Advertising & Sales Management

Assignment Set-1

Q1) Distinguish between the different types of advertising, providing recent

examples of each type.

Type of advertising refers to the primary focus in the message that is being sent, and
can be broadly classified into six types:

Company Image

Every well established company has a different, more comfortable image, in the
consumer’s minds, as compared to a relatively new company. An established
company would have worked its way to the top by establishing the name first and
then go on to concrete its position with reliable products and services. Therefore, it
would be safe to say that, If a new company would want to establish itself in the
market, it would need to institute its name first and then go on to talk about its
products and services. A perfect example for this kind of advertising would be the
campaign launched by Hutchison Essar (now Vodafone Essar India) in 2000-2001.
Hutch was making its way into the booming Indian telecom market, where Bharti
were well on their way to becoming market leaders. But the various commercial
advertisements (print, media) launched by Hutch captivated the interest of a large
section of people, mainly the youth. Once their name was established in the market,
they went on to grow with their services, and today are the second largest mobile
phone operator in India, behind Bharti Airtel.

Name Brands

When you hear the name alone, you know the product. A brand name creates a
perception in the customer’s mind that enhances the value of the brand for the
customers. Every advertiser strives to create this perception. To put this in
perspective, ‘Xerox’ is a company that makes computer and document management
peripherals. However, their photo copying machines have become so popular as a
brand that, unknowingly, people have misplaced the term ‘photocopying’ as ‘Xerox’.
The brand name has stuck with a consumer as a photocopying service. So it would
be difficult for a consumer to associate Xerox with a soap brand! Hence the
importance of creating a brand name and driving home the advantage!

Advertising as a service instead of a product

Advertising services is a complex type of advertising, as there isn’t a physical

product that can be put in someone’s hand. If it cannot be seen, touched or smelt, it
seems to not exist. In such a case, the service must be explained as well as
demonstrated. A good example to explain the value of service advertising would be
private tutorials for college students. No physical device is sold or shown in this case.
They only tutor students and prepare them for competitive examinations. Service
advertising is more of emotional advertising than anything else. Tutorials don’t sell
degrees. They sell education services to students and their parents, who realize the
importance value added education, apart from college education, for their children to
excel in this cut throat world of competitiveness. They sell pride, that students can
gain admissions into good professional colleges.
Business to Business Advertising

B2B Advertising is also referred to as Trade advertising. Business to business

advertising is something that most individual consumers never see. The techniques
used in consumer advertising concentrate on selling to people who may not know
about the product, but business to business advertising focuses on a group of people
who know exactly what they want--and why they want it. Copy (the words in an ad)
and graphics (pictures and layout)are carefully created to appeal to people in a
particular type of business and appear only in direct mail, catalogs, trade journals
and subscription websites that target a particular industry. Ads created are not
aimed at consumers; they contain wholesaling information only and emphasize
qualities important to wholesalers or retailers looking for an economical, superior or
easily marketable product. For example, Contractors, Construction companies,
Interior design agencies would advertise in their own trade publications (a practice
called business paper advertising), directed at business people or companies who
would buy these products or services for business use.

Co-op Advertising

In this type of advertising, the ad costs are divided between two or more parties.
Usually, such programs are offered by manufacturers to their wholesalers or
retailers, as a means of encouraging those parties to advertise the product. It is a
cost-effective way for manufacturers, retailers or distributors to reach their target
markets. Although co-op advertising policies differ from manufacturer to
manufacturer, most will pay a portion of the advertising costs and supply the retailer
with photos or graphics to use in the ad (or sometimes the entire ad itself), whether
for print, radio or television. A manufacturer's contribution to a cooperative
advertising campaign can range from a large amount of money to promotional
gimmicks. Another form of cooperative advertising is sponsored by shopping centers,
which feature an advertisement from each retailer in the shopping center. These
promotions are often found in local newspapers for back-to-school specials, St.
Valentine's Day, Mother's Day, Father's Day and so on.

Public Service Advertising (PSA’s)

If your company can sponsor a charity event, PSA’s are a great way to promote your
company in a positive way. Typically, it is directed at some humanitarian cause,
philosophical ideal, political concept, or religious viewpoint. Most public-service
advertising involves the donation of time or space on part of the medium in which it
is featured. For example, in the 2010 edition of IPL, the Mumbai Indians team was
involved with many child education and rehabilitation groups, thereby attaching
themselves to help these groups and thereby promoting their brand by associating
themselves with such humanitarian causes.

