UNIT – I

INTRODUCTION TO ADVERTISING
WHAT IS ADVERTISING?

When a product is manufactured, its existence needs to be made known to the general public, Otherwise the
product will not sell. Advertising draws the attention of potential consumers to a product. Advertising is a way
persuading potential customers to buy the product. Advertising informs potential Customers of the products
functions and features. Good advertising creates a demand for a product.

Good advertising may even create a brand identity for a product or series of products. Advertising seeks to create

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an image surrounding a product, so that customers feel that they need it. Advertising can promote a new product

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and increase sales of existing products.

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STAGES OF ADVERTISING:

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Advertising begins to work when the general public become aware of a products existence. Advertising then aims

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to develop customer interest, so that potential customers want to know more about the product. This should be

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followed by potential customers feeling a need to own the product and finally purchasing.

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DIFFERENT METHODS OF ADVERTISING:

Placing advertisements on TV, running as commercials between programmes.

Product placement in TV programmes, such as a well known actor drinking from a branded can. Audio
advertisements on the radio.

Printed advertisements in a newspaper or magazine.

Place advertisements on the Internet, through one of the major search engines such as Google.

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Sports sponsorship, such as Formula One Racing.

Direct Marketing, sending letters / leaflets to the homes of potential customers. Telephone

marketing, attempts to interest potential customers by ringing them directly. Logos and symbols
on clothing.
EVOLUTION OF ADVERTSING INDUSTRY

There are four very influential inventions that have shaped the media and thus the advertising industry - the
printing press, radio, television and the Internet. The printing press made the wide dissemination of information
with words on paper possible, mainly advertisements in newspapers and magazines. Selling material had to be
created and advertising agencies were born.

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The first advertising agency, Volney B. Palmer, was opened in Philadelphia in 1841. By 1861 there were 20

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advertising agencies in New York City alone. Among them was J. Walter Thompson, today the oldest American

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advertising agency in continuous existence. Radio became a commercial medium in the 1920s.

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For the first time, advertising could be heard, not just seen. Soap operas, music, and serial adventures populated
the new medium, and as radios appeared in virtually every home in America, sales of products advertised on the

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air soared. Advertisers rushed to write infectious advertising jingles, an art form that still has its place in the

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advertising repertoire of today.

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Then television changed everything. Although TV was invented in the 1920s, it didn't become a mass commercial

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medium until the 1950s when the prices of television sets began to approach affordability. Print and radio had to
take a back seat because, for the first time, commercials were broadcast with sight, sound and motion.

The effect of the telvesion on the advertising industry and the way products were sold was remarkable. Advertising
agencies not only had to learn how to produce these mini movies in units of 30 and 60 seconds, they had to learn to
effectively segment the audience and deliver the right commercial message to the right group of consumers.

Cable television was the next great innovation, offering a greater variety of channels with more specific program
offerings. That allowed advertisers to narrowcast. Before the advent of cable television, the networks attempted to
reach demographics by airing at different times throughout the broadcast period. Soap operas were broadcast
during the day to reach women, news in the evening to reach an older target audience.

Cable television, on the other hand, brought with it channels like MTV that catered to young music lovers, ESPN,
for (typically) male sports fans, and the Food Network, for people who love cooking (or at least love to watch
others cook). These new advertising channels were delightful for advertisers who

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wished to target certain audiences with specific interests, though less so for the networks who saw their share of
ad revenue dwindle.

TYPES OF ADVERTISING:

A successful advertising campaign will spread the word about your products and services, attract customers and
generate sales. Whether you are trying to encourage new customers to buy an existing product or launching a new
service, there are many options to choose from.
The most suitable advertising option for your business will depend on your target audience and what is the most
cost effective way to reach as many of them as possible, as many times as possible. The advertising option chosen
should also reflect the right environment for your product or service. For example, if you know that your target
market reads a particular magazine, you should advertise in that publication.

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The following list is an introduction to advertising tactics that you could use. Remember, you can always be

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creative in your advertising to get noticed (within advertising regulations).

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Newspaper:

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Newspaper advertising can promote your business to a wide range of customers. Display advertisements are placed

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throughout the paper, while classified listings are under subject headings in a specific section. You may find that a
combination of advertising in your state/metropolitan newspaper and your local paper gives you the best results.

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Magazine:

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Advertising in a specialist magazine can reach your target market quickly and easily. Readers (your potential

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customers) tend to read magazines at their leisure and keep them for longer, giving your advertisement multiple

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chances to attract attention. Magazines generally serve consumers (by interest group e.g. women) and trade
(industry/business type e.g. hospitality).
If your products need to be displayed in colour then glossy advertisements in a magazine can be ideal - although
they are generally more expensive than newspaper advertisements.
Magazines do not usually serve a small area such as a specific town. If your target market is only a small
percentage of the circulation, then advertising may not be cost-effective.

Radio:

Advertising on the radio is a great way to reach your target audience. If your target market listens to a particular
station, then regular advertising can attract new customers.
However, sound has its limitations. Listeners can find it difficult to remember what they have heard and sometimes
the impact of radio advertising is lost. The best way to overcome this is to repeat your message regularly - which
increases your costs significantly. If you cannot afford to play your advertisement regularly, you may find that
radio advertising does not generate strong results.

Television:
Television has an extensive reach and advertising this way is ideal if you cater to a large market in a large area.
Television advertisements have the advantage of sight, sound, movement and colour to persuade a

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customer to buy from you. They are particularly useful if you need to demonstrate how your product or service
works.

Producing a television advertisement and then buying an advertising slot is generally expensive. Advertising is
sold in units (e.g. 20, 30, 60 seconds) and costs vary according to:
 the time slot
 the television programme
 whether it is metro or regional
 if you want to buy spots on multiple networks.

