The structure role and relationship between parties in communication

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Explain the structure, role and relationship between parties in communication industry

1. Identify the different parties and briefly describe their role i.e. the functions of these parties (advertiser, client, ad agency etc.) in the communication industry

Centralized

This is the structure in which the key decisions are made by the head or top managers. This structure is used in order to have as much control as possible. Organizations with this kind of structure have several layers of management that control the company by maintaining a high level of authority. Staff and employees have limited authority to carry out any decisions without any approval from authority. It has a top-down management style where the top level communicates with the middle managers who further communicate with other staff. This kind of structure usually has decreased span of control. This type of structure is also becoming rare because of its many disadvantages. If the company is too large with such structure then its operations could become less efficient. Also lower level employees can become less motivated. On the other hand it can be advantageous too. It is a good structure for small business also it helps centralized authority may have a better picture of the organization.

Source: http://www.answers.com/topic/organizational-structure

Decentralized: This structure is the opposite to the centralized structure. This type gives less control to the top managers for the decision making, rather decisions are made at the lower levels in the organizational hierarchy. Usually companies tend to start off centralized and then progress towards decentralized style. Decentralized structure lets everyone participate in the decision making process. It lets employees use their mind, experience and skills to improve inefficient areas without having to wait for any approval. This structure helps to eliminate any unnecessary levels of management and to let first line mangers/staff to have the authority. This increases the span of control and has a botton-up management style. It also lets the higher level managers to concentrate more on important decision and let other decisions be handled by the lower level. The disadvantage can be that managers often lack training and understanding of advertising.

Source: http://www.learnmanagement2.com/centraliseddecentralised.htm

Parties In communication Industry:

Advertiser (Client)

Advertiser is a sender or communicator who develops a marketing program and at the end makes the final decision of that plan. An advertiser can be a person, an organization or company who plans, executes and places advertisement in order to target customers. Their main aim is to promote a product or service. The advertisers need to be prepared for their interaction with an advertising agency, advertising departments or In-house agencies. They need to understand the companies objectives clearly, identify the distribution channels appropriately and manage the budget accordingly.

Source: http://www.businessdictionary.com/definition/advertiser.html

In-house agency

In-house agency is an advertising agency in an organization that is set up, owned and operated by the advertiser. Sometimes there are advertising departments too. Instead of outsourcing the advertising to some agency, the ad campaigns are handled by its own in-house agency. This lets a business have more control n its advertising activities, it reduces advertising and promotion costs and is time saving for the advertisers.

Source: http://advertising.about.com/od/advertisingglossaryi/g/inhouseagency.htm

Advertising Agency

This is an outside organization that specializes in advertising development. It provides marketing and promotion services such as planning, preparing and placing of advertisements. Usually big clients use many advertising agencies and because of its continuous growth and use, agencies are becoming partners as well. They provide clients with very skilled, specialized, experienced, expertise services and objective view points because of which it is preferred over in-house agencies. There are different types of services that different agencies provide such as:

Full Service Agency: Provides marketing, communication, research, promotion

and all other services

Account Services : it is the link between the ad agency and the client

Marketing Services: provides all marketing services such as marketing research, planning or marketing selection

Creative Boutiques: they provide creative services for extra creativity. They emphasize on creative concept development and unique artistic services.

Media Buying Services: This is media related and lets a client buy radio and television time. This is quite commonly used these days which offers media strategy consultancy.

Media Organizations: these are television, radio, newspapers and etc. It has its own policy that

attracts particular customers.

Specialized Marketing Communication Services

These services include direct marketing agencies, sales promotion agencies, public relations, sampling programs, contest arrangements, interactive agencies for website development and etc.

2. Discuss the relationship between the different parties of the industry

Relationship of different parties:

Advertiser & In-house ad agency: The relationship between an advertiser and in-house agency is that an advertiser is who runs the in-house agency. He is the person in charge of what and how things go around in it. It can sometimes be owned by the advertiser as all. He operates all the operations, handles advertising activities and deals with outside ad agencies if any.

