PROMOTION

PROMOTING THE PRODUCT Marketing and the Internet The Internet enables marketers to promote products and services to millions of potential customers through the World Wide Web. Advertising, personal (face-to-face) or direct selling, sales promotion, and relationship building are the primary methods companies use to promote their products. ADVERTISING Advertising is often used to make consumers aware of a products special low price or its benefits. But an even more important function of advertising is to create an image that consumers associate with a product, known as the brand image. The brand image goes far beyond the functional characteristics of the product. For example, a soft drink may have a particular taste that is one of its benefits. But when consumers think of it, they not only think of its taste, but they may also associate it with high energy, extreme action, unconventional behavior, and youth. All of those meanings have been added to the product by advertising. Consumers frequently buy the product not only for its functional characteristics but also because they want to be identified with the image associated with the brand. By adding meaning to a product, advertising also adds value. For example, when Philip Morris Companies Inc. purchased Kraft Foods, Inc. in 1988 for nearly $13 billion, Philip Morris paid 600 percent more than Krafts factories and inventory were worth. Over 80 percent of the purchase price was for the current and future value of the Kraft brand, a value that was created in large part by advertising. Advertising plays such an important role in promoting products and adding value to brands that most companies spend considerable sums on their advertising and hire specialized firms, known as advertising agencies, to develop their advertising campaigns. Advertising is most frequently done on television, radio, and billboards; in newspapers, magazines, and catalogs; and through direct mail to the consumers. In recent years, numerous advertising agencies have joined forces to become giant agencies, making it possible for them to offer their clients a comprehensive range of worldwide promotion services. DIRECT SELLING Where advertising reaches a mass audience, personal or direct selling focuses on one customer at a time. That kind of individual attention makes direct selling expensive, but it also makes it effective. As the costs of personal selling have risen, the utilization of salespeople has changed. Clerks complete simple transactions. Salespeople are now used primarily where the products are complex and require detailed explanation, customized application, or careful negotiation over price and payment plan. But whether the sale involves an automobile or a customized computer network, personal selling involves much more than convincing the customer of the products benefits. The salesperson helps the customer identify problems, works out a variety of solutions, assists the buyer in making decisions, and provides arrangements for longterm service. Persuasion is only part of the job. A much more important part is problem solving. Because the selling process has become much more complicated, most companies now provide extensive training for the sales force. The average length of the initial training program is four months. A training program for new members of the sales force teaches them about such matters as company history, selling and presentation techniques, listening skills, the manufacture and use of the companys products, and the characteristics of both the industry and its customers. Moreover, because the sales force plays such a critical role in the marketing process, most companies provide on-going training for all members of the sales force to help them deepen their product knowledge and improve their interpersonal and negotiating skills. With the increasing complexity of business problems and products, effective sales solutions often require more knowledge than any one person can master. As a result many companies now use sales teams to

Promotion, MM; Som; FoM; GEU

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service their largest and most complicated accounts. Such teams might include personnel from sales, marketing, manufacturing, finance, and technical support. SALES PROMOTION The purpose of sales promotion is to supplement and coordinate advertising and personal selling; this has become increasingly important in marketing. While advertising helps build brand image and long-term value, sales promotion builds sales volume. Sales promotions are designed to persuade consumers to purchase immediately by providing special incentives such as cash rebates, prizes, extra product, or gifts. Promotions are an effective way to spur sales, but because they involve discount coupons and contests with valuable prizes, they are also expensive and so reduce profits. Promotion Communication that facilitates exchanges by influencing the audience to accept a product.

