The objective of this study is to develop indicators to measure quality control and customer satisfaction of a prosthetic company during the Covid-19 pandemic. A consecutive non-probabilistic quantitative descriptive investigation is carried out using the Likert scale in the questionnaire format to be used in a population of 102 patients from the Ecuaprotesis3D company. The results show a positive response in customer service, product quality and loyalty; but clients tend to be dissatisfied with delivery times and follow-up control of prosthetic devices.
How to select the right ad agency. Case study: Multinationals in Ecuador
Introduction
An advertising agency is a company in charge of developing creative and strategic ideas to advertise a firm in a specific market. Its main objective is that people could get interested in acquiring the product/service of the client-company. Companies tend to believe that advertising agency’s services are required only for the launching of a new product or service, or for particular needs. However, the advertising agency’s services should be a constant need. As Green (2011), most of advertising is not related to promote new products but to sell existing ones.
Multinational companies in Ecuador work with ad agencies. They don’t manage the advertising in-house, especially ATL (above the line) or BTL (below the line). The marketing department works directly with the agency; it is in charge of the development of the brief and gives the approval. Multinationals are aware that every single market is different from other, and every country has its own set of regulations regarding advertising. For this reason, multinational corporations work with same arts and logos to subsequently adapt them to their market of election.
Advertising campaigns requires special skills that are not easily found inside a company’s human resources (Kumar & Meenakshi, 2009). For this reason, it is necessary the co-working with an advertising agency. For Kumar and Meenakshi (2009), ‘‘larger agencies offer full service comprising creative work, media planning and buying, planning and strategy development, market research and production’’ (p. 468). This implies that the pure activity of advertising requires external agencies because it requires creativity and other special skills that are not commonly found inside the company.
For producing a 360° campaign, it is important to first develop a market research. This, also known as consulting, provides to the creative department the information to define the creative and communication concepts and work out the graphic pieces (ATL). After that, the TV commercials and radio spots are produced (production). Once the graphic and audiovisual pieces are ready, it is time to advertise them according to a media plan (media planning). To finish, there would probably have BTL activities and maybe a launching event that must have press coverage (BTL and PR).
Another benefit of working with advertising agencies is that they have a wide range of experience since they manage many other clients from different industries. People that work there are strategic advisers that can provide an outsider’s view of the requirements, and many ideas on how to solve problems. The Executives are the ones that should guide the client according to their experience. The marketing staff is not always right, that’s why the function of the Executive is vital to obtain the desired marketing and advertising results.
Literature review
Advertising
Advertising, as a marketing activity, differs because it is commonly outsourced to an external company or agents. Advertising is related to marketing; however, doing marketing is not the same as only focusing on advertising. As Kotler (2014) explained, he realized firms had little knowledge on marketing practices as they only spent money on advertising. Nevertheless, advertising plays an important role in doing marketing.
Table 1. Definition of Advertising
Illustrations are not included in the reading sample
From the compilation from the literature about advertising, the most repeated terms regarding the concept of advertising are: non-personal presentation, goods and services, identified sponsor. The essence of the definition of advertising has not varied through the years and it keeps reflecting the same idea: Advertising refers to the non-personal presentation of goods or services by an identified sponsor.
Kaptan (2002) contributed to the literature on advertising and defined the term as: it ‘‘consists of oral, written, and other types of communications disseminated by or at the behest of an advertiser for the purpose of soliciting or encouraging the use of the advertiser’s services/products’’ (pp. 9). Also, Vysekalova (2011) contributed to the literature by reviewing definitions on advertising and concluded that it could be defined it as a communication process between sponsors and the target market or to whom are the products or services offered through any medium. For Remziye (2014), advertising presents the most persuasive message at the lowest possible cost. Also, it could be found in the most unusual places from small tickets to big walls. Its nature is about trying to convince consumers to make a purchase.
The role of advertising has changed in business. In the past advertising was used for communication goals, with the unique function of transmitting information. In the modern society, advertising aims at persuading consumers to take some action such as the purchasing of a product or service (Kumar & Sharma, 1998). According to Johnová (2008), the objectives of advertising are related to the strategy of the firm. This implies the essential role of advertising, as it will portray the image of the company, its products and brand.
Ad agencies
An advertising agency is ‘‘a service organization that specializes in planning and executing advertising programs for its clients’’ (Belch and Michael, 1995: For Belch and Belch (2001), an advertising agency is ‘‘an outside firm that specializes in the creation, production and/or placement of the communication message and may provide other services to facilitate the marketing and promotions process’’ (p. 69)
According to Chunawalla (2009), the advertising agency plays the essential role of converting ‘‘the goals of the client into creative work which is carried by the media so as to reach the target audience’’ (p. 146).
