MK0007 – Advertising Management & Sales Promotion

Assignment Set- 1

1. What is the difference between media planning and media buying? Briefly
describe the various tasks of media planners and buyers.

Ans: Media planning is generally the task of a Media Agency and entails finding the
most appropriate media products for a clients brand or product. ,it determines how to
use time and space to achieve advertising objectives. One of those objectives is always
to place the advertising message before a target audience. The job of Media Planning
involves several areas of expertise that the Media Planner uses to determine what the
best combination of media is to achieve the given marketing campaign objectives. ).
Media planning is systematic and complex. But in fact, a media plan may be quite
simple and somewhat haphazard.
In the process of planning the Media planner needs to answer questions such as:
How many of the audience can I reach through different media? On which media (and
ad vehicles) should I place ads? Which frequency should I select? How much money
should be spent in each medium?

In answering these questions the Media Planner then comes to an optimum Media Plan
that enables him/her to deliver on the clients objectives

Media Planners help ad agencies choose the best outlet or medium to reach the
customer they want. They plan, schedule, book and purchase space in the print media
(newspapers, magazines) or outdoors (billboards, kiosks and bus panels) and time (TV
& radio, internet). The media planning exercise may also involve conducting some
targeted brand or need-specific research to assess recall and viewer ship/readership of
a campaign.

Media Buying is a sub function of Advertising management. Media Buying is the

procurement of the best possible placement and price of a piece of media real-estate
within any given media. The main task of Media Buying lies within the negotiation of
price and placement to ensure the best possible value can be secured.. Media Buyers
are individuals responsible for purchasing time and advertising space for the purpose of
advertising here. When planning what to buy, they must evaluate factors based on but
not limited to station formats, pricing rates, demographics, geographic, and
psychographics relating to the advertisers particular product or service objectives. The
Media Buyer needs to optimize what is bought and that is dependent on budget, type of
medium (radio, internet, TV, print), quality of the medium (target audience, time of day
for broadcast, etc.), and how much time and space is wanted. Media Buyers can
purchase spot, regionally, or nationally.
One of the most important media planner jobs is that of media buyer, also referred to
as a media planner. This job requires an individual to work with a client to determine
the needs and goals of a campaign. Additionally, this person must work with the
advertising department to create copy, scripts or entire commercials for the client.

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Finally, this person often must negotiate with media outlets such as television stations,
newspapers and websites to get the finished product out to the public.

The job of media planner is different because of its management responsibilities.

Media planner soften handle complex and high-dollar clients, but they mostly focus
their attention on running the media department. This job requires getting updates
from the media planners on various projects, monitoring the budget and helping to
develop the company's strategy with other management team members.

2. Compare the different approaches to setting advertising budgets, in terms

of their relative advantages and disadvantages.

Ans: 1. Percentage of Sales Method: Due to its simplicity, this method is most
commonly used by small businesses. When using this method, an advertiser takes a
percentage of either past or anticipated sales and allocates that percentage of the
overall budget to advertising. Critics of this method, however, charge that using past
sales for figuring the advertising budget is too conservative and that it can stunt
growth. However, it might be safer for a small business to use this method if the
ownership feels that future returns cannot be safely anticipated. On the other hand, an
established business, with well-established profit trends, will tend to use anticipated
sales when figuring advertising expenditures. This method can be especially effective if
the business compares its sales with those of the competition (if available) when
figuring its budget.

2. Objective and Task Method: Because of the importance of objectives in business,

this method is considered by many to make the most sense, and is therefore used by
most large businesses. The benefit of this method is that it allows the advertiser to
correlate advertising expenditures to overall marketing objectives. This correlation is
important because it keeps spending focused on primary business goals.

With this method, a business needs to first establish concrete marketing objectives,
which are often articulated in the ‘selling proposal’ and then develop complimentary
advertising objectives, which are articulated in the ‘positioning statement.’ After these
objectives have been established, the advertiser determines how much it will cost to
meet them. Of course, fiscal realities need to be figured into this methodology as well.
Some objectives (expansion of area market share by 15 percent within a year, for
instance) may only be reachable through advertising expenditures that are beyond the
capacity of a small business. In such cases, small business owners must scale down
their objectives so that they reflect the financial situation under which they are
operating.

