A Study On Effect of Advertisement On Sale

A
Project Report
On
“A Study on Effect of Advertisement on Sale "

With special reference of “VAM”
By
"ALOK SINGH"
Under the guidance of
"Mr. S. Ranjan upadhayay"

Faculty of AIT Kanpur
Submitted to
“Gautam Buddha Technical University Lucknow”
In partial fulfillment of the requirement for the award of the
Degree of
AIT KANPUR ALOK SINGH Page 1

Master of Business Administration (MBA)
"APOLL INSTITUTE OF TECHNOLOGY KANPUR"
(Year-2010-11)
Preface
“Advertising” –is a very interesting word for me. From my childhood I love to see
advertisements and I am very enthusiastic to know more about advertisements. So when
I was given an opportunity to do summer project, I selected advertising industry because
it has always been the industry of my choice.
The whole process of approach of the client to the outcome of the communication in the
form of advertisements has taught me a lot. The creative aspects, in addition to the
pressure of meeting deadline are unique in this industry.
With the growth of the industry in India and the full-fledged operations of the MNCs, the
expenditure on advertising has seen growth. Now companies do more and more
advertising of their products in order to improve their sales and compete with their
competitors. This gives freedom to the advertising agencies to display the best of their
potential. My project is divided into three parts. Firstly, I have made an effort to study the
current scenario of advertising industry in India. Second I have tried to learn functions of
various departments of Mudra. Third, I was given an analysis of the advertisement
campaign of Graffiti tiles by Mudra and subsequently ways to improve the visibility of
the ad campaigns.
This project has been carried out with sincere efforts and theoretical inputs have been
well included after carried out lot of study. It has certainly been a very good platform to
study advertising and related aspect.

Salient features
Project name : “A Study on Effect of Advertisement on Sale "
Company : Vishal Advertising & Marketing (P) Ltd (Only VAM)
Department (working with) : Space Marketing
Training Officer : Mr. GOPAL DWIVEDI (Director – VISHAL

ADVERTISING & MARKETING Pvt. Ltd.)
Co-ordination with : Mr. MANOJ (Marketing manager- VISHAL

ADVERTISING & MARKETING Pvt. Ltd.)
Duration of project : 8 Weeks (15th June to14th Aug)
College name : APOLLO INSTITUTE OF TECNOLOGY,

KANPUR
Name of presenter : ALOK SINGH

(M.B.A. III rd Sem. )
Acknowledgement
First I want to thank my parents for making me able, to be a part of M.B.A.

programme. For understanding the practical aspects of the industry as a M.B.A. student,
we have to carry out summer project in any industry of our choice. So, I really thank
those persons who give us this kind of opportunity to do our practical work.
I extremely grateful and acknowledge the help and support by Mr. S. Ranjan upadhyay
during the entire course of my research paper.
I am also thankful to Mr. Amit Tripathi (HOD) and all the faculty members of the
MBA DEPARTMENT who has given me a helping hand during the project report.
For giving me an opportunity to work on such a specific field to improve my knowledge

about advertising. I have been able to work in the High-profile organization and gain a lot
of important knowledge about advertising due to their immense help in the form of
guidance & suggestions..
I also thankful to all staff-members of VAM for giving their friendly response and kindly
support to me in my project.

Last but not the least, I also thank my classmates for their support and help in doing my
project effectively.
Table of Content
Topic Page no.

CONTENTS Pg. n.
S.N.
1. Objective of the Study 7
2. Introduction to Advertising Industry 8
3. History of Advertisement in India 25
4. About VAM 54
5. Measuring Advertising Effectiveness on sale 58
6. Impact of Advertisement 67
7. Research Methodology, Data collection & Interpretation 74
8. Conclusion 93
9. My Learning 94
10. Questionnaire 96
11. Bibliography 98
12. Webography 99

1. Objective of the Study
1. To study the current scenario of Indian advertising industry.
2. To study how the planning and execution of advertisements from starting stage to
finalization stage.
3. To conduct market research on designer tiles and to suggest how can advertising
agency make better and effective advertisements.
4. Recently competition has intensified in the industry and most of the corporate
have started reverting to advertising to differentiate themselves. My study
therefore focuses on importance of advertising.

2.INTRODUCTION
TO
ADVERTISING INDUSTRY

Introduction
Marketing is more than just distributing goods from the manufacturer to the final
customers. It comprises all the stages between creation of the product and the after-
market which follows the eventual sale. One of these stages is advertising. The stages are
like links in a chain, and the chain will break if one of the likes is weak. Advertising is
therefore as important as every other stage or links, and each depends on the other for
success.
The product or service itself, its naming, packaging, pricing and distribution, are
all reflected in advertising, which has been called the lifeblood of an organization.
Without advertising, the products or services cannot flow to the distributors or sellers and
on to the customers or users.
A successful national economy depends on advertising promoting sales so that

factory production is maintained, people are employed and have spending power, and the
money goes round and round. When this process stops there is a recession. Similarly,
prosperous countries are those in which advertising does its job. In third world countries
and Russia, economies are poor and advertising is minimal, especially when a large
proportion of the population is young non-earners.
The modern world depends on advertising. Without it, producers and distributors would
be unable to sell, buyers would not to know about and continue to remember products or
services, and the modern industrial world collapse. If factory output is to be maintained
profitably, advertising must be powerful and continuous. Mass production requires mass
consumption which in turn requires advertising to mass market through the mass media.

Costs: who pays for advertising?
The cost of advertising is justified in two ways: it enables the consumer to enjoy
the product (and, where there is competition between rival products, to have a choice),
and it also enables the manufacturer or supplier to enjoy a profit.
Generally, prices fall as advertising increases demands. If advertising were to be

stopped demand would also fall off. Either the product would fail to sell, or the price
would have to be increased as it would be more costly to produce and distribute a smaller
quantity.
Advertising involvement
Although advertising is listed as a single element it is associated with almost every other
element, borrowing from them or interpreting them.
a) The volume, emphasis and timing of advertising will depend on the product life
cycle situation. For instance, at the introductory or recycling stages, the weight of
advertising will be heavier than at the maturity or decline stages.
b) Marketing research will provide evidence of motives, preferences and attitudes
which will influence not only the copy platform or advertising theme but the
choice of media through which to express it.
c) Naming and branding may be initiated by the advertising department or agency,

and clearly plays an important role in advertisement design.

d) The product image will be projected by advertising and PR.
e) The marketing segment will decide the tone or style of advertising, and the choice
of media.
f) Pricing can play an important part in the appeal of the copy. Is the product value
for money, a bargain or a luxury? Pricing can be a very competitive sales
argument. People are very price conscious. Even though legislation prevents the
control of prices, indication of likely or “list” prices, can be important aspects of
advertising appeals.
g) The product mix has many applications. In advertising, one product may be
associated with another, or each brand may require a separate campaign.
h) Packaging is a vital aspect of advertising, as when recognition is sought. It is itself

a form of advertising, especially at the point –of-sale, as in a supermarket when
the package often has to identify the product and literally sell if off the shelf.
Increasingly, Eco-labeling will be looked for as proof that a product is

environmentally friendly. There are schemes in many countries for approving
products so that they may carry E marks.
i) Distribution involves trade advertising such as direct mail, in the trade press and
at exhibitions.
j) The sales force has to be familiarized with advertising campaigns which will
support their efforts in the field.
k) Market education is a public relations activity aimed at creating a favourable

market situation in which advertising will work.
l) Corporate and financial public relations often use institutional advertising in the
business press. The corporate image may be the theme of institutional advertising.
m) Test marketing requires a miniature advertising campaign simulating the future

national campaign.
n) Advertising research includes copy-testing, circulation and readership surveys and

statistics, recall tests, tracking studies and cost-per-reply and cost-per-conversion-
to-sales figures.
o) Sales promotion can augment or even replace traditional advertising.
p) The after-market calls for advertising to make customers aware of post-sales

services.
q) The maintenance of customer interest and loyalty may be achieved by advertising

which promotes additional uses and accessories, or simply reminds.
r) On-going public relations activities help to maintain long-term brand recognition.
Basics of an advertising campaign
A campaign should follow a five-point plan:
1. What exactly is to be achieved? Do we aim to achieve, say, a given sales

target?
2. When is this to be achieved? This week – over the year?

3. What is the strategy? Will the extra sales come from new or existing
customers or by switching customers from other brands?
4. What tactics shall be used? What creative ideas and media?
5. How much will this cost? It is a good investment?
The advertising department
The organization of advertising and public relations differ, so that most

advertising personnel work in advertising agencies but public relations personnel work
in-house. Nevertheless, both do have internal and external services. Whereas in
advertising it would be unusual not to use an agency, in public relations it is not
absolutely necessary to use consultancy. This is due to the very different natures of
advertising and public relations, and to the very different personnel employed by each.
The result is roughly that the larger the volume of advertising the greater the need
for an advertising agency and the ability to share the skills of many specialists. The
greater the volume of public relations department to deal with the communication needs
of numerous departments. If extra work (or specialized work such as financial or
parliamentary relations) occurs, a consultancy may also be used.
The in-house advertising department servers two purposes: to buy and supervise
agency services and to buy supervise services not provided by the advertising agency.
This division of responsibilities coincides with above-the –line and below-the –line.

