MDE: ADVERTISING

S. Suresh, Assistant Professor of Commerce

VMKV ARTS AND SCIENCE COLLEGE Salem
Course Code Course Title Category L T P Semester
MDE-I Advertising Theory 1 0 0 I
Scheme of Instruction Scheme of Examination
No. of Periods : 15Hrs. Maximum Score : 100
Periods/Week : 1 Internal Evaluation : 40
Credits : 1 End Semester : 60
Instruction Mode : Lecture Exam Duration : 3Hrs.
Preamble :
Course Outcomes: On the successful completion of the course, students will be able to Cognitive
CO No. Levels
CLO-Statement
(K-Level)
CO1 To learn and explore the advertising methodologies and integrated marketing methods K1
CO2 To understand the features of advertising and the role of advertising in the marketing mix K2
CO3 To analyze the classification of advertising K3
CO4 To understand the types of media in advertising K4
CO5 To study the economic aspects of advertising K5
Relationship Matrix
Programme Outcomes (POs) Programme Specific Outcomes Mean Scores
Course
(PSOs) of
Outcomes
COs
PO1 PO2 PO3 PO4 PO5 PSO1 PSO2 PSO3 PSO4 PSO5
CO1 2 3 2 2 1 3 2 2 1 2 2.0
CO2 2 3 2 2 2 3 2 2 2 2 2.2
CO3 1 2 2 3 2 2 2 3 2 2 2.1
CO4 1 2 3 2 3 2 2 3 2 2 2.2
CO5 1 2 2 2 3 2 3 2 2 2 2.1
Mean Overall Score 2.12
Unit Detailed Contents Hours-
15
Evolution of advertising; Social and economic effects of advertising; Advertising agency
I system; advertising budget; Legal and ethical aspects of advertising; 3
Marketing; Market segmentation; Social marketing; Consumer behaviour; Factors
II influencing consumer behaviour, buying behaviour, buying decision process; 3
Planning advertising campaigns; Advertising copy, Television and Radio commercials;
III Media selection, newspaper, magazines, radio, television, Internet, outdoor, direct mail 3

IV Industrial advertising; Retail adverting; Corporate advertising; Public service advertising; 3

Evaluation of advertising effectiveness, methods of measurement. Pre-testing and post –

