UNIT 2:

COMMUNICATION AND ADVERTISING

COMMUNICATION
Communication is an exchange of facts, ideas, opinions, or emotions by two or more persons- Newman W. H.

Communication is an intercourse of words, letters, symbols or messages and is a way that one organization member shares meaning and understanding with another. Koontz and O `Donnel

PROCESS OF COMMUNICATION
ENCODES
MEDIUM

DECODES RECEIVER

SENDER

MESSAGE

NOISE

FEEDBACK PRE TESTS AND POST TESTS

MODEL 1: AIDA MODEL

ACTION

DESIRE

INTEREST

AWARENESS

MODEL 2: HIERACHY OF EFFECTS

MODEL 3: INNOVATION ADOPTION

AWARENESS

INTEREST
EVALUATION TRIAL

ADOPTION

MODEL 4: INFORMATION PROCESSING

PRESENTATION

ATTENTION
COMPREHENSION YIELDING

RETENTION

BEHAVIOR

MODELS OF COMMUNICATION/ TRADITIONAL RESPONSE HIERACHY MODELS

AAKER AND MYERS COMMUNICATION MODEL

AWARENESS/FAMILIARITY WITH BRAND

INFORMATION OR BRAND ATTRIBUTES OR BENEFITS

CREATION OF BRAND IMAGE/PERSONALITY AD EXPOSURE BRAND ATTITUDE ASSOCIATION OF FEELINGS WITH BRAND PURCHASE BEHAVIOUR

LINKAGE OF BRAND WITH PEERS/EXPERTS AND GROUP NORMS

REMINDER OF INDUCEMENT ABOUT BRAND TRIAL

COMMUNICATION MODEL FOR RURAL AND URBAN COMMUNICATION

INTEGRATED MARKETING COMMUNICATIONS

"Integrated marketing communication is a strategic business process used to plan, develop, execute and evaluate coordinated measurable, persuasive brand communications programs over time with consumers, customers, prospects, employees, associates and other targeted relevant external and internal audiences. The goal is to generate both shortterm financial returns and build long-term brand and shareholder value" - Don Schultz of Northwestern University

FEATURES OF IMC
Shift from Media Advertising Solves communication problems by moving away from advertising Shift in marketplace power from manufacturer to retailers Rapid growth and development of database marketing Demands greater accountability from agencies and changes the way agencies are compensated Internet based changes

ADVANTAGES/ RELEVANCE OF IMC

Awareness Information Persuasion Attitudes Reminder Brand Loyalty Brand Image Counter competitors claims Educating the customers Markets expansion

COMPONENTS OF IMC
Advertising Direct Marketing Interactive/ Internet Marketing Sales Promotion Publicity Public Relations Personal Selling Packaging Trade Fairs and Exhibitions Sponsorships

FACTORS INFLUENCING IMC

Nature of the product Nature of purchases Product strategy Promotion mix of competitors Product life cycle Unit price of the product Dealer network Target marketing

OBJECTIVES OF IMC
Promotion objectives Communication objectives Sales objectives

IMC PROCESS
1. 2. 3. 4. 5. 6. 7. 8. Identifying the target audience Determining the communication objectives Determining the message Selecting the communication channels Determining the budget Promotion mix decision Implementing the promotion mix Evaluating the performance

DAGMAR
1961 - Russell Colley Report for association of national advertisers Model for setting advertising objectives and measuring the results of an ad campaign Communication effects are given key importance DAGMAR defines an advertising goal as a specific communication task to be accomplished among a defined audience in a given period of time.

DAGMAR (Defining Advertising Goals for Measured Advertising Results)

AWARENESS

COMPREHENSION

CONVICTION

ACTION

CHARACTERISTICS OF OBJECTIVES
Concrete measurable tasks Target audience Benchmark and degree of change sought Specified time period

CRITICISIMS OF DAGMAR
Problems with the response hierarchy Sales objectives Practicality and costs Inhibition of creativity

ADVERTISING- AN INTRODUCTION
The American Marketing Association Advertising any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. Advertisement V/s Campaign

5 M`s OF ADVERTISING/ 5-M MODEL

Mission: What are the advertising objectives? Money: How much can we spent?