Appointing an agency:
The advertising agent is the agent of the media, and the “agent acts as principal”
and is legally responsible for the payment of space and airtime costs even if the client
defaults, it is necessary for the advertiser to choose and appoint an agency to produce its
advertising.
The advertising manager is therefore engaged in the search for an agency, its
appointment and eventual re-appointment or otherwise. This will usually be done in
association with superiors such as the marketing director and managing director who will
sign the contract of service.
The appointment of the agency results from a number of agencies being short-
listed. This is called “shopping for an agency”. Arrival at this short-list will depend on
having decided how much and what kind of advertising is required. The size of the
appointment or budget will merit a small, medium or large agency. Technical, industrial
or business-to-business products or services are best served by a technical or business-to-
business agency.

ROLE OF ADVERTISING AGENCY:
The advertising agency performs all the managerial functions. Some of these are
planning, creation and execution, co-ordination, accounting, media, research and internal
control.
 Planning: The advertising agency plans the advertising campaign. The
management delegates the responsibility of advertising planning and execution to
the agency. The agency must have a fair knowledge of the firm’s products, its
history, the present market conditions, distribution methods, price level and other
conditions. A successful advertising programme is built on the basis of these data.
 Creation and Execution: Specific advertisements are created. The advertising
copy is written; the layout is prepared; illustrations are drawn; photographs are
finalized; and a correct mechanical form for running it in the selected media is
produced. The advertising agency prepares a suitable advertising copy for
insertion in all the media.
 Co-Ordination: The advertising agency co-ordinates several activities. It often
works with the client’s sales force and distribution network to ensure the long-run
success of the advertising programme. The combined efforts of sales persons,
distributors and retailers ensure maximum sales. Ideas, media, copy and decisions
are co-ordinated properly to project and implement the advertising programme.
 Accounting: The advertising agency maintains proper accounts in co-operation
with the client. The account executives see to it that the agency keeps to the stated
plan. The accountant is in charge of the administration of the advertising
programme on the agency side. A misunderstanding arising between the agency
and the client is eliminated by the accountant. The amount of fees received from
the client and the payment of taxes, bills and other charges are accounted for by
the accountant.
 Media: The advertising agency selects the media or a set of suitable media for the
client to reach the right type of audience which is an important factor in media
selection. The rates, circulation, population, audience, income and other important

information are collected for the purpose. It has to see to that the media plan is
carried out properly which is devised to implement the campaign’s
communication objectives. The media experts know all about the media and their
coverage. They prepare the schedule of advertising, publication, data on printing
and the time available from television and radio.
 Research: Research is a key function in an advertising campaign. The decisions
on creativity and media selection are taken on the findings uncovered for
research. Research makes every decision systematic and logical, based as it is on
facts and figures.
 Internal Control: The advertising agency manages its employees, finances and
other resources effectively and economically. It conducts the business behind the
scenes and exercises proper control over activities and funds. Public relations,
sales promotion functions and client contacts are maintained by the management
for the effective operations of the advertising agency.

EXTERNA CLIENT BRIEF
L
ENTERS THE AD AGENCY
INTERNAL
CREATIVE BRIEF MEDIA BRIEF
CREATION
STAGE CREATIVE PROCESS
COPYWRITING ILLUSTRATING
LAYOUTS
CLIENT APPROVAL
PRODUCTION BROADCAST
STAGE PRINT
TYPOGRAPHY ENGRAVING FILMING EDITING
PRINT AD COMMERCIAL
PRINT MEDIA BROADCAST MEDIA
AD REACHES THE TARGET AUDIENCE

ADVERTISING AGENCY STRUCTURE
Chairman & Managing

Director
(Chief Executive Officer)
Finance
Management Administration
Accounts
Client service Creative Director

Media Director
Director
Studio Films
Media Print &
Controllers Associate Production
Group Account Creative
Manager Directors
Media Supervisors
Creative Group Heads
Account
Supervisor Media Media
Planners Buyers Copywriters Art Directors
Account
Executives
Media Media

Copy writing
 Writing copy that sells
The creative team:
Advertising must present “the most persuasive selling messages.” Copywriting is

the art of writing selling messages. It is salesmanship in print. If it fails to provoke the
desired attention, interest, desire, conviction and action it has failed. Of course, it is
likely to be assisted by other forms of creativity such as pictures, typography and perhaps
colour, but the copywriter should think visually and direct these other elements to achieve
his or her purpose.
The copywriter should work closely with the visualiser and typographer to obtain
artistic and typographical interpretation of his or her copy. The copywriter cannot
successfully work in isolation, merely writing the words, with artists working in similar
isolation to create the physical appearance of the advertisement. Ideally, and for practical
reasons, the complete advertisement should be a team effort. The design or layout should
give effective presentation of the words, the illustration should give emphasis and
support, and the typography (choice of typefaces, and their size and weight) should make
the copy legible and give emphases where necessary. The copywriter should always try to
write the final appearance of the advertisement in mind.

Basic rules:
The essential characteristics of copywriting are as follows:
1. It must sell, even if it reminds.
2. The secret of successful advertising is repetition, whether by continuously

advertising or by the use of repetition in the advertisement.
3. People do not necessarily want to read the advertisement. Therefore the message
must not waste words, and convey its message quickly and with impact.
4. If the reader hesitates at an unknown word, attention is lost. Therefore every word
must be easily understood and there must be no ambiguity.
5. Short words, short sentences, short paragraphs help to demonstrate the message
and make it easy and quick to read and absorb.
6. While taking care to writ clearly and accurately when using language,
copywriters must also develop skills for abusing language to achieve the results
demanded by the brief.

Layout and typography
 Planning the advertisement
1. Teamwork:
Advertisements are often produced separately by the art director, who designs
them, and the copywriter, who writes the text and creates the basic idea and theme known
as the copy platform. As has already been emphasized in 11:1 these two creative experts
should work as a team. The copywriter should think visually, that is considered how the
words should be seen as well as read. It is a bad system for the two to work in isolation,
and for the visualiser merely to fit words to design. If there is no teamwork, and no
discussion between visualiser and copywriter, the result could be an advertisement
crammed with too much copy printed too small to be legible. Similarly, the copywriter
could suggest how the advertisements should be illustrated, while the visualiser could
suggest how many words are required for the available space.
2. AIDCA formula:
This well-used formula helps in the overall planning of an advertisement, and it is

particularly applicable to the hard-selling advertisement. It applies not only to the copy,
layout and typography but also to the choice of medium, the space size and its position in
the publication. An analysis of the five elements of the formula will explain this more
precisely.

3. Attention:
Unless an advertisement grabs attention, diverting the reader from either the
editorial or other advertisement, it will not even be noticed. Attention may be achieved by
position in the publication (either which page or on which part of a page), or by the size
or shape of the advertisement. Even a tiny advertisement will attract attention if it is in
the right position (e.g. a house for sale classified or a resort ad in a section on holidays).
Creative devices can be used to attract attention, e.g. colour, headline, Illustration
together with the general layout and choice of typeface. Thus, attention-getting may
depends on a blend of factors, not forgetting the subject of the advertisement itself.
4. Interest:
There is no point in using these devices to make people look at the advertisement
unless it also gains their interest. It may do so selectively, and certain readers will be
interested in advertisement for, say, cosmetics, foods etc. interest may be achieved by the
offer, the picture, or the copy and these will in turn be strengthened by the impact of the
wording and presentation.
5. Desire:
After attraction and interest, readers must be encouraged to desire the product or
service. It is most important element. How, creativity, can it be made desirable? What
benefits are offered? There is an exchange situation: what will the reader gain by paying
the price? Why should the reader sacrifice his or her money? – answering these questions
in order to make people to desire.

6. Conviction:
It is all very creating the wish to buy, own or enjoy the product or service, but it is
also necessary to inspire conviction that it really is worth buying and that it will give
satisfaction. This may require convincing facts, proofs of added value, performance,
testimonials and so on. Readers are likely to lose interest if essential information is
missing from an advertisement.
Such information could include the price, which can be one way of judging a
product or service. Is it good value for money?
7. Action:
The next question is how can the advertisement induce response? Some
advertisement merely remind, others build up interest and desire against immediate
action.
Design and layout
The design of a press advertisement goes through a number of stages. First, rough
scribbles, scamps or visualiser will be sketched in pencil or marker pen, and numerous
experimental versions will be produced by the visualiser, until the final layout.
Final idea will be worked up in a form which is sufficiently intelligible and can be shown
to the client for approval. When this provisional layout is approved, artwork is
commissioned and the layout artist produces finished layouts with typographical mark-
ups, regarding typeface and sizes.

The eight laws of design:
The basic principles of design, which can be applied to advertisement, are
• Law of unity
• Law of variety
• Law of balance
• Law of rhythm
• law of harmony
• law of proportion
• law of scale
• Law of emphasis
Typography:
Typography is the art of selecting typeface, of which there are thousands of

designs; blending different typefaces; casting off the number of words to fit spaces; and
marking up copy for typesetting, using different sizes and weights.

