Promotion in marketing

1Subash Ch. Nath, Sr.Lecturer (Marketing)

MODULE-I

(PROMOTION)

CONTENTS:

1. Introduction to Promotion

2. Promotion Mix-

What is Promotion mix?Elements under Promotion mix-

a) Advertisingb) Sales Promotionc) Personal Sellingd) Public Relationse) Publicityf) Propaganda

3. Probable Questions-


1. Introduction to Promotion

When a company develops a new product, changes an old one orsimply wants to increase sales of an existing product or service, it musttransmit its selling messages to potential customers.

Although there is no direct relationship between the promotion andsales but then also we can say that if promotional programs are directedtowards the target (potential) customers, it pays to the marketer.

Promotion is the fourth component of a company’s total marketingmix.

Promotion is only a means of communication about theproduct without the motive of persuading for that act which acustomer do not want to do.

In economic terms, the role of promotion is to change a firm’sdemand curve- either shifting it to the right or changing its shape to makedemand inelastic when prices increase and elastic when prices decrease.

In marketing terms, the role of promotion is to inform, remindand persuade existing or prospective customers to accept, resell,recommend or use of a product, service and ideas.

Usually the marketers’ communication efforts are known aspromotion. Fundamentally, the communication occurs when- i) a sendertransmits a message, ii) a receiver receives that message, and iii) thesender and the receiver have the shared meaning. The two majorparticipants in the communication process are the sender (source) and thereceiver. The sources of communication use channels and messages toreach their intended receivers. The communication process involvesperforming the communication functions of encoding, decoding,receiving feedback, and coping with noise. So, marketers mustunderstand the communication process to communicate effectively withtheir target marketer and other public.

2. Promotion Mix-


What is Promotion mix?

Promotion mix consists of careful blending of advertising,personal selling, sales promotion, public relations, publicity andpropaganda; to accomplish the marketer’s promotional objectives.

When deciding the promotional mix, the management shouldconsider-

The target audience/ Market size and concentrationThe objective of the promotional effort.The nature of the product.The stage of the product’s life cycle.The funds available for the promotion/ Resourceavailability and the cost of each promotional tool.Customer information needs

All the forms of promotion in promotional mix try to influenceconsumers’ attitudes, beliefs, ways of living or life style, values andpreferences towards a company and its products, and thereby influencehis/her behaviour.

Elements under Promotion mix-

a) Advertisingb) Sales Promotionc) Personal Sellingd) Public Relationse) Publicityf) Propaganda

a) ADVERTISING


Introduction:

The term ‘Advertising’ is derived from the original Latin word“advertere” which means” to turns the attention.

ADVERTERE ------------------: TO TURN THE ATTENTION

Therefore, it can be said that anything that turns the attention of thereaders or the listeners or the viewers towards a product or service oridea is known as advertising.

Advertising, generally speaking, is the promotion of goods, services,companies and ideas, usually performed by an identified sponsor.Marketers see advertising as part of an overall promotional strategy.

Kotler and Armstrong provide an alternative definition:"Advertising is any paid form of non-personal presentation

and promotion of ideas, goods and services through mass media suchas newspapers, magazines, television or radio by an identifiedsponsor".There are five main stages in a well-managed advertisingcampaign:Stage 1: Set Advertising Objectives

An advertising objective is a specific communication task to beachieved with a specific target audience during a specified period of time.Advertising objectives fall into three main categories:(a) To inform - e.g. tell customers about a new product(b) To persuade - e.g. encourage customers to switch to a different brand(c) To remind - e.g. remind buyers where to find a productStage 2: Set the Advertising Budget

Marketers should remember that the role of advertising is to createdemand for a product. The amount spent on advertising should berelevant to the potential sales impact of the campaign. This, in turn willreflect the characteristics of the product being advertised.


For example, new products tend to need a larger advertising budget tohelp build awareness and to encourage consumers to trial the product. Aproduct that is highly differentiated may also need more advertising tohelp set it apart from the competition - emphasizing the points ofdifference.

Setting the advertising budget is not easy - how can a business predictthe right amount to spend. Which parts of the advertising campaign willwork best and which will have relatively little effect? Often businesses use"rules-of-thumb" (e.g. advertising/sales ratio) as a guide to set the budget.Stage 3: Determine the key Advertising Messages

Spending a lot on advertising does not guarantee success (witness theinfamous John Cleese campaign for Sainsbury). Research suggests thatthe clarity of the advertising message is often more important than theamount spent. The advertising message must be carefully targeted toimpact the target customer audience. A successful advertising messageshould have the following characteristics:(a) Meaningful - customers should find the message relevant(b) Distinctive - capture the customer's attention(c) Believable - a difficult task, since research suggests most consumers doubt the truth of advertising in generalStage 4: Decide which Advertising Media to Use

There are a variety of advertising media from which to choose. Acampaign may use one or more of the media alternatives. The key factorsin choosing the right media include:(a) Reach - what proportion of the target customers will be exposed tothe advertising?(b) Frequency - how many times will the target customer be exposed tothe advertising message?(c) Media Impact - where, if the target customer sees the message - willit have most impact? For example does an advert promoting holidays forelderly people have more impact on Television (if so, when and whichchannels) or in a national newspaper or perhaps a magazine focused onthis segment of the population?

