Impact Of Advertising On International Marketing

Presented To: - PROF. GAYATRI BHOIR

By

S.Y.BMS GROUPDIV. A

PATKAR COLLEGE

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Preface

This report on ‘Impact of Advertising’ is prepared in fulfillment of

presentation in the International Marketing subject.

We present this report to Prof. Gayatri Bhoir who has helped us in

understanding this subject through a practical approach. She has

guided us through the preparation of this project and for this we are

grateful to her. We have prepared this report after a thorough

research and analysis of the topic. We would like to thank all those

who helped us make this project report worthwhile.

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GROUP MEMBERS

1 Ibhrahim Khan 125

2 Devashree Korlekar 126

3 Prabhawati Kuckian 127

4 Siddhraj Masali 128

5 Shailesh Maurya 129

6 Abhishek Mishra 130

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INDEX

Sr.

NoTopic Pg. No.

1 International Marketing: A global marketplace 4

2 Advertising and its milestones 5

3 Advertising plan 7

4 Consumer and Market analysis 8

5 Marketing Plan 9

6 Advertising communication system 10

7 Media strategy & tactics 11

8 International Advertising concept 12

9 Brand ambassadors 14

10 Impact of advertising on sales: Hero Honda 18

11 Agencies 19

12 Fact file 20

13 Advertising expenditure 21

14 Top 10 advertising companies 22

15 Factors affecting advertising 23

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International Marketing: A Global Marketplace

Trade is increasingly global in scope today. There are several reasons

for this. One significant reason is technological—because of improved

transportation and communication opportunities today, trade is now more

practical. Thus, consumers and businesses now have access to the very best

products from many different countries. Increasingly rapid technology

lifecycles also increases the competition among countries as to who can

produce the newest in technology. In part to accommodate these realities,

countries in the last several decades have taken increasing steps to promote

global trade through agreements such as the General Treaty on Trade and

Tariffs, and trade organizations such as the World Trade Organization

(WTO), North American Free Trade Agreement (NAFTA), and the

European Union (EU).

Some forces in international trade.

Trade between countries is beneficial because these countries differ in

their relative economic strengths—some have more advanced technology

and some have lower costs. Products tend to be adopted more quickly in the

United States and Japan, for example, so once the demand for a product

(say, VCRs) is in the decline in these markets, an increasing market potential

might exist in other countries (e.g., Europe and the rest of Asia).

Internalization/transaction costs refers to the fact that developing certain

very large scale projects, such as an automobile intended for the World

market, may entail such large costs that these must be spread over several

countries.

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Advertising

Advertising is a persuasive communication attempt to change or reinforce

ones’ prior attitude that is predictable of future behavior.

Historical Milestones In Advertising

Advertising goes back to the very beginnings of recorded history.

Archaeologists working in the countries around the Mediterranean sea have

dug up signs announcing various events and offers. An early form of

advertising was the town crier. Another early advertising form was the mark

that trades people placed on their goods, such as pottery. As the person’s

reputation spread by word of mouth, buyers began to look for his special

mark, just as trademarks and brand names are used today. As production

became more centralized and markets became more distant, the mark

became more important. The turning point in the history of advertising came

in he year 1450 when Johann Gutenberg invented the printing press.

Advertising no longer had to produce extra copies of a sign by hand. The

first printed advertisement in the English language appeared in 1478. In

1622, advertising got a big boost with the launching of the first English

newspaper, The Weekly News. Advertising had its greatest growth in the

United States. Ben Franklin has been called the father of American

advertising because his Gazette, first published in 1729,had the largest

circulation and advertising volume of any paper in colonial America. The

invention of radio and, later, television created two more amazing media for

the spread of advertising.

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Advertising's Two Important Virtues

You have complete control. Unlike public relations efforts, you

determine exactly where, when and how often your message will

appear, how it will look, and what it will say. You can target your

audience more readily and aim at very specific geographic areas.

