Unit – 4: Developing the Marketing Mix (Promotion & Distribution)

Promotion:

Promotion is one of the four major variables of marketing mix, the other three being Product, Pricing and
Place. Basically it is a communication process involving information, persuasion and influence. Promotion
persuades, motivates and convinces and causes repeat purchases by consumers. This has become necessary
as the process of selling is more complex today because products are more technical, buyers are more
sophisticated and competition is more intense. Without proper flow of information and effective
communication from the producer to the consumer, no sale is possible today.

Definition:

According to Brink & Kelly “Promotion is the coordination of all seller initiated efforts to set up channel of
information & persuasion to facilitate the sale of a product or service or the acceptance of an idea”

Promotion is defined as “the coordinated self-initiated efforts to establish channels of information &
persuasion to facilitate or foster the sale of goods or services, or the acceptance of ideals or points of view”

“Promotion is any effort whose function is to inform persuade about the merits of a product or service for
the purpose of introducing a consumer either to continue or to start purchasing the product for a price”

The concept of promotional strategy is based upon that nothing happens until somebody promotes something

A modern business manages a complex “marketing communication system” also known as promotion mix,
which consists of four ingredients namely,

1. Advertising: It is defined as any paid form of non-personal presentation & promotion of ideas, goods or
services by an identified sponsor. It is defined as selling imprint or printed salesmanship.
2. Publicity: it refers to news, views and messages spread through word of mouth among people about the
firm & its products.
3. Personal selling: It refers to oral presentation in a conversation with one or more buyers for the purpose
of making sales (salesmanship)
4. Sales Promotion: It refers to marketing activities like displays, shows, exhibitions, demonstrations etc.
Thus all kinds of promotion play an important role of communication channels between the marketer and
the consumer. The overall objective of promotion is to influence buyer behavior. (Needs, attitudes, goals,
beliefs, values & preferences)

The process of communication in marketing:

The word “communication” is derived from the Latin word “Communis” which means “common” or
sharing of ideas in common.
In marketing communication involves sharing meaning, information and concepts by the source and the
receiver about products and services and about the firm selling them.
Elements of communication:
1. Sender: It is the communicator who intends to send the message to another person.
2. Encoding: The communicator’s message is translated into a common language by words, symbols
reflecting the ideas, feelings, gestures, signs etc. so that the receiver understands the message easily
& correctly.
3. Message: It is the subject matter. It refers to commercial idea.
4. Media: It refers to the carrier/channel through which the message is communicated eg telephone,
television, computer, face to face communication.
5. Decoding: It is the process by which the receiver assigns meaning to the symbols encoded by the
sender. E.g. a consumer watches the advertisement and interprets the words and illustration it
contains.
6. Receiver: It is the party receiving the message sent by the sender. In marketing the receiver is the
potential customer, purchase influencer.
7. Response: It refers to the reactions of the receiver. It may be favorable or unfavorable response.
8. Feedback: A response, a reaction or message sent back by a customer.
9. Noise: It creates many obstacles reducing effectiveness of the communication processes. The
consumer may have poor TV reception or he may be disturbed by the family members while watching
the advertisement. Thus noise creates many obstacles reducing effectiveness of the communication
process.
Thus in marketing, the source or the sender or communicator is the marketer who wants to promote
his product. And the receiver is the group of consumers being the target market, of whom the
message is sent.

The main steps involved in marketing communication are:

1. Identifying the target audience: It is to decide to whom the communication is to be directed. The
marketer should have a particular consumer target in mind. For e.g. A construction materials
company may send its sales representatives to meet civil engineers and contractors.
2. Determining the response: Once the target market is defined and decided, the nest step is to find out
what is the response from the market. The target customers are unaware of the company and the
product, the marketing communicator should start with sending the messages repeating the name of
the company and its product, creating awareness of the product, making known the special features
of the product by advertising and creating favourable feelings among the target consumers, try to
build consumer preferences, build conviction by offering premium, discounts, etc.. He must catch
attention, Interest and Desire about the product and finally lead to action in the form of purchase.
Thus the communicator must adopt the “AIDA” approach.
3. Choosing a message: The three aspects of the message is
a. Content: The communicator has to frame or formulate an appeal or theme that will produce the
desired response from the targeted consumers
b. Structure: It can be done by asking questions ,caption, drawing conclusions, stressing the advantages
of the product
c. Format: It can be done with appropriate headline, size of letters, pictures, color combination, design,
shape etc. A radio advertisement should contain impressive voice and sound to catch the attention.
Television advertisement should contain in addition to the above good expressions, gestures dress,
posture, style, impressive language etc.

