Advertising: An Effective Promotional Tool for Marketing New Product
- DEFINITION AND CONCEPT OF ADVERTISING
Advertising have various definition based on different perception but it all mean the same thing. Dictionary of contemporary English describes advertising as the business of encouraging people to buy goods and services by means o advertisements on television, or in newspapers etc,
- Stanton in his book fundamental of marketing advertising consists of all the activities involved in presenting to a group, a non- personal, oral or visual openly sponsored message regarding a product, services or idea. This message called advertisement is disseminated through one or more persons and paid by an identified sponsor.
Aiming at a m ore professionally inclusive explanting the American marketing Association in 1984, narrowed the definition of advertising to any form of non personal presentation and promotion of idea, goods or services by an identified sponsor. In 1956 the international chamber of commence issued a dictionary of marketing determines which advertising was defined as a “Non personal, multiple presentation of the market of goods, service or commercial ideas by by identified sponsor who pays for the delivery of his message to the carrier (advertising medium) distinguished from publicity which does not pay the medium and does not necessarily identify the sponsor”.
According to Kotler “Advertising consist of non personal forms of communications to target buyers through paid media under clear sponsorship Kotler sees advertising as a form of communication through paid media. As this will enable the consumer to know certain information how it is used, the price and where the product can be bought.
Oyekan (1985), has it that it is better to look at advertising as a mixture of art and science, as a component part of settled or developing economy. He went further to say that advertising is a development or growth for post early man’s trade by barter to the revolutionary advancement made in the use of money as a unit of exchange.
According to business times, five well informed directors of a multi-national company in Nigeria were compelled to examine what definition of advertising would be acceptable. Eventually, it was agreed that “the summation of all the business activities individually research packaging, distribution, editorial of publicity, placement of announcement and message of products, and services in the press on television, radio out of outlets and promotional activities of all types, and point of sales displays and whatever else goes into creating awareness for product or services is advertising”
- CONCEPT OF ADVERTING
Advertising is one of the four major tools companies used to direct persuasive communication to target buyer and public. This however can not be achieved without a good communication network. The other three promotional tools which companies uses are personal selling, sales promotion and publicity. Advertising concept is the voice we hear on radio, the printed words, and illustration we read/see in news papers and magazine and outdoor, the sound and features that are beamed on television set, the special promotional activities sponsored by companies, all these are components of advertising.
Also Read: An Overview of Advertising
The propensity to advertise is the need of persuasive, compelling and urge on the part of a business to improve, increase, or commence awareness for products and services of the company. It is assumed that no rational management of any business would have decoded to produce a product or services without the necessary backing research in the form of either feasibility study or pilot survey,. To whether or not there will be demand for the product. A rational business organization will not produce a product without ascertaining that there will be demand for it, an adequate enough to employ its production capacity reasonably or fully in order to make profit in the short or long run.
A new product needs to be launched after it has been introduced. There is need to be advertising for consumer to know of its existence, its value, how it is used and where and when it is available among others. A product that is a leader in the market segment or ha high market share need to sustain its leadership position and advertising is a positive way of achieving such results. This provided the product is continuously developed to meet consumers changing needs.
The natural tendency is for a company to expand just like a plant grows, as the organization to be profiting, revenue graph must be scale above the cost graph. There is need to be advertising because of situation of new ideas, or improving on existing ones, in terms of durability cost saving, cost effectiveness and cheapness. These new ideas can be grouped into product or services.
Advertising makes the firms to achieve their aims especially these days because of monopolistic nature of the market new firms are coming up gradually and the main aim of the old firm/existing firms to be able to remain favourably with the new ones.
- THE PROPORTION OF INCOME THAT WILL BE ALLOCATED FOR ADVERTISING A PRODUCT
Advertising expenditure as observed by accountants are treated as expenses, “it resembles an immeasurable investment for which a return is expected”. Although, the evaluation is not very easy, an appropriation can be planned before advertising campaign starts on the other hand, it is absolutely necessary to know much should be spent on advertising in a given period of time. The available methods are affordable methods, percentage of sales methods, competitive party methods, arbitrary approach and finally, objectives and task method.
The affordable method depends on how much the company can afford unfortunately there are no established guidelines for arriving at an optimum advertising expenditures has been subject of concern. This is because of the problem of effective evaluation. This method is more logical and it justifies the amount spent on advertising the additional demand. This shows that Evly is in support of this method but emphasized more on its effectiveness in terms of evaluation.With regards to the percentage of sales methods, it is understood that a final satisfactory product figure will be achieved at the investment of advertising is held at free percentage sales turnover either current or anticipated.
Kotler “agues both in favour and against the method although it encourages competing to the extend that competing forms spend approximately same percent, of their development of advertising appropriation in product by product and territory by territory.
On the other hand, some companies set advertising budgets to march competitions. This is called the competitive party. This method is not convincing enough because the objective opportunities and resources available for advertising on one company may differ from the others. Marketers uses the arbitrary approach where high level executives in the company state how much can be spent on advertising for a certain period of time. This approach often leads to overspending or under spending.
