MM Mod 5 Asst. Prof.

Manini Hemanth

PROMOTION MIX
Definition: The Promotion Mix refers to the blend of several promotional tools used by the
business to create, maintain and increase the demand for goods and services.

Even a superior product doesn’t sell itself. Your customers need information about your product
or service before they buy it. The ways you communicate features and benefits to your potential
customers is called a promotional mix. This Business Builder will explain how you can
maximize your company’s promotional mix for best results

WHAT YOU SHOULD KNOW BEFORE GETTING STARTED [top]

When you promote your business, you’re engaging in persuasive communication: You want to
convince others to buy from you. You must select the right promotional strategy to:

1. Capture the attention of the right group of potential customers in a credible yet catchy way.
2. Educate them about your products or services.
3. Influence them to buy from you.
A promotional mix is an allocation of resources among five primary elements:

1. Advertising
2. Public relations or publicity
3. Sales promotion
4. Direct marketing
5. Personal selling
How you integrate these elements depends on what you’re promoting, the biases and preferences
of the potential customers you’re courting, general market conditions and your promotional
budget.

The communications process will succeed if:

 You deliver a clear, compelling message. You may have several important or beneficial
product features, but if you don’t emphasize what’s most important to your target market or you
overwhelm prospects with too much data, they might reject your message. Example: If the
target-market customer cares most about saving money, your message should emphasize how
this will happen.
 You choose the most appropriate promotion method. To convey your message effectively,
you must understand the best way to reach your target market. If your key customers are
manufacturers and you supply specialized equipment, communicating through an advertisement
in a general interest consumer magazine will waste time and money.

UNDERSTANDING THE MAIN COMMUNICATION CHANNELS [top]

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 Advertising. Advertising is any paid form of media communication. This includes print ads in
magazines, trade journals and newspapers, radio and TV announcements, Web-based visibility-
building, and billboards. Advertising is a nonpersonal promotional activity because the seller has
no direct contact with the potential customer during the communication process.
 Sales Promotions. In-store demonstrations, displays, contests and price incentives (50% off,
buy-one-get-one-free) are sales promotion techniques.
 Public Relations. These activities promote a positive image, generate publicity and foster
goodwill with the intent of increasing sales. Generating favorable media coverage, hosting
special events and sponsoring charitable campaigns are examples of public relations.
 Direct Marketing. A form of advertising aimed directly at target customers (usually in their
homes or offices) that asks the receiver to take action, such as ordering a product, clipping a
coupon, phoning a toll-free number or visiting a store. Catalogs, coupon mailers and letters are
common forms of direct marketing.
 Personal Selling. Face-to-face communication between buyer and seller.

1) Personal selling

It is a part of the promotional mix which involves a one to one communication between buyers
and customers (either potential or already customers). As it is a one-to-one communication, it

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generates direct contact with prospects and customers. Even though it is considered to be one of
the most expensive forms of promotion, it is also considered to be the most successful as a seller-
buyer relationship can be created and developed.

2) Advertising

One of the key factors in the promotional mix, which contributes to brand building and also how
the market perceives the company, is advertising. It is always a big part of the promotional mix
because of the far and wide reach of advertising and the message that you can send to your
existing and potential customers. Good advertising can build a solid brand for the company. On
the other hand, bad advertising with a wrong message, can cause the brand or product to fail.

3) Direct marketing

While advertising targets a mass-audience, direct marketing targets prospects and customers.
Social media marketing, Email marketing, Internet marketing are all types of direct marketing
used by companies. They have become important in the promotional mix lately because people
are using internet far more than they used to a decade back. Company’s employ direct marketing
in order to engage in one-way communication with its customers, about product announcements,
special promotions, order confirmations as well as customer inquiries.

4) Sales promotions

Sales promotions are one of the most common types of promotion used by companies. Their
main purpose is to stimulate purchasing and sales. While it has the potential of increasing sales,
it is also beneficial for informing prospects about new products on the market or just to recapture
old or lost customers.  Such examples include: coupons, product samples, etc.