Another key decision in relation to advertising media relates to thetiming of the campaign. Some products are particularly suited to seasonalcampaigns on television (e.g. Christmas hampers) whereas for other


products, a regular advertising campaign throughout the year in mediasuch as newspapers and specialist magazines (e.g. cottage holidays in theLake District) is more appropriate.Stage 5: Evaluate the results of the Advertising Campaign

The evaluation of an advertising campaign should focus on two keyareas:(1) The Communication Effects - is the intended message beingcommunicated effectively and to the intended audience?(2) The Sales Effects - has the campaign generated the intended salesgrowth. This second area is much more difficult to measure

The Objectives of Advertising:

i.To create awareness.ii. To informiii. To remind customersiv. To reassure customersv. To offset advertising by competitorsvi. To supports the sales force.vii. To persuadeviii. To promotes ideas, attitudes and causesix. To increase market sharex. To differentiate from rivals.xi. To encourage trialsxii. To build brand loyaltyxiii. To encourage brand switchingxiv. To change attitudesxv. To support activities in the distribution

chain.Types of advertising:

i. Informative : Provide information.ii. Persuasive : To encourage brand switching.iii. Reminder : To remind about a mature product.iv. Reinforcement : To reassure.v. Pioneering : To introduce new product.vi. Competitive : To point differential advantage.vii. Defensive : To reduce damage caused by


campaign of a direct competitor.viii. Institutional : Seeks to promote corporate identity, image and values.ix. Direct response : To elicit an order, enquire or request a visit by using of prime Medias.

Setting the advertising budgetIntroductionA famous comment usually attributed to Lord Leverhulme goes:“I know that half of my advertising budget is wasted, but I’m not surewhich half”

It is notoriously difficult to measure the effect of advertising on abusiness’ sales. Advertising is just one of the variables that might affectsales in a particular period. These include:

• Consumer and business confidence• Levels of disposable income• Availability of product (e.g. does the retailer actually have stockto sell?)• Availability of competing products• The weather (often blamed by retailers for poor sales!)How can a business know whether a specific advertising campaign

was effective?As a percentage of sales, advertising expenditure varies

enormously from business to business, from market to market. Forexample, the leading pharmaceutical companies spend around 20% ofsales on advertising, whilst business such as Ford and Toyota spend lessthan 1%. An average for fast-moving consumer goods markets(“FMCG”) is around 8-10% of sales.

In practice, the following approaches are used for setting theadvertising budget:Approaches to setting the advertising budgetMethod (1) Fixed percentage of sales


In markets with a stable, predictable sales pattern, some companiesset their advertising spend consistently at a fixed percentage of sales. Thispolicy has the advantage of avoiding an “advertising war” which could bebad news for profits.

However, there are some disadvantages with this approach. Thisapproach assumes that sales are directly related to advertising. Clearly thiswill not entirely be the case, since other elements of the promotional mixwill also affect sales. If the rule is applied when sales are declining, theresult will be a reduction in advertising just when greater sales promotionis required!

Method (2) Same level as competitorsThis approach has widespread use when products are

well-established with predictable sales patterns. It is based on theassumption that there is an “industry average” spend that works well forall major players in a market.

A major problem with this approach (in addition to thedisadvantages set out for the example above) is that it encouragesbusinesses to ignore the effectiveness of their advertising spend – itmakes them “lazy”. It could also prevent a business with competitiveadvantages from increasing market share by spending more than average.Method (3) Task

The task approach involves setting marketing objectives based onthe “tasks” that the advertising has to complete.

These tasks could be financial in nature (e.g. achieve a certainincrease in sales, profits) or related to the marketing activity that isgenerated by the campaigns. For example:

• Numbers of enquiries received quoting the source code on thea d v e r t i s e m e n t• Increase in customer recognition / awareness of the product orbrand (which can be measured)• Number of viewers, listeners or readers reached by the campaign

Method (4) ResidualThe residual approach, which is perhaps the worst of all, is to base

the advertising budget on what the business can afford – after all other


expenditure. There is no attempt to associate marketing objectives withlevels of advertising. In a good year large amounts of money could bewasted; in a bad year, the low advertising budget could guarantee afurther low year for sales.

Advertising Media:

Broadly grouped into four categories, such as- 1. Indoor Advertising – Press, Radio, Television and Film. 2. Outdoor Advertising – Posters, Painted displays, traveling displays, electric signs, sky, writing, Sandwich man. 3. Direct Advertising – Envelop enclosures, Broad sides, Booklets, Catalogues, Sales Letters,

Gift novelties, Store Publications, Package inserts. 4. Display Advertising - Displays, Showrooms, Showcases, Exhibitions and store cases.

1. Indoor Advertising Medias -

a. Newspapers:

Newspaper is one that gives news, views, ideas, interpretations, opinions, comments and explanations on every walk of life.

Merits: Wide coverage. Quick Response. Regularity and Frequency. Flexibility and Speed. Economical.

Demerits: Shortest Life. Lack of quality reproduction. Waste in circulation. Possibility of duplication.


The newspaper vehicle is best suited where the firm wants - To introduce new produce. To supports the efforts of middleman. Quick and unexpected changes are necessary.

Criteria for selection of Newspaper –The advertiser should take into account the following

points for selecting the newspaper for giving the advertisements.Such as –

CirculationAdvertisement ratesNewspaper policy.Space available.Language of the paper.Colour advertisementsTime of issue.

b. Magazines:

Magazines are the periodicals published weekly, fortnightly,monthly, and quarterly and annually covering either a specific areaof the general area of a subject or subjects.

Merits: longer life Visual display Selectivity Loyalty and prestige Geographic flexibilityDemerits: Inflexibility Waste in circulation Costlier Restricted frequency

Magazines are more suitable where:To accommodate longer copy needs.To imprint product features by colours.


To support promotion advertising.

c. Radio Advertising:

It is a mass medium that appeals to earns and brain of listeners. Itruled from 1920 to 1970 very powerfully and now curtailed role astelevision took its place.

The types of radio advertisements are –Straight commercials.Dialogue commercials.Dramatized commercials.Integrated commercials andMusic commercials.

Merits: - SelectivityHuman touchFlexibility and timingMass coverageEconomy.

Demerits:- MessagePerishabilityLack of illustrationsLimited time.Wastage

The radio advertising is better suited where –Low cost advertising is desired.Last minute changes are possible.Products can be described needing no visual display.

d. Television advertising:

It is the youngest, glamorous and highly specialized in terms ofsound, light, colour, vision and immediacy. Television advertisingare called television commercials – lasting for 10, 20, 30 seconds.These may be programmes or announcements.


Merits: - Deep impact.Selectivity and flexibility.Mass communication mediaUpper hand in distribution.Lifelike presentation.

