UNIT 1 INTRODUCTION

Advertising – Concept, Objectives, Evolution. Classifications, Advertising agencies –Role

,Functions, Agency& Client relationship –Responsibilities of Agency and Client-Client
Servicing-Process of Setting up an ad-agency-Growth of Ad agencies, Advertising industry
in Global and India scenario

ORIGIN OF ADVERTISING
The word advertising comes form the latin word "advertere meaning‖ to turn the minds of towards".
MEANING
Advertising is a marketing tactic involving paying for space to promote a product, service, or cause.
DEFINITIONS
Any paid form of non-personal presentation of ideas, goods and services by an un-
identifiedsponsor‖. American Marketing Association(AMA)
"Advertising consists of all the activities involved in presenting to an audience a non-
personal,sponsor-identified, paid-for message about a product or organization. William J.
Stanton Advertising is to give public notice or to announce publicity‖.-Webstar
Advertising is the means of mass selling that has grown up parallel with and has been
madenecessary to mass production‖. -Gardner

SCOPE OF ADVERTISING
• Advertising is used for communicating business information to the present and
prospective customers.
• It usually provides information about the advertising firm, its product qualities, place of
availability of its products, etc.
• Advertisement is indispensable for both the sellers and the buyers. However, it is more
important for the sellers. In the modern age of large scale production, producers cannot
think ofpushing sale of their products without advertising them.
• Advertisement supplements personal selling to a great extent.
• Advertising has acquired great importance in the modern world where tough competition
in themarket and fast changes in technology, we find fashion and taste in the custom

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OBJECTIVES OF ADVERTISING
1. To introduce a new product by creating interest for it among the prospective customers.
2. To support personal selling programme. Advertising maybe used to open customers'
doors forsalesman.
3. To reach people inaccessible to salesman.
4. To enter a new market or attract a new group of customers.
5. To light competition in the market and to increase the sales as seen in the fierce
competitionbetween Coke and Pepsi
6. To enhance the goodwill of the enterprise by promising better quality products and services.
7. To improve dealer relations. Advertising supports the dealers in selling he product.
Dealers areattracted towards a product which is advertised effectively.
8. To warn the public against imitation of an enterprise's products.

IMPORTANCE OF ADVERTISING
Advertising has become an essential marketing activity in the modern era of large scale
production and serve competition in the market. It performs the following functions:
1. Promotion of Sales : It promotes the sale of goods and services by informing and
persuading the people to buy them. A good advertising campaign helps in winning new
customers both in the national as wet as in the international markets.
2. Introduction of New Product : It helps the introduction of new products in the market. A
business enterprise can introduce itself and its product to the public through advertising.
A newenterprise can't make an impact on the prospective customers without the help of
advertising. Advertising enables quick publicity in the market.
3. Creation of Good Public Image : It builds up the reputation of the advertiser. Advertising
enables a business firm to communicate its achievements in an effort to satisfy the
customers' needs. This increases the goodwill and reputation of the firm which is
necessary to fight against competition in the market.
4. Mass Production : Advertising facilitates large-scale production. Advertising encourages
production of goods in large-scale because the business firm knows that it will be able to
sell on large-scale with the help of advertising. Mass production reduces the cost
production per unit by the economical use of various factors of production
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.
5. Research : Advertising stimulates research and development activities. Advertising has
become a competitive marketing activity. Every firm tries to differentiate its product from
the substitutes available in the market through advertising. This compels every 5 business
firm to do more and more research to find new products and their new uses. If a firm does
not engage in research and development activities, it will be out of the market in the near
future.
6. Education of People : Advertising educate the people about new products and their uses.
Advertising message about the utility of a product enables the people to widen their
knowledge. It is advertising which has helped people in adopting new ways of life and
giving- up old habits. It has contributed a lot towards the betterment of the standard of
living of the society.
7. Support to Press : Advertising provides an important source of revenue to the publishers
and magazines. It enables to increase the circulation of their publication by selling them at
lower rates. People are also benefited because they get publications at cheaper rates.
Advertising is also a source of revenue for TV network. For instance, Doordarshan and
ZeeTV insert ads before, in between and after various programmes and earn millions of
rupees through ads. Suchincome could be used for increasing the quality of programmes
and extending coverage.

CHARACTERISTICS /FEATURES OF ADVERTISING

1. Communication : Advertising is means of mass communication reaching the masses. It is
a non-personal communication because it is addressed to masses.
2. Information : Advertising informs the buyers about the benefits they would get when they
purchase a particular product. However, the information given should be complete and
true.
3. Persuasion : The advertiser expects to create a favourable attitude which will lead to
favourable actions. Any advertising process attempts at converting the prospects into
customers. It is thus an indirect salesmanship and essentially a persuasion technique.
4. Profit Maximisation : True advertising does not attempt at maximizing profits by
increasing the cost but by promoting the sales. This way It won‟t lead to increase the price

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of the product. Thus, it has a higher sales approach rather than the higher-cost approach.
5. Non-Personal Presentation : Salesmanship is personal selling whereas advertising is
non- personal in character. Advertising is not meant for anyone individual but for all.
There is absence of personal appeal in advertising.

