Promotion Decisions LEARNING OBJECTIVES After studying this chapter, you will learn: 10.1 Concept and Nature of Promotion 10.2 Importance of Promotion 10.3 Communication Process 10.4 Integrated Marketing Communication (IMC) Approach 10.5 Meaning of Promotion Mix 10.6 Elements of Production Mix (Methods or Tools of Promotion) 10.7 Factors Affecting Promotion Mix Decisions 10.8 Promotion Mix Strategies 10.9 Communication Planning and Control m Summary lm Test Questions .d, its price is decided and its distribution channel tive customers must be informed of its availability ded to buy it. All the activities involved in informing are collectively known as promotion in marketing. ‘dvertising, personal selling and publicity are used for NE A propuct is develope’ is selected, the ProsP© and they need to be persue’ and persuading the customers Sales promotion, Promotion.PRINCIPLES OF MARKET, 10.2 e m \ ure of Promotio' a cept and Nat! n of all seller initiated efforts to set y ‘cn to facilitate the sale of @ product op judes advertising, personal selling 10.1 Con Promotion refers to the coordination channels of information: and Pie he Service. According to Stanton *T ron i sales promotion and tees Sencar with the potential buyers involving Promotion is a process of includes all types of personal or imPersona] prsuasion an diemen. According to the American ens ihe customers and. midi ication with the custome communication with th eae “the persotialyor impersonal process of f s , promi Marketing Association Tinga prospective customer to BUY @ product Or service or to act favourably upon an idea that has commercial significance to the seller.” ‘The main features of promotion are as follows : : (g Promotion is a wide term as it includes alll types of communication with potential buyers and middlemen. (i It involves both personal and impersonal communication (ii) It seeks to inform, educate and persuade potential customers about products, services and ideas. (ix) It has commercial significance for the seller. \ 10.2 Importance of Promotion Promotion is a vital element of the marketing mix of a business enterprise. It is the spark plug of the marketing mix. No business enterprise can sell its goods and services. without informing the people about the availability of products and ea creating in them the desire to buy them. Customer demand is largely ee It must be awakened and stimulated through promotion. The prospective fesiomers ne to be informed about the features, utility and availability of . The purpose of promotion is to inform, » persuade and influence the Bencite eyes The eed. i Promotion has increased due to stiff , widening , rapid changes in consumers’ tasté and growing distance between producers and consumers. vistanbigme —————————————— ee The objectives of promotional activities are as fi > + To Provide Informati orate e businessman carries on promotional Product from the competitive products-' (on DECISIONS 10.3 oso 4 ctive of promotion is not onk x obie Debs Socotra ly to increase one time sale of a product to buil yalty for its brand e ie ran again Grater fore that consumers keep on in facing Sen eae and in gaining Sates Loca nn ae ig it the Ut A 4. To a ee aah of the Product. Promotional activities add ipue 10 2 Prete Y emphasizing its special features. For example, in the oe risement © ee ie aed its whitening power and safety of clothes re ern? e es a higher price and the consumer The image of the product continues to Cen ae: 5. To Eee ee Promotional activities help to ensure steady sales ensuring that existing customers do not purchase the competitors’ products and new ce a are created. Promotion is a tool for facing competition. 6, To Build Image. Promotional activiti favourable image of the organisation. ies are often used to build a Thus, promotion seeks to inform, remind, and 3 s a ¥ ersuade pr ti customers’ and to modify their behaviour. a :) poy im PEbke FOF es? 10.3 Communication Process Communication is a unique tool which marketers use in an attempt to persuade consumers to act in a desired manner. The purpose of marketing communication is to directly or indirectly influence individuals, groups and organisations. Communication can be written, spoken, through body language. pictures and other means. Like other forms of communication, marketing as shown in Fig. 10.1. ‘SENDER [encoping] MESSAGE |aamp[peconine jaw RECEIVER |—wedie communication is a process .g Communication Process ‘Marketin: FIGURE 10.1: s begins with the sender who is the 5 o ae to inform and persuade the source of communication. fp the communica jon process. potential buyers js the sender the process of converting the information into encoding is ihe receiver is likely to understand. 2. Encoding. : words, symbols, Be wie aaa PRINCIPLES OF MARK; ETN ane ication. It may - iesapntenteciseomnuioen consist essage is the con o ee a ot me eee unds, jingles and other details. The sene z) ire Use Words peccenae ‘or other signals. ‘The message is encode in a way that symbols, body language the receiver may interpret in the 4. Medium. The sender u the message can be transmitted type of message involved. The channel sh {yPrraction, It must provide direct access to 5. Receiver. The sent message may reach 0 o may be an individual, a group or an orgnisation. message to derive meaning from it . Decoding. It is the process of convertin information in order to understand it. : 7, Feedback. Communication is a two-way process and remains incomplete response to the message is called without feedback. The receiver's reaction or , € feedback. It is the beginning of another communication in which the receiver becomes the sender. The feedback mechanism helps the original sender to monitor how accurately the message was interpreted. 