Decline in financial advertising

As the stock markets were depressed, the financial advertising was affected adversely. The following diagram reveals the number of issues handled and the amount of capital raised through them in crores. There is a relationship between the number of issues raised and financial advertising. This is their major weakness too. The money was tempting enough to accommodate 76 new ad agencies entering financial markets in1995-95 alone. As stock-markets depressed, financial advertising was affected, and the agencies started looking at alternative areas of business viz., Public Relations, direct marketing, market survey, regular corporate advertising, co-ordination between issuer and registrar, investor relations, investor tracking. Some of the financial ad agencies are entering the mainline proper advertising. This transition means that financial advertising has a potential to sustain an agency up to a point only. Beyond that it has to enter product advertising business. They have also diversified into media software and corporate presentations.

Changing markets

It is necessary to appreciate that we cannot have a constant market. Markets do change. There are very few markets which are the same today as they were ten years ago. Consumer attitudes, competitive pressures, socio-economic changes all make it vital for each company to keep in its toes. This means that it is certain that once a product is born, it matures and eventually dies. To explain this, a simple product life cycle technique has been invented. But in spite of this, there are countless examples of 50 year old or even 100 year old products or brands growing stronger and str0nger each year. Are they not subject to product life cycle? Does a product have a perpetual life? However, product-life-cycle approach and an appreciation of changing markets make us anticipate the change and respond to them. No market, in fact, in the world has remained the same as it was ten years ago and whole remain the same ten years hence.

Dearth of Talent

The demand for the right talent in advertising is increasing day by day. There are enough people entering this profession. But very few are strategic thinkers. It is however very difficult to meet this demand. Many organizations find a short-cut. They attract the talents employed else where. This also inflates the already high salaries further. Besides this is hardly the answer except in the very short-run. Playing musical chairs is only a short-term answer. Another problem is that ad industry has a dubious image. May be by their life-styles ad professional contribute to this image. It was so far looked down upon by the best professional talent. However things are changing fast. Many candidates from elitist institutions are seriously considering advertising as a career option. We thus find many journalism, psychology and marketing major students in advertising industry today. However, marketing graduates from premier business school are lured away by finance and banking companies.

Advertising of new products

New product development is an important activity of the marketing process. A “new product” may refer to totally new product manufactured as a result of a technological breakthrough, which fully replaces the old and existing product. In marketing management, however, the term “new product” refers to a product that has been modified of improved, or which completely replaces a similar product. A modification of an existing product, an imitation of a competitive product and product-line acquisitions are also included in the broad meaning of the term ”new product”. The concepts of market segmentation and product differentiation are important in the achievement of better marketing results. Advertising, when rightly employed, makes it possible for such strategies to work beautifully. In segmentation, a product is modified in such a manner that it fits the special need which seems to exist among a group (segment) of potential buyers. In product differentiation, however, consumers have to adjust their demand to the product as it exists, or to a changed existing product. Advertising is effectively used to persuade consumers that they should a manner that it fits the special need which seems to exist among a group (segment) of potential buyers.

Revival of PLC

The following considerations are uppermost:
• Improve product quality
• Add new product features, generating additional benefits.
• Market penetration in new segments.
• Incentives to trade channels, and strengthening and increasing the channel
• Improve advertising/ sales efforts.
In a nutshell, innovation is the answer to revival to PLC. Ultimately however if necessary, a product is eliminated. It is sometimes difficult for he executives associated with the product for a long time to abandon it due to emotional reasons. This is a pit fall to be avoided. The PLC for some products, say consumer electronics items and fashion wear, is very long. Some products like personal computers (PCs) might have reached a maturity stage in the US, but India, they are at the introductory and growth stages. The students should appreciate that the level of advertising effort is related to the stage of PLC of a particular product.

Product Life Cycle

Each product class as a whole and an individual brand passes the fourth several stages form its birth to its final eclipse. When the new product is introduced in the market, the sales pick up slowly and the product comes to the notice of the customer due to heavy promotion. And then it is well-distributed. This is called the introductory stage. Later is the growth stage, where the sales rise quickly. The cost distribution and promotion is spread over a large volume is spread over a large volume, and so the cost per unit is low. It is a critical stage form the view-point of the product. The maturity stage is longer that other stages. The product can be revived at this stage by improving the product and by promotion. A new product mix can be thought of. The product may be eliminated or redesigned. Revival of PLC (product life cycle) extends the life of the product, by starting the stages once again from introduction onwards. The decline stage could be a result of changing consumptions patterns, improved technology, and availability of better substitutes. The profits take a dip, and the product might die. It can be eliminated prior to that. Or else, its price has to be slashed. But it is also ticklish to reduce the price, when extra promotional effort is needed to jack up the sales.

Advertising and Price

Price is an important consideration in buying decisions. Every one of us would like to know the price of a product for comparison purposes before finally deciding to buy. Indian consumers are, by and large, price conscious. Some people may not sometimes be mindful about the price of some product. At other times, the price for most of them plays an important in their buying decisions. Price is also indicative of quality. Many people equate price with quality. The costlier the product, the better the quality. The reverse is also true. If a product costs less, we immediately feel that it cannot be of good quality. Pricing a product is an important and critical activity. If a lower price is fixed, it will affect the profitability of a business; and if a higher price is fixed, the product will not be able to stand in competition and may be priced out of the market. Therefore, the right price has to be fixed. Then, the right price has to be fixed. Then, there are various pricing methods – such as the skimming and penetration pricing of new products; and the marginal pricing versus the full cost pricing method.

