Advertising and Sales Promotion Solved Question Paper May' 2019, Dibrugarh University B.Com 6th Sem

Advertising and Sales Promotion Solved Question Paper May’ 2019

COMMERCE (Specialty)

Course: 602 (Advertising and Sales Promotion)
Time: 3 hours
The figures in the margin indicate full marks for the questions
(New Course)
Full Marks: 80
Pass Marks: 24

1. Answer the following as directed:              1x8=8

a) Advertising is (Choose the correct option)

1. Personal

2. Non-personal

3. None of the above     

b) Advertising started in (Choose the correct option)

1. Japan

2. Germany

3. Egypt     

c) Drug addiction advertising is (Choose the correct option)

1. Rational

2. Public service

3. Emotional       

d) Media scheduling is not required in media planning.              (Write True or False)

Ans: False

e) The success of an advertisement to a great extent depends upon advertising appeal.    (Write True or False)

Ans: True

f) “Smoking is injurious to health” is a positive appeal.         (Write True or False)

Ans: True

g) In order to have an effective media plan, media testing is (Choose the correct option)

1. Unnecessary

2. Necessary

3. Wastage of time

4. None of the above             

h) Financial advertising is conducted by (Choose the correct option)

1. Business institutions

2. Financial institutions

3. Commercial institutions

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2. Write short notes on any four of the following:           4x4=16

a) Benefits of advertisement

Ans: Advertising is an indispensable part of the marketing strategy of any product or service. A proper advertisement has a great impact on the sales of the product. Advertising is the most important tool in the marketing of products and services. Companies all over the world universally accepted this fact. Some of the important benefits of advertisement to various section of the society are listed below:

a)       Communication with Customers: The main function of advertising is to communicate with consumer’s area to increase the sale of products and services and economy expands, the manufacturer should get profits. 

b)      Contribution to economic growth: Advertising contributes to economic growth to expand the market and market segments for new products. Company invests in research and development to develop a new product and how to increase their purchasing sales. 

c)       Persuasion: Advertising is to influence the opinion of the customers to buy a product/service. The planned persuasion is to agree the customers to purchase our products in a satisfaction manner. 

d)      Catalyst for Change: Creativity in advertising leads to the discovery of new relationships can change the perception. The originality of message communicated and eventual effect on consumer’s standard of living. The ability of changes can from originality innovation and imagination of advertising. 

e)      Stimulates demand: Inform the consumers about the availability of product in the market. The general agreement of advertising has some effect on aggregate consumption. 

b) Truth in advertising

Ans: Ethics and truth in Advertising

Ethics means “Good Conduct” or “Conduct which is right in view of the society and the time period”. By common consent, various modes of behaviour and conduct are viewed as “good” or “bad”.

In other word, we can say that Ethics are moral principles and values that govern the actions and decisions of an individual group. Ethics is a choice between good and bad, between right and wrong. It is governed by a set of principles of morality at a given time and at a given place and in a given society. Ethics is related to group behaviour in ultimate analysis, thus setting norms for an individual to follow in consistence with the group norms.

A particular action may be within the law and still not be ethical; Target Marketing is a good example for this. There is no law to restrict tobacco companies from promoting their brands to Africans & American, though it is in India but for Doordarshan only. Similarly, the alcoholic – beverage companies promote their brands & target not only college students but underage drinkers as well. These advertisements have increased alcohol related problems. Advertisements exposing pornography is another serious issue in advertising industry today. Advertisements promoting permissiveness & objectifying women are heavily criticized in the society.

Therefore, even advertising has ethical value. The mixing of Art and facts in advertising communication are subservient to ethical principles. In today’s competitive and buyer’s market, an advertisement has to be truthful and ethical. If an advertisement is misleading, the credibility of the organization is lost. To view the truth in advertisement, it has to be seen from to consumer’s point of view rather than from legal point. The advertising industry has been frequently criticized for putting out misleading or exaggerated claims in respect of product, goods and services advertised. It is also perceived as guilty of glorifying certain habits or tendencies regarded as undesirable and encouraging consume rest culture. However, it is very difficult to demarcate a clear line of difference between what is true and what is untrue. But the advertisement as such is judged by its impact, and by its acceptance by the consumers. The product must fulfill its advertised claims.