Directories:

Directories list businesses by name or category (e.g. Yellow Pages phone directories). Customers who refer to

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directories have often already made up their mind to buy - they just need to decide who to buy from.

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The major advantage of online directories over print directories is that if you change your business name, address

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or telephone number, you can easily keep it up to date in the directory. You can also add new services or

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information about your business.

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If your target market uses print and online directories, it may be useful to advertise in both, although print

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directories are being used less.

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Outdoor and transit:

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There are many ways to advertise outside and on-the-go. Outdoor billboards can be signs by the road or hoardings

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at sport stadiums. Transit advertising can be posters on buses, taxis and bicycles. Large billboards can get your

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message across with a big impact. If the same customers pass your billboard every day as they travel to work, you

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are likely to be the first business they think of when they want to buy a product.

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Even the largest of billboards usually contain a limited amount of information; otherwise, they can be difficult to
read. Including your website address makes it easy for customers to follow up and find out more about your
business. Outdoor advertising can be very expensive especially for prime locations and supersite billboards.

Direct mail, catalogues and leaflets:

Direct mail means writing to customers directly. The more precise your mailing list or distribution area, the more
of your target market you will reach. A direct mail approach is more personal, as you can select your audience and
plan the timing to suit your business. A cost effective form of direct mail is to send your newsletters or flyers
electronically to an email database. Find out more about direct mail.
Catalogues, brochures and leaflets can also be distributed to your target area. Including a brochure with your direct
mail is a great way to give an interested customer more information about your products and services. Learn more
about leaflet marketing using letterbox drops and handouts.

Online:

Being on the internet can be a cost-effective way to attract new customers. You can reach a global audience at a
low cost. Many customers research businesses online before deciding whom to buy from.

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A well-designed website can entice customers to buy from you. There are a number of ways you can promote your
business online via paid advertising or to improve your search engine rankings. Learn more about doing business
online.
Other ways to advertise your business online include promoting your products or services on social media sites,
blogs and search engines and other websites that your target audience visits. Find out more about social media.

ADVERTISING PROCESS:-

Mass demand has been created almost entirely through the development of Advertising”
Calvin Coolidge in the New York Public Library. For the development of advertising and to get best results one
need to follow the advertising process step by step.

The following are the steps involved in the process of advertising:

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1. Step 1 - Briefing: the advertiser needs to brief about the product or the service which has to be advertised

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and doing the SWOT analysis of the company and the product.

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2. Step 2 - Knowing the Objective: one should first know the objective or the purpose of advertising. i.e.

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what message is to be delivered to the audience?

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3. Step 3 - Research: this step involves finding out the market behavior, knowing the competitors, what type
of advertising they are using, what is the response of the consumers, availability of the resources needed in

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the process, etc.

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4. Step 4 - Target Audience: the next step is to identify the target consumers most likely to buy the product.

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The target should be appropriately identified without any confusion. For e.g. if the product is a health drink
for growing kids, then the target customers will be the parents who are going to buy it and not the kids who

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are going to drink it.

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5. Step 5 - Media Selection: now that the target audience is identified, one should select an appropriate

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media for advertising so that the customers who are to be informed about the product and are willing to
buy are successfully reached.
6. Step 6 - Setting the Budget: then the advertising budget has to be planned so that there is no short of
funds or excess of funds during the process of advertising and also there are no losses to the company.
7. Step 7 - Designing and Creating the Ad: first the design that is the outline of ad on papers is made by the
copywriters of the agency, then the actual creation of ad is done with help of the art directors and the
creative personnel of the agency.
8. Step 8 - Perfection: then the created ad is re-examined and the ad is redefined to make it perfect to enter
the market.
9. Step 9 - Place and Time of Ad: the next step is to decide where and when the ad will be shown. The place
will be decided according to the target customers where the ad is most visible clearly to them. The
finalization of time on which the ad will be telecasted or shown on the selected media will be done by the
traffic department of the agency.
10. Step 10 - Execution: finally the advertise is released with perfect creation, perfect placement and perfect
timing in the market.
11. Step 11 - Performance: the last step is to judge the performance of the ad in terms of the response from
the customers, whether they are satisfied with the ad and the product, did the ad

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 reached all the targeted people, was the advertise capable enough to compete with the other players, etc.
Every point is studied properly and changes are made, if any.
If these steps are followed properly then there has to be a successful beginning for the product in the market.

Advertising Campaign: Objectives, Types, Process and Outline

Advertising campaign involves designing a series of advertisements and placing them in various advertising
media to reach a desired target group. The objectives of Advertising Campaign are:
1. Building a strong brand image.
2. Accelerate growth and market share.
3. Influence buying decision.
4. Enhance perceived value.
5. Support selling and other means of communication.
6. Educate consumers.

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7. Reminder.

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8. Retrieve lost sales.

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9. Keep product in public eye.

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Advertising Campaigns - Meaning and its Process

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Advertising campaigns are the groups of advertising messages which are similar in nature. They share same
messages and themes placed in different types of medias at some fixed times. The time frames of advertising

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campaigns are fixed and specifically defined.

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The very prime thing before making an ad campaign is to know-

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Why you are advertising and what are you advertising ?

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Why refers to the objective of advertising campaign. The objective of an advertising campaign is to

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 Inform people about your product
 Convince them to buy the product
 Make your product available to the customers

The process of making an advertising campaign is as follows:

1. Research: first step is to do a market research for the product to be advertised. One needs to find out the
product demand, competitors, etc.
2. Know the target audience: one need to know who are going to buy the product and who should be
targeted.
3. Setting the budget: the next step is to set the budget keeping in mind all the factors like media,
presentations, paper works, etc which have a role in the process of advertising and the places where
there is a need of funds.
4. Deciding a proper theme: the theme for the campaign has to be decided as in the colors to be used,
the graphics should be similar or almost similar in all ads, the music and the voices to be used, the
designing of the ads, the way the message will be delivered, the language to be used, jingles, etc.
5. Selection of media: the media or number of Medias selected should be the one which will reach the
target customers.
6. Media scheduling: the scheduling has to be done accurately so that the ad will be visible or be read or
be audible to the targeted customers at the right time.