8. Noise in the communication process refers to any disruption or interference that may hinder communications ded manner: tle medium or channel through whic The channel used must be appropriate to the ould also be free from noise ang the receiver. me or more receivers. The receiver e receiver decodes the e inten a suital BAER g the encoded message inty 10.4 Integrated Marketing Communication (IMC) Approach one often different marketing and communication functions are managed as 3 ly pparnie entities, Business firms must realise that promotion and other elements pereerketing aa must be coordinated to present a consistent, unified SHERBET Pie ie i get market. Integrated marketing communication is an Ca ana ee marketing and promotional activities to make Heer the mi ion to target customers more effective and efficient. Serene ea il can Association of Advertising Agencies, “Integrated, HL Reece Ge aa is a concept of marketing communications planning seateate radars cao value of a comprehensive plan that evaluates the advertising, direct ant of communication disciplines—for example, general these disciplines to mae sales promotion and public relations and combines impact, through secmiece ian; consistency and maximum communications Integrated mark less integration of discrete messages”. marketin, eting communicati ate communication strategy that ee requires firms to develop a total (not just promot cognises that all of a firm’ ‘ket marketer does song motion) communi oa deta sa cate with its customers. Everything # improvement lessage to the target pee act over the traditional a ‘get market. The IMC approach is 2 totally separate. It nega chat of treating various promotion’! levelop the most suitable and effectiv®ti pECISIONS 10.5 to contact customers and other Ben eae interested groups. Integration of different Ips to maximise return on investment gem" eting and promotion. However, a * Applic: pian war between different depa eee of IMC is difficult as there is # ao ea ieee Adve we Personal selling Sales promotion a + eel Direct Marketing FIGURE 10.2. Integrated Marketing Communications Integrated marketing communications, (IMC) means carefully integrating and coordinating different communication channels to deliver a clear, consistent and compelling message about the organisation and its products. IMC builds strong brand identity in market place by tying together and reinforcing all the messages and images. It requires recognising all contact points where the customer may encounter the company, its products and its brands. The company must strive to deliver a consistent and positive message at all sone ee i e their various communication channels. Companies often. fal te ee teal can result in confused images of Conflicting messages from gift ives identifying the target audience and 3 iC the company and its Oe a Lemenl programme to elicit the desired developing a well-coorPRINCIPLES OF MARK Th « arget audience, Communica, dentifying tae rE awareness, provi 10.6 ve. After i mage from the audience. After Ir eg, ny respol " company ar ction and obtaining pure fhe comps convic! pjectives of # se, building © ‘Then the mé ~ edge, creating preference, keting ‘communication. Th eSsage |, ‘action can be the objectives of marketi ‘i, The contents, structure : Fourthly, Js (personal ani . the media or channel poe te ee promotion mix is decided keeping f promotion. v ae ee the following steps to integrate Its marketing A company communications: « Analyze tren ability to do business. most. Determine the strengths an‘ function. Develop a combination 0} strengths and wealnesse® ons spending throughout the organtzation, . lit the pockets of communi a single budgeting process. Reassess all communications expenditures by-product, promotional tool, stage of the life cycle, and observed fect. . identify all contact points for the company and its brands. Work to ensure that communications at each point are consistent with your overall communications strategy and that your communications efforts are occurring when, where, and how your customers want them. * Team up in communications planning. Engage all communications functions in joint planning. Include customers, suppliers, and other stakeholders at every stage of communications planning. * Create compatible themes, tones, and quality across all communications media. Make sure each element carries your unique primary messages ae ee pe ih Spee ke achieves greater impact and prevents Moers pee ion of work across functions. leasures that are shared by all communications element. Develop systems to eval uate i communications activities. ial Laas a nai * Appoint a director responsible mmunication for " icatt efforts. This move encoura; uitian cee ies. effici i eae waite eae eee Abats San ea GON SA Today w