c) Product advertising

Ans: Product advertising: A normal characteristic of advertising is to create primary demand for a product category rather than for a specific brand. It is wrongly believed that product advertising must stress on brand name. This is based on the feeling that a good image often enhances the effectiveness of product advertising. However, in practice, most companies are successful in building the product image by using the brand names (e.g., Dettol, Horlicks). In short, when the company tries to sell its product or services through advertising it is referred to as product advertising.

d) Advertising language

Ans: Advertising language is the key for the success of advertising. The advertiser must take into consideration that the language of advertising must be simple. The audience is not testing the language proficiency of the advertiser so he is not impressed by the use of fancy and literary words. The audience prefer simple language but unambiguous. Also, the advertising language must be appropriate to defined target audience and must not destroy the dignity of the language.

One of the major complaints against advertising is that the advertising copy is too breezy, too casual i.e. improper. It is believed that the advertisements have destroyed the dignity of the language. The research on advertising shows that consumer’s better responds to the simple and down to earth language than to the more dignified & formal copy. A successful copy is that which is descriptive, colourful and pictures are as warm, human & personal.

e) Demonstration

Ans: Production demonstration is a tool used for the promotion of new product or an existing product amongst the potential buyers. It is a most effecting tool in indoor and outdoor advertising. Demonstration can be given in the form of videos in indoor advertising and in the form of trade fairs and exhibition in outdoor advertising. Trade fairs and exhibition constitute an important vehicle of outdoor advertising. Exhibition is a huge gathering of manufacturers for the purpose of displaying, demonstrating and booking orders for their latest products. Exhibitions are usually organized by the trade association and chamber of commerce. The main aim of these exhibitions is to attract dealers and consumers towards the latest products in the line by giving detailed information and demonstration of the product. The success of these exhibitions and trade fairs depend to a large extent on sound preplanning and planning as to its size, design of exhibition spot, technical and sales staff, sales literature and the display and demonstration styles adopted.

f) Window dressing

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3. (a) Define the term ‘advertising’. Explain the different types of advertisement.    2+12=14

Ans: Advertising: When a marketer or a company develop a product to satisfy market demand after carefully analyzing the market, there comes a need for establishing contact with the target market to sell that product. Moreover, this has to be a mass contact so that the product may get maximum exposure to large number of people. The best way to reach the mass market is through mass communication. Advertising is one of the means of such mass communication along with other means, which may or may not using mass communication, like publicity, sales promotion, public relations.

The word ―” advertise” comes from the Latin word "advertere” meaning ―to turn toward" or ―to pay attention”.

Advertising is an impersonal form of promotion that is directed towards the public at large and is paid for. It is a communication tool used to influence or persuade specific group of audience to take a desired action during a particular period.

 It has been defined by various authors as: +

Philip Kotler, “Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services through mass media such as newspapers, magazines, television or radio by an identified sponsor”.

According to American Marketing Association advertising is any paid form of non-personal presentation of ideas, goods or services through an identification sponsor.

Types of Advertising

The various types of advertising are discussed below:

1) Print Advertising: The print media has been used for advertising since long. The newspapers and magazines are quite popular modes of advertising for different companies all over the world. Using the print media, the companies can also promote their products through brochures and fliers. The newspaper and magazines sell the advertising space and the cost depends on several factors. The quantity of space, the page of the publication, and the type of paper decide the cost of the advertisement. So advertising on the front page would be costlier than on inside pages. Similarly advertising in the glossy supplement of the paper would be more expensive than in a mediocre quality paper.

2) Broadcast Advertising: This type of advertising is very popular all around the world. It consists of television, radio, or Internet advertising. Advertising on the televisions have large audience and are very popular. The cost of the advertisement depends on the length of the advertisement and the time at which the advertisement would be appearing. For example, the prime time ads would be costlier than the regular ones. Radio advertising is not what it used to be after the advent of television and Internet, but still there is specific audience for the radio ads too. The radio jingles are quite popular in sections of society and help to sell the products.

3) Outdoor Advertising: Outdoor advertising makes use of different tools to gain customer ‘s attention. The billboards, kiosks, and events and tradeshows are an effective way to convey the message of the company. The billboards are present all around the city but the content should be such that it attracts the attention of the customer. The kiosks are an easy outlet of the products and serve as information outlets for the people too. Organizing events such as trade fairs and exhibitions for promotion of the product or service also in a way advertises the product. Therefore, outdoor advertising is an effective advertising tool.