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 7. Executing the campaign: finally the campaign has to be executed and then the feedback has to be
noted.

Mostly used media tools are print media and electronic media. Print media includes newspaper, magazines,
pamphlets, banners, and hoardings. Electronic media includes radio, television, e-mails, sending message on
mobiles, and telephonic advertising. The only point to remember is getting a proper frequency for the ad campaign
so that the ad is visible and grasping time for customers is good enough. All campaigns do not have fix duration.
Some campaigns are seasonal and some run all year round. All campaigns differ in timings. Some advertising
campaigns are media based, some are area based, some are product based, and some are objective based. It is seen
that generally advertising campaigns run successfully, but in case if the purpose is not solved in any case, then the
theory is redone, required changes are made using the experience, and the remaining campaign is carried forward.

Decision making process in advertising

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Introduction

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Decision making is a daily activity for any human being. There is no exception about that. When it comes

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to business organizations, decision making is a habit and a process as well.

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Effective and successful decisions make profit to the company and unsuccessful ones make losses.
Therefore, corporate decision making process is the most critical process in any organization.

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In the decision making process, we choose one course of action from a few possible alternatives.

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In the process of decision making, we may use many tools, techniques and perceptions.

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In addition, we may make our own private decisions or may prefer a collective decision.
Usually, decision making is hard. Majority of corporate decisions involve some level of dissatisfaction

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or conflict with another party.

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Let's have a look at the decision making process in detail.

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Steps of Decision Making Process
Following are the important steps of the decision making process. Each step may be supported by different tools
and techniques.

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Step 1: Identification of the purpose of the decision

In this step, the problem is thoroughly analysed. There are a couple of questions one should ask when it comes
to identifying the purpose of the decision.
 What exactly is the problem?
 Why the problem should be solved?
 Who are the affected parties of the problem?
 Does the problem have a deadline or a specific time-line?

Step 2: Information gathering

A problem of an organization will have many stakeholders. In addition, there can be dozens of factors
involved and affected by the problem.

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 In the process of solving the problem, you will have to gather as much as information related to the factors
and stakeholders involved in the problem. For the process of information gathering, tools such as 'Check Sheets'
can be effectively used.

Step 3: Principles for judging the alternatives

In this step, the baseline criteria for judging the alternatives should be set up. When it comes to defining
the criteria, organizational goals as well as the corporate culture should be taken into consideration.
As an example, profit is one of the main concerns in every decision making process. Companies usually do
not make decisions that reduce profits, unless it is an exceptional case. Likewise, baseline principles should be
identified related to the problem in hand.

Step 4: Brainstorm and analyse the different choices

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For this step, brainstorming to list down all the ideas is the best option. Before the idea generation step, it

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is vital to understand the causes of the problem and prioritization of causes.

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For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect diagram

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helps you to identify all possible causes of the problem and Pareto chart helps you to prioritize and identify the

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causes with highest effect.

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Then, you can move on generating all possible solutions (alternatives) for the problem in hand.

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Step 5: Evaluation of alternatives

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Use your judgement principles and decision-making criteria to evaluate each alternative. In this step,

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experience and effectiveness of the judgement principles come into play. You need to compare each alternative for

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their positives and negatives.

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Step 6: Select the best alternative

Once you go through from Step 1 to Step 5, this step is easy. In addition, the selection of the best
alternative is an informed decision since you have already followed a methodology to derive and select the best
alternative.

Step 7: Execute the decision

Convert your decision into a plan or a sequence of activities. Execute your plan by yourself or with the
help of subordinates.

Step 8: Evaluate the results

Evaluate the outcome of your decision. See whether there is anything you should learn and then correct in
future decision making. This is one of the best practices that will improve your decision- making skills.
Conclusion
When it comes to making decisions, one should always weigh the positive and negative business consequences
and should favour the positive outcomes.

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This avoids the possible losses to the organization and keeps the company running with a sustained growth.
Sometimes, avoiding decision making seems easier; especially, when you get into a lot of confrontation after
making the tough decision.
But, making the decisions and accepting its consequences is the only way to stay in control of your corporate life
and time.

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Prepared by: s. charan prasad,MBA.

Assist. Professor, RITS.
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 UNIT – II
ADVERTISING CREATIVITY
Creativity is the soul of advertising and branding. It is what gives life to messages about products and
services that may otherwise be boring or insignificant in the hearts and minds of target customers. Advertisers
often turn to advertising agencies for the design and development of campaigns and ads, which can lead to tension
regarding the influence of creativity.

Creative Team
The creative team consists of people at an ad agency who collaborate on the creative concept for an advertising
campaign. Typically, this includes copywriters, art directors or designers, and account planners. Account planners
convey the needs and interests of the clients to the ad designers so they understand the objectives before and during

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the creative process. Copywriters provide the text or verbal copy for the ad, while art direction provides the visual

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elements, such as illustrations and design. Copy and visual components must be in synch for creative cohesion in

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the message.

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Creative Strategy

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Prior to developing ads, the copy team formulates a creative concept or strategy. This is the theme of a campaign

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that will carry through all executions and serve as the foundation of the message you want to get across to target
customers. Internet service provider GoDaddy.com used a strategy of sensual messages to attract attention and

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drive customers to the company's website where they learn about products and services. Progressive insurance has

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relied on a character named "Flo" for several years to explain its products and services to audiences.