4. Selecting communication media: There are two types

a. Personal communication channel: The communication may be through telephone, mail, face-to-
face, meeting or conference. They are effective as immediate feedback is possible. For eg. A
company’s salesman may contact buyers in the target market either individually or in groups. This
channel is known as word of mouth channel. It has considerable effect in the case of many products.
b. Non-personal communication channel: It is the media which carry message eg. TV, radio, press,
magazines, newspapers, posters, banners, hoardings etc..
5. Selecting the message source: The impact of a message on the target consumers is affected by how
the target customers view the communicator. Message presented by trustworthy persons are more
appealing. It is related to honesty and faithfulness.
6. Collecting the feedback: After sending the message, the communicator has to find out its effect on the
target audience. This involves asking the target audience whether they remember the message sent,
how they felt about the message, the attitude towards the product and the company, how many times
they purchased the product etc. It is important for the company this feedback to improve on the
product.

Planning the Promotion Mix:

It is also known as communication mix, it is a combination of 4 tools, advertising, personal selling, sales
promotion and public relations.. Planning promotion mix refers to a coordinated plan laying emphasis
on different promotion tools in order to achieve marketing objectives of the company. One company may
spend more on personal selling and less on advertising, thus a company can achieve a given sales level
by its promotion mix. Company usually try to improve their promotion mix by replacing one tool with
another tool that is by spending more on one tool and less on another tool to be economical.
Designing a promotion mix is also called as promotional strategy which is influenced by number of
factors:

1. Nature of the product : Different products need different promotional methods. For eg. Consumer
goods are sold by advertisement. But personal selling plays important role when brands are new or
when goods are of technical nature.
2. Nature of the customers: If the buyers are total ignorant or have little knowledge about the product,
advertising and sales promotion have to be undertaken on an intensive scale. Personal selling will be
more effective in convincing the buyers If the market are widely spread and buyers are large in
number , advertising would be preferred.
3. Stage of Product Life Cycle (PLC) : In the introductory stage of a product, high level of advertising &
publicity is required to create awareness of the product. In the growth stage, advertising plays an
important role but samples, discount, offers, prizes etc can be reduced. In the maturity stage severe
competition calls for intensifying advertising, sales promoting and personal selling In the decline
stage , promotional are generally reduced. Thus the promotion mix has to be changed according to
the change in the stages of the product.
4. Funds availability: Small budgets do not allow costly and sophisticated promotional techniques, that
is why small firms rely on personal selling. Funds play a major role in choosing the promotional mix
5. Brand differentiation: Individual brands of similar products do not differentiate from each other. Eg,
there are various brands of tooth paste. It is difficult to differentiate one brand from the other as each
brand claims to be superior to al the other brands. Here they emphasize personal selling
6. Purchase frequency: Purchase frequency of a particular product influences the promotional strategy.
7. Market penetration/push & pull strategy: If the brand is new the company has to use good
promotional tool to make known the product.
Push strategy involves pushing the product through distribution channels to final consumers. The
manufacturer directs his activities through personally selling and trade promotion to keep a large stock
of products and promote its sales.
Pull strategy is where there is heavy use of advertising and sales promotion to generate consumer
demand.
8. Organization philosophy: A conservative and production oriented philosophy results in low cost, on
the other hand , a company with market oriented philosophy spends on diversified promotion mix.
 9. Competition: In modern markets there is severe competition. Promotion mix is developed in such a
way that it matches the competitive spirit of the company. Personal selling play an important role in
competitive markets.

ADVERTISING :

Definition :
Advertising refers to the supply of information about the product. It is one of the most powerful element in
the promotion mix. It is the form of mass communication.

According to Starch “ Advertising is selling in print”

American Marketing Association defines advertising as “any paid form of non-personal presentation and
promotion of goods, services or ideas by an identified sponsor”.
According to Hall “ Advertising is salesmanship in writing , print or pictures or spreading information by
means of the written and printed words and the pictures”
Objectives of Advertisement :

- To sell something- a product, a service or an idea

- To increase awareness.
- To build primary demand
- To introduce a price deal
- To inform about the product availability
- To build brand recognition
- To create a reputation for service
- To modify the existing product and buying motives
- To increase the frequency of the product
- To inform about the new products availability
- To increase the number of customers
- To build company’s image
- To reach a new area of population
- To develop markets etc…

Characteristics or features of Advertising :

1. It is a mass communication medium announcing the sales of goods and services

2. It is non personal pre sales effort
3. It is a silent but forceful salesmanship
4. It is a paid communication
5. It is a monologue through press, TV, radio etc.
6. It is one way communication and does not have feedback process
7. It can be addressed to large number of people at a time
8. It can be repeated any number of times
9. It can be planned and controlled
10. It is an artistic work designed to create favorable effect on the prospects by presenting the message
artistically using color, sound, picture movements etc..

