Dissertation Nikhil

7/30/2019 Dissertation Nikhil

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DISSERTATION

On

USE OF ADVERTISEMENTS FOR SMALL AND MEDIUM ENTERPRISES

By

NIKHIL BANSAL

A3914710022

BBA-M&S [2010-13]

Under the Supervision of

Mrs. Bhawna Gupta

Professor

Amity School of Business

AMITY SCHOOL OF BUSINESS

AMITY UNIVERSITY UTTAR PRADESH


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Acknowledgment

This Project Report is a result of efforts, time and skills contributed by a number ofpeople. I would like to take this opportunity to thank all of those who have worked

towards successful completion of this project report.

I must acknowledge my deep gratitude to my faculty guide, Mr. Dharmendra

Pandey Professor, Amity School of Business; for his valuable guidance, corrective

criticism and unflinching moral support during the tenure of the project.

Thanks are also due to all those whose writings and data I have drawn upon in the

preparation of the report.

I would also like to thank all my colleagues at the campus for taking out time and

helping me make this project.

Lastly, must not forget to thank my family and all friends for their constant support

and understanding during the work.


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DECLARATION

I, Nikhil Bansal S/O Anil Kumar Bansal hereby declare that this dissertation represents

my original piece of work and has not been copied from anywhere.

I am aware that in case of non-compliance, Amity School of Business is entitled to

cancel the report.

Place : Signature of Student

Date : Name of the Student

Enrollment No.


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Table of Contents

Sr. No. Content

1. Introduction(i) MSMEs Unique features(ii)SMEs in India(iii) Top 10 SMEs as per CRISIL Ratings(iv)What is advertising?(v)Importance of Advertising(vi)Functions and role of advertising(vii) Regulation for advertising in India

2. Methodology(i) Statement of Problem(ii)Objectives of the study(iii)Research Design

3. Findings

4. Value of Internet for SMEs

5. TV Advertising(i) What makes TV advertising an option for SMEs?(ii) TV Advertising usage by SMEs in India(iii)TV advertising platforms

6. Transaction based advertising tailored for the SME segment

7. Print Media Advertising for SMEs

8. Limitations9. Conclusion

10. Appendix


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Introduction

MSMEsUNIQUE FEATURES

MSME sector employs about 60.00 million persons spread over 26.1 million

enterprises. In terms of value, the sector accounts for about 45% of the manufacturing

output and around 40% of the total export of the country. The sector contributes 8% to

GDP, which is expected to raise to level of 10%. Banks exposure under MSE sector

has shown significant growth during the financial year 2010-11 and 2011-12 precisely,

the sector grew by 59.72% and 33.56% respectively.

Definition of MSME sector:

A micro enterprise is an enterprise where investment in plant and machinery

does not exceed Rs. 25 lakh;

A small enterprise is an enterprise where the investment in plant and

machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore; and

A medium enterprise is an enterprise where the investment in plant and

machinery is more than Rs.5 crore but does not exceed Rs.10 crore.


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SMEs IN INDIA

With the advent of planned economy from 1951 and the subsequent industrial policy

followed by Government of India, both planners and Government earmarked a special

role for small-scale industries and medium scale industries in the Indian economy.

Due protection was accorded to both sectors, and particularly for small scale industries

from 1951 to 1991, till the nation adopted a policy of liberalization and globalization.

Certain products were reserved for small-scale units for a long time, though this list of

products is decreasing due to change in industrial policies and climate.

SMEs always represented the model of socio-economic policies of Government of

India which emphasized judicious use of foreign exchange for import of capital goods

and inputs; labour intensive mode of production; employment generation; non

concentration of diffusion of economic power in the hands of few (as in the case of big

houses); discouraging monopolistic practices of production and marketing; and finally

effective contribution to foreign exchange earning of the nation with low import-

intensive operations. It was also coupled with the policy of de-concentration of

industrial activities in few geographical centers.