6. Identified Sponsor : A sponsor may be an individual or a firm who pays for the
advertisement. The name of reputed company may increase sale or products. The product
gets good market because of its identity with the reputed corporate body.
7. Consumer Choice : Advertising facilitates consumer choice. It enables consumers to
purchasegoods as per their budget requirement and choice. Right choice makes consumer
happy and satisfied.
8. Art, Science and Profession : Advertising is an art because it represents a field of
creativity. Advertising is a science because it has a body of organised knowledge.
Advertising is profession is now treated as a profession with its professional bodies and
code of conduct for members.

PEOPLE ACTIVELY INVOLVED IN ADVERTISING PROCESS

1. Advertiser : Seller who manufacture and market consumer products are the prominent
group of advertisers. Hindustan Unilever , Proctor and Gamble, Seimen And Larson And
Toubro Are the examples of advertisers. Also the retailers are the second prominent
segment among advertisers. They stock the products . and sell them to the ultimate
consumers. Government and social organization are also the active participant in this
category.
2. Target audience: It refers to the recipient of the advertising message. Every message is
either directed to a mass audience and class audience. Advertising desire to cover this
target audiencefor promoting sales. Advertising message intends to cover the potential
user and non user who may purchase the product in future. The messages are also directed
to the user of the competitor's product so that they switch over the advertiser's products.
3. Advertising Agencies :An advertising agency is composed of creative people, who
conceive design, develop and produce, advertising message with creative ideas and place
it in the desired advertising media, for and on behalf of its client (the advertiser). The
advertising agencies usually charge a commission of 15% on the media bills from the media

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owners. In addition, they charge out-of pocket expenses to their clients, i.e. the advertisers.
They employ copywriters, artists, photographers. Typographers, layout designers, editors
and such other creative people.
4. An advertiser has two options viz.

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• to design, develop and produce and advertising message and get it placed in desired media
directly through his own sales or advertising department, or
• to entrust the entire job of advertising to a team of highly professionalized, specialized,
independent, advertising agency
5. Advertising Production People (Artists) : The production of impressive and persuasive
advertisements is possible only with the active help and creative spirit of the artists like
copywriters, artists, photographers, typographers, layout designers, editors and such
other creative people. Such people are usually employed by the ad agencies or, their
services may be hired by the ad agencies on job basis.
6. Target Audience (Readers, Listeners, Viewers and Present and Future Buyers) :
Advertising messages are given to the audience. The target audience may be classified into
the following three categories, viz.,
• existing or, current consumers, who are reminded and influenced to continue their
patronageand to increase the volume of their buying,
• consumers, who buy and use, a competitor‟s brand; hence they are persuaded to
buy theadvertised brand, instead of the competitor‟s brand; and
• those consumers, who do not use any such product; and even then, are persuaded to
buy theadvertised product.
7. Mass Media : The advertising agencies guide their clients (advertisers) in selection of the
mostappropriate advertising media, which is known as „media planning‟. Each medium
has its own merits and demerits. Advertising messages are communicated to the target
audience through different mass media, such as,
• Print Media : They consist of newspapers, magazines, journals, handbills, etc.
• Electronic Media : They consist of radio, television motion pictures, video, multi-media
andthe internet.
• Outdoor Media : They consist off posters, hoarding, handbills, stickers air balloons, neon
singbill boards, local cinema houses, and transit media.
• Direct Mail : It consist of brouchers, leaflets, pamphlets, letters and return cards
addressed toconsumers.
8. Government Authorities : The business of advertising is regulated by the government
department. The government adopts law and regulation which have a direct or an
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indirect bearing on the advertising.