Television commercials:
• Storyboard:
The “visual” for a TV commercial is a set of drawing set in TV-screen shapes or

rectangles which tell the story of the proposed commercial. This is known as the
storyboard. The client approves this, together with the copy, before any shooting is done.
• Special effects:
The agency’s TV producer is responsible for the conception of the TV

commercials. The actual commercial is then made by an outside director and production
unit. Most commercials are first made on film, but can be transferred to video for post-
production treatments such as special effects and computer graphics.

3.HISTORY OF
ADVERTISEMENT IN
INDIA

HISTORY OF ADVERTISEMENT
Archaeologists have found evidence of advertising dating back to the 3000s BC,
among the Babylonians. One of the first known methods of advertising was the outdoor
display, usually an eye-catching sign painted on the wall of a building. Archaeologists
have uncovered many such signs, notably in the ruins of ancient Rome and Pompeii. An
outdoor advertisement excavated in Rome offers property for rent, and one found painted
on a wall in Pompeii calls the attention of travelers to a tavern situated in another town.
In medieval times word-of-mouth praise of products gave rise to a simple but

effective form of advertising, the use of so-called town criers. The criers were citizens
who read public notices aloud and were also employed by merchants to shout the praises
of their wares. Later they became familiar figures on the streets of colonial American
settlements. The town criers were forerunners of the modern announcer who delivers
radio and television commercials.
Although graphic forms of advertising appeared early in history, printed

advertising made little headway until the invention of the movable-type printing press by
German printer Johannes Gutenberg about 1450. This invention made the mass
distribution of posters and circulars possible. The first advertisement in English appeared
in 1472 in the form of a handbill announcing a prayer book for sale. Two hundred years
later, the first newspaper ad was published offering a reward for the return of 12 stolen
horses. In the American colonies, the Boston News-Letter, the first regularly published
newspaper in America, began carrying ads in 1704, and about 25 years later Benjamin
Franklin made ads more readable by using large headlines.
In the United States, the advertising profession began in Philadelphia,

Pennsylvania, in 1841 when Volney B. Palmer set up shop as an advertising agent, the
forerunner of the advertising agency. Agents contracted with newspapers for large
amounts of advertising space at discount rates and then resold the space to advertisers at a
higher rate. The ads themselves were created by the advertisers. In 1869 Francis Ayer
bought out Palmer and founded N. W. Ayer & Son, an agency that still exists today. Ayer
transformed the standard agent practice by billing advertisers exactly what he paid to
publishers plus an agreed upon commission. Soon Ayer was not only selling space but
was also conducting market research and writing the advertising copy.
Advertising agencies initially focused on print. But the introduction of radio

created a new opportunity and by the end of the 1920s, advertising had established itself
in radio to such an extent that advertisers were producing many of their own programs.
The early 1930s ushered in dozens of radio dramatic series that were known as soap
operas because they were sponsored by soap companies.
Television had been introduced in 1940, but because of the high cost of TV sets
and the lack of programming, it was not immediately embraced. As the American
economy soared in the 1950s, so did the sale of TV sets and the advertising that paid for
the popular new shows. Soon TV far surpassed radio as an advertising medium.
The tone of the advertising was also changing. No longer did advertising simply
present the product benefit. Instead it began to create a product image. Bill Bernbach,
founder of Doyle Dane Bernbach in New York City; Leo Burnett, founder of the Leo
Burnett agency in Chicago, Illinois; and David Ogilvy, founder of Ogilvy & Mather in
New York City, all came to prominence in the late 1950s and 1960s and led what has
been called the 'creative revolution.' Bernbach's agency captured the spirit of the new age.
Bernbach believed that advertising had to be creative and artistic or it would bore people.
He also believed that good advertising began with respect for the public's intelligence.
The ads his agency created were understated, sophisticated, and witty.
For example, when Bernbach's agency picked up the account for the Henry S.
Levy Bakery in Brooklyn, a borough of New York City, the agency created an ad that
entertained New Yorkers and provided fodder for many conversations. The ad showed a
Native American eating a slice of the bakery's rye bread with the headline, 'You don't
have to be Jewish to love Levy's.' But it was the advertising for Volkswagen that made
the agency's reputation. At a time when American cars were getting bigger and bigger
and the advertising for them trumpeted that bigger was better, Doyle Dane Bernbach

created a magazine ad that showed a small picture of the Volkswagen Beetle surrounded
by a sea of white space with the headline, 'think small.' An equally unconventional ad
carried the headline 'lemon' beneath a photo of an apparently flawed Volkswagen. The
ad's copy explained that 'this Volkswagen missed the boat. The chrome strip on the glove
compartment is blemished and must be replaced…We pluck the lemons; you get the
plums.' In an era of hype and bombast, the Volkswagen ads stood out because they
admitted failure in a witty way and gave facts in a believable manner that underlined the
car's strengths. This wit together with a conversational and believable style was a
hallmark of the advertising created by Doyle Dane Bernbach and that style became
highly influential.
The creative foundation established by Bernbach and others has been critical to
the success of contemporary advertising. The introduction of the TV remote control and
access to hundreds of cable channels mean that today advertising must interest and
entertain consumers or else they will simply use the remote to change the channel. New
digital devices even threaten to make it possible to edit out commercials. The
development of interactive television, combining the functions of a computer with access
to high-speed transmission over cable lines or optical fibers, will likely enable consumers
to select from a vast video library. Consumers will be able to determine not only when
they watch something, but also, to a greater extent than ever before, what they will watch.
Some industry observers believe that as consumers gain greater control over their
viewing activities, they will find it easier to avoid advertising.

DEFINITION OF ADVERTISING
The word advertising originates from a Latin word advertise, which means to turn
to. The dictionary meaning of the term is “to give public notice or to announce publicly”.
Advertising may be defined as the process of buying sponsor-identified media
space or time in order to promote a product or an idea.
The American Marketing Association, Chicago, has defined advertising as “any
form of non-personal presentation or promotion of ideas, goods or services, by an
identified sponsor.”
What Advertisement Is?
Advertisement is a mass communicating of information intended to persuade

buyers to by products with a view to maximizing a company’s profits.
The elements of advertising are:
(i) It is a mass communication reaching a large group of consumers.
(ii) It makes mass production possible.
(iii) It is non-personal communication, for it is not delivered by an actual person, nor is it
addressed to a specific person.
(iv) It is a commercial communication because it is used to help assure the advertiser of a
long business life with profitable sales.
(v) Advertising can be economical, for it reaches large groups of people. This keeps the
cost per message low.
(vi) The communication is speedy, permitting an advertiser to speak to millions of buyers
in a matter of a few hours.
(vii) Advertising is identified communication. The advertiser signs his name to his
advertisement for the purpose of publicizing his identity.

What is Included in Advertising?
(i) The information in an advertisement should benefit the buyers. It should give them a
more satisfactory expenditure of their rupees.
(ii) It should suggest better solutions to their problems.
(iii) The content of the advertisement is within the control of the advertiser, not the
medium.
(iv) Advertising without persuasion is ineffective. The advertisement that fails to
influence anyone, either immediately or in the future is a waste of money.
(v) The function of advertising is to increase the profitable sales volume. That is,
advertising expenses should not increase disproportionately.
Advertising includes the following forms of messages:
The messages carried in-

 N ewspapers and magazines;
On radio and television broadcasts;
Circular of all kinds, (whether distributed by mail, by person, thorough tradesmen, or
by inserts in packages);
Dealer help materials,
Window display and counter – display materials and efforts;
Store signs, motion pictures used for advertising,
Novelties bearing advertising messages and Signature of the advertiser,
Label stags and other literature accompanying the merchandise.
What is excluded from Advertising?

Advertising is not an exact science. An advertiser’s circumstances are never identical
with those of another; he cannot predict with accuracy what results his future advertising
efforts will produce.

(i) Advertising is not a game, because if advertising is done properly, both the buyer and
the seller benefit from it.
(ii) Advertising is not a toy. Advertiser cannot afford to play with advertising.
Advertising funds come from sales revenue and must be used to increase sales revenue.
(iii) Advertisements are not designed to deceive. The desire and hope for repeat sales
insures a high degree of honesty in advertising.
The activities excluded from advertising are:

 T he offering of premiums to stimulate the sale of products;
The use of exhibitions and demonstrations at fairs, show and conventions;
The use of samples and activities, involving news releases and the activities of
personal selling forces;
The payment of advertising allowances which are not used for advertising;
The entertainment of customers
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.

The basic objectives of an advertising programme may be
listed as below:
(i) To stimulate sales amongst present, former and future consumers. It involves a
decision regarding the media, e.g., TV rather than print ;
(ii) To communicate with consumers. This involves decision regarding copy ;
(iii) To retain the loyalty of present and former consumers. Advertising may be used to
reassure buyers that they have made the best purchase, thus building loyalty to the brand
name or the firm.
(iv) To increase support. Advertising impliedly bolsters the morale of the sales force and
of distributors, wholesalers, and retailers, ; it thus contributes to enthusiasts and
confidence attitude in the organizational. :
(v) To project an image. Advertising is used to promote an overall image of respect and
trust for an organization. This message is aimed not only at consumers, but also at the
government, shareholders, and the general public.
Importance of Advertising
Generally, advertising is a relatively low-cost method of conveying selling

messages to numerous prospective customers. It can secure leads for salesmen and
middlemen by convincing readers to request more information and by identifying outlets
handling the product. It can force middlemen to stock the product by building consumer
interest. It can help train dealers salesmen in product uses and applications. It can build
dealer and consumer confidence in the company and its products by building familiarity.
Advertising is to stimulate market demand. While sometimes advertising alone may
succeed in achieving buyer acceptance, preference, or even demand for the product, it is
seldom solely relied upon. Advertising is efficiently used with at least one other sales
method, such as personal selling or point-of-purchase display, to directly move customers
to buying action.