The functions of the ad agencies could be described as the process of advertising. The agencies have the role of understanding the product or service to be advertised, as well as the technology, the target market and the methods of distribution and selling (Chunawalla, 2009). Added to that functions, the advertising agency create the ads in their creative department, and also, they are in charge of buying the space or time in media in order to run the ads and assess them (Chunawalla, 2009).
Modern agencies provides a wider range of services to company-clients; this includes media planning and buying, research, market information, sales promotion assistance, campaign development, creation of advertisements (AAAA, 2011).
In most cases, the advertising agencies are the organizations in which the companies trust the largest amounts of money as well as high expectations. According to Medina and Ferrer (2014), the growth of the company depends largely on the selection of a good advertising agency.
According to the General Regulation to the Organic Law of Communication (2013), the advertising agencies provide the following services:
1. Creative strategies and development of the creativity.
2. Making of arts for publication in mass media or printing.
3. Electronic and companies’ audiovisual production.
4. Placing the agenda in mass media.
5. Image, market and marketing counselling.
6. Planning of advertising projects.
7. Development and maintenance of advertising campaigns (complete or parcial)
8. Planning and implementation of advertising strategies.
Agency Selection Contest
Agency evaluation and selection defines the stage 1 in the agency-client account management lifecycle. The selection of an advertising agency was described as ‘traumatic’ by Cagley and Roberts (1984), as it is time-consuming and expensive. The process begins with the selection of the advertising agency. In most cases, this step is the most difficult of the process, as it will involve review, evaluation and reselection of agencies. Also, this is important as the advertiser and advertising agency need to develop a smooth relationship in order to reach their shared goals.
There infinite ways and methods to carry out the selection process. The advertiser assesses the agency; in this assessment there are many factors taking in consideration. Cagley and Roberts (1984) found that the ‘people factor’ was an important criterion in the assessment of advertising agencies. This included the attributes of personnel quality, mutual agreement and understanding, reputation for integrity and interpersonal compatibility. The people factor is important because the relationship is developed on the basis of trust; the services are highly dependent on the people working from the service provider (advertising agency).
Horsky, Horsky and Zeithammer (2016) stated that in modern advertising the agency selection contest each participant proposes the creative campaign and the budget for the afterwards purchase of media space or time. Also, Horsky, et al (2016) proposed the scoring-auction mechanism to model advertising agency-selection contest. They found out that the advertiser could be benefited from this model by being provided of new-business stipend to encourage more participation in the contest. However the advertiser could benefit only if the agency faces a lower cost of developing creative customized to the specifications.
Advertising in Ecuador
Enacted laws about advertising
In Ecuador, mass media has been the most restricted field by constant changes in the freedom of expression. In 2013, the Organic Law of Communication (LOC) was enacted and it brought many changes regarding advertising in mass media, the most relevant reform was the Article 98:
National advertising production. Advertisement that is disseminated in Ecuadorian territory through the means of communication must be produced by Ecuadorian natural or juridical persons, whose ownership of the majority of the shareholding corresponds to Ecuadorian or foreign persons legally resident in Ecuador, and whose payroll for its production and production is made up of at least 80% of Ecuadorian or foreigners legally residing in the country. The import of advertising pieces produced outside the country by foreign companies is prohibited.
Muñoz (2015) conducted an analysis on advertising in Ecuador since the introduction of the Organic Law of Communication; on that study, it was found that some reforms could ‘be translated into barriers to the advertising practice’ (p. 129). The law was aimed to encourage the national production of advertisements. However, many agents were part of the collateral effects. For instance, with the article 98 the national producers along advertising agencies found incentives to enter into the market and grow. These two industries were impacted positively. However, companies perceived it as a deterrent for advertising. In the case of multinationals, they used to import the ads and slightly adapt them to the Ecuadorian market. As a consequence of the law, they were not longer allowed to import the advertisements and were forced to make larger investments on producing ads locally. Among other economic factors, the willingness to advertise faltered.
In contrast to the analysis of negative impact of LOC in advertising industry; Sánchez, et al (2016), based on an empiric study, concluded that printing media and audiovisual producers accept the reforms and think that it eases the work and encourages the national production. Also, they confirmed that LOC and its regulation improve the advertising activities and promote the development of those activities in the country.