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Branding

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Creativity can give meaning to brands in many ways. A prominent example of the impact of creativity is Kohler. A

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leading provider of bathroom and kitchen products, including faucets, showers, sinks and toilet bowls, Kohler has
relied on extremely abstract magazine ads created by professional artists and very creative television commercials
to create its "bold" image. The company's magazine ads normally depict a product in an abstract setting with no
copy other than the tagline "The bold look of Kohler." The company has managed to use creativity to turn
uninspiring products into a reputation for sophistication and luxury.

Tension
Though company executives and ad agency creatives all understand the role of creativity, tension often develops in
its use in advertising. The creative team normally develops thumbnail sketches and rough layouts to present to the
advertiser before following through on ideas. While advertisers turn to creative professionals for fresh ideas and
talent, they often express reluctance at overly abstract or hyper-creative messages. The line between being too
obvious and going beyond subtlety to an unclear message is very fine. Creatives often have to persuade executives
to buy in to a creative concept, often with the support of test market research.

PLANNING CREATIVE STRATEGIES

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CREATIVE PROCESS

Creativity does not just happen. It is a cognitive process that produces new ideas or transforms old ideas into
updated concepts, according to Brussels Free University psychology professor Liane Gabora. Scientists such as

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Jacques Hadamard and Henri Poincaré studied the creative process and contributed to the Creative Process Model,

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which explains how an individual can form seemingly random thoughts into an ideal combination or solution,

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according to the website The Information Philosopher.

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Preparation

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During the preparation step of the creative process model, an individual becomes curious after encountering a

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problem. Examples of problems can include an artistic challenge or an assignment to write a paper. During this

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stage, she may perform research, creates goals, organize thoughts and brainstorm as different ideas formulate. For

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example, a marketing professional may prepare for a marketing campaign by conducting market research and
formulating different advertisement ideas.

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Incubation

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While the individual begins to process her ideas, she begins to synthesize them using her imagination and begins to
construct a creation. Gabora states that during this step, the individual does not actively try a find a solution, but
continues to mull over the idea in the back of her head.

Illumination
As ideas begin to mature, the individual has an epiphany regarding how to piece her thoughts together in a manner
that makes sense. The moment of illumination can happen unexpectedly. For example, an individual with the task
of putting together an office party may have an idea for a theme while driving home from work.

Evaluation
After a solution reveals itself in an epiphany, the individual then evaluates whether the insight is worth the pursuit.
He may make changes to his solution so it is clearer. He may consult with peers or supervisors regarding his
insights during this step before pursuing it further. If he works with clients, he may seek a client's input and
approval before moving on to the next step.

Implementation
The implementation of an idea or solution in the creative process model is when an individual begins the process
of transforming her thoughts into a final product. For example, during this step, a painter may begin outlining
shapes on a canvas with charcoal before applying oil paints to the medium. According to Gabora, an individual
may begin this step more than once in order to reach the desired outcome. For example, a graphic designer may
open a new digital canvas if he did not have the scale calculated

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correctly on a previous work, and he will continue to implement his ideas and make adjustments until he reaches a
pleasing final product.

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Media planning:

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The word Media came from the Latin word "Middle". Media carry message to or from a targeted
audience and can add meaning to the message.

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Media Planning, in advertising, is a series of decisions involving the delivery of message to the targeted audience.

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Media Plan, is the plan that details the usage of media in an advertising campaign including costs, running dates,

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markets, reach, frequency, rationales, and strategies.

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Steps in Development of Media Plan

1. Market Analysis

Every media plan begins with the market analysis or environmental analysis. Complete review of internal and
external factors is required to be done. At this stage media planner try to identify answers of the following
questions:

 Who is the target audience?

 What internal and external factors may influence the media plan?
 Where and when to focus the advertising efforts?

The target audience can be classified in terms of age, sex, income, occupation, and other variables. The
classification of target audience helps media planner to understand the media consumption habit, and accordingly
choose the most appropriate media or media mix.

2. Establishing Media Objective

Media objectives describes what you want the media plan to accomplish. There are five key media objectives that a
advertiser or media planner has to consider - reach, frequency, continuity, cost, and weight.

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 1. Reach - Reach refers to the number of people that will be exposed to to a media vehicle at least once
during a given period of time.
2. Frequency - Frequency refers to the average number of times an individual within target audience is
exposed to a media vehicle during a given period of time.
3. Continuity - It refers to the pattern of advertisements in a media schedule. Continuity alternatives are as
follows:
o Continuous: Strategy of running campaign evenly over a period of time.
o Pulsing: Strategy of running campaign steadily over a period of time with intermittent increase in
advertising at certain intervals, as during festivals or special occasions like Olympics or World-
Cup.
o Discontinuous: Strategy of advertising heavily only at certain intervals, and no advertising in the
interim period, as in case of seasonal products.
4. Cost - It refers to the cost of different media

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5. Weight - Weight refers to total advertising required during a particular period.

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3. Determining Media Strategies

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Media strategy is determined considering the following:

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1. Media Mix - From the wide variety of media vehicles, the advertiser can employ one vehicle or a mix
suitable vehicles.

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2. Target Market

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3. Scheduling - It shows the number of advertisements, size of advertisements, and time on which
advertisements to appear.

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o Seasonal Pulse: Seasonal products like cold creams follows this scheduling.