You can be consistent, presenting your company's image and sales

message repeatedly to build awareness and trust. A distinctive identity

will eventually become clearly associated with your company, like

McDonald's golden arches. Customers will recognize you quickly and

easily - in ads, mailers, packaging or signs - if you present yourself

consistently.

What Advertising Can Do For Your Business

Remind customers and prospects about the benefits of your product or

service

Establish and maintain your distinct identity

Enhance your reputation

Encourage existing customers to buy more of what you sell

Attract new customers and replace lost ones

Slowly build sales to boost your bottom line

Promote business to customers, investors

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Advertising Plan

The manager needs to engage in situation analysis with respect to the

market conditions that are operating at the time and to assess the

consumer/market, competitive, facilitating agency, and social legal, and

global factors that will affect decision making and the development of the

plan. It is vital that the advertising plan be developed so as to mesh with and

support the various components of the marketing and communications mix

such as personal selling, pricing, public relation, and promotion. The

advertising manager also needs to know the major areas of his or her

planning and decision-making responsibilities.

There are three areas of major importance:

Objective And Target Selection,

Consideration,

Message Strategy And Tactics,

Media Strategy And Tactics.

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Consumer and Market Analysis

A situation analysis often begins by looking at the aggregate market

for the product, service, or cause being advertised: the size of the market, its

growth rate, seasonality, geographical distribution; the possible existence of

different segments; and trends in all of these aggregate market

characteristics.

Competitive Analysis

Advertising planning and decision-making are heavily affected by

competition and the competitive situation the advertiser faces. Competition

is such a pervasive factor that it will occur as a consideration in all phases of

the advertising planning and decision-making process. A type of market

structure analysis that involves the development of perceptual maps of a

market, for example, attempts to locate the relative perceptual positions of

competitive brands.

Situation analysis should usually include an analysis of what current

share the brand now has, what shares its competitors have, trends in these

shares, reasons for these trends, what share of a market is possible for the

brand, and from which competitors an increase in share will come. The

planner also has to be aware of the relative strengths and weaknesses

financial, production, and marketing of the different competing companies,

and the history of competitive moves and objectives in the product category.

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The Marketing Plan

Advertising planning and decision making take place in the context of

an overall marketing plan. The marketing plan includes planning,

implementation, and control functions for the total corporation or a

particular decision-making unit or product line. The marketing plan will

include a statement of marketing objectives and will spell out particular

strategies and tactics to reach those objectives. The marketing objectives

should identify the segments to be served by the organization and how it is

going to serve them. The needs and wants of consumers on which the firm

will concentrate, such as the needs of working men and women for easily

prepared meals, are identified and analyzed in a marketing plan.

There are several marketing tools that can be used to help an

organization achieve its marketing objectives. Most people are familiar with

the “4 Ps” the marketing mix which includes product, price, place, and

promotion. A marketing plan formulates the strategy and tactics for each of

these.

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Advertising Communication System

Advertising communication always involves a perception process and

four of the elements shown in the model: the source, a message, a

communication channel, and a receiver. In addition, the receiver will

sometimes become a source of information by talking to friends or

associates. This type of communication is termed word-of-mouth

communication, and it involves social interactions between two or more

people and the important ideas of group influence and the diffusion of

information.

An advertising message can have a variety of effects upon the receiver. It

can

Create awareness

Communicate information about attributes and benefits

Develop or change an image or personality

Associate a brand with feelings and emotions

Create group norms

Precipitate behavior

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Message Strategy and Tactics

The actual development of an advertising campaign involves

several distinct steps. First, the advertising manager must decide what the

advertising is meant to communicate by way of benefits, feeling, brand

personality, or action content. Once the content of the campaign has been

decided, decisions must be made on the best and most effective ways to

communicate that content.

Media Strategy

Although there are many rules of thumb often used to decide how

much money to spend on advertising, the soundest rules involve beginning

with a detailed specification of what a corporation is attempting to

accomplish with advertising, and the resources necessary. It is only when the

job to be done is well specified that the amount and nature of the effort the

amount of money to be invested in advertising can be really determined

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International advertising

It entails dissemination of a commercial message to target

audiences in more than one country. Target audiences differ from country to

country in terms of how they perceive or interpret symbols or stimuli,

respond to humor or emotional appeals, as well as in levels of literacy and

languages spoken. How the advertising function is organized also varies.

