Changing of Advertising and Promotion over Decades - Assignment Example

1 Marketing- Changing of Advertising and promotion over decades 2 Marketing is considered as a business philosophy as well as a business function. It is in the state of transition from an art to a profession with strong theoretical foundations. Michael J. Baker comments that ‘the enigma of marketing is that it is one of man’s oldest activities and yet it is regarded as the most recent of the business disciplines.’1Adam Smith in his Wealth of Nations observed that ‘consumption is the sole end and purpose of production’ and thus the whole issue evolved in improving the supply with out considering the demand. With the advent of Industrialization coupled with technological innovations, advanced economies and stabilization of populations led to managing the balance between demand and supply (buyers and sellers) in 1950s. Marketing was concerned with what sellers needed to do to retain over the transaction and consumers were seen as passive participants. In the later periods, with the evolution of service-oriented economies, consumer has become supreme. By mid-80s, buyers started demanding lower prices and in the competition the sellers’ choice is severely restricted. To have a win-win situation, it is imperative to go in for true marketing concept of mutually satisfying relationships and marketing mix. This is in this backdrop, we had witnessed over the past decade a shift in the way advertisers try to communicate with consumers. Now there is a greater focus on integrating communication tools, both domestically and globally, to create brand awareness and influence consumers’ attitudes. Forbs.com, 10.11.01, in an article ‘Five Lessons For Successful Small Companies’ indicated 5 strategies and one of them was ‘ don’t forsake marketing. If you can't afford it, try giving away your product’ (E.g. Green Mountain Coffee). 3 Advertising tools used then, now and future to communicate with consumers Advertising is a form of commercial mass communication designed to promote the sale of a product or service, or a message on behalf of an institution, organization, or candidate for political office. Archaeologists have found evidence of advertising dating back to the 3000 B.C, among the Babylonians. One of the first known methods of advertising was the outdoor display, usually an eye-catching sign painted on the wall of a building. An outdoor advertisement excavated in Rome offers property for rent, and one found painted on a wall in Pompeii calls the attention of travelers to a tavern situated in another town. The first advertisement in English appeared in 1472 in the form of a handbill announcing a prayer book for sale.2 Advertising agencies initially focused on print. Later on, with the invention of Radio, by end of 1920s it created a new opportunity and airing soap operas started3. However, by 50s, TV far surpassed radio as an advertising medium. The tone of the advertising was also changing. No longer did advertising simply present the product benefit. Instead it began to create a product image. Bern Bach agency believed that advertising had to be creative and artistic or it would bore people. He also believed that good advertising began with respect for the public's intelligence. E.g. Levy Bakery advertisement, Volkswagen ‘ think small’ advertisement etc., The access to hundreds of cable channels mean that today advertising on TV must interest and entertain consumers or else they will simply use the remote to change the channel. With the advent of Internet, there was a need for the players to 4 re-fuel their strategies. In In Forbes, May 2005, Kristen Stanton in the article ‘The Shift in Advertising’ states that ‘Businesses are dedicating more of their customer acquisition resources to the Internet, and the auto industry will be one of the leaders over the next few years’. A regional head of BPL, summarized the impact as under: The Internet has the power to change market dynamics and upset traditional channel strategies and business models by providing a more efficient and effective means to move information and products / services into the market. … the net should also be viewed as an interactive medium for more effective communication with consumers. 4 Reasons for the ‘shift in advertisers’ focus’ It is seen how the focus was shifted over the years both in the content and context. Here, it has to be noted that even though there had been growth of electronic media and new media, the basic philosophy and approach of Advertising i.e., to communicate to the right consumers in the right place in the right time with right message remains unfazed and unchanged. Shift in focus is a must because the advertising serves a contemporary purpose.5 The purpose of advertising is to inform and to persuade the consumer. The idea of consumer has grown the idea of product, which further transitioned to idea of brand. Advertising takes the transaction to the consumer either through the distributor or through a communication. It can do lot of things, but it can not solve all the business problems like no supply, short supply etc., in which case it is wiser not to go for advertisement. Choosing a media largely depends on scale, size, distance, convenience and cost. Strengths of media are the strengths of advertising. Marketing sets to achieve certain physical targets like to sell X units of a product; increase sales over previous quarter by Y% etc., 5 whereas communication creates awareness of a product or a brand, builds a demand or an opinion through