5) Public relations

Lastly, public relations enable an organization to influence a target audience and through this,
create a favorable and positive image for the company. The company tries to connect with the
audience by sharing information with them about the company and about the product. If anything
goes wrong on the information front, the public relations department has to step forward and
rebuild the public image.

While establishing your own promotional mix, you need to consider and decide upon several
factors:

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1. Determine which is your target market – in terms of which customers’ needs you are going
to fulfill through your products while understanding the attitudes and behaviors of your
targeted customers
2. Determine your objective – more precisely, what are you expecting to get one your
promotion mix is implemented.
3. Design your message in terms of content and format.
4. Select your promotional channels.
5. Determine your budget.
6. Determine your promotional mix.
7. Measure the results of the implemented program and make the necessary adjustments if
needed.
In order to succeed with your promotional mix, it would be a good idea to take a look at what
your competitors are doing. This does not imply that you copy them as it will not help you at all
since each company has its own identity. Monitoring their ads, promotions and special events
might provide you with a guide of how to promote yourself and differentiate yourself through the
promotional mix.

INTEGRATED MARKETING COMMUNICATION

It is essential for organizations to promote their brands well among the end-users not only to
outshine competitors but also survive in the long run. Brand promotion increases awareness of
products and services and eventually increases their sales, yielding high profits and revenue for
the organization.

To understand integrated marketing communication, let us first understand what does brand
communication mean?

Brand communication is an initiative taken by organizations to make their products and

services popular among the end-users. Brand communication goes a long way in promoting
products and services among target consumers. The process involves identifying individuals who
are best suited to the purchase of products or services (also called target consumers) and
promoting the brand among them through any one of the following means:

 Advertising
 Sales Promotion
 Public Relation
 Direct Marketing
 Personal Selling
 Social media, and so on
Integrated Marketing Communication - Let us now understand what does integrated marketing
communication mean?

Integrated marketing communication refers to integrating all the methods of brand

promotion to promote a particular product or service among target customers. In integrated
marketing communication, all aspects of marketing communication work together for increased
sales and maximum cost effectiveness.

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Let us go through various components of Integrated Marketing Communication:

1. The Foundation - As the name suggests, foundation stage involves detailed analysis of
both the product as well as target market. It is essential for marketers to understand the
brand, its offerings and end-users. You need to know the needs, attitudes and
expectations of the target customers. Keep a close watch on competitor’s activities.
2. The Corporate Culture - The features of products and services ought to be in line with
the work culture of the organization. Every organization has a vision and it’s important
for the marketers to keep in mind the same before designing products and services. Let us
understand it with the help of an example.
Organization A‘s vision is to promote green and clean world. Naturally its products need
to be eco friendly and biodegradable, in lines with the vision of the organization.

3. Brand Focus - Brand Focus represents the corporate identity of the brand.
4. Consumer Experience - Marketers need to focus on consumer experience which refers
to what the customers feel about the product. A consumer is likely to pick up a product
which has good packaging and looks attractive. Products need to meet and exceed
customer expectations.
5. Communication Tools - Communication tools include various modes of promoting a
particular brand such as advertising, direct selling, promoting through social media such
as facebook, twitter, orkut and so on.
6. Promotional Tools - Brands are promoted through various promotional tools such as
trade promotions, personal selling and so on. Organizations need to strengthen their
relationship with customers and external clients.
7. Integration Tools - Organizations need to keep a regular track on customer feedbacks
and reviews. You need to have specific software like customer relationship management
(CRM) which helps in measuring the effectiveness of various integrated marketing
communications tools.
Integrated marketing communication enables all aspects of marketing mix to work together in
harmony to promote a particular product or service effectively among end-users.

A distribution channel is a necessity in business. This lesson will discuss these channels, the
types of distribution systems, and the goods and services that move along these channels.

WHAT IS A DISTRIBUTION CHANNEL?

The distribution function of marketing is comparable to the place component of the marketing
mix in that both center on getting the goods from the producer to the consumer. A distribution
channel in marketing refers to the path or route through which goods and services travel to get
from the place of production or manufacture to the final users. It has at its center transportation
and logistical considerations.
Business-to-business (B2B) distribution occurs between a producer and industrial users of raw
materials needed for the manufacture of finished products. For example, a logging company
needs a distribution system to connect it with the lumber manufacturer who makes wood for
buildings and furniture.

