Advertising & Sales

Promotion
What is advertising
sender

It is
encode successful
when what
TV, print, WOM, the sender
Internet ,POS wants to
medium =ATL/BTL
say is
Manage the correctly
Noise ,filters interpreted
by the
decode receiver

receiver
 Advertising Functions
Informing

Persuading

Reminding

Adding Value

Assisting Other Company Efforts

 Advertising Functions
Informing
• Makes consumers aware, educates them
about the features and benefits, and
facilitates the creation of positive brand
images
• Facilitates the introduction of new brands and
increases demand for existing brands
• Performs another information role by:
 Advertising Functions

Persuading

• Persuades customers to try advertised

products and services
• Primary demand:
demand
• Secondary demand:
demand
Persuading
Gillette MACH3
 Advertising Functions
Reminding
• Keeps a company’s brand fresh in the
consumer’s memory
• Influences brand switching by:
 Advertising Functions
Adding Value
• Three basic ways by which companies
can add value
– innovating
– improving quality
– altering consumer perceptions
• Advertising adds value to brands by:
 Advertising Functions

Assisting Other Company Efforts

• Advertising is just one member of the

marketing communications team
• Sometimes, an assister that facilitates
other company efforts in the marketing
communications process
• Examples?
The Advertising Management Process
Advertising Strategy
• Setting Objectives
•Formulating Budgets
•Creating Ad messages
•Selecting Ad Media and Vehicles

Strategy Implementation

Assessing Ad Effectiveness
 Whole Egg Theory
• 1972 by Ed Ney, then president of Y&R
International.
– offer integrated services-not just advertising but
direct, PR, sales promotion and others-Mr. Ney refers
to it as "the Whole Egg."
– During the mid-1970s, Y&R buys numerous
companies specializing in non-consumer advertising
marketing disciplines, such as healthcare
communications shop and direct response agency
The name and the concept catch on.

The concept of IMC starts catching on , though it might not

,be from one agency .So agencies from specialised became
diversified
 Integrated Marketing
Communication
• Involves coordinating various promotional
tools ,marketing activities to form a message ,
rather than only relying on media advertising
– Get the consumer at touch-points
– Avoid duplication
– Consistent message for the product /brand
– Maximise the ROI ,more cost effective
– Leverage on changing environment /behavior
– Focus on actual purchase /trials
IMC Overview

5-13
 Tools of -IMC
• Advertising
• Direct marketing
• Interactive/internet marketing
• Sales promotion
• PR
• WOM
• Personal selling
• BTL
• POS
 IMC –planning model
• Review of marketing plan
– SWOT :environment/competition/TG/product/distribution/
manpower…
• Define the product message /TG/objective
• Understand the best mix of IMC basis the product
/message /TG
• Understand the budget
• Develop IMC
– Message /strategy/tools of IMC/adapting the message
• Integrate the IMC strategy/execution
• Monitor/evaluate & control the IMC
 IMC -process
Identify
Markets
Product
Segmentation Decision
-geographic/
Opportunity Pricing
Demographic/
Psychographic Decision Consumer
/VALS/ business
Competition Channel/
Behavior
/benefit Distribution
Target Decision
market
TG
IMC
Positioning decision
-product/pricing
TG/benefits Review
Monitor
modify
 IMC-participants
• Advertisers
• Agencies
• Media companies
• Marketing communication specialists
• Collateral services
 IMC objectives
• Stage of the product in PLC
• Awareness
• Recall
• Trials
• Informative
• Consumption
• Repeat purchase
 Types of agencies/revenue
• Types
– Full services
– Creative boutiques
– Media buying services
– Specialized
• Direct response/PR/interactive/brand
management/collateral/MR

• Payment mechanism
– Commission
– Retainer ship
– Retainership + commission
 Why agencies lose clients
• Do not understand the TG /product /market well
• Do not control their business intelligently/poor
recommendation
• Poor service
• Poor Communication
• Personality clashes
• Changes in management /manpower –agency/client
• Conflict of interest
 How agencies get clients
• Referrals
• Solicitations
• Presentations
• PR
• Image
 Persuasion matrix
Dependent variables-steps in being Independent variables –communication components
persuaded

source message channel receiver destination

Message presentation

attention

comprehension

yielding

retention

behavior
 Source
• Direct /indirect
• Credible
– Expertise
– trustworthiness
• Attractiveness
– similarity
– Likeability
– celebrity
• power
 Source-
Celebrity endorsement
• Stage of the product - It depends on what stage of the product life cycle is the brand in.

