Asahi Report by Dev

8/14/2019 Asahi Report by Dev

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Evaluation of impact of Advertisement in awareness and demand of thecommodity product: Glass

By

Dev Masand

PGDM (HR)

Sinhgad Institute of Management

Vadgaon, Pune

June, 2009

1 | S u m m e r P r o j e c t R e p o r t


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Evaluation of impact of Advertisement in awareness and demand of thecommodity product: Glass

By

Dev Masand

Under the guidance of

Mr. Alok Agarwal

Zonal Head- West Zone Prof.

M.M. Marathe

(Sales & Marketing) College Project

Guide

Asahi India Glass Ltd.

Mr. Shailesh Ranjan

Area Manager (Head Office)(Sales & Marketing)

Asahi India Glass Ltd.



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Sinhgad Institute of Management

Vadgaon, PuneJune, 2009



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Certificate of Approval

We approve this Summer Project Report titled " Evaluation of impact of Advertisement

in awareness and demand of the commodity product: Glass " as a certified study in management

carried out and presented in a manner satisfactory to warrant its acceptance as a prerequisite for

the award ofPost Graduate Diploma in Management ( HR) for which it has been submitted.

It is understood that by this approval we do not necessarily endorse or approve any statement

made, opinion expressed or conclusion drawn therein but approve the Summer Project Report

only for the purpose it is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report

Name Signature

1. Faculty Examiner

2. PGDM Summer Project Co-coordinator



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Certificate from Summer Project Guides

This is to certify that Mr. Dev Masand a student of the Post Graduate Diploma inManagement (HR), has worked under our guidance and supervision. This Summer ProjectReport has the requisite standard and to the best of our knowledge no part of it has beenreproduced from any other summer project, monograph, report or book.

Faculty Guide Organizational GuideDesignation DesignationSIOM Organization

AddressDate

Date



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ACKNOWLEDGEMENT

I am elated to extend my gratitude to the management ofAsahi India Glass Ltd. for

providing me an opportunity to undertake the summer internship program in their organization.

The knowledge gained from the organization during the project is of immense help that enables

me to understand the practical applications of the Business concepts in consonance with

academic learning.

I owe sincere thanks to my Project Guide Mr. Alok Agarwal-Zonal Head ( Sales &

Marketing- Mumbai) for guiding me towards every step in completion of this project.

And a special thanks to Mr. Shailesh Ranjan, Mr. Anish, Mr. Sumeet for sharing their

knowledge.

I would like to thankMr. Milind Marathe for guiding me at every step during Summer

Internship.

And in the end I would like to thank all the House owners, Dealers Sales Executive team

and drivers without whom this project would definitely have been incomplete.

Dev Masand

PGDM(HR)

SIOM



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Table of ContentsTable of Figures..........................................................................................................5

List of Tables..............................................................................................................5

Abbreviation....................................................................................................... ........5

Abstract......................................................................................................................5

Industry Overview......................................................................................................5

Float Glass Industry in India....................................................................................5

User Segments................................................................................................... ....5

Major Producers......................................................................................................5

New Entrants..........................................................................................................5

Current capacity versus demand in India................................................................5

Future Prospectus...................................................................................................5

Current Scenario.....................................................................................................5

Market Share.................................................................................................... .......5

Company Profile.........................................................................................................5

Vision and Mission...................................................................................................5Vision...................................................................................................................5

Mission........................................................................................................ .........5

Guiding principles...................................................................................................5

Collaborators......................................................................................................... ..5

SBUS......................................................................................................................5

AIS Auto Glass..................................................................................................... .5

AIS Glass Solution................................................................................................5

AIS Float Glass.....................................................................................................5

Market Research........................................................................................................5

Background.............................................................................................................5

Introduction............................................................................................................ .5

Problem Formulation...............................................................................................5



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Abbreviation

SGG SAINT GOBAIN GLASS INDIA LIMITED

AIS ASAHI INDIA GLASS LIMITED

GGL GUJRAT GUARDIAN LIMITED

MODIGUARD GUJRAT GUARDIAN LIMITED

TPD TONNES PER DAY

MT METRIC TONNES

Ad ADVERTISEMENT



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Literature surveyThis is the most researched topic and various methods were adopted to check the effectiveness

of advertising by different researchers. But that previous research has not specifically measured

the impacts of advertising and brand value, and their joint effect, on firm performance for the

glass kind of commodity product. We could not find the study which talks the likeable attributes

in commodity products like glass. What exactly customers are looking for in a glass? By

examining the effects of advertising and brand value, our work contributes to the existing

literature.

The Research Problem

The research problem is to find out the impact of advertisement on demand of commodity

product specifically glass.

Research Objective

Based on the problem statement, the research objectives are:

To find out whether consumers are really involved in Glass buying decision if yes then to

what extent?

To find out, Are consumers really aware of any Glass or cement Co, brand or Glassproducts?

To find out Does advertising has any impact in the minds of consumers?

Can the advertising be measured or connected with a equation to the top and bottom line

of the company.

Research is going to be descriptive as well as applied in order to achieve the desired objectives.

The null hypothesis and the research hypothesis has been developed keeping assumption that the

research will be specifically for the commodity product glass and keeping all the factors

affecting the glass busying constant other than advertisements.

The null hypothesis and alternate hypothesis is prepared to prove the research objectives.



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After the research study we should be able to judge the above hypothesis by accepting orrejecting it. The result will tell us about the effectiveness of the advertisement on glass

(commodity product) and should also explain the awareness on the different glass brands.

The Research Design

Research is going to be descriptive as well as applied in order to achieve the desired

objectives. Most of the objectives will be derived from the primary data after the survey. Focus

group, stratified sampling technique in A and B class cities particularly Mumbai and its nearby

cities will be surveyed.

Research approach

In this study, both sample survey and statistical approaches will be applied to collect data and

establish the relationships between variables of interest.

Sources of data

Both secondary (documents and records) and primary (a sample survey of customers and

channel partners in this case) data sources will be used in this work.

Research instrument

The structured questionnaire will be used for the survey. The SPSS tool is being used for theanalysis purpose. The complete research study will be done in 8 weeks parts.



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Recommendations

The commodity market has very less involvement of the end consumers in the buying

process , hence the company should push dealers and retailers through different schemes

, gifts and by giving them awards of Best Retailer of the Year and Best Dealer of the

Year awards. The visibility at the retail counter should be increased by giving them pad,

cutting tools to carpenters via retailers having AIS inscribed on it.

1. The companies can provide booklet containing samples of glass to carpenter to push theirproducts and increase their brand awareness. They can organize some kind of training onnew design to carpenters. They should distribute danglers, calendars to retailers shop.

2. They can put their videos on You tube to increase the awareness. The company shouldproject their positioning statement See More, See Clearin their advertising media.

3. The company can direct its advertisements through different channels towards thesefunctional benefits of glass. They should organize meets and exhibition with retailers,The mode of communications like PR, sponsorships to events will be good method tocreate the awareness.

4. The advertisements activities should be targeted on the middle segment. The awareness

can be increased by through tie-ups with the social society/community like BMC and

CARE to increase the awareness level among the middle income category.

5. They can also have the tie-ups with the known builders and architects to advertise their

brands on their websites. Different festivals should be targeted for the awareness.