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It can be observed that by and large, SMEs in India met the expectations of the

Government in this respect. SMEs developed in a manner, which made it possible for

them to achieve the following objectives:

High contribution to domestic production

Significant export earnings

Low investment requirements

Operational flexibility

Location wise mobility

Low intensive imports

Capacities to develop appropriate indigenous technology

Import substitution

Contribution towards defense production

Technologyoriented industries

Competitiveness in domestic and export markets

At the same time one has to understand the limitations of SMEs, which are:

Low Capital base

Concentration of functions in one / two persons

Inadequate exposure to international environment

Inability to face impact of WTO regime

Inadequate contribution towards R & D

Lack of professionalism


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In spite of these limitations, the SMEs have made significant contribution towards

technological development and exports.

SMEs have been established in almost all-major sectors in the Indian industry such as:

Food Processing

Agricultural Inputs

Chemicals & Pharmaceuticals

Engineering; Electricals; Electronics

Electro-medical equipment

Textiles and Garments

Leather and leather goods

Meat products

Bio-engineering

Sports goods

Plastics products

Computer Software, etc.

As a result of globalization and liberalization, coupled with WTO regime, Indian

SMEs have been passing through a transitional period. With slowing down of

economy in India and abroad, particularly USA and European Union and enhanced

competition from China and a few low cost centers of production from abroad many

units have been facing a tough time.


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OVER 40% SMEs USE THE INTERNET FOR ADVERTISING

SMEs from services, manufacturing and export vertical are the most active in online

advertising with over 65% using search engine marketing

Indian SMEs are reaping the benefits of using the Internet medium to grow their

businesses. This was revealed by a study conducted by Google India to understand

usage patterns and importance of online medium amongst the SMEs in India.According to the study, over 57 percent SMEs said that they now use their website as

a sales channel and get direct business leads from their website.

While accessing email is the number one purpose for using the Internet, a majority of

SMEs (71 percent) also use the Internet to search for vendors and suppliers and about

40 percent of them use the Internet to create online listings and advertise online. In

terms of mediums used to advertise, traditional media like newspaper ads and outdoor

ads still lead the advertising spends for SMEs, but Internet is emerging as one of the

fastest growing medium for advertising with 58 percent of SMEs with websites using

the Internet to generate business leads.

Amongst the SMEs who have an online presence, 56 percent of them feel that the

Internet is a cost effective medium as compared to traditional advertising medium like

print and television and 79 percent of SMEs believe that Internet advertising can

provide greater reach.

A closer analysis of the marketing spends of the SMEs reveals that SMEs with

marketing spends between `25 lakh and `70 lakh per annum tend to spend higher on

the online medium and rely less on traditional media like print and television. But


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majority of the spends (43 percent) comes from SMEs who spend between `12 lakh

and `25 lakh on advertising on a annual basis, reflecting the low cost benefit of

Internet advertising.

While the absolute number of SMEs with an online presence is very low compared to

actual businesses in India, were pleasantly startled to see increasing understanding

amongst Indian SMEs to use the web for business growth. In the last two years we

have seen a significant increase in the number of businesses that have started to

advertise online. But with over 35 million SMEs in the country, we have a long way to

go. Google India is working on a number of programs to educate more SMEs on how

they can get online and use the Internet as a primary sales channel, said Sridhar

Seshadri Head of Online Sales Google India.

Small and Medium Enterprises are one of the key growth drivers for Google India.

We undertook this study in order to understand the perception of these businesses

towards online marketing as well as to identify online advertising solutions that workfor them, he added.

Among all the SMEs surveyed, SMEs from insurance, technology B2B, IT hardware,

and travel & tourism spend around 30-45 percent on online marketing. Annual average

online spends are high among SMEs from media & entertainment, gems & jewellery

and apparel. Additionally, banner/display advertising and email marketing are themost popular form of Internet advertising and 30 percent SMEs use search engine

advertising to market their product and services.


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Top 10 SMEs as per CRISIL ratings

Sr.

NoName City

Rating

AssignedDate Assigned* Constitution

1A T E Enterprises Pvt. Ltd. Mumbai SME 2 05-Oct-11 Private Limited

2 Aacess Cranes Hyderabad SME 3 22-Feb-12 Others

3 Aacess Equipments Hyderabad SME 3 22-Feb-12 Others

4 Aarvi Encon Private Limited Mumbai SME 1 19-Dec-11 Private Limited

5 Abharan Jewellers Udupi SME 2 07-Mar-12 Partnership Firm

6 Abhiraj Engicon Private Limited Pune SME 4 15-Mar-12 Private Limited

7 Acer Engineers Private Limited Hyderabad SME 3 15-Mar-12 Private Limited

8 Adesh Welfare Society Muktsar SME 3 10-Nov-11 Others

9Adithya Agro Allied Oils Private

LimitedEluru SME 4 03-Nov-11 Private Limited

10Aditya Consumer Marketing

Private LimitedPatna SME 2 22-Feb-12 Private Limited


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What is advertising?