• Is it a strategic decision over 4, 5 years- brand value must remain consistent with the value
of the celebrity being endorsed in terms of personality, positioning. So even if the celebrity
changes the values remain consistent ..

• Celebrity–brand match:  , strong enough so that the endorsements are able to strongly
influence the thought processes of consumers and create a positive perception of the brand ?

• Constant monitoring mechanism : Are we able to monitor the behavior, conduct and public
image of the celebrity  continuously to minimize/maximize  any potential.

• Brand over endorser:  should ensure that this does not happen by formulating advertising
collaterals and other communications

• Celebrity endorsement is just a channel: it is one part of the communication mix that falls
under the broader category of  marketing. I have observed that the  teams/ sales /CP

• Celebrity ROI: should have a system combining quantitative and qualitative measures to

measure the overall effect of celebrity endorsements.
 Channel factors
= medium to deliver the message
• Personal
• Non-personal

– ATL –type of medium /program

– BTL
– Noise
– Clutter
 So Advertising ….

• Includes all activities involved in presenting a

non-personal, sponsor-identified, paid-for
message about a product or organization.
• Can classify it by:
– The target audience: consumers or
businesses
– Product/service vs. organization/company
– Objective: Primary or selective demand
 The Nature of Advertising is..
• advertising is distinguished from other forms of
promotion as follows
• it has a verbal and/or visual message
• the sponsor of the message is identified
• delivery is through recognizable media
• there is payment by the advertiser to the media
for carrying the message
• advertisers are increasingly being able to reach
specific audiences with tailor-made messages
 Advertising to
Target Audiences

• advertising can be classified by the target

audience to which it is directed
• consumer advertising generally appears in
mass media and is directed to end
consumers: may be product or institutional
in nature
• business-to-business advertising is often
called trade advertising and is directed to a
business market
 What is Being Advertised?

• product advertising is designed to promote the

sale of a specific product or service:
– may be direct-action,
direct-action quick-response
– may be indirect-action over a longer time
• institutional advertising promotes the firm or tries
to create a positive image:
– may promote customer service
– or send a public service message
 Comparative Advertising

• Selective-demand advertising
• Involves comparing a product to its
competing brand
• May be:
– Direct, naming competitors outright
– Less direct, alluding to competitors (e.g.,
“leading brand”, “Brand X”) but not
naming them
 Co-operative Advertising
• co-operative advertising involves the sharing of
the cost of advertising by two or more sponsors:
– a manufacturer and retailers (vertical),
vertical or
– a group of retailers (horizontal)
(horizontal
 What are the Objectives?
• primary-demand advertising is intended to
stimulate use of a category of products
• selective-demand advertising is intended to
encourage purchase of a particular brand or the
products and services of a specific firm
 Setting Advertising Objectives

• Expression of management consensus

• Guides the budgeting, message, and media
aspects of advertising strategy
• Provide standards against which results
can be measured
 Budgeting Considerations
in Practice

• What is the Ad objective?

• How much are competitors spending?
• How much money is available?
 Budgeting Methods
• Percent-of-Sales Budgeting
• Objective-and-Task Method
• Competitive Parity Method
(match competitors method)
• Affordability Method
Percentage-of-Sales Budgeting

• A company sets a brand’s advertising

budget by simply establishing the
budget as a fixed percentage of past or
anticipated sales volume
• Criticized as being illogical
Why??
 Objective-and-Task Method

• The most sensible and defendable

advertising budgeting method
• Specify what role they expect advertising
to play for a brand and then set the
budget accordingly
The Competitive Parity Method

• Sets the ad budget by basically following

what competitors are doing
 Affordability Method
• Only the funds that remain after
budgeting for everything else are spent
on advertising
• Only the most unsophisticated and
impoverished firms
• However, affordability and competitive
considerations influence the budgeting
decisions of all companies
DAGMAR-defining advertising goals for measuring
advertising results