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Industry Overview

Float Glass Industry in IndiaIndia with more than one billion people, one sixth of the worlds total population has

become an attractive destination for investment in Glass Industry for some time, it

contributes around (6 %) one sixteenth of the worlds total Gross Domestic Product. It is

one of the largest economies of the world that had a middle-class consumer market in

excess of 300 million people. With increasing purchasing power and development of

service sector, India is definitely on the radar of all the glass manufacturing companies.Float glass Industry in India is relatively new; the first float glass plant was established as

recently as 15 years back. In this period India has emerged an important player in float

glass production and today there are six float lines in operation and five new lines are at

different stages of completion. It goes without saying that the rapid increase in demand

during the late 1990s due to construction activities, in addition to provoking a cutback in

exports, charmed some international firms which now are the major producers of float

glass in the country.

India had been using sheet and lower quality float glass through ages. Secondary

processing was negligible with the majority of glass being installed in basic, monolithic

form such as casting glasses. Until 1992, only sheet glass was being manufactured in the

country, with a limited quantity of float glass being imported. In 1993, the first float glass

plant was set. Since then new varieties of float and sheet glass capacities have been

added. Against decades of old practice of casting glass in sheets over plain surfaces, the

technology of float glass had brought about a significant change in the production and

use of glass. The switch from low quality sheet glass with limited range and thickness to

the sophisticated float glass took place in just a decade.



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Totally, the flat glass industry grew by about 90% between 2000 and 2007, resulting in acompound annual growth rate of 11%. The per capita consumption of glass, which was

0.41 kg in 1999, reached 0.80% kg in 2007. The demand for flat glass in India has

increased at an average rate of 12 percent to 15 percent each year for the past five years.

Respective market share of float and sheet glass is 89 percent and 11 percent. However,

the greater proportion of sheet and lower-quality float capacity will gradually phase out

and be replaced with high-quality float. The two main consuming sectors of flat glass in

India are the construction and automotive industries, both of which have been

experiencing hyper growth for the last five years.

User Segments

Eighty-three percent of the glass produced is used in the construction industry, 15 percent

in the automotive industry and 2 percent in miscellaneous industries such as furniture and

photo frames. The automobile industry, four-wheelers, has registered 18.6 percent growth

between January and November 2007. The construction sector is growing around 12

percent per annum. India exports about 13,000 tons of glass per month to the Middle

East, African countries, Europe and South America. The rapid increase in the demand forflat glass in the domestic market has resulted in a cutback in exports by as much as 60

percent in the last couple of years.

Major Producers

The major producers of float glass in India are three foreign joint ventures and an Indian

company:

Asahi India Glass Ltd Taloja, Maharashtra, Roorkee, UP; Asahi Indias two plants

produce 500 tons and 750 tons per day. Asahi India Glass Ltd. It started operations in

December 1994. It started off as a joint venture between the Tatas and Asahis of Japan.

With the exit of the Asahis in 2003, it was taken over by Asahi India Safety, the

automotive glass manufacturing company. The merged entity is known as Asahi India



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Glass Ltd. The company started a new float plant with a 750-ton capacity on Jan. 1, 2007at Uttaranchal in North India.

Saint-Gobain Glass India Ltd., Sriperumbudur, Tamil Nadu; Saint-Gobains two

plants produce 550 tons and 700 tons per day. It started operations in 2000 and is Indias

largest capacity float plant.It is a 100 percent subsidiary of the Saint-Gobain Group

Gujarat Guardian Ltd., Ankleshwar, Gujarat, Gujarat Guardian, the first company to

set up float glass plant in India produces 550 tons per day; It is a joint venture between

Guardian Industries International Corp. of the United States and Indias Modi Group.

Triveni Glass in Allahabad produces 200 tons of float glass per day. Its a mini float plant

based on Chinese float-glass technology.

New Entrants

Other than these four established players, a few domestic companies too are venturing in

Float glass production; there float lines are at various stages of completion. All the three

new players are related to glass industry.

Gold Plus Glass Limited- Gold Plus glass is a New Delhi based glass processor, and has

a significant market share in processing glass industry, announced that its Roorkie based

latest float glass manufacturing plant of Gold Plus, would start production in June, 2008.

The furnace may be fired on any suitable day in June; 2008.The estimated cost of this

project is approximately Rs.400 Crores in the first phase. The capacity of this float glass

production line would be 460tonnes per day. This float glass production line will produce

clear and green tinted glass from 2 to 19mm thickness. Most of the machineries for this

plant are from Europe and America and Yaohua Glass Group of China.

Sejal Glass another prominent manufacturer of value added glass, based in Mumbai( Western Coast) has ambitious plans to set up a Float Line. The factory site is at

Bharuch, for which the construction has already begun and production will commence

from March 2009. The plant will undertake manufacturing of Clear and Tinted Glass



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HNG Float glass - Hindustan National Glass company, the leading manufacturer ofcontainer glass in India, made the announcement of setting its float glass plant in Dec.

2007, in Halol, Gujarat. Capacity of this line will be 600 Ton/day and is expected to be

on stream by middle of 2009. In its press release the company stated that equipments

would be sourced from European suppliers.

Current capacity versus demand in India

An excess capacity of raw glass in the industry was experienced in the beginning of

2006. This excess capacity could become larger in the years to come if current

investment plans see the light of day. In 2007, the excess capacity was four times that of

2006, and in 2008 it could be six times that of 2006. This is assuming demand continues

to grow at the current double-digit pace. It is interesting to note that the cumulative profit

of flat-glass manufacturers in India is still in the red.

Future Prospectus

The construction and automotive industries are the most important consuming sectors,

almost 80 million square feet of land in India is earmarked for shopping malls, taking

into consideration Special Economic Zones and Corporate offices, there is an immense

opportunity in Indian Glass industry. Nowadays, taking climate, safety, sound

attenuation, energy conservation and aesthetics into consideration, builders are opting for

more glass in their construction. The glass revolution is also taking place in the

automotive industry which is predicted to grow at more than 15% till 2012. Anyway, it

isnt all roses for Indian glass industry, problems like the overcapacity of raw glass (and a

projected surplus of processed glass); Chinese competition (in spite of anti-dumping

duties) and the lack of codes of standards threaten Indian glass industry. As far as

overcapacity concerned, analysts say that the supply will far exceed demand at least until

2009. Excess capacity, increased competition and the development of a regulatory

framework are the real future challenges for the Indian glass industry.



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Current ScenarioThe domestic glass industry and trade has been progressing at a consistent impressive rate of

growth of 12-13% per annum during the last nine years. However this progress has come to a

rude halt in the fourth quarter of the current financial year 2008-2009 and the rate of growth has

turned negative. During the last financial year 2007-08 all the three float glass manufacturing

companies operating in the country SGG, GGL and AIS had combined sales of 2043 tonnes

per day of float glass on an average. However , during the fourth quarter ( January- March ) of

the current financial year 2008-2009 this has slide to 1885 tonnes per day on an average having a

negative growth rate of -8.38%( Glass Yug magazine, January Edition- 2009).

Year MT/Day %Growth

2000-01 886 2.66

2001-02 980 10.6

2002-03 1106 12.85

2003-04 1310 18.44

2004-05 1427 8.93

2005-06 1402 14.22

2006-07 1695 20.89

2007-08 2043 20.46

2008-09 ( Jan-Mar) 1885 -8.38

Table 1: Domestic Float Glass Sales

Thefloat glass sales trend shows that from past nine years sales was increasing continuously, but

due to economic slowdown and recessionary condition it has decreased in the beginning of

2008-09 turning into negative growth rate in the sales .



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absorbed mostly in domestic market with 1885 mostly whereas export sales per day are 350TPD. The extra supplies or stocks are 2415 tonnes per day.