Q2) Select an advertisement which you feel is effective and explain how it
follows the AIDA formula. Briefly describe the ad or attach it with your
assignment

The AIDA formula is a fantastic little tool for that is very useful in writing excellent
classified ads and sales letters. An advertisement’s pull can be increased by 100%
to generate greater response just by changing the headline! Well that is why AIDA is
so important.
Running the AIDA formula against all sales literature is said to be helpful in creating
a winning ad copy.

A = Attention: Make sure that the headline catches the readers' attention. It must
excite them just by seeing it. It is imperative to make sure that the headline either
reveals or conceals a common interest. Consider a concern that a large percentage
of the target market has and use that as the theme of the headline. A few examples:
1) TO PEOPLE WHO WANT TO QUIT WORK SOMEDAY
2) HOW TO BURN OFF BODY FAT, HOUR-BY-HOUR
3) THE MOST EXPENSIVE MISTAKE OF YOUR LIFE

These headlines catch attention. The key is to think of something that will catch the
attention of the target audience.

I = Interest: Interest is created by giving a potential customer multiple benefits

that will enhance their life. Customers usually buy on benefits not on features.

D = Desire: Desire can be built by making the offer irresistible. Including heaps of
free bonuses (they can keep even if they return the product). Including an iron clad,
no risk guarantee. Also it is important to build urgency into every offer. For example:
"Order now in the next 72 hours and you will get this free bonus."

A = Action: Last but most important, the sales piece must have a call to action. The
emphasis must be to ask the customer to buy. If their attention has been captured,
they can be over-whelmed with benefits and an undeniable desire is created through
free bonuses and the best guarantee. Through all this, they must be asked to buy.
Buying must be made easy for them (as many payment methods as possible) so that
they don’t feel left out or disappointed.
The AIDA formula boasts of success when run on every piece of sales literature. It
takes time in the beginning but as this concept becomes ingrained, you will find
yourself writing better and better ad copy.
An ad that successfully incorporated this formula would be:

Tata Safari Dicor ‘Reclaim Your Life’ Ad

This ad was first released around the end of 2008. Conceptualized by the very
renowned ad agency, O&M (makers of the extremely creative Vodafone ads), the ad
starts with a guy inside a tent that is hanging precariously, on the brink of a cliff.
What follow are breathtaking outdoor shots of snow-capped mountains, beaches,
gushing rivers and such (shot entirely in New Zealand), combined with the following
captions–

“If you looked back on your life, what would you remember? The corner
office? The corporate power plays? The VIP lounge? What would you
remember?”
The ad ends with picture of a guy standing beside his Tata Safari Dicor at the edge of
a looming cliff as the voiceover says “Tata Safari Dicor, Reclaim your life”

An absolutely gripping concept that was beautifully displayed on celluloid, this was
an ad that the viewer could immediately relate with. The music woven into the
canvas, along with the breathtaking visuals would make you close your eyes and
visualize a sense of nirvana, which is exactly what the makers wanted to convey,
through the tagline, ‘reclaim your life’
The thought that here is a car that will help you do worthwhile things, things that will
be worth remembering when you look back at your life, is simply brilliant and
brilliantly simple at the same time. And which is why, I am sure each one of us,
trapped in our mundane daily-jobs, would feel tempted to do just that…reclaim our
life, the Tata Safari way! Some of the subtle nuances of description are absolutely
impeccable. For e.g, when the first line, if you looked back on your life, what
would you remember? appears, an old man is shown blowing some air into his
chilly hands, depicting a man (probably one of us) who seems to be narrating the
story of his life, or what he might have wanted it to be. Visuals aiding the other lines,
The corner office? The corporate power plays? The VIP lounge? What would
you remember?” are creative masterpieces, as each of the visuals metaphorically
describe these lines to almost perfection.

Backed by all the right elements in the delightfully subtle execution – awe-inspiring
visuals, a magical background score and some brilliant copywriting, this ad hits the
spot, where its target market is concerned. To top it all is the consistency with which
Tata Safari is following the ‘Reclaim your life’ theme, reinforcing the whole new
dimension they brought to the core benefits of this product category.

What this meant for Tata Safari Dicor was that there were enough potential
customers willing to step in their nearest Tata showrooms and check out how they go
about reclaiming their life. And that’s the good old power of proper advertising!