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o Steady Pulse: According to this scheduling one ad is shown over a period of time, say one ad per

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week or one ad per month.
o Periodic Pulse: A regular pattern is followed in such scheduling, as in case of consumer
durable, and non durable.
o Erratic Pulse: No regular pattern is followed in such scheduling.
o Start-up Pulse: Such scheduling is followed during a new campaign or a launch of a new product.
o Promotional Pulse: It is for short time, only for a promotional period.
4. Reach and frequency
5. Creative Aspects - Creativity in ad campaigns decides the success of the product, but to implement this
creativity firm must employ a media that supports such a strategy.
6. Flexibility - An effective media strategy requires a degree of flexibility.
7. Budget Considerations - In determining media strategy cost must be estimated and budget must be
considered.
8. Media Selection - It covers two broad decisions - selection of media class, and selection of media vehicle
within media class.

4. Implementation of Media Plan

The implementation of media plan requires media buying. Media Buying refers to buying time and space in the
selected media. Following are the steps in media buying:

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  Collection of information: Media buying requires sufficient information regarding nature of target
audience, nature of target market, etc.
 Selection of Media/Media Mix: Considering the collected information and ad-budget, media or media mix
is selected which suits the requirements of both - target audience and advertiser.
 Negotiation: Price of media is negotiated to procure media at the lowest possible price.
 Issuing Ad - copy to media: Ad-copy is issued to the media for broadcast or telecast
 Monitoring performance of Media: Advertiser has to monitor whether the telecast or broadcast of ad is
done properly as decided.
 Payment - Finally, it is the responsibility of advertiser to make payment of media bills on time.

5. Evaluation and Follow-up

Evaluation is essential to assess the performance of any activity. Two factors are important in evaluation of media
plan:

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How successful were the strategies in achieving media objectives?

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Was the media plan successful in accomplishing advertising objective?

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Successful strategies help build confidence and serve as reference for developing media strategies in future, and

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failure is thoroughly analysed to avoid mistakes in future.

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DEVELOPING A MEDIA STRATEGY:

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Healthy media relations involve building your media relations strategy and earning your media

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coverage. The process begins with developing a media policy or guidelines for your organization, and evolves

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to the point where you create a media strategy. Below, find 16 steps to developing an effective media strategy:

1. Describe the issue: Create a document and write a paragraph outlining why you want to engage the media
and the general premise for your strategy.
2. Analyze the media coverage: Summarize media coverage your organization has received to date, with a focus
on the trend toward positive or negative media coverage.
3. Analyze the issues: Drop the media coverage patterns or issues into “buckets,” such as crisis, proactive,
incident, or technical stories. Crisis issues are the most important and urgent; technical are least urgent and
important. Proactive issues are important and less urgent, while incidents are less important and have more
urgency. Segmenting these issues will help you prioritize your effort.
4. Set issue management goals: Determine what you are trying to achieve. State a few goals to
developing a media outreach strategy.
5. Develop strategy: Decide which strategy is appropriate for the subject matter of each issue. Examples
might include developing an “educate the media” strategy, or developing a “local media” strategy.
6. Develop target audiences: Determine who needs to know about this issue or issues, and determine how they
receive their information. Decide what they should do with this information if you engage the media. Segment
your audience as well for clarity.
7. Determine stakeholders: Stakeholders are often overlooked in developing a media strategy. They can be
supportive and influential in your success. Outline who you need to engage before you reach out to the media, and
brief them on what you are doing.

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8. Develop media targets: Build a list of media outlets that should be interested in your issue. The more specific
the media contact to your issue, the better your results will be.
9. Develop a media team: Decide who will talk if the media is interested. It is good to have a point person,
but also consider subject matter experts for technical topics.
10. Train spokespeople: Make sure the folks who will speak have their story straight, and that you arm them
with accurate, relevant facts. They should practice with question and answer sessions.
11. Develop messages: Develop a few key messages that you and the media team should consistently use.
One to two sentences for each.
12. Gather your facts: The media will want – and deserves – facts. Anticipate what reporters will request
and gather it in advance. If you don’t have an answer, know who you can go to get it after the media
interview.
13. Develop media tools: Create some media tools in advance, such as a press release, backgrounder, video b-
roll, or whatever will succinctly support an accurate story.

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14. Create a timetable: Develop a timetable for implementing your media strategy.

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15. Determine budget: Determine what you will need to implement the strategy in terms of resources, time and

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money.

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16. Measure results: Evaluate how your efforts have panned out once you’ve begun, and at increments afterward.

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Measure by polling opinions or perceptions before and after media outreach; by measuring media coverage; and

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evaluating whether the media outreach is influencing sales or behaviour toward your organization.

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Evaluation Print Media

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One of the most popular and growing industries is the print media and the reason being the fact that it is one of the

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easiest ways to reach targeted customers by advertisers and marketers. These advertisers and businessmen make

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the most of all forms of print media like magazines, newspaper, leaflets etc. If you want to know more about print

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media, then read this article as we bring to you the advantages and disadvantages of print media here. Read on to
find out what are they.

Advantages of print media

 Flashy magazines are always popular among consumers and are often read by them for a particular period
of time in a month. The monthly magazines are the best way to bring attention to any advertisements.

 Print media is an easy medium to spread awareness or advertise to any particular geographical area.
Like, a local newspaper is the best way to spread news about any local event of the place.

 Some forms of the print media have a huge and trusted followers. This is definitely a great boost to
attract readership.

 Print media allows you to choose your own space for advertisement, thus, you can manage your budget
and expenses while planning for the advertisement.

Disadvantages of print media

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  If you are targeting the global audience, then this is not the medium you should go for. Instead, the
internet has a much wider reach than print media in this.

 Placing an advertisement in print media requires a lot of planning and time. In this case, you are faced
with flexibility problem, particularly when you work in tight deadlines.

 In fact, there is much limitations when it comes to targeting your audience as the particular newspaper
may not be available to the audience all the time. On the other hand, a person can get access to the
internet from anywhere and everywhere.

