Introduction
In order to compete in a business world, companies have to create and find unique ideas and solutions to current problems and customers’ demands. The innovative idea for a business venture is audio and video advertisements sent to cell phones. This idea was chosen because advertising is one of the most profitable industries which propose great opportunities for further development and growth. Today, only a limited amount of advertisings are sent to cell phones and neither of them looks like video clips with video and audio support. It changes as its environment changes; its relevance to us is dependent on a host of interrelated variables.
Mediated Communication Content
Among business practices, advertising is unique for the amount and variety of attention it receives. There is increasing interest nowadays not only in the quantity of advertising messages produced but also in the qualitative differences between advertising messages. The lack of market information and of competition that would prevail in the absence of advertising would be costly to consumers: as some sellers offering bargains failed to attract buyers, others would find it possible to exploit a degree of monopoly power (Doyle and Stern 32). Hence, the choice again is not whether advertising through cell phones is perfect but whether the benefits of advertising outweigh the costs, so that the social welfare is greater. Video clips with video and audio will support provide valuable information, namely, the information that the goods are advertised. This information is valuable because consumers know what Nelson himself sets out to prove–that the more heavily advertised experience goods are likely to be the better buys (Fill 23).
Video clips with video and audio support will benefit both companies and consumers searching for new products and ideas. At the beginning of the 21st century, people spend less time watching TV or reading newspapers, so advertisements sent to cell phones will help consumers to go with a flow. Through advertising, firms might attempt to bring about perceived but not real changes in the amounts offered of given attributes and, in the process, provoke a self-defeating struggle to position their products at the most preferred location along the price-attribute spectrum (Fill 93). On the other hand, the consumer’s ability to verify cheaply at least some advertising messages and the firm’s incentive to establish and protect a reputation for credibility limit the scope for deception. The information provided by advertising tends to be more valuable the greater the consumer’s search costs, the greater the dispersion of consumer preferences, the greater the dispersion of prices and of product attributes associated with given product varieties, and the larger the expected size of the market (Doyle and Stern 82).
This venture will be profitable because producers derive significant temporary gains from false advertising owing to the slowness with which consumers evaluate product characteristics. This slowness, which is traceable to product complexity, infrequency of product use, and the lack of consumer knowledge, combines with advertising economies of scale to reduce the amount of accurate information that advertising might be expected to transmit. Advertising wastes resources by merely shifting consumers among different brands (Fill 53). The advertising of product attributes increases welfare by reducing search costs and by enabling consumers to select brands with characteristics that closely match their tastes. Contrary to the argument that advertising wastes resources, it expands sales by attracting additional consumers and producers into the market. Even if it did not expand sales, advertising would make a positive contribution to consumer welfare by bringing about a better matching of brands and tastes.
Historical Background
Traditional channels of advertising involve TV and radio, newspapers and magazines, The Internet and Cable TV. Usually, companies pass information to markets through promotion and receive information from them through feedback. Through promotion, a company unleashes stimuli and supplies the marketplace or components of the marketing network with informative and persuasive messages in order to stimulate, reinforce, or modify behavior. Conversely, through feedback the marketplace and marketing network transmit information to a company. Feedback provides useful information for the direction and control of promotion, and indicates adjustments that may be made in the media, form, message, and content of the communications, as well as in the other aspects of the marketing mix (Fill 43). The material that follows will develop two main themes advertising in the firm and advertising in society. Traditional marketing communications, which require interaction between two or more people or groups, encompass senders, messages, media, and receivers. The sender of the communication is, of course, the company, advertising agency, or both. The media may be salesmen, newspapers, magazines, radio, billboards, television, and the like.
The new business venture is expected to be profitable because traditional advertising channels have not meet demands and expiations of consumers and companies. Traditional messages are meeting increasing competition from a plethora of other ads, from other media, from competitors, and from all the activities that vie for a person’s attention (Doyle and Stern 98). As output swells and communications facilities increase, more claims will be made on consumer time and the cost of marketing communications will skyrocket. Moreover, a saturation plateau may be reached where larger expenditures yield proportionately smaller returns (Fill 83).
A variety of sensory stimuli including television, radio, newspapers, and magazines helps customers learn, thereby influencing their purchase decisions. Learning also requires constant reinforcement. Through reinforcement, habits are formed and response patterns set so that they become automatic. Habitual behavior is evidenced where goods of a nondurable nature, such as food products, are purchased regularly. Consumers have learned the types of products and brands that best satisfy family wants and needs, and automatic purchasing patterns evolve (Mullins 43). Traditional promotional mix helps shape preference and demand curves, implying that a company can affect its own market destiny; demand curves are not given items.
