Role of Advertising

Low Involvement Product

An item that is inexpensive and does not benefit a consumer’s status is called a Low Involvement Product (LIP). The time required to take decisions related to the purchase of a LIP is lower than other products. Regular use of products like soft drinks, toothpaste, and soap are examples of LIPs.

Factors Influencing LIP

1. Nature of the product

They are low-priced and perishable.

2. Price of the product

Customers spend very little time making decisions with respect to purchases because they are low-cost.

3. Nature of the customer

Middle-class consumers who are cost-conscious and are mass buyers are the Main Targets of LIPs.

4. Nature of competition

Since the entry barriers are low, they face huge competition. To ensure that the product stays in the market, companies opt for intensive sales promotion and advertising.

5. Stimulus Factors

Free gifts, exchange offers, and discounts are one of the many sales promotion methods used by companies owing to the massive competition in the market.

Suggested Advertising Model for LIP

  • Cognitive (or Awareness) followed by Conative (or Trial Purchase) and Affective (that is Interest and Desire)
  • A customer’s knowledge about a brand and its products is highlighted through brand advertisements.
  • Since the product is low in cost, customers can be driven to buy a product with the help of continuous exposure to advertisements.
  • A customer of this kind may buy products again and again, of a brand that he/she is attracted to.

Example – Low Involvement Product

Example – Budweiser spends big on Super Bowl

Example – Budweiser spends big on Super Bowl

Budweiser approximately paid $470 million to air 135 advertisement plugs in the 54 Super Bowls, becoming the only firm to have at least one commercial run in each Super Bowl. Following Budweiser, Pepsi was recorded as the second highest investor spending more than $320 million, and Coca-Cola the third spending around $200 million.

Budweiser’s Parent Company, Anheuser-Busch InBev reaches over 100 million U.S. TV viewers through Super Bowl Sundays every year and promotes vintage brands such as Budweiser and Bud Light. According to industry experts, Budweiser paid $42 million for a 4-minute ad in 2018.

Example – Coca-Cola Used 1,760 LED Screens to Make This Ad

Coca-Cola Used 1,760 LED Screens to Make This Ad

  • Coca-Cola has successfully come twice in the Guinness Book of World Records for an extraordinary Times Square billboard.
  • The ad composed of 1,760 independently programmed moving screens that synced the screen movement with the display.
  • The pictured illustration also changed based on the time or the day of the week.
  • Created and formulated by Radius Displays Limited, the billboard took many years to develop.

High Involvement Product

The kind of item that is high in price and adds to the status of a consumer is called a High Involvement Product (HIP). The time required to make a decision related to buying such a product is higher since a consumer might run into financial loss by taking the wrong decision.

Factors influencing HIP

1. Nature of the product

HIPs are generally long-lasting and have distinguishing features as compared to its competition. Washing machines, Refrigerators and TV are examples of HIPs.

2. Price of the product

HIPs are expensive and might range from a couple of thousands to even millions in some cases. Jewelry, Luxury cars, and Luxury Watches are examples of these HIPs.

3. Nature of the customer

While purchasing HIPs, customers take their time and spend a lot of energy deciding on the purchase

4. Stimulus Factors

A stimulus can lead a consumer into a purchase. For instance, a customer might buy a luxury car as soon as it hears that there is a discount on it due to a special occasion

5. Situational Factors

The involvement of a customer while buying a product can be affected due to situational factors.

Suggested Advertising Model for HIP

  • Cognitive (Awareness) followed by Affective (Interest and Desire) and Conative (Trial Purchase)
  • Brand awareness is created through continuous advertisement exposure.
  • A customer might be taken by a product or a brand due to sales promotion messages.
  • Depending on the stimulus applied by a company, and how much a consumer wants to buy a product, a consumer might end up buying a product.

Example – High Involvement Product

Insurance firms and luxury automobile brands splurge on advertisements to get them the required attention.

Aviva – “Names” (2008) – $13.4 million

Aviva

  • In 2008, British insurance company Norwich Union modified its name to Aviva.
  • With an intention to be noticed – the brand spent around $13 million on creating an ad starring Bruce Willis, Ringo Starr, Elle McPherson, and Alice Cooper starring.

Chrysler – “Imported From Detroit” (2011) – $12 Million

Chrysler

Launch of the luxury Chrysler 200- the ad revolved on the rugged history of Detroit, where Chrysler and Eminem share a lasting and colorful past that was best portrayed in the line, “the hottest fires make the hardest steel.”