This ad caught the ATTENTION of everyone who saw it. The “Reclaim your life”
was a winner tagline all the way, as TATA maintained the consistency with each
visual, to reinforce this thought.

Being a SUV that was revamped, remodeled, uplifted with new features, the idea by
TATA was to project an image to a prospective customer that, in spite of having
everything in your life, you still feel the need to reclaim it, by injecting some LIFE in
your world with the TATA Dicor. The INTEREST was created to go on and consider
the car.

DESIRE can be built by making the offer irresistible. This was a great offer for an
SUV purchase, since at the time, the Indian market was not filled with as many
SUV’s as it boasts now. The segment on which this ad was carefully targeted
(executives, businessmen, senior executives), had the desire to buy a car that was
trendy, had panache and created a sense of aura around it. The TATA Safari was the
answer in many cases.

Last but most important, the sales piece must have a call to ACTION. The emphasis
of this ad was first, to make the viewer realize the void in his life and then go onto
reclaim it. This ad was backed by an aggressive marketing campaign, which
catapulted TATA’s sales in this segment.

The ad: http://www.safaridicor.com/downloads/tvc.asp?id=01

Q3) What is the difference between visualization and layout in advertising?

Name two principles of visualization and layout.

An advertisement is an expresiion of an idea and the success of the advertisement

rests on the way in which the idea is expressed in terms of pictures and words used,
and the total message. Visualization can refer to “seeing in the mind, the form of the
idea as it would appear in an advertisement”. Visualization is the process of
designing the advertisement. The ultimate outcome of the process of visualization is
the layout. A visualiser decides about the inclusion of different elements at the
beginning of his work. His questions are:
• Whether my advertisement will have headline?
Whether there will be a sub-headline?
• Whether there would be a body copy? Whether to have illustration or a
photograph?
• Whether to include slogan? Etc.
At the second step, he foresees how all these elements will be appearing in the copy.
The basic elements with which a visualizer works are:
1. Headline, sub-heads
2. The body copy
3. The illustration
4. Logo signature

At the commencement of his work he becomes intimate with the copy. The
visualization process is shared by the copywriter and the creative director of
visualization. They decide:
• Whether the product should be featured?
• Whether people should be featured; what they would be doing; will there be a
background? Which type?
• Should photos be used?
• Or line illustrations and sketches?
• How large the headline should be?
• What components should make the final copy: the product?
• The address and the name of the company? The picture?

Visualizer operates under certain constraints: the space available, the type of paper
on advertisement will be printed, whether it is black and white or color
advertisement, the p technology employed etc.

Once a visualiser exercises himself mentally and puts his pencil to paper, the shape
of layout begins to emerge. It is very difficult to say where the process of
visualization ends and where the shape of layout begins. It is a smooth transition
however, and we are moving from abstract ideas to concrete shapes. Each element
is assigned a weight, depending upon its overall significance. In the visualization
process, we require a flow of ideas - those ideas are obtained from many sources
and using many techniques. We can pin down the problem and develop the
advertisement copy accordingly. We can have a good database or briefing before
visualization. There -can be some brain waves from the copywriter. We can employ
Osborn's Brainstorming technique. We do meditation from analysis and synthesis of
ideas.
The steps in the visualization process are those involved in any creative process

The following are the five principal stages in creative process:

(i) Saturation: The manager becomes very intimate with the problem and its
environment.
(ii) Deliberation: A perfect knowledge of the environment and attendant data is
essential for creativity.
(iii) Incubation: The subconscious activity precedes a fresh approach. The creative
mind forms a pattern of the problem by combining the scattered data. Then the
conscious mind shou1d be switched off from the problem and the subconscious mind
is allowed to take over. The conscious mind is the seat of logic and the subconscious
mind directs itself to problems, which are of interest to the conscious mind. When
the conscious mind is relaxed the subconscious mind works to give some of the best
ideas.
(iv) Illumination: Here an idea actually flashes across the mind of the decision-
maker. Very often this happens while sitting in a cafeteria, driving a vehicle, strolling
in a leisurely fashion or in some such state of relaxation.
(v) Accommodation: The original idea is modified, reframed or polished and made to
practical use.

Q4) How is the working of an advertising agency different from that of an

advertising department of a company? Name two advantages each of
working through an in-house advertising agency and working through an
outside advertising agency.

