1. Summer Internships 2013
PGDM 2012
Summer Internship Project Report
On
“Brand Promotion”
Undertaken at
Prepared By:
Ajay Jayaswal
12GM003
Company Guide
Faculty Guide
Mr. Tushar Sardana
Bakshi
Mrs. Priyadarshini
(Regional marketing manager)
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2. Declaration
I Ajay jayaswal student of PGDM in the Academic year 2012-14 at
IILM-AHL, Jaipur (Rajasthan) hereby declare that I have completed
project titled “ Brand Promotion” of videocon In selected Areas of
Jaipur as a part of the course requirement of PGDM of IILM-AHL,
Jaipur.
I further declare that the information presented in this project is true and
original to the best of my knowledge.
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3. ACKNOWLEDGEMENT
I am grateful to “Mr. Tushar Sardana” whose encouragement,
guidance and support from the initial to the final level enabled me to
develop an understanding of the subject.
I am highly thankful to my Faculty guide for giving me the
encouragement and freedom to conduct my project.
Lastly, I offer my regards to all of those who supported me in any
respect during the completion of the project.
Regards,
Ajay Jayaswal
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4. Preface
This project report has been prepared as per the requirement of the
syllabus of PGDM course structure under which the students are the
required to undertake project. My job during the project was the
“ Brand Promotion’’ of Videocon in selected Areas of Rajasthan”.
It was a first experience for me as that I was exposed to the professional
set-up and was facing the market, which was really a great experience.
During project period, when business is involved, experiences counts a
lot, as we know, experience are an instrument, which leads towards
success. As we all know that working in market on the grass route level
has always been a pleasure.
Now I take this opportunity to present the project report and sincerely
hope that it will be as much knowledge enhancing to the readers as it
was to use during the fieldwork and the completion of the report.
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5. TABLE OF CONTENT
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CONTENT
OBJECTATIVE OF REPORT
RESEARCH METHODOLOGY
WHAT IS “BRAND”?
A. CONCEPT
B. HISTORY OF BRANDING
C. TYPES OF BRANDIND
D. PRODUCT VS BRAND
E. SELECTION OF BRANDS
BRAND STRATEGIES
BRAND PROMOTION GUIDE
WHAT IS “PROMOTION”?
ADERTISING
A. TYPES OF ADVERTISING
B. ADV & CONSTITUTITIONAL RIGHT
C. OPPOSITIONS
D. FUTURE
FINDINGS
CONCLUSION
1. OBJECTIVE OF REPORT
Objective of this report is to below:1- The cause & effect of branding.
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6. 2- Its impact on Consumer psyches
3- Impact on Brand Building
4- Steps taken by the all new company and brand.
5- Present method and strategy.
6- Time and case of brand promotion.
2. RESEARCH METHODOLOGY
Hence we have evaluated Videocon & other companies. First we had gone
through questionnaire which we supposed to ask to targeted respondents.
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7. Then we had discussion over pros and cons of each segment of questionnaire so
that no one should face problem while dealing with odd or unexpected response
from respondent. We divided the target respondents by quota sampling technique.
We gathered required data and scrutinised it well for its correctness and validity.
Then we analysed the particular segments of questionnaire which were probing
more towards decision of investment in to the Videocon.
To add on to the client’s requirements we have also highlighted the areas where
improvement is required in ITM and the vital areas which require more flow of
financial resources towards them.
.
3. WHAT IS BRAND
BRAND:- A brand is a collection of experiences and associations connected
with a service, a person or any other entity.
Brands have become increasingly important components of culture and the
economy, now being described as "cultural accessories and personal
philosophies".
surpassed.
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8. "A company's brand is the primary source of its competitive advantage and a
valuable strategic asset."
"A company's brand is the primary source of its competitive advantage and a
valuable strategic asset." differentiates from the rest.”
A.CONCEPT
Some people distinguish the psychological aspect of a brand from the experiential
aspect. The experiential aspect consists of the sum of all points of contact with the
brand and is known as the brand experience. The psychological aspect,
sometimes referred to as the brand image, is a symbolic construct created within
the minds of people and consists of all the information and expectations
associated with a product or service.
People engaged in branding seek to develop or align the expectations behind the
brand experience (see also brand promise), creating the impression that a brand
associated with a product or service has certain qualities or characteristics that
make it special or unique. A brand is therefore one of the most valuable elements
in an advertising theme, as it demonstrates what the brand owner is able to offer
in the marketplace. The art of creating and maintaining a brand is called brand
management.
Careful brand management, supported by a cleverly crafted advertising campaign,
can be highly successful in convincing consumers to pay remarkably high prices
for products which are inherently extremely cheap to make. This concept, known
as creating value, essentially consists of manipulating the projected image of the
product so that that the consumer sees the product as being worth the amount that
the advertiser wants him/her to see, rather than a more logical valuation that
comprises an aggregate of the cost of raw materials, plus the cost of manufacture,
plus the cost of distribution. Modern value-creation branding-and-advertising
campaigns are highly successful at inducing consumers to pay, for example, 50
dollars for a T-shirt that cost a mere 50 cents to make, or 5 dollars for a box of
breakfast cereal that contains a few cents' worth of wheat.
A brand which is widely known in the marketplace acquires brand recognition.
When brand recognition builds up to a point where a brand enjoys a critical mass
of positive sentiment in the marketplace, it is said to have achieved brand
franchise. One goal in brand recognition is the identification of a brand without
the name of the company present. For example, Disney has been successful at
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9. branding with their particular script font (originally created for Walt Disney's
"signature" logo), which it used in the logo for go.com.
Consumers may look on branding as an important value added aspect of products
or services, as it often serves to denote a certain attractive quality or characteristic
(see also brand promise). From the perspective of brand owners, branded products
or services also command higher prices. Where two products resemble each other,
but one of the products has no associated branding (such as a generic, storebranded product), people may often select the more expensive branded product on
the basis of the quality of the brand or the reputation of the brand owner.
Brand name:The brand name is often used interchangeably within "brand", although it is more
correctly used to specifically denote written or spoken linguistic elements of any
product. In this context a "brand name" constitutes a type of trademark, if the
brand name exclusively identifies the brand owner as the commercial source of
products or services. A brand owner may seek to protect proprietary rights in
relation to a brand name through trademark registration. Advertising
spokespersons have also become part of some brands, for example: Mr. Whipple
of Charmin toilet tissue and Tony the Tiger of Kellogg's.
Brand identity:How the brand owner wants the consumer to perceive the brand - and by
extension the branded company, organization, product or service. The brand
owner will seek to bridge the gap between the brand image and the brand identity.
[2]
Brand identity is fundamental to consumer recognition and symbolizes the
brand's differentiation from competitors.
Branding approaches/Company name:Often, especially in the industrial sector, it is just the company's name which is
promoted (leading to one of the most powerful statements of "branding"; the
saying, before the company's downgrading, "No one ever got fired for buying
IBM").
In this case a very strong brand name (or company name) is made the vehicle for
a range of products (for example, Mercedes-Benz or Black & Decker) or even a
range of subsidiary brands (such as Cadbury Dairy Milk, Cadbury Flake or
Cadbury Fingers in the United States).
B.HISTORY OF BRANDING
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10. Although connected with the history of trademarks and including earlier
examples which could be deemed "protobrands" (such as the marketing puns of
the "Vesuvinum" wine jars found at Pompeii), brands in the field of massmarketing originated in the 19th century with the advent of packaged goods.
Industrialization moved the production of many household items, such as soap,
from local communities to centralized factories. When shipping their items, the
factories would literally brand their logo or insignia on the barrels used, extending
the meaning of "brand" to that of trademark.
Bass & Company, the British brewery, claims their red triangle brand was the
world's first trademark. Lyle’s Golden Syrup makes a similar claim, having been
named as Britain’s oldest brand, with its green and gold packaging having
remained almost unchanged since 1885.
Cattle were branded long before this; the term "maverick", originally meaning an
unbranded calf, comes from Texas rancher Samuel Augustus Maverick who,
following the American Civil War, decided that since all other cattle were
branded, his would be identified by having no markings at all.
Factories established during the Industrial Revolution, generating mass-produced
goods and needed to sell their products to a wider market, to a customer base
familiar only with local goods. It quickly became apparent that a generic package
of soap had difficulty competing with familiar, local products. The packaged
goods manufacturers needed to convince the market that the public could place
just as much trust in the non-local product. Campbell soup, Coca-Cola, Juicy Fruit
gum, Aunt Jemima, and Quaker Oats were among the first products to be
'branded', in an effort to increase the consumer's familiarity with their products.
Many brands of that era, such as Uncle Ben's rice and Kellogg's breakfast cereal
furnish illustrations of the problem.
Around 1900, James Walter Thompson published a house ad explaining
trademark advertising. This was an early commercial explanation of what we now
know as branding. Companies soon adopted slogans, mascots, and jingles which
began to appear on radio and early television. By the 1940s, manufacturers began
to recognize the way in which consumers were developing relationships with their
brands in a social/psychological/anthropological sense.
From there, manufacturers quickly learned to build their brand's identity and
personality (see brand identity and brand personality), such as youthfulness,
fun or luxury. This began the practice we now know as "branding" today, where
the consumers buy "the brand" instead of the product. This trend continued to the
1980s, and is now quantified in concepts such as brand value and brand equity.
Naomi Klein has described this development as "brand equity mania". In 1988,
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11. for example, Philip Morris purchased Kraft for six times what the company was
worth on paper; it was felt that what they really purchased was its brand name.
Marlboro Friday: April 2, 1993 - marked by some as the death of the brand [1] - the
day Philip Morris declared that they were to cut the price of Marlboro cigarettes
by 20%, in order to compete with bargain cigarettes. Marlboro cigarettes were
notorious at the time for their heavy advertising campaigns, and well-nuanced
brand image. In response to the announcement Wall street stocks nose-dived for a
large number of 'branded' companies: Heinz, Coca Cola, Quaker Oats, PepsiCo.
Many thought the event signalled the beginning of a trend towards "brand
blindness" (Klein 13), questioning the power of "brand value".
C.TYPES OF BRANDING
Individual branding:Main article: Individual branding
Each brand has a separate name (such as Seven-Up or Nivea Sun (Beiersdorf)),
which may even compete against other brands from the same company (for
example, Persil, Omo, Surf and Lynx are all owned by Unilever).
Attitude branding:Attitude branding is the choice to represent a larger feeling, which is not
necessarily connected with the product or consumption of the product at all.
Marketing labeled as attitude branding include that of Nike, Starbucks, The Body
Shop, Safeway, and Apple Computer.[1] In the 2000 book, No Logo, attitude
branding is described by Naomi Klein as a "fetish strategy".
"A great brand raises the bar -- it adds a greater sense of purpose to the
experience, whether it's the challenge to do your best in sports and fitness, or the
affirmation that the cup of coffee you're drinking really matters." - Howard
Schultz (president, ceo and chairman of Starbucks).
"No-brand" branding:Recently a number of companies have successfully pursued "No-Brand"
strategies, examples include the Japanese company Muji, which means "No label"
in English (from 無印良品 --- "Mujirushi Ryohin" --- literally, "No brand quality
goods") . Although there is a distinct Muji brand, Muji products are not branded.
This no-brand strategy means that little is spent on advertisement or classical
marketing and Muji's success is attributed to the word-of-mouth, a simple
shopping experience and the anti-brand movement. Another brand which is
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12. thought to follow a no-brand strategy is American Apparel, which like Muji, does
not brand its products.
Derived brands:In this case the supplier of a key component, used by a number of suppliers of the
end-product, may wish to guarantee its own position by promoting that
component as a brand in its own right. The most frequently quoted example is
Intel, which secures its position in the PC market with the slogan "Intel Inside".
Brand extension:The existing strong brand name can be used as a vehicle for new or modified
products; for example, many fashion and designer companies extended brands
into fragrances, shoes and accessories, home textile, home decor, luggage, (sun-)
glasses, furniture, hotels, etc.
Mars extended its brand to ice cream, Caterpillar to shoes and watches, Michelin
to a restaurant guide, Adidas and Puma to personal hygiene. Dunlop extended its
brand from tires to other rubber products such as shoes, golf balls, tennis racquets
and adhesives.
There is a difference between brand extension and line extension. When CocaCola launched "Diet Coke" and "Cherry Coke" they stayed within the originating
product category: non-alcoholic carbonated beverages. Procter & Gamble (P&G)
did likewise extending its strong lines (such as Fairy Soap) into neighboring
products (Fairy Liquid and Fairy Automatic) within the same category, dish
washing detergents.
Multi-brands:Alternatively, in a market that is fragmented amongst a number of brands a
supplier can choose deliberately to launch totally new brands in apparent
competition with its own existing strong brand (and often with identical product
characteristics); simply to soak up some of the share of the market which will in
any case go to minor brands. The rationale is that having 3 out of 12 brands in
such a market will give a greater overall share than having 1 out of 10 (even if
much of the share of these new brands is taken from the existing one). In its most
extreme manifestation, a supplier pioneering a new market which it believes will
be particularly attractive may choose immediately to launch a second brand in
competition with its first, in order to pre-empt others entering the market.
Individual brand names naturally allow greater flexibility by permitting a variety
of different products, of differing quality, to be sold without confusing the
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13. consumer's perception of what business the company is in or diluting higher
quality products.
Once again, Procter & Gamble is a leading exponent of this philosophy, running
as many as ten detergent brands in the US market. This also increases the total
number of "facings" it receives on supermarket shelves. Sara Lee, on the other
hand, uses it to keep the very different parts of the business separate — from Sara
Lee cakes through Kiwi polishes to L’eggs pantyhose. In the hotel business,
Marriott uses the name Fairfield Inns for its budget chain (and Ramada uses
Roadway for its own cheaper hotels).
Cannibalization is a particular problem of a "multiband" approach, in which the
new brand takes business away from an established one which the organization
also owns. This may be acceptable (indeed to be expected) if there is a net gain
overall. Alternatively, it may be the price the organization is willing to pay for
shifting its position in the market; the new product being one stage in this process.
D. Product vs Brand
• A product is made in a factory…
A Brand is bought by the customer.
• A Product can be copied… A brand is unique.
A product is quickly outdated…Abrand is timeless
Brands differentiate Products
• Fairness Creams: Fair & Lovely vs Ponds
Dream Fairness
• Coconut Hair Oil: Parachute vs Dabur
Vatika
• Cola: Coca Cola vs Pepsi
• ATM : HDFC vs HDFC
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14. 14

