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Managing Promotion-mix PromotionAdvertising, Sales Promotion, Public Relations, and Sales Force
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PowerPoint by Rupesh Malik NCCE

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Promotion Mix
A business' total marketing communications programme is called the "promotional mix" and consists of a blend of advertising, personal selling, sales promotion and public relations tools.

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Elements of the Promotion Mix

Advertising

Ingredients of the Promotion Mix

Public Relations

Personal Selling

Sales Promotion
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"Advertising is any paid form of non-personal nonpresentation and promotion of ideas, goods and services through mass media such as newspapers, magazines, television or radio by an identified sponsor". sponsor". ( Kotler and Armstrong ) Personal Selling Oral communication with potential buyers of a product with the intention of making a sale. The personal selling sale. may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale". sale".
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Sales Promotion Providing incentives to customers or to the distribution channel to stimulate demand for a product. product. Publicity The communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly. otherwise directly. known as "public relations" or PR. PR.

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The Communication Process

Noise

Sender

Encoding

Channel

Decoding

Receiver

Channel

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Goals and Tasks of Promotion

Informing Reminding

Target Audience

Persuading
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Advantages and Disadvantages of Each Element of the Promotional Mix

Mix Element Advantages Disadvantages Impersonal - cannot answer all a customer's questions Not good at getting customers to make a final purchasing decision

Advertising Good for building awareness Effective at reaching a wide audience Repetition of main brand and product positioning helps build customer trust Personal Selling Highly interactive - lots of communication between the buyer and seller Excellent for communicating complex / detailed product information and features Relationships can be built up important if closing the sale make take a long time
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Costly - employing a sales force has many hidden costs in addition to wages Not suitable if there are thousands of important buyers

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Mix Element

Advantages

Disadvantages If used over the long-term, longcustomers may get used to the effect Too much promotion may damage the brand image

Sales Can stimulate quick increases Promotion in sales by targeting promotional incentives on particular products Good short term tactical tool

Public Relations

Often seen as more "credible" - Risk of losing control - cannot since the message seems to be always control what other people coming from a third party (e.g. write or say about your product (e. magazine, newspaper) Cheap way of reaching many customers - if the publicity is achieved through the right media

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Factors that Affect the Promotion Mix

Nature of the Product

Stage in the Product Life Cycle

Target Market Characteristics

Type of Buying Decision

Available Funds

$$$
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PushandPull Strategies

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Creating a Promotion Plan

Analyze the Marketplace

Identify Target Market

Set Promotion Objectives

Develop Promotion Budget

Choose Promotion Mix

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Criteria for Setting Promotion Objectives

Promotion objectives should:

be measurable, concrete

be based on sound research, with a well-defined target audience

be realistic

reinforce the overall marketing plan and relate to specific marketing objectives
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Examples of Promotion Objectives

Objective: To Inform (Awareness)
To increase the top-of-mind awareness level for Peter Pan peanut butter from 16 percent to 24 percent

Objective: To Persuade (Attitudinal)

To increase the percentage of parents who feel that Peter Pan peanut butter is the best peanut butter for their children from 22 percent to 35 percent

Objective: To Remind
To remind consumers that Peter Pan peanut butter is the creamiest peanut butter and is available at their nearest grocery and convenience stores
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Techniques for Setting Promotion Budgets

All - You - Can - Afford Competitive Parity Percent of Sales Market Share Objective and Task

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Advertising
"Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services through mass media such as newspapers, magazines, television or radio by an identified sponsor". ( Kotler and Armstrong )

Kotler on Marketing
The best advertising is done by satisfied customers.
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Developing and Managing an Advertising Program

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Developing and Managing an Advertising Program

1. Setting the Advertising Objectives
Informative advertising Persuasive advertising Reminder advertising

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Developing and Managing an Advertising Program

2. Deciding on the Advertising Budget
Five factors to consider when setting the advertising budget:
Stage in the product life cycle Market share and consumer base Competition and clutter Advertising frequency Product substitutability
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Developing and Managing an Advertising Program

3. Choosing the Advertising Message
Message generation Message evaluation and selection
Twedt rates messages on:
Desirability Exclusiveness Believability

Message execution
Rational positioning Emotional positioning

Social responsibility review

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Developing and Managing an Advertising Program

4. Deciding on Media
(a) Deciding on Reach, Frequency, and Impact How many exposures, E*, will produce audience awareness A* Reach (R) Frequency (F) Impact (I)

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Developing and Managing an Advertising Program

Total Number of Exposures (E) E=RxF Where R = reach, F = frequency Known as Gross Rating Points (GRP) Weighted Number of Exposures (WE) WE = R x F x I where R = reach, F = frequency, I = average impact

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Deciding on Media and Measuring Effectiveness