An advertising agency is a team of experts appointed by a client to plan, produce

and place advertising campaigns in the media. Ad agencies, as they are commonly
referred, are constantly in need of a diversity of talents both on the creative as well
as product side.

Ad agency’s have become service-oriented, and are able to offer every possible
service including marketing, market research (MR) and public relations (PR). Ad
agencies have evolved over a period of time. These days we have mostly studio-
based agencies, some industrial and specialized agencies and hot-shops that only
plan creative campaign by engaging the services of freelancers.

The advertising agencies are shifting from the creative mode to the marketing mode.
Today the onus is on the agency to supply the client with data on his industry; the
days of the clients briefing the industry are almost over. The agencies are expected
to maintain database. There is learning towards software for optimizing media usage
and computerization of studio functions.

In recent years, there has been a healthy trend towards sound management
practices, especially financial planning and control, in advertising agencies. This is a
highly paid profession. It is a conspicuous high wage island. People operate on high
profile. Their life-styles are opulent because of high expense accounts of entertaining
clients. They got their elitist brand due to this reason. But high salaries and freedom
are necessary to attract talents.

A working of an ad agency largely depends on the people working there. There are a
definite set of people with diverse talents, skills, capabilities and experience working
in an ad agency.

The agency, like any other business organization, has something to sell. The
business of the agency should, therefore, grow so that, at any stage, its volume of
business may justify its facilities for the services that are offered by it. Moreover,
growth is one of the desirable requirements of any business. It is, therefore, logical
to have a separate cell in the agency, which is responsible for the growth of
business. This growth maybe achieved either by increasing the business with the
present accounts or by getting new accounts. Some agencies aggressively solicit new
business by themselves engaging in advertising. They highlight the agency’s
competent personnel, the resources and the facilities at their disposal, the influential
accounts they service and the successful-advertisement campaigns they have
handled.

Large corporations have in-house agencies, which operate and control the entire
advertising program by themselves. For example, Reliance has Mudra, Malhotra’s
have Bharat Advertising, Golden Tobacco has Govan Advertising.
As Sijid Peerbhoy rightly remarked ‘An in-house agency can hardly be sacked.’ Here,
objectivity and creativity may also suffer. When corporations have a variety of
products and services to sell and have a multi-divisional set-up, the in-house agency
is very economical to have.

Q5) Suggest the most appropriate method for selecting an advertising

budget for a) A newly launched product and b) A well established product.
Justify your answer.

Some companies are known to use the following methods to set their advertising
campaign budgets:

1. The Percent of Sales Method: The advertising campaign budget is a constant

percentage of desired sales. A car manufacturer may spend less than 1% of sales,
while a small retailer may budget 3 -7% of sales. A jewelry store may budget 8
-12% of sales and other companies may budget 20% or more. This method works as
long as the advertising campaign budget is set as a percentage of desired sales. If
the budget is set to actual sales, and sales drop, you do not want to cut your
advertising campaign budget, or you will get caught in a downward spiral.
2. The Task Objective Method: How much money do you need to spend to reach the
specific goals you have outlined for the advertising campaign? This is especially
effective when you are starting out, or if you are trying to grow rapidly. Some
advertising campaign strategies call for heavy spending upfront in order to win long-
term customers.
3. The Historical Method: How much did you spend to reach your sales goals in
previous years or periods? You will find that by tracking your ads, you will know in
advance what you need to do to accomplish your goals.
4. Share of Market - Share of Voice: This method links market share to advertising
expenditure. A company with a 20% market share would spend slightly more than
20% of the total advertising dollars spent in the market for that product or service.
For new companies, expenditures would be 1.5 times the desired market share until
that position is attained. [So if you want 20% market share, you spend 30% of total
advertising dollars in that market until you get it].
5. Competitive Parity: With competitive parity you spend in equal amounts to your
competitors as a percentage of market shares. This is a self-defense method of
budgeting marketing and advertising expenditures.
6. The Combination Method: The best advertising campaign budget you can set will
be based on some combination of all of the previous models. You want to maintain a
minimum level of advertising, fulfill specific goals, maintain your market share, keep
up with your competitors, and compare everything to last year.

Launching a new marketing product involves a lot of planning and preparation.

Business-to-business marketing, like business-to-consumer marketing, involves
everything from getting the product produced and manufactured to determining the
product's target market, developing and implementing marketing strategies and
coming up with a way to finance these activities. The associated costs must be
documented in a budget to ensure that a business has resources readily available for
a successful launch.