Break-up of Capacity ( in tonnes per

day)

Total Capacity

4

650

Domestic Sales on an average/day

1

885

Export sales on an average/day 350

Extra Supplies or Stocks

2

415

Table 3 : Break-up of Capacity

Figure 4 : Break-up of Capacity

Market Share

The SGG has the highest market share of 38.89%, whereas AIS stands second with 31.52 %

market share. The GGL has 23.23% market share and the Gold plus float glass Industry Ltd.

covers 6.37% market share.

Float Glass : Market Share ( Domestic

Market )

Manufacturers

Market

Share

Saint-Gobain Glass India Ltd. 38.89%

Asahi India Glass Ltd. 31.51%



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Gujarat Guardian Ltd. 23.23%Gold Plus Float Glass Industry Ltd. 6.37%

Table 4 : Market Share

Figure 5 : Domestic Market Share



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Company Profile

AIS is the largest integrated glass company in India, manufacturing a wide range of international

quality automotive safety glass, float glass, architectural processed glass and glass products.

AIS has a strong strategic position in the Indian glass industry. AIS is a leader in auto glass and

architectural processed glass segments and has prominent position in Float glass market.

AIS is jointly promoted by the Labroo family, Asahi Glass Co. Ltd., Japan and Maruti Suzuki

India Ltd. The promoters jointly hold 55.24% of paid up equity capital of AIS, with remaining

44.76% held by public.

Being a widely held listed public company with close to 62,000 shareholders, AIS remains

committed to maintain the highest standards of corporate governance and shareholder

accountability. The equity shares of AIS are listed on the Bombay Stock Exchange (BSE) and

National Stock Exchange (NSE) in India.

AIS is transforming itself from being a manufacturer of world-class glass and glass products to a

solutions provider by moving up the value chain of auto glass and architectural glass and

providing design, products and services that make glass more versatile and user-friendly.

AIS have the following three Strategic Business Units (SBUs):

Automotive Glass Unit AIS Auto Glass

Float Glass Unit AIS Float Glass

AIS Glass Solutions Ltd AIS Glass Solutions

AIS Auto Glass is India's largest manufacturer of world class automotive safety glass and is, in

fact, one of the largest in the field in Asia. It meets over 80% automotive glass requirement of

the Indian passenger car industry.

AIS Float Glass is the leading manufacturer of international quality float glass in the country.

Prior to its merger with AIS, it was known as Floatglass India Ltd.



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AIS Glass Solutions is a value addition in the architectural glass business of AIS, addressing thefollowing segments:

Architectural Processing and Glass solutions

Product and Knowledge development

Glass Services Sales & Marketing

The market and technology leader in the Indian Glass Industry, AIS continues to add to its

customer base and service offerings, while maintaining and enhancing product quality

Its ongoing efforts, to provide high quality products and reliable and excellent service to its

customers, are the key factors for AISs sustained success and leadership position in the Indian

glass industry.

AIS recorded gross sales and operating profits of Rs. 11742 millions and Rs. 2046 millions

respectively for the year ended 31st March, 2008.

Vision and Mission

Vision

AISs Vision is to SEE MORE

This byline captures AISs culture:

It describes AIS products and services which delight its customers by helping them see

more in comfort, safety & security.

It expresses AISs corporate culture of merit and transparency.

It defines the quality of AISs people to want to see, learn, and do more, in depth and

detail to transcend the ordinary.



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Mission

AISs Mission is JIKKO Execution for Excellence

With major investments in place, the time is now to reap the benefits by execution for excellence

Guiding principles

All actions of AIS are driven by the following guiding principles:

Creation of value for Shareholders

Customer Satisfaction

Respect for Environment

Use of Facts

Continuous Improvement

Strengthening of Systems

Upgradation of Human Potential through education and training

Social Consciousness

Collaborators

Asahi Glass Co., Ltd., Japan

Asahi Glass Co. Ltd, Japan, was established in 1907. Today, it is one of the leading glass

producers of the world. AGC has a global network of over 350 subsidiaries and affiliates in

Japan and 20 and above other countries. The groups operations comprise of flat glass,

automotive glass, and have recently diversified into display glass, chemicals, electronics and

energy.

AGC has evolved as a top multinational glass manufacturer with a leading share of the global

market in most key glass products. AGC group is the largest glass manufacturer of the world

with 12% global market share in the flat glass segment and 30% global market share in the



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automotive glass segment. It has further captured the top share in CRT glass, TFT display glassand PDP glass in the display field as well.

For the year 2007, the AGC Group has recorded net sales of 1681 billions of yen, and with

Operating Net Income of 69 billions of yen.

SBUS

AIS Auto Glass

OVERVIEW

AIS Auto Glass is the most reputed and trusted supplier in Indian automotive glass industryhaving over 21 years of technological expertise and is the largest manufacturer of world-class

automotive safety glass in India.

AIS Auto Glass has been awarded the prestigious Deming Application Prize, 2007, certifying the

outstanding performance improvements achieved by it through application of Total Quality

Management (TQM).

Today, AIS Auto Glass has a body of knowledge to be able to deliver cutting edge auto glass

solutions and value addition to its customers, most of whom are global and demanding players.

AIS Auto Glass is overwhelmingly the first choice supplier for most automotive manufacturers

in India. Hence, AIS Auto Glass is either the sole or a leading supplier of auto glass to most

passenger car manufacturers in India, supplying about 80% of their auto glass requirement.

Apart from supplying to OEMs in India, AIS Auto Glass has significant presence in the domestic

after-market with a market share of 43%. It also exports auto glass to the after-markets in Europe

and Pakistan.

AIS Auto Glass has state-of-the-art plants located at Rewari-Haryana, Roorkee-Uttrakhand

(North India) and Chennai- Tamil Nadu (South India) with a combined capacity to produce 2.81

million car sets per annum.



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Product Range

AIS Auto Glass is India's largest manufacturer of automotive safety glass. The unit

manufactures the full range of automotive safety glass, which includes:

Laminated Windshield

Tempered Glass for Side and Backlites

Silver Printed Defogger Glass

Antenna Printed Backlites

Black Ceramic Printed Flush Fitting Glass

Encapsulated Fixed Glass

Solar Control Glass

IR Cut Glass

UV Cut Glass

Reflective (PET) Windshield

Water Repellant Glass

Glass Antenna

Extruded Windshield

Clients

AIS Auto Glass : Share of Business

Customer SOB (%)

Maruti Suzuki India Ltd. 100

International Cars and Motors 100Reva Motors 100

Honda Motors 100

Ford India 99



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Toyota Kirloskar Motors 99Fiat India 83

Hyundai Motors 72

General Motors 67

Volvo India 57

Mahindra & Mahindra 52

TATA Motors 24

Piaggio 22

Hindustan Motors 17

Eicher Motors 13

Swaraj Mazda 5

Force Motors 1

Market Position

Sole supplier to almost the entire Indian passenger car industry, with a current market

share in excess of 80 %.

Significant presence in the after-market with a market share of over 43%.

Exporting auto glass to after-market in Europe and Pakistan.



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AIS Glass Solution

AIS Glass Solutions is the face of the architectural glass processing business of AIS. As a

separate business unit, AIS Glass Solutions focuses on offering innovative architectural glass

solutions to customers.

AIS Glass Solutions aims at raising per capita consumption of glass in the country to bring it at

par with the other developed countries in the world. It disseminates knowledge for increased

awareness of the use and application of architectural glass through innovative offerings.

AIS Glass Solutions has been supplying a wide range of high quality architectural processed

glass, comprising of toughened glass, laminated glass, insulated glass units and value added

glass products. It also caters to the project segment, meeting glass and related requirements of

construction projects.

Its product portfolio includes:

AIS Strong glass - impact resistant glass.

AIS Security glass - burglar resistant glass.

AIS Acoustic glass - sound resistant glass.