Advertising is a non-personal form of promotion that is delivered through selected

media outlets that, under most circumstances, require the marketer to pay for message

placement. Advertising has long been viewed as a method of mass promotion in that a

single message can reach a large number of people. But, this mass promotion approach

presents problems since many exposed to an advertising message may not be within

the marketers target market, and thus, may be an inefficient use of promotional funds.

However, this is changing as new advertising technologies and the emergence of new

media outlets offer more options for targeted advertising.

Advertising also has a history of being considered a one-way form of marketing

communication where the message receiver (i.e., target market) is not in position to

immediately respond to the message (e.g., seek more information).

Some of the popular modes of advertising are:

Television

Print

Radio

Internet


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Importance of Advertising

Spending on advertising is huge. One often quoted statistic by market research firm

Zenith Optimedia estimates that worldwide spending on advertising exceeds (US)

$400 billion. This level of spending supports thousands of companies and millions of

jobs. In fact, in many countries most media outlets, such as television, radio and

newspapers, would not be in business without revenue generated through the sale of

advertising.

While worldwide advertising is an important contributor to economic growth,

individual marketing organizations differ on the role advertising plays. For some

organizations little advertising may be done, instead promotional money is spent on

other promotion options such a personal selling through a sales team. For some

smaller companies advertising may consist of occasional advertisement and on a very

small scale, such as placing small ads in the classified section of a local newspaper.

But most organizations, large and small, that rely on marketing to create customer

interest are engaged in consistent use of advertising to help meet marketing objectives.

This includes regularly developing advertising campaigns, which involve a series of

decisions for planning, creating, delivering and evaluating an advertising effort. We

will cover advertising campaigns in greater detail in our next tutorial


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Functions and role of Advertising

Research conducted by Frank Jefkins (1982), answers in a simple yet convincing waythequestion aS to, why do we advertise? He explains: either, we have something we

want to sell or someone else has something we want to buy. Alternatively, we may

want to give something away, seek an exchange or invite donors or gifts. Therefore,

we advertise to make known our offer or need. Admittedly, Jefkins answer focuses

on new or novel offers or needs, but why do already established companies such as

Coca-Cola advertise? Conclusively, it is best to note that the roles that advertising

plays are many and varied but may in one way or the other be categorized into three

broad areas

To inform,

To persuade,

To sell.


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REGULATIONS FOR ADVERTISING INDUSTRY IN

INDIA

Advertising Standards Council of India is a self regulatory

voluntary organization of the advertising industry.

The Role and Functioning of the ASCI & its CCC in dealing with Complaints

received from Consumers and Industry, against Advertisements which are

considered as False, Misleading, Indecent, Illegal, leading to Unsafe practices,

or Unfair to competition, and consequently in contravention of the ASCI Code

for Self-Regulation in Advertising.

The main objects to be pursued by the Company on its incorporation are -

To monitor administer and promote standards of advertising practices in India

with a view to

ensuring the truthfulness and honesty of representations and claims made

through advertising and safeguarding against misleading advertising.

ensuring that Advertising is not offensive to generally accepted norms and

standards of public decency.


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safeguarding against the indiscriminate use of advertising for the promotion

of products or services which are generally regarded as hazardous tosociety or to individuals or which are unacceptable to society as a whole.

ensuring that advertisements observe fairness in competition and the

canons of generally accepted competitive behavior


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Methodology

(i) Statement of Problem

Use of Advertisements for Small and Medium Enterprises

Through my dissertation I would like to research about the usefulness of

advertisements for Small and Medium enterprises. I would also like to do a detailed

study of the various campaigns if any carried out by these SMEs.