(b) Choosing Among Major Media Types
Table 20.1: Profiles of Media Types
Medium Newspapers Advantages Flexibility; timeliness; good local market coverage; broad acceptance; high believability Combines sight, sound, and motion; appealing to the senses; high attention; high reach Audience selectivity; flexibility; no ad competition within the same medium; personalization
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Limitations Short life; poor reproduction quality; small passalong audience High absolute cost; high clutter; fleeting exposure; less audience selectivity Relatively high cost; junk mail image

Television

Direct mail

See text for complete table

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Deciding on Media and Measuring Effectiveness

Media planners consider: TargetTarget-audience media habits Product characteristics Message characteristics Cost Allocating the Budget
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Deciding on Media and Measuring Effectiveness

(c) Selecting Specific media vehicles Circulation Audience Effective audience Effective ad-exposed audience ad-

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Deciding on Media and Measuring Effectiveness

(d) Deciding on Media Timing

Classification of Advertising Timing Patterns

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Deciding on Media and Measuring Effectiveness

(e) Deciding on Geographical Allocation
Areas of dominant influence (ADIs) or Designated marketing areas (DMAs)

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Measuring Effectiveness
5. Evaluating Advertising Effectiveness
(a) Communication-Effect Research (Copy testing) Communicationi. Consumer feedback method ii. Portfolio test iii. Laboratory test

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Deciding on Media and Measuring Effectiveness

Advertising Research Techniques
For Print Ads. Starch and Gallup & Robinson, Inc. are two widely used print pretesting services. Test ads are placed in magazines, which are then circulated to consumers. These consumers are contacted later and interviewed. Recall and recognition tests are used to determine advertising effectiveness. For Broadcast Ads. In-home tests: A videotape is taken into the homes of Intests: target consumers, who then view the commercials. Trailer test: In a trailer in a shopping center, shoppers are shown the test: products and given an opportunity to select a series of brands. They then view commercials and are given coupons to be used in the shopping center. Redemption rates indicate commercials influence on purchase behavior.

See text for complete table

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Deciding on Media and Measuring Effectiveness

(f) Sales-Effect Research SalesShare of advertising expenditures Share of voice Share of consumers minds and hearts Share of market

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Sales Promotion
Sales promotion is a key ingredient in marketing campaign, consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular product or service by consumer or the trade

Purpose of Sales Promotion

Introduce new product in the market. market. Attract new customers. customers. Increase sales during the slack season. season. Minimizing brand switching. switching.
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Sales Promotion
Major Decisions in Sales Promotion
1. Establishing Objectives 2. Selecting Promotion Tools
Selecting Consumer-Promotion Tools ConsumerManufacturer promotions Retailer promotions
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Table 20.3: Major Consumer-Promotion Tools

Samples: Offer of a free amount of a product or service delivered door to door, sent in the mail, picked up in a store, attached to another product, or featured in an advertising offer. Coupons: Certificates entitling the bearer to a stated saving on the purchase of a specific product: mailed, enclosed in other products or attached to them, or inserted in magazines and newspaper ads. Cash Refund Offers (rebates): Provide a price reduction after purchase rather than at the retail shop: consumer sends a specified proof of purchase to the manufacturer who refunds part of the purchase price by mail. Price Packs (cents-off deals): Offers to consumers of savings off the (centsregular price of a product, flagged on the label or package. A reduced-price reducedpack is a single package sold at a reduced price (such as two for the price of one). A banded pack is two related products banded together (such as a toothbrush and toothpaste).

See text for complete table

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Sales Promotion
Selecting Trade-Promotion Tools TradeTable 20.4: Major Trade-Promotion Tools
Price-Off(offPrice-Off(off-invoice or off-list): A straight discount off the list price on each offcase purchased during a stated time period. Allowance: An amount offered in return for the retailers agreeing to feature the manufacturers products in some way. An advertising allowance compensates retailers for advertising the manufacturers product. A display allowance compensates them for carrying a special product display. Free Goods: Offers of extra cases of merchandise to intermediaries who buy a certain quantity or who feature a certain flavor or size.
Source: For more information, see Betsy Spethman, Trade Promotion Redefined, Brandweek, March 13, 1995, pp. 25-32. 2533
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Sales Promotion
Selecting Business-and Sales-Force-Promotion Tools BusinessSales-ForceTable 20.5: Major Business-and Sales-Force-Promotion Tools
Trade Shows and Conventions: Industry associations organize annual trade shows and conventions. Business marketers may spend as much as 35 percent of their annual promotion budget on trade shows. Over 5,600 trade shows take place every year, drawing approximately 80 million attendees. Trade show attendance can range from a few thousand people to over 70,000 for large shows held by the restaurant or hotel-motel industries. Participating hotelvendors expect several benefits, including generating new sales leads, maintaining customer contacts, introducing new products, meeting new customers, selling more to present customers, and educating customers with publications, videos, and other audiovisual materials. Sales Contests: A sales contest aims at inducing the sales force or dealers to increase their sales results over a stated period, with prizes (money, trips, gifts, or points) going to those who succeed.
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Sales Promotion
3. Developing the Program
Size of incentive Conditions for participation Duration of promotion Distribution vehicle