Glass products like shower enclosures, tabletops, shelves.

The state-of-the-art architectural glass processing facilities are located at Taloja (West India),

Chennai (South India), Rewari and Roorkee (North India). The Roorkee facility is the largest

architectural glass processing facility in the country.



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AIS Float Glass

OVERVIEW

AIS Float Glass is a premier manufacturer of international quality float glass and value-added

glass like reflective glass and mirror.

AIS Float Glass has state-of-the-art glass manufacturing plants located at Taloja near Mumbai

(West India) and Roorkee (North India) with a total production capacity of 1,200 tons per day

(TPD). Its newly commissioned unit at IGP Roorkee has manufacturing facilities for float glass,

superior quality heat reflective glass and new generation environment friendly mirror.

PRODUCT RANGE

AIS Float Glass offers a diversified product range of float glass in thickness of 2 mm - 12

mm in different shades and tints of clear, green, grey, bronze and blue in varying sizes. Its

product portfolio includes world-class range of international quality Supersilver heat-

reflective glass, the worlds finest quality "Environment Friendly" copper & lead free

premium AIS Mirrors, AIS Dcor lacquered glass & AIS Krystal Frosted glass for interior

applications.



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Application Of AIS Glass

With its wide product range and its status as the undisputed quality leader, AIS Glass is

the natural choice in most of the application segments:

Window Glazing: AIS Float Glasss superior strength, high optical clarity, distortion

free, smooth surface and bigger sizes give design flexibility, making it the natural choice

for all window glazing applications.

Curtain walls: Availability of AIS Tinted Float & AIS Heat Reflective Glass in various

shapes and sizes enable you to design the latest in curtain walls. Besides modern

expression, it reduces the overall dead weight of the building, allows faster construction

and requires less expensive maintenance. The heat-absorbing / heat-reflective

characteristic reduces the air-conditioning load substantially, thus saving precious energy.

Partition Walls: Due to its inherent strength and availability in large sizes, AIS Float

Glass can be extensively used for partitions. Glass partitions add to the aesthetics of the

room and give a feeling of spaciousness.

Doors: AIS Float Glass is extensively used in doors and entrances, exuding beauty and

elegance.

Shop-Fronts: Brilliantly clear and transparent shop-fronts made of Float Glass provide a

distinct image to a showroom.

Decorations: Modern expression, transparency, easy maintenance and non-

inflammability of AIS Float Glass makes it an indispensable material for display cabinets

Shop, partitioning, screening and designing modern and high-class Showrooms and

Shopping Malls.

Furniture: AIS Float Glass, due to its versatility, is ideal for furniture, tabletops, shelves,cabinets, showcases and sliding doors of large almirahs and cupboards etc.

Balustrades: The use of AIS Float Glass in balustrades gives a graceful effect to the

staircases.



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Mirrors: AIS Float Glass gives perfect reflected images when mirrored. Also AISMirrors, are world-class quality mirrors, being copper & lead free and corrosion

resistant.

Automobile Safety Glass: AIS Float Glass Unit is the single largest supplier to the OEM

segment. Its European Green glass is used extensively in almost all premium cars.

Special Applications: AIS Float Glass can be further processed to be used for skylights,

atriums, museums, art galleries, aquariums, lifts, dance floors etc.

MARKET POSITION

AIS Float Glass enjoys 38.89 % market share in the Indian float glass market.

CLIENTS

The diversified product portfolio of AIS Float Glass includes float glass in varying sizes,

shapes and thickness. AIS's quality products make it the preferred choice of a wide range

of clients including

Automotive Safety Glass Manufacturers

Processors

Dealers and Retailers

Architects

Interior Decorators

Builders

Aluminium Fabricators

Carpenters

Furniture Manufacturers

Household Consumers

With glass finding applications in an array of arenas, the client base of AIS Float Glass is

an ever-expanding one.



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Control

Because the product passes horizontally from one chamber to another, a greater degree of

inspection and quality control can be exercised unlike the other process where the glass is pulled

up against the force of gravity.

Variety

The float glass can be manufactured with thickness upto 19mm, to be used for applications such

as tabletops; furniture etc.This is not possible in sheet glass, as the glass would become brittle atsuch high thickness.



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Market Research

Background

In the present era of cut throat competition there is a very little scope left out for the

companies to create differentiation in the products to compete, hence need to start brand

building exercise by way of creating perceived images of superiority over the competition . This

starts with the various kind of activities to be undertaken by the companies to create brand ,

among them one way is advertising. Indian commodity market ( in the building material

segment )such as cement, steel, aluminum, Glass has adopted various methods to enhance the

demand for their products, they have simultaneously invested sizeable amount of money in

advertising to sell their products and increase their market share. VARIOUS consultants and

advertising agencies were hired to create a difference but, have they been successful in their

efforts to create demand or make any kind of impact on the demand or sale due to advertising or

mass media campaigns. Lots of subjective discussions (simply based on individual feelings and

selected market researches to show the positive impact, which can easily be contradicted by anyother agency or market research) have taken place and actually not yielded any results or

tangible benefits which can distinctively be observed or verified. Whenever organizations try to

establish a relationship between the advertising and the Top line, bottom line then efforts are put

in to de link it so that it goes to the expenses part rather than become a part of the cost. There is a

need to re-examine and evaluate the impact of advertising on the demand of commodity

products and see what exactly consumers are looking for. Once companies understand that

branding is a necessary (and profitable) part of doing business, the next logical question is

how do you brand?

Tactically speaking, there are numerous ways to go about branding. The look and feel of

the communications, the balance of advertising versus public relations versus grassroots, the



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media used, etc., all reflect tactical aspects of the branding process. However, these are onlyvehicles used to brand, and do not inherently lend themselves to developing a brand, per se. To

ensure a good, successful brand is the methodology used to develop and/or refine the brand in

the first place. In other words, just like a building, a good brand starts with a strong foundation.

Sound branding practice begins with addressing five key attributes present in any effective

brand: uniqueness, relevance, credibility, sustainabiiity, and practicality.

Uniqueness

The average American is exposed to approximately 3,000 advertising messages per day.

That means everything from the logo on your watch, to product placement in television and

movies, down to traditional commercials and print ads. And all this static is in addition to

children, family, job and various other aspects of everyday life that are constantly vying for

attention. To break through all of the clutter, a brand has to stand out, has to be memorable it

has to be unique.

Relevance

This attribute seems like a no-brainer, but it is an important check-off. If a brand is

positioned in a way that has no bearing in the life of the audience, then how can the audience be

expected to develop an affinity for the brand?

Credibility

Things can be true, but not necessarily believable. For instance, Kia brand automobiles

could spend hundreds of millions of dollars on the development of a luxury car that rivals BMW

in every aspect. However, it is a good bet that such an endeavor would fail. At the very least, Kia

could only command a fraction of the retail price of BMWs. The Kia brand has successfully

positioned itself as a low-cost automobile maker. People would simply not believe the companyhad produced a car that was on par with BMW. The lessons here dont let your business stray

from your brand. Once credibility in your brand is lost, it is near impossible to regain it. Just see

Arthur Andersen, WorldCom or Enron.



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Sustainability

This factor represents the most significant difference between advertising and pure

branding. An advertising campaign is finite, while a brand should theoretically be credible and

relevant forever. The core values inherent in a brand should reflect core human values. For

example, Nike's core value is achievement. McDonald's core value is convenience. Citibanks

core value is financial security. These values will be as relevant as in 2055 as they are in 2005,

which gives the brand consistency, staying power, and the ability to build consumer loyalty.