Advertising has become increasingly important to business enterprises –both large
and small. Outlay on advertising certainly is the voucher. Non-business enterprises have
also recognized the importance of advertising. The attempt by army recruitment is bases
on a substantial advertising campaign, stressing the advantages of a military career. The
health department popularizes family planning through advertising Labour organizations
have also used advertising to make their viewpoints known to the public at large.
Advertising assumes real economic importance too. Advertising strategies that increase
the number of units sold stimulate economies in the production process. The production
cost per unit of output is lowered. It in turn leads to lower prices. Lower consumer prices
then allow these products to become available to more people. Similarly, the price of
newspapers, professional sports, radio and TV programmes, and the like might be
prohibitive without advertising. In short, advertising pays for many of the enjoyable
entertainment and educational aspects of contemporary life. Advertising has become an
important factor in the campaigns to achieve such societal-oriented objectives such as the
discontinuance of smoking, family planning, physical fitness, and the elimination of drug
abuse. Though in India, advertising was accepted as a potent and recognized means of
promotion only 25 years ago, its growing productive capacity and output necessitates the
finding of consumers and advertising plays an important role in this process. Advertising
helps to increase mass marketing while helping the consumer to choose from amongst the
variety of products offered for his selection. In India, advertising as a profession is in its
infancy. Because of this fact, there is a tremendous scope for development so that it may
be productively used for the benefit of producers, traders, consumers, and the country’s
economy.

TYPES OF ADVERTISING:
1. Product – Related Advertising

A. Pioneering Advertising
B. Competitive Advertising
C. Retentive Advertising
2. Public Service Advertising
3. Functional Classification
I. Advertising Based on Demand Influence Level.
A. Primary Demand (Stimulation)
B. Selective Demand (Stimulation)
II. Institutional Advertising
III. Product Advertising
A. Informative Product Advertising
B. Persuasive Product Advertising
C. Reminder-Oriented Product Advertising
4. Advertising based on Product Life Cycle
A. Consumer Advertising
B. Industrial Advertising
5. Trade Advertising
A. Retail Advertising
B. Wholesale Advertising
6. Advertising Based on Area of operation
A. National advertising
B. Local advertising
C. Regional advertising
7. Advertising According to Medium Utilized

1. Product – Related Advertising
It is concerned with conveying information about and selling a product or service.
Product advertising is of three types, viz.,
A. Pioneering Advertising
B. Competitive Advertising
C. Retentive Advertising
A. Pioneering Advertising:
This type of advertising is used in the introductory stages in the life cycle of a
product. It is concerned with developing a “primary” demand. It conveys information
about, and selling a product category rather than a specific brand. For example, the initial
advertisement for black – and – white television and color television. Such
advertisements appeal to the consumer’s emotions and rational motives.
B. Competitive Advertising:
It is useful when the product has reached the market-growth and especially the
market-maturity stage. It stimulates “selective” demand. It seeks to sell a specific brand
rather than a general product category. It is of two types:
A. Direct Type: It seeks to stimulate immediate buying action.
B. Indirect Type: It attempts to pinpoint the virtues of the product in the expectation that
the consumer’s action will be affected by it when he is ready to buy.
Example: Airline advertising.
Air India attempts to bid for the consumer’s patronage either immediately - direct
action-in which case, it provides prices, time tables and phone numbers on which the
customer may call for reservations; or eventually – indirect action – when it suggests that
you mention Air India’s name when talking to your travel agent.
C. Retentive Advertising:
This may be useful when the product has achieved a favourable status in the
market – that is, maturity or declining stage. Generally in such times, the advertiser wants
to keep his product’s name before the public. A much softer selling approach is used, or
only the name may be mentioned in “reminder” type advertising.
2. Public Service Advertising
This is directed at the social welfare of a community or a nation. The
effectiveness of product service advertisements may be measured in terms of the
goodwill they generate in favour of the sponsoring organization. Advertisements on not
mixing drinking and driving are a good example of public service advertising. In this type
of advertising, the objective is to put across a message intended to change attitudes or
behaviour and benefit the public at large.
3. Functional Classification
Advertising may be classified according to the functions which it is intended to
fulfil.
(i) Advertising may be used to stimulate either the primary demand or the selective
demand.
(ii) It may promote either the brand or the firm selling that brand.
(iii) It may try to cause indirect action or direct action.
I. Advertising Based on Demand Influence Level.

A. Primary Demand Stimulation
Primary demand is demand for the product or service rather than for a particular
brand. It is intended to affect the demand for a type of product, and not the brand of that
product. Some advertise to stimulate primary demand. When a product is new, primary
demand stimulation is appropriate. At this time, the marketer must inform consumers of
the existence of the new item and convince them of the benefits flowing from its use.
When primary demand has been stimulated and competitors have entered the market, the
advertising strategy may be to stimulate the selective demand.
B. Selective Demand Stimulation
This demand is for a particular brand such as Charminar cigarettes, Surf detergent
powder, or Vimal fabrics. To establish a differential advantage and to acquire an
acceptable sort of market, selective demand advertising is attempted. It is not to stimulate
the demand for the product or service. The advertiser attempts to differentiate his brand

and to increase the total amount of consumption of that product. Competitive advertising
stimulates selective demand. It may be of either the direct or the indirect type.
II. Institutional Advertising

Institutional Advertising may be formative, persuasive or reminder oriented in
character. Institutional advertising is used extensively during periods of product shortages
in order to keep the name of the company before the public. It aims at building for a firm
a Positive public image in the eyes of shareholders, employees, suppliers, legislators, or
the general public. This sells only the name and prestige of the company. This type of
advertising is used frequently by large companies whose products are well known. HMT
or DCM, for example, does considerable institutional advertising of its name,
emphasizing the quality and research behind its products.
Institutional advertisements are at consumers or focus them upon other groups,
such as voters, government officials, suppliers, financial institutions, etc. If it is effective,
the target groups will respond with goodwill towards, and confidence in the sponsor. It is
also a useful method or introducing sales persons and new product to consumers. It does
not attempt to sell a particular product; it benefits the organization as a whole.
It notifies the consumers that the company is a responsible business entity and is
patriotic; that its management takes ecologically responsible action, is an affair- motive
action employer, supports the socialistic pattern of society or provides employment
opportunities in the community. When Indian Oil advertisements describe the company’s
general activities, such as public service work, this may be referred to as institutional
advertising because it is intended to build an overall favorable attitude towards the
company and its family of products. HMT once told the story of the small-scale
industries
supplying it with component parts, thus indicating how it aided the development of
ancillary industries.

iii. Product Advertising
Most advertising is product advertising, designed to promote the sale or reputation
of a particular product or service that the organization sells. Indane’s Cooking Gas is a
case in point. The marketer may use such promotion to generate exposure attention,
comprehension, attitude change or action for an offering. It deals with the non-personal
selling of a particular good or service. It is of three types as follows:-
A. Informative Product Advertising
B. Persuasive Product Advertising
C. Reminder-Oriented Product Advertising
A. Informative Product Advertising:
This form of advertising tends to characterize the promotion of any new type of
product to develop an initial demand. It is usually done in the introductory stages of the
product life cycle. It was the original approach to advertising.
B. Persuasive Product Advertising:
Persuasive product advertising is to develop demand for a particular product or
brand. It is a type of promotion used in the growth period and, to some extent, in the
maturity period of the product life cycle.
C. Reminder-Oriented Product Advertising:
The goal of this type of advertising is to reinforce previous promotional activity
by keeping the brand name in front of the public. It is used in the maturity period as well
as throughout the declining phase of the product life cycle.
4. Advertising based on Product Life Cycle

Most of the consumer goods producers engage in consumer product advertising.
Marketers of pharmaceuticals, cosmetics, scooters, detergents and soaps, cigarettes and
alcoholic beverages are examples. Baring a few, all these products are all package goods

that the consumer will often buy during the year. There is a heavy competition among the
advertisers to establish an advantage for their particular brand.
Industrial executives have little confidence in advertising. They rely on this form
of promotion merely out of fear that their competitors may benefit if they stop their
advertising efforts. The task of the industrial advertiser is complicated by the multiple
buying influence characteristics like, the derived demand, etc. The objectives vary
according to the firm and the situation. They are:
To inform,
To bring in orders,
To induce inquiries,
To get the advertiser’s name on the buyer’s list of sources,
To provide support for the salesman,
To reduce selling costs,
To help get items in the news column of a publication,
To establish recognition for the firm or its product,
To motivate distributors,
To recognition for the firm or its products,
To motivate distributors, to create or change a company’s image,
To create or change a buyer’s attitude, and
The basic appeals tend to increase the rupee profits of the buyer or help in
achieving his non-monetary objectives. Trade journals are the media most generally used
followed by catalogues, direct mail communication, exhibits, and general management
publications. Advertising agencies are much less useful in industrial advertising.