15. 4. BRAND STRATEGIES
To Fuel the Brand Engine
• Strategy 1:- Extension- Giving birth to new product brands
• Strategy 2 :- Revitalization- Injecting life to the existing brand
Brand Revitalization Strategy:Injecting life to same brand, energizing a mature brand Need to inject life into the
Mature Brand “Facelift” … Recharging the Brand Batteries
Brand Decisions: Leveraging Brand Identity
• Brand Extension Strategy
• Brand Revitalization / “Restage”
• Brand Identity: What does a Brand mean / stand for
• Brand Extension: What would you like (enjoy, love, admire) the brand to do
for you.
• Brand Revitalization: How would you like to see the Brand tomorrow (Future
Expectations).
• Brand System / Architecture: What are the important Relations that the Brand
has
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16. Brand Extension Strategy:Brand Growth
– Mature brand : provide fillip to stagnating sales
– Threat of new entrants: Protect Market Share
– Strengthen franchise
• Enhance Brand Image
– Strengthen Brand Identity
– Revive core values
Ways in which a Brand can be Extended
1. Line Extension
2. Brand Extension
3. Multiple Brands
4. New Brands
1.Line Extension Strategy
• Extend existing brand name to existing product category: Identify & occupy
different segments of the market – “market fragmentation”
– Pack variants: shampoos: sachets to economy packs…tubes to jars, bottles to
cans : differentiate uses
– Price variants: Rin Shakti to Rin Supreme. Taj Luxury to Taj Executive:
differentiate user groups… Parachute Uttam (differentiate Line Extension
Strategy).
2. Brand Extension Strategy
• Flavours / Variants: Diet Coke, Sunsilk Black, Parachute Lite…. Hair type,
skin type, user groups: Differentiate user needs … Colgate Gel, MaggiChinese
Noodles
• Ingredient Lead: Lux Sunscreen, Pond’s Talc with SAM : upgrade user needs
Brand
Extension Strategy
• Extend the brand name to a new Product Category: Brand fit in a new business
area
– Supplementary Categories: BPL TV to Washing machines, Maggi soups &
sauces, Lakme lipsticks to perfumes
– Complementary Categories: Colgate toothbrush & toothpaste
– Image Accessories: Bennetton T-shirts to sun-glasses, Nike sports shoes to Tshirts
– Diverse Categories: Similar core values: Britannia biscuits to dairy products
3.Multiple Extension Strategy
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17. • New Brand names in the same product category “market saturation”
• Expensive strategy: Leading corporates… often through acquisitions…
economies of scale
– HLL soaps- Lux, Breeze, Kai, Hamam,Lifebuoy, Dove, Pears
– P&G Detergents: Ariel, Tide
– Coca Cola: Coca Cola, Thums Up…
– Lakme: Elle 18, Orchids
4.New Brand Strategy
• New Brand Name for a product category: poor brand fit but business potential
– Kotex to Kleenex
– Huggies to Depend
– Thums Up to Gold Spot, Pepsi to Mirinda
– Lakme to Elle 18
Stretching the Brand Vertically Understanding the terms:
• Vertical stretch: Technically a Line extension since it is the introduction of Price
Variants of an existing Brand in the existing Product Class
• Stretching Up: Extending the Brand to a Higher Priced Segment
Eg: From Surf detergent 500g at Rs 43 to Surf Excel detergent 500g at Rs 60
• Stretching Down: Extending the brand to a Lower Priced Segment
Eg: From Ariel Washing Powder to Ariel Gain Washing Powde
6. BRAND PROMOTION GUIDE
Building a strong business using the Internet is a challenge. E-commerce can
yield tremendous returns, and may prove more cost-effective than traditional
ways of doing business.
The number of people using the Internet continues to grow, providing an
attractive growth opportunity for e-commerce. This means that the Internet will be
important for businesses in the foreseeable future. However, there is a growing
list of companies which have learned the hard way that they have to build their ebusiness on a sound platform. Traditional marketing techniques remain valid.
Developing and maintaining the e-business solutions to communicate with people
online, whether via a PC, mobile phone or even a fridge, is an expensive
investment in technology and marketing. It has to create a return. A business web
site has to work effectively. The right people need to see it. It has to sell. And it
has to give reasons for users to come back.
This simple 10 Steps guide is designed to help you in planning and marketing
your web site to achieve your e-business objectives.
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18. Step 1. What are your objectives for the site? What is its purpose?
'To be seen to be there' or 'because my competitor is there' are really no longer
viable justifications for being on the 'Net!
There are four clear stages of web development that can be identified:
- promotional tool - an interactive, online brochure
- sales tool - customers can place orders via the site
- process improvement - integration with other parts of the business
- new business model - integrate customer care, relationship management,
distributor management
You need to consider where you are in terms of development and therefore
which of the following purposes are in your short and
medium term plans:
- providing information
- giving a preview of products or services
- selling products or services online
- delivering sales online (e.g. software, data etc.)
- reaching new markets (e.g. by segment, geographically)
- reducing customer servicing and distribution costs
- managing customer relationships
- building customer lifetime value
- generating revenue though advertising (e.g. portals) and to add your
specific objectives.
Step 2. Assess your online marketing mix
Can you put together the right 'marketing mix' or commercial package to
meet the needs of your target audience and your own objectives? Products
Be sure that your products or services are suitable for selling online. How
complicated is the purchase decision? What does the buyer need to know? As ecommerce grows, it is becoming increasingly common to buy books, travel, CDs,
and groceries online - even to manage all one's personal finances. But ever
more unusual consumer products are starting to be sold successfully via the 'Net,
as well as quite complex business products and services. As penetration of the
Internet increases and users become more sophisticated, what are their
expectations likely to be for you to sell online? Should you sell your core product
range or a different level of service and a different type of product?
Pricing
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19. There are increasing customer expectations that online goods will be cheaper.
What impact will reducing prices have on your business? Do you actually want to
cannibalise offline sales?
What will be the overall impact on your margins of selling online? Will it cut
your costs? What impact on distribution costs?
Distribution
Fulfillment is key here. An online sale is effectively a direct sale, and you need to
be sure that you have all the systems and capabilities in place to process the order,
deliver efficiently and deal directly with customers.
Promotion
The e-business needs customer-pull to generate sales, as there is no intermediary
to do it for you. Can you afford to rely on search engines and telling your
customers
you have a site? Do you have the budget to build an appropriate campaign to
drive people to your site in the competitive world of the Internet? More of this in
step nine.
Service
Unfortunately not all sales go through smoothly. There are sometimes problems.
Buyers often need more information or reassurance before they buy. Some
products, like investments, can't even be fully transacted over the Web yet. What
customer service issues might you face? And what media will you set up to
handle customers? As the Internet is still less favoured by consumers for
obtaining
information than the use of telephone, post or face to face, will you need desk
staff, and or a call centre?
Step 3. Define your online customers
Consider who you want to talk to through your web site. Your online audience
may differ from that addressed by your current business. Will you use your web
site to target new customer groups - e.g. in other countries not served by your
existing
business?
How can you use the web to grow business with your existing customers through
relationship management? Talking to them more directly than before, can you
find ways to offer further opportunities for them to buy and build their lifetime
value with
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20. you? What information can you collect to ensure that these opportunities are
really well targeted?
Step 4. Plan the project implementation
Like most projects, the time invested in planning a web site - from the start or
when redeveloping - will pay dividends. You need to plan each phase of the
process, and note that it may take longer than you think! Do you know what you
want to achieve at each stage of the project? Do you know exactly what you need
to communicate through the site? What back end systems and integration will you
need to be able to deliver all that is promised on the site?
You'll need to brief this clearly to your suppliers (internal or external) to ensure
they create a workable solution for you. They can then develop a site map, design
concepts and functional specifications. Copy can then be written, as the last
activity.
Step 5. Select the team
Internally, your e-commerce team would ideally have a range of skills, including
marketing, and IT. The project manager needs to be a hybrid, with ideally some
marketing knowledge, a feel for design and an understanding of IT speak – such
people are in high demand! Most businesses then look outside for specialist
suppliers. Use experienced consultancies for the planning, design, development,
programming and ongoing management of your site. The newness and excitement
of the Internet has drawn in many different types of company who all offer web
site design services. Graphic designers will focus on the design of web pages; IT
companies on database integration and linking your
computer systems. Marketing expertise in the Internet world is less easy to find,
with a few companies such as Zed-Axis available to provide it. Which of these
skills are you likely to need to give you the best chance of success on the Web?
Step 6. Scope and design the site
When designing the site the user interface is key - if this doesn't work well don't
think that you will sell much or keep people on the site. It is essential to think
about:
?? Branding - is it consistent with offline/printed materials? Is it prominent
through the site?
?? Flexibility - does the design lend itself effectively to all requirements, e.g.
product/service sampling, enquiries, purchasing?
?? Navigation - is the navigation bar really clear? Is it consistent? Is everything
accessible within three mouse clicks?
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21. ?? Images - are there colorful, relevant graphics and images? Can these be used in
a way that doesn't negatively impact download times?
?? Animation - is it appropriate? Can it be done in a way that does not drastically
slow download?
?? Interactivity - can you involve the visitor in the site? Can you gather useful
information without deterring the customer? Can you provide reasons to return to
the site?
Step 7. Bring in the back end
If you are using your site to sell online, then just as with a retail outlet, you may
well have goods that need to be stored, processed, packaged, and delivered. If
your goods are 'soft', you'll need online fulfillment facilities.
Have you got the right systems in at the back end? Including secure payment
facilities and customer databases?
Step 8. Integrate the IT systems
Your web site needs to run, or be 'hosted', on a dedicated server to deliver pages
to web browsers. You may choose to invest in this technology in-house and run
the site yourself, or outsource to a specialist supplier.
Do you need to transfer information from your site into other systems? In most
cases the answer is likely to be yes. Although the smallest business may be able to
do this manually, it is best achieved through electronic links. Have you planned
this?
Are links to legacy systems going to cause you any problems?
Step 9. Promote, promote, promote!
A site with no promotion is like a poster in a rural shop window - only the locals
see it. But you don't always have to spend millions. A well-constructed, well
targeted plan will start to drive people to your site.
You'll need a well-rounded plan. It's no longer enough to rely on trying to get
listed on a few search engines - it's a very busy world out there. So, you'll need a
well balanced mix of promotions to get ahead of the competition, including:
Offline
?? Public relations - media, sponsorship, events
?? Advertising - press, poster, radio, TV
?? Direct marketing - direct mail, door to door, direct response TV
Online
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22. ?? Banner advertising
?? Email marketing
?? Affiliate links to other sites
?? Directories and portals
?? Search engines
Step 10. Monitor and evaluate
Make sure that you have software linked to your site to monitor its performance.
The ever-changing world of the 'Net means you can't be complacent. Make sure
you can identify monthly and weekly trends in:
?? 'hits' on the site and on specific pages, from individual users.
?? time spent on the site (to measure its 'stickiness')
?? click-throughs to ads and links · where traffic is coming from.
Also, do you have 'contact us' and feedback options on the site? What other
measures are important to you and anyone advertising on your site?
To stay ahead on the 'Net you need to constantly evaluate and update your
site and proposition - don't get complacent as there is always someone else
out there who will happily supply your customers.
Other issues
International matters
When planning a site that you want to work internationally, some of the issues to
consider include:
Design
If your operations in different countries wish to promote their own local business
individually, ensure you have design guidelines to ensure consistent branding and
design to promote the business in a coordinated way.
Languages
Consider making the site available in local languages as well as the 'international
language' of English.
Regulations
Be aware of regulations in each country in which you wish to actively sell your
services. Areas to consider include data protection, advertising and promotion.
Pricing
If you are quoting local prices, be aware that visitors will look for consistency
across your individual country sites.
Domain names
The regulations for setting up a web site vary. In some countries you have to
prove that you have a bona fide business before you can register a domain name.
In other countries, you do not have to offer any proof of identity. Find out the
local situation early.
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23. Budgets
The cost of web site development varies, depending on the size of the site, its
complexity, and the software used. It is advisable to get several competitive
quotes before commencing the implementation. Prior to launch, you will need to
budget for consultancy, design, copywriting, programming, and domain name
registration. Other costs may include online promotion and payment services.
Although many services appear to be free, you will probably find that these are
just taster services. You need to pay in order to get what you want for your online
business.
There are ongoing costs of hosting and managing your site. You must also budget
for continual maintenance and updating of the site. Your target audience will
expect that your content is reviewed and updated frequently.
Glossary
Bandwidth - the capacity of a telecommunications link. Correctly speaking, it
measures the range of frequencies which can be conveyed on a channel and is
measured in Megahertz or Kilohertz (MHz or KHz). The term is often used
interchangeably with the speed of the link, which is measured in Kilobits per
second
(Kbits/s) or Megabits per second (Mbits/s).
Banner advertisement - a form of advertising using a strip across the top of a
web page. Usually, the banner is linked to the advertiser's site.
Cache - the part of a computer's memory that temporarily stores web pages that
you have downloaded. Having the pages in the cache means you can read them
again without re-connecting.
Clickthrough - an expression for measuring the success of a banner
advertisement.When a visitor to a web page clicks on a banner, and goes through
to the advertiser's site, it is termed a 'clickthrough'.
Cookie - a piece of computer code that is placed onto your computer when you
visit a website. It helps the site owner track if you return to the site.
Extranet - a privately-owned Internet-type network that is used by a company to
communicate with its suppliers or customers.
Gateway page - a technical device used to direct search engine traffic to a web
site.
GIF - a graphics file format, used for digital images.
Hit - a popular expression for a user visiting a web page. However, the expression
is problematic for recording web user activity. When a user visits a web page, any
file which is opened on that page will be recorded as a 'hit'. This means that if a
page has lots of image files, it will be recorded as several 'hits'.
23