Marketing managers are concerned with the elasticity of demand. They want the demand for their product to be less elastic or responsive to price; they also wish to shift the primary demand curve for a product category so that the products’ total potential at various price points increases. Sales or advertising managers should not concern themselves with which group gets the biggest budget or is more important to the company. Rather, they should develop the most effective total marketing communications. Both should assess their relative contributions to the total marketing task and view each other as alternative and supporting communications resources (Mullins 43). As alternatives they present management with different means of cultivating markets. The problem at this level is one of deciding what proportion of the total promotional budget should be allocated to each. Even though a synergistic relationship often exists between them, advertising and personal selling perform different parts of the marketing task (Doyle and Stern 64).
New Medium
the only possible medium for this solution is mobile networks. Today, a cell phone becomes a common thing and integral part of life of every person. For this reason, advertisings directly sent to cell phones will help marketers to reach target audience and inform people about new services and products. Advertising expenditures alone are now over $18 billion per year. Personal-selling expenditures have been estimated at approximately three times those of advertising, and are greater than the total of expenditures on all other forms of promotion. Developing an integrated promotional campaign that achieves the best sales-and-profit result is a task of considerable magnitude (Mullins 73).
Two types of products will be e delivered to the end consumers: video ads with audio support and video ads. in addition, the benefit of this technology is that it will help advertising to measure effectiveness and response rate. Advertising results must be measured in communication terms, not just in sales terms. Determining the effectiveness of advertising requires the measurement of overall advertising impact-the matching of inputs with outputs, which conceptually is very simple. Practically, however, this is quite difficult, since advertising is only one element of the marketing mix in affecting demand. Yet some success has been achieved in measuring the responsiveness of sales and profits to advertising (Mullins 93). Video and audio ads sent to cell phones should lead consumers to believe ads, to know companies and brands, to progress from product attention to a sale, or to change images, habits, and preferences, we cannot easily determine how well the job is being done.
To assess advertising impact, we require better specification of objectives and of criteria for measuring the degree to which the objectives are being achieved. The statement of advertising objectives in concrete measurable terms is a most critical aspect in developing most effective advertising strategies. Advertising as an institution can be distinguished from advertising as an instrument, and both connotations have rich meaning for marketing management. As an institution, advertising has a role of mass communication that extends beyond the firm and influences changing economic systems, including those in socialist countries. The dissemination of information, presentation of ideas, and persuasion of people, however, may require the use of various instruments and the application of many techniques. Advertisers will not have to spend much money on advertisement campaigns because it would be possible to adopt existing ideas and transform them into digital format (Doyle and Stern 49).
Making a Profit
Ironically, in order to reach target market the new venture will have to use traditional marketing channels including TV and radio, the Internet and national newspapers. Advertising, a uniquely American institution, spreads to other countries as they develop. A fundamental institution of our society, it is one of the activities associated with our life style and a major social phenomenon. Similarly, to change automatic response patterns, relearning must occur. This is done by indicating other responses that are more gratifying than the previous ones (Paley 82). Relearning is central to situations involving resistance to change, acceptance of new products, and persuasion of consumers to switch brands and store patronage. Competitive advertising and personal selling have the responsibility of inducing the consumer to reevaluate the initial purchase decision and recognize alternatives. Consumption experience is itself a learning process. Past buying decisions and choices give an individual good information on possible outcomes. Even the perceptions of various goods are subjected to change on the basis of experience and influence future actions and concepts. Most psychological theories concerned with learning, however, focus on rather simple situations. Many deal with rats and learning in a maze. Consumer behavior is more complex (Mullins 54).
Formal channels, however, do not account for all marketing communications. Publicity, which is an integral part of many promotional campaigns and sometimes precedes the advertising and sales effort, lies outside them. Although it can be important in gaining market acceptance for products and companies, publicity, like word of mouth, is often a relatively low-grade communications channel with a high degree of interference, distortion, and noise. Marketing communications serve four basic management purposes (Doyle and Stern 57). First, they bridge information gaps existing among manufacturers, middlemen, and customers. Second, they help coordinate the promotional activities of the total marketing system to achieve a coordinated thrust. Third, they help adjust the system to customer and consumer requirements. Fourth, they adjust and help in adjusting the product to customer needs (Paley 77).
The task of marketing communications for video and audio ads is to get people or markets to progress from a state of unawareness, or even negative reaction, to one of positive action. The stages in this progression are unawareness, awareness, comprehension, conviction, and action. Opposing the marketing communications in this endeavor are such countervailing forces as competitors’ communications, predispositions, noise, brand loyalty, and habit (Paley 61). The concept of thresholds or limits is also a useful one in understanding market communications.