 Besides, most of the time, your advertisement might get lost among all other ads and editorials. Plus,
the lifespan of newspaper and magazines is very short as people have a tendency to throw them or keep
them aside after one day of read.

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There are both advantages and disadvantages for print media. We have to keep all these in mind and make the

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right planning to make the optimum use of print media.

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 UNIT- III
ESTABLISHING OBJECTIVES AND BUDGETING FOR ADVERTISING

Advertising is the best way to communicate to the customers. Advertising helps informs the customers
about the brands available in the market and the variety of products useful to them.
Advertising is for everybody including kids, young and old. It is done using various media types, with different
techniques and methods most suited.

Let us take a look on the main objectives and importance of advertising.

Objectives of Advertising
Four main Objectives of advertising are:
i. Trial

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ii. Continuity

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iii. Brand switch

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iv. Switching back

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Let’s take a look on these various types of objectives.

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1. Trial: the companies which are in their introduction stage generally work for this objective. The trial

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objective is the one which involves convincing the customers to buy the new product introduced in the

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market. Here, the advertisers use flashy and attractive ads to make customers take a look on the products

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and purchase for trials.
2. Continuity: this objective is concerned about keeping the existing customers to stick on to the product.

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The advertisers here generally keep on bringing something new in the product and the advertisement so

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that the existing customers keep buying their products.

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3. Brand switch: this objective is basically for those companies who want to attract the customers of the
competitors. Here, the advertisers try to convince the customers to switch from the existing brand they are
using to their product.
4. Switching back: this objective is for the companies who want their previous customers back, who have
switched to their competitors. The advertisers use different ways to attract the customers back like discount
sale, new advertise, some reworking done on packaging, etc. Budgeting of advertisement

Basically, advertising is a very artistic way of communicating with the customers. The main characteristics
one should have to get on their objectives are great communication skills and very good convincing power.

These budgets are essentially predetermined at the top level who generally fails to get a clear-cut field level picture
and hence the models under this approach have no true theoretical basis. The following figure illustrates the
approach.

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The following figure Illustrates various methods of setting up of advertisement budgets under top down budgeting
method:

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1. Affordable method:
This is a very simple method of budget allocation. After the budget has been allocated in all the areas i.e. all the
other expenses have been taken care of the company then allocates the left over money for the advertisements. This
method is also called “All you can afford”. Those companies, which follow this method, consider advertisement as
an expenditure and no expectations on returns are associated with this method.

2. Arbitrary Allocation:
This method seems to be a weaker method than the affordable method for setting a budget. The arbitrary allocation
method is completely dependent on the management’s discretion and hence has no theoretical basis. The budget is
determined by management solely. They on the basis of what they feel to be necessary. So ultimately the decision
depends on the psychological and economical build up of the people in the management and not on the market
requirements.

3. Percentage of Sales method:

This is the most commonly used method for budget setting. Large firms generally go by this method. According to
this method, advertising and promotions budget is based on sales of the product. Management determines the
amount by either.

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4. Percentage of Profits method:
In this method, companies set their budget at a certain percentage of their current or forecasted profits. The
problems and advantages of this method is more or less in line with the previous method. Moreover the cost factor
is also there which has an effect on profit. Now due to changes in macro environmental factors like, political,
social, demographic, economic (inflation) and legal the cost component might change over time and across
geography in the same industry. This in turn will affect the stability of this method of budget setting.

5. Historical Method:
In this method last year’s advertising budget is adopted for the year with a view that practically no change has
taken place in the market and market growth is slow, which does not justify any addition to the budget. Last year’s
budget could be multiplied by a factor to cover media rate increase.

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6. Competitive Parity Method:

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This method involves setting budgets to match competitors’ outlays and funds. In this method, the company

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monitors competitors’ advertising and follows it. This method is generally used in markets in which advertising is

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heavier and it is felt absolutely important to the companies not to be left behind the competitors.

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7. Return on Investment:

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In the percentage-of-sales method, advertising budget depends on the level of sales. But advertising causes sales.

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In the marginal analysis and S-shaped curve approaches increase in advertisement budgets may lead to increases in

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sales. In other words the advertisement budget can be considered as an investment.

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In the ROI budgeting method, advertising and promotions are considered investments, like plant and equipment. In

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other words investments in advertisements lead to certain returns. Like other aspects of the firm’s efforts,

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advertising and promotion are expected to earn a certain return.

ADVERTISING AGENCY FUNCTIONS

Functions of advertising agency

Advertising agency is an independent service-rendering organization. It delivers various services and performs
many functions for its clients, who are advertisers. It is mainly involved in activities like

planning, preparing and placing of ads in media. It also performs non-advertising functions for them. It offers them
advisory and creative services. It does so to make a profit.
Following image depicts the major functions of advertising agency.

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Eleven main functions of ad agency are as follows:

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1. Attracting clients,

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2. Research function,

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3. Advertising planning,

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4. Creative function,

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5. Media selection,
6. Advertising budget,
7. Coordination,
8. Sales promotion,
9. Marketing research,
10. Non-advertising functions, and
11. Public relations.

Now let's discuss above main functions of an advertising agency.

1. Attracting clients
Advertising agency needs clients (advertisers). Without them, it cannot survive.
Ad agency always tries to attract clients usually by giving ads in trade journals. It also seeks their attention by
offering them various services. It offers expert, cheap and quick services. It maintains good relations with them. It
tries to give them full satisfaction. It strives harder to attain their goodwill and customer-loyalty.

2. Research function
Advertising agency gathers information related to the client's product.
It collects following information about a product under its research function:
 Features, quality, advantages and limitations of a product,
 Present and future market possibilities,

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  Competition in the market,
 Situation in the market,
 Distribution methods,
 Buyers' preferences, so on.
Ad agency analyses (studies) all this collected information properly and draws conclusions for its research. It
helps in planning an advertising campaign, selecting proper media and creation function.