24. HTML - hypertext mark-up language. A computer language developed specially
to facilitate the display of graphics and text pages on the Internet. Before HTML,
all you could do was read basic text.
Http: - hypertext transfer protocol. A system used by computers on the Internet to
transfer the web pages.
Internet - a public network of computers, based on the Internet protocol.
Originally developed by the US military in the late 1970s. The most used
functions today are the World Wide Web and email and newsgroups.
Internet Protocol (IP) - an agreed industry standard set of rules for carrying data
over computer networks.
IP address - a unique numeric code which is allocated to every server attached to
the Internet, for the purposes of identifying that server.
ISP - Internet Service Provider. A company that provides you access to the
Internet.
Intranet - a privately-owned Internet-type network which is used exclusively by
the employees of a company for internal communications.
Java - a programming language developed by Sun Microsystems. It provides web
programmers with more flexibility than HTML, especially to create more
interactive features on the site.
Keyword - a word used by search engines to index web pages.
Metatag- a piece of HTML software code on a web page that contains
information readable only to computers and not viewed by visitors to the page.
Page impression - an expression used to measure activity on a web site. Each
time a visitor clicks on a page, it is recorded as one 'impression'. Unlike 'hits', it
doesn'tmatter if the page is made up of multiple files.
Search engine - a computer program that literally crawls through the World Wide
Web to find new pages. It indexes the pages under keywords so that people can
easily retrieve them.
World Wide Web - a collection of information on the Internet, which is written
in HTML and is easily accessible to the public.
24