• Communication objective which is SMART

– Objectives /measurable
– Clear TG
– Benchmark & results desired
– Specific time frame
– Budgets
• Top down/% of sales/affordability
• Allocation amongst elements of IMC
 Medium Objective Frequency of message

TV Reminder Pulsing /just enough to enable recall

for the brand

Press /print Talk Quite regular in the target markets

imagery /talk
about SKU
features
OOH medium Generate a High visibility in malls/shopping arcades
(best is drops down recall and All areas where consumers can be
scrollers at malls spur a influenced and where products are
/ purchase available
Dispensing units at decision
outlets

Consumer connect Establish a Sales at schools

activities direct Dedicated program for identified
contact cities/schools in India
Exhibition
Consumer touch poins
 Consumer
-5 stage decision making process
Stock out /desire/new need /Dissatisfaction/marketer induced
Problem /New products
recognition

Information Personal experience , family, market info, advertising ,

W search Influencers, peer group , trade ,existing users…

Evoke set , criteria defining need , demographics ,budgets,

Evaluate
O alternatives
Urgency of the need -want /motivation for the need

Decision to buy , decision to buy a particular brand , budget

Purchase ,time taken to actually buy after the decision ;changes with the
M decision Product /budget /urgency

Post purchase Cognitive dissonance-satisfaction /dissatisfaction

evaluation
 Consumer-
internal psychological process
Maslow’s hierarchy ;psychoanalytic theory , MR (In depth int
Projective technique, association tests, FGD
Motivation
Sensation ; selecting information ; interpreting information
It is a filter of the receiver for information from the sender
..e.g. can be selective perception /selective exposure/
Selective comprehension /selective retention
Perception Mnemonics /sublime perception is used to create stimuli
For awareness

attitude Multi attribute model; changes strategies/execution of msg

Consumer combine info /characteristics of a product &

Integration Compare ; heuristics is also used

Behavior approach , cognitive learning

learning
 Consumer-
learning – Behavior Approach

• Theories are based on STIMULI  RESPONSE

orientation
– Classical conditioning-learning is an associative process. It
assumes the individual is a passive participant who simply
receives stimuli . 2 things are important
• Contiguity – unconditioned/conditioned stimuli must be close in time
& space ..proximity /physical presence
• Repetition – frequency of association . More often the
unconditioned/conditioned stimuli occur –there would be an
association
– E.g. Pavlov experiment : Bell is a conditioned stimuli to unconditioned
stimuli :food & unconditional response :saliva

• Advertisers use images/figures/celebration to build as association

which evokes a response from the consumer
 Consumer-
learning – Behavior Approach

• Theories are based on STIMULI  RESPONSE

orientation
– Operant conditioning –here the individual actively operates or
acts on some aspect of the environment for the learning to
occur. The individual’s response is instrumental in getting a
positive reinforcement (reward) or negative reinforcement
(punishment)
• reinforcement is important
– Can be continuous
– Can be partial or intermittent

– All of it might lead to shaping of behavior patterns

 Consumer-
Cognitive Learning theory
goal Purposive insight Goal
behavior achievement

-Perception /formation of belief / attitude development /environment integration all

are important to the decision making process
All the 5 stages of consumer decision making process are relevant
Culture

Sub-culture

EXTERNAL Social class

FACTORS
INFLUENCING Reference groups

CONSUMER Situational-
determinants
BEHAVIOUR
 Consumer –
decision making process
• Problem recognition need/repeat purchase/desire/greed
– maslow’s hierarchy
– Psychoanalalytic theory –Sigmund Freud
– MR probes needs-in depth interview/FGD/association
tests/projecting techniques

• Information search
• Alternatives evaluation
• Purchase decision
• Post purchase evaluation –cognitive dissonance
• Recommendation-WOM
 Internal psychological process

• Motivation
• Attitudes/beliefs /baggage
• Culture
– Subculture/social class/reference groups/influencers
• Perception-visual/sensory/psychological
• Attitude formation
• Integration
• Learning
 Models of response process-
traditional
AIDA Hierarchy effects model Innovation adoption Information Processing
model model model