V testing methods. 3

Books Recommended:
1 B.S. Rathor; Advertising management
2 Chunnawala: Advertising theory and Practice
3 Sandage and others: Advertising: Theory and Practice
4 Thomas Russell and Glenn Verrill: Otto cleppner’s advertising Procedure
5 Manendra Mohan: Advertising Management: Concepts and cases
6 Philip Kotler: Marketing Management
7 David Aaker and George day: Marketing Research
8 Mahendra Mohan: Advertising Management; Concepts and Cases
9 Frank Jefkins: Advertising Made Simple
The Case Study / Field Report / Activity-Based Report shall be submitted for the relevant course.
 UNIT- I
DEFINITION AND MEANING OF ADVERTISING
Advertising is a non-personal, paid form of communication aimed at promoting ideas, goods,
or services by an identified sponsor.
Concept Description
Origin of the The word "advertising" comes from the Latin word "advertere," which
Word means "to turn the minds of towards."
AMA "Any paid form of non-personal presentation and promotion of ideas,
Definition goods and services by an identified sponsor."
William J. Advertising consists of all activities involved in presenting a non-
Stanton personal, sponsor-identified, paid-for message about a product or
organization to an audience.
Core Purpose It is used to communicate business information to present and prospective
customers, providing details about the firm, its product qualities, and
availability.
FEATURES/NATURE OF ADVERTISING
Advertising possesses several key characteristics that define its nature:
• Communication: It is a means of mass, non-personal communication that is
addressed to the masses.
• Information: It informs buyers about the benefits of purchasing a particular product,
and this information should be complete and true.
• Persuasion: It is an indirect salesmanship technique that attempts to create a
favorable attitude to convert prospects into customers.
• Profit Maximisation: It seeks to maximize profits by promoting sales (the higher
sales approach), not by increasing the cost or price of the product.
• Non-Personal Presentation: It is non-personal in character, directed at all people,
and lacks individual personal appeal.
• Identified Sponsor: The advertiser (an individual or firm) is clearly identified and
pays for the advertisement.
• Consumer Choice: It facilitates consumer choice by enabling them to purchase
goods according to their budget, requirement, and choice.
• Art, Science, and Profession: It is considered an Art (field of creativity), a Science
 (body of organized knowledge), and a Profession (having a code of conduct).
• Element of Marketing Mix: It is an important element of the overall Promotion
Mix.
• Element of Creativity: A successful campaign involves significant creativity and
imagination to match the expectations of the consumers.
OBJECTIVES OF ADVERTISING
The fundamental objective is to sell a product, service, or idea15. Beyond this general aim,
specific objectives include:
• To introduce a new product by creating interest among prospective customers.
• To support the personal selling program, often by opening doors for the salesman.
• To reach people inaccessible to salesmen.
• To enter a new market or attract a new group of customers.
• To fight competition and increase sales (e.g., the competition between Coke and
Pepsi).
• To enhance the goodwill of the enterprise by promising better quality products and
services.
• To improve dealer relations by supporting the dealers in selling the product.
• To warn the public against imitation of the enterprise's products.
IMPORTANCE (FUNCTIONS) OF ADVERTISING
Advertising is an essential marketing activity with several vital functions in the modern
competitive market:
• Promotion of Sales: It promotes the sale of goods and services by informing and
persuading people, helping to win new customers nationally and internationally24.
• Introduction of New Product: It enables quick publicity in the market and helps a
business introduce itself and its product to the public.
• Creation of Good Public Image: It builds up the reputation and goodwill of the firm
by communicating its achievements and satisfying customer needs.
• Mass Production: It facilitates large-scale production, which in turn reduces the cost
of production per unit due to the economical use of resources.
• Research: It stimulates research and development as firms must differentiate their
products and find new uses to fight competition.
• Education of People: It educates the public about new products and their utility,
helping people adopt new ways of life and improving the overall standard of living.
• Support to Press/Media: It provides a crucial source of revenue for publishers,
 magazines, and TV networks (e.g., Doordarshan and ZeeTV), which helps them
increase circulation and improve program quality.
TYPES (CLASSIFICATION) OF ADVERTISING
Advertising is classified based on several criteria, including Area Coverage, Audience,
Media, and Function.
I. Classification on the Basis of Area Coverage
Type of Description Media Used
Advertising
Local Also known as Retail Advertising, undertaken Local newspapers,
Advertising by local stores and directed at local customers. posters, window
displays.
Regional Has a wider coverage than local advertising, Regional newspapers,
Advertising covering a region where people may share a magazines, radio,
common language or use a common product. regional TV.
National Undertaken by manufacturers of branded National newspapers,
Advertising goods, communicating the message to radio, and television
consumers across the entire country. networks.
II. Classification by Function/Purpose (Other Important Types)
• Institutional Advertising (Corporate Image Advertising): Aims to build the
manufacturer's reputation and goodwill in the public mind rather than immediately
increasing sales.
• Financial Advertising: Directed to the public to attract funds for the company, such
as for raising capital.
• Social Advertising/Service Advertising: Designed to operate in the public interest
for public welfare and social development (non-commercial), focusing on changing
attitudes or behavior for the public benefit.
• Political Advertising: Promotes the plans and policies of a political party to convince
voters.
• Advocacy Advertising: Relates to public interest causes such as family planning or
environmental conservation.
• Internet Advertising: Advertising delivered through various forms of the internet.
III. Classification by Stage (Level of Demand)
• Pioneering Stage Advertising: Used to make the audience fully aware of a new
 product or brand and inform them of its unique features to persuade them to buy it.
• Competitive Stage Advertising: Undertaken to promote sales when the product
faces stiff competition from other established brands in the market.
• Retentive Stage Advertising (Reminder Advertising): Used when the product has a
large market share; its goal is to maintain or retain the stable position and remind
buyers about the product.
SOCIAL AND ECONOMIC EFFECTS OF ADVERTISING
Advertising is a powerful force with wide-ranging influences that shape both the economy
and the social environment of a community.
A. Economic Effects
Advertising contributes significantly to the growth and dynamics of the market economy:
• Promotes Economic Growth: It stimulates the economy by increasing the aggregate
demand for goods and services. By fueling the desire to shop and encouraging
continuous economic activity, advertising contributes to the overall development and
vibrancy of the market.
• Improves Standard of Living: By informing people about new products and
providing opportunities for people to improve their income (through increased
economic activity), advertising motivates consumption, thereby leading to the
betterment of their standard of living.
• Facilitates Mass Production: High demand generated by effective advertising
requires firms to increase production volume. Mass production, in turn, often leads to
economies of scale, which can reduce the cost of production per unit.
• Stimulates Research and Development (R&D): To create effective advertisements
and differentiate their products in a competitive market, firms are compelled to
undertake continuous research and development, leading to product innovation and
improvement.
• Provides Employment: The increased demand that results from advertising calls for
higher production levels, which requires more physical and human resources, thus
generating significant employment opportunities across various sectors, including
media, creative agencies, and manufacturing.
B. Social Effects
Advertising plays a pervasive role in society, influencing culture, behavior, and information
flow:
• Encourages Purchasing and Consumption: A primary social role is persuading
 people to purchase goods and services. Advertisers often operate by instilling a
feeling of "lack" or "need" to motivate individuals to buy.
• Reflects and Shapes Cultural Trends: Advertising acts as a bridge, communicating
varied cultural norms, trends, and lifestyles. This communication can bring variation
to social life and accelerate the adoption of new cultural practices.
• Educates the Public: It educates the public about new products, their functions, and
proper uses. This knowledge helps people adopt new ways of life, providing practical
information that expands their understanding of available options and utility.
• Supports Mass Media: It is a vital financial lifeline for mass media channels such as
newspapers, magazines, radio, and television. The revenue generated by advertising
supports the production of content, which can then be offered to the public at a lower
cost or for free.
• Maintains Competition: By providing information to the consumer, advertising
ensures that firms must continuously strive to offer better quality or lower prices to
maintain market share.
THE ADVERTISING AGENCY SYSTEM
An advertising agency is a crucial, independent partner in the advertising process, managing
the creation and placement of ads on behalf of a client.
1. Definition and Independence
• Definition: An advertising agency is a team of highly professionalized, specialized,
and independent individuals or firms.
• Role: Their fundamental function is to manage the entire advertising campaign job for
a client (the advertiser).
2. Advertiser's Options
A business that needs to advertise generally has two approaches:
1. In-House Department: Handle the entire advertising process (design, production,
and placement) directly through the firm's own sales or advertising department.