25. 6. WHAT IS “PROMOTION”
Promotion is tool with which public will be informed about the availability of a
particular product or service and the uses of such product. Production decides the
increase in demand for a product; promotion will make the prospective buyers to
know about the want, satisfying characteristics of the product, its price and place
of availability. This term includes advertisement, personal selling sales promotion
and other selling tools which are increasing the sales volume.
DEFINITION OF PROMOTION
The nature and role promotions and their function in the marketing of
packaged goods are defined below. These definitions apply universally in
the marketing sense irrespective of accounting practice of marketing
technology within particular companies. They define promotions in the
broadest possible sense.
IN SUMMARY
AN IMPORTANT
MARKETING
FORCE
AN EXTRA
INCENTIVE
PROMOTION IS AN IMPORTANT MARKETING
FORCE THE PROVIDES AN EXTRA INCENTIVE
(USUALLY SHORT TERM IN NATURE) FOR
CONSUMERS, THE TRADE. THE SALES FORCE
AND OTHER INFLUENTIAL GROUPS
PROMOTION IS ONE OF THREE MAJOR
ACTIVITIES IN THE MARKETING OF PACKAGED
GOODS
Promotion ranks with advertising and field selling
effort as one of the major activities that can be utilized
in the marketing of packaged goods.
PROMOTION IS A SPECIAL INCENTIVE
Promotion is an extra incentive over and above (1) the
product’s inherent qualities, (2) its established price, (3)
25

26. BROAD OR
SPECIALIZED
IMPACT
IMMEDIATE OR
LONG-RANGE
CHARACTER
its advertising and (4) its field selling efforts.
PROMOTION IS DIRECTED NOT ONLY TO
CONSUMERS OR THE TRADE, BUT ALSO ON
OCCASION TO THE SALES FORCE AND OTHER
INFLUENTIAL GROUPS
Promotion, in its broadest sense, provides extra
incentives for any group that is an important factor in
the marketing of a brand. Although it is most often
directed to the consumer or to the trade, it may also be
directed to the sales force, or to other influential groups
(such as doctors, home economists or appliance
manufacturers) … or to all of them at one. Promotion
covers a wide field.
PROMOTION IS BOTH A SHORT-RANGE AND A
LONG-RANGE ACTIVITY
Usually promotion is short-term in nature. On occasion,
however, it can be a long-term activity (as in the case of
a continuing in-pack premium operations).
FET BASIC TYPES PROMOTION IS LIMITED TO RELATIVELY FET
BASIC ENTRES
Although promotion covers a wide field and seems to
offer endless variety, almost all promotional activity is
a variation on one or more of a few basic types. An
understanding of what promotion is and what it does
starts with a knowledge of these basic types. A check
list of basic promotion types is provided in Appendix 1.
II. THE ROLE AND MECHANICS OF PROMOTION
Promotions are an extremely valuable tool for the marketing of packaged goods
brands. Like all other tools, promotions can make a valuable contribution to
marketing when they are properly used. Of course, they are capable of misuse as
well by unskilled and inexperienced hands. The doubts about promotions and
their misuse can be guarded against by clear understanding of its proper function
and mechanics in the context of the full range of marketing activities and
situations.
26

27. PROMOTIONS THE FUNCTION OF PROMOTION IS TO
FUNCTION
ACCELERATE ACTION STATED BY OTHER
MARKETING ACTIVITIES
Promotion acts as a catalyst to accelerate action, primarily
on the part of the consumer, the trade or the sales force. It
supplements, but is not a substitute for, advertising and
selling efforts.
BOTH
PROMOTION
WORKS
Its function is to speed up or trigger the action that: (1)
advertising has persuaded the consumer she should take …
)2) the salesman has persuaded the retailer he should take
… or (3) the sales manager has exhorted the salesman to
take. Promotion’s function is to act as a catalyst that
triggers action on the part of those who are favourably
predisposed – largely because of previous advertising and
selling efforts – to act.
PROMOTION ACCELERATES ACTION BY
CHANGING THE PRICE – VALUE RELATIONSHIP
OF THE BRAND
Every product has an established value in the minds of the
consumer, the trade or the sales force. This is what the
consumer or the retailer or the salesmen is normally
willing to expend (in money or effort) for what he gets, or
thinks be gets, when he buys (or sells) the product.
Promotion changes this price-value relationship to the
point where the individual is stimulated to take a desired
action. It does this in most cases either by lowering the
price or by increasing the value of the product, or both.
BOTH
PROMOTION
Where the product or its advertising or its selling efforts
have failed to establish any worthwhile value, promotion is
unlikely to be successful because promotion seldom if
ever, provides basic lasting values by itself.
PROMOTION IS A VERY GOOD METHOD – BUT
NOT THE ONLY METHOD – OF CHANGING THE
27

28. COMPARES
WITH OTHER
MARKETING
ACTIVITIES
PRICE-VALUE RELATIONSHIP
A product improvement can increase the real or imagined
value of a brand – at least until competition duplicates the
improvement.
An attractive, convenient, image-reinforcing package can
increase a brand’s value to the consumer or trade.
A price reduction can change the price-value relationship –
but in a way that can quickly be matched by competition.
Effective selling efforts (effective distribution, pricing,
display, etc.) can improve the price-value relationship –
not only to the trade, but to the consumer as well. Yet the
number of salesmen is limited end they call infrequently
on most stores.
Improved advertising is one of the best ways to increase
the value of a brand. A better advertising copy story – or
possibly better media coverage and frequency – can give a
brand an advantage that competitive brands cannot easily
duplicate. For advertising persuades by implanting ideas in
the mind – and what is put into the consumer’s mind is the
key to her action in the market place. And the consumer’s
action in the market place is, in turn, the key to the value
the trade puts on the brand. No other marketing endeavor
works so effectively o the consumer’s mind
- and thus indirectly on the retailer’s mind
- as advertising.
Promotion – provided it supplements all these other
marketing activities – can quickly accelerate action by
providing meaningful, readily visible (but temporary)
change in the price-value relationship. Without a backleg
of other value-building marketing support, however,
promotion is not likely to be effective long term.
28

29. Used properly, promotion can be an effective method of
temporarily changing the price-value relationship and thus
accelerating desired action by consumers, the trade, the
sales force, and other influential groups.
WHEN TO USE THE NEED FOR PROMOTION VARIES. IT IS
PROMOTION
GREATEST THEN:
1. A BRAND’S QUALITY IS INFERIOR TO
COMPETITION; OR
2. A BRAND’S ADVERTISING IS NOT AS
PRESUASIVE AS COMPETITIVE COPY; OR
3. A NEW BRAND IS BEING INTRODUCED
There is no known formula for determining what
percentage of a brand’s marketing expenditures should be
devoted to promotion. It depends on the situation. But
there are some guide lines.
Generally, promotion is most needed when a significant
number of consumers (or retailers) are not convinced that a
brand’s value in relation to competition is high enough to
warrant its price.
This usually occurs (1) when an established brand is
inferior to competitive brands in quality, appearance or
results, or 92) when the brand’s advertising copy –
completely apart from the media expenditures behind it –
is not as effective as competitive copy in persuading the
consumer to buy the brand, or (3) when a new brand is in
the process of establishing its basic value through its initial
advertising and through increasing consumer trial or the
product – trial which promotion can accelerate.
Obviously there are many degrees of need for promotion,
and in actual practice even a healthy brand needs a certain
amount of promotion in its marketing mix. But, long term,
the more the product’s quality and its advertising
persuasiveness fail to meet competition, the greater is the
29

30. need for promotion to improve the brand’s price-value
relationship.
Therefore, (except short term in new-product
introductions) a high ratio of promotion to advertising
generally indicates that work needs to be done to improve
the brand’s quality and/or its advertising copy.
PROMOTION’S AT EACH STAGE IN A BRAND’S LIFE CYCLE A
ROLE IN THE DIFFERENT DEGREE OF PROMOTINAL EMPHASIS
LIFE CYCLE OF IS REQUIRED.
A BRAND
In a competitive market a brand generally follows a well
defined life cycle, each stage of which requires different
promotional treatment.
New Product
A new product can usually profit from substantial
promotion support – if the product, the advertising,
distribution and price are right … i.e. equal to competition
in most respects and superior in some respects.
Here is where promotion can truly perform its function of
accelerating trial and purchase of a brand whose value has
not yet been fully established in the minds of all
consumers. Although good advertising on a new brand will
persuade many consumers to try the brand, it is not likely
to persuade every logical prospect to take immediate
action. Those that advertising does not quickly move to
action require an extra incentive, such as a free sample or
coupon or some other devide that increases the value of the
brand, or lowers its price, to the point where the prospect
decides to buy it. If the product is of good quality,
promotion thus helps to establish its value ore quickly in
the minds of more people.
There are indications, incidentally, that many new brands
(but not all) reach their share-of-market peak within six
months to a year after the completion of their introduction.
This leads to the conclusion that a brand of proven product
30

31. and advertising copy superiority would be well advised to
meet maximum trial during the introductory period by
spending heavily in the advertising media and on the
promotional devices that are most effective in reaching the
brand’s best longterm prospective consumers. Investment
at the highest practicable level in offective advertising and
promotion during the introductory stage, therefore – by
quickly achieving a high franchise level – can establish a
business that is less vulnerable to competition and that
returns higher level of profit in the following years.
Growing Brand
An established, growing brand generally requires minimal
promotion support, usually of a selective nature. The
product and its advertising are still equal to or better than
competition. A high proportion of potential customers
have tried the brand and many have become more or less
regular users.
Stable Brand
In such a healthy situation, the job that promotion has to
do usually is much narrower and more specialized. It can
be sued for sch specific purposes as improving distribution
on large sizes, attracting new users from fringe groups or
areas where usage levels are below potential, or increasing
the consumption among present users. Total promotion
expenditures, however, can be cut back to levels that
generate optimum profits – so long as the brand continues
to represent superior value for the price.
A mature, stable brand may need increased promotional
support as competition begins to match it in product
quality and in the persuasiveness of its advertising copy, or
as the brand reaches its natural franchise level. When this
happens, growth ceases, sales and share level off.
Although the market appears to be in a state of
equilibrium, there is seething turmoil under the surface.
Consumers are switching to competitive brands – but are
balanced by those switching away from competitors. In
this dynamic market increased promotional effort can
31