Advertising agency & Advertiser: In this case the advertiser is the client who outsources its advertising plans to an advertising agency. All the working, planning, preparing, and marketing activities are carried out by the ad agency. They take the responsibility of marketing and promotion services. Also these days they are becoming partners as well with bigger companies in order to be more efficient and productive in their dealing and working. They help advertisers define and refine their marketing strategies. It is important for an advertiser to do all its homework before getting into a relationship with any agency.

Media organizations & Clients/ad agency: Media organizations are media specialists who help in giving consultation to advertisers or even advertising agencies regarding buying media time and space. Since Media organizations buy media time in large quantities, they can help them to acquire media time at much lower cost than advertisers or ad agencies themselves could have.

In-house agency & ad agency: Sometimes even in-house agencies acquire help from ad agencies regarding different matters seeking for expertise and specialized help.

Outcome 1.2

Identify the trends in advertising and promotion and evaluate (advantages and Disadvantages) of their impact

1. Discuss the current trends in the advertising

With the growing competition in the advertising sector and evolution of trends with the passage of time has led advertising agencies to come up with different techniques, other than the traditional tv, radio, newspaper ways, to attract and retain customers. Some of these new trends include:

· Media fragmentation

· Micro-marketing

· Brand proliferation

Media fragmentation:

Media fragmentation is dividing and increasing the range of media, its choices and consumption in terms of more different channels, mobile, Internet, more websites, radio stations, magazines, satellite tv’s and etc. This has given consumers a new set of habits and expectations.

Advantages: Since a long time (and even still) cable channels was the only way of distributing video signals on a large scale, which meant small number of channels to large audience. Now the number of different channels as well as satellite tv has reduced this problem. Media fragmentation is just the right thing to divide and target its audience. The web specifically has increasingly divided its audience and has fragmented the media at large. Internet, online ads has played a big role, similarly the radio and mobile networks have helped in delivering their message efficiently as well. Moreover it has given increased consumer control. It has created a lot of opportunities for media buying businesses. This is one of the current trends that helps in reducing the difficulty of reaching its audience

Disadvantages: Yet at the same time fragmentation had made it difficult to reach everyone too, because consumers now have a wide range of choice of what to watch, listen and read. It has decreased the attention since there is so much variety therefore media has become less efficient and more complex. Following are some factors related to media fragmentation.

Source: http://moneyterms.co.uk/media-fragmentation/

Micro Marketing:

Micro marketing is basically niche marketing in which the tailoring of products and marketing strategies are made locally within a smaller region. In this type marketing message is made a lot more personally to the buyer. A good example would be of local cable advertisements.

Advantages: micro marketing helps in focusing and specializing on a smaller segment from a larger market. Locating a profitable micro niche is important and quite beneficial in terms of less competition. One can specialize on a smaller target. It has become easier to figure out the relevant market segment for a specific product, to keep in contact more often and to become more closely acquainted with a smaller crowd.

Disadvantages: Through micro marketing the economies of scale and the sales growth is limited. Since a business focuses on a smaller segment, the survival of the firm may be difficult if the sales begin to drop. It is not very beneficial to larger level firms.

Source: http://en.wikipedia.org/wiki/Micromarketing

Brand Proliferation:

When one company introduces and puts new brands under same product lines is called brand proliferation. More items are brought in with new brand names to cover each and very market segment for that product line.

Advantages: It helps in expanding a company’s market share as well as the market. The basic aim is usually to keep the prime brand intact while competing with the lower brands. It also brings variety to the customers and excitement to the sales team. For example Gap, Old Navy and Banana Republic are of same product line but with different brand names and price range.

Disadvantages: This sometimes hurts the prime brand sales figures because of higher sales of other brands in same product line. This increases competition in the market as well as among themselves too. Revenue might not increase because of brand proliferation.

Source: http://www.citeman.com/3193-brand-proliferation-and-the-other-strategies/

2. Identify at least two of the trends in Pakistani market and discuss with examples.

Two trends in Pakistan that are very common these days are micro marketing and telecommunication.