P Gonring, “Puttin, ; ieee i Integrated M i, Totey", Publie Relations Quarterly, 1994, pp, aed Communication t of the message are deciq, a. form personal) are selected, Fina” few the unique characteris.” ee that can affect your company, uf and external—thai ; aa ace for areas where communications can help the ‘d weaknesses of each communication f promotional tactics based on these 22:8 Meaning of Promotion tion mix’ son of promotional te Seta to refer to the combination of different kinds by a business enterprise to create, maint Mix“he jpow0rON — vedi ofa 10.7 Aon © sase demand for its products and sery; MN on Tour basic sale of promotion, viz., oe ie Sauls oneer EN Baan Orme een) Giacinto a permination of Promotion mix 1s Important Because Gr taal Gace ea pepination of promotional activities has to be ced ney ee ly, cromotional tool May riot prove effective. In the modern tuciucsoen ta ee ly | Mopot depend upon a single technique of promotions Ce onal tools in different degrees. § sai importance and their value inayranaed tae reporeyLicalscrgtel Ai ere is ilor-ma ine soe nde a aman ml so mix represent alternative ways to influence buyers. Thereime ce ae cross-substitution among them. In order to develop a promotional strates: alternative combinations of personal selling, advertising, aie eer Ga publicity might have to be tried. Promotional strategy is based aus the product market strategy and overall marketing strategy of the firm. Once the overall promotion mix is decided, objectives, policies and strategies must be formulated for each component of the promotion mix. Alarge business enterprise in a competitive market cannot depend exclusively ona single promotional tool. It has to employ all the promotional tools in different degrees depending upon the nature of the product, type of market, stage of product life cycle and availability of funds. The marketing department decides an appropriate combination of different promotional tools and allocates budget for them. While deciding the promotion mix, the following considerations need to be kept in mind : () A combination of promotional tools is to be used because any tool alone may not be successful. ‘ (i) All promotional tools are not equally important and their relative rea change from time to time. i cieniticenes et Seen mix, Every firm has to design and develop its own promotional mix. Different promotional tools are alternative ways of influencing buyers/;One tooljean tosame exient) be subst aed by anothensThere can be different combinations of advertising, personal sel ling, oe promotion aaa on ee er tereaina onl o besene une apersculae Periog willdepend pul ity. ‘ ae riee Ket strategy and its ig strategy. upon the firm's produc! dynamic concept and need to be reviewed from Thus, promotion mix is f ifeation and improvement should be made in time to time. Necessary mo! es in the environment of business. promoHarimaie in tlewponccue Coane otion Mix 10.6 Elements of forie of Promotion) ds 0 i (Metho! : is the process of assisting and persuad A selling ae 1. Personal Selling. Personal oduct or service nea, face-to-face situation, It * [Oo a prospective buyer all promotional tools are not ge with changes in the business liePRINCIPLES OF MAR, ING 10.8 tween the prospective buyer ang 4, involves direct and pers (Soya conversation oF COMMUNION. Perse selling is the most effective tool of Apel eoalhgade BE dane EE representative and the prospective corer TESS Message can be adapted or customized to suit the SP fs Es fe (i#) Individual. Personal selling is a one to one me 2 of promotion rathe, than mass communication method. It is focussed. ; (iif) Two Way Process. The sales person can paswenthg queries and doubt, of customers. The feedback is immediate and clear. a (iv) Complete: Personal selling not only creates ae fe! does the complete job of selling. The sales person can build long term ang mutually beneficial relationships with customers. — (v) Sales Force Management. Personal selling requires management of sales force which is not necessary in other methods of promotion. Sales force management involves hiring, training, compensating, motivating, supervising and leading sales persons. TABLE 10.1: Merits and Demerits of Personal Selling 1. Most persuasive tool of promotion 1, High cost per contact 2. Allows two way communication 2. Training and motivation of salesforce is difficult and time consuming 3, Most flexible technique 3. Poor sales presentation can hurt company image and sales 4, Provides immediate feedback 5. Essential in case of technically complex products advertisement, is diss eminat identified sponsor." enone r more media and paid for by the Advertising is any pai c Paid form of non- A services by an identified AO Personal presentation or promotion of ideas, goods of i — American Marketing Association ing are as follows : nal, Advertising is involved is non-personal a: a ct between. the advertiser and ene a pening Jace cont] norton DECISIONS r (i) Mass Communication. Advertisin Identified Sponsor. ; Dae caine ofitic ee ‘dvertisement is issued by an identified sponsor. Piiciacten once er is mentioned in the advertisement itself, is to inform customers acon The baste purpose of an advertisement peered me product or service and to persuade (vi) Controlled. In advertising the s ofits contents, size, length, ean contols the message in terms ing, graphics and the target audience. its of Advertising 1.Can reach a large number of people simultaneously 1. Exposure time is brief lawicbst per contact 2. Quickly screened out and forgotten 3. Effective for creating brand image 3. Criticised due to high invisibility 4.Variety of media 4, No feedback 5, High degree of flexibility 5. Incomplete tool of promotion 3. Publicity. Publicity is a non-personal and non-paid stimulation of demand for a product, service or a business unit by planting commercially significant news about it in a published medium or by obtaining favourable presentation of it upon radio, television or stage that is not paid for by the identified sponsor. “Publicity means any form of non-paid, commercially significant news or editorial comment about ideas, products or institutions”. The distinguishing characteristics of publicity are as follows: 1. Publicity is not a paid form of promotion. No direct payment is involved in publicity. 2 i, des any commercially 2, Publicity inclu in the media. in terms of size, contents, length, the message . 1. 3, In publicity the See of mith the media. graphics, timing, w duct, service. organisation or idea. 4, Publicity may be about ous and negative. Positive publicity is a news 5, Publicity can be pe ge ‘a firm. on the other ae ee publicity - t is ben tal to the interes of the S pp Coe item that is See nay the target audience as itis controlled significant news or editorial commentPRINCIPLES OF Maj RKE ING 10.10 in a short period. | ass audience withi than an advertisement, 7, Publicity can reach @ ™: 8. Publicity can provide greater information publicity is relatively inexpensive as the firm does not pay for the time ce in the media. oT and Demerits of Publi TABLE 1 1. Low cost Control is not in the seller’s hands 2, Can stimulate demand 2. Can be negative and hurt brand image, 3. Can buiid image 3. Content decided by the media 4 Consumers may pay more attention PABST ep rr oustion pitvinclides all’ thegactivities> iothety ¢Naugusy selling, advertising and publicity, that stimulate consumer purchasing and on efiectiveness Sales promotion activities are designed to supplement and ee advertising and personal sli Aes a oy eanapies) eoupoust preity . point of purchase displays, shows and exhibiti (Sem oe aaa plays, shows and exhibitions are examples of sales Advertising Promotion Mix FIGURE 10.3: Promotion Mix Sales prom eet eae eae store:sqnor08 DECISIONS of 10.11 ling. The basi 1 ying “rough aha eae sales promotion is to stimulate on- Ss c 7 inefotion 1s to supplement advertising eae estes objective of sales P erican Marketing Association, “Sales erecta ae 4 According to the ales activities that supplement both persona) pecific sense, refers to ‘dinate and help to make them e Personal selling and advertising; ffecti i o ive, such as, displays, shows and sitions, demonstrations and other similar selli, ea atte ee ae selling efforts not in the ordinary gales promotion activities hel Bee er ata Aen SaaS ne products, to make immediate Phe aes tcecnitre ts) attra ompetition. Sales promotion also en ee ayeetak another brand. Sales promotion activities supplement tlsing and personal selling. The main weakness of sal promotion is that its effect lasts only till the incentive ie offered, Sales promotion activities offer the following advantages : 1. Low Unit Cost. The cost of sales promotion per unit is quite low. 2. Sales Support. Sales promotion provides strong support to personal selling and advertising. It serves as a bridge between them. 3. Faster Product Acceptance. Sales promotion makes a product acceptable to consumers faster than any other technique of promoting sales. 4. Effective Control. Management can have an effective check on the results achieved through sales promotion schemes. The costs incurred in and the benefits derived from these schemes can be analysed. 5. Best for New Products. Sales promotion efforts are best suited for new products. Sales promotion provides access to a large market and personal contacts with customers and dealers. Need for sales promotion activities has increased due to growing competition, proliferation of brands, trade pressures, and the need for quick returns. However, sales promotion schemes suffer from the following crabs : ae i thro sales promotion schemes are artific: on a re mmm Hk Teter the cot ofthese the price of products. Incentives by raising (™™ Pure offered only during particular seasons. (b) Sales promotion =! Ihort-term results. AS soon as the incentives Therefore, they produce Sh0r Ts, are withdrawn, the oes romotion schemes are mainly intended to (9 There is a feeling that sales P sell a sub-standard product. TABLE 10.4: Merits and Dene be of Sales Promotion Pes ois 2. Can be easily‘S SALES PROMOTION OBJECTIVE: > Increase in sale volume. The lure of on offer’ brings customers who othervive WOUA Hck by ng Induces customers to buy more. Increase trial, The customers who have not tried the product are induced t0 try because of spec incentives lke free sample or trial coupon. repeat 1d the future purchases or incentives foy Enhanced buy. Some promotions bring forwa tee ext buy, for instance, discounts off