Demerits:- Shortest lifeCostlierThe clutter problemTime taxing

Television advertising is more suitable where-The message needs visual display.A new product is to be introducedFreedom is needed in selection of programme andtime of advertising.

e. Film advertising:

Cinema is a audio-visual medium for masses. It has the widestrange starting from ordinary slide presentation to the ad filmscreening.

Merits: - Dramatic Impact.Selectivity and FlexibilityMass publicityLeast wasteSupplimentary

Demerits:- CostlyInterjectionLimited coverageClutter problem

The cinema advertising is most suitable where-The product needs demonstration.Rural markets are to be reached.There is need for introducing new product.The advertiser needs selectivity and flexibility inmessage spread.

2. Out door Advertising Medias -


This is called indirect advertising which is the oldest and yet notlost its contents even today. It is one meant for the moving peoplethat catch the notice of people within the minimum time. Thecomponents of morale advertising media are discussed as follows:-

a. Posters: A poster is a sheet of paper pasted on awooden or card or a metal board depicting the advertisingmessage. It is a prominent vehicle of outdoor mediaaccounting for 75%. These may be of various sizes. Thesuccess of poster advertising depends on two factorsnamely, its designing and the selection of site for display.

b. Painted Displays: These are the painted bulletins or thewall paintings. Bulletin is the metal sheet of a rectangularshape of a standard size erected at height to command thevisuality from a distance. This also takes a number ofvarieties.

c. Electric signs: These are non-standardized, large andpermanent signs that make use of elaborate light and actioneffects. These provide a kind of wonderland to the passerbyparticularly during the night time.

d. Traveling displays: It refers to the transit displays.These are used in and out of the vehicles. These are of threetypes namely- car cards, outside displays and stationposters.

e. Sky-writing: It is air advertising in the sense that even thesky is not spared by the advertisers to pass on theirmessage. The ways are kites, balloons and search lights.

f. Sandwich man: This is the oldest and funniest mode ofoutdoor advertising. Sandwich men are the men hired topass on the message in a usual way. These persons dressthemselves in the funniest way even make use of artificialprops to look abnormally tall/fat. They carry posters both infront and back of their own.

Merits of Outdoor advertising:Wider and deeper appealGreater flexibilityEconomy


Easy accommodationBeautification

Demerits of outdoor advertising:Only remainder publicity.UglificationHeavy investmentImmeasurability

Outdoor advertising is best suited where –Repeat advertising is a mustTo supplement other mediaPackage identification is soughtGeographical selectivity is warranted.

3. Direct Advertising Medias -

It is one that passes on the printed matter by postal or handdelivery to the persons. The components of direct advertising areas follows:

a. Post cards: Most widely used vehicle of direct advertising.It is designed to get direct and immediate action on the part ofthe recipient. It also acts as a reminder, rescinder, andannouncer and so on.

b. Envelop enclosures: It stands for the bunch of the papersposted and not the enclosures as normally understood. It maybe a circular or suffer or a folder. All these pass on usefulinformation to the recipient.

c. Booklets: It is a very small book having not more than 8to 10 pages fastened with staples or glue to allow it to open. Itgives the product story in a colourful way and hence it isnormally preserved.

d. Catalogues: It is similar to the booklets but moresubstantial in covering more information on the entire productrange. It also gives the prices of the products. It also act as areference book for the dealers.

e. Sales letters: It is the one that sells the name of the companyand then sales the products. The principle of A-I-D-A isfruitfully employed in designing the sales letters.

f. Gift novelties: These are the gifts to be given to theconsumers, dealers and the executives. Therefore, these can be


of three types namely advertising novelties, calendars andexecutive gifts.

g. Store publications: It is the house organ that intends topromote the company goodwill speaking of its philosophy,research achievements, participation in community projects andso on.

h. Package inserts: It refers to inserts and labels giving verbalinformation to the buyer. It is mainly used to promote the salesof jointly demanded products.

i. Sampling: The practice of disturbing the goods freely tothe consumers on the pretext that the pre purchase useconvinces them, is sampling. These may be distributed door todoor, through dealers, against coupons and vending machines.

Merits: - Heavily selective.Flexibility.Personal touch.Deeper impact.Result measurability.

Demerits:- High costLow reader interest.Limited spanWarrants specialized skill

The direct advertising media is best suited where –The advertiser has limited and concentrated class

of customers.Keenness of reaching customers and middlemen.Timely and less waste circulation.Advertiser wanted to maintain secrets of his line.

4. Display Advertising Medias -

This is one that convinces the customers by presentation,demonstration rather than telling. It is gaining ground these days ofself service and selection. The components of display advertisingare - displays, showrooms, showcases, exhibitions and trade fairs.

a. Display: There can be window and counter display.Window Display: - It is the exterior display that

attracts the passerby to come nearer and enter the shop. Thiscreates love at first sight.


Merits: - Point of purchase impact. - Colourful life size presentation. - Act as a beauty mask.

Counter Display: - It is interior display anarrangement in side the shop. It has the ability of creating on thespot desire called as impulse buying.

Merits: - Easy location of products.- Results in impulse buying.

- Consumer Loyalty.

Demerits of display advertising:- Creativity.

- Placement. - Wastage; which are to be solved effectively.

b. Showrooms & showcases:

A showroom is a specially designed room or the room cumoffice rented or owned located in the prominent place or the salesterritory mainly used for display, demonstration and after salesservices.

A showcase is a glass box or a cupboard or a glazed caseor a cabinet with glass doors used to display the products in anartistic way to arrest the attention passerby.

Merits: - Place to get orders.- A training ground.

- Centre for after sales services. And the success of these depends upon suitablelocation, easy accessibility, accommodation, working staff and thetestimonials of satisfied customers.

c. Exhibitions & Trade fairs:

Though most of the people use these two words namelyexhibition and trade fairs interchangeably, there is differencebetween these two.


An exhibition is the huge congregation of manufacturers anddealers under a single roof for displaying, demonstrating andselling their products. A trade fair is a huge gathering of prospects arranged by themanufacturers and dealers where fun and frolic and entertainmentare prominent.

