Wednesday, 26 August 2020

Objectives of Advertising (A&BM 19Aug2020)

Objectives of advertising:

Advertising programme as an integral part of the promotion campaign may have one or more of the following specific objectives:

1. Preparing Ground for Sale of New Products:

Whenever a new product is introduced in the market, advertising becomes necessary for informing potential consumers about the product. In this way, advertising can be used for preparing ground for sale of new product.

For achieving this objective, various mass media like radio, television and cinema are used by the advertisers.

2. Increasing Demand for the Product:

Another objective of the advertising is to increase the demand for the product. Advertising helps in creating a favourable atmosphere for maintain or improving sales of the product. By means of the advertising prospective customers may be induced to buy a particular product by informing them about comparative quality price and other attributes of the product. Thus, changing the habits of the consumers so as to shift from a rival product.

3. Educating the Consumers:

One of the basic objectives of every advertising is to educate the consumer and the users about the uses and utilities of the product. This helps the consumers and users in making good choice.

4. Building up Brand Image:

Another objective of advertising is to build up brand image and brand loyalty towards the product. This objective is achieved through constant and repeated advertising about the brand.

5. Facing the Competition:

One of the basic objectives of advertising is to help the marketer to face the existing competition effectively and efficiently. The marketers inform the consumer about the price, quality and availability of product through advertising.

6. Supplementing the Salesman:

The objective of advertising is also to assist the salesman’s efforts in increasing the sales of the product. By means of educating customers about the product, advertising reduces the work load of the salesman for selling the product.

7. Promotion of New Product:

Advertising can make prospects at least aware of the entry of the new product in the market.

8. Support to Personal Selling:

Advertising can move the prospect nearer and nearer to the point of purchase. Under favourable atmosphere, salesman’s job is easier and simple. Actual closing of sale is, thus, facilitated by advertising. Selling costs are reduced incidentally. It should be noted that advertising and salesmanship are really complementary and in no way competitive tools of promotion.

9. Brand Patronage:

In the long run, effect of advertising on brands and campaigns may be of great importance. The advertising programme can aim at consumer awareness and attitudes. Buyers may be induced to purchase and re-purchase. If the trial is satisfactory, consumers may stick with the brand. Thus, advertising tries to create and retain brand preference and brand loyalty.

10. Immediate Buying Action:

Advertising may attempt to obtain immediate buying action. For instance, mail order advertisement, direct-action retail advertisement, price-deal offers, last-chance offers are special advertisements persuading prospects and securing prompt actions. Direct mail is the usual medium for coupons, samples, and other forms of direct action advertising.

11. Pre-Sold Goods:

Well-advertised brands are pre-sold goods. Buyers are pulled by such advertisements. Supermarket advertisers pull customers and goods are sold without active help of counter sales force.

12. Dealer Support:

National or big firms advertise extensively and intensively to support dealers and distributors so that they can assure accelerated distribution. Advertising alone can create mass markets for products which are intrinsically sound and can easily fill the customers’ needs and desires. Mass marketing brings about reduction in the cost of production as well as cost of distribution.

 

Summery

Objectives of Advertising

The various objectives of advertising may be stated as follows:

1. To announce the introduction of a new product.

2. To motivate the buyers to buy.

3. To create demand for the product.

4. To achieve an immediate sale.

5. To announce certain concessions to buyers like discount, price cut, gift etc.

6. To popularize the brand name and to secure brand loyalty.

7. To support the activities and efforts of the salesmen.

8. To build up image for the business.

9. To achieve a higher market share.

10. To inform product modifications and alterations to the buyers.

11. To explain how the product works.

12. To counter the competitors’ strategies.

13. To promote sale during off-season.

14. To maximize sale during festival season.

15. To remind the buyers about the company and its product.

Objectives of the advertis­ing:

(a) To make an immediate sales.

(b) To build primary market.

(c) To introduce a price deal.

(d) To inform about a product.

(e) To build brand recognition or brand insistence.

(f) To help salesmen by building an awareness of a product among retailers.

(g) To create a reputation for services, reliability or research strength.

(h) To increase market share.

(i) To modify existing product appeals and buying motives.

(j) To inform about the availability of new products or features or price.

(k) To increase the frequency of use of a product,

(l) To increase the number or quality of retail outlets,

(m) To build overall company image,

(n) To effect immediate buying action.

(o) To reach new areas or new segments of population within existing areas, and

(p) To develop overseas. 

Kinds of advertising (A&BM 19Aug2020)

Kinds of advertising

1. Product advertising

Most business houses try to sell their products and services through advertising. The need for product advertising arises mainly because the business has to create demand for its products. This is being done through a public medium like newspapers, television or radio by means of an advertisement.