3. Advertising planning
Advertising agency plans the entire ad campaign of its client.
Advertising planning is a primary function of an ad agency. It is done when its research function is completed.
That is, after analyzing the client's product, its competitors, market conditions, etc. It is done by experts who use
their professional experience to make a result-oriented advertising-plan.
After making the advertising plan, it is shown to the client. If the client likes and approves it, then the plan is

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executed (put into action).

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4. Creative function

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Advertising agency put the advertising-plan into action under its creative function.

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Creation of ads is the most important function of an ad agency. Generally, it involves activities like:

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 Copy writing,
 Drawing photographs,

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 Making illustrations, layouts, an effective ad message, etc.

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These jobs are done by experts like copy writers, artists, designers, etc. These people are highly skilled and

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creative. They make an advertisement more appealing. Attractive ads help to increase the sales of the product.
The ad agency must always use fresh ideas for creating ads. It must neither use old tactics nor copy the ad-

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campaign of other products.

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5. Media selection
Advertising agency helps an advertiser to select a proper media (ad platform) to promote his advertisement
effectively.
Media selection is a highly specialized function of an ad agency. It must select the most suitable media for its
client's ad. It must choose media, which has a potential to give best results for the lowest cost. It must select more
than one media for the ad. For example, an advertisement can be put on television, the Internet, newspapers,
magazines, etc.
After selecting the media, the ad agency must maintain goods contacts with the media.

6. Advertising budget
Advertising agency helps an advertiser to prepare his ad budget. It helps him to use his budget economically and
make the best use of it.
Without a proper advertising budget, there is a risk of client's funds getting wasted or lost. If an advertiser suffers a
loss, he may not bring new projects. As a result, there is a possibility of losing a potential client that can bring
more business to an ad agency.

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7. Coordination
Advertising agency brings a good coordination between the advertiser, itself, media and distributors. This is a very
important function. If coordination is proper, it will increase the sales of the product.

8. Sales promotion
Advertising agency performs sales promotion. It helps an advertiser to introduce sales promotion measures for
the dealers and consumers. This helps to increase the sales of the product.

9. Marketing research
Advertising agency helps its clients to solve their marketing problems. It does so by conducting a marketing
research for them.

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10. Non-advertising functions

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Advertising agency also performs many non-advertising functions:

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 It fixes the prices of the product,

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 It determines the discounts,

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 It designs the product,

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 It also designs its package, trade marks, labels, etc.
These non-advertising services help an advertiser to increase its sales.

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11. Public relations

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Advertising agency does the public relations (PR) work for its clients. It increases the goodwill between its clients

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and other parties like consumers, employees, middlemen, shareholders, etc. It also maintains good relations

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between the client and media owner.

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EVALUATING ADVERTISING AGENCY

The relationship between an advertiser and their agency of record is unique. Unlike other suppliers that
support a business, agencies are looked at as strategic partners, where both parties work closely together and are
incentivized, based on mutually agreed upon business objectives. To ensure this partnership remains healthy and
strong, advertisers must implement the appropriate measures to properly evaluate their agency partner(s) on a
regular basis. There are varying approaches that can be taken to managing agency relationships. These can differ
based on where you are in the agency lifecycle, the importance of an agency to a particular brand or the
organization as a whole, and the services provided by the agency.
Performing an agency search can seem like a daunting task. There is no shortage of agencies in the marketplace –
some are significantly larger than others, some have specialized core competencies, and others tailor their offering
to a particular industry or sector. Whether an agency is being evaluated yearly or the search for a new agency is
underway, a core set of criteria should typically be used to evaluate whether or not an agency is a good fit for your
brand. Below is a list of the top 10 criteria that should be used when searching for a new agency partner or
evaluating a current relationship.

1. Talent and Functional Expertise. There will be a variety of people from different departments within the
agency working on your marketing program. Having the right people involved is essential for

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your campaign’s success. Ask for the names and backgrounds of those individuals who will be dedicated to your
account so that you have an understanding of the levels of experience and overall capabilities of the individuals
involved. Most importantly, make sure the core team is present for the agency’s onsite pitch presentation so that
you can meet each team member in person and gain a sense of the chemistry that exists between the brand team
and the agency. Ask yourself the following questions: What is the range of services that can be delivered by the
agency team? Can they ramp up quickly in order to meet the launch timeline?

2. Account Management. Often this criterion is considered a subset of the previous, but should stand alone as the
account management function is often considered a vital role in keeping the agency relationship on the right track.
One of the most essential components of a successful marketing campaign is proper communication between the
brand team and the agency. What your organization has in mind for an assignment may be completely different
from the agency’s vision; therefore, having open communication between you and your agency is critical to
developing the right program. If there are ongoing issues that need to be addressed, you should be able to rely on

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the agency’s account management team to navigate the right channels in order to properly address these issues in a

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timely manner.

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3. Industry/Category Expertise. When searching for an agency, look for one that has experience or core

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competencies in your field. An agency who has knowledge about your industry will not have to spend time

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acclimating itself with the needs and concerns associated with your area of business. In addition, the agency will

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already have experience working with clients similar to your company and understand the requirements of a
successful marketing strategy for your product or campaign. Keep in mind that conflicts of interest may limit your

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options when it comes to finding strong category expertise. This is why it is important to look at the backgrounds

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of the team members being proposed for the account in addition to the agency’s background. An agency’s current

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clients may also provide some leniency in terms of allowing their agency to engage new prospects that may be

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viewed as competitors. Overall, be on the lookout for those agencies that specialize in a particular industry but are

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able to differentiate your brand from the other clients they support. Does the agency have retail experience? Are

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they focused on the business to business sector? Do they understand the regulations that align with your industry?