on next purchase or collect specified number of wrappers ta gap refund, jotions like joint promotions Creating awareness. Sometimes companies devise special prom (hey two companies Join) or tie-up with special groups like charities to build name awareness for the brand. Gaining shelf space and displays. By devising special promotion events firrns can gain preferreg ‘space at the counters and shelf at the point of sale. Block competition. Promotions are often used to block the competitive rnoves by directing customers attention to a promotion for instance holding a contest or a game on a very large scale, TABLE 10.5: Types of Sales Prom Rueda Ocul oe ‘Sales Meetings In-store Dernonstrations Sales Meetings Contests Premia Sales Manuals Dealer Gifts Samples Product Demonstration Point of Purchase Materials Coupons Contests “Trade Shows and Exhibitions Trading Stamps Sales Bulletin Advertising Allowances Refunds Business Catalogues Contests : Direct Mailing TABLE 10.6: Distinction between Advertising and Publicity EoeennsJon DECISIONS Ne | yt , for Increasing Use of 10.13 pss Sales Promotion Fg promotion activities have hegg ; ee die Sailoning factors: me increasingly popular among business @ identify a product frony commupantes are increasingly using branding t increased tremendously Brees Products, the number of beats as features cannot be a dvertised = become less distinctive and product promotion to ensure their share, ¢ctively. Companies adopt sales ree © Of the limited shelf space with the ii) Trade Pressures. Ther, & provide support and Say aes Pressure on manufacturers to chain stores and other forms of retarce oromth Of super markets, promotion to assist retailers eee Many firms now use sales Product managers are also under ereby secure their cooperation. (i) Growing Competition, Whee” Ere to increase current sales. promotional strategy to wenn ; uennsetiiten adopts aggressive manufacturers are affected. ie gran’ image, the sales of other | manufacturers also start sales promotion activiten le wy ioe a ‘promotion war’, Competitors are using eres cere aie their offers because competing brands are ae differentiated ae (iv) Recession. During a recession, consumers can be persuaded to buy through rebates, bonus offers and other sales promotion activities, Therefore, manufacturers make use of these activities to reduce inventory and to improve cash position. (v) Quick Returns. Sales promotion activities are launched quickly and | yield faster and more measurable results than advertising, These activities also motivate the over-burdened and lethargic sales force. Therefore, there is widespread use of sales promotion schemes. Advertising efficiency has declined due to rising costs, media clutter and legal restraints. , Due to specialisation, new staff positions have been (vi) Competent Staff. ee Executives with specialised qualifications in several companies. i fave ante! faith in modern techniques of sales promotion. ii) Change in Attitudes. Earlier senior managements were of the view (vii) ge Pao tepailed the image of their brand. But the success that sales prom ales promotion have made sales promotion more of compen oe 5 agements. Consumers and retailers have become acceptable to su qua more deal-oriented. R) means the management function lic relations (P! 5. Public Relations. Pul ithe policies and procedures of an ttitudes, iccntites ecutes a programme of action (and which evaluates public a! and organisation with the publ nderstanig and acceptance. communication) to ¢ stages! PR requires the foll ne @ evaluation (9 The determination > of public attitudes. Research may be10.14 conducted for this purpose. Suc! a serves as an early warning system. S communication. (i The identification of public interest. Rate (tt The development and execution & public understanding and accep’ Press releases may be sent to anr be organised to create goodwill in the in the media to state the company’s P ance. a communication programme tg PRINCIPLES op “ARKETy, c h research provides inputs for Planny, ecures internal support and ang eases policies and procedures of an organisation y, Bain, nounce new products. Special events community. Advertisements may be = position on a controversial issue Public relations offers the following advantages : rT 1. Nature 2. Contact 3. Cost 4. Flexibility 5. Sale 6. Customer satisfaction 7. Coverage Meaning 2. Time Horizon 3. Regularity 4. Focus S. Techniques 6. Scope 7. Contact 8. Orientation TABLE 10.7: Distinction between Advertising and Personal Selling ‘A mass selling method. Impersonal — no face-to-face contact. Less costly. Less flexible, Cannot result in immediate sale. Cannot remove doubts of customers. Wide TABLE 10. ‘Any paid form ofnon-personal presentation and promotion of any product, service or idea by an identified sponsor. Long-term, build-up image of the company and its product. Repetitive and routine, Inform, persuade and remind customers about the firm and its Products. Newspapers, Magazines, radio, TV, ciner Outdoor and other media, Very wide, Moves buyers towards the product. Consumer-oriented, One to one selling method. Personal — face-to-face contact, More costly. More flexible. Can result in immediate sale, Can remove doubts of customers, Narrow Difference between