In the case of NASCO or marketing company. It makes use of investment approach where advertising is considered as an investment because its effect continue into the future. This approach is also known as the payment planning method, since advertising expenditure is budgeted for several years ahead. Apart from the fact that can advertiser might be mainly interested in immediate sales and profit, the approach presupposes that the sales response to advertising expenditure can be reasonably estimated, since it determines future cash flow rest on such estimates. The critically and best way for advert appropriation is the objectives and task method. This depend solely on:
- Proper definition of advertising objectives
- The task to be performed so as to achieve these objectives
- The cost involved to perform these task in the high copy development, choice of media and the influence this will have on the promotion cost.
- WHAT IS A NEW PRODUCT?
A new product is defined perspective of management “a new product is anything that an organization believe to be a new product”. This approach makes some sense, since in most cases such “newness” results in new research, new organization, new advertising campaign and other new ingredients in the marketing mix.
A formal definition of the word “product” will aid a better understanding of the concept of a product newness. Kotler (1981) defines a product as “anything that can be offered to a market for attention, acquisition, use or consumption that majority satisfies a need if includes physical objects services, person, places, organization and ideas”.
CLASSIFICATION OF NEW PRODUCT
Based on the given definition, Kotler went further to distinguish among the three categories a new product that is fundamentally new both to market and to the company. This is the real “new product that established single handedly a new product class to compete against other product classes. Since it is new and different, consumers have much learning to do before they respond to it. Consequently, the company may have to make a substantial investment in establishing the need for this product overcoming resistance that might stem from product complexity, possible in compatibility with certain cultural or social values and possible riskiness
The second of new product is the minor innovation. A product that is new to the company, but not very new to the market. The new brand represent the effort of the company to add its own entry into an established product class and consumers recognize the brand as part of the established product class and less clearing has to take place compared to the case of innovation. The company task is to seek to persuade buyers on the superiority of its brand satisfying their well defined needs. The company regularly collects information on brand shares and brand switching or order to evaluate its rate of brand acceptance.
The third category of new product is the mode style or packaging size. Here, the company’s product is only superficially new to the company and the market. It is immediately recognized and understood as an extension or depending on the company’s product line. The product already has established distribution channels and has established image in the in the minds of buyers. The company’s job is to make people aware of the availability of new features style, or convenience. The required introductory marketing effort is small compared to the other two new product situations on the whole, it is pertinent to note that a new product is introduced to company when a favourable estimate of new products sales is shaped by many factors including the size of the potential markets, the nature of competition, and company’s marketing plan and resources. As the product is soled, the company receives sales data and other type of feed back leading it to update it sales estimate and possibly revise its marketing strategy. It sales are disappointing, management may have to consider discontinuing the product.
- WHY THE NEED FOR NEW PRODUCT?
The social and economic justification for the existence of a business is its ability to satisfy its customer. A company meets its product and services and unless it fulfils this mission a firm should not exit. It is in light of this that Stanton (1981), the author of fundamental marketing said that “the watch word for management must often be innovative or die” and this innovation attitude can become philosophy almost Para telling that of marketing concept”.
Drunker (1954) recognized that importance of the two concepts when he said “because it is its purpose to create a customer, any business enterprise has two and only this two basic function marketing and innovation.
May companies will get a substantial portion of the sales value and net profit from product that did not exceed five ten years ago. In other words new products are essential to growth by providing an effective means of maintaining or increasing market share. The question one may ask is why should a company which already has a range of goods selling line spend time and effort on innovation and thereby non answer lies cycles in what has been called the product life cycle”. The theory of the product is launched into the market until it is finally withdrawn a product passes through four mains stages. These stages cover the period of introduction, growth, maturity, and decline. This is illustrated with the following diagram
From the diagram, the introductory stage manifests itself with high investment and minimal profit. This is due to the fact that at this stage, initial sales is low, and coast of promoting and advertising the product is high. At growth stage, sales start growing rapidly, is during this period of its life that a product can achieve its greatest impact on the market and its greatest profitability.
By the third stage i.e maturity stage, the fully established product will undoubtedly be faced with competition from other contenders for a share in the market. Sales may necessitate a considerable increase in advertising to retain market share. Further more, there is likely to be reduction in price in the facer of competitive price pressure. At the forth stage (decline stage) market saturation and decline commence. Competition becomes increasingly fierce, price are further reduced and both sales and profit levels enter a decline stage.
In a nutshell it is because no single product can maintain its portion in the market indefinitely that product innovation is essential new product are introduced in order to spread business risk over a broader-based and to improve the return and capital employed in the business by further utilization of resources, for example by ironing out the effort of seasonal variation in production.
In recent time, consumers have become more selective in their choice of products with this development, it become important that companies follow in the same direction. Thurstain Vebslem theorized that as members of a social class attain the means to accumulate wealth, they pass through a period of conspicuous consumption, during which they acquire worthy goods to impress their neighbours. To uphold the philosophy of market concepts, organization should direct their efforts towards satisfying those customers/social requirements by developing new product.
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This article was extracted from a Project Research Work/Material Topic
“ADVERTISING AN EFFECTIVE PROMOTIONAL TOOL FOR MARKETING NEW PRODUCT
(A CASE STUDY OF NASCO MARKETING COMPANY) ”