Example – LIP & HIP

Advertisers spend $100,000 to $500,000 to get their products to have a cameo appearance in movies or television.

At times product placements like these are the effect of a bigger network advertising deal. Still, small product placement shops too maintain ties with prop artists, set designers and production officials. Some companies get product placement at zero cost.

Example – “Tomorrow Never Dies” (1997) history-making $100 million product placement deal

Example – LIP & HIP

BMW, Avis, and L’Oreal were among the few brands of corporate partners that contributed to the “Tomorrow Never Dies” (1997) history-making $100 million product placement deal.

According to AMC, 100 % of its production budget was covered by the 18th Bond flick with brand tie-ins by 8 main partners.

 

Role of Advertising in Brand Building

Registering the central values of a brand into the target consumers’ heads is called brand building. The image of a brand in the mind of customers is called a brand image. The image of brands in the consumers’ minds is the basis of their purchase decisions.

Ways of Building a Brand with the help of Advertising:

  1. Creativity in Advertising
  2. Brand Ambassador
  3. Media Selection
  4. Symbols
  5. After Sales Service
  6. Product Performance
  7. Price
  8. Company

1. Creativity in Advertising

Creative ads are created by advertisers in order to build a likable brand image. Different elements of an ad like the color combination, text, copy, headline, and slogan must be carefully selected by ad agencies.

Example: Jeep “See what you want to see” – Leo Burnett, France.

Creativity in Advertising

  • Leo Burnett France created a print ad for Jeep.
  • Every advertisement features a picture of an animal.
  • When the image is turned upside down, it turns into a different creature.
  • An elephant becomes a swan, a doe turns into a sea-lion, and a giraffe turns into a penguin.
  • The idea is to convey that with a Jeep, you can take off wherever you like and ‘see what you want to see’

2. Brand Ambassador

The brand and its ambassador’s personality must be in tune with each other.

Michael Jordan and Nike

Example: Michael Jordan & Nike

  • In 1984, a 21-year-old rookie Michael Jordan signed a five-year deal with Nike worth $500,000 per year.
  • Nike was a struggling company back then and Jordan himself preferred either Adidas or Converse.
  • However, Nike agreed to give Jordan his signature line, which reportedly earned around $3.14 billion in 2019.

3. Media Selection

Brand image is highly influenced by the programming quality and media selection.

Example – Coca-Cola Used 1,760 LED Screens to Make This Ad

Example – Coca-Cola Used 1,760 LED Screens to Make This Ad

  • Coca-Cola has successfully come twice in the Guinness Book of World Records for an extraordinary Times Square Billboard ad.
  • The ad composed of 1,760 independently programmed moving screens that synced the screen movement with the display.
  • The pictured illustration also changed based on the time or the day of the week.
  • Created and formulated by Radius Displays Limited, the billboard took many years to develop.

4. Symbols

A unique brand image must be created with the logos and symbols linked to the brand.

In addition to that, they should also help customers recognize these brands immediately.

Example: Ronald McDonald

Symbols

5. After Sales Service

A good brand image can be built in a market with the help of immediate and effective after-sales service.

Example: Apple

Example Apple

  • Apple stores have been a central part of its customer experience since Steve Jobs took over in 1997.
  • Before that, Apple computers were sold through chain stores and other authorized outlets.
  • The company was not comfortable with this model as Apple severed ties with over 10,000 third-party retailers.
  • After that, the company opened the first Apple store and overhauled its entire website.
  • The transition from third-party sellers to running its own stores gave Apple more control over its customer service.

6. Product Performance

Building a brand image is directly dependent on the product itself.  A brand’s image will be positively affected when the product leads to the consumers being satisfied due to its performance.

Example – Samsung (Campaign – Farewell, Flat | Agency Network: Ogilvy)

Samsung

Farewell, Flat: Samsung Goes Bold with Provocative Z Fold2 Campaign. Ogilvy New York, Production Studio Room 121 and their teams across Korea and New York produced this new global campaign.

It was made in collaboration with Samsung Mobile’s Brand Team. With I’ve Been Loving You Too Long”, playing in the background, the camera pans across a pile of flat phones before ascending to Galaxy Z Fold2 sitting on a stack of smartphones.