Advertising and Sales Promotion ee E Marketing activities designed to stimulate consumer purchasing and dealet effectiveness. Short-term, increase immediate sales. Non-tepetitive and non-routine. Push product towards the buyer and supplement advertising and personal selling, Free samples, premium offers, contests displays, free offers, ete. Limited, Moves product towards buyers.oni DECISIONS m ™ credibility. Public relations communi ae public does not realise that the eae enjoy credibility because File in newspapers or magazines discussing the iGra stg or CERIN, sated as more truthful than an ad sing the values of aspirin may be Be advertisement for a particular brand of Ceca g.Low Cost. In both absolute and relative t " i lerms, the cost of very se Lamarrinnern Programmes require Hae eee eee d expt 7 puttin, an uted. ig the programme together and getting it 3. Avoidance of Clutter. Public relations mess: j caret these are typically perceived as news cae are not subject to clutter eet oe ae oT about technological innovations, medical breal , etc. a multitude of inquiries. The iri the firm some quality sales leads. Ca eae 5. Ability to Reach Specific Groups. Some products appeal to only small market segments. Therefore, it is not feasible to engage in advertising to reach them. The best way to communicate to these groups is through public relations. 6.Image Building. Effective public relations helps to develop a positive image for the organisation. A strong image is insurance aj ainst later E Bi misfortunes. ‘The main disadvantage of PR is that it may not complete the communicating process. The receiver may not make the connection to the source. PR may also misfire through mismanagement and lack of coordination with the marketing department. The key to effective PR is to establish a good programme, mostly of public interest, and manage it properly. the What social media can do 1. Meet new people 2. Stay in touch with friends 3. Make contacts for work 4, Promote yourself 5, Learn something new 6. Share knowledge 7. Change opinions 8. Be creative 9, Express yourself 10. Make money 11. Have fun/be entertained 12. Feel like you pelong 13, Share new experiences i—————— 10.16 14, Earn respect 15, “Hang out” or waste time . 16. Keep up to date . 17, Explore the world around me 18. Manage my life better e's opinions d 19, Seek other peopl» viass of PR. It is necessary to judge the effectivenss | Measuring the Effectiveness ee improvements ma’ Beye att objectives and results, team approach can by Personal observation, matching ults, 1 rer to measure the effectiveness of PR. MBO, public opinion, surveys, inter | and external audits can also be helpful. HAL has developed the following crit public relations : () Total number of impressions overtime. (i) Total number of impressions on the target audience. (ii Total number of impressions on specific target audience. (iv) Percentage of positive articles over time. (v) Percentage of negative articles over time. } (vi) Ratio of positive to negative articles. | (vi) Percentage of positive/negative articles by subject. | (vii) Percentage of positive/negative articles by publication or reporter. (i9 Percentage of positive/negative articles by target audience. [10.7 Factors Affecting Promotion Mix Decisions ] SMO SNA AAS While determining the promotion mix of eee eee p mix of a business firm, the following factors ere of Product. Different products require different tools of promotion. Bue Ruste goods (like plant, machinery, equipment, etc.) personal payee Paeie ef ces because a great deal of pre-sale and after-sale services ell and install the product. Such products are often made t0 specifications and the market is well such as air-conditioners, Rael ane ae PRINCIPLES OF my |g aes teria to measure the effectiveness g in case of consumer : ising and publici goods, parti ity are more im] Use. In case of these goods Rie cularly low-priced convenience goods for buy ‘ ot Brive and no installation eee are generally made at the point (ii) Nature of Market, i7 wf stom $ di we val ! t10N pEcISIONS are scattered widely in diffe 10.17 rent sin tn seme a UY, tng ers ec ie juences method of promintiga Hi to sell the product. Type require different types of promotion as o lucated, urban and industrial jd customers, compared to illiterate, rural and th nal yseb0) onsumer markets, sales promotio on the other hand in busines % ‘S$ markets advertising can perform the following hivetions in beese scant jess markets: the prospects a (a Making the prospects aware of the they become willing to see the company's sales represcntative. that ve. (b) Making the prospects understand the new features in a product. (0 Reminding the prospects about the product in an on pthers (a) Generating sales leads for sales representatives. os (e) Sales representatives can use cor b and products. mpany’s ads to legitimise their company (f) Advertising can remind customers how to use tl dt them about their purchase. Se Personal selling can make an important contribution in consumer markets n and advertising, are used more | inthe following ways: aim features, utility, etc. Therefore, a © and Temi customers and to meet com ea wad ee in the promotional efforts and sales promotion e, drastic cu mad features which must be