Cognitive attention Awareness awareness Presentation

stage knowledge Attention
comprehension

Affective Interest Liking Interest Yielding

stage Desire Preference evaluation retention
conviction

Behavioral action purchase Trial behavior

stage adoption
 3 order model of information
processing – Michael Ray
High Low

high (learning model ) (low involvement model)

Cognitive
Cognitive Conative
Affective affective
Conative

low (dissonance /attribution model)

Conative
Affective
Cognitive
 FCB grid-consumer response
-Richard Vaughn of Foote, Cone & Belding advertising
agency
thinking Feeling

High involvement Informative Affective

-IT/cars fashion/j wellery/mobikes
Media- long copy media-large space /image
Creative –info demo creative- exceptional impact

Low involvement Habit formation Self-satisfaction

-household products -cigarettes/liquor/candy
Media-small space ads Media-billboard/POS/newspaper
Creative -reminder Creative -attention
 Basic emotion Basic opposite

Joy Sadness

Trust Disgust

Fear Anger

Surprise Anticipation

Sadness Joy

Disgust Trust

Anger Fear

Anticipation Surprise

dvanced emotion Composed of... Advanced opposite

Optimism Anticipation + Joy Disappointment

Love Joy + Acceptance Remorse

Submission Acceptance + Fear Contempt

Awe Fear + Surprise Aggressiveness

Disappointment Surprise + Sadness Optimism

Remorse Sadness + Disgust Love

Contempt Disgust + Anger Submission

Aggressiveness Anger + Anticipation Awe

 Creative Communication ?
• Is the product positioned simply , with clarity
• Does it show a a clear benefit
• Does it contain a powerful idea
• Does it talk about the brand personality
• Is it unexpected /memorable
• Is it focused
• Does it reward the viewer with something –
tangible/intangible
• Is it visually exciting /attention grabbing
• Is it well made
 Creative Strategy
-planning involves :
• Challenge
– Brief, TG, SMART objectives
– Research =product/competition/TG habits & behavior/media
• Quanti -quali/ focus groups/ethnographic (observing consumer in the natural
environment)
• Evaluate storyboards/concept testing /animate
• Risks
– Ability to do the right thing , not necessarily the obvious

• Personnel
– Client, agencies, consumer

• Process
– Rigor, time , budgets, understanding of the personnel /audience ,media type
• Young’s model :immersion, digestion, incubation, illumination, verification
• Graham Wallas : Preparation, incubation, illumination, verification
 Creative Strategy
-development involves
• Communication of a product is developing
a series of messages (which make up an
IMC ) which is a set of interrelated ideas
and coordinated activities that revolve on
the core central theme during a specified
period

• Developing the unifying theme is the

critical objective of a campaign
 Copy Platform
• 2 critical components of the copy platform are
the development of the major selling ideas and
the creative strategy development
– Basic problem
– IMC objectives
– TG
– Major selling idea
– USP /Positioning
– The brand image desired
– Creative strategy , the inherent drama
– Supporting information required
 Creative -Appeal
• Informational/ Rational
• Emotional
• Rational + Emotional
• Reminder
• Teaser
 Communication -Execution
• Straight /factual
• Scientific/technical
• Demonstration
• Comparison
• Testimonial
• Slice of life
• Animation
• Personality symbol
• Fantasy
• Drama
• Humor
• Combinations
 Creative –Tactics..eg
• Print
– Headlines :direct/indirect/sub heads
– Body copy
– Visual elements
– layout
• TV
– Video
– Audio – voice-over/needle-drop/jingle
– Script
– Production – PPC/production/post production
 Creative approach
- Client Evaluation
• Is the creative approach consistent with the brief , brand
objectives
• Is it consistent with the creative strategy objective ?Does
it say what was intended?
• Is it appropriate for the TG?
• Does it communicate clearly /convincingly?
• Does the creative execution overwhelm the brand /
brand objectives ?celebrity endorsements?
• Is it appropriate for the media environment?
• Is it truthful and tasteful ?