9. Advertising boards : ASCI (Advertising standards council of India) and ABC (Audit
Bureauof circulation) are also some of authorities regulating advertising.
10. Advertising Production Firms: Advertising production firms are the support agencies
whichhelp in the production of advertisement. This includes copywriter, artist,
photographers,typographers, producer, editors. These are the people who transform
ideas into a finished formsThus the success and failure of the advertisement depend on
these people.
CLASSIFICATION OF ADVERTISING
The nature and purpose of the advertising differ from one industry to another or across
situations. Marketers advertise to the consumers market with national, local and direct-
response advertising which may involve stimulating primary or selective demand. They
use industrial, professional and trade advertising for business and professional markets.
To better understand the nature and purpose of advertising it can be classified by the
following criteria:
1. National Advertising: Advertising done by a company on a nationwide basis or in most
regions of the country and targeted to the ultimate consumer market is known as national
advertising. The companies that sponsor these ads are generally referred to as national
advertisers. Most of the advertisements for well-known brands that we see on TV or in
other major media are examples of national advertising. It informs or reminds consumers
of the brand and its features, benefits, advantages and uses or reinforces its images.
2. Retail/Local Advertising: Another prevalent type of advertising directed at the consumer
market is classified as retail/local advertising. This type of advertising is done by major
retailers or smaller local merchants to encourage consumers to shop at a specific store or
use a local service such as local financial companies, bank, hospitals, fitness club,
restaurants, show rooms etc. While the national advertisers sell their products at many
locations, retail or local advertisers must give the consumer a reason to patronize their
establishment. Retail advertising tends to emphasize specific customer benefits such as
store house, credit policies, services, atmosphere, merchandise assortment and other
distinguish attributes.Direct- Response Advertising: Direct-response advertising is a

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method of direct marketing whereby a product is promoted through an advertisement that
lets the customer purchase directly from the manufacturer. Direct response advertising
has become very popular In recent years owing primarily to changing life-styles. The
convenience of shopping through the mail or by telephone has led to the tremendous
increase in direct-response advertising.

3. Primary and Selective Demand Advertising: Another way of viewing advertising to the
ultimate customers is in terms of whether the message is designed to stimulate either
primary or selective demand. Primary Demand Advertising is designed to stimulate
demand for the general product class or entire industry; Selective Demand Advertising
focuses on creating demand for a particular manufacturer's brands.Primary demand
advertising is often used as part of a promotional strategy to help a new product gain
acceptance among customers. Products in the introductory or growth stages of their life
cycles often have primary demand stimulation as a promotional objective because the
challenge is to sell customers on the product as much as it is to sell a particular brand.
4. Business to Business Advertising: Some times the ultimate customer is not the mass
consumer market but rather another business, industry, or profession. Business-to
Business advertising is used by one business to advertise its products or services to
another. It is categorized in three basic categories like industrial, professional, and trade
advertising.
5. Industrial Advertising: Advertising targeted at individuals who buy or influence the
purchase of industrial goods or other services is known as industrial advertising. Industrial
goods are those products that either become a physical part of another product, or used in
manufacturing other goods. Business service, such as insurance, financial services, and
health care, are also included in this category.Industrial advertising is usually found in
general business publications or in trade publications targeted to the particular industry.
6. Professional Advertising: Advertising that is targeted to professional groups-such as
doctors, lawyers, dentists, or engineers-to encourage to use the advertiser's product or
specify it for other's use is known as professional advertising. Professional groups are
important because they constitute a market for products and services they use in their
businesses. Also, their recommendations influences, many consumer purchase decisions.

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7. Trade Advertising: Advertising with in a trade to attract the wholesalers and retailers and
motivate them to purchase its products for resale is termed as trade
advertising.Company sales
representatives call on resellers to explain the product, discuss the firm's plans for building
demand among ultimate consumers, and describe special programs being offered to the
trade, such as introductory discounts, promotional allowances. Trade advertise usually
appears in publications that serve the particular industry.

EVOLUTION OF ADVERTISING AND GROWTH OF AVERTISING IN INDIA

Advertising is an important element of our culture because it reflects and attempts to

change our life style. The concept of advertising dates to early civilization. It had to
undertake a long journey through the centuries before- it attained its present form.
Actually advertising is directly related to the need of man to communicate his message and
attract to each other. Our knowledge of advertising in ancient times naturally is
fragmentary.

Invention Industrial Modern

Early Advertising Revolution
of press Advertising

Early advertising
Initially word of mouth or oral advertisement or spoken publicity was used to give
information.Early advertising can be traced back to the archaeological evidences available
in Greece and Rome. In 3000 B. C. Babylonia merchants hired parkers to hawk their wares
to perspective, customers and placed signs over their doorways to indicate what they sold.
Advertisements were found on walls in the streets of the excavated Roman city of
Pompeii. Another evidenceof a piece of papyrus preserved in the British Museum provides
the earliest and direct reference to written advertisement. An Egyptian had advertised
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3,000 years ago asking for the return of arun away slave.

