Difference Between Product and Institutional Advertising

Advertising is one of the most crucial elements that decides the fate of a particular business in the market, and has different approaches based upon the nature of promotion that is required to be done. This MarketingWit article covers the difference between product and institutional advertising.
MarketingWit Staff
Did You Know?
Corporate advertising is another term used for institutional advertising.
Advertising basically involves attracting the attention of existing and future possible customers to a product or service by a brand. It may focus on the brand as a whole, or may choose to focus on only one particular service or product. Hence, the fact that different products need a different advertising approach is somewhat of a given. The most common and popular means of advertising have been observed to be television commercials, billboards, commercials in newspapers or magazines, brochures and pamphlets, and more recently, commercials on the Internet.
It is a well-known fact that every thriving business needs to ensure that it remains in the minds of its customers through different promotional tactics in order to ensure a steady flow of consumers, as well as attract more at the same time. In case of budding businesses, advertising is extremely crucial in order to gain the trust of the target consumer audience if the business even expects to survive in the market. Plus, advertising is essential if a business has (which it usually does) rivals in the market.
Product advertising and institutional advertising are two such sought-after approaches used by companies around the world. The following sections shall look at the differences between these two approaches.
Product Advertising
Definition and Meaning
Product advertising, as the name suggests, refers to the advertising and promotion of a particular product in order to entice customers and boost sales. It is the art of creating and maintaining awareness of a product (or a service) offered by the brand, rather than of the brand itself.
  • To create demand for a particular product
  • To make existing and potential customers aware about the product
  • To spark off an interest about that product in the minds of the target audience
  • To increase sales of that product and ultimately, company profits
  • More than anything, product advertising means the promotion of a particular product or service exclusively, in order to boost sales. Product advertising ranges from paid to unpaid, and expects quick financial returns. Most popular methods of product advertising include print and digital media, radio and television, flyers and brochures, billboards, event sponsorship, and word-of-mouth. Product advertising is short in its length.
  • Print media (newspapers, magazines), digital media (social-networking websites), billboards, flyers, and brochures all promote a particular product of a brand through catchy ads that instantly attract the attention of prospective customers. They also may use techniques such as sales or discounts to promote that particular element of the brand.
  • On the radio or on TV, catchy jingles or ads starring celebrities are a popular way of enticing prospective customers. These ads are made in accordance with the psyche of the target audience in such a way that the product is left irresistible to the customers.
  • As expected, the benefits of product advertising are immense. It arranges for the introduction of a particular product to the market, and helps potential customers analyze if it is better than its competitors, and if they should buy it or not.
  • One of the main objectives of product advertising is to boost sales to a great extent. If done correctly, it helps in increasing sales and ultimately the company profits.
  • Though product advertising is done to promote a particular product and not the brand as a whole, it also reinforces the brand image in the minds of the customers through its product promotion. For instance, when an advertisement talks about the greatness of a product, it also reminds the target audience of what brand it belongs to.
  • Sometimes, consumers may be harboring some misconceptions about the product or brand due to lack of proper awareness or information. Product advertising thus helps to clear out any misconceptions that may exist.
  • Product advertising often misleads customers into believing the greatness of a product. This makes customers make the wrong choices when it comes to buying.
  • It encourages the sales of products which may be really inferior as compared to others available in the market.
  • If buyers don't get what they expected, they feel cheated. This tarnishes the image of the brand as a whole, only because of one product and the advertising that accompanied it.
  • Sometimes, some ads catering to a particular audience may make use of immoral elements or unethical elements which may offend another class/community of people.
Product Advertising
Institutional Advertising
Definition and Meaning
Institutional advertising refers to the promotion of the company as a whole, rather than of one particular product or service. This approach to advertising can be labeled as the art of creating and maintaining awareness of a particular company or brand in the minds of existing and potential customers. Institutional advertising tends to improve the image of the company as a whole.
  • To promote the image of the company as a whole rather than of a particular good or service
  • To create and maintain goodwill in the market about the brand as a whole
  • To promote the generic good qualities of the company, such as low prices, reliability, good customer care, etc.
  • To promote the principles and philosophies that make up the foundation of the brand.
  • Since institutional advertising is done to promote the company as a whole, it is generally paid for by the brand without the expectation of immediate financial returns. Popularly, institutional advertising is undertaken via different forms of mass communication devices, such as television, radio, print media, and digital media.
  • Institutional advertising on the radio and TV basically consists of commercials and infomercials that are played at a specific time called a 'spot'. These can last up to even the length of an entire program, and are not only used to build a reputation of the brand, but also as a sales pitch.
  • Institutional advertising through print and digital media includes brand promotion through newspapers, magazines, restaurant menus, emails, online ads, text-messaging ads, direct mail (snail mail/email), etc.
  • As is the basic objective, institutional advertising establishes, maintains, and improves the image of a brand in the market and in the eyes of the target audience.
  • Institutional advertising results in the promotion of the benefits of using the brand's products or services, rather than the promotion of the products themselves.
  • It also creates an image of sophistication, or pride to be associated with a particular brand.
  • Institutional advertising helps develop a subtle sales pitch as customers don't realize that they are being attracted to the products indirectly.
  • Institutional advertising also tends to showcase anything the brand may do for the society, such as donating a part of the company profits to charity. This instills confidence, trust, and goodwill about the brand in the minds of the customers.
  • Institutional advertising promotes the brand, not any particular product. Hence, some experts feel that these ads only add to the company costs without getting any appropriate returns in the short run.
  • If one brand invests a lot in institutional advertising, it may lead to the establishment of monopoly in the market, with that particular brand ruling over others. Monopoly in any form is considered bad for the consumers as well as other companies (small-scale or medium-scale) according to experts.
  • Like product advertising, institutional advertising also tends to mislead the people, after which they may feel cheated. This may lead them to turn to other brands, which ultimately results in elevation of the competitors.
Institutional Adverticing
Product Advertising Institutional Advertising
Promotion of a specific product Promotion of the brand as a whole
To boost sales To boost company image and reputation
Increased profits, attracting potential customers Improves and maintains a brand's image, and puts forward a subtle sales pitch.
Misleads customers, may tarnish company image Is an added cost to the company without immediate returns.
Although advertising is deemed essential for the survival and growth of an organization, it is accompanied by its share of disadvantages. While product advertising caters to serve the target audience the best aspects and all the reasons why they should choose a particular product, institutional advertising seeks to remind the existing and potential target audience continuously of why an association with a particular brand will only benefit both sides. Both advertising approaches seek to promote a win-win situation, every time.