Message: What message should we send?

Media: What media should we use? Measurement: How should we evaluate the results?

5-M MODEL

1. MISSION
ADVERTISING OBJECTIVES: 1. Informative advertising 2. Persuasive advertising 3. Reminder advertising 4. Reinforcement advertising

2. MONEY
Stage in the PLC Market Share and Consumer base Competition Frequency of advertisements Product substitutability

3. MESSAGE
Message generation Message content Message structure Message format

4. MEDIA
Reach, Frequency, Impact Variables Considered: Media habits of target audience Product characteristics Message characteristics Cost

5. MEASUREMENT
Communication effect research Sales effect research

FEATURES OF ADVERTISING
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Paid form of communication Non-personal presentation Ideas, goods and services Identified sponsor Controlled Mass communication Element of promotion mix Element of marketing mix Persuasive Provides information Target oriented Builds image Creates awareness Helps in consumer choice Creativity Art, science and profession

FUNCTIONS OF ADVERTISING
PRIMARY Increases sales volume Persuade channel intermediaries Assist channel intermediaries Increase product usage Receptiveness of new product/ model Build confidence in quality Eliminate seasonal fluctuations Raise standard of living Bring more business Create insurance

SECONDARY Encourage salesman Furnish information Impress executives Impress factory workers Feeling of security Secure better employees

ADVERTISING MESSAGE DECISIONS

Message Content: Rational, Emotional, Moral Appeal Message Structure: Conclusions, Repetition, One-sided versus 2 sided arguments, order of presentation Message Format: Copy, Illustrating, Layout Message Source: Source Credibility (expertise and trustworthiness), Source Attractiveness

ADVERTISING AGENCY
American Advertising Agency Association (AAAA) 1. An independent business organization 2. Composed of creative and business people 3. Who develop, prepare and place advertising on advertising media 4. For sellers seeking to find customers for their goods and services.

FEATURES OF AN AD AGENCY
Independent organization Works for advertisers Creative talent Various services Fees from client and commission from media

STRUCTURE OF AN AD AGENCY
Contact Department Media Department Copy Department Art and Visualization Department Production Department Finance Department Research Department Public Relations Department

FUNCTIONS OF AD AGENCIES
Selection of prospects Advertising planning Media selection Creative function Research Marketing functions Coordination Trained personnel

TYPES OF AD AGENCIES
1. 2. 3. 4. 5. 6. 7. Full service agencies Creative boutiques Specialist agencies Modular ad agencies In-house agencies Agency networks Media buying agencies

PILLARS OF AD AGENCY/ TRIANGLE OF DELIGHT

Client Servicing

Creative

Media

FACTORS IN SELECTION OF AN AD AGENCY

1. Creativity 2. Size 3. Initiative and involvement 4. Market standing 5. Type of clients 6. Media connection 7. Services offered 8. Location 9. Accreditation 10.Compensation

PROCESS OF MAKING AN AD
BRIEFING STAGE CREATION STAGE PRODUCTION STAGE RELEASE STAGE Ad brief to a/c executive Analysis and Clarifications Creative and Media Brief Research by Creative and Media C + M present ideas to A/c Executive Internal Review and finalization Presentation to client Ad Pre- testing Budget & Estimate Approvals Ad Processing Printer or Commercial Media Buying Launch of Ad Billing/ Compensation Post Evaluation

METHODS OF AD BUDGETING
1. FIXED GUIDELINE METHOD

Percentage of Sales Unit of Sales Competitors Expenditure Market Share

2. TASK METHOD/ OBJECTIVE METHOD

3. SUBJECTIVE METHODS
Arbitrary Affordable amount Go-for-Broke Profit Planning