Advertising remains one of the cornerstones of marketing communications. However,

determining its impact on a firms performance continues to be a difficult proposition for many

marketing and advertising managers. Although firms in the USA spent over $230 billion on

advertising in 2001 (Coen, 2002), a clear link Between advertising expenditures and financial

performance remains somewhat Uncertain in many cases. One common belief is that

advertising creativity is an Essential element of advertising success (El-Murad and West, 2004;

Smith and Yang, 2004) and may lead to an improved financial performance, that is, as firms

focus more resources and develop more creative advertising, they will realize marginal benefits

in the form of higher sales, an increased market share and higher future earnings. Whileseemingly reasonable, this particular belief fails to provide much more than an anecdotal basis

for determining the effects of advertising on a firms bottom line. While providing some useful

insights, these mostly academic studies typically failed to take into consideration the myriad of

other variables that also affect advertising effectiveness (e.g. differentiating message, repetition

and recall).



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Introduction

Can Advertising Contribute?

On the heels of what seems to be a never-ending series of attacks on advertising, two

new studies purport to reveal more evidence of its diminishing impact. For several years,

respected industry leaders have been assailing both advertisers and their agencies for lack of

performance. Some experts, such as Sergio Zyman, former advertising head at Coca-Cola, claim

that ad agencies have abandoned their basic responsibility to sell the brands they're paid to

advertise. Others, including noted author Al Ries, have gone even further, contending that

advertising's business building capabilities now pale in comparison to the "buzz" public relations

can generate. (See "Is Advertising Dead?" Adding fuel to this fire are two recently released

studies. The first, by Yankelovich Partners, maintains that the effectiveness of ad campaigns has

been declining markedly. It cites as evidence the apparent growth in consumers' negative

perceptions of advertising. According to Yankelovich, about 6 in 10 U.S. consumers report that

they now feel more negatively about advertising than they used to. Furthermore, they claim to

"avoid buying products that overwhelm them with advertising and marketing."The second study, recently released by Deutsche Bank, is based on a more wide ranging

analysis of sales and marketing spending data. It concludes that TV advertising delivers, in most

cases, a negligible return on investment (ROI) for mature package-goods brands. According to

the Deutsche Bank data, only 3 of 18 major brands competing in established product categories

(ranging from beer to detergent and from snacks to toothpaste) could demonstrate financial

returns that exceeded the company's investments. In the other 15 cases, the companies were

simply spending more money than they were making. No bang for the buck Reports such as

these have caused consternation among advertisers and the agencies they've enlisted to create

and deliver sales-building and business-enhancing messages. Wall Street analysts and company

boards are increasingly expecting and demanding accountability for marketing expenditures. If,

as the Deutsche Bank data contend, major advertisers such as Coca-Cola, Heinz, and Colgate are



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realizing no tangible business benefits from their expenditures, then ad money will likely bereallocated to other, higher-return uses. The dilemma, of course, is to identify what those

alternatives might be. According to the Deutsche Bank report, the solution is not an increase in

trade-promotion spending, as this tactic also falls short when it comes to ROI. So where are

companies to turn? What are these studies telling today's brand marketers? Perhaps, as some

have suggested, the solution is simply "better advertising." The argument is that the money is

squandered -- not because all Advertising is wasteful, but because too many companies have

been lured into creating ad campaigns that just don't work. Either marketers are employing the

wrong media mix (for example, relying on expensive and inefficient TV commercials), or they're

relying on the wrong selling strategies (such as creating messages that have little or no potential

impact). Does a company's advertising just need to "work harder"? Or is the real problem that

today's advertisers are heading in the wrong direction, and as a result, are making no apparent

progress toward meeting their ROI challenge? It appears that far too many companies operate

under an incomplete or erroneous model of how advertising can best contribute to building a

healthier brand. Consequently, they fail to hold their ads -- and their ad agencies -- accountable

for the end results they should be delivering.

Consider the Yankelovich study, which apparently equates "liking" advertising with its

impact. The study suggests that if people say they're feeling increasingly negative toward

advertising, then that means that advertising has increasingly less impact. This argument would

imply that the solution for enhancing the return on advertising expenditures would be to make

the ads more entertaining and fun to watch, hear, or read. But should that be the goal? Is

advertising's real purpose to entertain -- or to sell? As experts from David Ogilvy to Sergio

Zyman have pointed out, advertising's objective is not to be "fun to watch." Entertaining

consumers is not the reason companies invest billions of dollars in ads. Customer acquisition orcustomer retention? What should advertising's goal be? What are the appropriate objectives for

today's marketers to pursue? These are the questions that marketers must answer as they rethink

their targets and reexamine their strategies. Some time ago, companies began shifting their



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looking at what it takes to generate trial, and that's a mistake. In a world that's now stronglyfocused on customer retention, advertising must be designed, crafted, and held accountable for

its ability to enhance the customer relationship, not just initiate it. This means that company

marketers -- at least those who are marketing established brands -- must rethink not just what

they're spending, but what they're doing, what they're saying, and how they're monitoring their

progress. Unless advertisers and their agencies reexamine where they're heading and reconsider

what they're striving to achieve, marketers will continue to read bleak and scary reports about

advertising's lack of impact and effectiveness. Ad expenditures, already clearly in jeopardy, will

decline. And the real promise and potential of advertising will, sadly, continue to be left

unrealized.

Marketers are too willing to concede that their products have reached commodity status.

That's a major reason why advertising effectiveness has suffered mightily. Here's the problem:

When companies treat their brands the same as their competitors', they no longer focus on

attributes of the brand itself as reasons to buy it. Instead, they talk about the people who buy the

product, or they make fun of the advertising -- anything to keep from admitting that their

product purportedly has no real advantage over the next guy's. So, when advertising is forced to

get away from concentrating on what makes it most effective and efficient -- tangible and

meaningful product benefits -- the result is likely to be disappointing.

It's amazing how sophisticated marketers make this mistake. The contention is that they are

selling their products short; that their products have advantages that can be exploited by great

advertising if only their custodians would look harder for the hidden gems buried deep within

the product -- or maybe just under the surface.

Although the agency is only too happy to oblige, the client is clearly the place to lay the

blame. After all, if the top guys at Miller Brewing Co. had insisted that their agencies dig outand exploit attributes of their beers, instead of the weird people who drink their beers, they

would be gainfully employed today.



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The agencies, of course, were glad to be let off the hook. It's hard work to come up withan advantage that can give a product an edge and convey that advantage in a meaningful,

creative and entertaining way. How much easier to ignore the product altogether and focus on

the lifestyles of the consumers who use the product. That way, you can say anything you

want.It's easy to go down the road that says most products are the same. You see that most often

when companies are floundering.

Kellogg Co. is a sad case in point. Its troubles started when the cereal companies

drastically lowered the prices on their products, giving consumers the impression that they were

all the same. (Kodak did the same thing with its film.)

When that line of thinking takes hold, management starts looking for non-product-related

things to talk about. So now, the head marketing guy at Kellogg concedes that, because "the

functional benefits are the same" from brand to brand, Kellogg is intent on creating a personality

for each brand -- and a relationship with its consumers.

If the "functional benefits" of a brand are all the same, how can the brand's personality be

distinct, other than by fabricating it out of whole cloth? A brand's uniqueness comes out of its

real and tangible product advantages.

The moral of the story is that few consumer products are commodities unless their

owners concede that they are. And because so many companies today are making that

concession, smart marketers have a terrific new weapon at their disposal.

Marketing is at the top of the list because this is the area where rigorous financial

evaluations have not been used extensively to justify the expenditures within a firm.