32. provide the improved price-value relationships needed to
hold onto present customer and to attract new users to
replace those lost to competition. But here also is the time
for efforts to be redoubled to develop an improved
product, a better package, a new and more persuasive
advertising story, better distribution or a new use or
market. Promotion can delay the day of reckoning and give
time for such work … but it cannot prevent the inevitable
Declining Brand decline that will occur without an improved product and
better advertising to re-establish the basic value of the
brand.
A declining brand may need much heavier promotion
support as it becomes old and out-dated by new or
improved competitive brands. Efforts to improve the
brand’s quality and its advertising copy to equal
competition may have been unsuccessful. Increasing the
advertising appropriation may not help – and may, in fact,
merely reduce profits.
Yet the old successful brand has a strong base of loyal
users – or potential users – because of past product quality
and memorable advertising … a substantial reservoir of
good will, an established value in the consumer’s mind.
True, the value may be lower that it used to be before
competitive brands made inroads, but it is there and it still
is substantial.
Under these conditions, promotion can temporarily
maintain brand sales by building on the established good
will. It can increase the value of the brand, or lower its
price, to the point where the reservoir of potential
consumers is persuaded to buy the brand. Unfortunately,
unless improvements are made in the product and the
advertising – and unless the advertising is maintained –
heavy emphasis on promotion at this stage seems to erode
the brand’s basic values, so that ever larger discounts and
heavier promotions are required to maintain sales volume.
Ultimately, advertising may be discontinued and a decision
32

33. made to “milk” the brand by relying solely on promotion
to brake the decline.
The decision to “milk” a brand through promotion,
however, must not be taken prematurely. Brands that were
once strong can retain remarkable vitality under the
survace. They may have a more firmly established value
and longer life than is realized. Abandoning efforts to
improve the product and the advertising while switching to
heavy promotion may serve only to erode more quickly the
established values of the brand. This in turn hastens its
eventual demise and the loss of profits which the brand has
generated. The decision to switch almost completely to
promotion is one that should not be taken lightly.
In Summary, it appears that there is no magic formula to
tell the marketing man what promotion of his funds should
be spend on promotion. But there is a general life-cycle
that most brands in a competitive market follow. And this
life-cycle greatly influences promotion activity, as needs
change for improving the price-value relationship … needs
that are satisfied in many cases most practically by
promotion.
III. 11 PRINCIPLES OF EFFECTIVE PROMOTIONS
Basic Principles that Are crucial to Successful Promotion Projects
(Regardless of Promotion Type, Product, Country or Time
It is to be noted that there are general principles that seem to be
common to successful packaged-goods promotions. These principles
relate to individual promotions and describe inherent qualities of the
promotion; they do not cover techniques of planning or
administration or execution. (Such points are covered later in the
report.)
It has been observed that an effective promotion adheres, in the
greatest possible degree, to the following 11 basic principles:
1
IT DOES NOT ATTEMPT TO ACCOMPLISH GOALS
33

34. THAT ADVERTISING OR SALESMANSHIP CAN
ACCOMPLISH BETTER
2
3
4
The promotion is directed towards specific objectives that
promotion properly can achieve. It is not used to perform
functions that are best performed by advertising or a good
salesman. It is not offered simply because of whim or habit
or desire for a change. It is aimed at specifically-defined
goals that promotion realistically can be expected to achieve
better than any other marketing endeavour.
IT EMPLOYS THE SPECIFIC TYPE OF PROMOTION
THAT MOST CLOSELY FITS THE CONDITIONS AND
THE GOAL
Every basic type of promotion has certain fundamental
strengths and limitations. Some are better fitted to one task
than another; some cost more than others. Some attract new
users at the expense of immediate sales to present users, or
vice versa. Successful promotions employ the type of
promotion that – on the basis of past record and logical
analysis – offers the best chance of achieving the desired
goals under existing conditions.
IT IS AIMED PRIMARILY AT THE CONSUMER – BUT
AT THE SAME TIME IT OFFERS POSITIVE
INCENTIVES TO THE TRADE, SALES FORCE OR
OTHER INFLUENTIAL GROUPS.
The consumer is the key to packaged goods marketing
success. Strong consumer demand is one of the best
incentives that can be offered to the trade to stock, display
or feature a brand. Promotion to the trade or to the sales
force without ensuring that consumers will take the goods
out of the store is likely to be inefficient and ineffective.
This does not mean that trade promotions should be used
properly. The most successful promotions have consumer
appeal built into them.
IT IS CONSISTENT WITH PRESENT – OR POTENTIAL
– BEHAVIOR PATTERNS OF THE GROUPS
34

35. INVOLVED
5
It does not require them to do something that is completely
foreign to their practice (unless there is strong evidence to
suggest that predisposition to change these practices already
exists). Unless conditions are right and unless the incentive
to action is adequate, consumers will not buy sizes or
quantities they don’t usually use or need … nor will the
trade buy merchandise they can’t sell or deals that require
involved administrative procedures. Successful promotions
build on existing – or latent – behavior patterns.
IT USES EMOTIONAL, AS WELL AS RATIONAL,
APPEALS TO SELF-INTEREST
The successful promotion appeals strongly to the selfinterest of the consumer (or the trade, or other target group).
It frequently does this on the emotional, as well as the
rational, level.
While the rational appeal of a reduced price can be very
effective, cut prices or conetary rewards are not the only
incentives that move people to buy. Equally effective – or
even more effective – is the addition of extra value to a
brand. Frequently an added-value promotion not only
provides longer-lasting benefits than reducing the price, but
also is much more difficult for competition to duplicate.
The added value may be extrinsic, or tangible (as in the case
of a premium or reusable container) …. Or it may be
intrinsic, or intangible – even emotional. Here, especially, is
where ideas become so important to the success of a
promotion. For ideas evoke actions which can enhance a
brand’s prestige and quality, its reputation for service and
surety of results – its image and its value.
A great opportunity also exists for adding ideas and
emotional qualities even to cut price or other so called
rational promotions – ideas such as creatively tying in with
35

36. news of a product improvement or a new package;
dramatizing a new advertising claims; supplying spring
house-cleaning hints or Christmas dinner service
suggestions. Ideas such as linking an intriguing name or a
plausible reason with what would otherwise be a prosaic
price-off pack.
6
7
Successful promotions employ both emotional and rational
approaches in appealing to the self-interest of the groups the
brand is trying to move to action.
IT SETS ITSELF APART FROM OTHER PROMOTIONS
BY UNIQUENESS, VARIETY AND CREATIVE
IMAGINATION
Promotions may be successful because no other brands in
the category are using promotions, or because the promoted
brand may be the first or only brand to use a particular type
of promotion or an intriguing variety of promotions. But
more likely, success is due to creative, imaginative thinking
in the conception and execution of the promotion –
creativity in the basic idea or the reason for the promotion,
in the name given to it, in the prizes or premiums offered, in
the little, intriguing differences that excite imagination and
arouse enthusiasm at all levels. Creative thinking is just as
important in promotion as it is in advertising, field selling
and product development.
IT HAS ATTENTION-VALUE, URGENCY AND
ACTION BUILT INTO IT
An effective promotion is arresting and cannot be ignored. It
is concentrated within a limited time period and is limited in
quantity. It features a sense of urgency, an incentive to
action. It is not something that the consumer or the trade or
the sales force can put off doing until later. Generally, the
more immediate the reward, the greater the effectiveness of
the promotion. A successful promotion is an infrequentlyoffered incentive of limited duration and quantity that
demands action now.
36

37. 8
IT HAS SUFFICIENT IMPACT TO ACHIEVE ITS
STATED OBJECTIVE, BUT DOES NOT WASTE
MONEY
A promotion that is too weak to accomplish what it sets out
to do is a waste of money. An effective promotion has
sufficient impact at every level to achieve its goals. The
incentive is adequate to trigger the desired action. Deal
quantities realistically meet the trade’s obvious minimum
requirements.
But, on the other hand, an effective promotion does not give
away more than is necessary. The amount of money spent
on a promotion, or the size of the incentive that is offered, is
not necessarily a measure of its effectiveness. A 20-cent
coupon usually does not get twice as many new triers as a
10-cent coupon. Doubling the deal quantity may do nothing
more than reduce brand profits. A good on-pack premium
may attract more potentially loyal consumers than a priceoff pack costing 50% more. Adding a trade display
allowance to a strong consumer promotion may result in
only a few more displays than would have been obtained
anyway.
9
10
A brand with an established value may need a smaller priceoff concession than a brand of lesser value or poorer image.
A good promotion is strong enough to do the job, but does
not waste money.
IT IS CLEAR, SIMPLE AND EASY TO UNDERSTAND
AND EXECUTE
The consumer refuses to be confused. If the promotion is
complicated, she will ignore it. So will the trade. And so
will the sales force. The most successful promotions are
simple in concept, clear in presentation, easy to operate.
There is little opportunity for things to go wrong.
IT IS HONEST, BELIEVABLE AND REPRESENTS
GOOD VALUE AND QUALITY
37

38. 11
It is straight forward and honest in presenting the terms of
the promotion offer and in describing the incentive. Prizes
and premiums are not misrepresented in terms of value or
quality. It avoids trickery or subterfuge or gimmickry that
the consumer or trade is quick to spot and which diminishes
believability and brand loyalty.
IT IS CONSISTENT WITH THE BRAND IMAGE
A good promotion can enhance brand image. But many
promotions actually conflict with the image that the product,
its package, its advertising, its positioning have carefully
developed. By appealing to the wrong type of consumers,
some promotions not only waste money but actually drive
the brand’s best prospects away. Good promotions are
consistent with the brand image.
IV. 7 ESSENTIAL ELEMENTS IN AN ORGANIZED, DISCIPLINED
APPROACH TO AN EFFECTIVE PROMOTIONAL PROGRAM
It has been observed that successful promotions don’t “just happen.” They
not only incorporate the 11 basic principles previously cutlined, but are also
the result of careful planning and organization. Successful promotions
require the existence of certain essential conditions and the application of
an organized, disciplined approach and follow-up to all promotion
activities.
The conditions and disciplines that are essential to long-term brand and
company success follow:
1
A SIGNIFICANT VALUE MUST HAVE BEEN
ESTABLISED FOR THE BRAND BEFORE PROMOTION
CAN BE EFFECTIVE
A reduced price on an unwanted brand does not make the
brand more wanted. A significant value for the brand must
exist in the minds of consumers (or others) before promotion
can be effective. (In the case of a new product this value
38