2. External Agency: Entrust the entire job to a professional, independent Advertising
Agency.
3. Core Functions
The agency acts as the client's creative arm and media expert, performing the following key
tasks:
• Conceiving the Message: Developing the core idea and strategy for the
advertisement.
 • Creative Production: Designing, developing, and producing the advertising message
with creative ideas (e.g., writing the copy, creating visuals).
• Media Placement: Strategic planning and placement of the message in the most
suitable advertising media to reach the target audience.
• Client Representation: Carrying out all these tasks for and on behalf of their client
(the advertiser).
4. Specialized Personnel
To fulfill their complex functions, advertising agencies employ a diverse team of specialized
creative personnel, including:
• Copywriters
• Artists
• Layout Designers
• Photographers
• Typographers
• Editors and Producers (for electronic media)
5. Compensation Structure
Advertising agencies typically use a two-part system to charge for their services:
1. Commission: They traditionally earn a commission of 15% on the media bills. This
commission is generally paid by the media owners (e.g., the TV network or
newspaper).
2. Out-of-Pocket Expenses: They charge any direct expenses incurred (such as
production costs or travel) directly to the client (the advertiser) in addition to the
commission.
ADVERTISING BUDGET
The advertising budget is the financial plan that dictates the total amount a company plans to
spend on promotional activities for its products or services over a specified time period (e.g.,
a fiscal year or quarter).
1. Definition and Scope
Concept Description
Definition The allocation of promotional expenditures over a specified time period,
representing the financial investment required to reach the target audience
and achieve marketing objectives.
Budget The budget encompasses all costs, including: Media Buying: Purchasing
 Components ad space (impressions, clicks, time slots) across various channels (TV,
digital, print). Creative Development: Costs for copywriting, design,
video production, photography, and printing. Production: Expenses
related to shooting commercials or manufacturing physical outdoor ads.
Agency Fees: Fees or commissions paid to the advertising agency.
Research: Market research or testing conducted before and during the
campaign.
2. Importance of the Advertising Budget
Setting a detailed budget is crucial for the success, control, and accountability of any
advertising campaign.
• Financial Control: It prevents overspending or underspending, ensuring that funds
are utilized wisely and that promotional costs are kept within profitable limits.
• Strategic Planning: It aligns advertising spending with the company's overall
business objectives and marketing goals (e.g., increasing brand awareness versus
driving immediate sales).
• Resource Allocation: It helps management allocate funds efficiently to the most
effective advertising channels (media mix) and campaigns, maximizing reach and
impact.
• Performance Measurement (ROI): A clear budget allows for tracking cost-
effectiveness. Marketers can compare spending against results (sales, leads,
awareness) to measure the Return on Investment (ROI) and optimize future spending.
• Competitive Parity: A well-planned budget ensures the company maintains a
sufficient level of spending to remain competitive in the market.
3. Methods for Determining the Advertising Budget
Companies employ various methods to calculate and allocate their advertising budget. The
choice of method depends on the firm’s size, financial health, marketing objectives, and
industry dynamics.
Method Description Advantages Disadvantages
1. Percentage Allocating a fixed Simple, easy to It treats advertising as
of Sales percentage of either calculate, and ensures a result of sales, not the
Method past sales or advertising spending is cause. It discourages
anticipated future proportionate to the increased spending
sales revenue to company's financial when sales are low
 advertising. performance. (when advertising is
needed most).
2. Affordable Setting the budget Financially safe; avoids It ignores the
Method (All- based on what overspending and risk. opportunity to use
You-Can- management believes advertising for growth.
Afford) the company can It treats advertising as
afford after meeting an afterthought rather
all other necessary than an investment in
expenses. sales.
3. Setting the budget by Maintains a Competitors may have
Competitive matching or basing it competitive presence different objectives or
Parity on competitors' and avoids promotional resources. It assumes
Method spending levels or "wars" (escalating the competitor's
industry averages. expenditure). spending is optimal,
which may not be true.
4. Objective Defining specific, Most logical and Difficult to implement,
and Task measurable strategic method as it especially for new
Method advertising links spending directly products, as it is
objectives, to specific goals. challenging to
determining the tasks Encourages accurately estimate the
required to achieve management to specify costs of various tasks.
those objectives, and assumptions about the Can lead to higher-
then calculating the relationship between than-expected budgets.
cost of performing spending and results.
those tasks.
4. Key Factors Influencing the Budget
Several factors determine the final size of the advertising budget:
• Stage in Product Life Cycle (PLC): New products (Introduction stage) require
significantly higher budgets to build awareness compared to mature products
(Maturity stage) which only need reminder advertising.
• Market Share: Brands trying to increase their market share often need to spend more
than market leaders who are focused on maintenance.
• Competition and Clutter: In highly competitive or cluttered industries, a larger
 budget is necessary to achieve adequate exposure and break through the noise.
• Advertising Frequency: The number of times the message needs to be repeated to be
effective; higher frequency requires a larger budget.
• Media Costs: The rising cost of media space, particularly for prime-time TV or high-
traffic digital platforms.
• Company Financial Resources: The overall financial health and available funds of
the company set the ultimate upper limit on spending.
ETHICAL ASPECTS OF ADVERTISING
Ethical advertising goes beyond what is legally required, adhering to moral principles to build
and maintain public trust.
Core Ethical Principles
Principle Description
Truthfulness & Advertisements must be factually accurate. They must not contain
Honesty misrepresentations, exaggerations, or omissions that are likely to
mislead the consumer about the product, service, or price. The
principle of caveat emptor (let the buyer beware) is largely replaced
by the advertiser’s moral obligation to be honest.
Transparency & Consumers should be able to clearly identify what they are viewing as
Disclosure an advertisement. This is crucial for influencer marketing and
sponsored content, where the commercial relationship must be
explicitly disclosed. Disclaimers should not contradict the main claim
or be hidden.
Social Advertisements have a powerful impact on culture and values. Ethical
Responsibility advertisers avoid content that:
• Perpetuates Harmful Stereotypes: Avoids discrimination based on
gender, race, religion, etc.
• Offends Public Decency: Avoids gratuitous vulgarity or
exploitation.
• Promotes Dangerous Behavior: Does not glorify illegal or reckless
activities.
Protection of Special care is required when advertising to groups who may lack the
Vulnerable experience or cognitive ability to understand persuasive intent, such
Audiences as children. Ethical guidelines require avoiding exploitation of their
 insecurities (e.g., body image, perceived inadequacies).
Data Privacy In the digital age, ethical advertising involves being transparent about
how consumer data is collected, used, and protected. It requires
obtaining clear consent and allowing consumers to opt-out.
Fair Competition While comparative advertising is common, it should be factual and
verifiable. Ethical competition means refraining from unfairly
denigrating a competitor's product or service through false claims.
2. Legal Aspects of Advertising
Advertising is regulated by various laws to prevent consumer harm, ensure fair competition,
and safeguard public interest.
Key Legal Issues & Regulations
A. Misleading and Deceptive Advertising
The most significant area of advertising law revolves around ensuring claims are truthful and
substantiated.
• Truth-in-Advertising Laws: These laws prohibit false or deceptive advertisements.
Claims, especially those concerning health, performance, safety, or price, must be
backed by adequate scientific evidence or proof.
• Penalties: Penalties for false or misleading advertising can include:
o Fines and Imprisonment: For manufacturers, service providers, and
sometimes even endorsers. (e.g., In India, under the Consumer Protection Act,
penalties for a manufacturer/service provider can extend up to two years
imprisonment and fines up to ₹10 lakh for a first offense).
o Cease and Desist Orders: Mandating the advertiser to stop running the
advertisement.
o Corrective Advertising: Requiring the company to run new advertisements to
correct the false impressions created by previous campaigns.
B. Content Regulation for Specific Products and Groups
Legal restrictions are often placed on advertising for products deemed harmful or for content
that affects protected groups.
Product/Content Legal Focus
Category
Drugs & Health Prohibits advertising of certain drugs, medical devices, or
remedies that claim "magical" cures or violate regulations (e.g.,
 claiming to cure a disease that requires a licensed medical
professional).
Tobacco & Alcohol Advertisements are often prohibited or severely restricted.
Companies may resort to 'surrogate advertising' (advertising a
non-restricted product with the same brand name), which is
heavily scrutinized and often illegal if it indirectly promotes the
restricted product.
Financial/Investment Ads must clearly state risks, disclaimers, and terms to prevent
Services consumers from being misled about security or rates of return.
Indecency & Public Laws prohibit the indecent or derogatory representation of
Morality women or content that is obscene or harmful to young persons.
Intellectual Property Advertisements must not infringe on the copyrights or
trademarks of other companies (e.g., using a competitor's logo
or product name without permission or in a disparaging way).