International advertising can, therefore, be viewed as a

communication process that takes place in multiple cultures that differ in

terms of values, communication styles, and consumption patterns.

International advertising is also a business activity involving advertisers and

the advertising agencies that create ads and buy media in different countries.

The sum total of these activities constitutes a worldwide industry that is

growing in importance. International advertising is also a major force that

both reflects social values, and propagates certain values worldwide.

The Communication Process

The process of communication in international markets involves a

number of steps. First, the advertiser determines the appropriate message for

the target audience. Next, the message is encoded so that it will be clearly

understood in different cultural contexts. The message is then sent through

media channels to the audience who then decodes and reacts to the message.

At each stage in the process, cultural barriers may hamper effective

transmission of the message and result in miscommunication.

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International Advertising as a Business Practice

International advertising can also be viewed as a business

activity through which a firm attempts to inform target audiences in multiple

countries about itself and its product or service offerings. In some cases the

advertising message relates to the firm and its activities, i.e. its corporate

image. In other cases, the message relates to a specific product or service

marketed by the firm. In either case, the firm will use the services of an

advertising agency to determine the appropriate message, advertising copy

and make the media placement.

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Brand Ambassadors: their effect on International Marketing and

advertising

Soft drinks, chocolates, biscuits, paints, cars, tyres, scooters, suiting,

footwear, watches, pens, hair oil, insurance packages, diamonds, photo films

... The list could goes on. It appears that, of late, corporate India does not

want to sell anything to the consumer without using either a movie star or a

sports hero. This in itself is an important advertising strategy for majority of

the companies.

So, when Cadbury India wanted

to restore the consumer's

confidence in its chocolate

brands following the high-pitch

worms controversy, the company

appointed Amitabh Bachchan for

the job.

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Last year, when the even more controversial pesticide issue shook up

Coca-Cola and PepsiCo and resulted in much negative press, both soft drink

majors put out high-profile damage control ad films featuring their best and

most expensive celebrities.

While Aamir Khan led the Coke fightback as an ingenious and fastidious

Bengali who finally gets convinced of the product's `purity,' PepsiCo

brought Shah Rukh Khan and Sachin Tendulkar together once again in a

television commercial which drew references to the `safety' of the product

indirectly.

The success that the Aamir Khan commercial brought Coca-Cola is

universally acknowledged. A

creation of Prasoon Joshi,

National Creative Director,

McCann-Erickson, and the ad

has been exported to foreign

markets as well. Thus it proved

beneficial for international

marketing of the product.

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The Tata Group has some of India's most famous personalities from the

sports and entertainment fields endorsing its products and services, and the

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Tata brand like Narain Karthikeyan, Sourav Ganguly and Irfan Pathan, Sania

Mirza, Naseeruddin Shah and Aamir Khan who have greatly contributed to

the success if Tata’s products and services.

Highest Earning Celebrities

1. Amitabh Bachchan

2. Sachin Tendulkar

3. Narain Karthikeyan

4. Shahrukh Khan

5. Aamir Khan

6. Aishwarya Rai

7. Rahul Dravid

8. Saif Ali Khan

9. Saurav Ganguly

10.Sania Mirza

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Impact Of Advertising On Sales

HERO HONDA

Sales Performance

Dec'04 Dec'05Apr'04-

Dec'04

Apr'05-

Dec'05

Domestic 225250 238822 1892540 2155479

Exports 5501 6282 43441 72815

The Hero Honda Company achieved a solid growth of 35% as compared

with sales recorded during January 2005.

The cumulative sales of the company for the period April 2003 - January

2004 are 16,73,421 motorcycles, a notable jump from 14,27,052 units sales

achieved during the corresponding period last year (April 2002-January

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2005). This reflects a growth of 17% in the cumulative sales of the company

owing to its advertising strategies.