Economic & social effects of Advertising :

To a common man, advertising is nothing more than the use of bright ideas to popularize and get customers.
Advertising is an important function of marketing. Advertising is a boon to both the producer and to the
consumer. It helps the producer in creating and expanding market demand for his products which in turn
results in mass production at lower costs, availability of variety of products, increase in employment, rise in
the income level and standard of living, increase in demand, development of trade, commerce and industry,
agriculture, transport etc. Thus it has led to the overall economic development of the community.

Advantages of Advertising :
Manufacturers Retailers Consumers Society
It creates new market & It helps the retailers Advertising helps It raises the standard of
increase the sales salesmen’s to get more consumers to purchase living
business with confidence
Helps to maintain a It reduces the sales They are generally It avoids & minimizes
steady demand by efforts branded goods the fluctuations in prices
avoiding seasonal
fluctuations
Low inventory It increase the sales Eliminates or minimizes It helps the artists to be
the number of more creative by using
middlemen new ideas
Quick sales It creates confidence It helps the co. to It helps the press,
establish direct contact newspaper, periodicals,
journals, magazines etc.
to get huge income
Reduce the cost of It creates the feeling of It gives idea about the Research and discovery
production pride for his shop products is promoted
It creates goodwill Retailers are known by It informs the availability Creates employment
advertising of new products
It creates a feeling of It satisfies the needs of
pride in the employees the consumers
Constant advertising Consumers has a variety
creates automatic selling of choice
Brings in direct contact
with the retailers

Disadvantages:
1. Advertisement multiplies the needs of the people and forces them to buy goods which
are really not needed
2. It affects the sales of the product
3. Competition is increased
4. It tempts the people at large
5. It leads to wastage of natural resources
6. While introducing the new product old products become useless
7. It adds to the cost of the product and hence raises its price
8. Consumerism is encouraged

Essentials of Good advertisement:

1. It requires effective planning, organizing and effective control

2. It should give importance to the communication task such as brand awareness, change in attitudes
etc.
3. Message should be communicated through right media
 4. Selection of media is important for the advertisement to be effective
5. The advertisement should contain right message and it should attract attention, create interest and
desire to buy the product
6. The advertisement should have truth and then it should satisfy the consumers
7. It should bring about the positive change in the attitude of the target consumers, create awareness,
remove ignorance and develop brand loyalty.
8. Advertising should be repeated every now and then so as to build the strong impression on the
consumers and create positive brand image
9. It should be economical and at the same time effective
10. Consumer satisfaction and enough profit for the company

MANAGEMENT OF ADVERTISING:
It involves the following important decisions:
1. Setting the advertising objectives
2. Setting the advertising Budget
3. Creating the advertising message
4. Selecting the advertising media
5. Creating the advertising copy
6. Advertising evaluation.

1. Setting the advertising objectives :

The objectives should be based on past decisions about the target market.
There are two objectives –
1. sales objective- It is concerned with increasing the sales
2. Communication objective- To get the audience during a specified period of time. The aim is to
inform, persuade or remind

2. Setting Advertisement Budget:

Every company has a budget for advertising. How much company spends on advertisement depends upon the
size and volume of business. Smaller the company, smaller will be the budget for advertising, whereas large
companies spend a lot of money on advertising because of the size and operation of business in a wider
geographical region.
The advertising budget is usually prepared by the advertising manager of the company. However the
advertising agencies help marketing managers in their planning work.

The following factors are considered in advertising budget decision:

1. Company’s size
2. volume of business
3. Types of products
4. Geographical coverage of the markets desired
5. Media availability and estimating the cost of each media
6. Advertising objective or sales goal
7. Advertising frequency
8. Availability of money

3. Creating the advertising message:

 The success of an advertisement depends mainly on hoe the message is well planned. Advertising can
succeed only if it gains attention of the audience. The advertisement copy should be more imaginative,
more entertaining and more rewarding to consumers. It should be creative presentation, meaningful,
should have distinctive qualities of the product, creates confidence in the minds of the consumers, give
facts and figures about eh products, presentation style should be good, good image, music, symbol, words
or phrases, caption etc..