3. The Role of Self-Regulation

Many countries have Self-Regulatory Organizations (SROs)—bodies funded and run by
the advertising industry (advertisers, agencies, and media). These SROs bridge the gap
between strict law and ethical principle.
• Function: They create an industry code of conduct that is generally stricter and more
agile than government law. They handle complaints quickly and use moral persuasion
and public pressure to enforce compliance.
• Example (India): The Advertising Standards Council of India (ASCI) is the self-
regulatory body. Its code requires advertisements to be:
1. Truthful and Honest.
2. Not Offensive to Public Decency.
3. Safe (especially for children).
4. Fair in Competition.
Unit -I Completed
 UNIT- II
MEANING AND DEFINITION
Meaning
At its core, Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large.
The modern concept of marketing emphasizes customer satisfaction and value creation over
aggressive selling. It is the process of moving goods and services from the concept stage to
the customer.
Definitions
1. American Marketing Association (AMA) Definition:
"Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and
society at large."
2. Philip Kotler's Definition:
Marketing is "the science and art of exploring, creating, and delivering value to satisfy the
needs of a target market at a profit."
FEATURES OF MODERN MARKETING
Modern marketing operates on the principle of the Marketing Concept, which is a
philosophy centered on the customer. The key features of this approach are:
Feature Description
Customer The customer is the focus (the "king") of all business activities. The
Orientation primary goal is to identify and understand the target customer's needs
and wants, and then produce goods and services that satisfy them.
Integrated All departments within the organization (production, finance, R&D,
Approach and marketing) must coordinate their efforts to ensure customer
satisfaction. Marketing is not just a department; it is a philosophy that
guides the entire business.
Starting Before Unlike the traditional selling concept, modern marketing begins with
Production market research to identify customer needs before the product is even
designed or produced.
Focus on The ultimate goal is to achieve profits through customer satisfaction,
Profitability not just through maximizing sales volume. Creating happy, loyal
 customers ensures long-term profit and growth.
Value Creation Marketing focuses on creating, communicating, and delivering superior
value to the customer, which involves a strong focus on building long-
term relationships (Relationship Marketing).
THE MARKETING MIX (4 PS)
A crucial feature of marketing is the Marketing Mix, which is a set of controllable tactical
marketing tools that the firm blends to produce the response it wants in the target market.

1. Product: The goods and services combination the company offers to the target
market (quality, design, features, brand name, packaging).
2. Price: The amount of money customers must pay to obtain the product (list price,
discounts, allowances, payment period).
3. Place (Distribution): Company activities that make the product available to target
consumers (channels, coverage, logistics, inventory, and transportation).
4. Promotion: Activities that communicate the merits of the product and persuade target
customers to buy it (advertising, personal selling, sales promotion, public relations).
IMPORTANCE OF MARKETING
Marketing is vital not only for the success and survival of a business but also for the economy
and society as a whole.
Importance to Business
Benefit Description
Drives Sales and Marketing campaigns are essential for making products visible,
Revenue Growth generating demand, and encouraging purchases, which directly
translates to higher sales and financial growth.
Builds Brand Consistent and effective marketing helps a company establish a
 Awareness and clear, recognizable brand identity (logo, values, messaging). This
Trust builds credibility and loyalty among consumers.
Facilitates Through market research and data analytics, marketing provides
Informed Decision management with insights into customer behavior, trends, and
Making competitor actions, guiding decisions on product development,
pricing, and distribution.
Acquires and Modern marketing focuses on building strong, long-term
Retains Customers relationships with customers, maximizing their lifetime value, and
turning them into repeat buyers and brand advocates.
Helps Face By identifying unique selling propositions (USPs) and
Competition differentiating the product/brand, marketing enables a business to
stand out in a crowded marketplace and gain a competitive edge.