5. Trade Advertising:-
This may be defined as “covering all advertising by the stores that sell goods
directly to the consuming public. It includes, also advertising by establishments that sell
services to the public, such as beauty shops, petrol pumps and banks.” Advertising
agencies are rarely used. The store personnel are usually given this responsibility as an
added task to be performed, together with their normal functions. The result is that
advertising is often relegated to a secondary position in a retail store. One aspect of retail
advertising is co-operative advertising. It refers to advertising costs between retailers and
manufacturers. From the retailer’s point of view, co-operative advertising permits a store
to secure additional advertising that would not otherwise have been available.
Wholesalers are, generally, not advertising minded, either for themselves or for
their suppliers. They would benefit from adopting some of the image-making techniques
used by retailers – the need for developing an overall promotional strategy. They also
need to make a greater use of supplier promotion materials and programs in a way
advantageous to them.
6. Advertising based on Area of Operation:-

It is classified as follow:
A. National Advertising
B. Regional Advertising
C. Local Advertising

A. National advertising
It is practiced by many firms in our country. It encourages the consumer to buy
their product wherever they are sold. Most national advertisements concentrate on the
overall image and desirability of the product. The famous national advertisers are:
Hindustan Levers
DCM
ITC
Jay Engineering
TISCO
B. Regional advertising
It is geographical alternative for organizations. For example, Amrit Vanaspati
based in Rajpura claims to be the leading hydrogenated oil producer in the Punjab. But,
until recently, it mainly confined itself to one of the vegetable oil brands distribution to
Malihabad district (in U.P. near Lucknow).
C. Local advertising
It is generally done by retailers rather than manufacturers. These advertisements
save the customer time and money by passing along specific information about products,
prices, location, and so on. Retailer advertisements usually provide specific goods sales
during weekends in various sectors.
7. Advertising According to Medium

The most common classification of advertising is by the medium used. For
example: TV, radio, magazine, outdoor, business periodical, newspaper and direct mail
advertising. This classification is so common in use that it is mentioned here only for the
sake of completeness.

4. ADVERTISING
INDUSTRY IN INDIA
(Current Market Situation)

Current market situation
Key findings:
• Print constituted 36% of total advertising in Q1 2006
• In Q1 2006, Print ad space grew by 24% over Q1 2005
• Southern publications cornered 38% of print advertising
• The ‘Services’ industry contributed to 15% of print advertising in Q1 2006
• ‘Properties/real estates’ was the top category with 12% share
• Hewlett Packard India was the highest spending advertiser with 2% share in
print
• Newspapers cornered 96% ad space in Q1 2006

1. Share of TV, Press and Radio in overall advertising in Q1 2006:
Print medium had the highest share (36%), second to TV advertising in Q1 ‘06

2. Drift of Print advertising from Q1 2004 to Q1 2006:
Q1 ’06 experienced a growth of 24% in ad space compared to Q1 ‘05

3. Zonal split of Print advertising in Q1 of 2006:
Southern publications garnered maximum share (38%) of print advertising

4. Share of super categories in overall Print advertising in Q1 2006:
In Q1 ’06 the ‘Services*’ super category emerged with a share as high as 15%.
This super category encompasses all kinds of services offered, right from
hospitals/clinics to beauty parlors. (* ‘Services’ include categories like Properties/Real
Estates, Travel & Tourism, Airlines, Transport, Courier Services, etc.)

5. Top 10 categories in Print advertising in Q1 of 2006:
‘Properties/real Estates’ accumulated a share of 6% in print advertising in Q1 ‘06

6. Top 10 advertisers in Print for Q1 2006:
In Q1 ’06 Hewlett Packard India Ltd was the top advertiser with a share of 2%

7. Nature and genre of Publications used in print in Q1 2006:
Business Newspapers constituted a share of 9%, while 20% of Magazine ad space went
to Women’s magazines in Q1 2006.
(Source: Advertising trend in Print media in 1st Quarter of 2006: AdEx study - June 9,
2006)

The Indian Top 10
Top 10 Brands:
1. Colgate
2. Amul
3. Dettol
4. Britannia
5. Lifebuoy
6. Ariel
7. Horlicks
8. Lux
9. Zee T.V.
10. Doordarshan
Source: - A & M
Top 10 Advertising Agencies in india :
1. HTA
2. O&M
3. Mudra
4. FCB-Ulka
5. Rediffusion DY&R
6. McCann Erikson India

7. R.K.Swamy / BBDO Advertising Ltd.
8. Trikaya Grey Advertising
9. Chaitra Leo Burnett
10. Pressman Advertising & Marketing
Source: - A & M
Top 10 Advertising Spenders 2004-2005:
Ad Spend (in Rs. Crore)
1. HLL 688.95
2. ITC 201.24
3. Colgate-Palmolive (India) 163.87
4. Dabur India 114.12
5. Nestle India 108.51
6. Videocon International 103.41
7. McDowell & Co 86.05
8. Tata Tea 73.47
9. Maruti Udyog 65.63
10. Godfrey Philips India 65.05
Source: - A & M

Top Indian Companies:
Rank (2005) Rank (2004) Company
1 11 HINDUSTAN LEVER
2 2 IOC
3 10 BPCL
4 6 HPCL
5 9 VSN
6 13 ITC
7 27 WIPRO
8 120 BHEL
9 39 HERO HONDA MOTORS
10 17 BAJAJ AUTO
11 3 RELIANCE INDUSTRIES
12 37 NESTLE
13 5 GAIL
14
15 1 ONGC
16 20 M&M
17 86 INFOSYS TECHNOLOGIES
18 24 RANBAXY LABORATORIES
19 54 CASTROL
20 4 MTNL

4. ABOUT VAM

COMPANY PROFILE

5.Measuring Advertising
Effectiveness on sale

Measuring Advertising Effectiveness on sale:
All advertising efforts are directed mainly towards the achievement of

business, marketing and advertising objectives i.e., to increase the sales turnover
and thus to market the maximum profit. The advertiser spends lakhs of rupees in to this
advertising activity. In the background of all these efforts, is an attempt to attract the
customer towards the product through advertising. As soon as the advertising campaign is
over, a need is generally arisen to measure the effectiveness of the campaign. Whether, it
has achieved the desired results i.e. desired sales profitability or results in terms the
change in customer’ behaviour in favour of the company’s product which will naturally,
affect the future sale of the product.
In order to measure the effectiveness of advertising copy, two types of tests pre
tests and post tests- can be undertaken. Pre tests are generally conducted in the beginning
of the creation process or at the end of creation process or production stage. There are
several pre and post tests techniques to measure the effectiveness of the advertising copy.
The effectiveness of advertising in a particular media may also be measured
in any of the following ways –
(a) By giving different addresses to different media,
(b) Different newspapers may be selected for advertisements of different departments,
(c) Coupon blank etc. May be provided with the advertisement or
(d) Enquiry from consumers should mention the name of the source of information.
The technique is known as keying the advertising. Thus in measuring the
effectiveness of advertising we include measuring of the effectiveness of advertising
campaign, advertising copy and the effectiveness of individual media. This chapter deals
these three problems.

Importance of measuring the Effectiveness of Advertising
(1) It acts as a Safety measure

Testing effectiveness of advertising helps in finding out ineffective advertisement
and advertising campaigns. It facilitates timely adjustments in advertising to make
advertising consumer oriented and result oriented. Thus waste of money in faulty
advertising can be avoided.
(2) Provides feedback for remedial measures
Testing effectiveness of advertising provides useful information to the advertisers
to take remedial steps against ineffective advertisements.
(3) Avoids possible failure
Advertisers are not sure of results of advertising from a particular advertising
campaign. Evaluating advertising effectives helps in estimating the results in order to
avoid complete loss.
(4) To justify the Investment in Advertising
The expenditure on advertisement is considered to be an investment. The
investment in advertising is a marketing investment and its objectives should be spelt out
clearly indicating the results expected from the campaign. The rate and size of return
should be determined in advance. If the expected rate of return is achieved in terms of
additional profits, the advertisement can be considered as effective one.
(5) To know the communication Effect
The effectiveness of the advertisement can be measured in terms of their
communication effects on the target consumers or audience. The main purpose of
advertising is communicated the general public, and existing and prospective consumers,
various information about the product and the company. It is therefore desirable to seek
post measurements of advertising in order to determine whether advertisement have been
seen or heard or in other words whether they have communicated the theme, message or
appeal of the advertising.

(6) Compare two markets
Under this procedure, advertising is published in test markets and results are
contrasted with other. Markets – so called control markets – which have had the regular
advertising program. The measurements made to determine results may be measurements
of change in sales, change in consumer attitudes, changes in dealer display and so on
depending upon the objectives sought by the advertiser.
METHODS OF MEASURING ADVERTISING

EFFECTIVENESS:
Advertising is aimed at improving the sales volume of a concern so its

effectiveness can be evaluated by its impact on sales. Most of the managers believe that
the advertisement directly affects the sales volume and hence they evaluate the
effectiveness of the advertising campaign by the increase in the sales volume.
There may be two types measures
(i) Direct measures: and
(ii) Indirect measures:-
(1) Direct Measures of Advertising Effectiveness
Under direct measures, a relationship between advertising and sales is established.