Objectives of the study:

a) Determine the usefulness of Advertisements for SMEs

b) List the top SMEs as per Crisil ratings.

c) Identify different advertising platforms available for SMEs


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(ii) Research Design:

Type of Research: Primary Research

Data Collection Tools: Journals

E books

Research Papers

Survey (Questionnaire)

Observation


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Findings

Following are the results of the survey conducted by me to determine the usefulness of

advertisements forSMEs; the questionnaires have been filled by employees working

in different SMEs.

Q1.) Do you feel the need to advertise for your company?

As it is evident from the above graph, majority of the employees working in a SME

feel that there is a need to advertise, however, a lesser majority opposes this belief.

0

1

2

3

4

5

6

7

8

9

Yes No Maybe

Need

Need


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Q2.) If yes, what is the preferred media for advertisements?

The most preferred media is internet as we all know that today each and every

enterprise however small it is, does have its presence in the cyber world as it is the

most effective medium to reach a larger audience. Print and Television are also

considered to be useful mediums. Radio is a little behind in the race but nevertheless

we can never underestimate the impact it can have.

0

1

2

3

4

5

6

Television Radio Print Internet

Preferred Media

Preferred Media


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Q3.) How useful will advertisements be for your company?

Most of the respondents feel that advertising is a very useful medium as it helps them

reach a wider audience, few of them consider the usefulness to be moderate and a very

negligible part of the respondents feel that it is useless.

0

1

2

3

4

5

6

Very Useful Moderate Useless

Usefulness

Usefulness


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Q4.) How much on an average should your company spend on advertisements in case

they decide to advertise?

This graph exhibits the amount that people feel should be spent on AD campaigns, a

similar majority exists for the brackets of less than 10,00,000 and more than 30,00,000

a negligible majority falls within the bracket of 10,00,000- 20,00,000, whereas no one

come in the bracket of 20,00,000- 30,00,000

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

upto 10,00,000 10,00,000 -

20,00,000

20,00,000 -

30,00,000

more than

30,00,000

Cost Effectiveness

Cost Effectiveness


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Purpose of an advertisement:

These are some of the purposes for advertisements as quoted by the people who were

questioned via the questionnaire:

Publicity

Marketing of product

To increase awareness about your company

With a modern media driven society combined with multiple formats for mass

communication, the influence of advertising is remarkably strong today.

Its an art of convincing people to spend money they dont have for something

they dont need.

Highlighting you Brand Image

To reach to all the people in the country mostly to Tier 3 cities to make them

aware of the company.

To promote our security homeland products, otherwise our company is wellknown in the market. (Aditya InfoTech)


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Value of Internet for Small and Medium Enterprises

In multiple countries small and medium enterprises (SMEs) that have engaged actively

with consumers on the Internet have experienced three-year sales growth rates up to

22 percentage points higher than those of companies with low or no Internet presence,

according to the 'Internet Economy in the G-20' report by the Boston Consulting

Group.

While SMEs constitute 17 percent of India's GDP they are responsible for 25 percent

of private-sector employment. Almost all the high and medium web SMEs added jobs

during the last three years but 17 percent of low- or no-web companies did not, saysthe report.Given that the SMEs have such a track record of job creation, policies that

encourage more of these companies to develop an online presence could help address

the lingering unemployment that currently plagues developing countries.

But the report finds that a surprising number of SMEs have not grasped the power of

the Internet to build their businesses- or have ventured only to a very limited extent.

Half of SMEs in India cited local business culture a significant barrier keeping SMEs

from engaging more broadly or deeply online. While most of the hurdles need to be

overcome by SMEs themselves, policy makers should take note that two in five SMEs

cited access issues and government regulations as impediments to internet adoption.

33 percent of the people in India are willing to give up sex and 70 percent willing to

give up alcohol for a year instead of the internet.

The most powerful advantage of the Internet for the SMEs is an improved level of

customer interaction which is achieved by exploiting the participatory nature of

today's internet. Nearly two-thirds of High Web SMEs are moving quickly to match

their customer's engagement in social networks.


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Social network penetration among internet users in India over 85 percent developing

markets are going straight to social adopting social networking quickly as they come

online. As per the three year historical sales growth figures in India, High web SMEs

are seen to be growing 6 percent faster than their low or no-web counterparts.