Manufacturing costs have been reduced from 50 per cent to 30 per cent, and general

management costs have also declined as a proportion of the total corporate costs from 30 per

cent to 20 per cent, but in contrast to manufacturing and general management costs, marketingcosts have increased significantly from only 20 per cent of the total corporate costs 50 years ago

to 50 per cent today. In spite of the huge marketing expenditures, managers frequently do not

have concrete measures or knowledge of what is obtained in return from a significant investment



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in marketing. Moreover, many have doubted that definite quantitative measurements ofmarketing effectiveness could ever be made

Problem Formulation

The impact of advertisement on the demand of commodity product specifically Glass is

to be find out. India is the only country where glass as commodity product is being advertised on

TV. The huge amounts of investment in ads are happening in the industry. But their effectiveness

in impacting consumers mind for using more glass is not clear. Do the advertisements help the

company in commanding more market share, has become the main issue. The connection of ad

to the top and bottom line of the company is not yet established clearly for the commodity

product such as glass. The perception of consumers towards glass is still very traditional as that

of fragile nature etc. The relationship between glass buying behavior and the awareness towards

the brand among the commodity glass market is to be figured out. All these issues are the

rationale behind choosing this research study.

Literature Review

RIEDESEL (2002) COMMENTS that the modeling of company sales and income as a function

of three types of media spending using Data Envelopment Analysis (DEA) by Luo and Donthu

(2001) is questionable. He acknowledges that the relationship between media spending and

company sales may be reciprocal, but the impact of sales on media spending is more direct than

vice versa. First, there are numerous marketing, management science, econometrics, and

advertising studies that have established the causal relationship from media spending to sales

volume ( Aaker and Carman, 1982; Feinberg, 2001; Mesak, 1999; Simon and Arndt, 1980;

Stewart, 1989). Danaher and Rust (1994) theoretically propose that optimal level of media

spending can be achieved by maximizing the advertising productivity/efficiency. Following this

school of research, we believe that the amount spent on different media such as broadcasting,

print, and outdoor can be treated as DEA inputs, while sales and income as DEA outputs.



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Second, while some firms may be using a fixed percentage of previous sales as currentmedia spending budget, the approach is ad hoc and not supported by science. One hopes that

many firms are actually setting advertising budget based on future sales goals. However,

irrespective of how advertising budgets are set, advertising expenditure may or may not be

efficient (given level of advertising may produce different levels of sales) and DEA can be used

to investigate this.

It is not the setting of the budget that creates sales but the spending of the budget. If sales

fall below or above projected levels, real-time changes have to be made in spending. DEA can

be used to model such contemporaneous spending/sales data.

Finally, a pure empiricist may argue that DEA is a correlation technique used to analyze the

relationship between two sets of variables.

In conclusion, advertising theory dictates that media spending be treated as inputs and sales be

treated as outputs. Media spending should reflect sales goals. Irrespective of how advertising

budgets are arrived at, inefficiencies exist in advertising and that inefficiency can be

benchmarked using DEA. ( Mehir Kumar Baidya and Partha Basu Measurement and Analysis

for Marketing 2008) did one study with the aim to check the impact of individual marketing

efforts (advertising, sales force , promotion, distribution and price) on sales and overall customer

satisfaction for a brand by taking into consideration both the financial and non financial aspects

of the measurement. The return on- investment (ROI) has been calculated for each effort on the

basis of sales The findings suggest that all the marketing efforts have significant positive impact

on sales except price. Moreover, all the marketing efforts have significant positive effects on

overall customer satisfaction for the brand. Furthermore, among all the marketing efforts the

adjusted ROI is the highest for sales force. These results will assist the managers in allocating

the resources to different marketing efforts in a better manner, so as to improve the effectivenessof marketing expenditures.

Stone and Duffy , and Basu and Batra used the judgmental and mathematical

(ADSPLIT) models to frame the relationship between sales and advertising expenditures. Both



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studies used response function to allocate marketing budget to advertising as well as to differentbrands.

Effects of sales promotion : (Bawa and Shoemaker) performed a study to identify the influence

of sales promotion activities on customers brand choice behaviour. The authors found that sales

promotion activities have short-term and long term positive effects on the brand choice

behaviour of customers. In the same direction, Jones made an attempt to examine the short term

and long-term impact of sales promotion activities on sales by a multivariate technique

Regression model estimation indicates that the short-term effect is more prominent than the

long-term.

The author found that the effect of a low price on attracting buyers depends on the level

of advertising. The high advertising plan produces sales 50 per cent above the low plan at the

base price. At the middle price it was 34 per cent, and at the highest price with the high

advertising level it was only 11 per cent.( Effectiveness of marketing expenditures 2008

Palgrave Macmillan Ltd 0967-3237 Vol. 16, 3, 181188 Journal of Targeting, Measurement and

Analysis for Marketing 183).

Customer Satisfaction Studies: Anderson analysed a database matching the CSI with

ROI, and the productivity of each company covered by the Swedish Customer Satisfaction

Barometer (SCSB) from 1989 to 1992. Regression model estimation indicates that the

coefficient for the direct relationship between the customer satisfaction and ROI is positive and

significant. Similarly, Ittner and Larcker 12 extend this study by using stock price as a dependent

variable and CSI as an independent variable. The authors found that the estimated regression

coefficient is 7.36. This shows that customer satisfaction has a positive impact on shareholder

value.

Advertising remains one of the cornerstones of marketing communications. However,

determining its impact on a firms performance continues to be a difficult proposition for many

marketing and advertising managers. Although firms in the USA spent over $230 billion on



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advertising in 2001 (Coen, 2002), a clear link between advertising expenditures and financialperformance remains somewhat uncertain in many cases. One common belief is that advertising

creativity is an essential element of advertising success (El-Murad and West, 2004; Smith and

Yang, 2004) and may lead to an improved financial performance, that is, as firms focus more

resources and develop more creative advertising, they will realize marginal benefits in the form

of higher sales, an increased market share and higher future earnings. While seemingly

reasonable, this particular belief fails to provide much more than an anecdotal basis for

determining the effects of advertising on a firms bottom line. In addition, while positive returns

are expected, this type of unsubstantiated claim has become unacceptable as more marketing

managers are being asked to validate the links between traditional marketing variables and

financial performance (Jedidi et al., 1998).

Although the search for the true value of advertising has led to the completion of

numerous experimental and econometric studies, evaluating the effectiveness of specific

advertising campaigns continues to be problematic for practitioners and academics alike. For the

most part, past studies have tended to focus on a handful of executable devices such as the use

of humor, sex, and celebrity presenters (Stewart and Furse, 2000, p. 85). While providing some

useful insights, these mostly academic studies typically failed to take into consideration the

myriad of other variables that also affect advertising effectiveness (e.g. differentiating message,

repetition and recall). Exceptions to these fairly limited studies are practitioner studies that rely

on an experimental design and use single-source data (e.g. Eskin, 1985; Lodish et al., 1995).

Such studies are able to estimate advertising performance by tracking the actual purchasing

behaviour of a sample of consumers (via retail scan cards). However, while providing useful

insights, many of these experiments were not well documented in terms of methodology

(Stewart and Furse, 2000) and were very expensive, technically difficult to conduct and relied

heavily on the ability for tracking exact consumer purchasing patterns carefully. While both



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categories of studies have helped to extend our general understanding of how advertising affectsfirms performances, more research is needed.

Consequently, a number of empirical studies have recently been conducted in order to

extend our understanding of the links between specific aspects of a firms advertising function

and various financial performance measures (e.g. market share, profitability and stock price).

While market share and profitability continue to demand attention as managers attempt to link

their decisions to financial outcomes directly, many researchers have opted for a more unique

approach and have begun to examine the impact of specific marketing and advertising decisions

on expected future earnings (as manifested in higher or lower abnormal stock returns).