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Business-to-customer (B2C) distribution occurs between the producer and the final user. For
instance, the lumber manufacturer sells lumber to the furniture maker, who then makes the
furniture and sells it to retail stores, who then sell it to the final customer.

Direct vs. Indirect

In marketing, goods can be distributed using two main types of channels: direct distribution
channels and indirect distribution channels.
Direct Distribution
A distribution system is said to be direct when the product or service leaves the producer and
goes directly to the customer with no middlemen involved. This occurs, more often than not,
with the sale of services. For example, both the car wash and the barber utilize direct distribution
because the customer receives the service directly from the producer. This can also occur with
organizations that sell tangible goods, such as the jewelry manufacturer who sells its products
directly to the consumer.
Indirect Distribution
Indirect distribution occurs when there are middlemen or intermediaries within the distribution
channel. In the wood example, the intermediaries would be the lumber manufacturer, the
furniture maker, and the retailer. The larger the number of intermediaries within the channel, the
higher the price is likely to be for the final customer. This is because of the value adding that
occurs at each step within the structure.
Direct or indirect distribution structures may include any combination or all of the following
entities:
 A wholesaler or distributor
 The Internet (direct)
 Catalogs (direct)
 Sales teams (direct)
 The value-added reseller (VAR)
 Consultants
 Dealers
 Retailers
 Agents

A distribution channel is the route through which goods or services move from the company to
the customer or the transfer of payment happens from the customer to the company.

Distribution channels can mean selling of products directly or selling through wholesalers,
retailers etc. The same applies for payment transfer from customers to company; it can move
through a path or can be sent directly to the company.

Functions of Distribution Channels

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Distribution channels basically function to deliver goods from the manufacturer to the customer.

The following are the functions of distribution channels −

 Facilitate selling by being physically close to customers

 Gather information about potential and current customer competitions, other factors and
forces of the environment

 Provide distributional efficiency by bridging the gap between the manufacturer and the
user efficiently and economically

 Assemble products into assortments to meet buyers’ needs

 Match segments of supply with segments of demand

 Assist in sales promotion

 Assist in introducing new products

 Assist in implementing the price mechanism

 Assist in developing sales forecast

 Provide market intelligence and feedback

 Maintain records

 Take care of liaison requirements

 Standardize transaction

Objectives of Distribution Channels

Objectives of a distribution channel are planned as per the target of the enterprise and executed
respectively. The following are the various objectives behind the planning of distribution
channels −

 To ensure availability of products at the point of sale

 To build channel member’s loyalty

 To stimulate channel members to put greater selling efforts

 To develop management efficiency in channel organization

 To identify the organization at the level

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 To have an efficient and effective distribution system for making the products and
services available readily, regularly, equitably and fresh.

Major Channels of Distribution

Here is a list of some of the major channels of distribution −

 Manufacturer → Consumer

 Manufacturer → Retailer → Customer

 Manufacturer → Wholesaler → Customer

 Manufacturer → Wholesaler → Retailer → Customer

 Manufacturer → Agent → Retailer → Customer

 Manufacturer → Agent → Wholesaler → Customer

 Manufacturer → Agent → Wholesaler → Retailer → Customer

Profit distribution decreases as the channel length increases.

Designing Distribution Channels

We have seen what a distribution channel is. Let us now see the designing process of a
distribution channel.

The following steps are involved in the designing of a channel system −

 Formulating the channel objectives

 Identifying the functions to be performed by the channel

 Analyzing the product and linking the channel design to the product characteristics

 Evaluating the distribution environment, including legal aspects

 Evaluating competitor’s channel designs

 Evaluating company resources and matching the channel design to the resources

 Generating alternative designs, evaluating them and selecting the one that suits the firm
best

Classification of Wholesalers
A wholesaler purchases from the manufacturer and further distributes the product to customers
or retailers. Wholesalers can be classified into the following categories as per area of
functioning −
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 Merchant wholesalers

 Agents and brokers

 Manufacturer’s sales branches and offices