A comparison of sales of two periods or two periods or two markets may be done and the
corresponding changes may be noted. The following are some of the methods that are
generally used in measuring that advertising effects.
(a) Historical Sales Method
Some insights into the effectiveness of past advertising may be obtained by

measuring the relationship between the advertising expenditure and the total sales of the

product. A multiple regression analysis of advertising expenditure and sales over several
time periods may be calculated. It would show how the changes in advertising
expenditure have corresponding changes in sales volume. This technique estimates the
contribution that advertising has made to explaining in a co relational manner rather than
a casual sales, the variation in sales over the time periods covered in the study
(b) Experimental Control
The other measure of advertising effectiveness is the method of experimental

control where a casual relationship between advertising and sales is established. This
method is quite expensive when related to other advertising effectiveness measures yet it
is possible to isolate advertising contribution to sales. Moreover this can be done as a pre-
test to aid advertising in choosing between alternative creative designs. Media schedules
expenditure levels or some combination of these advertising decision areas. One
experimental approach to measuring the sales effectiveness of advertising is test
marketing.
(i) Before-after with Control Group Design

This classic design uses several test and control cities in this design two types of
cities are selected. Cities in which advertising campaigns are affected may be named as
test cities and other cities may be called central cities. First of all, the normal sales level
is calculated for both type of cities prior to advertising campaign, and then the advertising
campaign is presented to the test cities and not the central cities. The effect of advertising
campaign, can then, be measured by subtracting the amount of post campaign figure of
sale from the pre campaign sale figures in test cities
(ii) Multivariable Experimental Designs
While the experimental design discussed above yields a reasonably accurate

estimate of the effects of the advertising on sales, it is not successful in explaining the
success or failure of the campaign itself. Multivariable designs Produce these
explanations and are, therefore used by some very large firm because of their diagnostic
value.The power of this multivariable factorial design is explained by G.H.Brown, former
Fords Director of Marketing Research. For any single medium, eight possible geographic
areas have been exposed and eight have not been exposed. Thus, in this experimental
model it is possible to evaluate how each individual medium behaves alone and in all
possible to evaluate how each individual medium behaves alone and in all possible
combinations with other media.
(2) Indirect Measures
As it is very difficult to measure the direct effect of advertising on company’s

profits or sales, most firms rely heavily on indirect measures. These measures do not
evaluate the effects of advertisements directing on sales or profits but all other factors
such as customer awareness or attitude or customer recall of advertising message affect
the sales or profits or goals of the business indirectly. Despite the uncertainties about the
relationship between the intermediate effects of advertising and the ultimate results, there
is no other alternative but to use indirect measures. The most commonly used measures
are –
(i) Exposure to Advertisement
In order to be effective, the advertisement must gain exposure. The management

is concerned about the number of target audiences who see or hear the organization
message set in the advertisement. Without exposure, advertisement is bound to failure.
Marketers or advertisers may obtain an idea of exposure generated by the medium by
examining its circulation or audience data which reveal the number of copies of the
magazine, newspaper or journal sold the number of persons passing the billboards or
riding in transit facilities, or the number of persons living in the televiewing or radio
listening area, and the number of persons switching on their T.V. and radio sets at various
points of time. This number can be estimated by interviewing the numbers of the
audience for different media.
(ii) Attention or Recall of Advertising Message Content
This is one of the widely used measures of advertising results. Under this
measure, a recall of the message content among a specified group or groups or
prospective customers is measured within 24 hours of the exposure of the advertisement.
Attention value is the chief quality of the advertising copy the advertisements
cannot be said to be effective unless they attract the attention of the target consumers.
There are two methods for evaluating the attention getting value of the advertisements.
One is pre-test and the other is post-test. In a pre-test evaluation, the consumers are asked
to indicate the extent to which they recognise or recall the advertisement, they have
already seen. This test is conducted in the laboratory setting. Here consumers read, hear
or listen to the advertisement and then researchers ask question regarding the
advertisement just to test the recall and then evaluate it. In post-test method, the
consumers are asked questions about the indication of recognition or recall after the
advertisement has been run. These measures assume that customers can recall or
recognize what they have viewed or listened to. Various mechanical devices are being
used in the western countries which provide indices of attention such as eye-camera etc.
(iii) Brand Awareness
The marketers who rely heavily on advertising often appraise its effectiveness by
measuring the customer’s awareness about the particular product or brand. The
assumption of this type of measure is that there is a direct relationship between the
advertisements and the awareness. This type of measure is also subject to the same
criticisms as is applicable to direct measures of effectiveness (sales measures because
awareness is also not the direct result of the advertisements. It is also affected by many
other factors. But, for new products, changes in awareness can often be attributed to the
influence of advertising.

(iv) Comprehension
Consumers generally use advertisements as a means of obtaining information

about the product, brand or the manufacturer. They cannot be informed unless they
comprehend the message (grasp the message mentally and understand it fully). Various
tests for valuating comprehension are available –
One is recall tests – an indicator of comprehension because it is evident that
consumers recall what they comprehend. Another measure of the variable is to ask
questions about subjects how much they have comprehended a message they have
recently heard or seen. One may employ somewhat imprecise test of the comprehension
of a newspaper and radio advertisement. One may ask typical target consumers from time
to time such questions like ‘what did you think of our new commercial?’ and ‘Did it get
the message across’? The answers of these questions will provide sufficient insight into
advertising decision making.
(v) Attitude Change
Since advertising is considered to be one way of influencing the state of the mind
of the audience towards a product, service or organisation, the results are very often
measured in terms of attitudes among groups exposed to advertising communication.
Several measures are used ranging from asking the questions about willingness to buy the
likelihood of buying to the measurement of the extent to which specific attributes (such
as modern or new) are associated with a product.
(vi) Action
One objective of advertisement may be assumed to be to stimulate action or

behavior. The action or intention to take an action may be measured on the intention to
buy measuring instrument. Under this type of measure, consumers are asked to respond
why they are interested in purchasing the product or brand. One type of action that
advertisers attempt to induce is buying behavior. The assumption is that if an increase in
sales follows a decrease in advertising expenditure, the change in sales levels are good
indicators of the effectiveness of advertising. Logic suggests that measurement of sales is
preferable to other measurements.
Thus, these above measures (direct or indirect) are used to evaluate the
effectiveness of advertisements. It seems from the analysis of the above methods of
measuring effectiveness that directly or indirectly changes in sales or profits are taken as
the measuring rod of the effectiveness of the advertising.

6.Impact
of
Advertisement

IMPACT OF ADVERTISEMENT
Advertising has an important effect on a country’s economy, society, culture, and

political system. This is especially true in the United States where the advertising
industry plays such a prominent role.
1. Economic Impact
Most economists believe that advertising has a positive impact on the

economy because it stimulates demand for products and services, strengthening
the economy by promoting the sale of goods and services. Manufacturers know
that advertising can help sell a new product quickly, enabling them to recoup the
costs of developing new products. By stimulating the development of new
products, advertising helps increase competition. Many economists believe that
increased competition leads to lower prices, thereby benefiting consumers and the
economy as a whole. These economists also argue that by interesting consumers
in purchasing goods, advertising enables manufacturers and others to sell their
products in larger quantities. The increased volume of sales enables companies to
produce individual units at lower costs and therefore, sell them at a lower price.
Advertising thus benefits consumers by helping lower prices.
Other economists, however, believe that advertising is wasteful. They

argue that the cost of advertising adds to the cost of goods and that most
advertising simply encourages consumers to buy one brand rather than another.
According to this view, advertising simply moves sales from one company to
another, rather than increasing sales overall and thereby benefiting the economy
as a whole.

2. Social Impact
Advertising can have wide-ranging repercussions on a society. Some

critics suggest that advertising promotes a materialistic way of life by leading
people to believe that happiness is achieved by purchasing products. They argue
that advertising creates a consumer culture in which buying exciting new products
becomes the foundation of the society's values, pleasures, and goals.
Other critics express concern over the way advertising has affected women
and racial minority groups. Ads in the 1950s depicted women primarily as
decoration or sex objects. Although millions of women worked outside the home
in the 1960s, ads continued to focus on their role as homemakers. Whether owing
to the feminist movement or to women's increasing economic power, after the
1960s it became more common to see women depicted in professional roles.
However, many ads today still emphasize a woman’s sexuality.
The way advertising has depicted racial minorities has also been harmful.
Prior to 1960, African Americans were usually shown in a subordinate position.
Due to the influence of the civil rights movement, however, advertisers by the
1980s had begun to depict African Americans as students, professionals, or
business people. However, many African American organizations and community
activists continue to object to the way that alcohol and tobacco companies have
seemingly targeted low-income minority communities with a heavy
preponderance of outdoor advertising for their products.
As ads have begun to more fully reflect the lives of women and African
Americans in the United States, increasing attention has been paid to the way in
which advertising shows other ethnic groups, including Hispanics, Asians, Native
Americans, and Eastern Europeans. There is still considerable debate over how
advertising influences public perception of gender and of particular ethnic groups.