me! is an impersonal and mass (a) Sales representatives can persuade dealers to take more stock and devote more shelf space to the company’s brand. (b) They can build dealer enthusiasm for a new product. (9 They cam sign up more dealers to carry the company’s brand. (iii) Stage of the product's Life. During the introduction stage the main of promotion is to create primary demand by emphasising the product's ‘ombination of advertising and publicity is ain distribution coverage and sales wired. Personal selling may be used to manic to induce eaaaottied the maturity stage, sales promotion, advertising eeded in that order to ensure continued patronage of yn. In the growth stage demand gains momentum eo ne Be tonned down. During the decline personal selling are 0! ains strong. ‘the promotional budget of the firm is an ae ty of Funds. ’ if the funds available for promotional (iv) Availabilit omotion MX. tional methods can be used. But important determinant of Pr aes are large, a com ination Eas ‘be selective in use of promotional traints the ‘effective in the short run. Advertising in case of financial cons .¢ and more tools. Personal selling 35 cas ee number OF customers. attract 4 ferioiauccmm moun has, ite; unique is costly but can a rechnid' the tion mix. Advertising (v) Nature of the 7% stood belor deciding "Therefore, advertising can be thod of promot aé PRINCIPLES OF yyqy Hey Ny ins: ct and for genera age of the product and for generatin, 1 a long-term image of : used fr both building along: term ima O° Or eration and ts, theres sales. Personal selling invo pe and building, buyers! preferengs Pa effective in cultivating relator induces buyers to buy now. It can res promotion offers incentives and incu Public relations enjoys high cregq'® & E and/ boost sagging sale i ‘did quick response and/ boos! Siem other tools, of promotic y e supplement the Re cerategy. Promotion mix depends to a great ex, (of) Promotional Stree ey. tir pull strategy: to create. sales, ta whether a company chooses a push or pull state Ye strategy, the manufacturer ind Bee eee Bc rant ito consumers, Personal selling and trade promollon are on . vie stra : ers to a Bsteny On the other hand, a pull atratsay vols, ne cine ane ae dealers to carry the product. Advertising a appropriate for pull strategy. i z (vii) Readiness of Buyer. Different tools of promotion are effective 5 é At the awareness stage, advertising different stages of buyer readines " UO ae publicity are more effective, At the comprehension stage advert stn and perso selling play a greater role. During the conviction stage, personal selling is mex effective. Personal selling and sales promotion are effective at closing the sale stage. Thus, advertising and publicity are more effective during the early stages of the buying decision process whereas personal selling and sales promotion are more effective during the later stages. (viii) Product Strategy. A branded product with market penetration can be promoted through advertising, On the other hand, a nonbranded product with little market penetration requires personal selling. (i) Distribution Strategy. Personal selling is more effective when the direct selling is used. In case of long distribution channel, advertising is more appropriate (x) Pricing Strategy. If the brand is priced higher than the competition, more personal selling is required to persuade middlemen to store and push the brand, If the brand is priced lower little promotion may be needed. \ 10.8 Prom, 8 ay Ny re, The arene from two basic promotion mix strategies—push, and pull. strategies. The push stracsg eee Promotion tools differs for push and pull members to indice thems a eae volves Pushing the product [werd chant’ The producer saree hg BOBS the product and to Promote it to final consumers: ~~ron DECISIONS ym 40 ( for the product, the retailers wiy ler’ . ll as ra ne producers. ‘Sk the wholesalers, the wholesalers Producer Producer Efforts by Producer Wholesalers| / en Wholesalers, . Retailers Reta . lors. Efforts by De: J alers Tetons by Producer Consumers ce consumers Push Strategy Pull Strategy FIGURE 10.4. Promotion Mix Strategies | : ieeear company takes into consideration several factors while designing its promotion mix strategy. Type of product, type of market, product life stage are | Fie of these factors. Pull strategy is more common in case of consumer products markets while push strategy is more popular in case of industrial products markets. In general, personal selling is used more in case of expensive and risky roducts and in markets with few large sellers. The effects of different promotional ith stages of the product life cycle. In the introduction stage, ty create high awareness. In the growth stage, advertising ful. In the maturity stage advertising is needed only to In the decline stage, advertising is used as | ey : fools also vary wil | advertising and publici and publicity are power | femind consumers of the brand. | feminder, But sales promotion remains strong. n between Pull Strategy and Push Strategy | pies Sl ‘Middlemen 1, Target Group End users ‘i Selling the product 2. Purpose Creating deman« Primarily industrial products 3, Suitability Primarily consumer products ee ane 4, Speed of promotion Fast 7m Already available 5, Availability