– Can be checked through

• Informal discussion /research /informal feedback /test market
 Creative Brief

What is . . .
• The objective
• The target audience
• The message theme
• The support
• The constraints

5 - 69
 The Support
The support claims
highlighted in this
advertisement is that
MicroThins are:

• 30% thinner
• 40% lighter
• 4 times more scratch resistant
• 10 times more impact resistant
• 99.9% UV protection
• Anti-reflective

5-70
 Creative Brief - Del Monte
• The Objective – increase awareness of the smaller-size
cans with pull-top lid.

• Target Audience – senior citizens, especially those that live

alone and suffer from arthritis.

• Message Theme – the new cans not only contain a smaller

portion but are easier to open.

• Support – 30¢ intro coupon to encourage usage.

• Constraints – copyright logo, toll free #, Web site, legal

requirements of a coupon, and what is meant by a small
serving.
5-71
 Del Monte
Advertisemen
t

Based on the
Creative Brief
in the
previous slide.

5-72
 Left – Right Brain Ads

• “Left brain” advertisement

 Logical, rational side of brain
 Manages numbers, letters, words, and
concepts
 Rational appeal

• “Right-brain” advertisement
 Emotional side of brain
 Manages abstract ideas, images, and
feelings
 Emotional appeal

5 - 73
 An Advertising Campaign
(Steps 1 and 2)
1. Transforming a theme into a coordinated
advertising program to accomplish a specific
goal.
2. Objectives of the campaign determined by
firm’s overall marketing strategy. Typical
objectives are:
– Support personal selling
– Improve dealer relations
– Introduce a new product
– Counteract substitution
– Expand use of a product category
 The Advertising Campaign
(Steps 3 and 4)
• Creating a message that:
– Gets and holds the attention of the intended
audience.
– Influences the audience in the desired way.
• Selecting media involves:
– The choice of a medium such as television, radio,
newspaper, or magazine.
– The specific category of the selected medium to be
used, such as special interest (Chatelaine) vs.
general interest magazines (Maclean’s).
– The specific media vehicles.
 The Campaign Budget

• A budget must be allocated among the

various activities comprising the overall
promotional program.
• Promotional budgets can be extended with
co-operative advertising.
 Advertising Goal
• A specific communication task to be
achieved to a specific degree to be
communicated to a specific target
audience in a specific period of time.
 How much to spend?
• ‘Half my advertising is wasted, but the
trouble is I do not know which half
- John Wanamaker
 Advertising Management

• Evaluate role of advertising in IMC program.

• Select in-house or external agency.
• Develop advertising management strategy.
• Develop creative brief.

5 - 79
 External Agencies
Boutique ------------------ Full-service
• Advertising agencies
• Media service companies
• Direct marketing agencies
• Consumer and trade promotion
specialists
• Public relations firms

5 - 80
 Choosing an Agency
1. Set goals.
2. Select process and criteria.
3. Screen initial list of applicants.
4. Request client references.
5. Reduce list to 2-3 viable agencies.
6. Request creative pitch.
7. Select agency.

5 - 81
 Evaluation Criteria
Selecting Advertising Agency
• Size of agency
• Relevant experience
• Conflicts of interest
• Creative reputation
• Product capabilities
• Media purchasing capabilities
• Other services available
• Client retention rates
• Personal chemistry

5 - 82
 Advertising Planning and
Research
• General pre-planning input
• Product specific-research
– Major selling idea
• Qualitative research
– Anthropology
– Sociology
– Psychology
• Value and lifestyle model (VALS)

5 - 83
 Key Advertising Personnel
Client Client Client
Marketing Manager Marketing Manager Marketing Manager

Account
Executive

Creative Traffic Media

Director Manager Buyers
&
Planners
Creative Creative Creative Creative

5-84
Steps in Advertising Campaign
Management

1. Review communication market analysis.

2. Establish advertising portion of IMC
objectives.
3. Review advertising budget.
4. Select media.
5. Prepare creative brief.
1. Communication Market Analysis
Review

• Competitors
• Opportunities
• Target markets
• Customers
• Product positioning

5 - 86
 2. Advertising Goals

• To build brand image

– Top of mind
– First choice
• To inform
• To persuade
• To support other marketing efforts
• To encourage action

5 - 87
 3. Advertising Budget

Manner of Distribution:
• Continuous schedule
• Flighting schedule
• Pulsating schedule

5 - 88
 Media selection
• The most cost effective media mix to
ensure achievement of the advertising
goal.
 How should you select media?

