Integrated

Marketing
Communication
Presented by: -
Anupreet Singh (09)
Avleen Singh (13)
Bhavya Murali (16)
Natasha Ahuja (34)
Neeharika K. (36)
Sanchit Shandil (59)
Sujit Chauhan
( )

Class 2A
Purpose of Advertising
building awareness of products
creating brand equity
generating sales
building a long lasting relationship

 Advertising effectiveness has to be captured by
the additional sales of a product over and
above those that would have happened in
absence of any advertising or promotion.

Factors affecting sales
Questions to be
answered
Does advertising add value to the firm?
Impact of advertising on profitability of the firm
Differences between the impact both in degree
and time across the industry
Implications for the marketers.
Hypothesis
There is no Impact of Advertisement spending
on Profitability of the firm.
There is no Impact of Advertisement Spending
on firm value.
There is no Impact of Advertisement Intensity
on firm value.
Effect of advertising
Rests on the theory of message repetition
Can be classified into three main effects:
§ a current effect on behaviour,
§ a carryover effect on behaviour and,
§ a non behavioural effect on attitude and
memory
Methods of Measuring
Advertising
Effectiveness
Direct Methods
Indirect Methods
Carry over effects or
persistence
time series regression
Results
correlation
test the correlation among the advertisement
spending (ADE), Net Profit (NP) and Net Sales
(NS)
positive correlation between:
Advertising Spending and PAT
Advertising Spending and Net Sales
Impact of ad spending on profitability on
different sectors
Conclusion
 Significant and positive relationship between advertisement
spending and profitability

 Elasticity is very small and this can be attributed to the fact
that ad spending is given as the treatment of expense on
the current revenue.

 Four sectors (banking and financial services, telecom,
pharmaceuticals and consumer durables) show a significant
positive relationship.

 This indicates the firm increasing its advertising in relation to
sales may not have an impact on the firm value.


 Rather advertising spending in absolute terms show a

significant impact.
Why advertise
 To reach to new customers
 To remain with shoppers through the buying process
 Create industry buzz
 Because competitor is advertising
 Pays off over a long period
 To generate store traffic
 To make more sales
 Because there is always business to generate
 To keep a healthy positive image
 To maintain employee morale