Merits: - Display and demonstration.- Deeper impact.

- Market development. Demerits: - High cost.

- Management.

The success of these exhibitions and trade fairs depends onsound planning as to size, site, and design of spot and sales staff,display and demonstration style.

Choice of advertising media:

The most important issue is one of selecting the bestmedium or media by every advertiser.

And this depends variables like- - Audience : Does it reach the target audience? - Impact : Does it have the impact to ensure the message has a chance of getting

through. - Message : Does it ensures the message is clearly communicated? - Response : Does it make responding easy? - Internal Mgmt : Does it enhance the efficient management of the campaign? - The end response : Cost & projected likely response.


Advertising Effectiveness:

The effectiveness of advertising is expressed in termsof its ability to meet the objectives.If sales increased profit and sales are the aims, theireffectiveness are measured in terms of the return oninvestment in advertising spending.If competitive defense is the main aim it is measuredin terms of maintenance in indicators of competitiveposition. (e.g. market share)

Measures of advertising effectiveness:

Advertising awareness: The ability of a consumer toremember a particular advertisement.Advertising Coverage: The %age of the target marketwho have at least one opportunity to see anadvertisement during a campaign.Advertisement sharing of voice: The proportion ofoverall advertising in a market accounted for by abrand or company.Advertising to sales ratio: Expenditure on advertisingas a proportion of sales.

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SALES PROMOTION

Meaning and Definitions:

Sales promotion is any initiative undertaken by an organization to promotean increase in sales, usage or trial of a product or service (i.e. initiatives that arenot covered by the other elements of the marketing communications orpromotions mix). Sales promotions are varied. Often they are original andcreative, and hence a comprehensive list of all available techniques is virtuallyimpossible (since original sales promotions are launched daily!).

1. Short term incentives to encourage purchase or sales of a product orservice.

2. The promotional and sales techniques aimed at short-term increases insales.

3. A range of tactical techniques designed within a strategic marketingframework, to add value to a product or services in order to achieve aspecific sales and marketing objectives.

4. Sales Promotion collectively comprises the tools used to promote sales ina given territory and time.

5. These are primarily short term in nature and are designed to quicklystimulate sales.

6. While advertising creates awareness, information; and providing to thetarget customers the rationale to buy a product…

7. Sales Promotion induces him/her to try/buy the product. And in thissense SM is an incentive to buy.

Objectives of sales promotion:

1. To increase sales.2. To introduce new product.3. To encourage consumers to buy more.4. To encourage the consumers to try the product.5. To encourage the customers to buy at off peak times.

REDUCEPROMOTIONS

MAINTAIN/ENHANCE

REDUCEPROMOTIONS

MAINTAIN/ENHANCEPROMOTIONS

REDUCEPROMOTIONS


6. To reward the loyal customers by increasing customers time of contactwith the company.

7. To increase sales among existing customers.8. To regain former customers.9. To maintain competitions.10.To increase off peak sales.11.To support other forms of sales promotion.12.To extend the firm’s database of customers.13.To motivate the supply chain.14.To challenge the competitors.15.To reinforce the image of the product and brand.

When and how much SP needs for a firm?

WIN-WIN

FIRM LOOSESMARKET SHARE.OTHERS GAINMARKET SHARE

FIRM WINS MARKETSHARE

NOBODY WINS:-MARKET SHARECONSTANT, PROFITMARGINS ERODE

Firm’s Strategic Options

MARKET’S STRATEGIC OPTIONS

Product Life Cycle and Sales Promotion:


In the INTRODUCTION STAGE of PLC, advertisement helps inawareness creation and brand positioning, while SP induces trials.In the GROWTH STAGE of PLC, advertising helps competitivedifferentiation and market expansion, while SP helps to create and rewardloyalty.In the MATURATION STAGE of PLC, advertising helps remindingcustomers about product availability, while SP helps maintain customerloyalty and attract new customers.And in DECLINE STAGE of PLC, SP is more often useless andunnecessary….

Classification of sales promotions:

Sales promotion can be classified as-

A. Consumer promotion : Targeted at the consumers.B. Trade promotions : Targeted at the intermediaries

in the channel of distributions.C. Sales force promotions : Designed to motivate the sales

force.A. Consumer promotions

Sales promotion aimed at final consumers & designed tostimulate consumer purchasing.Role:-

- To encourage sales.- To increase usage.- To increase in frequency.- To increase in frequency of usage.- To encourage sales of slow moving products.- To increase off peak sales.

Techniques:-- Contests- Coupons- Point of purchase display- Free Samples- Tradeshows & exhibitions- Banners & streamers- Cross promotions- Premiums (gifts)


- Product Warranties- Cash Rebates- Free Trials- Bargain packs- Rewards for loyalty- Special finance deals % finance scheme)- Bunding- Discounts

B. Trade promotionsSales Promotion designed to gain reseller support and toimprove reseller selling effort.Sales Promotion aimed at distributors to encourage them tostock a particular product.Role:-

1. To obtain self space.2. To develop goodwill.3. To encourage retailers to promote the products.4. To increase the distribution network.5. To encourage sales of slow moving products.6. To assist sales force.

Techniques:-

- Price off deals- Promotion allowances- Sales Contests- Calendars/Diaries, etc- Gifts- Cooperative advertising- Trade shows- Meetings- Catalogues- Point of purchase display- Free goods- Training middlemen’s sales force- Product demonstrations

C. Sales force promotions:


Sales Promotions designed to motivate the sales people andmake sales force selling more effective.Sales Promotions designed to make the sales men’s effort moreeasy and effective.Techniques:-

- Bonus- Contests.- Meetings and Conferences.

- Incentives

Steps in Sales Promotion Process:

Defining Sales Promotion target.Setting Sales Promotion objectives.Setting Sales Promotion budget.Developing the Sales Promotion strategy.Selecting the types of Sales Promotion.Coordinating the plans.Evaluating the Sales Promotion Effectiveness.

