Final Copy Dhawal

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Impact Of Advert ising OnInternational Ma rke ting

Presented To: - PROF. GAYATRI BHOIR

By

S.Y.BMS GROUPDIV. A

PATKAR COLLEGE

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Preface

Th is report on Impact of Advertising is prepared in fulfillment of

presentation in t h e International Marketing subject.

We present t h is report to Prof. Gayatri B h oir w h o h as h elped us in

understanding t h is subject t h roug h a practical approac h . Sh e h as

guided us t h roug h th e preparation of t h is project and for t h is we are

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

researc h and analysis of t h e topic. We would like to t h ank all t h ose

wh o h elped us make t h is project report wort h wh ile .

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INDEX

S r.Topic

No1

2

3

4

5

67

8

9

10

11

12

13

14

15

International Marketing: A global marketplaceAdvertising and its milestones A dvertising planConsumer and Market analysisMarketing PlanAdvertising communication systemMedia strategy & tacticsInternational Advertising conceptBrand ambassadorsImpact of advertising on sales: Hero Honda A genciesFact fileAdvertising expenditureT op 10 advertising companiesFactors affecting advertising

Pg. No.

45789

10111 2141819

20212223

International Marketing: A Global Marketplace

T rade is increasingly global in scope today. Th ere are several reasons for

this. One significant reason is technologicalbecause of improved

transportation and communication opportunities today, trade is now more

practical.Th

us, consumers and businesses nowh

ave access to th

e very bestproducts from many different countries. Increasingly rapid technology

lifecycles also increases t h e competition among countries as to w h o can

produce t h e newest in tec h nology. In part to accommodate t h ese realities,

countries in t h e last several decades h ave taken increasing steps to promote

global trade t h roug h agreements suc h as t h e General T reaty on T rade and

Tariffs, and trade organizations such as the World Trade Organization

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(WT O), Nort h American Free T rade Agreement ( NAF TA), and t h e European

Union (E U).

S ome forces in international trade .

T rade between countries is beneficial because t h ese countries differ in

th eir relative economic strengt h ssome h ave more advanced tec h nology

and some h ave lower costs. Products tend to be adopted more quickly in t h e

United States and Japan, for example, so once t h e demand for a product (say,

VCRs) is in t h e decline in t h ese markets, an increasing market potentialmight exist in other countries (e.g., Europe and the rest of A sia ).

Internalization/transaction costs refers to t h e fact t h at developing certain very

large scale projects, suc h as an automobile intended for t h e World market,

may entail suc h large costs t h at t h ese must be spread over several countries.

Advertising

Advertising is a persuasive communication attempt to c h ange or reinforce

ones prior attitude t h at is predictable of future be h avior.

Historical Milestones In Advertising

A dvertising goes back to the very beginnings of recorded history.

Arch aeologists working in t h e countries around t h e Mediterranean sea h ave

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

advertising was t h e town crier. Anot h er early advertising form was t h e mark

th at trades people placed on t h eir goods, suc h as pottery. As t h e persons

reputation spread by word of mout h , buyers began to look for h is special

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

became more centralized and markets became more distant, t h e mark became

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INDEX

S r.Topic

No1

2

3

4

5

67

8

9

10

11

12

13

14

15

International Marketing: A global marketplaceAdvertising and its milestones A dvertising planConsumer and Market analysisMarketing PlanAdvertising communication systemMedia strategy & tacticsInternational Advertising conceptBrand ambassadorsImpact of advertising on sales: Hero Honda A genciesFact fileAdvertising expenditureT op 10 advertising companiesFactors affecting advertising

Pg. No.

45789

10111 2141819

20212223

International Marketing: A Global Marketplace

T rade is increasingly global in scope today. Th ere are several reasons for

this. One significant reason is technologicalbecause of improved

transportation and communication opportunities today, trade is now more

practical.Th

us, consumers and businesses nowh

ave access to th

e very bestproducts from many different countries. Increasingly rapid technology

lifecycles also increases t h e competition among countries as to w h o can

produce t h e newest in tec h nology. In part to accommodate t h ese realities,

countries in t h e last several decades h ave taken increasing steps to promote

global trade t h roug h agreements suc h as t h e General T reaty on T rade and

Tariffs, and trade organizations such as the World Trade Organization

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(WT O), Nort h American Free T rade Agreement ( NAF TA), and t h e European

Union (E U).