Shopping Goods

Shopping goods are those which are purchased after a careful consideration and comparison of quality, price and suitability. Unlike convince goods, they are infrequently purchased and have a high unit price. Buyers will normally discuss with their spouses, friends and other family members before making a decision to buy; and they may visit many retail stores before the purchase. Here, style is an additional factor in the buying motive. Typical shopping goods are women’s apparel, men’s ready-to-wear clothing, home furnishing etc. Since customers may not have adequate product knowledge about such goods, advertising should amply provide this, together with rational and emotional appeals about product benefits, quality and such other product features as the fact that they are easy to operate, are durable, and safe. Such goods have a few retail outlets which are located in the vicinity of similar other outlets so that customers may conveniently make comparisons. Retailers do advertise such products. Retail advertising by itself is a matter of detailed study.

Financial Advertising on satellite Television

Financial advertising accompanies financial programs since the viewers of such programs form the target audience. Financial programs are niche audience directed programmed, and are not dependent on TRP ratings. The message becomes focused. Satellite channels are viewed by middle class, upper-income bracket people and these are the people who invest. The satellite channels and financial advertising have the go well with each other since the viewership fits the target audience of financial advertising. The influencers in securities buying are the financial consultants, brokers, sub-brokers and merchant bankers. Business-based programmers are watched by these influencers. ST reaches NRI’s and with NRI reservation the satellite channel proves to be an effective medium for financial advertising. Satellite channels offer special packages for financial advertisers. Some TV’s claim that 30 per cent of its ad revenue comes from financial programs. Besides, certainly some financial advertising requires more than 30 seconds, and cooperate films lasting 10 minutes are the way out. They may prove expensive as per tariff card rate, and so special package is offered.

Product classifications

A brief account of product classification is appropriate here. The obvious broad categories are consumer goods and industrial goods. Those products which satisfy our personal wants and needs, such as food, clothing and household item, are consumer goods, whereas industrial goods are used for a multitude of business purposes, ranging from blast furnaces, pig iron and forklift trucks to wash basin cleaning compounds and typewriter ribbons. However, this categorization is based on the use to which the product is put. It is possible that some product may be put to use in both household and business premises. Since both the markets, the consumer market and the industrial market have different characteristics and different requirements, the marketing strategies, including advertising, have to be different. For example, table salt is different form several varieties of salt processed for industrial uses. Similarly, the writing papers used in printing and Xeroxing.

Advertising and the Product

It has been said that advertising is an important component of the marketing mix. Marketing executives decide about the marketing mix elements to be use, and the proportion in which they are to be blended into their marketing programmers. The right choices determine the executive success, and of the marketer’s reputation. Almost all consumer goods manufactures and many industrial product marketers include advertising in their marketing mix. Advertising’s specific role is of pre-selling to present and potential customers. Together with other elements of the promotion mix such a personal selling and sales promotion activities, the point of purchase displays, coupons, premium offers, demonstrations and trade shows- advertising ensures that these important functions lead to a successful marketing programmer of selling mass produced, mass marketed consumer goods. In the marketing of industrial product, too, advertising plays useful role; it informs unknown prospects and enables the salesman in the field to obtain a hearing form the buyers.

Marketing Defined

Marketing is the process that facilitates the exchange of goods and services between producers and users to the satisfaction of all parties. The word process is used to emphasize the point that the marketing activity does not stoop even after a sale has been made. In fact, post-sales activity is a vital part of marketing. Second, the word user is used in place of the consumer. A food processing industry uses steel for the canning purpose. It is the user of steel but no the consumer. The wholesaler and retailer buy grocery items, but do not consume them. They are simply involved in the re-sale business. They in fact use commodities and products for re-selling to retailers and actual consumers. Originally, marketing was founded as a branch of applied economics devoted mainly to the study of distribution channels. Later, it became a management discipline devoted to affecting an increase in sales.

While Communicating with Audiences

The following points are to be kept in mind while communicating with an audience:
• Instead of building a wall around the product, the message should create a bridge to the target audience by being persuasive.
• Arouse the audience, and give it a reason for listening to you.
• Make us of questions to involve the audience.
• Use familiar words and build up points of interest.
• Repeat key points.
• Convince the audience by sticking to facts.
• Empathize with your audience.
• Use rhyme and rhythm, for instance when Waterbury’s compound is advertised they say ‘when vitality is low, Waterbury’s brings back the glow.
• Make use of Zeigarnnik effect, i.e., leave the message incomplete, where the audience is provoked to complete and close it by pondering over it.
• Ask the audience to draw conclusions.
• Let them know the implications of these conclusions.

One versus two sided communication

This raises the question whether the advertiser should only praise the product or should also mention some of its shortcomings. The most common approach in sales and advertising is a one-sided approach. The most common approach in sales and advertising is a one-sided approach. However, on deep analysis, it is found that one-sided messages tend to work best with the audiences which are initially favorably predisposed to the claims made in the ad message. Two-sided arguments go well when audiences are an unfavorable opinion about the communicator’s position. Also, a two-sided message tends to be more effective with educated audiences capable of sound reasoning, particularly when they are exposed to counter propaganda. A two-sided communication produces the greatest attitude change when people are opposed to the point of view presented. Also, a two-sided communication is effective in maintaining the belief level against a counter-attack by competitors.

Advertising and channels and distribution

We have so far considered two components of the marketing mix, namely, the product and the price, which influence the advertising process and decisions. We shall now study the third element of this mix, namely, channels of distribution. Our focus in this section will be the role of advertising in the marketing channel s of distribution. Our focus in this section will be on the role of advertising in the marketing channel as well as how channel decisions affect the advertising process. Before we of into this, however, let us understand some of the relevant concepts involved in the distribution of the path which the product takes while moving to the ultimate consumers. The actual channel of distribution varies in its form and length from consumer goods to industrial goods. Within one class of goods, it varies from product to product.