Importance to Society and Economy

Benefit Description
Raises Standard of Marketing identifies consumer needs and motivates producers to
Living innovate and offer better-quality products at competitive prices,
ultimately improving the variety and quality of goods available to
society.
Creates The various functions of marketing—such as market research,
Employment advertising, selling, distribution, logistics, and retail—require a
Opportunities large workforce, thereby generating millions of jobs.
Sustains Economic By stimulating demand and promoting the exchange of goods and
Growth services, marketing drives economic activity, leading to mass
production, higher national income, and overall economic
prosperity.
Informs Consumers Marketing acts as a communication bridge, educating consumers
about new products, their features, and how they can solve a
problem, enabling them to make better purchasing decisions.

WHAT IS MARKET SEGMENTATION?

Market Segmentation is the process of dividing a large, heterogeneous (diverse) market into
smaller, homogenous (similar) groups of consumers who have similar needs, wants,
characteristics, or behaviors.
The goal is for a company to tailor its products, services, and marketing efforts to meet the
specific needs of one or more chosen segments more effectively than competitors.
Key Terms
• Segment: The small, homogeneous group of customers identified by the
segmentation process.
• Targeting: The process of evaluating the attractiveness of each market segment and
selecting one or more segments to enter.
• Positioning: Arranging for a product to occupy a clear, distinctive, and desirable
place relative to competing products in the minds of target consumers.
BASES FOR SEGMENTING CONSUMER MARKETS
There are four primary ways to segment a consumer market. A marketer often uses a
combination of these variables to define a segment.
1. Geographic Segmentation
Dividing the market into different geographical units.
• Examples: Nations, regions, states, counties, cities, or even neighborhoods.
• Variables: Population density (urban, suburban, rural), climate, and size of the
market area.
2. Demographic Segmentation
Dividing the market based on easily measurable, factual variables. This is the most popular
segmentation basis.
• Examples: Age, life-cycle stage, gender, income, occupation, education, religion,
ethnicity, and generation (e.g., Millennials, Gen Z).
3. Psychographic Segmentation
Dividing the market based on psychological characteristics that relate to how consumers
think and live.
• Examples: Lifestyle, personality traits, values, attitudes, and interests.
• Note: People in the same demographic group can have very different psychographic
profiles.
4. Behavioral Segmentation
Dividing the market based on consumer knowledge, attitudes, uses, or responses to a product.
• Examples:
o Occasions: When the idea to buy, the actual purchase, or use occurs (e.g.,
holidays, seasonal).
 o Benefits Sought: The specific benefits consumers look for in a product (e.g.,
durability, economy, speed).
o User Status: Non-users, ex-users, potential users, first-time users, and regular
users.
o Usage Rate: Light, medium, and heavy product users.
o Loyalty Status: Consumers can be segmented by their loyalty to brands,
stores, and companies (e.g., highly loyal, somewhat loyal, or disloyal).
REQUIREMENTS FOR EFFECTIVE SEGMENTATION
To be useful, market segments must have the following characteristics:
1. Measurable: The size, purchasing power, and profiles of the segments must be
quantifiable.
2. Accessible: The market segments must be effectively reached and served with
promotional and distribution efforts.
3. Substantial: The segments must be large or profitable enough to serve. A segment
should be the largest possible homogeneous group worth pursuing with a tailored
marketing program.
4. Differentiable: The segments must be conceptually distinguishable and respond
differently to different marketing mix elements and programs.
5. Actionable: Effective programs must be designed for attracting and serving the
segments. A small company with limited resources, for example, might identify
several segments but find it lacks the necessary resources to develop separate
marketing programs for each.
WHAT IS SOCIAL MARKETING?
Definition: Social marketing is the systematic application of marketing principles and
techniques to influence a target audience to voluntarily accept, reject, modify, or maintain
a behavior for the benefit of individuals, groups, or society as a whole.
The core distinction is the objective:
• Commercial Marketing Goal: To maximize profits for the marketer by selling
goods or services.
• Social Marketing Goal: To maximize social good by "selling" a positive behavior or
"unselling" a negative one.
The "Product" is a Behavior Change
In social marketing, the product being offered is not a physical good, but the desired
behavior itself, along with its associated benefits.
 Social Marketing Product Desired Behavior (The "Product")
Examples
Public Health Quitting smoking; using a condom; getting vaccinated.
Environmentalism Recycling; conserving water; using reusable bags.
Safety Wearing a seatbelt; checking for smoke alarms; not
drinking and driving.
Community Volunteering; enrolling children in school; voting.