3. Competitive Parity Method: While keeping one’s own objectives in mind, it is

often useful for a business to compare its advertising spending with that of its
competitors. The theory here is that if a business is aware of how much its competitors
are spending to inform, persuade, and remind (the three general aims of advertising)
the consumer of their products and services, While it is important for small businesses
to maintain an awareness of the competition’s health and guiding philosophies, it is not
always advisable to follow a competitor’s course.

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4. Market Share Method: Similar to Competitive Parity Method, this method bases its
budgeting strategy on external market trends. With this method, a business equates its
market share with its advertising expenditures. Critics of this method contend that
companies that use market share numbers to arrive at an advertising budget are
ultimately predicating their advertising on an arbitrary guideline that does not
adequately reflect future goals.

5. Unit Sales Method: This method takes the cost of advertising an individual item
and multiplies it by the number of units the advertiser wishes to sell.

6. All Available Funds Method: This aggressive method involves the allocation of all
available profits to advertising purposes. This can be risky for a business of any size; for
it means that no money is being used to help the business grow in other ways
(purchasing new technologies, expanding the work force, etc.). Yet this aggressive
approach is sometimes useful when a start-up business is trying to increase consumer
awareness of its products or services. However, a business using this approach needs
to make sure that its advertising strategy is an effective one, and that funds which
could help the business expand are not being wasted.

7. Affordable Method: With this method, advertisers base their budgets on what they
can afford. Of course, arriving at a conclusion about what a small business can afford in
the realm of advertising is often a difficult task, one that needs to incorporate overall
objectives and goals, competition, presence in the market, unit sales, sales trends,
operating costs and other factors.

3. What are the differences between advertising objectives and sales

promotion objectives? Give five examples of consumer sales promotion
techniques, with a specific example of each.

Ans: Advertising objectives: Each advertisement is a specific communication that

must be effective, not just for one customer, but for many target buyers. This means
that specific objectives should be set for each particular advertisement campaign.
Advertising is a form of promotion and like a promotion; the objectives of advertising
should be specific. This requires that the target consumers should be specifically
identified and that the effect which advertising is intended to have upon the consumer
should be clearly indicated.
The objectives of advertising were traditionally stated in terms of direct sales. Now, it is
to view advertising as having communication objectives that seek to inform persuade
and remind potential customers of the worth of the product. Advertising seeks to
condition the consumer so that he/she may have a favourable reaction to the
promotional message. Advertising objectives serve as guidelines for the planning and
implementation of the entire advertising programme.

Objectives of Sales Promotion: The basic objectives of sales promotion are:

i. To introduce new products, to induce buyers to purchase a new product, free

samples may be distributed or money and merchandise allowance may be
offered to business to stock and sell the product.

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 ii. To attract new customers. New customers may be attracted through issue of free
samples, premiums, contests and similar devices.
iii. To induce present customers to buy more
iv. Present customers may be induced to buy more by knowing more about a
product, its ingredients and uses.
v. To help firm remain competitive. Sales promotions may be undertaken to meet
competition from a firm.
vi. To increase sales in off season. Buyers may be encouraged to use the product in
off seasons by showing them the variety of uses of the product.
vii. To increase the inventories of business buyer, Retailers may be induced to keep
in stock more units of a product so that more sales can be affected.

Consumer sales promotion techniques and examples:

Price discounts or price-off deals: A price deal for a customer means a reduction in
the price of the promoted product and the consumer saves money on purchase.

Example: Colgate fresh energy ice blue gel (Colgate India) 50 gm pack, Rs. 5.50 off on
normal price, now available at Rs. 12.50 only.

Price pack deals: Price pack deals are also called value packs. They can take any of
the two forms:
Bonus pack: In case of a bonus pack, an additional quantity of the same product is
offered free when the standard pack size of the product is purchased at the regular
price.

Examples: Godrej Colour Gloss triple action shampoo, offers 20% extra free. 100ml
+20ml.
Sunsilk shampoo (HLL) 400ml bottle gives 33% more free.
Dettol shaving cream get 40% extra free.

Banded pack: The Banded pack is when the marketer develops special packs of the
product containing more quantity but the price is proportionately low. This technique is
often used to introduce a new large size of the product or to encourage continued
usage and also to increase consumption. Another variation of this technique is “buy 1
get 1 free” or some similar offer, it could be “same for less” or “more for the same.”

