June 9, 2014

Management of Advertising - Kotler's Chapter Summary

Marketing Management Revision Article Series based on Kotler's Marketing Management Book.

Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor


Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor (Kotler).

Advertising is aimed at a target market and buyer motives have to be considered in developing the advertisement strategy or program.

Five Major Decisions in Advertising

Five major decisions are to be made developing the advertisements.

Mission: the objectives of the advertisement

Money: how many needs to be spent or how much can be spent?

Message: What is the message to be sent to get the desired response?

Media: What media should be sued?

Measurement: What are the evaluation criteria for results of the advertisement?

These five decision are known as Fives Ms (5 Ms) of advertising.

Objectives of Advertising

One classification of objectives is to inform, persuade or remind or reinforce.

Under the above broad heads more number of objectives can be specified. Colley lists 52 possible advertising objectives in his book ‘Defining Advertising Goals for Measured Advertising Results.’

The objective is decided based on the marketing situation of the product or brand.

Informative advertising aims to create brand awareness and knowledge of new products or features of existing products.

Persuasive advertising aims to create liking, preference, conviction, and purchase of a product or service. Persuasive advertising uses comparative advertising also.

Reminder advertising aims stimulate repeat purchase of products and services.

Reinforcement advertising aims to convince current purchasers that they made the right choice.

Advertising Budget Decision

Five specific factors are considered in this decision.

Stage in the production life cycle

Market share and customer base size

Competition and clutter

Advertising frequency

Product substitutability

In adaptive-control method of setting advertising budgets, the company tests in some market segments with low advertising, and in some market segments with high advertising. In most of the market segments, the normal advertising expenditure is incurred. The results give the response of the market to advertising expenditure by the company. These results will help the company to adjust the advertising expenditure.

Advertising Elasticity

The success rate of advertising was higher on new products or line extensions than on established products/brands.  When advertising was successful in increasing sales, its impact lasted up to two years after peak spending. The long term incremental sales generated were approximately double the incremental sales observed in the first year of advertising spending increase.

Academic literature review reveals that advertising elasticities were estimated to be higher for new (0.3) than for established products.

Advertising Message

(Picture source: http://www.toyotabharat.com/Images/prius160-big.jpg )

An advertisement has to gain attention of the reader or listener to generate sales. So the quotation to keep in mind is “Until it’s compelling, it isn’t selling.”

Advertisers use four-step process to generate advertising messages and select the appropriate message.

1. Message generation

2. Message evaluation and selection

3. Message execution
4. Message social responsibility review

1. Message generation

Inductive and deductive methods are used to generate messages.

In inductive method, creative people talk to customers, dealers, experts and competitors to know the strengths and weaknesses of the product or brand, their uses, the personalities of potential users and related demographic and psychographic variables.

Deductive framework says buyers expect four types of reward from a product: rational, sensory, social, or ego satisfaction. Buyers might visualize these rewards from results-of-use experience, product –in-use experience, or incidental-to-use experience. The combinations from these give twelve types of advertising message themes. The advertiser with the now available computer facilities can prepare advertisement messages for each of the themes and provide them for evaluation.

2. Message evaluation and selection

The advertisement messages are to be rated on desirability, exclusiveness and believability. They have to be tested in the market to find determine which message is having the maximum desired effect.

3. Message execution

Style, tone, words and format etc. are to be decided in executing an advertising message.

4. Message social responsibility review

Advertising ethics and codes need to be followed by advertisers and advertising agencies. Social and legal norms are to be followed. Advertisers must not make false promises. They should not show false demonstrations.

Prius Family Advertisement - What do you call when it turns into more?


Deciding on the Media

Media selection involves finding the most cost-effective media to deliver the desired number of exposures to the target audience.

Evaluating Advertising Effectiveness

Advertisers try to measure the communication effect of an advertisment - its effect on awareness, knowledge or preference. Ad’s sales effect can also be measured and Kilter says emphatically that sales effect also needs to be researched.


Russell, H. Colley, Defining Advertising Goals for Measured Advertising Results, National Association of Advertisers, New York, 1961.

Roland T. Rust, Advertising Media Models: A Practical Guide, Lexington Books, Lexington, MA, 1986.

Herbert E. Krugman, "What Makes Advertising Effective?' Harvard Business Review, March-April 1975, pp. 96-103.

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