MEANING OF CONSUMER BEHAVIOUR

Consumer behaviour is the study of how and why individuals and groups select, buy, use,
and dispose of ideas, goods, and services to satisfy their needs and wants.
Essentially, it seeks to answer questions like:
• What consumers buy (product/brand choice).
• Why they buy it (motivation/needs).
• How they buy it (payment method, information sources).
• When they buy it (time, season).
• Where they buy it (location, channel).
• How often they buy it (frequency).
Definition of Consumer Behaviour
A widely recognized definition comes from the American Marketing Association (AMA):
"Consumer behaviour is the dynamic interaction of affect and cognition, behaviour, and the
environment by which human beings conduct the exchange aspects of their lives."
Another definition emphasizes the decision-making process:
"Consumer behaviour is the subset of the larger field of human behaviour. It is the behaviour
that a consumer displays in various consumption-related activities, such as searching,
purchasing, using, evaluating, and disposing of products, as they expect that these will help in
satisfying their needs."
FACTORS INFLUENCING CONSUMER BEHAVIOUR
Consumer buying decisions are influenced by a complex interplay of four major categories of
factors: Cultural, Social, Personal, and Psychological.
1. Cultural Factors
These factors form the fundamental basis for a consumer's beliefs, customs, and behavior.
• Culture: The shared values, traditions, and behaviors learned by a member of society.
 • Subculture: Smaller groups within a culture that share common experiences and
values, such as nationalities, religions, racial groups, or geographic regions.
• Social Class: Relatively permanent and ordered divisions in a society whose
members share similar values, interests, and behaviors (often determined by a
combination of income, occupation, education, and wealth).
2. Social Factors
These factors relate to the immediate environment and groups that influence a consumer.
• Reference Groups: Groups that directly or indirectly influence a person's attitudes or
behavior, such as friends, club members, professional associations, or aspirational
groups (like celebrities or influencers).
• Family: The household structure plays a major role in decision-making, as members
influence brand awareness, preferences, and purchase decisions.
• Roles and Status: A person's position in different groups (e.g., student, employee,
parent) carries a corresponding role and status that influences the products they
choose to buy.
3. Personal Factors
These are individual characteristics unique to a person.
• Age and Life Cycle Stage: Needs and wants change throughout a person's life (e.g., a
teenager vs. a senior executive).
• Occupation: A person's job can influence the type of products they buy (e.g., a
lawyer purchasing formal clothes).
• Economic Circumstances: Income level, savings, and borrowing capacity directly
affect a consumer's purchasing power and spending habits.
• Lifestyle: A person's pattern of living as expressed in their activities, interests, and
opinions.
• Personality and Self-Concept: A person’s unique psychological characteristics (e.g.,
confidence, introversion) influence their brand choices.
4. Psychological Factors
These are internal mental processes that affect a consumer's thinking and emotional response
to products.
• Motivation: The internal driving force (need or want) that pushes a consumer to seek
satisfaction, often structured by models like Maslow’s hierarchy of needs.
• Perception: How a consumer selects, organizes, and interprets information to form a
meaningful picture of the world (e.g., perceiving a higher-priced item as superior
 quality).
• Learning: Changes in an individual’s behavior arising from experience. Learning can
come from advertising, reviews, and actual use of the product.
• Attitudes and Beliefs: A consumer's consistent, favorable or unfavorable evaluations,
feelings, and tendencies toward an object or idea.
CONSUMER BUYING DECISION PROCESS
The consumer buying decision process typically involves five stages that a buyer passes
through when purchasing a product or service. It is important to note that a consumer may
skip or go back through steps, depending on the product type and level of involvement.
1. Problem/Need Recognition
The process begins when a consumer recognizes a problem or an unmet need. This need can
be triggered by:
• Internal stimuli: Basic impulses like hunger, thirst, or a change in lifestyle.
• External stimuli: A television advertisement for a new product, a friend's
recommendation, or a display in a store.
• The desire to meet this need becomes strong enough to motivate a purchase.
2. Information Search
Once the need is recognized, the consumer seeks information about how to fulfill it. Sources
of information include:
• Personal Sources: Family, friends, neighbors (often the most influential source).
• Commercial Sources: Advertising, salespeople, dealer websites, and packaging.
• Public Sources: Mass media, consumer rating organizations, and online reviews.
• Experiential Sources: Handling, examining, or using the product.
3. Evaluation of Alternatives
The consumer uses the gathered information to evaluate the various brands and products they
are considering.
• They develop a set of criteria (e.g., price, quality, features, durability, brand image)
and weigh the prospective choices against these criteria.
• The consumer forms beliefs and attitudes toward different brands, leading to a brand
preference.
4. Purchase Decision
At this stage, the consumer makes the decision to buy the most preferred alternative.
However, two factors can still intervene between the purchase intention and the final
decision:
 • Attitudes of Others: If someone close to the consumer suggests a better choice.
• Unforeseen Situational Factors: Sudden financial loss, a friend getting a better deal,
or an unexpected price increase.
The purchase decision also involves making related decisions, such as when to buy, where to
buy, and the method of payment.
5. Post-Purchase Behaviour
After the purchase, the consumer takes further action based on their satisfaction or
dissatisfaction.
• Satisfaction: When the product performance meets or exceeds expectations, the
consumer is satisfied or delighted and is likely to repurchase and recommend the
product.
• Dissatisfaction (Cognitive Dissonance): When the product performance is less than
expected, the consumer is disappointed. They may experience post-purchase doubt or
anxiety ("Did I make the right choice?") and may complain or return the product.
Marketers often work to reduce this dissonance through follow-up communication.
Unit- II Completed
 Unit- III
PLANNING ADVERTISING CAMPAIGNS
Advertising campaign planning is a systematic process designed to coordinate all advertising
efforts to achieve a set of specific marketing goals.
Key Steps in the Planning Process
1. Define Objectives (The 'Why'): Campaigns must have specific, measurable,
achievable, relevant, and time-bound (SMART) goals. Objectives can be to:
o Inform: Launch a new product or feature.
o Persuade: Convince consumers to switch brands.
o Remind: Maintain brand loyalty and awareness (e.g., seasonal or long-
running campaigns).
2. Identify the Target Audience (The 'Who'): Define the audience's demographics,
psychographics, needs, and media consumption habits. This is crucial for designing
the message and selecting the right media.
3. Determine the Budget (The 'How Much'): Allocate resources based on objectives,
competitive spending, and media costs.
4. Develop the Message Strategy (The 'What'): Create the "Big Idea"—the central
theme that will run across all advertising efforts. This leads directly to the creation of
the advertising copy.
5. Select Media and Schedule (The 'Where' and 'When'): Choose the optimal media
channels (TV, radio, digital, etc.) to reach the target audience effectively, and
determine the scheduling pattern (e.g., continuous, flighting, or pulsing).
6. Execute and Launch: Produce the final advertisements and launch the campaign
according to the media schedule.
7. Evaluate and Measure: Track key performance indicators (KPIs) like reach,
frequency, engagement, and sales impact to assess success against the initial