Information about the customers and marketing environmental forces

P R O Organization M O T I O N

FIG- INFORMATION FLOWS INTO AND OUT OF ORGANIZATION

PROMOTION AND COMMUNICATION MIX

Communication A sharing of meaning Source A person, group or organization with a meaning it wants and tries to share with an audience. Communication A sharing of meaning Receiver The individual, group or an organization that decodes the coded message. Coding process Converting meaning into series of signs. Medium of The means of carrying the coded message from source to receiver. transmission Decoding Converting signs into ideas and concepts. process Decoding Converting signs into concepts and ideas. process Noise Whatever reduces a communications clarity and accuracy Feedback The receivers response to message. Channel The limit on the volume of information a communication channel can handle capacity effectively.

SOURCE

CODED MESSAGE

MEDIUM OF TRANSMISSIO N

DECODED MESSAGE

RECIEVER

FIG- THE COMMUNICATION PROCESS

OBJECTIVE OF PROMOTION
a. b. c. d. e. f. g. h. Create awareness Stimulate demand Encourage product trial Identify prospects Retain loyal customers Facilitate reseller support Combat competitive promotional efforts Reduce sales fluctuations

MARKETS

TARGET MARKETING PUBLICITY AS SUB STRATEGY OF A MASTER MARKETING STRATEGY CUSTOMERS STRATEGY AND TARGET Advertising AUDIENCE (Marketing Sales Promotion Personal Selling Mix) Publicity

Product Price Place

MARKETS

PROMOTION MIX
Promotion Mix is a combination of promotional methods used to promote specific products. The four possible elements of promotion mix are Advertising Personal Selling Public Relations Sales Promotions

PERSONAL SELLING

PUBLIC RELATIONS

ADVERTISING PROMOTIONS

SALES
FIG-THE FOUR POSSIBLE ELEMENTS OF PROMOTION MIX

Advertisement A paid form of non-personal communication about an organization and/ or its products that is transmitted to a target audience through a mass medium. The mass media used include print media, direct mail, audio-visual media, billboards etc. Sponsors may be non-profit organizations, a political candidate, a company or an individual. Advertising is used when sponsors want to communicate with a number of people who cannot be reached economically or effectively through personal means. Merits 1. Can be reached to many consumers simultaneously 2. Relatively low cost per exposure 3. Excellent for creating brand images 4. High degree of flexibility and variety of media to choose from. 5. Can accomplish many different types of promotion objectives. Demerits 1. Many consumers reached are not potential buyers (waste of promotion money) 2. High visibility makes advertising a major target of marketing critics. 3. Advertising exposure time is usually brief. 4. Consumers usually quickly and easily screen out advertisements. Personal Personal, paid communication that attempts to inform customers Selling and persuade them to purchase products in exchange situation. It is a face-to-face contact between a sellers representative and those people with whom the seller wants to communicate. Non-profit organizations, political candidates, firms and individuals use personal selling to communicate with the public.

Merits 1. Can be most persuasive promotion tool; sales people can directly influence the purchase behaviour. 2. Allows two way communication 3. Often necessary for technically complex products. 4. Allows direct one to one targeting of promotional efforts. Demerits 1. High cost per contact. 2. Sales training and motivation can be expensive and difficult. 3. Personal Selling has a poor image making sales force recruitment difficult. 4. Poorly done sale presentations can hurt sales as well as company, products and brand images. Public Relations A broad set of communication activities used to create and maintain favourable relations between organization and public, such as customers, employees, stockholders, government officials, and society in general. Publicity is news carried in mass media about a firm and its products, policies, personnel or actions. The unique feature about the publicity is that it is a non-paid form of promotion. Organizations frequently provide material for publicity in the form of new releases, photographs and press conferences. Merits 1. As free advertising, publicity can be positive and stimulate demand at no cost. 2. May be perceived by consumers as more credible because, the seller does not pay it. 3. Consumers may pay more attention to these messages because they are not quickly screened out as many advertisements. Demerits 1. Publicity is not always possible because it is not in hand of seller. 2. Limited repetition of publicity material. 3. Publicity can be negative and can hurt sales and company image. 4. Company cannot completely control the content of publicity messages. Sales Promotion An activity and/ or material that acts as a direct inducement to resellers, sales persons or consumers; it offers added value or incentive to buy or sell the product. Sales promotion includes activities that seek to directly or indirectly induce, or directly serve as incentives to motivate a desired response on part of target customers, company sales people and middlemen and their sales force. These activities add value to the product. In sales promotion, the activities like discounts, gifts, contests, premiums, displays and coupons are included. Some type of Sales Promotion