Example: Fair & lovely face cream – buy 3 get 1 free,

2. Refunds and Rebates: Refund is the repayment of total money paid for purchase,
while the rebate represents repayment of only part of the money paid for the purchase.
Refund offers seem to work very well in guaranteeing the trial of a product or service
since there is no risk involved for the customer because of the promise of total refund
of the purchase amount.

Refunds and Rebates play an important role in the consumer durable segment because
the product price is reduced to a great extent because of the rebate offer.

Example: “Taj Mahal Tea” guaranteed its taste by openly telling the public of its offer
that “if do not like at any point return full money”. After having launched it new product
Whisper Ultra Thin, confident about the product quality and confident about offering the
promised product, to increase its trail and usage, had started the money back offer.

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3. Coupon: A coupon entitles a buyer to a designated reduction in price for a product
or service. Coupons are the oldest and most widely used form of sales promotions.
Coupons bear an expiry date and cannot be redeemed after the cut off date.

The main Advantages of coupons are:

a) Encourage brand switching
b) Stimulate trial for a product
c) Take off the attention from price

Fair and Lovely dark circle removal cream to create more product trials has coupons in
the newspapers and magazines which avail you of Rs.10/- off on a 40 gm pack.

4. Contests and Sweepstakes: Contests and sweepstakes can draw attention to a

brand like no other sales promotions technique. A contest has consumers compete for
prizes based on skill or ability. Winners in a contest are determined by a panel of judges
or based on which contestant comes closest to a predetermined criterion for the
contest. Contests were very often used earlier where people have to write slogans,
poems, stories etc. generally “I like the product because …” and the best ones won
prizes. But off lately, contests are becoming less and sweepstakes increasing. People
are more willing to play on luck rather than participate by showing their abilities.

A sweepstake is a promotion in which winners are determined purely by chance.

Consumers need only to enter their names in the sweepstakes as a criterion for
winning. Some popular types of sweepstakes also use “scratch-off cards”.

Contests and sweepstakes often create excitement and generate interest for a brand,
but the problems of administering these promotions are substantial. One problem is
that the game itself may become the consumer’s primary focus, while the brand
becomes secondary. The technique thus fails to build long-term affinity for the brand.

Example: Britannia khao world cup jao campaign has taken the market by a swing.

Under the offer you collect points available on Britannia biscuit packets and exchange
100 points for a scratch card, which has various gifts and the 100 world cup tickets. The
offer was actually introduced during the last world cup and had shown phenomenal
results. Sale increased tremendously; there was an increase in the sales by 25%, claims
the company. So it is being done this year too. This year too the contest is showing
good results.

5. Sampling: Getting consumers to simply try a brand can have a powerful effect on
future decision-making. Sampling is a sales promotion technique designed to provide a
consumer with an opportunity to use a brand on a trial basis with little or no risk. Saying
that sampling is a popular technique is an understatement. Sampling is particularly
useful for new products, but should not be reserved for new products alone. It can be
used successfully for established brands with weak market share in specific geographic
areas.

Examples: Lakme has in-store trail products. Since it in the cosmetics market it is very
essential to provide samples, many stores in Mumbai from time to time have Lakme
sampling offers. Where they allow you to try the product and then buy it.

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Scents and certain deodorants give the prospective customers sample spray for sales
promotions.

Shampoo sachets with Magazines etc.

MK0007 – Advertising Management & Sales Promotion

Assignment Set- 1

1. Distinguish between five different forms of advertising, giving a specific

example of each.

Ans: Persuasion and meaningful communication directed at a specific target audience,

in the form of advertising through mass media, including outdoor advertising, may be
effectively supplemented by offering incentives to the trade and prospective buyers.
Such incentives are classified as sales promotion aids and are included in ‘advertising
and sales promotion’ or just ‘promotion’ which is intended to cover all forms of
advertising and sales promotion. Sales promotion programs for trade may provide
direct financial incentives for distribution channel for special occasions or for new

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product introduction. There may be display which has become an essential promotional
feature of shops and department stores, especially in industrial nations. Items such as
dealers’ name boards, which carry a company’s brand name and other advertising
message, displayed at the point of purchase (POP), carry definite advertising value.