objectives.
ADVERTISING COPY
Advertising copy refers to all the written, spoken, or visual elements that communicate the
core message of the advertisement. It is the language that persuades the consumer.
Components of Effective Copy
• Headline/Title: The most important element in print or digital media, designed to
grab attention and introduce the main benefit.
• Body Copy: The main text that elaborates on the headline, detailing the product's
 features, benefits, and how it solves a consumer's problem.
• Slogan/Tagline: A short, memorable phrase that encapsulates the brand's position
(e.g., "Just Do It").
• Visuals/Sound: While not copy, these are inseparable. The copy must align perfectly
with the graphics, images, music, and sound effects used in the advertisement.
• Call to Action (CTA): A clear instruction telling the consumer what to do next (e.g.,
"Visit our website," "Buy now," "Call today").
3. Television and Radio Commercials (Execution)
Radio Commercials
Radio is often called the "theater of the mind" because it relies entirely on sound to convey
the message.
• Key Elements: Voice (announcer, character dialogue), Music (jingles, background
atmosphere), and Sound Effects (SFX) are the creative tools.
• Scripting: A radio script must clearly detail when each voice, music track, and SFX
cue enters and exits, ensuring the story is told clearly within the standard 30- or 60-
second format.
Television Commercials
TV combines sight, sound, and motion, making it a highly impactful medium.
• Execution: TV ads require a storyboard, which is a panel-by-panel depiction of the
visual action and corresponding audio script.
• Camera Shots (Technical Considerations):
o Due to the small size of a typical video screen, TV is considered a 'close-up
medium'.
o It is common to establish the scene using a Long Shot (L.S.) or Very Long
Shot (V.L.S.) for only a few seconds.
o The director then quickly cuts to Medium Close-Ups (MCU), Close-Ups
(CU), and Big Close-Ups (BCU) to stress facial expressions and show
detailed product use.
4. Media Selection
Media Selection is the process of choosing the most appropriate channels to deliver the
advertising message to the target audience with the required reach and frequency, all while
optimizing cost.
The table below outlines the requested media types with their respective advantages and
disadvantages:
Advertising Advantages (Pros) Disadvantages (Cons)
Medium
Newspaper High local coverage; Timeliness Short life span (read once and
(short lead time); Consumers discarded); Poor color
actively look for ads. reproduction/quality; High
competition/clutter.
Magazines High quality reproduction (color, Long lead times (need to submit ads
paper stock); High audience months in advance); High cost per
selectivity (niche topics); Long life reader; Less flexibility in ad
span (kept for weeks/months). placement.
Radio Low cost of production and Lack of visual element (cannot
airtime; High frequency potential; demonstrate product); Fragmented
Good for reaching specific audience; Message is fleeting
local/regional markets; Appeals to (perishable); High commercial clutter.
non-visual audiences.
Television High impact (sight, sound, Very high absolute cost (production
motion); High reach (mass and airtime); Lack of audience
audience); Highly persuasive. selectivity compared to digital; High
clutter during commercial breaks.
Internet High targetability (demographics, High clutter/Ad-blockers; Privacy
(Digital) behavior); Measurable results concerns; Can be intrusive; Need for
(clicks, conversions); High constant new content.
flexibility (changes can be made
instantly).
Outdoor High reach and frequency (for Limited message length (must be
passersby); Low cost per exposure; short); Difficult to target specific
Excellent for building brand demographics; Potential for
awareness in a geographic area. distraction/low retention value.
Direct Mail High audience selectivity (mailing High cost per contact; Negative
lists); Allows for personalized consumer perception ("junk mail");
messages; High control over Requires constant list maintenance.
presentation.
Unit- III Completed
 Unit- IV
1. INDUSTRIAL ADVERTISING
Industrial advertising is a form of Business-to-Business (B2B) advertising. It is not aimed at
the final consumer, but at other businesses, manufacturers, and industrial buyers who
purchase goods for use in their own production processes or operations.
Feature Description
Target Factory managers, engineers, purchasing agents, and technical experts.
Audience
Product Type Raw materials, machinery, industrial components, tools, commercial
services (logistics, security), and heavy equipment.
Purpose/Goal To generate leads, build trust in the product's quality and reliability, and
provide technical specifications.
Media Used Highly specialized media: trade magazines, industrial publications, direct
mail to specific company personnel, professional industry websites, and
trade shows.
Copy Style Factual, technical, and rational. It focuses on features, specifications,
durability, efficiency, and return on investment (ROI).
Decision The buying decision is often long and involves multiple technical experts
Process (the buying center).
2. RETAIL ADVERTISING
Retail advertising is any advertising done by local merchants who sell goods directly to the
final consumer. It focuses on driving immediate sales by promoting the store itself, its
location, or its current sales and promotions.
Feature Description
Target Local consumers living within the store's trading area.
Audience
Product Type Specific, branded, or unbranded merchandise available in the store (e.g.,
groceries, apparel, electronics).
Purpose/Goal To generate store traffic, announce sales and price cuts, highlight store
services, and build a local image.
Media Used Local media: newspapers (daily or weekly inserts), local radio, direct
mail flyers, local search ads (Google Maps/Yelp), and in-store displays.
Copy Style Highly price-driven, featuring urgency ("Limited Time Offer!"), and
 providing practical information (location, store hours).
Decision Tends to motivate quick purchase decisions based on price, convenience,
Process and immediate availability.
3. Corporate Advertising (or Institutional Advertising)
Unlike product advertising, corporate advertising is designed to promote the firm as a
whole—its ideas, philosophy, social responsibility, or place in the community—rather than a
specific product or service.
Feature Description
Target All stakeholders: Consumers, investors, employees, regulators, and the
Audience general public.
Product Focus The company's image, values, and reputation (not a specific product).
Purpose/Goal To build goodwill, repair or enhance corporate image (e.g., after a
crisis), attract top talent, and advocate for a company position on an
issue.
Media Used Broad, prestigious media: major television networks, national news
magazines, op-ed sections of major newspapers, and corporate
websites/social channels.
Copy Style Emotional, visionary, and philosophical. It focuses on themes like
sustainability, diversity, innovation, or the company's long-term
contribution to society.
Example An oil company running an ad about its investments in solar energy.
4. PUBLIC SERVICE ADVERTISING (PSA)
Public Service Advertising aims to promote a social issue, cause, or idea rather than a
commercial product or company. PSAs are typically sponsored by non-profit organizations,
governments, or religious groups, and media outlets often run them for free.
Feature Description
Target The general public or a specific demographic whose behavior the ad
Audience seeks to change.
Product Focus A social or health-related concept or behavior (e.g., safe driving, disaster
relief, blood donation).
Purpose/Goal To educate the public, raise awareness, change harmful social behavior,
and stimulate action (e.g., vaccination, recycling).
Media Used Mass media: television, radio, and print; frequently aired during non-
 peak times due to free/discounted placement.
Copy Style Emotional and often hard-hitting, relying on strong visual or audio
appeals to create a sense of urgency or empathy.
Example Campaigns against drug use, encouraging forest conservation, or
promoting voting.