The report also showed that all of the High Web SMEs in India intensely use the

internet for setting up their website, online advertising, social networking and e-

commerce and a majority also uses it for blogging, recruitment and paying their

suppliers. "Around the world, SMEs that embrace the Internet are growing faster and

adding more jobs than those that don't. By encouraging businesses to turn to the

Internet, countries can improve their competitiveness and growth prospects," said Paul

Zwillenberg, a BCG partner and co author of the report.

At a time when 33 percent of the people in India are willing to give up a sex and 70

percent willing to give up alcohol for a year instead of the internet, its impact is

unquestionably clear. It is up to the SMEs to leverage this trend and rein in their

profits.


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TV advertising

What makes TV advertising an option for SMEs now?

To attain success in any business, creating brand awareness is an important process

and it can be carried out effectively with advertising. It helps increase the selling

power of products and services. As the penetration of TV is quite high in India,

advertising on TV as a marketing tool could be used by any type of business

efficiently to its advantage.

With the emergence of cable and regional television, it is possible for any small

business to benefit from TV advertising just like the large corporations. The industry

is booming, new cable stations are coming up every year along with the growing

requirement of advertising to attract consumers. As TV advertising is becoming

competitive, many stations are providing affordable packages to the small businesses.

SMEs need to understand that TV advertising is powerful and it can help any business

attain instant credibility. It has potential to position the small businesses in the same

league of MNCs, which enhances the visibility factor. In India, there are many

regional SME brands engaged in different sectors like pharma, FMCG, steel, cement,

beverages, household appliances and dairy products. It is often found that the regional

SMEs enjoy better understanding of the domestic needs as compared to the big brands.

Hence, the advertising need for SMEs is bigger as they have better capability to cater

in regard to cost, quality and specific needs of their marketplace. TV advertisingmakes it possible for the small businesses to convert more potential buyers into paying

customers.

TV advertising usage by SMEs in India

The usage of TV advertising platform by SMEs is still at a nascent stage as high

marketing costs often hinders their brand building process. Regional TV advertising

comes handy here to position the company in local regions. Reports suggest that on an


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average, hours watched per viewer per week in case of TV stands at 36, while in case

of online the figure is close to 10. It clearly shows that TVs popularity continues to

grow despite the presence of online video content.

TV holds the title of the largest mass medium used for advertising for over 60 years

and that designation is still retained by it while Internet has also picked up on

popularity. Television is a significant part of a media plan due to its pervasiveness,

effect and targeting abilities.

TV advertising platforms in India

As Indian SMEs are slowly adopting the concept of TV advertising, there are firms

offering solutions to help the small enterprises.

One such company is Bangalorebased advertising player Amagi Media Labs that

realised the needs of SMEs and developed a unique platform for these units to

advertise their brands. Currently, Amagi has over 700SME customers on board and

its 'Smart TV Advertising platform' helps small businesses to advertise by spending a

notso high amount.

In an interview to SME News about the growing need of TV advertisements among

the SMEs, KA Srinivasan, co-founder, Amagi Media Labs, said, We are seeing an

increased shift towards TV for SMEs television has always been perceived as

expensive medium by most SMEs but with success stories of the likes of Fevicol,Lion dates, Ghari Detergent, we are seeing a fundamental mindset change. This has

been further aided by increasing availability of targeted content (more niche channels

coming up targeting specific demographics, language or regions) as well as new

platform options like Amagi which provide zerospillage TV by targeting on national

TV channels.


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Reports suggest that the regional SMEs developed brand campaigns on multiple

National TV channels with the help of Amagi platform at the low budget of just Rs 2

lakh per month. Amagi said that over 500 advertisers across the country benefited by

using the platform and it is available across MAS Financial Services Ltd, a retail

financing organisation and also a client of Amagi, said that this platform has helped in

effective branding of the company. Saumil Pandya, vice president, MAS Financial

Services Ltd, said, Amagis Smart TV Advertising platform is a boon for regional

brands like us. I can now get the best of both worlds national TV and local rates.

Coupled with Amagis creative services, this platform has helped me get both

branding and response at a reasonable budget.

Advantages

(i) Large Reach: Television offers the largest possible reach. Virtually al

Indian home contains one or more television sets, and TV viewing

occupies around 40% of average leisure time. In-fact TV can provide

blanket coverage of a market.

