Sip Report

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Chapter 2 Literature Review

2.1 Introduction to Advertisement

As known for decades, advertisement is one of the main strategies in marketing either a product or service. It can be defined as “An Advert that does not create a buying response, or at least produce a desire to want to know more is not an advert” (Quinn, 1985). The Table 2.1 holds the summary to the types of advertising being exercised (Aaker and Mayers, 1975).

Table 2.1: Types of Advertisement Targeted on Customers
To Inform a. Telling the market about the new product b. Suggesting new user for the product c. Informing the market of a price change d. Explaining how the product works e. Describing available service f. Building company image

To Persuade a. Building brand preference b. Encouraging switching brand c. Changing customers perception of a product attribute d. Persuading customers to purchase e. Persuading a customer to receive a sales call To Remind a. Reminding consumers that the product may be needed in near future b. Reminding them where to buy it c. Reminding how to check for quality (originality) d. Keeping in their minds during off seasons

e. Maintaining its top-of-mind awareness

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According to a research concentrating on the advertisers viewpoint, advertisement is an important tool which companies use to directly persuade buyers and public (Kotler, 1994). Being a key element in the marketing process, advertisements face many challenges in reaching the audience.

One of the main obstacles is the low audience involvement (Krugman, 1975). In most forms of communication, the audience least make some effort to pay attention or appear to be doing so. The adverts are meant for the audience to watch but unfortunately the audience is likely to take active steps in avoiding them. The advertiser therefore have problem of making loomed perhaps generally evasive audience pay attention to what is going on or at least enough to get basic selling message (Krugman, 1975). The challenge gets more difficult in a multiracial country such as Malaysia.

The existence of the advertisement rooted in Malaysia dated back to the 1971 as claimed by Bonnex (1975) in his thesis. His theory is even supported by the Honourable Minister Tan Sri Gazali’s speech in 1971(Bernama, 1971). Advertising agencies fuel the basic needs of a company to plan, strategise and introduce their product in the market. It is one of the basis of the supply chain and many advertising agencies are involved in this business in Malaysia.

2.2 Industry Background

As a preparation to start this project, background of the agency was studied to know and identify the operations involved and the key personals needed to be interviewed. Before concentrating on the agency’s background, reasonable amount of time was spent studying and understanding the advertising industry in detail to have a 10

better understanding on how the business is being done nationwide. The five main categories identified from the study are explained in the sections below.

1. Television 2. Radio 3. Print media 4. Web advertising 5. Other media

2.2.1 Television Currently there are 7 television channels in Malaysia including ASTRO and MiTV. The traditional television stations such as RTM1, RTM2 and TV3 are sharing the advertising budget with the other channels. As in Malaysia the television have towering percentage of penetration but it involves very high budget and suitable only for big companies. For example, it cost RM23340.00 (MediaBase, 2004) for just a single 60 seconds of film let (moving advertising which is not a still picture) advertisement during prime time in TV3. However, these big companies normally have their own unit for advertisement as done by Dunhill (Dunhill Tobacco). Nevertheless, most of the time, the companies make use of the service of the advertising agencies rather than having their own advertising unit since it is more cost effective. As a conclusion, the television...
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