Process visibility implies that business customers need to have access to order status, product information, pricing and availability. Providing visibility to products and services helps create additional demand. Consider the example of United Parcel Service (UPS) tracking system. Customers can use the internet to track air and ground parcels anytime, anywhere and anyplace. Sophisticated information systems allow shippers to call any time of the day or night and find out exactly where their packages are.
What does this trend mean for e-business? Companies must strive to build internal applications and processes that open the black box and make internal operations more transparent. Increasing visibility can have a significant impact on creating demand as well as on retaining customers.
To survive, firms are turning toward business process outsourcing (BPO), which is defined as the delegation of one or more business processes to an external provider to improve overall business performance in a particular area. For example, gas and electric companies are outsourcing their cost centers – human resources and purchasing functions – so they can concentrate on their core competence, making and selling energy.
The market trends that drive the adoption of BPO include pressure to increase earning and reduce costs and an increased need to create and maintain a competitive edge. Traditionally, outsourcing has been used as a cost-control technique to move cost-centers such as data processing, payroll processing and systems development to outside specialists.
What does this trend mean for e-business?
Outsourcing lays the foundation for creating the virtual enterprise, the core of the e-business concept. It is clear that a single organization working alone is no longer a justifiable business model.
To continually grow, deliver better service, or reduce prices, an enterprise must become a learning organization that can prosper in a fast-paced, demanding business environment. For this purpose, the management must develop an organization that is capable of innovating constantly and learning continuously which is only possible by retaining employees. Management must use exceptional incentives to motivate employees, including paying very high commissions and cash rewards given to outstanding employees.
What does this trend mean for e-business? Supporting and sustaining a culture that can succeed and innovate is not only a requirement but also a prerequisite for doing e-business. The old ways of command and control over knowledge workers will not work well in the future.
It is a form of mass communication, a powerful marketing tool, a component of the economic system, a means of financing the mass media, a social institution, an art form, an instrument of business management, a field of employment and a profession.
In India the advertising business is growing at the rate of 30% to 35% annually. The total advertising expenditure in India is about $5 Billion. It is a 1200 crore industry, even when billings are Rs. 8000 plus crores. It is 90% of India’s GDP.
Today we see our senses bombarded with lots of advertisements. Be it the newspapers, magazines, the television or even so many hoardings which line up any street or highway, there are lot of advertisements to be seen. In fact the quantity and the quality both are increasing day by day. It has become an important tool at the hands of the marketers to sell their products. Some advertisements are criticized for being false, misleading, and deceptive and for concealing information. Advertisements can also manipulate the consumer to go in for unnecessary buying spree. So it is important to understand what advertising is all about.
Now, let us say that a firm has developed a product, which will satisfy the market demand. So essentially he has to reach out to the public or to his target market and inform them about his product. For optimum exposure he has to make sure that he reaches out to the maximum number of people. So mass communication would be the best way to reach out to the people hence the medium of advertisements to reach out to the masses. It should be however understood that advertising itself couldn’t sell the product it merely assists in the selling process. Advertising also cannot rejuvenate or restore a poor product it only helps in the selling process through the means of communication.
Matrimonial advertisements, recruitment advertisements, tenders, classified advertisements, notice, public announcements are also examples of advertisements.
Basically you must understand that advertising is an announcement to the public of a product, service or idea through a medium to which the public has access. The medium may be print (newspapers, magazines, posters, banners and hoardings), electronic (radio, television, video, cable, phone, internet) or any other. An advertisement is usually paid for by an advertiser at rates fixed or negotiated with the media.
The American Marketing Association, Chicago, defines advertising as
“any paid form of non personal presentation of ideas, goods and services by an identified sponsor.”
So a form could be a presentation. It may be sign, a symbol, an illustration, an ad message in a magazine or newspaper, a commercial on the radio or on television, a circular dispatched through the mail or a pamphlet handed out at a street corner; a sketch or message on a billboard or a poster or a banner on the Net.
Non-personal would mean that it is not on a person-to-person basis.
Goods, Services, Ideas for action would mean making a consumer’s work easy in knowing about the product of the firm. It could be a television, or a banking service or filing your tax returns, which the firm or the marketer wants the consumer to know about. An idea could also be political parties letting the people know about their party and why they should vote for their party. Adult education, beware of AIDS, donate your eyes are but a few examples of ideas.
Paid by an identified sponsor would imply that the sponsor has control over the form, content and scheduling of the advertisements. The sponsor could be identified by the company name or the brand of the particular product.
To Communicate, to Persuade, to Influence and to Lead to some action is what advertising is all about. Human nature and advertising are closely related. A man who wears shirt-trouser instead of dhoti is advertising that he is westernised; a woman who wears a lipstick wants to advertise that she wants to look beautiful; a boy who rides a beautiful bike wants to advertise that he wants to be noticed. So we see that people want to notice for anything that they do. That is what advertising does. It pulls people towards the product like the flowers attracts the bees towards it.
Advertising is a career for many. I am sure you might want to make it a career. It is getting professionalized. Competition, growing marketing expenses, product failures, liberalization, globalization and the emergence of new electronic media has given an impetus to advertising activity.
You must understand however that advertising is a communication process. You have a certain message and that is ‘Decoded’ by a party (Sender) to be ‘Encoded’ by another (Receiver). We must understand that the message so encoded should be so clear that the person should not distort the meaning of it. This means that what you are trying to say and what the other person makes out of the message should be the same. You should not make the other party confused. So it means that the message should:
1. Gain attention of the receiver.
2. Be understood.
3. Be able to stimulate the receiver and suggest appropriate method to satisfy their needs.
So the sender must know his receivers or the audience and the kind of response they are likely to elicit. This response he can get by maintaining a proper feedback mechanism. The feedback can also have some “Noise elements”. These could be poor message planning, busy audience members or careless feedback of response.