Arguments for SP:

Complements media advertising.Short term boosts to sales.Added incentive to purchaseCan be measured in terms of sales.

Arguments against SP:

Excess SP result in a cut-price situation.Benefits of short lived sales falls off after the promotion is finished.

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PERSONAL SELLING

Personal selling occurs where an individual salesperson sells aproduct, service or solution to a client. Salespeople match the benefits oftheir offering to the specific needs of a client. Today, personal sellinginvolves the development of longstanding client relationships. Incomparison to other marketing communications tools such as advertising,personal selling tends to:

use fewer resources, pricing is often negotiatedproducts tend to be fairly complex (e.g. financial services ornew cars)there is some contact between buyer and seller after the saleso that an ongoing relationship is builtclient/prospects need specific informationthe purchase tends to involve large sums of money.

There are exceptions of course, but most personal selling takes place inthis way. Personal selling involves a selling process that is summarized inthe following Five Stage Personal Selling Process.

PERSONAL SELLING Vs. ADVERTISING:

%ageof

Promotional

Simple/ Complex/Expensive Goods

Personal

Advertisin


Sl.No.

ADVERTISING PERSONAL SELLING

1 Directed at the audiences. Directed at the individual.

2 Impersonal, indirect contact. Personal, direct contact.

3 Working in breadth. Working in depth.

4 One way flow ofcommunication.

Two way flow ofcommunication.

5 Organised and delayedfeedback.

Direct and quick feedback.

6 Less directly adaptable. High level of adaptability.

7 Expensive and effectivelyhigh.But it is lower per customeras compared to personalselling.

Less Expensive and effectivelylow.But it is high per customer ascompared to advertising.

8 Pull effect Push effect

9 Collective interest is having Individual interest is having


more weightage thanindividual.

more weightage than collective.

10 Unlimited scope. Limited scope.

Push and Pull strategies:"Push or Pull"?Marketing theory distinguishes between two main kinds of promotionalstrategy - "push" and "pull".PushA “push” promotional strategy makes use of a company's sales force andtrade promotion activities to create consumer demand for a product.The producer promotes the product to wholesalers, the wholesalerspromote it to retailers, and the retailers promote it to consumers.A good example of "push" selling is mobile phones, where the majorhandset manufacturers such as Nokia promote their products via retailerssuch as Car phone Warehouse. Personal selling and trade promotions areoften the most effective promotional tools for companies such as Nokia -for example offering subsidies on the handsets to encourage retailers tosell higher volumes.A "push" strategy tries to sell directly to the consumer, bypassing otherdistribution channels (e.g. selling insurance or holidays directly). With thistype of strategy, consumer promotions and advertising are the most likelypromotional tools.PullA “pull” selling strategy is one that requires high spending on advertisingand consumer promotion to build up consumer demand for a product.If the strategy is successful, consumers will ask their retailers for theproduct, the retailers will ask the wholesalers, and the wholesalers will askthe producers.A good example of a pull is the heavy advertising and promotion ofchildren's’ toys – mainly on television. Consider the recent BBCpromotional campaign for its new pre-school programme – theFimbles. Aimed at two to four-year-olds, 130 episodes of Fimbles havebeen made and are featured everyday on digital children's channelCelebes and BBC2.


As part of the promotional campaign, the BBC has agreed a deal with toymaker Fisher-Price to market products based on the show, which ithopes will emulate the popularity of the Tweenies. Under the terms of thedeal, Fisher-Price will develop, manufacture and distribute a range ofFimbles products including soft, plastic and electronic learning toys forthe UK and Ireland.THE ESSENCE OF PERSONAL SELLING:1. The presentation of products & associated persuasive communication

to potential clients.2. Involves two way persuasive communications.3. The aim is to match customer needs with the goods or services on

offer.4. Ultimate objective: To make a sale.SELLING INVOLVES:

Creative positive attitudes towards a product or service.Motivating people to want to purchase a product or service.Convincing people that they will be acting wisely if they buy.Closing a sale.Reassuring people that they have acted wisely in making a purchase.

THE OBJECTIVES OF PERSONAL SELLING:To increase the volume of sales.To increase sales revenue.To reduce the costs of sales.To increase the number of distribution outlets.To prospects for new customers.To reduce the number of customers with minimum viable orders.

THE ROLE OF SALES EXECUTIVES:To gather information about customer wants.To communicate information specifically on the advantages of theproduct to the customer.


To prospect look for new opportunities. Means to locate newpotential customers.To display and demonstrate the product.To build goodwillTo build with complaints.To close a sale that is to secure a sale.In some cases to make deliveries.

SKILSS REQUIRED FOR PERSONAL SELLING:Interpersonal SkillsAdaptability.Self motivation.Problem solving capabilities.Product knowledgeCustomer knowledgePresentation skills.

SALES REQUIRED INFORMATION ON:The productThe customersTerritoryTechniques of sellingPromotional materialsHis/Her own organizationTargets

FIVE P’S IN PERSONAL SELLING:PreparationProspectingPre approach PresentationPost sales support

STEPS IN PERSONAL SELLING- I:


PROSPECTING – LOCATE POTENTIAL CUSTOMERS

PRE-APPROACH – GATHER INFORMATION ON PRODUCT & THE

PROSPECTS.(THE POTENTIAL BUYER)

THE APPROACH – - FACE TO FACE MEETING.

- TO CREATE FAVOURABLE IMPRESSION.

- TO VERIFY THE FACTS.

- TO SET THE STAGE FOR THE RESTOF THE MEETING.

THE PRESENTATIONS:- - TRANMIT THE PROMOTIONAL MESSAGE.

- DESCRIBE THE PRODUCT.

- HIGHLIGHT THE ADVANTAGE

- CITE EXAMPLES OF CUSTOMERSSATISFACTION.

- DEMONSTRATE TO REINFORCE THEMESSAGE

HANDLING OBJECTIONS:-

- THIS IS AN OPPORTUNITY TO PRESENTADDITIONAL POINTS.