Unless a company spends at least a on communications, it realizes little benefit. Beyond this level, however, communications have a sharp impact, keep increasing in effectiveness, and then tend to reach a limit — another threshold. For expenditures greater than b, little additional impact is realized. The mix is concerned with pricing, branding, variety, assortment, product planning, product development, product lines, packaging, labeling, warrantees, and servicing. It stresses the innovative powers of’ the firm to change products in order to conform more adequately to consumer wants and needs. It implies that customer specifications are translated into product development and then into the products. Information on a holding company that is planning to dispose of a subsidiary may be almost priceless to a company planning to acquire a foothold in that market but is worthless to another which has no such ambitions (Timmons and Spinelli 51).
The costs of the new venture will be generated from two sources: cell phone users (through subscription) and companies (marketers) which want to advertise their products through cell phones. Low subscription will help the venture to attract wide target audience and collect demographic and psychographic data about potential receivers (Timmons and Spinelli 59). A high price will be established for marketers ordering this service. This price will help to cover operational costs and lower the price for subscription. It is expected that video and audio ads sent to cell phones will furnish information, call attention to some clues and not others, change attitudes and opinions, relate products to consumer need, give consumers support for their decisions, affect the intensity of desires, and thereby generate action. Within the firm, a lack of clear-cut, integrated advertising objectives results in aimless advertising and wasted resources. The main causes of ineffective advertising are vagueness of objectives and goals; misconceptions and conflicting ideas of the function of advertising among all those who influence advertising decisions; lack of planning; insufficient emphasis on tactics and day-to-day activities; and failure to use available research aids (Paley 32).
The proposed solution will bridge information gaps in distribution channels, help coordinate the total marketing system, and adjust products and services to customer needs. Both advertising and personal selling, discussed in the next, are integral components of the communications mix (Timmons and Spinelli 102) A major problem in marketing-communications strategy is deciding how much to spend on advertising. Although optimal decisions are impossible, by considering the situation logically and noting relationships among advertising and personal-selling components, improved allocation of resources can be achieved (Timmons and Spinelli 59).
Even if data are not available, it behooves management to think of the total promotional task and match resources with market potential. For example, with a relatively small budget many alternatives are not feasible. Once a total budget is set, management should think in terms of the possible impact of different combinations: the extremes of spending the total budget on advertising or on personal selling, and the results expected from different combinations of each. Here again, although it is impossible to get precise data, management estimates can be made. There is at least an advantage to thinking in terms of inputs of alternative mixtures and resulting outputs (Paley 62).
A central-systems problem of marketing management is to combine all the marketing elements and resources into a marketing mix that will insure the achievement of such corporate goals as profit, volume, image, reputation, and return on investment by satisfying consumer wants and needs (Timmons and Spinelli 104). The marketing mix is the result of blending, compounding, and mixing marketing factors into an integrated whole at a particular period of time. It implies that all of the marketing elements have been arranged on a planned basis. The mix is the results of the application of creative skills of marketing management and requires a systems perspective. It results in the total bundle of utilities actually purchased by consumers in selecting products and services, and it is concerned with such factors (Doyle and Stern 32).
Conclusion
New venture, video and audio ads, will help marketers to solve the main problem: reach potential consumers and promote their products. Even so, such problems as allocating budgets among media, or among campaigns within a medium, present formidable challenges. Some general models and concepts useful in arriving at such decisions are presented. Functions relating-sales, profits, and advertising expenditures are discussed in general and as they relate to different media. The use of a payoff matrix and game-theory concepts in setting advertising budgets, and problems of measuring advertising effectiveness, are examined. If management, therefore, can identify significant traits that indicate sales success, and test applicants for them, sales productivity should be increased. To do this, some companies compare the characteristics of their most and least successful salesmen. Others start with sales tasks and objectives and impute the traits required. Still others rely on general lists of characteristics of successful salesmen, and try to establish tests that determine whether applicants have these traits.
Works Cited
Doyle, P., Stern, Ph. Marketing Management and Strategy. Financial Times/ Prentice Hall; 4 edition, 2006.
Fill, C. Marketing Communication: Contexts, Contents, and Strategies 2 edn. Upper Saddle River, NJ: Prentice Hall, 1999.
Mullins, J. The New Business Road Test. Financial Times/ Prentice Hall; 2 edition, 2006.
Paley, N. The Manager’s Guide to Competitive Marketing Strategies. Thorogood, 2006.
Timmons, J.A., Spinelli, S. New Venture Creation: Entrepreneurship for the 21st Century. McGraw-Hill Higher Education; 7 edition, 2006.