Unit- IV
 Unit – V
EVALUATION OF ADVERTISING EFFECTIVENESS
The primary purpose of evaluation is to measure the communication effect (did the ad
communicate the message?) and the sales effect (did the ad increase sales/profits?).
METHODS OF MEASUREMENT
The two main categories of measurement methods are:
Category Timing Focus
Pre-testing (Copy Before the ad is finalized To predict the ad's effectiveness and
Testing) and released to the identify flaws in the creative execution
media. or message.
Post-testing After the ad or campaign To measure the ad's actual impact on
(Campaign has run in the media. consumer memory, attitudes, and
Evaluation) behavior (sales).

1. Pre-testing Methods
Pre-testing evaluates ad copy, message, and visuals before the campaign launches. It helps
advertisers save time and money by discarding ineffective ads or making necessary
adjustments.
Method Description
A. Consumer Jury A group of target consumers is asked to rate or rank a set of
alternative advertisements (copy, layouts, storyboards, or mock-
ups) based on their preference, clarity, or emotional appeal.
B. Portfolio Test Several test ads are mixed with control (non-test) ads and
placed in a portfolio or magazine dummy. Respondents are
asked to go through the publication and then recall the ads they
remember. The difference in recall for the test ads compared to
the control ads is used to measure effectiveness.
C. Readability Test Used primarily for print ads, this test assesses the ease with
which the copy can be read and understood. Techniques like the
Flesch-Kincaid test analyze sentence length, word length, and
complexity to assign a readability score.
D. Laboratory Tests These tests measure involuntary consumer responses to the ad:
(Physiological Pupillometrics: Measures pupil dilation as an indicator of
 Measures) interest and attention. Galvanic Skin Response (GSR):
Measures changes in the skin's electrical resistance (sweating),
which reflects emotional arousal/engagement. Eye-Tracking:
Uses specialized cameras to monitor where the respondent
looks on the screen or page, indicating attention patterns.
E. Dummy For TV or radio, potential viewers/listeners are invited to a
Broadcasts/Theater controlled environment (often a theater). They watch a program
Testing containing test commercials and are later asked questions about
the ads (recall, comprehension, attitude change).

2. Post-testing Methods
Post-testing (also known as tracking or field testing) is done after the campaign has been run
in the market to measure its actual performance.
Measuring Communication Effect
These methods determine if the ad reached consumers and communicated the intended
message:
Method Description
A. Recall Tests Measures how much of the ad content the audience can remember.
Unaided Recall: Respondents are asked, "What ads have you
seen/heard lately for a soft drink?" (Brand/product category provided,
but no other prompts). Aided Recall: Respondents are given some
prompting, such as the publication or program, and asked if they
remember seeing an ad for a specific brand.
B. Recognition Used for print media (newspapers and magazines). Respondents are
Tests (Starch shown the ad and asked if they remember seeing or reading it. Scores
Test) are recorded for: Noted: Saw the ad. Seen/Associated: Read or saw
some part of the ad and associated it with the brand. Read Most: Read
50% or more of the written material in the ad.
C. Attitude and Surveys conducted to measure changes in consumers' attitudes towards
Opinion Tests the brand or product before and after the campaign runs. This can use
rating scales to check for changes in favorability, brand image, or
purchase intent.
Measuring Sales Effect
These methods link the advertising campaign directly or indirectly to actual sales results.
Method Description
D. Split-Run A direct marketing technique where two or more versions of an ad
Testing (e.g., with different headlines, offers, or visuals) are run in the same
medium at the same time, but exposed to different, comparable
audience segments. Response rates (e.g., coupon redemption, online
sign-ups) are tracked to determine which ad copy is more effective.
E. Store Audit Store Audits: Track inventory, purchase data, and market share in
and Coupon retail locations to see if sales increased in areas where the advertising
Returns ran heavily. Coupon Returns: Simple, direct measurement. The
number of coupons returned or tracked online sales using a unique
code provides a quantifiable measure of the ad's ability to drive a
direct response.
F. Experimental The most sophisticated method, involving running the ad in select,
Design (Test geographically comparable "test markets" and not running it in
Marketing) "control markets." By controlling for other marketing variables, the
difference in sales between the two markets can be primarily
attributed to the advertising campaign.

Unit-V