4. Selecting the advertising media :

The next step is to select the advertising media to carry the message. The steps for selection are:
a. Deciding the frequency and the impact
b. Selecting major types of media that is TV, radio, newspapers, magazines etc..
c. Selecting specific media vehicle- e.g. Select particular newspapers- daily weekly, fortnightlies,
monthlies etc…

5. Creating the advertising copy :

It refers to the reading matter that forms the text of the advertisement. In other words it is a written word
or a spoken material. For e.g. it l includes captions, slogans, brand name, trade mark, prices, pictures,
advertisers name and signature.

6. Advertising evaluation:

It should be evaluated regularly to see whether it is effective or not. The evaluation can be done by the
company before and after the advertisement.

Distinction between Advertising and Publicity:

Advertising Publicity
It is non-personal communication It takes place through personal contact
The sponsor is identified The initiator is not known

Paid form of communication Publicity is free of cost

It can be seen or heard It is spread by word of mouth, gossip, rumors etc
It can be planned and controlled It cannot be planned and controlled
It includes press, radio,T.v, posters It includes opinions, satisfied customers
Formal communication Informal communication

Distinction between Advertising & Personal Selling:

Advertising Personal selling
Non personal communication It is personal communication
Mass communication tool It is coming in contact through salesmen

No personal contact Face to face communication

Pre sale effort Sales effort
No immediate feedback Immediate feedback
Less effective More effective
Expenses are less Costly
It is suitable for new products or creating new It is suitable for maintaining or increasing demand.
demands
Sales Promotion :

Meaning: It refers to the steps taken by the company for promoting or

increasing its volume of sales.

According to A.H Delen: Sales Promotion means “any steps that are
taken for the purpose of obtaining or increasing the sales. It refers to
the selling efforts that are designed to supplement personal selling and
advertising and by co-ordination, help them to become more effective”

According to Council of sales promotion Agencies “ Sales promotion is

a marketing discipline that utilizes a variety of incentive technique to
structure sales- related programs targeted to consumers, trade and sales
that generate measurable response for a product or service ”

Aims and Objectives of Sales Promotion :

1. To introduce a product
2. To increase the sales
3. To face competition
4. To encourage repurchase
5. To overcome seasonal gaps
6. To widen the market
7. To help the salesmen to render effective and efficient services
8. To get dealer promotional assistance

Methods of sales Promotion:

1. Consumer Promotion Tools:

a. Advertising Specialties: They are useful articles imprinted with an

advertiser’s name given as a gift to consumers e.g. Key chain, pens,
bag, etc.
B. coupons: It is to arrange for price reductions to consumers when they
purchase any items
C. cash refund: It is an offer to the consumer. After the purchase the
consumer sends the proof of purchase to the manufacturer who will
refund a part of the purchase price.
D. price offs: It is an offer to the consumer of a price reduction from the
printed price list. It is used when a substitute or a competing product
enters the market.
E. premiums: They are goods offered either free of cost or at low cost as
an incentive to the buyer.
f. Samples: It is a small quantity of a product given with a hope to
convince the customer. It helps the consumer to try the product.
g. contest and games: To a consumer to win something for having
purchased. It may be in the form of a cash gift, trips or goods.
h. Patronage Rewards: It is given to a regular buyer. For example, a
transport company may offer a certain number of free travels to a
person who travels for more than100 times in its vehicle.

2. Trade promotion Tools :

a. Training Aids: It refers to the help provided by the manufacturers to

dealers in training the salesmen
b. Special Sales Aids: It refers to the help provided to the dealers in
planning and conducting special sales promotion activities.
c. Points of purchase Display Aids: It includes pictures, signs, banners,
graphs, charts, wall-posters, window display, counter display etc.
d. Management Aids: It includes the help given to retailers in
remodeling their shops, rearranging the goods and introducing
improved methods of sales.
e. Display materials: It includes product specimens or samples, show
cards etc.
f. Sales Literature: It includes pamphlets, circulars, booklets which
describe the details of the product offered for sale.
g. Dealer contests: The winner middlemen are awarded prizes in the
form of cash or products. It is an indirect method of increasing the
sales.
h. Dealer premiums: The manufacturer gives to the middlemen a gift
every time they make bulk purchases

9. Sales force Promotion Tools: It is also known as sales promotion

at salesmen level. It includes contests, premiums, and visual aids
to be used in sales presentations.