The advertisement may appear in a visual form with the picture of the product together with its features explained (in the case of newspapers and magazines). It may also appear in the form of oral presentation of the product idea (in the case of radio advertisement) or in both visual and oral forms (as in the case of television advertisement) and Digital.

Such advertisements speak not only about the product but also stress the brand. Examples are Vicco Turmeric Cream, Cock brand crackers, Double-Deer Basmati rice, etc.

2. Institutional advertising

Here, the focus is on the company and its services. Such an advertisement is not intended for the consumers alone. It may also be meant for various other groups like the shareholders, creditors, suppliers and so on. The goal of such an advertisement is mainly to boost the image of the concern. It may also be used to make an offer or an announcement

Example: There may be an offer to the suppliers of materials to submit price-quotations. The advertisement may also announce the date and time of the Annual General Meeting of the company.

3. Competitive advertising

In this case, the goal of advertisement is to show the superiority of one product over the competing products. Such an approach is resorted to when there is cut-throat competition in the market. The advertisement stresses on brand name, product quality, price and the company image. Eg. Different tooth paste ads and different hair oil ads.

4. Comparative Advertising

Here, the marketer highlights the comparative features of the competing products. Such advertisements are quite common these days and also have become a matter of controversy. Car, motorcycle and television manufacturers adopt such an approach.

Example: The comparative features of different car models are often advertised by the manufacturers. In the same way, the comparative advantage of two-wheeler are advertised. The advertiser invariably claims that his product alone is superior.

5. Collective or Cooperative advertising

Certain products are jointly advertised by the manufacturers and dealers together. Such an advertising is what is known as collective or co-operative advertising. The manufacturers of car, motorcycle and TV also use such an approach. Eg. Premson Motors, Ranchi

6. Non-commercial advertising

Advertisements for non commercial purpose are brought out by charitable organizations mainly to secure financial help from philanthropists. Organizations like NGOs solicit financial help from generous people, particularly during festival times, for the benefit of the inmates.

7. Primary Demand Advertising:

It is intended to stimulate primary demand for a new product. It is heavily utilised during the introduction stage of the product life cycle.

8. Shortage Advertising:

When there is short-supply of products shortage advertising is resorted to. Example- oil crisis. In such kind of advertising, new promotional objectives may be incorporated such as-

(a) Educating the people about the most economic use of the product.

(b) Making appeal to save resources.

(c) To reduce customer pressure on the sales force.

9. Co-Operative Advertising:

When manufacturers, wholesalers and retailers join and share the expenditure on advertising it takes the form of co-operative advertising. Such advertising would carry the names of all the parties involved. From the point of view of the customers this is beneficial as they get the articles directly from the authorised outlets.

10. Commercial Advertising:

It is also termed as business advertising. Such advertising is only meant for affecting increase in sales.

Usually the following forms of commercial advertising are recognised:

(a) Industrial advertising — this is exclusively meant for selling industrial products.

(b) Trade advertising — advertising relating to a trade.

(c) Professional advertising — undertaken by professionals like doctors, accountants, etc.

(d) Farm advertising — exclusively used for selling farm products such as fertilisers, insecticides, farm implements etc.

11. Direct Action Advertising:

Advertising that stresses and persuades immediate buying of the product is known as Direct Action advertising. Direct mail advertising is capable of achieving immediate action to a greater extent. 

Scope of Marketing Indian products abroad (IM 25 Aug 2020)

Scope of Marketing Indian products abroad

The potential for international marketing is enormous for Indian firms. The fast expansion of the international business, as indicated by the current statistics available from appropriate sources is an indication of this. The scope of international business for developing countries is amply demonstrated by the rapid strides made by several developing countries like South Korea, Taiwan, Hong Kong, Singapore and People’s of Republic of China. India’s performance, in comparison with these countries has been very poor. Developing countries like South Korea with very good economic performance has such well known multinationals like Hyundai, Daewoo, Samsung, LG, which are making inroads into India whereas India with its massive size and diverse resource base and which has a longer history of industrialization can hardly boast anything of that sort.

The rapid strides made by several other developing countries in the international market, and trends of the growing economic power of the developing countries described earlier are indication of the enormous global business opportunities which Indian firms could exploit.

A look at some of the successful Indian example, covering products ranging from bullock cart technology to high-tech would indicate the strategies Indian firms may employ to seize the various opportunities.

Product modification to suit the requirements of the foreign markets will enable international marketing of many products by Indian firms. Examples include TI cycles. Hero cycles, TTK pressure cookers etc.