CLOSING:-- THE CRITICAL STAGE IN WHICH THE

SALESPERSON SEEKS TO GAIN THE BUYER’SCOMMITMENT TO PURCHASE.

THE FOLLOW-UPS:- - TO MAKE SURE THE BUYER IS SATISFIED.

ADVANTAGES OF PERSONAL SELLING:Personal selling is a face-to-face activity; customers thereforeobtain a relatively high degree of personal attention.The sales message can be customized to meet the needs of thecustomer.The two-way nature of the sales process allows the sales teamto respond directly and promptly to customer questions andconcerns.Personal selling is a good way of getting across large amountsof technical or other complex product information


The face-to-face sales meeting gives the sales force chance todemonstrate the product.Frequent meetings between sales force and customer providean opportunity to build good long-term relationships.

OUTLINE FOR THINGS TO OBSERVE DURING A SALES CALL:Identify customer type.What type of selling model did he/she use?How did the salesperson begin the presentation?How did the salesperson uncover needs?How many objections did the customer bring up?Did you hear any trial closes? What were they? When did theyoccur?Did the buyer give any closing signals?How many times did the salesperson try to close? Whattechniques did they use?Did the salesperson try to relieve post-purchase dissonance?How was the interview ended?Evaluate the sales call as to its effectiveness andprofessionalism.

Exercise - Personal Selling:Fish Bourne Financial Services

You are the salesperson for Fish Bourne Financial Services. You haveworked hard recently on prospecting and have a meeting with Mr Boosh,regarding his personal finances. You have sent some information to himprior to your call. You are about to begin your sales call, and yourobjective is to sell the client a pension scheme Complete the followingTasks:


(a) Mr Boosh raises the following objection - 'Your pension schemeseems very expensive' - How would you handle it? [There are 4 ways tohandle this objection](b) You have reached the end of the sales call. How would you close thedeal for the pension scheme with Mr Boosh? [There are 3 ways to closethis deal]

Answer -Personal Selling(a) Mr Boosh raises the following objection - 'Your pension schemeseems very expensive' - How would you handle it?Yes, but the final pension is much better in comparison with otherschemes, when you actually retire. [i.e. 'yes but.']Why do you think the pension scheme is expensive? [i.e. ask 'why?']Our pension scheme is too expensive? [i.e. restate]I appreciate your point. However, in comparison to the pension schemesoffered by our competitors, this scheme is very reasonable [i.e.contradiction](b) You have reached the end of the sales call. How would you close thedeal for the pension scheme with Mr Boosh?Shall I arrange the pension for you? [i.e. ask for the business]You like the easy monthly payments, the payment holiday if needed, theadded bonus for remaining with us and not moving your pension toanother provider, and the free travel clock, so shall I arrange the pensionfor you? [i.e. summary close ]Would you like to pay by cash weekly or by regular monthly salarydeductions?[ [i.e. alternative close.]

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PUBLIC RELATIONSMeaning and Definitions:

The term “Public Relation” is an expression of public opinion. Public relations is the art and science of managing

communication between an organization and its key publics to build,manage and sustain its positive image.

One of the earliest definitions of PR was coined by DannyGrisword, Publisher of 'Public Relation News. According to him "Public


Relations is a management function which tabulates public attitudes, definesthe policies and producers of an organisation with the interest and executes aprogram of action to earn public understanding and acceptance".

According to two American PR professionals Scott.M.Cutlipsand Allen.H.Center, "PR is a planned effort to influence opinion throughgood character and responsible performance based upon mutual satisfactorytwo-way communication".

“Public Relations” is the art and science of managingcommunication between an organization and its key publics to build,manage and sustain its positive image.

“Public Relations” is to establish and maintain a mutualunderstanding between an organisation and its publics; to communicate thecompany’s views, objectives and purposes; at the same time monitoring offeedbacks and correcting the publics attitudes and reactions.What is meant by the term “publics” in the above definition?

A business may have many “publics” with which it needs tomaintain good relations and build goodwill. The publics of the company arethe financial community, the local community, the government, the suppliers,the stakeholders, the customers, the employees and the press. Theserelations are always two ways in nature. As a routine matter, but of utmost significance, the company isto understand the interests of these publics and serve them for mutualbenefits and smooth getting on. Let us see what each public expects from the company and what itis prepared to pay back in return for what it has received from thecompany.Who are the publics of a company?

THEPRESS

THESTOCKHOLDERS

THECUSTOMERS

THEEMPLOYEES

THEFINANCIAL

COMMUNITY

THE LOCALCOMMUNITY

THEGOVERNMENT

THESUPPLIERS

THECOMPAN


Public Relations involves :

1. Evaluation of Public attitude and opinions.

2. Organisations procedure and policies helping public in mind.

3. Communication programme

4. Developing rapport, good-will through a two way communicationprocess.

5. Relationship between organisation and public.

Examples include:

Corporations use marketing public relations (MPR) to conveyinformation about the products they manufacture or services theyprovide to potential customers to support their direct sales efforts.Typically, they support sales in the short and long term, establishingand burnishing the corporation's branding for a strong, ongoingmarket.


Corporations also use public-relations as a vehicle to reach legislatorsand other politicians, seeking favorable tax, regulatory, and othertreatment, and they may use public relations to portray themselves asenlightened employers, in support of human-resources recruitingprograms.

Non-profit organizations, including schools and universities, hospitals,and human and social service agencies, use public relations in supportof awareness programs, fund-raising programs, staff recruiting, and toincrease patronage of their services.

Politicians use public relations to attract votes and raise money, and,when successful at the ballot box, to promote and defend their servicein office, with an eye to the next election or, at career’s end, to theirlegacy.

Organisation Structure of PR:- In most companies, public relations are not the responsibility ofthe marketing department. If there is an organized effort, it is usuallyhandled by a small public relations department that reports directly to thetop management.Functions of PR Department:

Press (Media) Relations: Presenting news and information about theorganisation in the most positive light.Product Publicity: Sponsoring efforts to publicize specific products.Corporate Communication: Promoting and understanding of theorganisation through internal & external communications.Lobbying: Dealing with legislators & govt. officials to promote ordealt legislation and regulation.Counseling: Advising management about public issues and companyposition & image during good times and crisis.