Distribution Channels:

Meaning :
Out of the 4 elements of marketing mix, Promotion mix or
distribution channel is the most important and powerful element. The
primary aim of this element is to find out correct ways through which
goods or services have to be moved from producer to the final
consumers. The success or failure of the company depends on the
channel of distribution.

According to Cundiff & Still “Channel of distribution is a path traced

in the direct or indirect transfer of title to a product as it moves from
a producer to ultimate consumers”

Sub division of distribution system:

1. Channels of distribution: They are intermediaries such as
mercantile agents, wholesalers, retailers, selling agents, dealers,
brokers, commission agents, etc.
2. Physical distribution: It includes processing the order, handling
of goods, packaging, warehousing, transportation, inventory
control and customer service.
Role & importance of Distribution Channels:

1. It bridges or links the manufacturers and the final consumers

2. It breaks the bulk order and caters to the small size requirements of
the individuals.
3. It assembles the variety of goods manufactured by different
manufacturers.
4. the channel perform physical handling activities like warehousing,
transportation, inventory etc.
5. They provide credit facilities
6. They provide special services and help in introducing the products.
They accept the responsibility and they guide the consumers
7. They study the requirement and render satisfactory services

Classification of distribution channels :

a. Non-integrated or Conventional channels :

1. Manufacturer to Consumer: It is the shortest and the simplest

channel and it is direct. It is opted when the goods are industrial
and consumer goods e.g. Water coolers, vacuum cleaners, oil
engines, generators and bakery products etc.
2. Manufactuer to retailer to consumer: This channel has one
intermediary. It is the most common channel in case of consumer
durable like textiles, readymade garments, footwear,
3. Manufactuer to wholesaler to retailer to consumer: It is also the
popular channel used for big companies. The wholesaler stocks the
goods and distributes to the retailers.
4. Manufacture to wholesaler to consumer: It is most acceptable
practice when the consumers are not individual buyers but are
institutional buyers such as hospitals, schools, colleges, government
agencies etc.
5. Manufacturer to agent to wholesaler to retailer to consumer: It is
the longest indirect channel. Here the producer wants to
 concentrate only on production when they deal with various kinds
of products.

b. Integrated channels.

1. Vertical channel: They are centrally programmed networks to

get maximum impact. They are of 3 types :
a. Administered vertical channel: it is the channel where marketing
activities is done though use of programmes. It involves various
facilities such as efficient management, display etc.
b. Contractual vertical channel: Here the independent firms
operating at different stages of distribution join together by an
agreement to purchase some common program to eliminate
duplication of services and to increase the market impact. Eg.
Retail cooperative stores, Franchising etc.
c. Corporate vertical channels: It is operated by a single
organization. That means the company owns both production
and distribution facilities. E.g. Tatas, Modis, Bata etc

2. Horizontal channel: Here, tow or more companies producing the

same products join together to jointly exploit the marketing
opportunities either by themselves or creating the unit. Eg.
Cement manufacturing co, Hindustan Lever Ltd,

Case study

Newfun Company is manufacturing moulded plastic toys.

 1. What are the measures to be taken to overcome the problems
of marketing faced by new fun company?
Automation, advertisement in the television because children watch TV,
Change the design, color combination of the toys, make it more
attractive, offer some gifts along with the toys, decrease the price of the
toys, give a brand name, concentrate on quality, for some time have
sales off, with bulk purchases offer some toys as complimentary gift,
Exhibit in various places to make it known etc…….

2. What is the real problem?

The real problem is that New fun company is manufacturing
moulded toys which do not have the market as there are branded
toys in the market. Children of today are attracted to branded
toys, animated toys, moving toys, talking toys than plastic toys.
Due to the technological era there are toys in the market which
has more demand than the plastic toys. Children are attracted to
colorful toys, attracted toys where branded companies meet their
demand. As a result plastic moulded toys do not have demand
and so new fun company is facing the problem to sell its product.

3. Why the demand is declining for Newfun company toys?

Because of technological era and digital age, children play with
mobiles, internet give lot of facilities to entertain the children
and branded companies spend lot of money and come up with
creative toys and so the plastic moulded toys do not have demand
as it does not satisfy the children of today.
 3. Suggest remedies.

1. One best remedy may be to diversify the product. That means along
with the moulded plastic toys manufacturer several other toys which are
creative, moving, talking, animated toys which has a demand today.
2. Change the brand name altogether.
3. Create toys which children like to play that means to take into
consideration the likes of the children. The company should not
manufacturer without taking into consideration the demand.
4. Create variety of toys to meet the demand of various kinds of
customers (income group)

Wishing you all the best for the

exams!