• Reach
• Frequency
• Impact
 Reach
• No. of persons exposed to a particular
media schedule at least once during a
specified time period
 Frequency
• No. of times within the specified period
that a person is exposed to that message
 Impact
• Qualitative value of an exposure through a
given medium
• GRP (Gross rating points) = R * F
• Wt. GRP = R * F * I
 Choosing Media
• Objectives of the ad.
• Audience coverage.
• Requirements of the message.
• Time and location of the buying
decision.
• Media cost (CPM)
• Media characteristics.
 Characteristics of Key Media

• Newspapers: flexible, local

• Television: versatile, powerful but costly,
fragmented
• Direct Mail: personal, selective, effective, but
tough
• Radio: strong locally, cheap but single
medium
• Magazines: top quality, little flexibility
 More ..Key Media

• out-of-home advertising
• specialty advertising
• emerging media:
– World Wide Web
– infomercials
– place-based media
– videos and CD-ROMs
– yellow pages
 Evaluating the Major Media

• newspapers are flexible and timely, have a

local orientation and wide coverage, low cost
• television is versatile, but audience is now
fragmented, reaches mass audiences
• direct mail is efficient, targets certain
audience
 More Media
Evaluations

• radio stations target specific segments, low

cost, local orientation, short message life
• magazines deliver quality advertising to specific
segments, message stays around
 The Changing Nature
of Media

• media are becoming less mass, more targeted

• cable TV offers many specialty channels
• direct-to-home TV adds to fragmentation
• lots of new out-of-home media
• Yellow Pages and other directories on CD-ROM
• place-based media where they shop and live
• advertising on the Web works as Yellow Pages does
-- the customer seeks out the advertiser
 Evaluating Advertising
• It is difficult to measure the sales effectiveness of
advertising because:
– Ads have different objectives.
– Ads can have an effect over time period.
– Measurement problems.
• Effectiveness can be tested:
– Before an ad is presented.
– While it is being presented.
– After it has completed its run.

SMART
 Sales Promotion
• Whereas advertising gives a reason to
buy, SP gives an incentive to buy
Sales Promotion

PERSONAL
SELLING ADVERTISING

PUBLICITY SALES
PROMOTION
 Sales Promotion
Definition: any activity or material used
as a direct inducement to purchase
Objective: Bolster/complement other
promotional mix elements during a
specific time period
Targeted toward:
• Sales force
• Wholesalers and retailers
• Consumers
 Sales Promotion
Methods for Consumers

Product sampling, demonstrations

Coupons, refunds

Rebates, cents-off-

Contests, games & sweepstakes

 Sales Promotion
Methods for Consumers
Premiums

Multiple purchase offers,

Frequent-user incentives

P-O-P material

Product placements/tie-ins
 Classifying Types of Sales
Promotion
Promotional Non-price Sampling
pricing promotions
• Price reductions
• Free goods
• Tied offers • Most effective in
• Contests the early stages of a
• Money off next
• Free gifts new product launch
purchase
• Loss leader • Self-supporting offers (#1 use for coupons)
• • Important for food
pricing Multi-brand promos s
products
• Cheap credit • Guarantees and added
• Very expensive
services
Rebates: A Consumer Information
Source
• Buyers fill out rebate forms with names,

addresses and household data about

customers
- directly targets price cuts to customers
- 5-10% are redeemed (A Phantom
discount)

Pepsi offers a $5 rebate on the Home Alone video

 Rebates are often effective at changing
purchase probabilities, even for big-ticket items
 Coupons, too, can be effective at getting
consumers to purchase specific products
 Sales Promotion - Methods for the
Trade
• Trade shows
• Contests, free merchandise
• Display equipment, P-O-P materials
• Cooperative advertising & promotions
– Vertical - channel members
– Horizontal - group of retailers
• Allowances (buying vol., buy-back, scan-back,
merchandise)
• Premium or push money, slotting allowances
 Trade Shows
Selling objectives Non-selling objectives
Maintain relationship Maintain image
Transmit messages Test products
Current
to key accounts Gather competitive
customers Remedy problems intelligence
Add-on sales Widen exposure