(ii) Powerful Impact: TV is the most powerful and popular medium as it

has the ability to combine vision and voice, music and motion, sound

and light and also colour, it creates a lasting impact on the human

memory.


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(iii) Higher Frequency: TV is high frequency medium. It allows the

advertiser to spread messages into the minds of prospects through

constant repetition.

(iv) Low per Head Cost: Millions of people watch the same popular

programme at the same time and as such per head cost of TV

messages is comparatively low.

(v) Product Demonstrations: Products demonstrations are possible on the

TV and the audience can be convinced about the goodness of the

product.

(vi) Product Introduction: TV plays a vital role in introducing new

products to the target audience.

Disadvantages

(i) Expensive: TV advertising is a costly affair as a 10 seconds

advertisement at prime time on the national network cost about Rs. 1

lakh for every exposure and as such small clients can not afford the

luxury of TV advertising.

(ii) Lacks Flexibility: TV advertising lack flexibility in that last minute

changes may prove very expensive.


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(iii) Clutter: TV advertising suffers from high level of clutter. One often

comes across over 30 to 40 advertisements at a time before a popular

serial and such spot advertisements get lost in a chain of

advertisements.

(iv) Short Life: TV advertisements suffer from short life. Once the

advertisements appear 10 seconds or so and then it is gone forever,

unless and until it is repeated again.


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Radio

Radio is a major media. It provides wide coverage. But it lacks visual impact. The

message is only heard in a fleeting manner. In recent years, listeners interest in radio

has revived to a great extent because of the advent of FM channel which has more

contemporary, youthful and entertaining content. Radio reaches to more than 90% of

the Indian area & 97% of the Indian population. The programmes are broadcast in

over 24 languages. By an estimate there are over 15 crore radio sets in India. There are

178 radio stations spread all across the country and 298 transmitters.

Primary Channel

The emphasis is on social welfare and development rather than on entertainment.

Vividh Bharti

It covers 30 radio stations and it is primarily an entertainment channel covering larger

towns.

Advantages

(i) Flexibility: Advertisement on Radio is rapid and flexible in the sense that

effective commercial can be produced in a matter of hours to adapt to the

changing market price and advertising is not hampered by production delays.

(ii) Local Language: Local radio stations in India can effective use of local

languages to convey the advertising messages.

(iii) Target Market Medium: With a wide variety of format and audience choices, the

advertisers can reach just the type of people who are the best prospects.

(iv) Low Advertising Cost: This makes radio an excellent choice for low budget

advertiser. Besides production of radio commercials is easy and inexpensive.


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(v) Mobility: Radio is extremely mobile. It follows the listerner to any place he

goes.

Disadvantages

(1)Short Life: The life of radio advertising is restricted to a few seconds. Message can

not be preserved unlike press advertising.

(2)Clutter: Radio suffers from extreme commercial clutter. An advertisement is

surrounded by a sea of other commercials crying out for attention.

(3)Lacks Visual Elements: Radio advertising lacks visual impact such as products

where visual demonstration is very much required can not be advertised through

radio.


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Transaction-based advertising tailored for the SME segment

A new concept called transaction-based advertising is replacing the traditional retail

advertising to cater to Small and Medium Enterprises (SMEs) that have small

advertising budgets.

Transaction-based advertising is a kind of stage through which a company can get

advertisements, brochures and logos designed for a budget that they can afford. This is

catching up with SMEs who have low advertising funds and cannot afford to hire a

full-fledged advertising agency to do the designing.

With see-saw market conditions, SMEs are finding it hard to pay for brand building

and advertising. We have a very low advertising budget. We use mostly working

media such as social networking sites and word of mouth to spread the message, said

Ms Uma Reddy, Chief Executive, Hitech Magnetics.

With increasing competition, advertising has become more of a necessity than an

option, say SME sector veterans. Advertising is the need of the hour, but our

advertising budget is on the lower side. Getting an advertisement designed and

published in a newspapercosts a lot of money, said Mr Sundar Nadimpalli, Founder,

Nudzine. The company produces child safety belts for two-wheelers.

We have been using the transaction based advertising platform to get some flyers

designed. It has worked well for us, said Mr Nadimpalli.

Expensive proposition

Traditional advertising through agencies can be quite expensive for SMEs and would

mean paying the agency every month for carrying out advertising campaigns.