Another international marketing opportunity which a number of Indian firms may avail of is the one provided by the vocation of certain industries / segments of the market in the developed countries by the large players as they become unattractive for them. For example, several dominant firms have vacated the ply tire segment in the developed markets as this segment has shrunk due to the popularity of radial tires. Similarly developed country firms have given up several chemical products due to various reasons.

There are enormous international marketing opportunities for developing products that suit the specific markets. The Balsara, for example, developed a herbal toothpaste, brand named Auromere to take advantage of the growing preference for nature based products in the USA. Balsara has R&D scored a unique advantage when Auromere was developed as saccharine free toothpaste. The company expanded its market by introducing other variants of mint and menthol. These were taboo for users of homeopathic medicine and therefore it introduced a toothpaste free of such mints. Other variation include Auromere Fresh Mint for the young and Auromere Cina Mint, containing a combination of cinnamon and peppermint.

Indian firms with products of acceptable quality may explore the foreign markets. The Pricol, supplier of dashboard instruments to Maruti, thus entered the US market in a small way and today it is an international player. The Sundaram Fastners, which was adjudged as one of the 20 best Asian companies, is a highly reputed global supplier of automobile parts like radiator caps to dominant players like General Motors. There is enormous opportunity to take advantage of the growing global sourcing. The growing foreign investment in India and development of quality consciousness in Indian firms will encourage the growth of an ancillary sector of quality products and thus enlarge the Indian base for global sourcing.

Firms which are suppliers to foreign firms or whose products are sold under foreign brand names may explore the possibility of selling their own products under their own brand names.

There are a number of products in which the developing countries have advantage like textiles, leather, gems, and jewelry, seafood etc. Although these are among India’s important export items, the nation has not been very successful, when compared with several other developing countries, in exploiting these opportunities.

Many products, which become off patent, provide international marketing opportunities for firms of developing countries like India because of the low cost advantage. A number of them pose technical challenges. The Technocrat Industries, an Indian firm set up in 1972 by two fresh graduates from IIT, succeeded in mastering the technology of drum closures, precision products used to seal drums in which oil and chemicals are stored, competed with the MNC in the Indian market and entered foreign markets . Several Indian pharmaceutical firms are globalizing using generics and bulk drugs as their mainstay.

India is an important exporter of many products like spices and seafood. They are, however, mostly commodity exports. A lot of potential exists for developing their value added exports. There is also considerable scope for quality improvement, product development and value addition in respect of several other categories like leather, textiles, etc.

The top 20 Indian companies in the World

1) Peter England

Believe it or not, Peter England is a Top Indian Brand. Owned by the Madura Fashion and Lifestyle, a division of the Aditya Birla Group, the brand has its presence in more than 300 cities around the globe.

Peter England is one of the largest brands in the menswear category in the country with a consignment movement of more than 5 million garments a year.

The brand is popularly known for its premium range of shirts and formals.

2) Cafe Coffee Day

Marketing itself as the favorite hangout spot to host casual meetings and hearty talks, the company Coffee Day Global Limited finds its base in the town of Chikmagalur, Karnataka. They grow their own coffee on a 12,000-acre estate and are the largest exporter of Arabica beans in Asia.

There are more than 1530 cafe outlets in India alone and the chain has now expanded internationally to countries like Austria, Malaysia, Egypt, Czech Republic, etc.

3) Tata Group

Tata is one of the most well known Indian brands in the world. The brand finds its presence in multiple industries including chemicals, consumer products, energy, engineering, IT Systems, Services like TIS, telecommunications and consultancy, steel industry, etc.

Tata has a stronghold in the minds of the Indian consumers and is also recognized globally now as a familiar brand. It finds its offices in more than 80 countries around the world.

Holding the tag as India’s largest conglomerate, the Tata Group saw a revenue of $103.51 Billion is the financial year of 2015-16. It also has an army of 660,000 total employees on their payroll.

4) State Bank of India

SBI is the largest and the most popular Indian Bank in the world. The government-owned bank has more than 14,000 branches and 191 foreign offices in around 36 countries. If that is not impressive enough, consider this – the total valuation of their assets stand at INR 20,480 trillion or $300 billion!

As of 2016, SBI finds its place in the list of Fortune 500 Global companies at the 232nd position.

5) Titan

Titan Company manufactures roughly 15 million watches per annum for a userbase of over 100 million customers around the world. There are 4 brands existing under the purview of the company, namely Titan, Fastrack, Sonata, and Xylys. There are also dozens of sub-brands under each main brand.