4) Covert Advertising: This is a unique way of advertising in which the product or the message is subtly included in a movie or TV serial. There is no actual Advertising, just the mention of the product in the movie. For example, Tom Cruise used the Nokia phone in the movie Minority Report.

5) Public Service Advertising: As evident from the title itself, such advertising is for the public causes. There are a host of important matters such as AIDS, political integrity, energy conservation, illiteracy, poverty and so on all of which need more awareness as far as general public is concerned. This type of advertising has gained much importance in recent times and is an effective tool to convey the message.

Or

(b) Discuss the various legal provisions of advertisement to be followed by an advertising agency.            14

Ans: Legal Aspects of Advertising

Advertising has a responsibility within our economic system to provide information on new and existing products and services. Most of what is purchased is advertised. Thus, the economic and social well-being of the buyer and other competitors is affected if the advertising is full of false claims and misleading statements. The results can be misallocation of resources, disappointment of the customers, injury to the health of the buyers and unhealthy and damaged competition. In view of above, two schools of thoughts present their idea of regulation of advertising. One school advocate government intervention and legislation in regulating the advertisement professions. The second school feel that advertising profession should self-regulate itself by following ethical values.

Regulatory Authorities in India:

There have been increasing efforts to protect the public interest by regulating the content and the influence of advertising. Some examples include restrictions for advertising alcohol, tobacco or gambling imposed in many countries, as well as the bans around advertising to children, which exist in parts of Europe. Advertising regulation focuses heavily on the veracity of the claims and as such, there are often tighter restrictions placed around advertisements for food and healthcare products. A number of institutions are involved in regulating advertising:

1) Self-regulation by the industry

2) Regulation by the government

1) Self-regulation by the industry: In 1985, the Advertising Standards Council of India (ASCI) was established as an independent body under Advertising Agencies Association of India (AAAI). ASCI created a code of advertising practices known as ASCI code. All advertising agencies and all media channels are expected to follow this code.

ASCI Codes:

a) Ensure Truthfulness and honesty

b) Advertisements should not be offensive

c) Safeguards against promotion of hazardous products/services.

d) Observe fairness in competition.

Complaints can be made by any person or group or department against the advertiser for false, misleading, unfair or offensive ads. Independent consumer’s complaints council evaluates the complaints. Public pressure groups and consumer protection group also exist. However, consumer boycott is the best form of self-regulation.

2) Regulation by the government: Various laws are framed to regulate the advertisements. Competition Commission of India (CCI) looks after the issues of unfair competition and trade practices. Some laws are listed below:

a) IPC’s provisions governs obscenity and vulgar contents.

b) The Young Persons (Harmful Publications) Act 1956

c) The Emblems and Names (Prevention of Improper Use) Act, 1950

d) The Incident representation of Woman Act, 1986.

Several other laws cover aspects like magic remedies, human organ transplants, cigarettes and tobacco products, cable TV network and more govern advertisement representations. Various laws were enacted to govern changes – Like radio, Televisions, Cable Network, etc.

4. (a) What is mean by media planning? What steps are involved in media planning? Explain them.   4+10=14

Ans: Advertisers and advertising agencies believe that customers have needs and desires, which can be fulfilled through the purchase and use of products and services. Advertising works largely through appeal of emotions of envy, fear, anxiety, about one’s appearance and lack of status. It is widely assumed that advertising works if the AIDCA formulas are followed. The formula sums up the principles of advertising. The name of the formula is derived from the initial letters of the words: Attention, Interest, Desire, Conviction and Action. The formula suggests that the attention and interests of the customers must be gained first before the process of stimulating desire, imparting conviction and urging action in advertisements can bring about a change in the buying behaviors.

The Attention part is the banner or headline that makes an impressive benefit promise. Interest builds information in an interesting way, usually meaning that this must relate closely to the way that the reader thinks about the issues concerned. If you seek a response you must move then to create Desire, which relates benefits to the reader so that they will want them. Finally, you must prompt an Action, which may be to call a telephone number or to complete and send of a reply coupon. Advertising that does not prompt action is a wasted opportunity. The Planning process of Advertisements Campaigns include the following activities:

1. Situation Appraisal: Before planning any activity, one requires relevant information regarding the situation. For planning an Ad campaign, we require information about the target market or consumer, the company or product and the competition. The three important research areas are:

a)       Consumer research and market research

b)      Product and company research

c)       Competitive research

2. Situation or SWOT Analysis: (analyzing strengths, weakness, opportunities and threats) From all the information collected, campaigns planners find out the strengths of the product. These strengths could be in any area. The strength often leads to new opportunities to be explored. Weaknesses make the product vulnerable to threats from others.