Telecommunication:

We are in an era where globalization and telecommunication is increasing at a fast pace. This is having a great positive effect on the economy of Pakistan. The country now boasts 5 major operators that are Telenor, Mobilink, Ufone, Warid and Zong. This has helped to reduce call charges and improve the quality of service. All of these in competition have offered a lot of different, unique and new innovative value added services such as MMS, low international call rates, low SMS rates, GPRS and recently Mobile tv. The telecommunication trend has offered a huge potential for advertisers to reach out to new markets in a totally new way.

Source: http://pafkiet.edu.pk/LinkClick.aspx?fileticket=u7RC2hLlgQ0%3D&tabid=515&mid=1805

Micro-marketing:

This has recently become quite common trend in Pakistan due to increase use of local cable services and channels. For example the local ads of ‘Sona jewellers, Karegar, Rsheen’ on local cable service in Peshawar. Also telemarketing such as Televantage on channels has also become quite common too. Online advertisement is another new trend increasingly developing. This has cost loss to a lot of newspaper agencies as well as traditional advertising media companies.

3. Evaluate the impact of these trends on the industry and parties of the industry

These trends have had a great impact on the over all advertising industry as well as the parties of the industry. It has opened up new markets, opportunities and chances for advertisers, clients, ad agencies and etc to reach out to everyone. Due to media fragmentation there is wide range of variety and options for them to choose from. Moreover it has provided Media buying businesses with a lot of new opportunities to target its market specifically and earn profit. Mobile phones have become one of the most popular devices and have increased capabilities of technologies. It has enabled access to email, internet browsing and multimedia thus giving advertising yet another channel to reach the audience. Media fragmentation has allowed advertising delivery on a per user basis according to the viewers interests, location, habits, demographics and etc.

Source: http://www.wikinvest.com/concept/Impact_of_Internet_Advertising

Outcome 1.3

Use any two response hierarchy models on the two ads selected by the students

1. Select two ads which have to be evaluated considering the response hierarchy models.

2. Discuss how these ads confirms to the response hierarchy models being discussed

AIDA response hierarchy model:

AIDA stands for ‘Attention, Interest, Desire and Action’ which are the four stages of the sales process. It can be used as a checklist or guideline to determine where they stand and help them increase the sales if they fulfill the checklist for a customer.

A : Attention, attracting and gaining the attention of the customers. The customers don’t want to watch, listen or read long stories and long advertisements therefore keeping it short and the first few seconds attractive is important. Maybe a pleasant surprising element for example.

I : Interest, after attention is gained it is the focus on customers interest by mentioning the benefits and advantages. Making sure not to bore the audience.

D : Desire , To initiate a desire in a customer or convince a customer for what you want them to do or to buy a specific product.

A : Action , Convincing the customer enough to take some action in purchasing a product.

Souce: rhttp://changingminds.org/disciplines/sales/methods/aida.htm

The AIDA model for Ufone advertisement:

Source: http://www.youtube.com/watch?v=Zx0-nrjp0bM ufone

Attention: Yes, the advertisement uses a good humorous approach that grabs attention. The format is very colorful and catchy.

Interest: Yes, The slogan ‘its all about you’ creates an interest and question in the mind of the customer, to see how well the product meets upto its claims in the advertisments.

Desire: Yes, the low prices and attractive promotional packages were able to create a desire to try the product.

Action: Yes, the advertiser was successful to be able to force the customer in a light humorous manner to switch to their product if they want a better quality. This package has been running very successfully.

The AIDA model for Pepsi:

Source: http://www.youtube.com/watch?v=oYsO5PAWSPs

Attention: Yes, The expensive advertisements and use of celebrities grabs attention.

Interest: Yes, their catchy slogan ‘Ye dil maange more’ provokes interest whether one can really have enough of it.

Desire: Yes, the colorful ad, use of cricketers/celebrities creates a feeling of desire to try the product.

Action: Yes, the advertisement showed what length do people go through just to have a Pepsi and it is a more common drink in the easy as compared to Coke.

Hierarchy of effects model:

This is a sequence of five steps that a consumer passes through before purchasing a product. It basically shows how advertisement works. It is said that a consumer passes through thinking, feeling and intention phases.

http://www.businessdictionary.com/definition/hierarchy-of-effects.html

Awareness: creating awareness and capturing attention of the main target audience.