39. sometimes is created almost simultaneously with the offer of
the promotion – usually through media advertising, the
advertising massage accompanying the sample or coupon, or
even through broad consumer awareness of the product
class.)
The establishment of brand value relies on many things, of
which the following two are most important:
Good Product
Persuasive
Advertising
The product must be good. The better the product is in
relation to competitive brands, the more effective promotion
will be in attracting and holding new triers … and at the same
time the less will be the need for continuing and heavy use of
promotion beyond the introductory period. On the other hand,
the more the brand fails to meet competitive product quality,
the greater must be the reliance placed on promotion to
compensate for diminished value. In order for promotion to
be truly effective in accelerating long-term growth and
profits, a good product is essential.
The advertising must be persuasive. Even a good product will
not be successful unless consumers (and everyone else)
believe that the brand offers the advantages (i.e. value)
provided by no other brand. Implanting this idea in the
consumer’s mind is the function of advertising. If advertising
does this job well, promotion can effectively provide added
incentives to accelerate purchase and trial. If advertising
performs this job poorly, promotion must make much more
drastic changes in the brand’s price-value relationship. Good
advertising copy and the effective use of media, therefore, are
prerequisities for effective promotion.
Some brands seem at first glance to be exceptions to these
conditions. Take, for example the older brand with no
product superiority which has abandoned advertising
completely in favor of promotion … and which is building its
share of market in spite of this. Does not this cast doubt on
the validity of these conclusions? The answer is “No”. For it
is clear that the brand’s past advertising and product quality
39

40. 2
have effectively created a scund value concept as the base
upon which promotion builds … at least until such time as
the brand’s value begins to decrease in the minds of a
shrinking group of consumers. Promotion cannot be effective
unless a significant value has been established for the brand.
PROMOTION MUST BE PART OF AN OVER-ALL PLAN
Since promotion has already been found to be an important
element of marketing that supplements advertising and filed
selling and is interrelated with every from of marketing
activity on a brand, it seems clear that consideration of
promotion must be included in every overall marketing plan.
It cannot be treated as an afterthought, nor can it be ignored.
It must be included in every brand’s and every company’s
marketing planning, rimarily in the following two ways:
Marketing
Strategy
All promotion planning must stem from and be part of the
brand’s marketing strategy. The marketing strategy (which
must be a written, working document) defines the brand’s
long-range marketing objectives, the brand concept and
reason for being, and the basic strategy by which it hopes to
achieve these objectives throughout the years. It is based
upon an intensive, organized study of the consumer, the
market, the product and the competition.
The marketing strategy also defines in general terms the role
of each marketing element (i.e. advertising, promotion, sales
effort, etc.) in achieving the brand’s marketing objectives and
provides broad guidelines as to the relative proportion of
marketing funds that will be put against each element –
particularly the relationship of promotion to advertising effect
– under defined conditions or during various stages of
marketing development. It is the basic long-range planning
document for the brand and (while it must be kept up to date)
the basic strategy should be changed infrequently.
Annual
Marketing Plan Promotion activities must be planned and budgeted on an
annual basis. They must be part of the brand’s annual
40

41. marketing plan. The annual plan is (1) a statement of brand
objectives, strategies and tactical plans for all marketing
activities during the coming year, and (2) a financial forecast
that translates these plans into sales, expenses and profits.
Failure to include realistic plans and expenditures for
promotions means that when a decision is suddenly made to
use promotion, advertising or other marketing activities must
be cut to provide promotional funds. This in turn makes it
impossible 91) to forecast profits accurately, and (2) to
coordinate promotion with other marketing activities.
3
Objectives
Annual
Program
An annual brand marketing plan, therefore, must include
objectives, strategy and plans for promotion as well as for
advertising, field sales effort, product development, etc. the
annual plan must also (1) be consistant with the brand’s longrange marketing strategy, and (2) provide a reasonable degree
of flexibility when periodic reviews show that importantlychanged conditions dictate changes in plans. Promotion, like
advertising and field selling efforts, must be planned on an
annual basis and coordinated with other marketing activities
on the brand.
EVERY BRAND MUST HAVE A WRITTEN
STATEMENT OF PROMOTION OBJECTIVES AND
STRATEGY
The promotion strategy statement is one of the major
elements of the brand’s annual marketing plan. It
fundamental purpose is to establish guidelines and principles
that are most likely to ensure promotion success for the
brand. It does this by translating the eleven principles of
effectives promotions ………. Into basic policy decisions
applying more specifically to the brand involved. The
promotion strategy statement should cover five major points
(each to the extent applicable)
Broad objectives – What the brand’s promotion program is
espected to accomplish. (See Promotion Principle No.1)
41

42. Program
Principles
Kinds of promotion that will be used (or not used) – The
relative reliance that will be placed on cutting price vs.
adding value to the brand in order to achieve these objectives;
the approsimate proportion of annual promotion effort that
will be directed against the consumer vs. the trade or other
groups. The specific types of promotion, therefore, that will
generally be used (or not used) by the brand. (See Promotion
Principles Nos. 2, 3, 5, and 11).
Policies relating to the annual program – The frequency,
duration and number of promotions to be offered; the times of
year or types of areas in which promotions will be
concentrated or in which no promotions will be run; the
relative emphasis (in broad terms), if any, that will be placed
on promoting specific package sizeds; provision of funds, and
Guidelines For broad policies to be followed, to meet specified types of
Promotion
competitive conditions that may arise. (See Promotion
Development Principles Nos. 2, 4, 7 and 8)
Supporting
Reasons
Guidelines relating to individual promotions – Limitations,
ranges or standards to assist in establishing pack quantities,
price discounts, types and values of premiums, coupon
values, etc.; the degree and nature of advertising coordination
or support, if any, that is deemed essential for certain type of
promotions or conditions; the nature of tie-in promotions that
will be used and the standards established for the selection of
products and brands as tie-in partners; etc. (See Promotion
Principles Nos. 4 through 11)
Reasons – Why these strategic decisions a and guidelines are
believed to be the ost effective and efficient way to achieve
the brand’s promotion – and overall marketing – objectives,
based on analysis of results of prior efforts and appraisal of
current conditions.
The promotion strategy a statement tell what the brand will
do in promotion, but not how to do it. It is a long-term
statement of principle and policy that provides guidance to all
concerned. It is changed only when the product manager and
42

43. 4
his management agree that new conditions or new knowledge
dictate a change in basic strategy. Once the strategy has been
agreed upon, all promotional activities on the brand must
conform to it.
A WRITTEN TACTICAL PLAN MUST BE PREPARED
FOR EACH INDIVIDUAL PROMOTION COMPRISING
THE YEAR’S PROMOTIONAL PROGRAM – AND MUST
DEFINE THE SPECIFIC NUMERICAL OBJECTIVES OF
THAT PROMOTION
The promotion strategy statement, as just described,
establishes general promotion objectives for the brand’s
promotion program and tells what the brand will do (in terms
or principle and policy) to achieve these objectives. A tactical
promotion plan, on the other hand, tells how the brand will
execute an individual promotion that is part of the progress,
translating the strategy into specific terms for that promotion,
and establishing numerical goals against which each
promotion’s accomplishment can be measured.
Details of Plan
and Time
The tactical promotion plan also gives full details of the plan,
Table
the quantities, the cost, the timing, the specific areas covered,
the responsibilities of sales, Manufacturing and other groups
involved. It must include a time table showing the time
required for each preparatory step and establishing realistic
target dates. Where possible, the tactical promotion plan
should also past experience, research or other facts to support
the reasonableness of the stated objectives, anticipated
Plans To
consumer and trade reaction, and costs.
Evaluate
Results
Finally, the tactical promotion plan should describe the basis
for evaluating the promotion afterit has run, and should
indicate what special measurements must be set up in
advance for this purpose.
The tactical promotion plan, in summery, serves (1) as a tool
to sharpen planning, (2) as a device to communicate plans,
coordinate operations and control the execution and cost of
43

44. Outline And
Summary
Included in
Annual Plan
5
the promotion, and (3) as the basis for measuring how
successful and efficient the promotion, as run, actually was in
relation to anticipated goals and costs. A separate tactical
plan is prepared for each promotion in the brand’s program.
A consolidated outline and summery of the individual
promotions planned for the year’s promotion program is
included in the brand’s annual marketing plan to show how
the strategy will be carried out and to provide a finance
breakdown and summery of the total annual promotion
budget. This consolidated summary include information on
the timing, nature, scope and cost of each promotion planned
for the year (or it set up reserves and indicates preliminary
plans for these promotions for which final plans have not
been established.) the detailed tactical plan sheets for each
promotion, however, usually are not included in the annual
plan, since the consolidated outline and summary provides
the essential information for management purposes.
A written tactical plan for each promotion is an essential
element in the effective use of promotions.
EFFECTIVE COMMUNICATION, COORDINATION AND
CONTROL MUST BE ESTABLISHED TO ENSURE THE
SUCCESSFUL EXCUTION OF PROMOTION PLANS
In almost no other marketing activity do so many different
groups of people become involved as in promotion. It
requires the assistance of manufacturing, warehousing,
transportation, sales, accounting, purchasing and legal groups
– in addition to promotion specialization, sales, accounting,
purchasing and legal groups – in addition to promotion
specialists, creative people, advertising agencies and brand
marketing management. Careful and articulate
communication of objectives and plans is essential. So is the
effective scheduling and coordination of their activities. And
so is the establishment of controls to ensure that the
promotion works in practices as it was planned in theory. A
good plan can be vitiated, for example, by salesmen who
44