3. Structural or Strategic Planning: Advertising is an art and a science. While the art comes from writing, designing and producing exciting advertisements, the science comes from scientific methods of research and strategic planning. Strategic planning is the process of making intelligent decisions. It starts with finding out what to do, deciding how to accomplish the objectives. It also decides whom to address (the target audience), how to distinguish the product, how much to spend (budgeting), and how long to run the campaign.

4. Creative Planning: It includes developing a theme, the creative strategy and finally deciding the creative tactics. The theme needs to be a strong concept to be able to hold all these different and diverse ads together. A powerful theme brings about ‘synergy’ to the campaign. A theme must always relate to and reflect the campaign objectives. Another step of creative planning is finding the creative strategy. The creative strategy outlines the impressions the campaign wants to create. Some common creative strategies are:

a)       Generic Strategy- this is used by market leaders who ignore the presence of competitors

b)      Pre-emptive claim strategy- here the brand is the first to pick up a particular feature. In the minds of the people, it becomes associated with that brand.

c)       Unique selling proposition (USP) strategy- here the campaign talks about some features, which is unique to that advertised brand and is not available in others.

d)      Brand image strategy: when there are no strong differentiating features among the competitors, then branding try and create images.

e)      Product Positioning- sometimes products or brands are positioned different from competing brands.

5. Media Planning- the ultimate goal of advertising is to reach the target audience with the advertising message. Thus, the major decisions in media planning, which needs to be taken, are:

a)       Which media to be used?

b)      Where to advertise (geographic region)?

c)       When to advertise (timing and scheduling)?

d)      How intense the exposure should be (frequency)?

Media planning is a ‘behind the scene’ part of advertising. It plays an integral role in merging the science of marketing with the art of advertising. A media planner has to find out about the availability of various media, the media rates, their reaches and also analyze their effectiveness.

Or

(b) Explain the different factors affecting in the process of selection of an advertising media.             14

Ans: Media Planning & Selection and Factors Guiding Media Selection

Selection of a suitable medium for advertising is really a complex problem to the advertiser. There are a number of kinds and classes of media in the modern advertising. Hence, the advertising media selection means not only the choice of the right classes of media out also the individual medium within the class or classes. Besides there is no single medium that is best suited for all advertisers. In reality, a medium which is best suited for one may be almost useless for another. The medium once employed for advertising a particular product itself may be found unsuited subsequently. Therefore, the right choice of a medium calls for a careful analysis. If the medium is unsuited the whole amount of money spent on the advertising campaign shall turn to be a waste. The advertiser, therefore, while selecting the media, should consider the following factors:

1) Class of the audience: Firstly, the advertiser must note the class of the audience to be influenced by the medium. The audience can be classified into different groups by their social status, age, income, educational standard, religion, cultural interests. They may also be divided into men and women.

2) Extent of coverage: Secondly, the advertiser must consider the number of audience to be covered by the medium. Every media has a general as well as an effective circulation. The general circulation is made up of the total number of people who read or subscribe to the media. The effective circulation is the number prospective customers who read it and the number of those who influences sales, though they may not buy for themselves. Effective circulation must be considered while estimating the number of people to be covered. The extent to which the medium reaches the same audience as that covered by some other media i.e., the percentage of over-lapping must also be taken into account.

3) Nature of the product: Nature of the product itself is a principal factor governing the selection of the medium. Products can be classified into various kinds – consumer ‘s products and manufacturer ‘s products etc.

4) Nature of the competition: The nature of the competition has greater influence of the selection of the media. If the competition is stiff utmost care is needed in the selection of medium and a larger advertising budget is also required. In many cases, where the advertising copy is similar or the choice of the media solely determines the effectiveness of the campaign as compared with that of the other competitors.

5) Reputation of the medium: Newspapers and magazines can offer a beautiful illustration for the reputation of the media. There are a few newspapers and magazines which have international reputation with a high readership. Advertisements in such magazines and newspapers are generally recognized and believed as true. Such advertisements also add prestige to the product.