Titan boasts a 60% domestic market share and is present in around 32 countries, mainly in the regions of Middle-East, Asia Pacific, and Africa. Moreover, the total brand value of the Titan Group stands at more than $15 billion

6) Bira91

Talk about a brand getting viral offline through word of mouth (#recursion). This is the story of a new beloved beer in town – Bira91. Launched in 2015 and already finding its presence throughout the Indian and US markets, Bira has disrupted the casual beer market.

7) Old Monk

Old Monk Rum or OMR is 60-year-old Indian dark rum brand. The most interesting aspect of the brand is that their expenditure on marketing over the decades amount to negligible sums. It mainly depends on word of mouth advertising for its success around the world which in itself speaks about the tremendous user base of the brand.

8) Bharti Airtel

Airtel is the most marketed Indian telecom service. The largest telecom in India as well as the third largest in the world.

Airtel is based out of New Delhi and runs in 18 countries around the world, mainly spanning the continents of Africa and Asia.

9) Jaguar

Jaguar owned by none other than the Tata.

10) Jet Airways

Jet Airways has various offices around the world in over 76 countries and operates flights to 47 destinations within India as well as 21 international destinations around the globe.

11) Zomato

Zomato is a popular Indian food startup which was founded in 2008 and is headquartered in Gurugram, Haryana. It has now gradually expanded to 23 different countries with more than a million restaurants listed on the platform.

12) InMobi

InMobi is a startup giving competitions to the likes of Google and Apple.

It has expanded quite well with 17 offices around the world and boasts of 750 million users around 160 countries.

13) Magzter

Magzter provides users with online magazines. The platform currently boasts of more than 11 million users in more than 150 countries.

14) Indian Oil Corporation Limited

Indian Oil is the top petroleum trading company in the Asia-Pacific region.

15) Royal Enfield

Enfield is a well recognized global brand and has reserved a respectable place in the cruiser motorbikes category. It is the oldest bike making company in the whole world.

16) Freshdesk Inc

Freshdesk Inc provides cloud-based support to the customers of their clients. More than 80,000 global businesses today are using the services of Freshdesk to achieve better customer support systems.

17) Louis Philippe

Louis Philippe is Indian and international brand caters to a bunch of different age groups and both genders.

18) Micromax

Micromax is known throughout the world for their Canvas series.

19) Godrej Group

Godrej Group has offices in more than 40 countries around the world and also exports to around 60 overseas nations. E.g. Europe, US, Middle East, Africa and Asia.

20) Lakme Cosmetics

Lakme finds its presence in the markets of more than 70 countries with a product line of about 300 diverse products.

Trends in International Trade (Market) (IM 25 Aug 2020)

5 Major Current Trends in Foreign Trade

1) Forced Dynamism:

2) Cooperation among Countries:

3) Liberalization of Cross-border Movements:

4) Transfer of Technology:

5) Growth in Emerging Markets

Current trends are towards the increasing foreign trade and interdepen­dence of firms, markets and countries.

Intense competition among countries, industries, and firms on a global level is a recent development owed to the confluence of several major trends. Among these trends are:

1) Forced Dynamism:

International trade is forced to succumb to trends that shape the global political, cultural, and economic environment. International trade is a complex topic, because the environment it operates in is constantly changing. First, businesses are constantly pushing the frontiers of economic growth, technology, culture, and politics which also change the surrounding global society and global economic context. Secondly, factors external to international trade (e.g., developments in science and information technology) are constantly forcing international trade to change how they operate.

2) Cooperation among Countries:

Countries cooperate with each other in thousands of ways through international organizations, treaties, and consultations. Such cooperation generally encourages the globalization of business by eliminating restrictions on it and by outlining frameworks that reduce uncertainties about what companies will and will not be allowed to do. Countries cooperate:

i) To gain reciprocal advantages,

ii) To attack problems they cannot solve alone, and

iii) To deal with concerns that lie outside anyone’s territory.

Agreements on a variety of commercially related activities, such as transportation and trade, allow nations to gain reciprocal advantages. For example, groups of countries have agreed to allow foreign airlines to land in and fly over their territories, such as Canada’s and Russia’s agreements commencing in 2001 to allow polar over flights that will save five hours between New York and Hong Kong.

Groups of countries have also agreed to protect the property of foreign-owned companies and to permit foreign-made goods and services to enter their territories with fewer restrictions. In addition, countries cooperate on problems they cannot solve alone, such as by coordinating national eco­nomic programs (including interest rates) so that global economic conditions are minimally disrupted, and by restricting imports of certain products to protect endangered species.

Finally, countries set agreements on how to commercially exploit areas outside any of their territories. These include outer space (such as on the transmission of television programs), non-coastal areas of oceans and seas (such as on exploitation of minerals), and Antarctica (for example, limits on fishing within its coastal waters).