Specialty Ads (imprinted novelties, calendars, match boxes, souvenirs etc.) and business gifts. Temporary price reductions via coupons, extended interest free or low interest credit; refunds, rebates; price off deals, combination offers, bonus packs, multiple packs; other methods. Promotions designed to get trials such as coupons, refunds, rebates, price-off deals, bonus packs, samples, offers, trial sizes, free trials, special guarantees, premium, self liquidating premiums, reusable containers and souvenirs. Business, industrial, traders and magazines, and technical papers; Journals and Publications. Directorate and Buyer Guides Trading stamps redemption coupons, dividend coupons and continuity premiums.

Merits 1. Excellent approach for short-term price reduction for stimulating demand. 2. A large variety of sales programme to choose from. 3. Can be effective for changing a variety of consumer behaviour. 4. Can be easily tied in with other promotional tool. Demerits 1. May influence primarily brand loyal customers to stock up at lower price but attract few new customers. 2. May have only short term impact 3. Over use of price related sales promotion tools may hurt brand image and profits 4. Effective sales promotions can be easily be copied by competitors DIFFERENCE BETWEEN Advertising and Personal Selling To communicate to a larger group (mass To communicate individually and to small communication) group. Non-personal communication Personal communication It is difficult to measure the effectiveness Sales persons receive the immediate feed of advertising back People may forget advertising Very intense means of communication. It is very difficult to get rid of sales people. Not inter personal and effective when Interpersonal and effective when population is large and scattered population is concentrated Advertising and Sales Promotion Slow response Response is immediate Indirect approach Direct Approach Advertising is frequent and repetitive Sales promotion is promotional effort

non-recurring

Paid form, paid by sponsor Presentation is programmed Marketers exercise control Advertising is positive

Advertising and Publicity Non-paid form Presentation is non-programmed Marketers have less control Publicity may be positive or negative

CHARACTERICTICS OF PROMOTIONAL TYPES

FACTOR Advertising Sales Promotions Publicity Personal Selling

AUDIENCE MESSAGE COST

Mass Uniform Lower per viewer/ reader Company Low High Moderate
To appeal to a mass audience at a reasonable cost, and create awareness and favourable attitude

Varies Varies Moderate per customer Company Moderate High Moderate

To stimulate short term sales, to create impulse purchases

Mass Uniform None to moderate No formal sponsor Low None Moderate

To reach a mass audience with separately reported message

Small Specific High per customer Company High High High

To deal with individual consumer, to resolve questions, to close sales

SPONSOR FLEXY CONTROL

INTEGRITY MAJOR GOAL

COMPLEX NATURE

Poor to Good

Poor

Poor to Good

Very Good

EXAMPLES OF DIFFERENT PROMOTION TOOLS

Advertising
Print and broadcast ads Packaging-outer Packaging-inner Motion pictures Brochures & booklets Posters & leaflets Reprints of ads Directories Billboards Display signs Point of purchase displays Audio & visual material Symbols & logos Video games

Sales Promotions Public Relations

Contests, games, sweepstakes, lotteries. Premiums & Gifts Sampling Fairs & Trade Shows Exhibits Demonstrations Coupons Rebates Low-interest financing Entertainment Trade-in allowances Continuity programs Tie-ins

personal Selling

Press Kits Seminars Speeches Annual reports Charitable donations Sponsorship Publications Community relations Lobbying Identity Media Company Magazine Events

Sales Presentations Sales Meetings Incentive Programs Samples Fairs & Trade Shows