Building a perfect PR Programme:-This should be a long term time bound programme.And a perfect PR Programme has six steps approach, such as-

1. The public relation audit. 2. Correlation of public relations weakness.


3. Setting of public relations objectives. 4. Formulations of the public relations programme. 5. Carrying out the programme. 6. Determine the programme effectiveness.Tools of PR:-

Press Media: - Include Books, Booklets, Reports, Broachers,Feature Articles, Specially designed literatures and the like.

Visits and Tours: - Specially arranged visits to the organisationfor the financial and local community members are of immenseimportance to create a good impression as what company is and whatthey can expect for the future.

Audio Visuals: - Include films, displays, exhibits, conferences,bulletins to portrait the present status and the future preogrammes of theorganisation.

Treatment Extended: - This is the invisible thread attached withthe publics by the company employees.

Relationship of PR with Advertising:-Contributions of Advertisingtowards PR

Contributions of PR towardsAdvertising

1. It provides channel to publics.

1. It guarantees organisational soundness.

2. It builds institutional advertisements.

2. It refines advertising.

3. It creates congenial climate.

3. It places publicity releases.

Marketing PR (MPR):-


Assisting in lunch of new products.Assisting in repositioning a mature product.Building interest in a perfect category.Influencing specific target groups.Defending products that have encountered public problems.Building the corporate image in a way that reflects favouring on itsproduct.

Major decisions in MPR:-In considering when and how to use MPR, management must establish-

- The marketing objectives. - Choose the PR message and vehicles. - Implement the plan carefully, and- - Evaluate the results.

PUBLICITYMeaning of Publicity…

a. Publicity is a tool of PUBLIC RELATION.b. Publicity is a type of public relations in the form of a news item or

story which conveys information about a product, service, or ideain the media.

c. Whereas public relations is the management of all communicationbetween the client and selected target audiences, publicity is themanagement of product- or brand-related communications betweenthe firm and the general public.

d. Communications regarding an organization, product, service, oridea that is not directly paid for or run under identifiedsponsorship.

e. "Publicity is information from an outside source that is used by themedia because the information has news value. It is an uncontrolledmethod of placing messages in the media because the source doesnot pay the media for placement.

f. Publicity is the "information designed to appear in any medium ofcommunication for the purpose of keeping the name of a person or

http://en.mimi.hu/marketingweb/public_relations.html

http://en.mimi.hu/marketingweb/product.html

http://en.mimi.hu/marketingweb/service.html

http://en.mimi.hu/marketingweb/media.html

http://en.wikipedia.org/wiki/Product_%28business%29

http://en.wikipedia.org/wiki/Brand

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http://en.mimi.hu/marketingweb/product.html

http://en.mimi.hu/marketingweb/service.html

http://en.mimi.hu/marketingweb/sponsorship.html


company before the public or of creating public interest in theiractivities“.

g. Publicity is typically generated from an organization's publicrelations department and its goal is to gain media coverage.

h. Publicity is the deliberate attempt to manage the public's perceptionof a subject. The subjects of publicity include people (for example,politicians and performing artists), goods and services,organizations of all kinds, and works of art or entertainment.

i. Publicity is the means of using an external entity (celebrities,people from the media, etc) to increase the awareness levels of theproduct, company, goods etc amongst the public and/or buyingsegment.

Definitions: - PUBLICITY is any form of non personal presentation ofgoods/ideas/services to a group. Such presentation may or may not besponsored only by the one responsible for it and it may or may not be paidfor. In this way, advertising is only a type of publicity. And that’swhy publicity is more comprehension than the word advertising itself.Therefore, it can be said that all advertising is publicity but all publicity isnot advertising.Means of gaining good publicity:-

Prepare and distribute a story (called a news release) to the media: - Theintention is for the selected newspapers, television stations or other mediato report the information as news.Personal communication with a group of people: - A press conferencewill draw media representatives if they think the subject or speaker hasnews value.One-to-one personal communication: - Companies lobby legislators orother powerful people in an attempt to influence their opinions andsubsequently their decisions.

Similarities with Advertising….Both of them deal with the conveying of information regarding the goods/services/ideas.Both are the attempts to present information impersonally.Both use the components of mass media for effective communication.

http://www.bookrags.com/Product_%28business%29


Dissimilarities with Advertising….Publicity may or may not be related with the communication ofcommercial information, -while advertising is essentially a commercialcommunication of information to the public.In case of publicity, the message of the sponsor is controlled by themedia owners in respect of space and timing with other dimensions suchas the style, the format, etc.On the other hand, in case of advertising, it is the sponsor who decideson these facts as he is paying for the services of the media owners andagencies.

Benefits of Publicity:-Lower cost:- As there is no media space or time costs for conveying themessage and no sales people is to support in case of publicity.Increased attention: - Publicity is more likely to be watched, listened to, orget read.More information: - Publicity contains greater detail than the usual ad.Timeliness: - A company can put a news release very quickly when someevent occurs, expectedly or unexpectedly.

Limitations of Publicity….Loss of control over the message: - There is no way to control how muchor what portion of a story the media will print or broadcast.Limited exposure: - The media will typically use news releases to fillspace when there is a lack of other new and only use them once. If thetarget audience misses the message when it is presented, there is nosecond and third chance.Publicity is not free: - Even though there are no media time and spacecosts, there are expenses in generating ideas for publicity and in preparingand disseminating news releases.