In the case of a new launch, the following aspects should be considered:

• Determine the target market for the new marketing product. Although there
will be undoubted marketing of the product to businesses, the market has to
be narrowed to decide if a more specific niche or industry is being targeted.
These details will help to decide how many items are needed to be produced
and help to project sales based on the size of the market.
• Pinpoint the costs to produce the new marketing product. Include any costs
incurred for research and development, marketing and promotions, as well as
costs for employee salaries and training. Production costs for an informational
product, such as a book or an e-book, will likely be cheaper than costs for a
hard product, such as a promotional tote bag or custom-made trade show
banner. Include the costs of all materials, equipment and supplies. If the work
involves working with a manufacturer, include all the costs that are being
charged for production.
• Set sales goals to come up with tactics for reaching the target market.
Reaching business owners with a new marketing product might involve
hosting an event, hosting a webinar, attending a trade show, sending post
cards to market the product, sending press releases and even cold calling.
Assign a projected cost to each activity that is planned to include as a part of
the new marketing product launch.
• It is a good idea to set up a chart in excels to list expenses on one side of the
page and income on the other side. All expenses should equal income or be
less than the income.

Q6) What is comparative advertising and what are its advantages? When is
comparative advertising considered to be unethical? Explain with examples.

Comparative advertising is an advertisement in which a particular product, or

service, specifically mentions a competitor by name for the express purpose of
showing why the competitor is inferior to the product naming it. It is a marketing
strategy that involves conducting a direct comparison between specific products that
compete in the marketplace. The idea is to demonstrate that one product is inferior
to the other product in some manner, thus enticing consumers to purchase the
obviously superior product. In addition to use in promoting various goods and
services for sale, comparative advertising is also sometimes used in political
campaigns.
Many different types of major industries make use of comparative advertising. This
particular advertising technique has been used to demonstrate how one brand of
bleach leaves clothing whiter than others, and how one brand of gasoline contains
additives that extend engine life and a major competitor does not. Airlines
sometimes compare their service records and range of onboard services to that of a
competitor, as a means of wooing customers away from the competition. In all
instances, the focus is on showing why a consumer should choose one product over
the other.
The actual process of comparative advertising must rely on using verifiable data that
supports the claims made in the advertising. For example, if a soft drink company
makes the claim that more people prefer the taste of their product to a similar
product marketed by a different company, they must base this claim on data
collected during actual taste comparisons conducted with consumers. In like manner,
if a politician wishes to contrast his or her stand on key issues with the past actions
of an opponent, the contrast must be done by comparing the actual public service
records of the two politicians.

Comparisons between goods and services of different undertakings carry with them
some significant risks. There is a danger that once undertakings address the merits
and inadequacies of competing goods or services, they maybe tempted to denigrate
them or derive unfair advantages from such inaccurate comparisons.

Advertisements containing comparisons with other manufacturers or suppliers or

with other products including those where a competitor is named are permissible in
the interests of vigorous competition and public enlightenment, provided:
(a) It is clear what aspects of the advertiser’s product are being compared with what
aspects of the competitor’s product.
(b) The subject matter of comparison is not chosen in such a way as to confer an
artificial advantage upon the advertiser or so as to suggest that a better bargain is
offered than is truly the case.
(c) The comparisons are factual, accurate and capable of substantiation.
(d) There is no likelihood of the consumer being misled as a result of the
comparison, whether about the product advertised or that with which it is compared.
(e) The advertisement does not unfairly denigrate attack or discredit other products,
advertisers or advertisements directly or by implication.

To explain the guidelines above, in retrospect, with the ethics of comparative

advertising:

Recently, an advertisement from Rin – a TV commercial claiming to be better than

Tide by not just naming but showing the competitive product, has brought the
debate on comparative advertising back in focus. In the Rin ad, the claim is limited
to a whiter wash- ‘Tide se kahin behatar safedi de Rin’ (Rin gives better whiteness
than Tide), without getting into specific, feature-to-feature comparison. Almost all
detergent ads promise a whiter wash – except that they used to refer to ‘ordinary
detergents’ leaving the consumer to figure that they are talking about her brand. The
only difference here is that a competitor has been named, and shown brazenly. The
ad was however, quickly taken off air because of obvious reasons.