6) Cost of the media: Cost of the medium in most cases, is an important factor in the selection of the medium. Advertisements in certain media are expensive, for instance, TV and Radio advertisements. Magazines and newspaper advertisements are generally considered as less expensive. Yet, certain magazines and newspapers, having larger circulation and high reputation charge higher rates. The rates also differ depending upon the space occupied and the preferential positions. The first page of a newspaper is rarely missed by the reader. Hence they have more attention value, than the advertisements presented anywhere inside the newspaper.

7) Time and location of buying decisions: The location of the audience and the time by which it should reach them must also be looked into. This consideration also enables the advertiser to keep his retail outlets in the proximity of the customers.

8) Trade Acceptance: The degree of acceptance that a medium can generate among the advertiser’s intermediaries such as wholesale and retailers would generate more favourable effect. Accordingly, the message and the media should be such that these intermediaries are enthusiastic about it. For example, an advertisement placed in a trade journal which is popular among intermediaries will have a positive effect on them which would in turn be carried to consumers.

5. (a) What is an advertising appeal? Explain the principles of effective advertising appeals.             4+10=14

Ans: Introduction to Advertising Appeals

An advertising appeal is the device by which specific consumer response is solicited in the advertisement. It is the basic use of service or satisfaction which the product can render and which the advertisement is to present. An appeal in an advertisement, is an earnest request or plea to prospects. Every advertise aims to appeal to the prospects whether he succeeds or not in achieving his goals. In that sense, every piece of advertisement is an appeal – telling the story of his with reasons as to why a prospect should prefer his products to those of his competitors.

Classifications of appeals: Prof. William, M. Weilbacher of New York University classifies these advertising appeals into three clear categories:

1.       Product/service related appeals,

2.       Consumer related appeals, and

3.       Non-consumer or non-product related appeals. Let us try to have a clear cut idea as to each of these appeals with the help of day-to-day examples.

Principles of Effective Advertising Appeals

An advertising appeal - sincere request or a plea to prospects-to serve the purposes of advertising, must have certain requirements which can be called as the tenets or the essentials. There are at least six such essentials to be fulfilled by an effective appeal.

1.       It is communicable: An advertising appeal is communicable; the prospect must understand the message to be conveyed by the advertiser. On several occasions, it so happens that we mean something but say something else. There is a gap between what we say and we mean. A scientifically communicated appeal is the same as what prospect perceives as intended by the advertiser.

2.       It has a good theme: Substance of an advertisement constitutes its theme. A piece of advertisement can communicate effectively if it has anything worth communicable. It should be noted that mere words may not serve the purpose for they may not be backed by meaning. Every good advertisement appeals, because it has a theme – a story – rather interesting story at its command. A good appeal is backed by good theme.

3.       It is interesting creating: The prospects evince interest in the advertisement only if it is appealing to their mind and it is appealing provided it stirs his imagination and makes him to show his interest. The prospects interest depends on the way the appeal is made. An appeal should speak of the features and benefits of the product in a novel way.

4.       It is believable: The theme so presented must be believable. Incredible and fantastic claims made can only produce negative results. Such an attempt will only frighten and caution them. A matter which is intended to be believed, if doubted will fail to persuade the prospects. Therefore, it can be said that every advertisement is a story but not a fiction, because fiction is a story engineered but a story is real and is factual narration.

5.       It is complete: A good appeal is complete but not superfluous. In order to make an appeal very effective, the advertisement must tell everything about the product, producer and the dealer to make the prospect to commit for purchase. At the same time. It should not burden the prospect with unnecessary information. Such a superfluous information is likely to blunt the process of decision-making – much against the interests of the advertiser.

6.       It is true: The appeal made must be true. While giving the features, merits or benefits, there should not be the attempt of mispresenting or exaggerating the facts. Over-stretched or over-polished appeals are likely to create doubts in the minds of prospects. Truth, here implies – what product is, what it does – without attacking the competitive products. Truth also means her commercial honesty.