Moving from repetition to innovation, it ends with the aggressive provocation: Farewell, flat.

Stephanie Choi, Senior Vice President and Head of Global Marketing Team of Mobile Communications Business at Samsung Electronics, said: “With Farewell, Flat, we wanted to show our commitment to the future of foldable. This is not a passing fad. Creating something new is hard, but the Z Fold2 will transform how we use our phones. Foldables are here to stay, and Samsung has boldly put the first stake in the ground. We are proud to be leading this exciting new era of mobile and call the world’s trailblazers to lead it with us.”

7. Price

The image of a brand can be influenced by the product price.

Example: BMW, Mercedes & Audi

Brands with premium cars like Audi, BMW,

and Mercedes get the image of luxury due to their high price.

BMW, Mercedes & Audi

8. Company

A brand image can be influenced by its company’s image.

Example: Dove Men+Care “Dad On” by Ogilvy

Dove Men+Care “Dad On” by Ogilvy

  • Film advertisement created by Ogilvy, Canada for Dove Men+Care
  • Taking a different approach than the common sad scene among most pandemic ads, Ogilvy Toronto created something different inspired by the pandemic.
  • The “Dad On” video shows dads having fun during the pandemic.
  • A series of videos showed how a dad helped make a change in an autistic child’s routine, a dad giving a haircut, a dad helping kids overcome fear, dads being creative and dads helping out.

 

Role of Advertising in Product Life Cycle

1. Introduction Stage

Introduction Stage

Product information can be provided, buyers can be encouraged to buy a product, brand awareness can be created, and a positive attitude can be developed with the help of advertising in the introduction stage.

Aggressive and direct product marketing constitutes a hard sell approach which is the focus. Advertising budgets can be increased more than the sales revenue by advertisers.

The product is introduced into the market in this stage after which the sales grow steadily. Sales can be improved while ensuring that products survive in the market with the help of brand awareness.

Example – IKEA

Example – IKEA

IKEA spent between Rs.150 to Rs.180 crores on Advertising in India. It has opened its second outlet in Mumbai and the focus now has shifted to Delhi NCR and Bengaluru.

2. Growth Stage

 

Growth Stage

Improving the brand image, brand loyalty, magnifying corporate image, acquiring a competitive edge, and increasing market share is the main focus of advertising at this stage.

The hard-sell approach might be continued by advertisers in environments that have a lot of competition. And in environments with very little competition, a soft-sell approach can be implemented. A high advertising budget may be continued with.

A company’s profits and sales, develop in the growth stage, while the product prospers in the market. The sales can be increased by bringing in new customers, which is possible with the help of extensive and intensive advertising.

Example – Absolut Vodka: The Absolut Bottle

  • Example – Absolut Vodka (Print Ads)Absolut bottles don’t have a distinct shape.
  • It is, however, the easiest to recognize bottle around the globe.
  • Absolut’s campaign included print ads were a huge success.
  • These showed the bottles “in the wild”.
  • The ad continued running for 25 years.
  • It’s the longest ad that has run without interruption.
  • It consists of more than 1,500 separate ads.
  • Absolut’s vodka market share was only 2.5% when the campaign was launched.
  • It finally came to an end in the 2000s.
  • By then, Absolut was importing 4.5 million cases into the US per year.
  • This is half of the total vodka imported into the country

3. Maturity Stage

The company tries to maintain its brand loyalty in this stage where it is already established. Since companies spend money on advertisements to sustain market share and the sales are stable, profits reduce. Retentive advertising is used by advertisers.

Example – Nivea Sun

Example – Nivea Sun

  • These ads came with a phone plug and very thin solar cells.
  • These additions used the sun’s rays to keep the cell batteries charged.
  • That way, people could stay longer at the beach, knowing that their cells wouldn’t switch off
  • The sunscreen was advertised in Brazil.
  • Nivea, along with Giovanni+ DraftFCB, published special ads which were solar-powered chargers for cell phones.
  • The ads came with a solar panel and cell phone plug.
  • This lets consumers leave them to soak up the sunlight and charge the phones.
  • In the meantime, they could enjoy the sun and the beaches of Rio de Janeiro.

4. Decline Stage

Decline Stage

Sales reduce in this final stage due to the launch of improved and new products in the market and due to a change in customer preferences. The advertisement might not help keep the brand afloat on the stage.

The advertising budget may reduce. Reminder advertising might be used by advertisers.