frequent readers. For example, newspapers are not frequently read by teenagers and college students and the illiterate ones are

out of its coverage. For correcting this deficiency, newspapers have started relevant supplements like Young World with The Hindus on Saturday & education supplements of The Hindustan Times ad The Times of India. Female oriented supplements are also there with some newspapers.
(iii)

Poor Production Quality: Although many newspapers are using colour, the majority are still printed black and white only, on low quality newsprint stock. This does not lend itself to high quality visual images. This disadvantage is reduced by the weekly colour supplements, which are printed on high quality art paper like Sunday Review with The Times of India and The Hindustan Time Sunday Magazine. The reproduction is excellent like in magazines. A lot of product launches and corporate campaigns are being released in these supplements.

(iv)

Clutter: In newspapers there are several advertisements, and some are so placed in such a congested manner that hardly attracts the attention of the readers.

(v)

Hasty Reading: An average reader spends less than half an hour in newspaper reading. This means that the advertisement must make its impression quickly or it will be ignored by the readers.

MAJOR NEWSPAPERS OF INDIA

English:

The Times of India, The Hindustan Times, The Hindu, Indian Express, The Pioneer, Statesman, Tribune, Telegraph, Deccan Herald, Deccan Chronicle etc. There are around 60 English newspapers in India with a total circulation of around 90 lakh copies.

Hindi:

Navbharat Times, Hindustan, Dainik Jagran, Dainik Bhaskar, Punjab Kesari, Amar Ujala etc. There are around 160 Hindi newspapers with a circulation of around 110 lakh copies.

Regional:

Rajasthan Patrika, Eanadu, Loksatta, Gujrat Samachar, Thanthi, Malysala Manorama, Mathrubhumi etc.

INCREASING SIGNIFICANE AND CONTRIBUTION OF THE INDUSTRY

Advertising in India is a highly competitive business. Today with the increasing consumer awareness no business can survive for long without advertising. With growing business competition it has become necessary to ensure right media mix to each target audience. Today, advertising agencies are precisely taking care of consumer needs and provide creative designs with concept & ideas.

Advertisers in India reach about 75 per cent of the population through television, and almost the entire population through radio. Certain televised programs enjoy a viewership of more than 100 million. The Indian viewership exhibits brand name recognition of both foreign and domestic products and services.

With value added information such as television rating points, audience profiles, and opinion polls available to marketers, the sophistication of advertising in India is at par with world standards. The world's leading advertising agencies - Ogilvy & Mather, J W Thompson, BBDO, Young & Rubican, Lintas, McCann Ericsson, Leo Burnett and a host of others - all have a major presence in the Indian market.

The major Indian advertising media are newspapers, magazines, television and radio, business publications and billboards.

Advertising on the Internet is the most cost-efficient way of reaching customers all over the world including ones own country. Indian advertising agencies need to wake up to the challenges posed by global economic trends and emerging interactive technologies like the Internet, Indian companies need to pay attention to characteristics of the new economy like open standards, digitalization, and volatility, as Internet-based communication offers "tremendous new opportunities for Indian companies via media convergence and re-intermediation." This also requires Indian advertising agencies to pay attention to the importance of online market research, since new media like the Net are bound to affect people's perceptions of advertising. The challenge for Indian advertising agencies in the coming years is to be able to target the rural market as well as the sophisticated urban market that may have Internet access.

Conclusion

The problem with SMEs and advertising is the cost effectiveness of is, advertising sometimes turns out to be way too expensive for SMEs. In such a situation the concept of transaction based advertising as mentioned above can be useful as it is comparatively more economical for the SME. When we look at the survey conducted in this report it is evident that most of the employees working in SMEs do feel that advertising is a necessity for them and some of them even believe in larger budgets. Internet is the most preferred medium for advertising, given its ability to reach a wider audience at a considerably lower budget. Television and Print Media follow behind Internet with Radio being the last but not the least preferred medium for advertising. The crux of the matter is in todays world you need to communicate with your audience and build a relation with them you need to be present everywhere and be seen by everyone to save yourself from the funda: OUT OF SIGHT, OUT OF MIND!!

Appendix

Q1.) Do you feel the need to advertise for your company? Yes No ____ ____

Maybe ____ Q2.) If yes, what is the preferred media for advertisements? Television Radio Print Internet _____ _____ _____ _____

Q3.) How useful will advertisements be for your company? Very Useful Moderate Useless ____ ____ ____

Q4.) How much on an average should your company spend on advertisements in case they decide to advertise? Up to 10, 00,000 10, 00, 000-20, 00, 000 20, 00, 000 30, 00, 000 More than 30, 00, 000 _____ _____ _____ _____

Q5.) What according to you is the purpose of an advertisement?

__________________________________________________________________________________