Importance of advertising in a marketing mix?

First, there is the issue oI what is advertising. Traditionally, advertising included things like TV, print ad (newspapers,
magazines), radio, maybe outdoor (billboards and buses). However, today many less Iormal media are apart oI the mix even iI
they are not what the industry used to call "measured media"- media which they could tell you things like "the demographics
Ior the "Today Show" on NBC are X, Y, Z and roll up to 7 million people each day."

Things like social media (Facebook) or even pr or word oI mouth campaigns are increasingly used by companies instead oI or
in addition to traditional advertising. Small brands in Iact may Iind traditional media too expensive Ior their needs (i.e. you hit
your target but you are also hitting a huge number oI people who are not in the target that you are paying Ior as well) and so
these newer tools are becoming even more important. E-mail campaigns are oIten not thought oI as advertising but once you
have a customer database they are a great way to reach a narrower target- probably Iar better than traditional advertising.
Sponsorships are also a Iorm oI advertising that might not oIten Iall under the banner oI advertising.

Even historically, however, advertising might not be the right choice Ior more niche brands or products-- think oI selling Yoga
apparel beIore it was trendy. Someone like Luluemon surely spends some dollars on advertising but their brand ambassador
approach is Iamous now as a more grass roots way to reach your market (they basically get the local yoga instructors to wear
and/or endorse their products). Why run an ad in the newspaper where 90 oI the people might be oII target when you can go
to this approach. Perhaps more expensive per impression (people who see the ad) but ultimately a much better investment.

Finally, there are also some brands where they target businesses. In those cases a direct sales approach might be the winer Ior
them, perhaps supported with some trade show appearances. In these cases advertising might be a tiny part oI the marketing
mix.

Where advertising has traditionally been a big part oI the budget has been Ior mass-marketed consumer products (laundry
detergents, soap) or automobiles (where someone like Honda needs to reach the masses a lot to drive Honda Accord sales). II
you need to drive awareness in a hurry advertising can be the key tool. Ultimately, Ior many brands that's the role it plays-
either building awareness or maintinng it. Few people are unaware oI Budweiser but it helps to keep in Iront oI people when
there are so many brands out there competing Ior your attention.
Spending on Advertising is huge. One oIten quoted statistic by market research Iirm ZenithOptimedia estimates that worldwide
spending on advertising exceeds (US) $400 billion. This level oI spending supports thousands oI companies and millions oI
jobs. In Iact, in many countries most media outlets, such as television, radio and newspapers, would not be in business without
revenue generated through the sale oI advertising.

While worldwide advertising is an important contributor to economic growth, individual marketing organizations diIIer on the
role advertising plays. For some organizations little advertising may be done, instead promotional money is spent on other
promotion options such a personal selling through a sales team. For some smaller companies advertising may consist oI
occasional advertisement and on a very small scale, such as placing small ads in the classiIied section oI a local newspaper.

But most organizations, large and small, that rely on marketing to create customer interest are engaged in consistent use oI
advertising to help meet marketing objectives. This includes regularly developing advertising campaigns, which involve a
series oI decisions Ior planning, creating, delivering and evaluating an advertising eIIort.