Advertising has a major social impact by helping sustain mass
communications media and making them relatively inexpensive, if not free, to the
public. Newspapers, magazines, radio, and broadcast television all receive their
primary income from advertising. Without advertising, many of these forms of
mass communication might not exist to the extent that they do today, or they
might be considerably more expensive, offer less variety, or even be subject to
government control through subsidies. In-depth news programs, a diversity of
magazines, and free entertainment might no longer be widely available.
At the same time, however, some critics warn that because advertising
plays such a major economic role, it may exercise undue influence on the news
media and thereby curtail the free flow of information in a free society. Reporters
and editors, for example, may be hesitant to develop a news story that criticizes a
major advertiser. As a result, society might not be alerted to harmful or potentially
harmful conduct by the advertiser. Most members of the news media deny that
pressure from an advertiser prevents them from pursuing news stories involving
that advertiser, but some members of the media acknowledge that they might not
be inclined to investigate an issue aggressively if it threatened to offend a major
advertiser.
Advertisers may affect media programming in other ways, too, critics

charge. For example, companies that sponsor TV programs prefer relatively
wholesome, noncontroversial programming to avoid offending a mass audience.
This preference causes TV networks to emphasize this type of programming. The
result is that society may be denied the benefits of being able to view challenging
or highly original entertainment programs or news programs on controversial
issues. Because advertisers are especially interested in attracting the 18 to 34 year
olds who account for most consumer spending, television shows are often
developed with this audience in mind. If the ratings show that a program is not
attracting large audiences, particularly among 18 to 34 year olds, advertisers often

withdraw support, which causes a program to be canceled. As a result, shows that
are more likely to interest and to be of value to older audiences are not produced.
The impact of television on young children has received much attention.

Research suggests that children see television advertising as just another form of
programming and react uncritically to its messages, which makes them especially
vulnerable to advertising. There is also concern about the way in which
adolescent girls respond to advertising that features beautiful, thin models.
Research indicates that many adolescent girls are unduly influenced by this
standard of beauty, become dissatisfied with their own bodies, and may develop
eating disorders in pursuit of a thin figure. New research suggests that adolescent
boys are also being influenced by advertising images of bulked-up, buffed bodies.
As a result, many become dissatisfied with their own body image, devote large
amounts of time to weightlifting, and may even take drugs that have harmful side
effects in order to develop more muscle. Those over the age of 60 are thought to
be less influenced by advertising, but some elderly people no longer process
messages as easily as younger people, making them more susceptible to
questionable advertising claims.
3. Political Impact
Advertising is now a major component of political campaigns and

therefore has a big influence on the democratic process itself. In 1998 more than
$467 million was spent on election campaigns in the United States. That amount
of spending placed political advertising in the ranks of the country’s 30 leading
advertisers that year. Political advertising is a relatively new development in U.S.
history. Advertising professionals did not become involved in electoral campaigns
until the 1950s. But since then, political advertising has grown in sophistication
and complexity.
Political advertising enables candidates to convey their positions on

important issues and to acquaint voters with their accomplishments and
personalities. Television advertising is especially effective for candidates running
for national or statewide office because it can reach so many people at once.
Candidates can also use advertising to respond effectively to the charges of their
opponents.
Various campaign finance reform proposals, however, have tried to

address the impact of television advertising on political campaigning. Because of
the high cost of television ads, the costs of political campaigns have skyrocketed,
making it necessary for candidates to raise money continually, even after they
have been elected to office. Critics say this factor jeopardizes the democratic
process by making elected officials beholden to wealthy contributors and by
making it more likely that only the wealthy will run for office. Some reform
proposals have called for free airtime, but television and radio networks have
resisted this idea.
Critics of political advertising also charge that the 30-second television

spot has become more important to a political campaign than a thorough
discussion of the issues. As a result, voters are bombarded with image advertising
rather than being acquainted with the candidate’s positions. They contend that this
practice is harmful to good government. Issues are simplified, and candidates are
“packaged and sold” much like a consumer product, thereby distorting the
political process.
4. Cultural Impact
Advertising can affect cultural values. Some advertising messages, for

example, encourage aggressive individualism, which may clash with the
traditional cultural values of a country where the collective or group is
emphasized over the individual or humility or modesty is preferred to
aggressiveness. With the globalization of the world economy, multinational
corporations often use the same advertising to sell to consumers around the world.
Some critics argue that advertising messages are thus helping to break down

distinct cultural differences and traditional values, causing the world to become
increasingly homogeneous.
Many advertising campaigns, however, have universal appeal, overriding

cultural differences, or they contribute to culture in a positive way. Humor in
advertising has made many ad campaigns widely popular, in some cases
achieving the status of folklore or taking on new life in another arena. For
example, a popular ad campaign for a fast-food chain with the slogan “Where’s
the beef?” became part of the 1980 Democratic presidential primary campaign
between Gary Hart and Walter Mondale. The ad ridiculed a competitor by
depicting a small hamburger patty dwarfed by a huge bun. During a primary
debate one of the candidates used the ad slogan to suggest that his opponent’s
campaign lacked substance.

7.Research Methodology,
Data collection &
Interpretation

RESEARCH METHODOLOGY
Research Design : Descriptive

Data Source : Primary data
: Secondary data
Research Instrument : Questionnaire
Sample design : Simple random design
Sample size : 100
Sample location : Kanpur
Sample element : Students

: Business class
: House hold
: Service class
SAMPLING UNIT

Sampling Unit is the total number of samples differed in different locality.
Sl. No. Classes No. of Classes

1. Students 25
2. Business class 25
3. Household 25
4. Service class 25
Total 100
Data have been collected through the survey method while surveys have been conducted
in one city: Kanpur
The data collected was both from the primary and secondary source. The primary data
was collected through questionnaires and was collected personally.
The secondary data was collected through books, magazines, company website and other
websites. All the area had segmented according the population of this area. I have
considered 100 as sample size.
HYPOTHESIS TESTING
H0: The difference among the parameter which influences the perception of
consumers towards the product is significant.

H1: The difference among the parameter which influences the perception of
consumer towards the product is insignificant.
DETERMINANTS STUDENTS BUSINESS SERVICE HOUSEHOLD

CLASS CLASS
STILL IMAGE 3 8 8 9
MOVING IMAGE 22 17 17 16
ENTERTAINMENT 10 5 4 7
INFORMATION 22 22 24 19
LANGUAGE 5 19 18 21
CELEBRITY 19 14 19 17
INTENSITY 16 12 11 13
SOCIAL ISSUE 5 17 18 19
NATIONAL ADS 23 23 16 14
LOCAL ADS 2 2 9 11

Source of Sum of Degree of Mean F-Ratio 5% F-Limit
variation Samples freedom Square (from F-table)
Column 21.8 3 7.29 0.179 F(3,36) =

2.8387
Rows 1454.77 36 40.41
Total 1476.57 39
F1-TABLE VALUE at (0.05) level of significance of (3,36) = 2.8387

Here in this case F1-statistics < F1-table value.
Hence the null hypothesis is accepted.
Interpretation:-
Since when the statistical value is less than table value then the null hypothesis is
accepted and hence we can say that the difference among the determinants and
parameters is insignificant.
GRAPHICAL INTERPRETATION

1. From where do you get information about the new product?
Answers No. of respondents

Television 42
Newspapers 26
Magazines 11
Internet 6
Peers (Family / Friends) 15
Interpretation:
A large size of population is influenced by Television and Newspapers.
2. Which form of advertisement do you like more?

Still image 28
Moving image 72
Interpretation:
People are more affected by advertisement with moving image.
3. For you advertisement is a source of :

Information 62
Entertainment 38
Interpretation:
More number of people consider advertisement as a source of information rather

than a source of entertainment.
4. Does entertaining advertisement affect your opinion about the product?

Yes 26
No 74
Interpretation:
Entertaining advertisement does not affect the opinion of customer about the
product
5. Does information provided in advertisement affects your opinion about the

product?

Yes 87
No 13
Interpretation:
Information provided in the advertisement affect very much on the opinion of

consumers about the product.
6. Does language used in advertisement affects your opinion about the product?

Yes 63
No 37
Interpretation:
Language used in the advertisement affects a lot on the opinion of consumers

about the product.
7. Does presence of any celebrity in the advertisement affects your opinion
about the product?

Yes 69

No 31
Interpretation:
Presence of any celebrity affects on the opinion of consumers about the product.
8. Does intensity of the advertisement affects your opinion about the product?

Yes 52
No 48

Interpretation:
The effect of intensity is very powerful on the opinion of consumers about the
product.
9. Does presence of social issues in the advertisement affects your opinion about
the product?

Yes 59
No 41

Interpretation:
Presence of social issues in advertisements affects very much on the opinion of

consumers about the product.
10. Do you think advertisement helps in increasing sales of any product?

Yes 87
No 13

Interpretation:
Advertisement helps very much in increasing the sales of any product.
11. Which type of advertisement influences you more?