Facilitating Agencies

Another external factor involves the agencies that facilitate

advertising and provide the means to advertise. From a situation analysis

viewpoint, the advertiser basically needs to know what kind of facilitating

agencies exist and the nature of the services they can provide. From a

planning viewpoint, much local advertising, for example, is done without the

services of an advertising agency or a research supplier. A national

advertiser, on the other hand, may have under contract many different

agencies and research suppliers, each serving one or more brands in a

product line made up of several products.

Many advertising decisions involve choices among facilitating

agency alternatives. What advertising agency should be chosen? What media

should be used? What copy-testing supplier will be best for our particular

situation? Concerning the question for agency selection, for example, Cagley

and Roberts found that the people factor” tends to dominate in agency

selection. Characteristics such as the quality of personnel, reputation,

integrity, mutual understanding, interpersonal compatibility, and synergism

were very important.

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Fact file

The majority of large advertising agencies are headquartered in the

US. Of the ten largest advertising agency groups, seven are

headquartered in the US, and one each in the UK, France and Japan,

although WPP, the British agency holding company, is made up of

two large US-based agencies.

With the exception of Dentsu, the Japanese agency, most other agency

networks generate the majority of their revenues outside their home

country.

The largest agency group, Omnicom, places over $37 billion of

advertising for its clients around the world and derives half its revenue

from outside the US.

US-based advertising agencies and their subsidiaries are responsible

for most of the advertising throughout the world.

China is the next largest advertising market and is also growing

rapidly.

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Advertising Expenditure

The Table below shows advertising spending in the top ten global ad

markets.

Country

1997 Advertising

Expenditures (millions) Percent

  U.S.

 Japan

 U.K.

 Germany

 France

 Brazil

 Italy

 Australia

 Canada

 S. Korea

117.0

35.7

20.8

20.3

9.7

8.8

7.2

5.5

5.4

5.3

50

15

 9

 9

 4

 4

 3

 2

 2

 2

Total: 235.7 100

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Top 10 Advertising companies.

Ran

k

Company Total U.S

Advertising

(Millions $)

Total U.S

Sales

(Millions

$)

Advertising

As A

Recent Of

Sales

1 Philip Morris 2,058 20,866 9.9%

2 Procter & Gamble 1.507 11,805 12.8

3 General Motors 1,294 91,260 1.4

4 Sears 1,045 50,251 2.1

5 RJR Nabisco 815 12,635 6.4

6 Grand Metropolitan 774 3,211 24.1

7 Eastman Kodak 736 10,024 7.3

8 McDonald’s 728 11,380 6.4

9 Pepsi Co 712 10,551 6.7

1

0Kellogg 683 2,766 24.7

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Factors Affecting Advertising

The final external factor in the planning framework concerns

environmental factor social, legal, and global. Law forbids deceptive

advertising. One solution is to create brand advertising that is vague and

contains little specific information. However, such an approach can result

not only in ineffective advertising; by it can lessen the social value of

advertising by reducing the amount for useful information that it provides to

society. Thus, and advertiser who attempts to provide specific, relevant

information must be well aware of advertising regulation.

Even more difficult consideration for people involved in the

advertising effort is broad social and economic issues. Another concern is

that advertising, especially when it is more irritating than entertaining, is an

intrusion into an already excessively polluted environment. A whole set of

rules is emerging to cover advertising directed at children, and advertising

for products such as alcohol and cigarettes, and the use of environmental and

health claims in advertising.

Thus advertising has a tremendous impact on international marketing

and the two concepts therefore go hand in hand and are dependent on each

other.

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Five Keys to Radio Advertising Success

Radio is an affordable ad medium that can reach a mass audience. These five keys help increase your chances of having a successful radio ad campaign.

Frequency of Ads

A radio commercial needs to air multiple times before it sinks in with the listener. Running your commercial once a week for a month isn't going to be enough. Frequency refers to how many times your ad airs in a short amount of time. A commercial that airs multiple times in a day has a better chance of reaching the listener than a commercial that only airs a few times in a week.