Marketing Mix: The Price
What is the Price? What are the pricing goals of marketing mix?
The Price is the one oI components oI Marketing Mix, along with Promotional Mix, Product Distribution
and Product. The price is usually deIined as Iinancially expressed value oI the product or service at the
market. Price levels are Iorming the public opinion about a speciIic supplier. For modern shopper the
price is not only the expression oI money outIlow, but also represent a certain value, beneIit or
satisIaction perceived by certain product / service.
The price has speciIic relationship with other components oI marketing mix. Actually the price is the only
component that generates revenue, while other components generate costs. ManuIacturing oI the product
represent the cost.
The distribution oI the product also generate the cost. The promotion usually creates the increase oI
demand Ior the product/service, but directly also creates costs. All these costs needs to be covered
through the price.
Still, the goal oI the price is not only to cover the basic costs oI manuIacturing, distribution and
promotion. The Iunction oI the price is much more complex and depends on diIIerent variables.
Goals oI price depends on company's policy against various relationships:
The price is usually deIined as Iinancially expressed value oI the product or service at the market. Price
levels are Iorming the public opinion about a speciIic supplier. For modern shopper the price is not only
the expression oI money outIlow, but also represent a certain value, beneIit or satisIaction perceived by
certain product / services
ProIit oriented goals are including three main variables. ProIit maximizing has the goal oI extraction oI
maximal possible proIit. SatisIactory proIit goals target the speciIic proIit rate. Return on investment
pricing is primarily Iocused on direct return oI investment to the investor.
Sales oriented goals can have two main targets. Market share approach is targeting a speciIic price level
that should bring the company to the speciIic position in the market. Sales maximizing prices is supposed
to bring direct increase oI proIit.
Competition variable is very important, thereIore the company can adopt several price policies that should
address the competition in appropriate way.
Competition avoiding process have a goal oI avoiding clashes ( price wars ) with competition. Repelling
prices policy has the aim oI discouraging the competition Irom entering the new market or product
category. Stabile prices policy is the common price strategy that brings balance between attractiveness to
shoppers and challenge to competition.
Prestige price positioning have relatively high price level. There is a certain segment oI customers that are
willing to pay high premium price in order to distinguish themselves Irom the majority oI the market.
These customers are building their liIestyle image by purchasing exclusive and luxury products.
Status Quo is pricing policy when company does not want to make to make disturbances in the market.
This is the case with the products that have the speciIic position in the market, while any bigger alteration
in price policy would not bring much value.

Promotion Mix: Advertising (B)
What is the role of advertising within promotion mix? What is the difference between product
advertising and institutional advertising?
The advertising, as a part oI promotion mix, is the basic element oI promotion within marketing mix.
Advertising is any Iorm oI indirect presentation oI ideas products or services. The basic purpose oI
advertising is to stimulate demand and product sales. ThereIore advertising is considered to be basic
instrument oI sales and communication with public.
The advertising can support two diIIerent goals oI the company. II the goal oI advertising is the product
or service, with the purpose oI sales increase it is called Product Advertising. On the other hand, iI the
goal is to promote the image oI the company, than it is Institutional Advertising.
Product Advertising can have diIIerent roles. The most important roles oI product advertising are:
Pioneer Advertising that points to primary demand Ior the product. It is relevant during the introduction
phase oI the product. Since the product is new the pioneer advertising is promoting novelty and set a new
trends.
Competitive Advertising is pointing Ior demand increase Ior speciIic product oI the company. Since the
product is in the phase oI growth or maturity, competition is developed and active. ThereIore the goal oI
competitive advertising is to diIIerentiate product Irom the competition and to increase or protect sales
volume.
Sustainability Advertising has a goal to keep the loyal segment oI customers. The Sustainability
advertising is reminder advertising that makes sense Ior established and developed brands.
The advertising can support two diIIerent goals oI the company. II the goal oI advertising is the product
or service, with the purpose oI sales increase it is called Product Advertising. On the other hand, iI the
goal is to promote the image oI the company, than it is Institutional Advertising.
Institutional Advertising has advertising goal that is much wider than the product advertising. While the
product advertising is basic advertising stage, the institutional advertising is advanced level. Institutional
advertising cannot be conducted without developed product advertising.
The institutional advertising is developing image oI the company, clariIying the mission and vision to
population and building the public opinion about the community contribution oI the company.
The example oI institutional advertising can be promotion oI eco & recycling programs, introduction oI
new additive Iree Iood production technology, switching Irom import to local production etc.
The usual channels Ior communication oI product advertising and institutional advertising are TV, radio,
newspapers, internet advertising, mail, e-mail, billboards, ...
The Advertising activities are planned mostly by the company, with consulting and execution by
marketing agencies.


#ole of Advertising in Marketing Mix

MurkeLIng mIx consIsL oI Iour ImporLunL vurIubIes oI murkeLIng, I.e. qPs-ProducL, PrIce, PromoLIon und PIuce.
ApurL Irom LIe LrudILIonuI qPs, LIere ure uIso oLIer vurIubIes, I.e. PuckugIng, PosLIng, und Puce.
AdverLIsIng Is un eIemenL oI promoLIon. However, IL noL onIy ussIsLs In promoLIng LIe producL, buL uIso uIIecLs LIe
oLIer vurIubIes oI murkeLIng mIx. TIIs cun be expIuIned us IoIIows:

1. Advertising und Prodoct: A producL Is normuIIy u seL oI pIysIcuI eIemenLs, sucI us quuIILy, sIupe, sIze,
coIour und oLIer IeuLures. TIe producL muy be oI very IIgI quuIILy .AL LImes, LIe producL Is so desIgned LIuL IL
requIres cureIuI IundIIng und operuLIons. Buyers musL be InIormed und educuLed on LIe vurIous uspecLs oI LIe
producL. TIIs cun be eIIecLIveIy done LIrougI udverLIsIng. TIus, udverLIsIng pIuys LIe role oI inIormution und
edocution.