Knowledge: Along with the awareness it is important to give knowledge about a product and brand.

Liking: Next is to create liking in a customer for a product. It is important to find if the product is liked or not and the cause for it.

Preference: Building customer preference of their product through values, quality, image, performance and etc. It should be made sure that the customer not only likes your product but prefers it over other products.

Conviction: Next is to make the consumer come back again and again for your product. Advertiser is to convict the target customers and develop a firm belief in them to always come to you.

Purchase: This is the evaluation of the purchase whether its made or not. The problematic area and reasons should be found as to why a certain product wasn’t purchased or liked in order to fix faulty areas.

Hierarchy of effect model for Ufone Advertisement:

Awareness: Yes, the advertisement is creating awareness about the launch of the new sms package.

Knowledge: Yes, knowledge is given to the customer about the pricing and detail of the package being introduced.

Liking: Yes, a humorous approach in advertisements is always attractive and helps in gaining customer attention. Moreover the low prices will automatically create a liking in them.

Preference: Preference is created by introducing a unique package of lowest rates.

Conviction: yes

Purchase: Yes

Hierarchy of effect model for Pepsi Advertisement:

Awareness: Yes, awareness to the product is made in the advertisement.

Knowledge: No, there is not much emphasis on knowledge of the product (for example price, deals etc)

Liking: Yes, the use of big celebrities helps in gaining customer attention and liking.

Preference: No emphasis was made to create a preference over competitors (for example seasonal deals like buy one get one free)

Conviction: yes

Purchase: Yes

For Merit

Outcome 1.3

12 Make an effective judgment on the ads selected whether you think the ads are appropriately developed to satisfy the hierarchy models. Give reference to books or internet sources used.

The two hierarchy models i used in the previous question were AIDA and Effects model. They were applied on two selected ads (Pepsi and Ufone) to determine their effect. Based on my observation and study it can be concluded that these ads were appropriately developed to satisfy the hierarchy models. They were both successful in gaining the attention, interest and develop the desire in the customer.

Ufone is using humorous theme in its ads which has become its benchmark. People enjoy watching, discussing and following Ufone ads the most and it is the biggest achievement of Ufone in recent times.

Ufone became a part of the Emirates Telecommunication Corporation Group (Etisalat) in 2006.Since its inception, Ufone has focused on the people of Pakistan, empowering them with the most relevant communication modes and services that enable them to do a lot more than just talk, at a price that suits them the most. With a strong and uniquely humorous communication direction that has now become Ufone’s signature across all advertising media, Ufone gives its customers many reasons to smile.

(source: http://thecurrentaffairs.com/ufone-ufone-pakistanufone-call-packages-ufone-jobs.html)

Moreover with its success Ufone has been able to build a subscriber base of over 20 million, network coverage in 10,000 locations, international roaming to more than 260 live operators in more than 150 countries.

As the world of telecommunications advances, Ufone promises its customers to stay ahead, developing and evolving, to go beyond their expectations, because at Ufone, it’s all about U.

http://www.amcy5.com/Reports/marketing/amcy10.htm

http://www.recipeapart.com/ufone-best-funny-ads-and-tv-commercials/

Pepsi on the other hand is already a successful brand which uses advertisment to just ‘remind’ the customer of their existence. The pepsi ad i chose has used two most popular celebrities of Bollywood (Shahrukh, actor and Sachin, cricketer). Shahrukh was the Brand ambassador till 2008 and so was Sachin at some point. Pepsi’s style of advertisment has almost always used a celebrity for their advertisement to gain customer attention as well as create desire in them to use a brand popular among celebrities.

source: http://entertainment.oneindia.in/bollywood/news/2009/shahrukh-pepsi-thrown-out-160209.html

Therefore both the advertisements till some extent satisfies and fulfills the hierarchy model criteria. However Pepsi company could have made this advertisment a little more innovative and creative by developing a more effective story line stating its preference and more knowledge regarding price for Pepsi. Ufone could have also given a bit more knowledge about their rates and number of sms offering.