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Due to this, the transaction-based advertising model is now catching up, said Mr

Manik Kinra, Founder and CEO, Jade Magnet, a platform that implements the concept

of transaction-based advertising. Over the past 20 months, more than 500 SMEs have

used this model for creating advertisements. Every day, two new SMEs register with

us, he said

(This article was published in the Business Line print edition dated October 5, 2011)

Print Media Advertising for SMEs

In the mid 1990's print media advertising was the main advertising media on the

schedule for SME's around the world - how things have changed. Today, media

advertising is driven by enhancements to technology and the need for advertisers to

reach their target audiences in the places where they are looking for information. It

seems that Internet Advertising is the fastest growing format of the moment, but print

media advertising still has a very firm place in most ad schedules.

One of the main reasons it still works is the fact that people tend to be very much

away from work when they are reading information and looking at adverts in print. If

we look at magazine advertisements, their main advantage is the fact that a very

directed audience is seeing them. This is of huge benefit to the advertiser

and magazine advertising gives them the space to take potential customers when they

are at their most relaxed.

This is also true fornewspaper advertising, although there is probably a significantly

higher amount of wastage in terms of matching the ad content to the type of reader.

Now you can see why suppliers of mobile phones and car companies advertise in

newspapers - most of the target audience is relevant to the products or services shown

in the advert.
http://myadbase.com/index.phphttp://myadbase.com/index.phphttp://myadbase.com/guide_final.php?page=magazine_advertisinghttp://myadbase.com/guide_final.php?page=newspaper_advertisinghttp://myadbase.com/guide_final.php?page=newspaper_advertisinghttp://myadbase.com/guide_final.php?page=magazine_advertisinghttp://myadbase.com/index.phphttp://myadbase.com/index.php


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Another area to consider for print is yellow pages and other directories. Some

directories are now very targeted and the advantage to this format is that people are

actually looking for adverts. The other thing to consider is cost and an annual price for

an eighth page in a directory can be very reasonable.

Limitations

Lack of data on advertising campaigns run by SMEs

The report is limited to SMEs in India

The target audience for difference products was not interviewed separately.

This is because of the wide range of the products and also time constraint.

Hence the views of the target audience about the effectiveness of different

advertising media are not reflected in the report.

.Accuracy of the secondary data: pieces of data which have been picked from

various sites can be slightly inaccurate and there is no source to check this data.

1. Newspapers

Among the print media, newspapers have become most popular. They command high

readership. Today, reading newspaper everyday is a habitual activity for the educated

people all over the world. In India there are around 400 daily newspapers in almost all

the languages with a total circulation of around 3 crores.


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Advantages

(i) Large Reach: The vast majority of households subscribe to one or more local

newspapers. In some communities, it is possible to reach over 90% of

households with a single newspaper.

(ii) High Frequency: The advertising agencies have the ability to expose

advertisements day after day.

(iii) Geography Selectivity: Newspapers serve a well-defined geographic area and the

advertiser can effectively reach to his target audience.

(iv) Low Cost per Thousand (CPT): Newspapers offer a cost-effective way to reach

large number of people.

(v) Low Production Cost: Newspapers advertisements are inexpensive to create and

reproduce.

(vi) Quick Turnaround Times: Newspapers can accept advertisements on very short

notice, which makes it a good medium for timely and topical promotions.

Disadvantage

(i) ShortMessage Life: The newspaper which is reach each morning is discarded

the same evening, along with advertisements.

(ii) Limited Coverage of Certain Groups: Although newspapers have wide

coverage, certain groups are not frequent readers. For example, newspapers are

not frequently read by teenagers and college students and the illiterate ones are


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out of its coverage. For correcting this deficiency, newspapers have started

relevant supplements like Young World with The Hindus on Saturday &

education supplements of The Hindustan Times ad The Times of India.

Female oriented supplements are also there with some newspapers.

(iii) Poor Production Quality: Although many newspapers are using colour, the

majority are still printed black and white only, on low quality newsprint stock.

This does not lend itself to high quality visual images. This disadvantage is

reduced by the weekly colour supplements, which are printed on high quality art

paper like Sunday Review with The Times of India and The Hindustan

Time Sunday Magazine. The reproduction is excellent like in magazines. A

lot of product launches and corporate campaigns are being released in these

supplements.