45. don’t understand its purpose, or who authorize payment of
trade allowances for services not actually performed as
specified; or by failure of the plant to ship deal packs on
specified dates. Delays and mistakes cost money – such of it
hidden – that may seriously reduce brand and company
profits.
Every promotion must, of course inform to legal and ethical
standards. But the interpretation of law often is unclear …
some times even personal and capricious.
Lack of understanding and enthusiasm by legal advisors can
result in routine legal opinions that deny to a brand a form of
promotion that a more aggressive competitor may kind a way
to carry out, within legal restrictions, with only minor change.
A lawyer who is clearly told the purpose and the concept of a
promotion can frequently make constructive legal, conceptual
and operational suggestions of great value.
8
The successful execution of sound promotion plans requires
persistent attention to detail effective communication,
contagious enthusiasm, disciplined coordination and tight
control.
FACTUAL KNOWLEDGE ABOUT PROMOTION MUST
BE DEVELOPED AND ASSEMBLED THOUGH A
PROGRAM OF PROMOTION TESTING, ANALYSIS,
EVALUATION, RESEARCH AND MEASUREMENT
It costs as much to run a bad promotion as a good one,
perhaps even more. The best way to eliminate bad promotion
is to build each promotion plan on a solid foundation of
knowledge.
Unfortunately, too little is known about promotion and the
way it works. There are few experts or authorities with a
broad knowledge of promotion principles and with objective
experience in the things that mean better results for less
money. And the information that is known is usually not
45

46. Pre-Testing
made available to others facing the same problem … or else it
is ignored.
Analyzing
Pre-Testing – Every important unknown element of a given
promotion should be pre-tested if the risk of failure is greater
than the risk of delay or breach of security. In addition, a
general program of testing alternative promotions, or lowercost variations, or premium items or contest prizes must be
established to build a backlog of proven devices that can be
utilized when conditions do not permit full-scale pre-testing.
Evaluating
Analysis of past records – Frequently a study of past records
on the same or other brands suggests how promotions can be
improved or prevents a brand from repeating a bad mistake.
But analysis is impossible unless records are kept and unless
they are interpreted and conclusions are drawn by a qualified
person. Faulty memory, superficial study and minister
pretation are dangers that must be eliminated.
Evaluation of results – Every promotion should be evaluated
after it has been used to determine whether it did, in fact,
achieve its objectives within the budgeted cost. If it did, how
could it have been improved? If it did not, conclusions should
be drawn – with complete objectivity – as to why it failed to
perform as planned. The evaluation should be in writing and
should be made available to others within the company as a
means of increasing their knowledge.
Such a program of evaluation depends on two essentials:
The objectives of the promotion must be clearly defined and
stated in measurable terms (i.e. “to obtain offshelf displays of
at least five cases each in 15% of the Class A stores”, or “to
build retail inventories from a 3-week supply to a 5-week
supply,” or “to raise the usage level from 7% to 10%).
Agreement must be reached in advance regarding what will
be measured and arrangements must be made before the
promotion runs to obtain the necessary measurement and
46

47. Developing
fundamental
Knowledge To
Replace
Unproved
Assumptions
information needed for the evaluation. After the promotion
has ended it is too late to set up research or to ask for special
reports or to make personal observations.
Developing insights about how promotion works through coordinated methods and special research – Every promotion
plan is based on a combination of fact and unproved
assumption. Some of these assumptions are of basic
importance. If they are incorrect the plan will fail. Hence it is
vital to confirm or disprove such assumptions as the
following:
… “New triers obtained by a price-off valuable to a brand as
those obtained by a coupon (or by a sample).”
… “New triers usually buy the small size and “trade up” to
larger sizes if they are satisfied.”
… “Misredemption of a magazine coupon follows the same
pattern as for a mail coupon”.
… “The real value of a sendaway offer lies in the number
who buy the product but forget to send in the box top.”
In order to prove or disprove such broad assumptions as these
– assumptions which are important to every brand and
company – three steps are necessary:
All promotion tests and evaluations – on all brands must be
designed not only to answer the questions of immediate
interest ot the specific brand but also to permit deeper
analysis and insights into the fundamental behavior of people
and the basic ways in which promotion works standard
methods of testing and evaluating brand promotions may be
needed to permit brand-to-brand comparisons.
Special research may have to be undertaken – probably
underwritten by several brands or an entire company – to
determine the validity of some of the most important basic
47

48. assumptions about promotion. It is likely that such validation
will not come from normal brand testing and research, but
will have to be obtained through planned corporate projects
of major importance.
Research techniques must be improved and developed which
will provide the basic knowledge that each brand needs to
define the right marketing and promotion objectives, rather
than objectives that are assumed to be right. Establishing the
right objective for a brand requires that basic knowledge
abuut consumer needs, usage habits and attitudes and about
consumer profiles and brand images be available.
In summary, something more than ad-ccc testing and
evaluation of specific promotions is required. A special effort
must be made to develop deeper knowledge of the
fundamentals of promotion and marketing – knowledge that
can be applied to all brands in all countries, knowledge that
can replace the many unproved assumptions on which most
objectives and most promotion plans are now based.
Assembling
And
Circulating All
Promotion
Assembling, analyzing and interesting this knowledge – What
Knowledge
one brand learns can be of great value to another brand. A
piece of information about one type of promotion may
provide insights on how another type works. Basic research,
while it may have little application to a given brand’s
immediate problems, has vital implications for every brand’s
long-range marketing program.
A way must be provided to assemble all available promotion
information and knowledge, t analyze and interpret it, and to
develop fundamental insights and uncover basic principles.
Then a way must be provided to make this knowledge
available to every product manager, to every promotion
specialist, to every echelon of management so that it can be
applied to current marketing operations.
The mounting cost of promotion and the high risk of failure
demand that knowledge be developed as rapidly as possible.
48

49. It also demands that this knowledge be assembled and made
available in valid and actionable from to all involved in
promotion.
7
SPECIALISED, PROFESSIONAL SKILL AND
KNOWLEDGE MUST BE BROUGHT TO EVERY
PROMOTION OPERATION
The planning, execution and evaluation of promotion is a
highly skilled task that require specialized knowledge and
professional ability. It is not something to be turned over to
the newest trainee.
Product
Manager
Primary
Many groups are involved in promotion planning and
Responsibility operation, including both sales and advertising departments.
It seems clear, however, that primary responsibility for all
promotion activity on a brand must lie with the individual
responsible for formulating the brand marketing mix and for
Professional profit contributions. In most companies this is the product
Assistance
manager.
Required
But it is also clear that the product managere requires the
same sort of professional help in promotion that the
advertising agency (and company staff experts) provide in
advertising Just as no product manager is expected to be an
expert in copy, media, advertising production and advertising
research (although he may well be very capable in some), so
no product manager should be expected to be an expert in
promotion theory, promotion research and analysis,
promotion development, promotion execution and promotion
Advertising
evaluation. The job is too complex, too specialized – it
Agency
requires too much knowledge beyond the product manager’s
Limitations
have the time or the opportunity or the inclination to develop.
A Staff
Advertising agencies have at times been suggested as a
possible source of this professional assistance in promotion.
Undoubtedly they can be of great help in the development of
promotion ideas. But their help in preparing and executing
detailed plans is likely to be limited. It is doubtful, therefore,
49

50. Promotion
Group Is
essential
that any agency can contribute in the promotional field in the
same way that it contributes in advertising.
This means that there is a real need for a central staff
promotion group within every company where promotion is
employed. The form of organisation will very with each
situation. A large company may need a complete department
staffed with broadly-experienced managers and with
specialists in such activities as couponing, contests,
premiums, trade promotions, promotion research, evaluation,
etc. in a small company the promotion specialist may well be
one person who may also have other responsibilities.
The point is that there must be a central, iniesnient staff group
– responsible to top management – to supply specialized
knowledge and reccive annual and ato ….. company-wide
and basic projects. This staff promotion group can also
pending specialized services such as preparing display
material; or setting up managements with mailing beauses; or
developing, testing and buying premiums; or assisting in pretests and evaluations. There must be someone within the
company to whom both the product manager and
management can turn for professional assistance in
promotion as they turn to the advertising agency for help in
advertising.
Successful promotion under today’s conditions requires that
specialized, professional skill and knowledge be brought to
bear on every phase of promotion planning, execution and
evaluation.
APPENDIX
CHECK LIST OF BASIC PROMOTION TYPES
In convenitnece, the most important types of promotions have been typed
50

51. under broad headings, even though it may be misleading in the cased to do
so. For example, a trade allowance that is passed …100% to consumers in
the form of a special reduced price might be classified as a consumer
promotion. Likewise, a coupon distributed only to present users of a brand
might not be used as sampling device”.
Inspite of these drawbacks, the following check list of basic promotion
types if furnished with the hope that it will illustrate the promotion is:
CONSUMER
PROMOTION
PROMOTIONS IN WHICH THE MAJOR EFFORT IS
AIMED INITIALLY AT CONSUMER
A Sampling
Devices
1. Sampling (distribution of free special or regular size
package to consumers)
House to house
By mail
In or on packages of same brand or other brands
F…. inserts
Other
2.Couponing (distribution of certificates with a stated
monetary or merchandize value which the consumer
redeems through a retailer towards the purchase of the
specified item
House to house
By mail
In or on packages (same brand or different brand)
In media advertisements
Other
3. Demonstrations ( An illustration or demonstration of how
a product is prepared and/or used, frequently involving
consumer tasting of food products and usually involving the
presence of a home economist or other trained
representative.
In Store
51

52. B. Pack
Promotions
Fairs, exhibits, etc.
1. Reduced-revenue packs (usually at factory, but also may
be banded in stores)
Price off
½ price sale
“Two for…..” sale
Bonus packs (larger quantity at same price)
2. Premium packs
C. Other
Consumer
Promotions:
In or on-pack premium free or self-liquidating, or partially
liquidating ( Premium may be a sample of another brand)
May also include separate premiums distributed in stores,
but not actually attached to package).
1. Refund offers
(Cash, check or coupon given consumer for proof of
purchase…usually by mail)
2. contests or competitions (puzzles, games, estimates, or
competitions involving skill for prizes or rewards of various
types)
3. Sweepstakes-type drawings (No skill or proof of
purchase required)
4. Sendaway (or mail-in) premiums Free or liquidating
(usually with proof of purchase) Label saving plans
5. Display promotions, Receipe or service or “idea” display
promotions (alone or tied in with other items)
6. Other miscellaneous consumer promotions, such as
trading stamps, out-of-pack premiums, etc.
TRADE
52