3) Liberalization of Cross-border Movements:

Every country restricts the movement across its borders of goods and services as well as of the resources, such as workers and capital, to produce them. Such restrictions make international trade cumbersome; further, because the restrictions may change at any time, the ability to sustain international trade is always uncertain. However, governments today impose fewer restrictions on cross-border movements than they did a decade or two ago, allowing companies to better take advantage of international opportunities. Governments have decreased restrictions because they believe that:

i) So-called open economies (having very few international restrictions) will give consumers better access to a greater variety of goods and services at lower prices,

ii) Producers will become more efficient by competing against foreign companies, and

iii) If they reduce their own restrictions, other countries will do the same.

4) Transfer of Technology:

Technology transfer is the process by which commercial technology is disseminated. This will take the form of a technology transfer transaction, which may or may not be a legally binding contract, but which will involve the communication, by the transferor, of the relevant knowledge to the recipient. It also includes non-commercial technology transfers, such as those found in international cooperation agreements between developed and developing states. Such agreements may relate to infrastructure or agricultural development, or to international; cooperation in the fields of research, education, employment or transport.

5) Growth in Emerging Markets:

The growth of emerging markets (e.g., India, China, Brazil, and other parts of Asia and South America especially) has impacted international trade in every way. The emerging markets have simultaneously increased the potential size and worth of current major international trade while also facilitating the emergence of a whole new generation of innovative companies.


INTERNATIONAL MARKETING DECISIONS (IM 25 Aug 2020)

Why International Marketing Decisions are taken ?

1. Market – First reason in because of no growth opportunities in the domestic market. To sustain its growth, an organization moves to lure customers in more attractive markets. Since the organization has a vast experience in marketing in domestic market, they rely heavily on the experience and brand value to enter new markets.

2. Competition – It is because of entry of competitors that can be domestic as well as international that an organization sees no new customer base in the domestic market. The organization tries to invest in international market to maintain its profitability and counter competition. Sometimes the organizations enter into the competitor country. This helps reduce the organizations dependence on one market.

3. Environment (technology, Government policies) – The world is constantly shrinking into a global village with the advent of technology in past few decades. The organizations today have ample of opportunities in different countries to market their products. To improve standard of living and invite investments in their country, governments have also relaxed their laws which paved the way for international trading and foreign investments.

4. Cost – Some of the foreign markets are more profitable than domestic markets. Exporting is most of the times favorable than domestic operations. To achieve economies of scale an organization needs high sales. This can be achieved by gaining more customers in new markets.

International marketing decisions are same as domestic marketing; only difference is that all marketing decisions are taken with reference to foreign or international markets (or customers). More clearly, product, price, promotion, and distribution decisions are made for international buyers.

How to Enter the International Market? (IM 20 Aug 2020)

How to Enter the International Market?

There are following ways through which companies can globalize:

1. Exports: The easiest way to enter the market is through exports that can be indirect or direct. In Indirect Exports, the trading companies are involved that facilitates the buying and selling of goods and services abroad, on the behalf of the companies.

Whereas in Direct exports, the company itself manages to sell the goods and services abroad, by opting one of the following ways:

§     By setting Domestic based Export Department, working as an independent entity

§     Through Overseas sales branch, that carries out the promotional activities and facilitates sales and distribution.

§     The sales representatives traveling abroad

§     The distributors or agents in abroad working exclusively on the behalf of the company

2. Global web Strategy: Nowadays, companies need not go to the international trade shows to show their products, they can very well create the awareness among the customers worldwide through an electronic media i.e. internet.Through the company website, customers can read the detailed information, generally written in different languages, about the product and can order online.

3. Licensing and Franchising: One of the ways to globalize is through licensing, wherein the domestic company issues the license to the foreign company to use the manufacturing process trademark, patent, name of the domestic company while facilitating the sales. In licensing, the domestic company has a less control over the licensee.

But, in the case of franchising, the domestic company enjoys the higher control as it allows the franchise to function on its behalf, and in line with the terms and conditions of the domestic company. MC Donalds, Dominos are the examples of franchising.

4. Joint Ventures: The companies can go international by joining hands with other country based companies with the intention to monetize their existing relationships with the local customers.In India, TATA AIG, HDFC standard life insurance, TATA Sky are the examples of joint ventures.

5. Direct Investment: Ultimately, the firms can establish their own business facilities or own a part of the local company to facilitate the sale of goods and services.

The companies go international with the objective to have an increased sales along with the huge market share. But certain things such as political, social, technological, cultural situations should be kept in mind while designing the marketing principles since these are different for the different nations.