(iv) Clutter: In newspapers there are several advertisements, and some are so placed

in such a congested manner that hardly attracts the attention of the readers.

(v) Hasty Reading: An average reader spends less than half an hour in newspaper

reading. This means that the advertisement must make its impression quickly or

it will be ignored by the readers.


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MAJOR NEWSPAPERS OF INDIA

English: The Times of India, The Hindustan Times, The Hindu, Indian Express,

The Pioneer, Statesman, Tribune, Telegraph, Deccan Herald, Deccan

Chronicle etc. There are around 60 English newspapers in India with a

total circulation of around 90 lakh copies.

Hindi: Navbharat Times, Hindustan, Dainik Jagran, Dainik Bhaskar, Punjab

Kesari, Amar Ujala etc. There are around 160 Hindi newspapers with a

circulation of around 110 lakh copies.

Regional: Rajasthan Patrika, Eanadu, Loksatta, Gujrat Samachar, Thanthi, Malysala

Manorama, Mathrubhumi etc.


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INCREASING SIGNIFICANE AND CONTRIBUTION OF

THE INDUSTRY

Advertising in India is a highly competitive business. Today with the increasing

consumer awareness no business can survive for long without advertising. With

growing business competition it has become necessary to ensure right media mix to

each target audience. Today, advertising agencies are precisely taking care of

consumer needs and provide creative designs with concept & ideas.

Advertisers in India reach about 75 per cent of the population through television, and

almost the entire population through radio. Certain televised programs enjoy a

viewership of more than 100 million. The Indian viewership exhibits brand name

recognition of both foreign and domestic products and services.

With value added information such as television rating points, audience profiles, and

opinion polls available to marketers, the sophistication of advertising in India is at par

with world standards. The world's leading advertising agencies - Ogilvy & Mather, J

W Thompson, BBDO, Young & Rubican, Lintas, McCann Ericsson, Leo Burnett and

a host of others - all have a major presence in the Indian market.


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The major Indian advertising media are newspapers, magazines, television and radio,

business publications and billboards.

Advertising on the Internet is the most cost-efficient way of reaching customers all

over the world including ones own country. Indian advertising agencies need to wake

up to the challenges posed by global economic trends and emerging interactive

technologies like the Internet, Indian companies need to pay attention to

characteristics of the new economy like open standards, digitalization, and volatility,

as Internet-based communication offers "tremendous new opportunities for Indian

companies via media convergence and re-intermediation." This also requires Indian

advertising agencies to pay attention to the importance of online market research,

since new media like the Net are bound to affect people's perceptions of advertising.

The challenge for Indian advertising agencies in the coming years is to be able to

target the rural market as well as the sophisticated urban market that may have Internet

access.


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Conclusion

The problem with SMEs and advertising is the cost effectiveness of is, advertising

sometimes turns out to be way too expensive for SMEs. In such a situation the

concept of transaction based advertising as mentioned above can be useful as it is

comparatively more economical for the SME.

When we look at the survey conducted in this report it is evident that most of the

employees working in SMEs do feel that advertising is a necessity for them and some

of them even believe in larger budgets.

Internet is the most preferred medium for advertising, given its ability to reach a wider

audience at a considerably lower budget. Television and Print Media follow behind

Internet with Radio being the last but not the least preferred medium for advertising.

The crux of the matter is in todays world you need to communicate with your

audience and build a relation with them you need to be present everywhere and be

seen by everyone to save yourself from the funda:

OUT OF SIGHT, OUT OF MIND!!


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Appendix

Q1.) Do you feel the need to advertise for your company?

Yes ____

No ____

Maybe ____

Q2.) If yes, what is the preferred media for advertisements?

Television _____Radio _____

Print _____

Internet _____

Q3.) How useful will advertisements be for your company?

Very Useful ____

Moderate ____

Useless ____

Q4.) How much on an average should your company spend on advertisements in case

they decide to advertise?

Up to 10, 00,000 _____

10, 00, 000-20, 00, 000 _____

20, 00, 00030, 00, 000 _____

More than 30, 00, 000 _____

Q5.) What according to you is the purpose of an advertisement?

__________________________________________________________________________________


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