Advertising scope in Ecuador
In Ecuador, the advertising industry is led by traditional media. Despite the increasing usage of mobile phones and social media, advertising on TV and radios remain on lead positions as it captures the majority of Ecuadorian audience.
Illustrations are not included in the reading sample
Source: Infomedia (2016)
The preferred media for advertising is TV. Along the years, it had not change, and TV remains the largest holder of share of advertising. In 2015, ads in TV added the 56% of total ads.
Investment share per advertiser 2014-2015
Illustrations are not included in the reading sample
Source: Infomedia (2016)
In Ecuador, the advertiser with the largest share is the Central Government. Unilever holds the second place, as its share of advertising investment was 4.4% in 2015. One important aspect to highlight is that the advertising investment of Central Government had decreased compared to 2014; however, it still holds the highest share of the total: 6.3%.
Diario El Telégrafo (2015) reported that there has been a reduction in the advertising investment in Ecuador due to many factors. Among the reasons of reducing the investment on advertising is the global economic situation which has contracted the market and impacted on companies’ revenues. Also, in Ecuador there have been constant changes in legislation regarding mass media and communication. The Organic Law of Communication, the regulatory body of media, reduced the time for advertising bundles and also set specific time for the advertising on products, especially on TV. As a consequence of this reduced space for ads on TV, the price for advertisers increased and so discourage the investment on advertising. The last factor influencing on this reduction is the popularity of internet. The social media and other digital tools had captured the attentions of brand and companies due to the low cost and high reach.
The process of selecting an agency
The agency selection process starts once the need is identified. It is important to take into consideration the nature of the business, and the services the multinational requires.
There are agencies in the market that offer an integral service that includes ATL, PR, production, consulting, media planning, digital, and BTL. Of course, not all companies require the same services at the same time, but there are definitely areas that are related and cannot be worked separately. There are also small agencies that offer a unique service and that are specialized on that.
For Kumar and Sharma (1998), the selection process of an advertising agency could be described in the following steps: “definition of requirements, developing a list of agencies in the market, credentials pitch by the agencies, giving the issue brief, see the presentations the agencies have prepared, analysis of pitch, select wining agency, agree contract details, and announce the winner” (p. 468).
Here are six key questions the multinationals should ask themselves when selecting an ad agency:
1. How good is its creative/strategic/media/research work?
2. Does this agency have people who we can work with?
3. How important does the account appear to them?
4. How well know is it? What are its other accounts? Does it have experience in our field?
5. Does it offer a full service or does it contract out some function?
6. What is the fee? What does the fee include?
The development of the brief is crucial to obtain the expected results. It is the task of the client to make it, but it is always recommended that the Account Executive develop it together with the client. The brief most be complete, and it most include product history, attributes, objectives, communicational focus, market situation analysis, target market, competition analysis, services required, and budget.
Key figures in the development of an advertising campaign are the Account Executive and Creative Director. The Executive is the intermediate between the client and the agency; this person receipts the client’s order, and coordinates the work of other departments on behalf of the account. By the other hand, the Creative Director is the person who understands the client’s objectives and has the skills to translate them into creative concepts that excite, inspire and engage (Fleishmanhillard).
The contest between advertising agencies
In this contest, a company calls for a closed competition between preselected agencies. The only award is the assignation of the account, either full, partial or for a specific project. It is a formal process; the advertiser hands out the brief and determines a presentation schedule. During that time, the agency does not get to receive further hints or tips from the advertiser.
When the contest is for a big account, ad agencies put all their efforts and resources into it. It tends to be stressful because there is a lot to lose for the losing ones. Not all agencies can afford this kind of contest. It involves extra expenses, personal assignation, extra efforts, and no feedback from the client during the process, and demoralization in the case of losing.
Agencies take it serious to the extent that they hire foreign specialists to work with them during the contest period. They dedicate for full weeks to it, and even use to forget about other accounts for been working on that. Being part of a contest between agencies represents thousands of dollars that could end up as an investment or as a total lost.
For agencies, the contest is very expensive because the proposal does not consist in storyboards or sketches, the TV and radio spots are actually produced with the same quality as any other ad. The graphic pieces include photo production in order to develop the arts. The contest production is a real-life campaign. With few changes, it must be ready to be advertised in media.
Doing this contest, the company itself may confront several problems. It represents an extra investment of time during all the process, there might be confidentially issues and filtered information, and the evaluation process is rough.
One of the most important problems the advertiser may have is the creation of rumors about what agency is wining even before the contest begins. There are cases where it is rumored that the contest is just a formality and that the decision had been already made.