Promotions directed at prospective buyers may take various forms. There may be
contests to interest prospects in buying the products which, in turn, will entitle them to
take part in contests where attractive prizes are offered.

Special incentives may be attached to introductory offers of products. Advantage may

be taken of established brand loyalty of a product for introducing or enhancing sales of
other product. Certain concessions on purchase of the advertised product are offered in
one form or another. Such approaches and methods constitute sales promotion directed
at consumers.

2. Discuss the relative advantages and disadvantages of sales promotion, as

compared to advertising.

Ans: A total business communications strategy includes advertising, sales promotion

and personal selling. The cohesiveness and effectiveness of these efforts is what
achieves sales and profit objectives. The Duquesne University Small Business
Development Center explains why every company should have a promotional strategy
in place.

Promotional strategy is the function of informing, persuading, and influencing a

consumer decision. Why should a company implement a promotional strategy?

· To provide information – In the early days of promotional campaigns, when many

items were often in short supply, most advertisements were designed to tell the public
where they could find a product. Today, a major portion of U.S. advertising is still
informational. Promotional campaigns designed to inform often target specific market
segments.

· To differentiate – Marketers often develop a promotional strategy to differentiate

their goods or services from those of competitors. This strategy is called positioning.
The idea is to communicate to customers meaningful distinctions about the attributes,
price, quality, or usage of a good or service. Market research is a valuable tool for
positioning since it helps to identify what consumers want and what attributes are
important to them.

· To increase sales – Increasing sales volume is the most common objective of a

promotional strategy.

· To stabilize sales – Advertising is another tool that can stabilize sales. A stable sales
pattern has several advantages: it evens out the production cycle, reduces some
management and production costs, and makes it easier to do financial, purchasing and
market planning.

· To accentuate the product’s value – Some promotional strategies are based on

factors that add value, such as warranty programs and repair services.

Advertising

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Advertising is a paid, non-personal sales communication usually directed at a large
number of potential buyers. Types of advertising include:

· Informative advertising – Advertising approach intended to build initial demand for

a good or service in the introductory phase of the product life cycle.

· Persuasive advertising – Used in the growth and maturity stages of the product life
cycle to improve the competitive status of a product, institution or concept.

· Comparative advertising – Persuasive advertising approach in which direct

comparisons are made with competing goods or services.

· Reminder-oriented advertising – Method used in the late maturity or decline states

of the product life cycle that seeks to reinforce previous promotional activity by keeping
the name of the good or service in front of the public.

The following are some of the most popular forms of advertising media:

· Newspapers – Can be costly so you want to reach the exact audience that will buy
your product or service. Avoid using small print if possible. You may be able to place an
ad in the more affordable weekly papers where you can run your ad by zip code.

· Television and radio – Are typically expensive. The most popular stations are
typically expensive. Be sure to know your target audience and study the media kits to
determine if the station reaches that audience.

· Direct mail – Can be either generated by you individually or can be a part of a co-op
program such as Val-Pak.

· Magazines and trade journals – Many have space available regionally.

· Outdoor advertising including billboards and transit ads (buses, cabs)

· Yellow pages – This is possibly the first type of advertising you should purchase. A
large ad is not necessary; a listing is sufficient to let your potential customer know you
are a valid company, not a fly-by-night. The downfall with Yellow page advertising is
that it takes the customer directly to your competition! Have a listing but be careful
while promoting it.

· Internet – Website or banner advertising.

Some lower-cost advertising opportunities include co-op advertising programs where

there is a cost sharing arrangement between the manufacturer and the retailer, cable
TV advertising, and targeted direct mail postcards.

3. Select an advertisement for any product of your choice from a newspaper

or magazine and analyze the advertising strategy in terms of a) Objective b)
Target audience c) Consumer benefit and product attributes d) Proof e) Tone
and manner. Attach the ad with your response.

Ans:

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 a) Objective: To encourage customers to make an initial purchase of the
product.

b) Target audience: Electronic gadget lovers, people who use electronic

gadgets to make their life simpler.

c) Consumer benefit and product attributes: Simple to use hand held

device available in trendy design and stylish colours.

d) Proof: As advertised.

e) Tone and manner: Advising

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