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PROPAGANDAMeaning and Definition:-

Propaganda is a specific type of message presentation directly aimed atinfluencing the opinions of people, rather than impartially providinginformation.Propaganda is originally a neutral term used to describe thedissemination of information in favor of a certain cause.Propaganda is the means of gaining support for a given cause or beliefor an attitude.The word propaganda refers to any technique that attempts to influencethe opinions, emotions, attitudes, or behavior of a group in order tobenefit the sponsor.To protect yourself against the techniques of propaganda, three goodquestions to ask yourself are:

1. Who does this benefit? 2. Why did they do that?

3. According to whom?For Example…

The example below is a clever way of blaming everything that happenedon Saddam Hussein. It shows the blood splashed flag of Kuwait withHussein saying, in Arabic, that he didn't know how this happened. Whatelse might this imply? How about: Is he a thoughtless leader? Does hetake responsibility for his actions? Does he realize what he's doing to hispeople, and to other people? Does he care?

http://en.wikipedia.org/wiki/Message

http://en.wikipedia.org/wiki/Opinion

http://en.wikipedia.org/wiki/Objectivity

http://en.wikipedia.org/wiki/Information

US Office for WarInformation

propaganda message:

Working lesshelps our enemies

U.S. Propagandafrom WWII,Depicting Hitler asfoolish


For Example… This cartoon shows Saddam Hussein cutting off his own headwith his sword. This image shows how Iraq would suffer because ofHussein's warlike and thoughtless actions. What else might this imply?

For Example…

F o rE x ample

…

I SP RO PA G

A ND AALW AY SNEGATIVE?People often think of propaganda assomething negative. But propagandareally doesn't have anything to do withnegative or positive. It's a technique.

The word propaganda refers to any technique that attempts to influencethe opinions, emotions, attitudes or behavior of a group in order tobenefit the sponsor.

http://en.wikipedia.org/wiki/Hitler


Classification of Propaganda…Propaganda can be classified according to the source and nature of themessage –

1. White propaganda generally comes from an openly identified source, and is characterized by gentler methods of persuasion, such as standard public relations techniques and one-sided presentation of an argument. 2. Black propaganda is identified as being from one source, but is infact from another. This is most commonly to disguise the true origins of the propaganda, be it from an enemy country or from an organization with a negative public image. 3. Gray propaganda is propaganda without any identifiable souce or author.

Techniques of propaganda generation :- A number of techniques which are based on social psychological research are used to generate propaganda. Many of thesesame techniques can be found under logical fallacies, since propagandistsuse arguments that, while sometimes convincing, are not necessarily valid Following are some techniques for generating propaganda-

Appeal to authority: Appeals to authority cite prominent figures tosupport a position idea, argument, or course of action.

Appeal to fear: Appeals to fear seek to build support by instilling fear inthe general population.

Argumentum ad nauseam: Uses tireless repetition. An idea oncerepeated enough times, is taken as the truth. Works best when mediasources are limited and controlled by the propagator.

Bandwagon: Bandwagon and inevitable-victory appeals attempt topersuade the target audience to take the course of action that "everyoneelse is taking."

a. Inevitable victory: invites those not already on the bandwagon to join those already on the road to certain victory. Those already or at least partially on the bandwagon are reassured that staying aboard is their best course of action.

http://en.wikipedia.org/wiki/Social_psychology



http://en.wikipedia.org/wiki/Logical_fallacy

http://en.wikipedia.org/wiki/Appeal_to_authority

http://en.wikipedia.org/wiki/Appeal_to_fear

http://en.wikipedia.org/wiki/Argumentum_ad_nauseam

http://en.wikipedia.org/wiki/Bandwagon_effect

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b. Join the crowd: This technique reinforces people's natural desire to be on the winning side. This technique is used to convince the audience that a program is an expression of an irresistible mass movement and that it is in their best interest to join.

. Black-and-White fallacy: Presenting only two choices, with theproduct or idea being propagated as the better choice. (Eg. You can havean unhealthy, unreliable engine, or you can use Brand X oil)

Common man: The "plain folks" or "common man" approach attemptsto convince the audience that the propagandist's positions reflect thecommon sense of the people. It is designed to win the confidence of theaudience by communicating in the common manner and style of the targetaudience. Propagandists use ordinary language and mannerisms (andclothe their message in face-to-face and audiovisual communications) inattempting to identify their point of view with that of the average person.

Direct order: This technique hopes to simplify the decision makingprocess. The propagandist uses images and words to tell the audienceexactly what actions to take, eliminating any other possible choices.Authority figures can be used to give the order, overlapping it with theAppeal to authority technique, but not necessarily. The Uncle Sam "Iwant you" image is an example of this technique.

Euphoria: The use of an event that generates euphoria or happiness inlieu of spreading more sadness, or using a good event to try to cover upanother. Or creating a celebrateable event in the hopes of boostingmorale. Euphoria can be used to take one's mind from a worse feeling.i.e. a holiday or parade.

Falsifying information: The creation or deletion of information frompublic records, in the purpose of making a false record of an event or theactions of a person during a court session, or possibly a battle, etc.

Glittering generalities: Glittering generalities are emotionally appealingwords applied to a product or idea, but which present no concreteargument or analysis. A famous example is the campaign slogan "Fordhas a better idea!"

Intentional vagueness: Generalities are deliberately vague so that theaudience may supply its own interpretations. The intention is to move the

http://en.wikipedia.org/w/index.php?title=Join_the_crowd&action=edit

http://en.wikipedia.org/wiki/Black-and-white_fallacy

http://en.wikipedia.org/wiki/Common_man

http://en.wikipedia.org/w/index.php?title=Direct_order&action=edit

http://en.wikipedia.org/wiki/Appeal_to_authority

http://en.wikipedia.org/wiki/Uncle_Sam

http://en.wikipedia.org/wiki/Euphoria

http://en.wikipedia.org/w/index.php?title=Falsifying_information&action=edit

http://en.wikipedia.org/wiki/Glittering_generality

http://en.wikipedia.org/wiki/Intentional_vagueness


audience by use of undefined phrases, without analyzing their validity orattempting to determine their reasonableness or application. The intent isto cause people to draw their own interpretations rather than simply beingpresented with an explicit idea. In trying to "figure out" the propaganda,the audience foregoes judgment of the ideas presented. Their validity,reasonableness and application is not considered.

Promotion in marketing

Marketing

Transcript of Promotion in marketing