Specifically, researchers have explored the links between stock price and the use of celebrity

endorsers (e.g. Ohanian, 1991; Agrawal and Kamakura, 1995; Mathur et al., 1997; Farrell et al.,

2000), corporate sponsorship and the marketing of sporting events (e.g. Miyazaki and Morgan,

2001; Tomkovick et al., 2001), changing a companys name (Horsky and Swyngedouw, 1987)

and changing a firms advertising slogan (Mathur and Mathur, 1996). However, while some

progress has been made in this area, more research is needed.

Managerial relevance. Jointly examining weight and content effects on market responsecan be extremely appealing to brand managers who try to strike a balance between copy and

weight and may ultimately help them achieve higher advertising efficiencies. The results of

MacInnis et al. are encouraging, since they suggest that media expenditures are not a waste of

money when combined with the appropriate type of copy appeal (in their case emotional) in

mature markets. Similarly, the implications of the study by Chandy et al. [3] may help managers

in copy-changing decisions depending on the maturity of the market they compete. The

approach suggested in Reference [7] can be used when advertising appeals are ambiguous and

need to be inferred by examining their effects on response.

Long-term effects and hysteresis



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Although the long-term effectiveness of advertising has long been a popular subject ofacademic research with the Koyck model being the main methodological tool (e.g. Reference

[8]), in recent years new paradigms in the study of long-term advertising effects have emerged.

Most notably, Dekimpe and Hanssens [9, 10] proposed the use of persistence modelling to

study long-term advertising effects. Applying vector auto-regressive (VAR) models to data from

evolving markets, Dekimpe and Hanssens essentially redefine what should be considered as

long term and contrast it with the more traditional Koyck modelling approach. Koyck models

may be applied to stationary markets but their advertising effects cannot be permanent (and thus

really long term), because market performance in these markets reverts to its mean. In

evolutionary

markets, however, market performance can exhibit permanent increases and if such increases

can be attributed to advertising spending then advertising effects may be considered long term.

More specifically, Dekimpe and Hanssens [9] estimated a VAR model using home-improvement

chain sales and advertising data.

A relevant, but not identical, approach to measuring long-term effectiveness of

advertising is to examine whether it causes hysteresis, a concept introduced in the marketing

literature by Simon [12]. Hysteresis suggests that a temporary increase in advertising

expenditures can lead to a permanent increase in market performance (sales). The critical

assumption in the econometric modelling of hysteresis is that there is not a one-to-one

relationship between advertising and market performance, since decreasing advertising to its

previous level would not affect sales but increasing advertising from the same level would. In

other words the sales path is different for decreases from, than for increases to any level of

advertising spending. Hanssens and Ouyang [13] empirically examined hysteresis in the

computer printer market. They distinguish between full hysteresis, where temporary changes in

advertising cause permanent changes in sales without needing additional spending to maintain

the new high sales levels, and partial hysteresis, where some maintenance advertising is needed.



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Their empirical results provided evidence for partial hysteresis caused by print mediaadvertising.

The studies by Mela et al. [14] and Jedidi et al. [15] offer an alternative approach to

studying long-term advertising effects. The first study looks at the effects of quarterly

advertising expenditures on quarterly price sensitivities, while the second examines the

cumulative effects of advertising on choice and quantity and their short-term pricing and

promotion sensitivities.

Advertising effects on stability of performance

While recent research has addressed the issue of advertising effects in evolutionary

markets, the question remains whether advertising has a significant impact on mature markets.

The results reported in Reference [5] are encouraging as they suggest that increased advertising

effort can increase sales in mature markets. However, the maintenance role of advertising in

mature markets (see Reference [33]) should also be investigated. In other words, whether

advertising contributes to the stability of a brands performance, since many markets especially

for frequently purchased goods are mature The issue may be of greater importance for big

brands that would like to maintain leadership in a market but it could also be important for

smaller niche brands that enjoy a healthy profit margin and are satisfied with their market

position. There are two possible approaches to modelling advertising effects on stability of

performance. One is to examine the effects of advertising on the variance in the performance

(sales or share) of a brand across time. If advertising is expected to increase performance

stability, it should decrease variance in performance. To make comparisons meaningful across }

It should also be acknowledged that recent research has started examining the effects of

advertising/marketing expenditures on financial metrics (see for example Reference [29]). kFor

example, P&G, Unilever and GM are the top three media spenders worldwide. Although they do

introduce new products annually, they also support a lot of mature brands.(Copyright # 2005



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John Wiley & Sons, Ltd. Appl. Stochastic Models Bus. Ind., 2005; 21:351361 358 D.VAKRATSAS)

The specification of advertising effects on the variance of performance should follow

from the specification of advertising effects on the mean performance (e.g. Reference [34]),

which may complicate matters. Furthermore, showing that advertising contributes to lower

variance in performance may not easily convince managers to continue investing in advertising

since performance variance is not explicitly linked to profitability.

An alternative approach to evaluate advertisings maintenance role would be to look

fordifferential effects of increases and decreases in advertising. In other words, a mature brands

performance may be resistant to advertising increases (due to ceiling effects) but may be

sensitive (declining) to advertising decreases (due to lack of critical support). The implication

then would be that although advertising does not lead to increased performance, it helps

maintain it as declining advertising spending would result in deterioration of brand performance.

This is conceptually the opposite of hysteresis, where brand performance is resistant to

advertising decreases, as it focuses on losses in performance as a result of lower advertising

investment. Both approaches to measuring maintenance effects need sufficient variability in thedata in order to produce reliable results (see Reference [35]), which may be difficult to attain as

such studies should be carried in mature markets where managers may not change status quo

advertising practices.

Europe shows that advertising recall is lower in countries with higher levels of television

advertising. Specifically, yfield and Nazaroff (2003) report that in Denmark, where there are

only 80 average television exposures per week per person, the Millward Brown awareness index

is 150 (compared with the U.K. benchmark of 100).1 However, in Italy, where there are 300

average exposures per week per person, the awareness index drops to only 50. Thus, an effect of

increasing advertising levels is to decrease the recall of all advertisements. In addition, academic

studies have found lower ad recall and recognition in the presence of too much advertising from



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competitors (Burke and Srull 1988; DSouza and Rao 1995; Keller 1987, 1991). Increasingadvertising content on television also increases ad avoidance behavior (Danaher 1995; Lafayette

2004), such as channel switching or time-shift viewing with a personal video recorder (Green

2003).

A commonly used term to describe the presence of high levels of advertising is clutter.

For television, clutter is the combination of commercials and other nonprogram material,such as

program promotions and public service announcements. The increase in clutter over the past 40

years is due to both an increase in nonprogram time and an increase in the number of 15-second

commercials (Brown and Rothschild 1993; Kent 1995). The topic of increasing advertising

clutter is one of the most publicized issues in the advertising trade literature and continues to be

one of the greatest concerns facing the advertising industry (Chunovic 2003; Lafayette 2004).

Kent (1993) makes a distinction between competitive and noncompetitive clutter. Competitive

clutter, which is also called competitive interference (Burke and Srull 1988; Kent and Allen

1994), is clutter that arises from advertisements delivered by competing brands (within a

category) at or near the same time and place as those for a focal brand.Kent (1993, 1995) finds

that competitive clutter has a more harmful effect on ad recall than noncompetitive clutter. In

this study, we focus on competitive clutter.