Contact prospects Contact prospects

Potential Determine needs Foster image building
customers Transmit messages Test products
Commit to call back Gather competitive
or sale intelligence
 Sales Promotion
•Advantages:
•Motivation method for
special efforts
•Short-term sales increase
•Defined target audience
•Defined role/objectives
•Indirect roles (e.g., wider
distribution)
•Disadvantages:
•Only short-term
•Hidden costs
•Confusion
•Price cutting -Brand image
•Postponement effect
•Significant government
regulation
•Lack of effectiveness
sometimes (learning effect)
A Benefit Congruency Framework of
Sales Promotion Effectiveness

Are monetary savings the only explanation for

consumer response to sales promotions?
If not, how do the different consumer benefits
of sales promotion influence its effectiveness?
Six Benefits
Savings Quality
Convenience Value expression
Exploration Entertainment
Positioning Map
Sales Promotions Benefit Matrix

High *
Free
Gifts

Free Product Offers

*
Hedonic
* Sweepstakes * Coupons

* *Price Reductions
Rebates
Low
Low Utilitarian High
 Role of The Promotion Mix
• Promotion is an organization’s unique set of
communications (stimuli) designed to influence
(inform, persuade & remind) selected target
audiences into desirable responses.
• Who says what to whom, in what setting , by which
channels, with what purposes.
• Promotion facilitates (efficient) exchange
 Advantages of SP
• Induces trials
• To reward loyal customers
• To induce stocking by the trade
• Adjust to short term variations in trade
• Liquidating inventories
• Preempting competition
 Disadvantages of SP
• With too many promotion schemes ‘promotion
clutter’ confuses consumers
• Attracts ‘brand switchers’ and ‘deal prone’
customers
• Dilutes brand equity
• Preponement of purchases
• Lowers margins
• Expensive and wasteful, when not handled
properly
 Types of SP
• Trade
• Consumer
 Developing a SP campaign
• Planning the programme
• Duration
• Incentive to be given
• Assessing viability
• Pretesting
• Implementing and controlling
• Evaluation
 Sales Promotion
• Demand-stimulating devices designed to
supplement advertising and facilitate personal
selling.
• Sales promotions include such things as
coupons, in-store displays, premiums, trade
shows, in-store demonstrations, and contests.
• The target for these activities may be
middlemen, end users, or the producer’s own
salesforce.
 Results of Sales Promotion

• It can produce short-term results.

• Competitors are using sales promotions.
• Sales promotions are attractive to price-
conscious consumers.
• Can enhance/facilitate retail salesmanship
which is often of low quality.
 Key Reasons for
Sales Promotion
• Stimulating end-user demand.
– Sampling program for new/improved
product
• Improving the marketing performance of
middlemen and salespeople.
– Sell more, win a holiday trip.
• Supplementing advertising and facilitating
personal selling.
– Displays, promotional giveaways
 Managing Sales Promotion
• Select from wide range of techniques, depending on your
objectives
• Select promotional devices based on:
– Nature of target audience
– Your promotional objectives: Push vs. Pull.
– Cost of device-- sampling can get costly.
– Current economic conditions-- coupons, rebates
work best in recessionary period.
• Evaluating Sales Promotion:
– Much easier than with advertising.
– Usually clear start, finish, goal.
 Public Relations
• Involves a variety of programmes to
promote or protect a company’s image or
products
 Functions of PR
• Media relations
• Product publicity
• Corporate communications
• Lobbying
• Counseling
 Public Relations
• A tool designed to influence favourably attitudes
towards an organization, its products and policies.
• Public relations is often overlooked by management
because of:
– Organization structure; not in marketing.
– Inadequate definitions; loosely defined.
– Unrecognized benefits; many non-believers.
 Publicity

Publicity is a form of public relations that

includes any communication about an
organization or its products that is
presented by the media but is not paid
for by the organization.
 Strengths of Publicity
• Can announce new products, recognize employees,
report good results, breakthroughs.
• Key Benefits:
– Lower cost than advertising or personal selling.
– Increased readership; advertising ignored
often.
– More information.
– Timeliness.
 Weaknesses of Publicity
• Some loss of control over message.
• Limited exposure; only happens once.
• Not free; preparation costs.