Target Audience

Just like with every ad one create, you must know ones target audience. Advertising your western gear store on a country station makes sense. Advertising a teen clothing store on the same station doesn't.

Make a list of the radio stations in your market. Listen to each one to help identify your own target audience. What kind of listeners will be tuning in and are they a potential customer for your product or service?

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Radio stations also offer programs you'll want to know more about before you buy.

Producing A Commercial

Unlike television commercials, production is simpler for a radio commercial.

However, that doesn't mean one should just slap something together. Your copy isn't relying on any visuals so it's vital you capture the listener's attention from the start. The copy needs to be crystal clear and not muddied by trying to be cutesy in your pitch.

Frequency is the key so make sure your ad hits the mark and will get the consumer's attention the first time. Research shows it takes a few times before the consumer actually gets what your company is all about. It's vital your ad stands out and conveys your message repeatedly.

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Advertising Legends1)

A G KrishnamurthyEx Chairman & Managing Director

Mudra CommunicationsA G Krishnamurthy is the Captain who steered his agency from a Rs. 35 lakh company to a Rs. 7 billion corporation in a remarkably short 23 years. But little is known of his

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considerable contribution in the agency’s creative reputation - doubling up as copywriter/art director and quite often even as creative director

Brands: Rasna, Vimal Suitings & Sarees etc.

2)

Brendan Pereira

Chairman & Creative Director

From his palette of skills, Brendan Pereira has been imparting knowledge to a

wide audience over his 40 years in the business of art, advertising design and

communications.

His work with agencies in London and a stint as Brand Manager at

Beecham’s International, London, for a range of consumer products, created

a firm base for the task of leading Aiyars Advertising in Bombay as Creative

Director, and one of the first in the industry to be elected to the Board in that

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capacity. As Deputy Managing and Creative Director, he was one of the

major shareholders who founded Chaitra Advertising, and led it on to

produce some of the outstanding work of that era.

Spreading his talent, he published his first book “Changing Faces” in 1999.

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Indian Advertising Industry

Concrete advertising history begins with classified advertising

Ads appear for the first time in print in Hickey's Bengal Gazette. India's first newspaper (weekly).

Studios mark the beginning of advertising created in India (as opposed to imported from England) Newspaper studios train the first generation of visualisers & illustrators

Major advertisers: Retailers like Spencer's, Army & Navy and Whiteaway & Laidlaw

Marketing promotions: Retailers' catalogues provided early example

Ads appear in newspapers in the form of lists of the latest merchandise from England

Patent medicines: The first brand as we know them today were a category of advertisers

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Case study: Knockout shoes

Agency: Weiden & Kennedy

Objective:

Change what people expect of the brand from performance and

winning to possibility and creative self-expression

Target Audience: Young people -- open, ready and willing to have fun

Active-minded 16 - 22 year olds during summer vacation

How Magazines Were Used: Speaking to the target, drawing them in with rich, inspiring copy

Results: Product sell through strong; basketball was prime success story -

complete sell through at urban and athletic specialty retailers

Positive feedback from retailers and consumers

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Advertising Campaign Break-Through

1) VolkswagenThe Volkswagen campaign of the 1960’s is considered a huge breakthrough in the history of advertising. During this time, the auto industry tended focus on the beauty and engineering stretch of the vehicle. However, Volkswagen advertising broke through the clutter by creating ads based upon the same principle that drew drivers of Volkswagens in the first place: simplicity, honesty, uniqueness and humor. Now, the brand continues to stand out with maximum creativity.

2) Marlboro

Marlboro CigarettesThe Marlboro Man smoking cigarettes has come to be one of the biggest icons of advertising. The handsome

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and suave person made smoking cigarettes look “cool.” It has demonstrated the powerful impact the industry has on consumers.

Top Advertising Agencies in India

Mammoth Graphic Communications

Accord Advertising

FCB-Ulka Advertising Ltd.

Glare Advertising

Marketing Consultants & Agencies Limited

Mudra Communications Pvt. Ltd.

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Bibliography

Websites:

Books referred:

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