We talk about the 4 P’s of Marketing – Product, Price, Promotion and Place. In a way we can say that the entire process of Marketing is a Communication process. For example what do we want to say about a particular product – is it youthful, young, matured, secured, – that is what is the profile of the customers that we are looking at. Once we have identified a group and further identified a few characteristics about them then we can incorporate those very characteristics in our message formulation. This would be under the context of Product. That is the distinctive image you want to associate the brand with.
Within the context of Price, quality plays a major role. When you think about Mercedes Benz at a price tag of Rs. 70 Lakhs, there is certainly a difference you perceive when you are given an automobile with a tag price of Rs. 3 Lakhs.
The Place would mean the interaction between the buyer and the seller. It is like you advertise your brand of television but when the buyer goes to the shop he does not get it there. So the place would mean the distribution channels.
Promotion would encompass the method and the media used to reach out to the people. Even in rural areas, where there may not be many televisions in households, but through the local shows and with the help of ‘Nautankiwalas’ you promote your product. The local salesman coming to your house to sell shawls from Kashmir is another example of promoting your wares.
Advertising as such is related closely to other subjects of marketing too. Be it Personal Selling, Sales Promotion, Publicity or even Public Relations, advertising plays a significant role in reaching out to the selected target audience.
As we have understood that the sender identifies the receiver(s) and develops a message, the basic of the sender is that the customer or the target audience should buy the product or the service. For this we must understand whether a particular message so created has been effective in reaching out to them. So what makes an advertisement effective? Below are the key points on the effectiveness of a message.
1. Attract Attention
2. Secure Interest
3. Build Desire for the product
4. Obtain Action
The above has been formulated as the AIDA Model.
Attention could be the form of the layout of a print advertisement or the way an advertisement is made in the form of moving pictures, the colors used, the models used and the copy written, the movements used and the contrasting element used.
We are bombarded by so many advertisements that there are a few we see and while a few we don’t. The advertisement, which arouses interest in us and provokes us to think or feel about a product, is what an advertiser looks at. It basically means to catch the eye of the public.Desire would mean the buying motive. When you feel that you want to posses the particular product or be associated with it.
Action would normally mean the acquisition of the product.
Within the AIDA framework, Attention would refer to the cognitive stage, both Interest and Desire would relate to the affective stage and Action would be a behavioral activity.
Advertising has a dark side to it too. The use of women to sell virtually everything and to have sexual overtures in an advertisement has been a contentious issue. Then showing one community in a bad light, like if you don’t put fairness cream then you would not get married have come under the microscope of the ethics committee.
Advertising involves lot of creativity and also marketing aptitude to be successful in this field. You have to keep your eyes and ears open for inspirations. After all great advertisements were not made in the think rooms.
Within the framework of advertisements the following should be kept in mind:
• Understanding the Objective(s) of the advertisement (MISSION)
• Defining the Target Audience (MARKET)
• Understanding the Budget (MONEY)
• Understanding the Message (MESSAGE)
• The Media used for putting the advertisement (MEDIA)
• Seeing whether the advertisement was Effective (MEASUREMENT)
- The Mission statement would refer to the Aim of your advertisement. Is to improve sales, is to launch a new product, it for recall, is it for some short term offers, is it to gain attention, etc.
- The Market analysis would incorporate the type of buyer you want to sell the product to. For a cosmetic company it is but natural they would show women and not men in their advertisement. For Horlicks they would show children having the product.
- Money is the amount of budget constraint that the advertiser has in allocating the money between different medias and the expenditure to be incurred. For example, Procter & Gamble may allocate Rs. 2 crore for the advertisement of Tide detergent spread over one year.
- What to say, how to say, who will say it and what type of appeals to be given in the message is what Message formulation is all about. Shahrukh Khan being the spokesperson for Hyundai Santro, the colors used in the car, the movements of the car and what the person should remember the car as are few of the elements to be kept in mind.
- Star Plus, Zee TV, Star Movies, Times of India, Radio Mirchi, etc, are few of the choices where you could think of putting your advertisement. The people watching those media are very crucial to the success of your advertisement being seen by your target audience.
- You have spent Rs. 5 crore on your advertisement but do you think that your sales have improved or do you think the people have seen the advertisement? Measurement is precisely the way in which see as to whether your advertisement has been effective or not.
Integration is the key to unlocking information and making it available to any user, anywhere, anytime.
Why is integration hard?
Most Companies separate their business applications, creating functional specialists: accounting, finance, manufacturing and customer service.
This is divide and conquer: If the job could be defined specifically enough, a specialized application could optimize functions in a particular area.
The assumption was that if all functional links in a company were optimized, the company itself would function at an optimum level.
However, modern business theorists recognize that if a chain of processes is to run at a high-performance level, the individual applications must be tightly linked with other processes around them.
This thinking gives birth to the notion of a connected corporation built on a foundation of well-integrated enterprise application software. Enterprise applications help companies connect disparate systems, provide greater access to information, and more closely link employees, partners and customers.
The future techno-enterprise will be built on a well-integrated set of enterprise software applications. For example, enterprise applications such as SAP, PeopleSoft and Baan, represent the backbone of the modern corporation.