S ome forces in international trade .

T rade between countries is beneficial because t h ese countries differ in

th eir relative economic strengt h ssome h ave more advanced tec h nology

and some h ave lower costs. Products tend to be adopted more quickly in t h e

United States and Japan, for example, so once t h e demand for a product (say,

VCRs) is in th

e decline in th

ese markets, an increasing market potentialmight exist in other countries (e.g., Europe and the rest of A sia ).

Internalization/transaction costs refers to t h e fact t h at developing certain very

large scale projects, suc h as an automobile intended for t h e World market,

may entail suc h large costs t h at t h ese must be spread over several countries.

Advertising

Advertising is a persuasive communication attempt to c h ange or reinforce

ones prior attitude t h at is predictable of future be h avior.

Historical Milestones In Advertising

A dvertising goes back to the very beginnings of recorded history.

Arch aeologists working in t h e countries around t h e Mediterranean sea h ave

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

advertising was t h e town crier. Anot h er early advertising form was t h e mark

th at trades people placed on t h eir goods, suc h as pottery. As t h e persons

reputation spread by word of mout h , buyers began to look for h is special

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

became more centralized and markets became more distant, t h e mark became

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more important. Th e turning point in t h e h istory of advertising came in h e

year 1450 wh en Jo h ann Gutenberg invented t h e printing press. Advertising

no longer h ad to produce extra copies of a sign by h and. Th e first printed

advertisement in t h e Englis h language appeared in 1478 . In 1 622,

advertising got a big boost wit h th e launc h ing of t h e first Englis h newspaper,

Th e Weekly News. Advertising h ad its greatest growt h in th e United States.

Ben Franklin h as been called t h e fat h er of American advertising because h is

Gazette, first publis h ed in 1729 ,h ad th e largest circulation and advertising

volume of any paper in colonial America. Th e invention of radio and, later,television created two more amazing media for t h e spread of advertising.

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Advertising's Two Important Virtues

You have complete control. Unlike public relations efforts, youdetermine 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 geograp h ic 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 wit h your company, likeMcDonald's golden arc h es. Customers will recognize you quickly and

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

consistently.

Wh at Advertising Can Do For Your Business

Remind customers and prospects about t h e benefits of your product or

service

Establis h and maintain your distinct identity

En h ance your reputation

Encourage existing customers to buy more of w h at you sell

Attract new customers and replace lost ones

Slowly build sales to boost your bottom linePromote business to customers, investors

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Advertising Plan

Th e manager needs to engage in situation analysis wit h respect to t h e

market conditions that are operating at the time and to assess theconsumer/market, competitive, facilitating agency, and social legal, and

global factors t h at will affect decision making and t h e development of t h e

plan. It is vital t h at t h e advertising plan be developed so as to mes h with and

support t h e various components of t h e 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.

Th ere are t h ree areas of major importance:

Objective And Target Selection,

C onsideration,

Message Strategy And Tactics,

Media Strategy And Tactics.

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Consumer and Market Analysis

A situation analysis often begins by looking at t h e aggregate market

for t h e product, service, or cause being advertised: t h e size of t h e market, itsgrowt h rate, seasonality, geograp h ical distribution; t h e possible existence of

different segments; and trends in all of these aggregate market

ch aracteristics.

Competitive Analysis

A dvertising planning and decision-making are heavily affected bycompetition and t h e competitive situation t h e advertiser faces. Competition is

such a pervasive factor t h at it will occur as a consideration in all p h ases of

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

structure analysis t h at involves t h e development of perceptual maps of a

market, for example, attempts to locate t h e relative perceptual positions of

competitive brands.

Situation analysis s h ould usually include an analysis of w h at current

sh are t h e brand now h as, w h at s h ares its competitors h ave, trends in t h ese

sh ares, reasons for t h ese trends, w h at s h are of a market is possible for t h e

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

planner also h as to be aware of t h e relative strengt h s and weaknesses

financial, production, and marketing of t h e different competing companies,

and t h e h istory of competitive moves and objectives in t h e product category.