53. PROMOTIONS
A. Trade
Allowances
PROMOTIONS IN WHICH THE MAJOR EFFORT IS
AIMED INITIALLY AT THE TRADE (DISTRIBUTORS,
WHOLESAILERS, RETAILERS OR THEIR
SALESMEN)
Allowances
Payments to the trade usually for a specific purpose and for
a specified time. Payment may be in the form of cash or
credit. There are several types, including:
Count and recount allowance
Customer stocks counted at beginning and end of period
(plus purchases) to give net movement out of stock;
allowance paid on net movement.
Advertising and/or display or merchandising
Allowance
Allowance paid for performance of specified activity, such
as featuring in dealer’s advertising, display, reduced price,
or offer of extra trading stamps, etc.
Introductory allowance
Payment during introductory period to obtain distribution
Buying allowance
B. Trade
Reduced
Revenue
Promotion
Payment made without stipulation as to service required in
return.
Reduced Revenue offers
A reduction in the regular price to the trade without
requiring that such reductions be passed along to the
consumer or that my specified action be performed. The
53

54. distinction between this promotion and a buying allowance
is small. Generally, however, the reduced revenue
promotion takes the following forms.
C. Other Trade
Promotions.
One package free with purchase of 11 (assuming cases are
packed 12’ s)
Baker’s dozen deal (13 for the price of 12) One case of one
size free with purchase of specified number cases of
another size.
1. Trade Premiums (A gift to the organization or to
individuals, frequently upon the purchse of specified
quantities or selections. May include permanent display
racks, or dual-use display pieces, such as a plastic boat).
2. Redemption of retailer certificates packed in each case of
merchandise.
3. Trade contests, competitions or Prizes
4. Trade Sampling
Distribution of free product samples to dealers and
distributors (usually for personal use).
5. Other miscellaneous trade incentives
(Pushmoney for retailer’s salesmen; billing; etc.) Some
forms – such as delayed billing dates or opportunities to
SALES FORCE buy in advance of an announced price increase – are
INCENTIVE
frequently classified as other than promotions, but actually
PROMOTIONS might be considered as promotional devices.
Salesmen’s
Inventives
PROMOTIONS IN … THE MAJOR EFFORT IS AIMED
INITALLY AT THE SALES FORCE
54

55. 1. Sales contests
Prizes for best or target performances by salesmen
2. Salesmen’s premiums
Merchandize awards for achievement of established sales or
pint-value goals, frequently from premium catalogues.
INCENTIVES
FOR OTHER
SPECIALIZED
GROUPS
A. Professional
Promotions
3. Salesmen’s cash bonus plans
These are usually classified as selling expense or
compensation, but ma be considered a special form or
promotion.
PROMOTIONS IN WHICH THE MAJOR EFFORTS IS
AIMED INITALLY AT GETTING THE COOPERATION
OF OTHER SPECIALIZED GROUPS
Offering of samples, premiums, service material, special
literature, and other incentives to professional people in
order to inform that of product advantages in their fields
and so encourage them to use and/or recommend the brand
in their contacts with consumers and/or other influential
groups. Such professional include:
B. Appliance
Manuracturer
Promotions
Doctors
Dentists
Nurses
Teachers
Home Economists
Hair Dressers
Etc.
Incentive programs designed to encourage equipment and
appliance manufacturers or dealers to recommend the brand
in their instruction books and service literature and/or
enclose samples, coupons or brand service materials with
their equipment and appliances. (Examples: washing
55

56. machine manufacturers, dishwasher manufacturers, electric
mixer or frying pan manufacturers, retail appliances stores,
etc.) Promotions may include:
Sampling
Couponing
Free service material
Display material
Merchandising allowances
Advertising cooperation and support
Technical assistance
7. ADVERTISING
Advertising is a form of communication that typically attempts to persuade
potential customers to purchase or to consume more of a particular brand of
product or service. “While now central to the contemporary global economy and
the reproduction of global production networks, it is only quite recently that
advertising has been more than a marginal influence on patterns of sales and
production. The formation of modern advertising was intimately bound up with
the emergence of new forms of monopoly capitalism around the end of the 19th
and beginning of the 20th century as one element in corporate strategies to create,
organize and where possible control markets, especially for mass produced
consumer goods. Mass production necessitated mass consumption, and this in
turn required a certain homogenization of consumer tastes for final products. At
its limit, this involved seeking to create ‘world cultural convergence’, to
56

57. homogenize consumer tastes and engineer a ‘convergence of lifestyle, culture and
behaviors among consumer segments across the world’.”
Many advertisements are designed to generate increased consumption of those
products and services through the creation and reinvention of the "brand image" .
For these purposes, advertisements sometimes embed their persuasive message
with factual information. Every major medium is used to deliver these messages,
including television, radio, cinema, magazines, newspapers, video games, the
Internet, carrier bags and billboards. Advertising is often placed by an advertising
agency on behalf of a company or other organization.[citation needed]
Organizations that frequently spend large sums of money on advertising that sells
what is not, strictly speaking, a product or service include political parties, interest
groups, religious organizations, and military recruiters. Non-profit organizations
are not typical advertising clients, and may rely on free modes of persuasion, such
as public service announcements.[citation needed]
Money spent on advertising has increased dramatically in recent years. In 2007,
spending on advertising has been estimated at over $150 billion in the United
States and $385 billion worldwide, and the latter to exceed $450 billion by 2010.
While advertising can be seen as necessary for economic growth, it is not without
social costs. Unsolicited Commercial Email and other forms of spam have
become so prevalent as to have become a major nuisance to users of these
services, as well as being a financial burden on internet service providers.
Advertising is increasingly invading public spaces, such as schools, which some
critics argue is a form of child exploitation.
A. Types of advertising:1. Media
Commercial advertising media can include wall paintings, billboards, street
furniture components, printed flyers and rack cards, radio, cinema and television
adverts, web banners, mobile telephone screens, shopping carts, web popups,
skywriting, bus stop benches, human billboards, magazines, newspapers, town
criers, sides of buses, banners attached to or sides of airplanes ("logojets"), inflight advertisements on seatback tray tables or overhead storage bins, taxicab
57

58. doors, roof mounts and passenger screens, musical stage shows, subway platforms
and trains, elastic bands on disposable diapers, stickers on apples in supermarkets,
shopping cart handles (grabertising), the opening section of streaming audio and
video, posters, and the backs of event tickets and supermarket receipts. Any place
an "identified" sponsor pays to deliver their message through a medium is
advertising.
One way to measure advertising effectiveness is known as Ad Tracking. This
advertising research methodology measures shifts in target market perceptions
about the brand and product or service. These shifts in perception are plotted
against the consumers’ levels of exposure to the company’s advertisements and
promotions. The purpose of Ad Tracking is generally to provide a measure of the
combined effect of the media weight or spending level, the effectiveness of the
media buy or targeting, and the quality of the advertising executions or creative.
2. Covert advertising
Covert advertising is when a product or brand is embedded in entertainment and
media. For example, in a film, the main character can use an item or other of a
definite brand, as in the movie Minority Report, where Tom Cruise's character
John Anderton owns a phone with the Nokia logo clearly written in the top
corner, or his watch engraved with the Bulgari logo. Another example of
advertising in film is in I, Robot, where main character played by Will Smith
mentions his Converse shoes several times, calling them "classics," because the
film is set far in the future. I, Robot and Spaceballs also showcase futuristic cars
with the Audi and Mercedes-Benz logos clearly displayed on the front of the
vehicles. Cadillac chose to advertise in the movie The Matrix Reloaded, which as
a result contained many scenes in which Cadillac cars were used. Similarly,
product placement for Omega Watches, Ford, VAIO, BMW and Aston Martin
cars are featured in recent James Bond films, most notably Casino Royale.
Bladerunner includes some of the most obvious product placement; the whole
film stops to show a coca cola billboard.
3. Television commercials
The TV commercial is generally considered the most effective mass-market
advertising format, as is reflected by the high prices TV networks charge for
commercial airtime during popular TV events. The annual Super Bowl football
58

59. game in the United States is known as the most prominent advertising event on
television. The average cost of a single thirty-second TV spot during this game
has reached $3 million (as of 2009).
The majority of television commercials feature a song or jingle that listeners soon
relate to the product.
Virtual advertisements may be inserted into regular television programming
through computer graphics. It is typically inserted into otherwise blank backdrops
or used to replace local billboards that are not relevant to the remote broadcast
audience. More controversially, virtual billboards may be inserted into the
background where none exist in real-life. Virtual product placement is also
possible.
Trends
With the dawn of the Internet came many new advertising opportunities. Popup,
Flash, banner, Popunder, advergaming, and email advertisements (the last often
being a form of spam) are now commonplace.
The ability to record shows on digital video recorders (such as TiVo) allow users
to record the programs for later viewing, enabling them to fast forward through
commercials. Additionally, as more seasons of pre-recorded box sets are offered
for sale of television programs; fewer people watch the shows on TV. However,
the fact that these sets are sold, means the company will receive additional profits
from the sales of these sets. To counter this effect, many advertisers have opted
for product placement on TV shows like Survivor.
59

60. Particularly since the rise of "entertaining" advertising, some people may like an
advertisement enough to wish to watch it later or show a friend. In general, the
advertising community has not yet made this easy, although some have used the
Internet to widely distribute their ads to anyone willing to see or hear them.
Another significant trend regarding future of advertising is the growing
importance of the niche market using niche or targeted ads. Also brought about by
the Internet and the theory of The Long Tail, advertisers will have an increasing
ability to reach specific audiences. In the realm of advertising agencies, continued
industry diversification has seen observers note that “big global clients don't need
big global agencies any more”. This trend is reflected by the growth of nontraditional agencies in various global markets, such as Canadian business TAXI
and SMART in Australia and has been referred to as "a revolution in the ad
world".
In freelance advertising, companies hold public competitions to create ads for
their product, the best one of which is chosen for widespread distribution with a
prize given to the winner(s). During the 2007 Super Bowl, PepsiCo held such a
contest for the creation of a 30-second television ad for the Doritos brand of
chips, offering a cash prize to the winner. Chevrolet held a similar competition for
their Tahoe line of SUVs. This type of advertising, however, is still in its infancy.
It may ultimately decrease the importance of advertising agencies by creating a
niche for independent freelancers
60