MM03
Advertising & Brand Management
(For CNM Cases)
Assignment – I
Assignment
Code: 2016MM03A1 Last Date of Submission: 30th
April 2016
Maximum Marks: 100
Attempt all the questions. All the questions are compulsory and carry
equal marks.
Section-A
1.
Unlike
Sales Promotions - Advertising is a form of market
communication aimed at promoting awareness and achieving long term Marketing
Objectives? Examine this statement and give examples.
2.
Distinguish between Traditional Mass Media and today’s
contemporary Media? Briefly outline the
criteria behind media choice and selection for running an advertising campaign?
3.
Discuss
the following models of advertising and explain how they differ from one
another:
(a)
Hierarchy of Effects Model
(b)
AIDAS Model of Advertising
(c)
DAGMAR Approach
4. (a) Describe
briefly the objectives and functions of advertising?
(b) What are the various ways in which
advertisements can be classified?
Section-B
Case
Study: SMS Advertising - A New Media Mix
Tool
SMS - A New Concept
By
the early 21st century, the cellular telephony revolution had
radically transformed the global telecommunications industry. Cellular phones
offered a whole new experience to people desirous of keeping in touch with
their close ones anytime, anywhere. Cell phones (or mobile phones) became more
popular, largely due to the emergence of the Short Messaging Service (SMS). The
popularity of SMS took even industry experts by surprise, as the service had
always been looked down upon as a 'low-end' option offered by a cell phone. As
per the findings of a study conducted about the usage of SMS across 14
countries, over 80% of cell phone users in countries such as Finland, the UK
and many European countries used SMS at least once a month
In
Sweden, Singapore, Italy and Germany, around 75% of the people used SMS at
least once a month. SMS was most popular in the 'under 25 years' age group.
Text messages sent across the world reached an astounding 62.45 billion per
month by December 2002 (Refer Table I for SMS growth statistics). According to
the estimates of Strand Consult1, the global
market for SMS doubled from $ US 7.5 billion in July 2000 to $ US 15 billion by
December 2001, and was still growing at a scorching pace.
The firm
expected the revenues from SMS advertising to exceed those from Internet
advertising in the near future. Considering this huge pool of mobile-savvy
customers, marketers could not ignore the potential that advertisements
directed towards SMS senders had. Thus, was born the concept of SMS advertising
- something that was to influence the media mix plans of many companies in the
years to come.
Background Note
The basic concept of cellular phones
originated in 1947 in the US, when researchers at Bell Laboratories got the
idea of cellular communications from the mobile car phone technology used by
the police department of the country. However, it took over three decades for
the first cellular communication system to evolve.
The
public trials of the first cellular system began in Chicago during the late
1970s and the first commercial cellular telephone system was launched in Tokyo.
Cellular telephone services were introduced in the US in the early 1980s, and
became popular within a short span of time.
By
the late 1980s, cellular services were operational in many developed countries
across the world. Over the years, there was an improvement in both the number
and quality of services offered on account of dynamic technological
advancements. There were mainly two types of cellular services offered by
operators - post-paid and pre-paid.
Post
paid cellular services, also called billing card services, required the
customers to pay for the cellular services utilized by them at the end of a
specific period (generally every month). These services also included fixed
rental charges for the services provided. Pre-paid cellular services required
the customers to pay in advance for the services they would be using.
These
cards were available in different denominations, and the customer could choose
one, keeping in mind his/her call requirements and budget. When customers
exhausted the call time they were entitled to, the services were withdrawn. To
attract and retain their customers, cellular companies offered a host of other
services like voice mailing, chatting, Internet browsing, roaming services,
call wait/hold/divert options and games. Customers could also download ring
tones and logos, and receive information (horoscopes, game scores, traffic
updates and weather news among others). Subscribers usually had to pay for all
the above services depending on the service provider's tariff plans.
Many
of the services were priced on the higher side. SMS, however, was a service
that was generally priced low, and in a few cases, offered free of charge as
well. Simply put, SMS is a single, short message, upto 160 characters (word,
numerals, alpha-numeric, or images) that can be sent from one cell phone to
another...
Realizing
the benefits SMS advertising could offer, many companies such as Pepsi, Sony,
Cadbury Schweppes, Coca-Cola, Heineken and Johnson & Johnson tried
advertising their products through this medium.
A marketing company based in the US, The
Mobile Channel, conducted a survey of 1000 people regarding the acceptance of
SMS advertising. Approximately 94% of the users were positive about the choice
of advertisements sent and showed that text advertising could elicit a product
response of up to 28%. Even as corporates and
cell phone users seemed to be rather enthusiastic about the growing popularity
of SMS advertising, there were a few criticisms as well.
Like many other media mix components, SMS advertising
too had various pitfalls associated with its usage - the foremost being that of
'Spam SMS' (similar to spam e-mails, spam SMS refers to the unsolicited,
unwanted junk SMS that land up in a cell phone user's inbox). Commenting on
this, an industry observer said, "Some unscrupulous firms are bound to
start sending out spam and clogging the vastly bigger inbox of your futuristic
phone with messages that you do not want about services or offers you do not
need."...
5.
Discussion Questions:
a.
Identify
the reasons behind the growing popularity of SMS?
b.
Examine the factors responsible for
its emergence as a media mix tool”
c.
Do
you perceive that SMS advertising option is effective and has a good future for
promoting items belonging to certain categories of industries?
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