market research. In direct marketing only communication can sell the product. As a short-term goal, advertising shall aim at creating awareness and as a long-term goal it should aim at creation of a brand. Keith Crosier in his article ‘Promotion’ 6 using Mc Cathy’s Useful 4Ps, in marketing mix explains that Promotion is one among them and the other three are Product, Place & Price. Promotional mix consists of Advertising, Publicity, Direct marketing, Sponsorship, Exhibitions, Mail, Tele-marketing, on-line marketing, Internet etc., ‘Creating brand awareness’: whether the ‘newer tools’ are effective in creating brand awareness. Brand is a sign. Brand power is partly measured in terms of brand awareness. Brand awareness means the number of people who knows the brand stands for what and they are aware of the product and services the brand gives.7 The people should feel tempted to purchase the product presented by the brand. Jean Noel Kapferer mentions three types of awareness- top of the mind (brand comes to the mind of the consumer first-to the buyers who had to take decisions quickly to purchase); un-aided awareness (brand impact i.e. to what extent it is associated with the product, to attract the consumer who is unwilling to spent too much time on choosing); and aided (asking targeted audience whether they heard of certain brand- to lure the hesitant consumers).8 Of these, Top of mind communication is expensive; but target should be to achieve this. Jagdeep Kapoor in Business line (December,17,2001) suggests a good brand strategy to be 6 on the fast track during the slowdown. Gone are the days when customers would approach you. Today, one has to proactively approach customers and be able to sell value, not price. The essence of successful marketing is to make a customer and to keep the customer. Do they add significant value to brand awareness? Brand financial value is measured at the level of Earnings Before Interest & Tax. Brand exists only if it creates profitable business. The journey of brand is from awareness to strength to value. Brand has value addition- encourages trials, attractiveness, repeat sales, retains consumer base (loyalty) in spite of low cost imitations or alternatives. Peter Doyle in his article’ Branding’9 states that tangible one is the product; while basic brand consists of brand name, pack features, quality & design; augmented brand has service, credit terms, guarantees & delivery/ installation in its fold. When any brand reaches 80% of top of mind awareness in a category, the indication is that there is no scope for improvement. In such cases the company had to go for creation of ‘Corporate Brand’ from its ‘Product Brand’ (Eg. Velux: roof windows). Further, it has to be noted that a brand cannot be defended only through intangible values (E.g. Jaguar brand had to bought by Ford to regain the capacity to make high quality & high technology cars). Brand- whose identity focuses with the product can go global (E.g. Coke, Pepsi; stable through out time and similar in all countries). American companies can go global considering its multi cultural social diverse fabric. When a company expands towards Europe or Asia, it has local units and makes them responsible for the results (E.g. Procter & Gamble leads in the whole of Europe and spreads technical know how to other countries). There exist two routes to obtain Brands- buying brands 7 or building brands.10 The approach of the company mostly depends upon what their primary objectives were- marketing and market share (right-handed companies) or return on investment and financial results (left-handed companies). Companies, whose objectives are financial, primarily, go for buying brands (E.g. Coke buying Thumps-up in India). Japan companies tend to be right-hand oriented and go for building & expanding the brands.(E.g. Sony, Toyota, Honda, Suzuki, Canon etc.,).Jack Trout on forbs.com (10.03.05, 6:00 AM ) in ‘Know The Enemy’ suggests: Squash Your Smaller Competitors As Quickly As Possible; If You've Got A Bigger Competitor, Avoid Being Squashed ; If You're Losing The Battle, Shift The Battlefield; and If A Bigger Competitor Is About To Attack, You Should Attack First. Celebrities are roped in for advertising their products/ brands. Brands ambassadors are appointed for the purpose.. It is argued, whether such large scale spending is required at all? Take the case of Hutch- with out any such celebrities; it could push its brand logo effectively. The money thus saved can be spent on Research and developmental activities. US, Japan, Germany and UK spends annually billions of Dollars on Advertisements. Thus, Advertising has become increasingly international. Corporations are looking beyond their own country's borders for new customers. Faster modes of shipping, the growth of multinational corporations, rising personal income levels worldwide, and falling trade barriers have all encouraged commerce between countries. Because corporations are opening new markets and selling their products in many regions of the globe, they are also advertising their products in those regions making Advertising a global activity touching all cultures. 8 REFERENCES Michael J.Baker, Marketing: theory and practice, Macmillan,1976. Microsoft Encarta Reference Library, 2005. How to produce successful Advertising by Farabey A.D, 2002 Ed. The Marketing Book, edited by Michael J. Baker, 4th Ed. Butterworth Heinemann Strategic Brand Management; creating and sustaining Brand equity long term, by Jean Noel Kapferer Bussiness line (December,17,2001) Read More