4. Presenting, Implementing, Controlling, and Evaluating the Program

Lead time SellSell-in time

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Public Relations
Public is any group that has an actual or potential interest in or impact on a companys ability to achieve its objectives. objectives. Public Relations involves a variety of programs designed to promote or protect a companys image or its individual product Public Relations Department Performs the following Five Functions: Functions:Press relations Product publicity Corporate communication Lobbying Counseling
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Public Relations
Marketing Public Relations (MPR)
MPR assists in the following tasks: tasks:
Assisting in the launch of new products Assisting in repositioning a mature product Building interest in a product category Influencing specific target groups Defending products that have encountered public problems Building the corporate image in a way that reflects favorably on its products
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Public Relations
Major Decisions in Marketing PR
Establishing the Marketing Objectives
MPR can: Build awareness Build creditability Hold down promotional cost

Choosing Messages and Vehicles

Event Creation

Implementing the Plan and Evaluating Results

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MANAGING THE SALES FORCE

TYPE OF SELLING Deliverer Order Taker Missionary Technician Demand creator Solution vendors DESIGNING THE SALES FORCE Sales force objectives Sales force strategy Sales force structure Territorial Product Market Complex Sales force size Compensation
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MANAGING THE SALES FORCE

1. 2. 3. 4. Recruiting and selecting representatives Training sales representative Supervising sales representative Motivating sales representatives Sales quotas Supplementary Motivators 5. Evaluating sales representatives
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Designing and Managing Marketing Channels

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PowerPoint by Rupesh Malik NCCE

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Marketing-Channels
Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption. consumption. A channel is the pipeline through which a product flows on its way to the consumer. The manufacturer consumer. puts his product in to the pipeline or marketing channel and various marketing people move it along to the consumer at the other end of channel. channel. Richard M. Chewett
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What Work is Performed by Marketing Channels?

Channel Functions
Gather information about potential and current customers, competitors, and others Develop and disseminate persuasive communications to stimulate purchasing Reach agreements on price and other terms so that transfer of ownership or possession can be effected Place orders with manufacturers
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Acquire funds to finance inventories at different levels in the marketing channel Assume risk connected with carrying out channel work Provide for the successive storage and movement of physical products Provide for buyers payment of their bills through banks and other financial institutions Oversee actual transfer of ownership

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Types of Channel
ZeroZero-level channel (direct-marketing channel) (directOneOne-level channel TwoTwo-level channel ThreeThree-level channel
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Manufacturers sales branch

Industrial Distributor

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Channel-Design Decisions
Push strategy Pull strategy

Designing a channel system involves four steps:

Analyzing customer needs Establishing channel objectives Identifying major channel alternatives Evaluating major channel alternatives
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Channel-Design Decisions
Analyze Customers Desired Service Output Levels
Lot size Waiting time Spatial convenience Product variety Service backup
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Channel-Design Decisions
Establish Objectives and Constraints Identify Major Channel Alternatives
Types of Intermediaries Number of Intermediaries
Exclusive distribution Selective distribution Intensive distribution
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Channel-Design Decisions
Terms and Responsibilities of Channel Members
Price policy Conditions of sale Distributors territorial rights

Evaluate the Major Alternatives

Economic Criteria Control and Adaptive Criteria

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Channel-Design Decisions

Break-even Cost Chart

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Cooperation and Conflict Management Types of Conflict

Vertical channel conflict
Occurs when the channel member at one level is in conflict with another member at the next higher or lower level. level.

Horizontal channel conflict

Conflict at the same level between the channel members. members.

Multichannel conflict
Sometimes the middlemen come in conflict with the manufacturer, using both direct and indirect means of distribution. distribution. Such a conflict is called multichannel conflict. conflict.
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Cooperation and Conflict Management

Causes of Channel Conflict
Goal incompatibility Unclear roles and rights Differences in perception

Managing Channel Conflict

Regular Communication Forming Dealer Councils Mediation Arbitration
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Logistics
Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers

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Marketing Logistics Decisions

1. 2. Order processing: how should orders be handled? Warehousing: where should stocks be located?
Number of Warehouse. Company owned warehouse V/S Third party warehouse.

3.

Inventorying: how much stock should be held?

Economic order quantity Just in Time

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4. Transportation: How should stocks be finally sent? Cost Reach of the mode Dependability of the mode Speed to reach the market

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