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The Marketing Plan

Advertising planning and decision making take place in t h e context of

an overall marketing plan. The marketing plan includes planning,

implementation, and control functions for t h e 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 reac h th ose objectives. Th e marketing objectives s h ould identify

th e segments to be served by t h e organization and h ow it is going to serve

th em. Th e needs and wants of consumers on w h ich th e firm will concentrate,

such as th e 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 ac h ieve its marketing objectives. Most people are familiar wit h

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

promotion. A marketing plan formulates t h e strategy and tactics for eac h of

these.

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Advertising Communication S ystem

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 h ave a variety of effects upon t h e receiver. It can

Create awareness

Communicate information about attributes and benefits

Develop or c h ange an image or personality

Associate a brand wit h feelings and emotions

Create group norms

Precipitate behavior

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Message S trategy and Tactics

Th e 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 t h e content of t h e campaign h as been

decided, decisions must be made on t h e best and most effective ways to

communicate t h at content.

Media Strategy

Alth oug h th ere are many rules of t h umb often used to decide h ow

muc h money to spend on advertising, t h e soundest rules involve beginning

with a detailed specification of what a corporation is attempting to

accomplis h with advertising, and t h e resources necessary. It is only w h en t h e job to be done is well specified t h at t h e amount and nature of t h e effort t h e

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 t h an one country. T arget audiences differ from country to country in

terms of h ow t h ey perceive or interpret symbols or stimuli, respond to h umor

or emotional appeals, as well as in levels of literacy and languages spoken.

How t h e advertising function is organized also varies.

International advertising can, therefore, be viewed as a

communication process t h at takes place in multiple cultures t h at differ in

terms of values, communication styles, and consumption patterns.

International advertising is also a business activity involving advertisers and

th e advertising agencies t h at 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 t h at

bot h reflects social values, and propagates certain values worldwide.

T h e Communication Process

Th e process of communication in international markets involves a

number of steps. First, t h e advertiser determines t h e appropriate message for

th e target audience. Next, t h e message is encoded so t h at it will be clearly

understood in different cultural contexts. Th e message is t h en sent t h roug h

media c h annels to t h e audience w h o th en decodes and reacts to t h e message.

A t each stage in the process, cultural barriers may hamper effective

transmission of t h e 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 t h roug h wh ich a firm attempts to inform target audiences in multiple

countries about itself and its product or service offerings. In some cases t h e

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

image. In ot h er cases, t h e 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 t h e appropriate message, advertising copy

and make t h e media placement.

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Brand Ambassadors: their effect on International Marketing and

advertising

S oft drinks, chocolates, biscuits, paints, cars, tyres, scooters, suiting,

footwear, watc h es, pens, h air oil, insurance packages, diamonds, p h oto films

... Th e list could goes on. It appears t h at, of late, corporate India does not

want to sell anyt h ing to t h e consumer wit h out using eit h er a movie star or a

sports h ero. Th is in itself is an important advertising strategy for majority of

th e companies.

So, w h en Cadbury India wanted

to restore

in

the

its

consumer's

chocolateconfidence

brands following the high-pitchworms controversy, t h e company

appointed Amitab h Bac h ch an for

the job.

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Last year, w h en t h e even more controversial pesticide issue s h ook up

Coca-Cola and PepsiCo and resulted in muc h negative press, bot h soft drink

majors put out h igh -profile damage control ad films featuring t h eir best andmost expensive celebrities.

Wh ile Aamir K h an led t h e Coke fig h tback as an ingenious and fastidious

Bengali w h o finally gets convinced of t h e product's `purity,' PepsiCo broug h t

Sh ah Ruk h K h an and Sac h in Tendulkar toget h er once again in a television

commercial w h ich drew references to t h e `safety' of t h e product indirectly.

The success that the A amir Khan commercial brought C oca- C ola is

universally acknowledged. A

creation

National

of Prasoon Joshi,C reative Director,

McC ann-Erickson, and the ad

has been exported to foreignmarkets as well. Th us it proved

beneficial for international

marketing of t h e product.