Or

(b) What are the basic elements of an advertising copy? Explain.           14

Ans: Advertisement Copy/Layout and Its elements

An advertising copy is the means by which the advertiser’s ideas are given expression to in a message to readers.  Regardless of its length and brevity copy refers to all the reading matters of an advertisement, including the headline, sub- headlines, text or body, and the name of the firm or the standard initials of the advertiser.  As we have seen that advertising has so many immediate purposes but its ultimate goal is to stimulate sales.  As a reader turns the pages of a magazine or newspaper, he notices so many advertisements but a great variation in copy.  Some copy may be so sticking that the reader takes immediate action and rush to the nearest dealer to purchase it while there may be some other copy or copies that he does not like or it does not click to his mind.  The first copy conforms to the requisites of a good copy.  A copywriter must take pains in making up a sound advertisement copy containing its various components i.e. headlines, subhead lines, illustrations etc.

The following are the main components of an advertisement copy:

1. Background: The background for the advertisements should be somewhat catchy and colourful. The arrangement of background differs from medium to medium and advertisement to advertisement. In short, background should be suitable for the contents of the advertisement.

2. Border: It is defined as the frame of the advertisement. Border is employed to impart the reading atmosphere. The border may be light or heavy, obvious, plain or fanciful. The border may also contain a logo.

3. Caption: It refers to the subtitle. But in most of the advertisement it is converted into heading or sub-heading.

4. Coupon: Coupon is that part of the advertisement which is intended for the convenience of the prospective customer in communicating with the advertiser. The coupon must contain the name and full postal address of the firm followed by the offer. The offer should be brief and clear. There should be space for name and address of the prospective customer. The usual shape of the coupon is triangular or rectangular.

 5. Decoration: Advertisement decoration is the ornament of the advertisement. This is done to emphasis the advertisement message.

6. Heading: The heading or headline is defined as the title of the advertisement. The words in the heading should be short.

7. Illustration: Illustrations are the part of layout that pictures the basic theme of the advertisement. It has the power to capture the attention of the reader. The advertisements become richer by the use of illustrations.

8. Mascot: It is known as the trade character or trade figure. It is an illustration of either a real or an imaginary figure or personality given in the advertisement.

9. Name Plate (logo): The name plate or name block is the signature of the advertiser. It represents the personality of the company and its product.

10. Price: It is another part of layout. The price of the product should be featured clearly. The price is usually taken in the concluding lines of the copy.

11. Product: It refers to the representation of the product offered for sale. A very popular practice is to show the product in use with illustrations.

12. Slogan: Slogan is a sales argument. The arrangement of slogan in the layout is determined by the importance of its relation to the advertising message.

13. Space: Space refers to the entire space left in the space hired by the advertiser. This depends on the design of the copy.

14. Subheading: It is a secondary heading. It is given to support the heading or to pick out the various selling points given in the text.

15. Text: Text or body of the advertisement refers to the general reading matter. It is the subject matter of the copy. It should be neither too wide nor too narrow.

16. Trade mark: It is a word or design by which a product is defined. If the trade, marks are registered it can be included in the layout.

6. (a) What meant by an advertising agency? Discuss the various functions of advertising agency.        4+10=14

Ans: Advertisement Agency: The advertising agency is a profession organisation of specialists operating under a system created by advertising media, to which the advertiser entrusts drawing up and carrying out of his advertising plans. Advertising agency is a service organisation which has come to be accepted as a professional body that undertakes planning and preparation of advertising, it has emerged out as a highly specialized marketing institution. It is a firm specialized in advertising that provides counsel relating to advertising and allied operations of its clients and actually prepares, buys, space and time for and places a large part of advertising of its clients.

An ad agency has a vital role to play. It converts the goals of the client into creative work which is carried by the media so as to reach the target audience. There are hundreds of agencies in India. Most of them are located in the four metros, Mumbai, Chennai, Kolkata and Delhi. Mumbai is the main point of Indian advertising industry, where most of the bigger agencies are located. Advertising agencies have now spread to emerging metros like Bangalore, Hyderabad, Pune, Ahmadabad, etc.

Role & Functions of Advertising Agency

Advertising agency performs following functions

1)      Contacting Clients: Advertising agency first of all identifies and contact firms which are desirous of advertising their product or services. Ad-agency selects those firms which are financially sound, makes quality products or services, and have efficient management.

2)      Planning Advertisement: Advertising agency's next function is to plan ad for its client. For ad planning following tasks are required to be performed by ad-agency:

a)       Study of client’s product to identify its inherent qualities in relation to competitor’s product.

b)      Analysis of present and potential market for the product.

c)       Study of trade and economic conditions in the market.

d)      Study of seasonal demand of the product

e)      Study of competition and competitor’s spending on advertising.

f)        Knowledge of channels of distribution, their sales, operations, etc.

g)       Finally, formulation of advertising plan

3)      Creative Function: Creative people like - the copywriters, artists, art-directors, graphic-specialists have to perform the creative function which is most important part of all advertising function.