National advertisement 76
Local advertisement 24

Interpretation:
National advertisements affect people’s opinion more than the local

advertisements.
FINDINGS
 Advertisements with moving image are more effective than advertisement with
still image.
 Information provided in the advertisement has more influence on consumer’s

perception about the product.

 Language used in the advertisement also plays important role in increasing
effectiveness of an advertisement.
 Intensity of advertisement affects the perception of consumers towards the

product and leads them for its purchase.
 Social issues included in advertisement affects the perception of high age group
people.
 National advertisement has more influence on consumer’s perception about the

product instead of local advertisement.
 Advertisement increases the sales of any product.
LIMITATIONS
The marketing researcher has to face certain difficulties while he

carries out the research work. He knows the limitation beforehand, uncontrollable and
others are controllable. Some important limitations, which are faced by researchers as
follows: -

 Sample size restricted to 100 only which was very less according total
population.
 The responses given by respondents were not always accurate because the
respondents gave the response according to their understanding.
 Survey is a time consuming process but the time to collect the data for
research was very less.
 Sometimes the respondents are not willing to fill the questionnaire and
hence the resultant may not be correct.
 Marketing researchers studies the behavior that is rational. Very often,

they do not express their feeling correctly what they think. In such cases
their habitual, practice, preferences cannot be assessed correctly.
10. Conclusions
• It’s difficult to sell anything to people who don’t know about company
or its product.

• Advertising makes the sales happen.
• Advertising is often as important to a small business as location,

employees, and cash flow. It’s an essential form of business communication, for
both products and services.
• Frequency is a key to successful advertising strategy. Frequency is the

number of times the average person sees an ad.
• The objective of advertising agency is to hammer company’s message

into the minds of their potential customers. Company wants them (potential
customers) to recall company’s message and be motivated to buy from them
(company) at the critical moment.
• To accomplish this, frequency is vital. A consistent advertising

program with a well thought out theme is vital to increasing sales through
advertising.
• So more and more companies are heavily advertising their products

and also allocate more budgets for that.
• In today’s competitive environment a good advertising campaign

makes a large difference in company’s business.
• Print ads in dailies/magazines are not as successful as ads on radio or

on hoardings.
11. My Learning

During this project I learnt about the planning and execution processes of advertising,
market research and marketing functions. But not only these things, I also learnt various
important skills, activities, work-styles and working environment of an organization.
In VAM, every person work under tremendous pressure to do the best within time limit.
Their relations between each other are very friendly.
So I learnt that how to do work without taking more stress under tremendous pressure
and how to make good relations between your seniors and juniors. This knowledge helps
me not only in my professional career but in my normal life also.
.
Instructing:
Teaching others how to do something.
Active Learning:
Understanding the implications of new information for both current and future
problem-solving and decision-making.
Coordination:
.
Fluency of Ideas:
The ability to come up with a number of ideas about a topic (the number of ideas
is important, not their quality, correctness, or creativity).
Organizing, Planning, and Prioritizing Work:

Developing specific goals and plans to prioritize, organize, and accomplish your
work.
Identifying Objects, Actions, and Events:

Identifying information by categorizing, estimating, recognizing differences or
similarities, and detecting changes in circumstances or events.
Self Control:
Job requires maintaining composure, keeping emotions in check, controlling
anger, and avoiding aggressive behavior, even in very difficult situations.
Stress Tolerance:
Job requires accepting criticism and dealing calmly and effectively with high
stress situations.
SUGGESTIONS

 Advertisement should be made with keeping the determinants of effectiveness in
mind.
 Advertisement should be according to the product and its suitability with different
age groups.
 To make advertisement more effective all the determinants of effectiveness

should be taken care of.
 Investment in advertisement should be made with great care of media of

advertisement and type of advertisement.
 Advertisers should develop new and more effective ways of advertisement.
Questionnaire

I am Alok Singh pursuing II Semester of Master of Business Administration from
A.I.T. KANPUR. I am doing my research report on “A Study on Effect of Advertisement
on Sale” as a part of my course curriculum. For this I require you to please fill this
questionnaire.
Name: ……………………………….................................
Sex: a. Male [ ] b. Female [ ]
Age:
a. Below 20 [ ]
b. 20 to 30 [ ]
c. 30 to 40 [ ]
d. Above 40 [ ]
Occupation:
a. Student [ ]
b. Business class [ ]
c. House hold [ ]
d. Service class [ ]
1. From where do you get information about the new product?
a. Television [ ]
b. Newspapers [ ]
c. Magazines [ ]
d. Internet [ ]
e. Peers (friends/family) [ ]

2. Which form of advertisement do you like more?
a. Still image (Magazines / Newspapers) [ ]
b. Moving image (Television / Internet) [ ]
3. For you advertisement is a source of
a. Information [ ]
b. Entertainment [ ]
4. Does an entertaining advertisement influence your opinion about the product?
a. Yes [ ]
b. No [ ]
5. Does information provided in advertisement affects your opinion about the

product?
a. Yes [ ]
b. No [ ]
6. Does language used in advertisement affects your opinion about the product?
a. Yes [ ]
b. No [ ]
7. Does presence of any celebrity in the advertisement affects your opinion about the
product?
a. Yes [ ]
b. No [ ]

8. Does intensity of the advertisement affects your opinion about the product?
a. Yes [ ]
b. No [ ]
9. Does presence of social issues in the advertisement affects your opinion about the
product?
a. Yes [ ]
b. No [ ]
10. Do you think advertisement helps in increasing sales of any product?
a. Yes [ ]
b. No [ ]
11. Which type of advertisement influences you more?
a. National advertisement [ ]
b. Local advertisement [ ]
13. Bibliography
1. Advertising Management – concepts and cases Mahendra Mohan.

2. Marketing Management – Philip Kotler
3. Branding – Geoffrey Randoll
4. Strategic Brand Management – Kapferer
5. Advertising and Sales Promotion Management – S.L.Gupta, V.V.Ratra
6. Advertising and Salesmanship – P.Saravanavel

14. Webography
1. www.books.google.com
2. www.scribd.com
3. www.paulbeelen.com
4. www.indiainfoline.com
5. www.exchange4media.com
6. www.clarkeagency.net

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A

“A Study on Effect of Advertisement on Sale "

Under the guidance of

"Mr. S. Ranjan upadhayay"

“Gautam Buddha Technical University Lucknow”

In partial fulfillment of the requirement for the award of the

AIT KANPUR ALOK SINGH Page 1

"APOLL INSTITUTE OF TECHNOLOGY KANPUR"

AIT KANPUR ALOK SINGH Page 2

Project name : “A Study on Effect of Advertisement on Sale "

Company : Vishal Advertising & Marketing (P) Ltd (Only VAM)

Department (working with) : Space Marketing

Training Officer : Mr. GOPAL DWIVEDI (Director – VISHAL

Co-ordination with : Mr. MANOJ (Marketing manager- VISHAL

Duration of project : 8 Weeks (15th June to14th Aug)

College name : APOLLO INSTITUTE OF TECNOLOGY,

AIT KANPUR ALOK SINGH Page 3

Name of presenter : ALOK SINGH

First I want to thank my parents for making me able, to be a part of M.B.A.

For giving me an opportunity to work on such a specific field to improve my knowledge

AIT KANPUR ALOK SINGH Page 4

Topic Page no.

2. Introduction to Advertising Industry 8

3. History of Advertisement in India 25

5. Measuring Advertising Effectiveness on sale 58

7. Research Methodology, Data collection & Interpretation 74

AIT KANPUR ALOK SINGH Page 5

1. To study the current scenario of Indian advertising industry.

AIT KANPUR ALOK SINGH Page 6

AIT KANPUR ALOK SINGH Page 7

A successful national economy depends on advertising promoting sales so that

AIT KANPUR ALOK SINGH Page 8

Generally, prices fall as advertising increases demands. If advertising were to be

c) Naming and branding may be initiated by the advertising department or agency,

AIT KANPUR ALOK SINGH Page 9

h) Packaging is a vital aspect of advertising, as when recognition is sought. It is itself

Increasingly, Eco-labeling will be looked for as proof that a product is

k) Market education is a public relations activity aimed at creating a favourable

m) Test marketing requires a miniature advertising campaign simulating the future

n) Advertising research includes copy-testing, circulation and readership surveys and

o) Sales promotion can augment or even replace traditional advertising.

p) The after-market calls for advertising to make customers aware of post-sales

q) The maintenance of customer interest and loyalty may be achieved by advertising

r) On-going public relations activities help to maintain long-term brand recognition.

Basics of an advertising campaign

A campaign should follow a five-point plan:

1. What exactly is to be achieved? Do we aim to achieve, say, a given sales

2. When is this to be achieved? This week – over the year?

AIT KANPUR ALOK SINGH Page 11

4. What tactics shall be used? What creative ideas and media?

5. How much will this cost? It is a good investment?

The advertising department

The organization of advertising and public relations differ, so that most

AIT KANPUR ALOK SINGH Page 12

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ENTERS THE AD AGENCY

CREATIVE BRIEF MEDIA BRIEF

TYPOGRAPHY ENGRAVING FILMING EDITING

PRINT MEDIA BROADCAST MEDIA

AD REACHES THE TARGET AUDIENCE