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T h e Tata Group h as some of India's most famous personalities from t h e

sports and entertainment fields endorsing its products and services, and t h e

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T ata brand like Narain Kart h ikeyan, Sourav Ganguly and Irfan Pat h an, Sania

Mirza, Naseeruddin S h ah and Aamir K h an w h o h ave greatly contributed to

th e success if Tatas products and services.

Hig h est Earning Celebrities

1 . A mitabh Bachchan

2. S achin Tendulkar

3 . Narain Karthikeyan

4 . S hahrukh Khan

5 . A amir Khan

6. A ishwarya Rai

7 . Rahul Dravid

8 . S aif A li Khan

9 . S aurav Ganguly

10 .S ania Mirza

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Impact Of Advertising On S ales

HERO HONDA

S ales Performance

Dec'04DomesticExports

2252505501

Dec'05238822

6282

Apr'04-

Dec'041892540

43441

Apr'05-

Dec'052155479

72815

Th e Hero Honda Company ac h ieved a solid growt h of 35% as compared

with sales recorded during January 2005 .

Th e cumulative sales of t h e company for t h e period April 2003 - January

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

ach ieved during t h e corresponding period last year (April 2002 -January

2005 ). Th is reflects a growt h of 17% in th e cumulative sales of t h e company

owing to its advertising strategies.

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Facilitating Agencies

Anot h er external factor involves t h e agencies t h at facilitate advertisingand provide t h e means to advertise. From a situation analysis viewpoint, t h e

advertiser basically needs to know w h at kind of facilitating agencies exist

and t h e nature of t h e services t h ey can provide. From a planning viewpoint,

much local advertising, for example, is done without the services of an

advertising agency or a researc h supplier. A national advertiser, on t h e ot h er

hand, may have under contract many different agencies and researchsuppliers, eac h serving one or more brands in a product line made up of

several products.

Many advertising decisions involve c h oices among facilitating

agency alternatives. W h at advertising agency s h ould be c h osen? W h at media

sh ould be used? W h at copy-testing supplier will be best for our particular

situation? Concerning t h e question for agency selection, for example, Cagley

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

selection. C haracteristics such as the quality of personnel, reputation,

integrity, mutual understanding, interpersonal compatibility, and synergism

were very important.

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Fact file

Th e majority of large advertising agencies are h eadquartered in t h eUS . Of the ten largest advertising agency groups, seven areh eadquartered in t h e US, and one eac h in th e UK, France and Japan,

alth oug h WPP, t h e Britis h agency h olding company, is made up of two

large US-based agencies.

Wit h th e exception of Dentsu, t h e Japanese agency, most ot h er agencynetworks generate t h e majority of t h eir revenues outside t h eir h ome

country.

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

advertising for its clients around t h e world and derives h alf its revenue

from outside th

e US.

US-based advertising agencies and t h eir subsidiaries are responsible

for most of t h e advertising t h roug h out t h e world.

C hina 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 admarkets.

1997 Advertising

CountryU.S .

Japan

U.K.

Germany

France

Brazil

Italy A ustraliaC anadaS . Korea

Total:

Expenditures (millions)117 .0

35 .7

20 .8

20 .3

9 .7

8 .8

7 .25 .5

5 .4

5 .3235.7

Percent50

15

9

9

4

4

3

2

2

2100

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Top 10 Advertising companies.

Rank Company Total U.SAdvertising

(Millions $)