. Advertising und Price: TIe prIce Is LIe excIunge vuIue oI LIe producL. A murkeLer muy brIng ouL u very IIgI
quuIILy producL wILI uddILIonuI IeuLures us compured Lo compeLILors. n sucI u cuse, prIce wouId be deIInILeIy
IIgI. BuL buyers muy noL be wIIIIng Lo puy u IIgI prIce wouId be deIInILeIy IIgI. BuL buyers muy noL be wIIIIng Lo
puy u IIgI prIce. Here comes udverLIsIng. AdverLIsIng cun convInce buyers regurdIng LIe superIorILy oI LIe brund
und LIus ILs vuIue Ior money. TIIs cun be done by ussocIuLIng LIe producL wILI presLIgIous peopIe, sILuuLIons, or
evenLs. AILernuLIveIy wIen u IIrm oIIers u Iow prIce producLs LIe job oI udverLIsIng needs Lo sLress LIe
prIce udvunLuge by usIng Iurd IILLIng copy. L Is noL jusL enougI Lo convInce, buL IL Is desIrubIe Lo persuude LIe
buyer. TIus udverLIsIng pIuys LIe role of conoiction ond persuosion.

. Advertising und Pluce: PIuce reIers Lo pIysIcuI dIsLrIbuLIon und LIe sLores wIere LIe goods ure
uvuIIubIe MurkeLer sIouId see Lo IL LIuL LIe goods ure uvuIIubIe uL LIe convenIenL pIuce und LIuL Loo uL LIe rIgIL
LIme wIen LIe buyers need IL. To IucIIILuLe eIIecLIve dIsLrIbuLIon und expunsIon oI murkeL, udverLIsIng Is oI greuL
sIgnIIIcunce. TIus udverLIsIng do IeIp In effectioe distribution ond morket exponsion.

q. Advertising und Promotion: PromoLIon consIsLs oI udverLIsIng, pubIIcILy, personuI seIIIng und suIes
promoLIon LecInIque. BusInessmen Loduy Iuve Lo Iuce u IoL oI compeLILIon. Every seIIer needs eIIecLIve promoLIon
Lo survIve und succeed In LIIs compeLILIve busIness worId. AdverLIsIng cun pIuy u sIgnIIIcunL roIe Lo puL Iorwurd
LIe cIuIm oI seIIer, und Lo counLer LIe cIuIms oI compeLILor. TIrougI eIIecLIve udverLIsIng, seIIers cun Iuce
compeLILIon und uIso IeIp Lodeoelop brond imoge ond brond logoltg.

g. Advertising und Puce: Puce reIers Lo LIe speed In murkeLIng decIsIons und ucLIons. L InvoIves umong oLIer
LIIngs LIe IuuncI oI new producLs or brund vurIuLIons uL greuLer speed LIun beIore. As und wIen new brunds ure
IuuncIed, udverLIsIng pIuys un ImporLunL role of informing, educoting ond persuoding the customers to
bug the product.

6. Advertising und Puckuging: TIe muIn purpose oI puckugIng Is proLecLIon oI LIe producL durIng LrunsIL, und
preservuLIon oI quuIILy und quunLILy. Now u uCduys, murkeLers Luke IoL oI eIIorLs Lo deveIop und desIgn uLLrucLIve
puckuges us LIey curry udverLIsIng vuIue. A creuLIveIy desIgn puckuge uLLrucL LIe uLLenLIon oI LIe cusLomers. L uIso
currIes on ossuronce of guolitg ond creotes confidence in the minds of customers to bug the
product.

,. Advertising und Positioning: ProducL posILIonIng uIms uL creuLIng und muInLuInIng u dIsLIncL Imuge oI LIe
brunds In LIe mInds oI LIe cusLomers. TIrougI udverLIsIng LIe murkeLer cun convey LIe posILIonIng oI LIe brund
und uccordIngIy cun InIIuence LIe buyIng decIsIon oI LIe LurgeL uudIence.