In 2011, the AEAP (Agencia Ecuatoriana de Agencias de Publicidad) issued a document to regulate this type of contest. This document applies in the country, as well in Argentina, Venezuela, Mexico and Spain, and seeks efficiency in the process of selecting agencies for both advertisers and the agencies themselves. The regulation seeks to encourage healthy competition among partners, and helps the companies to choose in the best way their advertising agency (El Tiempo).
It establishes guidelines, penalties and obligations for contracting companies and those belonging to the AEAP. It also indicates that advertisers must include a timeline of the contest’s stages, give a minimum of two hours to present each proposal, and pay $2.500 to each participating agency for time spent in competition time.
Even though, that document is not completely executed here in Ecuador. The agency must bear all possible expenses, and they do not get to recover that money in the case of losing. For this reason, the companies know exactly which advertising agencies they pick. Not all can enter to the competition.
Real examples:
Unilever Ecuador
Unilever is a multinational corporation with presence in 150 countries around the globe. In the year 2000, Unilever enters the Ecuadorian market with the acquisition of Jabonería Nacional. Since then, it has been established as a top food, personal care and home care company.
When choosing an ad agency to work with, they have many regulations and international standards to accomplish. The ones that postulate for the contest must have their paperwork up to date and meet all requirements imposed by the law and government.
For the Skin Cleansing and Face categories, Unilever works with two agencies for everything that is ALT and BTL: Visacom and Enjoy. They have done a good job so far, but more important they have learnt to work with each other. Unilever’s term of payment establishes that the agency will be paid every three months. It is clear that not all agencies can afford that. For other services, such as trade and promotional marketing, they work with CNC Lobby, and for PR with MarketGate.
“Unilever Ecuador works with many ad agencies because of the amount of work we release. We have so many product categories that it would be impossible for one or two agencies to handle all that work. The idea is not to saturate them. We also prefer small agencies because in that way, our accounts are priority and they can specialized on them”, explained Luar Salazar, Unilever Ecuador Brand Coordinator of Skin Cleansing and Face.
Claro Ecuador
Claro is a multinational telecommunications company that operates in 16 countries of Latin America. Claro Ecuador is the leader in telecommunications with 69% share of the mobile market in the country. It has the largest network of voice and data, reaching more than 1,300 cities and towns, and has a 96% coverage of the country.
Claro Ecuador has worked with Veritas DDB for around four years now. The services Veritas offers it are ATL, BTL and Digital. The relationship has been great during this time, and they have got to create loyalty bonds. A really good thing is that both buildings are near to each other, so most of the meetings are face-to-face, in comparison to other cases where the communication is more through e-mails. This has allowed them to have a close and direct relationship.
The Public Relations are managed in-house, but for special events, they require the services of an agency. In this area, they have worked with Saltiveri and Creacional.
“Like most of the Ecuadorian companies, Claro is afraid of trying new things when it comes to advertising. They are afraid of getting out of their comfort zone. It is not that they do not have the freedom to do it, because they do. Of course there are stuff that are standardized throughout the region, like a renewed logo Claro Mexico just sent them about a week ago, which we have to adapt to the different arts. It definitely has a lot of potential, and this year we are definitely trying to do something new”, commented Jimmy Cobos, Veritas DDB Art Director of Claro Ecuador.
Kimberly Clark Ecuador
Kimberly Clark is a multinational company with over 140 years of history, manufacturers of globally recognized brands such as Scott, Flor, Huggies, Kotex, Kleenex, Plenitud, Poise, Kimberly-Clark Professional, leading over 80 countries around the world.
“In the Marketing department, we work with a middle size agency, a freelance designer and a graphic designer. When we have big projects and complete campaigns, we work with the agency. Small things that we require and that are daily, such as adjustments and POP material, we do them in-house”, said Andrea Sánchez, Kimberly Clark Ecuador Graphic Designer of Kotex.
Sagma Comunicaciones, a small PR agency based in Guayaquil, manages its Public Relations. Gabriela Pinoargote, Sagma Comunicaciones Account Executive of Kimberly Clark Ecuador, explains that it’s a very demanding client. She has to accomplish 30 publications monthly, and even though she has a good relationship with them, there is a lot of pressure to reach that goal. “We work great together. They are very open to listen my communicational advisories to obtain better results. They like working with us because we are a small agency, and we can attend their requirements quickly”.
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- Quote paper
- Carlos Sempertegui (Author), 2022, Implementación de indicadores para la medición del control de calidad y satisfacción de los clientes de empresa protésica en pandemia, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/1477060