4)      Developing Ad-Copy: Ad-agency with the help of their writers, artists, designers, animators, graphic-designers, and film-directors prepares and develops Ad-copy.

5)      Approval of Client: Ad-copy is shown to the client for his approval.

6)      Media Selection and scheduling: It is very important function of ad-agency to select appropriate media for its clients. Ad agency has to consider various factors like- media cost, media coverage, ad-budget, nature of product, client's needs, targeted customer, and etc. while selecting media.

7)      Ad-Execution: After approval, verification, and required changes, the ad-copy is handed to the media for ad-execution.

8)      Evaluation Function: After execution, it is the responsibility of ad-agency to evaluate the effectiveness of ad to know how beneficial the ad is for its client.

9)      Marketing Function: The advertising agency also performs various marketing function like- selecting target audience, designing products, designing packages, determining prices, study of channel of distribution, market research, sales promotion, publicity, etc.

10)   Research Function: Ad-agency performs various research functions like- research of different media, media cost, media reach, circulation, entry of new media, information regarding ratings, and TRP's of TV programmes, serials.

Or

(b) Explain the different factors required to be considered at the time of selection of an advertising agency.       14

Ans: Points to be taken into consideration while Selection of Advertising Agency

While selecting an advertising agency, the importance of compatibility should be borne in mind. An agency takes a long time to grasp the problems and accumulate the facts that are necessary for the smooth functioning of a client. Though this investment period is long, it pays rich dividends. Therefore, an agency should not be frequently changed, for that results in repeated wastage of the investment period leading to a lowering of the effectiveness of advertising.

The agency should be told that the client is theirs only so long as their services are of the highest quality standards ensuring rich dividends. The agency should understand the need for the advertising to sell a product and that advertising is salesmanship in print, sound and action. The agency should understand the importance of creating and developing a long term brand image of the product.

In fact, selection of right agency goes a long way in determining the success or failure of a product/brand name/company image. The selection of wrong agency can prove to be very costly. Therefore, a logical approach to selecting an agency would be to establish a selection criterion and evaluate short listed agencies on that basis. Some of the factors that can be part of selection criterion are as follows:

(a) Suitability of the agency from advertiser’s view point: The suitability of the agency can be evaluated from following angles:

                     i.Competing products: If an agency has already another client with the same or similar product, then it would be advisable to select some other agency to avoid conflict of interests.

                   ii.Agency size and location: Large advertiser having large advertising budget prefer to go to large agency as they feel large agencies have more specialization and expertise. Similarly, large agencies have a preference for large budget advertisers as these small clients are not profitable.

The nature of agency client relationship requires frequent communication. Therefore, the proximity of agency to the client is desirable. However, if the advertiser needs to promote the product in different geographic areas, it may select network agency.

Some experts advocate using service of smaller agencies if the advertiser needs closers and personalized services.

(b) Agency skill and facilities: Some agencies are known for their skill in advertising consumer goods while others may have perfection in legal advertising. Accordingly, it would be better for the advertiser to know the area of specialization of the agency so that the same knowledge can be applied in choosing an agency is known for its innovation or problem solving capabilities the advertiser may decide in its favour.

(c) Length of time the agency has been in business: The longer an agency has been in business, more would be its experience and expertise in handling diverse issues and more stable it is expected to be and stable agencies are more reliable.

(d) Agency’s financial position: The agency should be financially sound and should be able to cover both local and national advertising campaign. A financially weak agency will be spending more time in solving its own problem than working on the advertiser’s campaign. Moreover, poor financial conditions of the agency indicate poor planning and execution of the campaign and lack of stability.

(e) Agency’s client turnover ratio: Analysing the list of client of the agency would help the advertiser know how many old clients left the agency and how many new clients were acquired during the past say 2-3 years. The reasons for the lost clients may highlight some of the weaknesses the agency may possess which would affect advertiser’s decisions to choose the agency.

(f) Agency’s method of payment: As there are various methods of agency compensation the advertiser must discuss them before entering the contract. The method whether fees based or commission based or otherwise must be discussed and decided in details so that there is no misunderstanding afterwards at the time of payment.