of productto Needs reinforceme! consumer Trade journals ‘ c 6 Method of Pe | newspapers: a Sales calls on dealers (a) Advertising sales calls on Ceo mnomy packs, Trade discounts, dealer contests, Samples, COUP! \ g and Control nication « ae 10.9 Comm' total marketing communication and an effective The process of acvelOPing ye followind a prodotant yee aaa 10.20 PRINCIPLES OF bg Mh, all, the marketing comr nce. iret of all, t 4 COMMUN Ie, tifying the Target Audience: rn nay be the ent ato ie hae “er ee target audience. The audience bi av ste ieee User must identify clear ret aking the buyin. decision NeINg tt muy or potential buyers nsist of individuals, groups oF the gen e targeted. The audience may CO! , ey e : Eile. he target audience will determine what Is to be sald, how, when, yj! and who will say it 2. Determining the Objectives of Communication. Once Hig target audiens, at respo! ougl oe Is defined, it is necessary to decide wh Se eee stages ace depends upon the buyer's readiness stage. yet it purchase comin ss ome, ng sh created. In case liking exists, preference is to be developed. Then the target cudience has to be convinced. Finally, the objective is to ensure that the audlenge buys the product or service: 3. Designing the Message. After deciding the desired response, an effective message 1s designed. An ideal message 1s one which can get Attention, hold Interest, arouse Desire, and obtain Action. This framework is known as AIDA model, Three issues are significant in developing the message: (i) Message Content — what is to be said. Three types of appeals — rational (e.g., quality, low pric c.) emotional (e.g., love, pride, joy, humour, etc.), and moral (e.g., equal rights for women, environmental protection, etc.) can be used in the message. (ii) Message Structure —how to say. There are three issues in message structure: (a) Whether to draw a conclusion or leave it to the audience. (b) Whether to present one sided or two sided argument. (Q Whether to present the strongest argument first or last. | (iii) Message Format — it consists of headline, copy, illustration, colour, words, sound, voice, pictures, etc. i Ba Rica. oe Se eh communication should be used and non-personal. Sale persons are Saat ae he peer Channels consist of print media (newspapers, magazi . Non persor men Grado, television, ete), dissing oan agazines, direct mail, etc.), bi : media (audio tape, vi nia ee signs, billboards, etc.), electron 5. Deci Ged. be spent eters Recrmeee Budget. The total amount of money sales, competitive parity, sear | Several methods — affordable, percentage ° 6. Deciding the Ne and task are used for this purpose. advertising, personal selling, eaten Mix. In this step the relative focus o acon mein, ply eal ON are given above, are considered in deciding the promot?a jquoTion DECISIONS uring the Results of Pr ap2s 7. Meas" . ion, jn. sts impact on the target audience ts See mening the promotion plaguing the target audience whether they recognize _ eee be collected recall the message, how wy they read, heard times they read, heard or saw it: wi PY ne message, and change in their ae prints they recall, how they feel soeiits of promotion can also be measured in term, pr meaning and Nature of Promotion : Promot ; potential customers. tis both personal and ae ee ear Importance of Promotion : Promotion provides informati : the product, highlights utility of the product, Sulboaelesd ed bance jae aaa Communication Process : It consists of sender, encoding, mee ici Geen eet feedback. | \g, message, medium, decoding, receiver integrated Marketing Communication : Coordination of all i of marketing mix. all tools of marketing and elements Meaning of Promotion Mix : A unified mix of different methods of promotion. Methods or Types of Promotion : Advertising, personal selling, sales promotion, and publicity Factors Influencing Promotion Mix : Nature of product, nature of market, stage of the product life cycle, availability of funds, effectiveness of different methods of promotion. Promotion Mix Strategies : (1) pull strategy aimed at pulling buyers to the product or service, and (2) Push strategy which seeks to push the product or service towards the buyers. Communication Planning and Control : (i) identify the target audience, (ii) determine Communication objectives, (ii) design the message, (iv) choose the media, (v) decide the total promotion budget, (vi) decide the promotion mix and (vi) messure the results of promotion. a a ee TEST QUESTIONS What is meant by ‘promotion’ in marketing? Explain its nature and importance. What is Integrated Marketing Communication? Describe its significance. L a - ix? Explain its elements. 3. What is Promotion M' ion of promotion mix of a firm. 4. 5. ce the determinat . Discuss the factors that influent® io. pMcG-firms whereas pull strategy is . “Push strategy is better s". Do you agree? Give reasons, better for manufacturers of sndustil Pe ecing communication for a new brand 6. Discuss the steps 1m eee) at people in higher age groups. (DU, 2007] | 2 SSSR ce ny i a oo ais j What is commu) les promotion? F rete : price and non: BACs Bias of prometion techni Bean store 9. Differentiate bet ane reasons for t8 gr0Wing importance in India, relations. selling? Explain 10. What is pe!