TotalSales

U.S AdvertisingAs A Recent

(Millions $) Of Sales

1

23

4

5

6

7

8

9

10

Philip Morris

Procter & Gamble

General Motors

S ears

RJR Nabisco

Grand Metropolitan

Eastman Kodak

McDonalds

Pepsi C o

Kellogg

2,058

1 .507

1 ,294

1 ,045

815

774

73 67 28

71 2

683

20 ,8 66

11 ,805

91 ,26 0

50 ,251

1 2,6 35

3 ,211

10 ,0 2411 ,380

10 ,551

2,7 66

9 .9%

1 2.8

1 .4

2.1

6.4

24 .1

7 .3

6.4

6.7

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 t h at is vague and

contains little specific information. However, suc h an approac h can result not

only in ineffective advertising; by it can lessen t h e social value of advertising

by reducing the amount for useful information that it provides to society.Th us, and advertiser w h o 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. Anot h er concern is

th at advertising, especially w h en it is more irritating t h an entertaining, is an

intrusion into an already excessively polluted environment. A w h ole set of

rules is emerging to cover advertising directed at c h ildren, and advertising

for products suc h as alco h ol and cigarettes, and t h e use of environmental and

h ealt h claims in advertising.

Th us advertising h as a tremendous impact on international marketing

and t h e two concepts t h erefore go h and in h and and are dependent on eac h

other.

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Five Keys to Radio Advertising S uccess

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. A dvertising your western gear store on a country

station makes sense. A dvertising a teen clothing store on the

same station doesn't.

Make a list of the radio stations in your market. Listen to eachone 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?

Radio stations also offer programs you'll want to know more

about before you buy.

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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 C h airman & Managing Director

Mudra Communications A G Krishnamurthy is the C aptain who steered his agency from

a Rs. 35 lakh company to a Rs. 7 billion corporation in a

remarkably short 2 3 years. But little is known of his

considerable contribution in the agencys creative reputation -

doubling up as copywriter/art director and quite often even as

creative director

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Brands: Rasna, Vimal Suitings & Sarees etc .

2)

Brendan Pereira

Ch airman & Creative Director

From h is palette of skills, Brendan Pereira h as been imparting knowledge to a

wide audience over h is 40 years in t h e business of art, advertising design and

communications.

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

Beec h ams International, London, for a range of consumer products, created

a firm base for t h e task of leading Aiyars Advertising in Bombay as Creative

Director, and one of t h e first in t h e industry to be elected to t h e Board in t h at

capacity. A s Deputy Managing and C reative Director, he was one of the

major shareholders who founded C haitra A dvertising, and led it on to

produce some of t h e outstanding work of t h at era.

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Spreading h is talent, h e publis h ed h is first book C h anging Faces in 1999 .

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Indian Advertising Industry

C oncreteadvertising

A ds appear for the first time in print in Hickey's Bengal

advertising history begins with classified

Gazette. India's first newspaper (weekly ).

S tudios mark the beginning of advertising created in India

(as opposed to imported from England ) Newspaper studios

train the first generation of visualisers & illustratorsMajor advertisers: Retailers like S pencer's, A rmy & Navy

and Whiteaway & Laidlaw

Marketing promotions: Retailers' catalogues provided early

example

A ds appear in newspapers in the form of lists of the latest

merchandise from EnglandPatent 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:

Ch ange w h at people expect of t h e brand from performance and

winning to possibility and creative self-expression

Target Audience:

Young people -- open, ready and willing to h ave fun

Active-minded 16 - 22 year olds during summer vacation

How Magazines Were Used:

Speaking to t h e target, drawing t h em in wit h rich , inspiring copy

Results:

Product sell t h roug h strong; basketball was prime success story -

complete sell t h roug h at urban and at h letic specialty retailers

Positive feedback from retailers and consumers

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Advertising Campaign Break-T h roug h

1) VolkswagenThe Volkswagen campaign of the 19 60 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 drewdrivers of Volkswagens in the first place: simplicity,

honesty, uniqueness and humor. Now, the brand

continues to stand out with maximum creativity.

2) Marlboro

Marlboro Cigarettes

The Marlboro Man smoking cigarettes has come to be

one of the biggest icons of advertising. The handsome

and suave person made smoking cigarettes look cool.

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It has demonstrated the powerful impact the industry

has on consumers.

Top Advertising Agencies in India

Mammoth Graphic C ommunicationsA ccord A dvertising

FC B-Ulka A dvertising Ltd.

Glare A dvertising

Marketing C onsultants & A gencies Limited

Mudra C ommunications Pvt. Ltd.

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Bibliograp h y

Websites:

Books referred:

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Documents

Final Copy Dhawal