Invention of Printing press

In England, some of the advertisement, which were known as a "Pioneering
advertisements" were Coffee (16(1652), Chocolates (1657) and Tea (1658). The use of
hand bills, posters and newspaper advertisements emerged after Gutenberg developed
movable type in the 15th century. When Benjamin Franklin established the Philadelphia
Gazette in 1729, it soon became a favorite medium of advertising. When the weekly
Pennsylvania packet and General Advertiser became a daily in 1784, it featured an entire
front page of advertisement. In ancient India, some of the typical seals used by the Mohanj
Pennsylvania packet and General Advertiser became a daily in 1784, it featured an entire
front page of advertisement. In ancient India, some of the typical seals used by the
Mohanjodaro and Harrapa people were directly connected. But formally, the history of
advertisement in In dia parallels the history and development of the Indian Press during
the past 200 years. In other words we can say that advertising is a father of Journalism.
Because the first Indian newspaper started by James August Hickey on January 29, 1780,
was called the "Bengal Gazette" or "Calcutta General Advertiser". It was full of informative
advertisement. In 1785, the Bengal Journal published with Government advertisement free
of charge.
Industrial Revolution:

By the dawn of 19th century the pattern of advertising changed-and the power of
advertising increased rapidly with the power of advertising increased rapidly with the
growth of trade and commerce. The Industrial revolution, discovery of the growth of
transportation facilities, advent of radio and television and revolution in printing
technology discovery technology discovery of the steam power in England and America
had a keen role to play in the development of advertising. After the Second World War and
with the independence of India many British advertising agencies were brought by Indian
businessman. During the above period print advertising had to be used to raise funds. With
the Industrial Revolution in India, the number of advertisements from British Business
Houses rose considerably. The Times of India and The Statesman started their own

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facilities for layout and copy of the advertisement. The development of advertising agency
was founded due to the development of Indian industries provided by the Swadeshi
Movement of 1907-1977. The major advertising agencies were, The Calcutta Advertising
Agency, Alliance Advertising Associates, Publicity Society of India, J.
.Walter Thompson (Now Hindustan Thompson). During the mid -17th Century, newspaper
started appearing in Europe and newspaper advertising was initiated in full swing and
large number of advertisement started crowding the newspaper announcing publication
of books, new beverages, travel plans and matrimonial offers. But all early
advertisements were basically only announcement. By 1932 there were
109advertising agencies in India~ advertisement had become the main source of revenue
of print media.
Modern Advertising

In 1950 the advertisement of cosmetics was on the top of the list of items advertised and
in 1960 consumer goods continued to dominate with textile advertisement. The 1970 was
the important year of the growth of advertising in India. When the 'Vividh Bharati' and
'Doordarshan' played a great role in the form of commercial broadcasting and telecasting.
Now radio commercials made a real dent on the rural audience and urban working class.
Besides these many periodicals like 'India Today', 'Bombay'; New Delhi'Surya' and various
film magazines made their appearance in Indian advertising. The role of tabloids in English
and the Indian languages were very examples in the field of advertising in India. The
programmes and plans of the government were also publicity announcements as also those
of the TISCO, DUNCOP, Coltex, Philips, Godrej and Hindustan Lever. These media gradually
started emerging as a mutual competitor for advertising revenue also.
Advertising in the 21st century
With the beginning of 21st century, the advertisers themselves became more serious and
their approach becomes more sophisticated. Print, Radio, T. V. and Internet Commercials
have created deep impact on Indian advertising. Indian advertisement has no doubt to
register a rapid growth and has acquired a certain amount of prof essional character. In
India it has played a vital role in the development process by creating a demand for
consumer goods and raisin a standard of living of millions. In the government sector,
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advertisement of the railways also dominated which was soon joined by the public sector
advertisement. The massive government campaign for family planning was a new attempt
to penetrate into the conservativepsyche and practice of Indian massive. Mani Shankar Iyer
has also won laurels for his unique campaign on canc er prevention. In 20th century
advertisement bloomed to its full form. More emphasis was laid on advertisement copy.
Art services and advertisement production became more and more important. Advertising
is an activity of attracting public attention to a product or business, as by paid
announcements in the print, broadcast, or electronic media.Advertising is the promotion
of a company‗s products and services though different mediums to increase thesales of the
product and services. It works by making the cus tomer aware of the product and by
focusing on customer‗s need to buy the product. Globally, advertising has become an
essential part of the corporate world. Therefore, companies allot a huge part of their
revenues to the advertising budget. Advertising also serves to build a brand of the product
which goes a long way to make effective sales.
Anthropologist William Mazzarella divides advertising in post-independence India into
four key phases. The first of these began after Indian independence from Great Britain
(1947) and lasted until the early 1960s. Indian advertising in this period still operated as
an outpost of the British Empire. The overall style of advertising was factual presentation
coupled with an overall lack of creativity. The second phase (early 1960s to 1980s)
emerged in large part as a reaction to the first and stressed creativity and an Indian
professional identity independent of Great Britain. A third phase (1980s) turned away from
creative and innovative advertising and toward creating efficient marketing channels that
would have a wide impact throughout the country. The fourth and current phase, which
also came into being in the 1980s, is characterized by a synthesis of effective marketing
mechanisms and a high level of creativity

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