Most previous research on brand advertising interference has been conducted in

laboratory settings, in which participants are exposed only to commercials and no editorial

material (Burke and Srull 1988; Keller 1991; Kent and Allen 1994), resulting in limited external

validity. Other studies of this topic have used unfamiliar brands, which Kent and Allen (1994)

show are more prone to interference effects. Finally, previous marketing studies have examined

the effect of competitive interference on recall, recognition, or brand evaluations rather than the

all-important effect on sales (East 2003, p. 19).

Advertising response models with managerial impact: an agenda for the future Faculty of

Management, McGill University, 1001 Sherbrooke St. W, Montreal, QC H3A 1G5, Canada



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ALBA, Athens, Greece.This paper discusses recent advances in advertising response models andidentifies new opportunities for managerially relevant research. First, it establishes that recent

research has shifted attention from topics such as duration of advertising effects in mature

markets and short-term advertising elasticities to issues such as combined effects of ad content

and weight and effectiveness in evolving markets. Then, motivated from recent trends in

advertising practice, it presents a research agenda consisting of four main topics: (1) new media

and forms of advertising (e.g. product placement), (2) media synergies, (3) advertising

productivity and (4) advertising effects on performance stability. Copyright # 2005 John Wiley

& Sons, Ltd. This paper has two main objectives. The first is to discuss new research findings (of

the last ten years) in advertising response research, their implications for managers and their

importance for broadening the scope of advertising research. The second objective is to propose

an agenda consisting of four new areas of research: non-traditional media, media synergies,

advertising productivity and advertisings role in performance stability. The choice of these four

issues was based on their practical relevance and the lack of sufficient academic research to

consider them resolved. The discussion of the proposed research agenda includes suggestions for

potential methodological approaches, data requirements and measurement. Given the focus of

the paper on advertising response models, the discussion mainly concerns empirical econometric

studies that use market-based performance measures (e.g. sales, share).

Marketing managers are under increasing pressure to justify marketing spending. The

issue of quantifying the returns to marketing activities in financial terms is one of the greatest

challenges facing marketing and brand managers today. For example, Rust and colleagues (2004,

p. 76) note that marketers have not been held accountable for showing how marketing adds to

shareholder value and that this lack of accountability has undermined marketers credibility,

threatened the standing of the marketing function within the firm, and even threatened

marketings existence as a distinct capability within the firm.



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Brand-The initial framework, developed in the 1990s, was based on four pillars:differentiation, relevance, esteem, and knowledge (Agres and Dubitsky 1996). Implications from

this model have helped shape thinking on various brand issues. For example, Aaker (1996, Chap.

10) uses the BAV model as one of the key inputs into formulating his brand equity ten and has

continued to make use of the framework to highlight the crucial role of differentiation in brand

building (Aaker 2004, p. 136; Aaker and Joachimsthaler 2000, p. 263). Y&R recently modified

its framework and introduced a fifth pillar called brand energy.1 The measure is based on the

Y&R survey questions reflecting the degree to which the brand is viewed as (1) innovative and

(2) dynamic.

The Pillars of the Initial Y&R BAV Model

Researchers have repeatedly established that the brand beliefs generated by an

advertisement affect consumer perception of the physical product during subsequent trial (e.g.,

Deighton and Schindler 1988; Kempf and Laczniak 2001; Kempf and Smith 1998; Marks and

Kamins 1988; Olson and Dover 1979; Smith 1993). However, those studies have typically

exposed consumers to the physical product shortly after exposing them to advertising. It is

therefore likely that in the marketplace a more extensive time lag occurs between both exposures

with beliefs decaying over time and that effects exist from perceived product physical attributes

on specific post experience brand beliefs in such cases (Kempf and Smith 1998).

Advertisement Effectiveness

The role of advertisement is to

Give your customer the reason to keep buying from you

Attract Must -Have customers to try your products

Increase the sales and profits



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(Core customers are companys most loyal customers who are willing to pay a fairprice for a product or service. Must-Have customers are people who could become

the core customers, but they currently do business with the competition.

Advertisement effectiveness can be checked a process call Plus Over Normal. To determine

the Plus over Normal results every ad is benchmarked against the normal business baseline. The

lift from the ad is sales can then be evaluated.

There are only three measures of advertising effectiveness:

Did core customers increase their spending with the company after seeing my

advertising?

Did any Must-Have customers start doing business with the company after seeing the

advertising?

Did the ads generate a net profit?

The Effects of Advertising and Brand Value on Future Operating and Market

Performance

Li Li Eng and Hean Tat Keh

This paper examines the joint effects of advertising and brand value on the firms future

operating and market performance. We operationalize future operating and market performance

as future accounting returns and future stock returns, respectively. Our results show that both

advertising and brand value improve future accounting returns at the firm level. The impact of

advertising and brand value on future stock returns is minimal. We find that spending on

advertising results in better brand sales and brand profitability. Brand value is also a good

predictor of brand performance. Thus, we conclude that advertising and brand value benefit thebrand and the firm through improved accounting performance. In this paper, we investigate the

impact of advertising and brand value on future operating and market performance. Key

intangible assets such as brand value (or brand equity), product differentiation, and goodwill are



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the outcomes of investment in advertising. It is generally believed that advertising contributes tothe creation of brand value (Chaudhuri 2002; Chu and Keh 2006; Kimelman 1993; Sheinin and

Biehal 1999). Mizik and Jacobson (2003) argue that brand-based advertising can create a

comparative advantage for firms through its ability to differentiate the firms product. The brand

can be a formidable barrier to imitation, as brand equity is difficult for competitors to copy,

becoming an effective entry deterrence strategy. Industry observers and analysts note that many

companies continue to emphasize brand-building activities. For example, Samsung has been

rated by Interbrand, a brand-consulting firm, as the fastest-growing brand over the past few years

(Yun Jong Yong 2004). The CEO of Samsung, Yun Jong Yong, has been instrumental in

driving the creation of its brand value, claiming, Our future will depend on our brand equity.

While brand value creation is generally regarded as a good thing, we need to have

more concrete measures of brand value appropriation (i.e., extracting profits from brand value).

Merely knowing the effect of brand value on purchase intent (Cobb-Walgren, Ruble, and Donthu

1995) is inadequate; Chaudhuri (2002) proposes a stylized model of how brand reputation

affects the advertisingbrand equity link. Using survey data, the models brand reputation as a

mediator on the effect of brand advertising, brand familiarity, and brand uniqueness on brand

equity outcomes. His results suggest that advertising directly or indirectly affects brand equity

measured as brand sales, market share, and relative price.

Second, firms spend large amounts annually on advertising and brand value creation with

the expectation of reaping returns in the future. As such, it is important to examine not only the

contemporaneous effect of advertising or brand value on firm performance, According to Low

and Mohr: To be sure, advertising is vital to brand equity. However, advertising, per se, is not a

sacred cow that should necessarily be part of every years marketing allocation. Monies should

be allocated to advertising only if it has a clearly defined role within that years strategy for

meeting a brands goals (1999, p. 72). They reached this conclusion via a qualitative study

using 21 in-depth interviews. Our review of the literature indicates that previous research has not



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specifically measured the impacts of advertising and brand value, and their joint effect, on firmperformance. By examining the effects of advertising and brand value, our work contributes to

the existing literature.

There have been numerous studies, however, on the individual effect of advertising on

the persistence of profits (e.g., Mueller 1990), implying that excess returns erode more slowly

for firms that advertise heavily. For example, Chauvin and Hirschey (1993) provide evidence

that advertising expense has a positive influence on the market value of the firm. They suggest

that spending on advertising can be viewed as a form of investment in intangible assets with

positive effects on future cash flows. When Erickson and Jacobson (1992) control for the

endogeneity between discretionary expenditures and profitability, however, they find that

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