4. Executional Excellence. Ask agencies to provide case studies of successful campaigns for other brands they
supported that share a similar scope of work to your brand. Examining the tactics and strategies applied to past
campaigns will help you evaluate the agency’s ability to successfully develop and deploy marketing programs.
Requesting details on how an agency has supported a product launch or early product lifecycle will allow you to
evaluate the agency’s executional capabilities. Also be sure to ask for metrics that were used to measure success.
Your definition of a successful campaign may be different than the agency’s definition. And sometimes it may
come down to performing reference checks and reaching out to past and current clients of the agency to further vet
its ability to execute.

5. Strategic Thinking. One critical factor to consider when evaluating an agency is its proposed strategy and its
ability to deliver the value proposition and ultimately differentiate your brand from competitors. The strategy must
be well defined and the more detail the agency provides about their strategic framework during the selection
process, the better. Ask agencies to provide a detailed landscape assessment of the market for your product/service,
outlining the challenges and differentiation opportunities facing your organization. If the agency is able to bring
new thinking to the table, this may be what sets them apart from the other agencies under consideration. The
campaign messaging and the market in which the campaign is being targeted and deployed can make or break
your marketing efforts.

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In some cases, this criterion may not be weighed as heavily if your internal team takes on all strategic planning
functions.

6. Creativity. An agency must be able to relay the strategic message through strong creative work. Successful
marketing campaigns typically possess an innovative creative element that grabs the target market’s attention and
leads to a call to action. Gathering case studies and bios of creative leads and requesting tissue concepts to present
during an onsite pitch presentation are some approaches that should be employed in order to evaluate an agency’s
creativity and whether or not their work meets your vision. You can also consider some recent awards an agency
has been recognized for when it comes to its creative work.

7. Innovative and/or Technologically Advanced. In today’s digital environment, it is more important than ever to
have an understanding of technology and the best ways to utilize it within a marketing program. When evaluating
an agency, it is valuable to ensure that technological capabilities are thoroughly assessed as it relates to the nature

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of the assignment and projected scope of work. The scope may call for social media marketing, application

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development, website hosting, or digital advertising in general. Whatever the case may be, be sure that the agency

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has the ability to keep up with the latest technologies. In addition, the overall innovative mindset must also be

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evaluated to make sure that the tactics being proposed are relevant and applicable to your brand’s target market. If

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a proposed tactic does not align with your target market, this may be an indicator that the agency either does not

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understand your target market or has not given much thought to the proper use of marketing tactics that should be

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employed.

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8. Cultural Fit. If an agency has proposed strong strategic insights and creative concepts along with an innovative

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tactical plan for your brand but does not have alignment with your company’s culture, a partnership with that

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agency may be a challenging one to manage. An agency is often considered an extension of a brand team and

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therefore, if it does not fit within your company’s culture and share the same vision for your brand, it may not

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make sense to onboard that agency. Be sure to establish an understanding of the culture of each agency under

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consideration and decide amongst the stakeholders involved in the project which ones will work well within your
organization. Onsite presentations are a good opportunity to gauge the chemistry. In addition, gathering details on
how an agency has supported companies that share a similar culture to yours will prove beneficial. Ask yourself
the following questions: Is the agency too big for my liking? How will my account fit within the agency’s client
base? Will other clients get the “A” team?

9. Adaptable to Change. Change is bound to happen during some stage of your campaign’s development, making
it important for your agency to be able to adapt to these changes in requirements. Make sure that your agency has
processes and procedures in place for when/if changes occur so that a project is not delayed or pushed over budget.
You can also gain a sense of how flexible an agency is during the sourcing process based on its response to
timeline and milestone adjustments. Your agency’s account management team must be able to demonstrate how it
will address changes effectively without disrupting the overall flow of the campaign.

10. Demonstrated Commitment to Working with Other Agency Partners. In order to deliver an integrated
program for your brand, you may have other agencies supporting the campaign that offer up more specialized
services aside from what your primary agency delivers from a strategic and creative standpoint. Your primary
agency must be able to collaborate with other agencies in order to serve the

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best interests of the brand. This selection criterion ties to a strong account management function, strong
communication across all parties, and flexibility. One brand may have a creative agency, a media buyer, a digital
shop, a PR agency, and other supporting agencies that are all required to work together to deliver an integrated
marketing approach. And in some cases, a product may have joint ownership. Ensure that the agency selected for a
particular assignment has experience dealing in this type of multi-stakeholder environment.
The commonality among these 10 evaluation criteria is that they are all considered qualitative standards. When it
comes to choosing a strategic partner, the qualitative aspects of a candidate are typically given more weight than
the quantitative elements. A quantitative analysis will supplement the decision making process, but it will not drive
the decision in one direction or another. Weaknesses identified within a qualitative portion of an agency’s proposal
can be deal breakers during an agency search; whereas, quantitative weaknesses such as an uncompetitive rate card
or compensation structure can be addressed through negotiations with the agency finalist(s).

Overall, this set of criteria is applicable in three different scenarios. If your company is currently utilizing an

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agency to support an active marketing campaign, performance evaluations should be held regularly to ensure

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service levels are being met and the relationship is in good standing. This list of criteria should be the primary

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input for those performance evaluations. If your company is seeking to onboard a new agency altogether to support

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a new product in the pipeline, this list of criteria should be referenced throughout the selection process to ensure

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you have a basis for your final decision. This criteria set can also come into play if your brand team has decided to

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explore other options aside from your current agency partner. The outcomes of your ongoing performance

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evaluations may indicate some underlying issues that continue to exist with no corrective action plan completed.
Whatever the case may be, this list of criteria should be communicated to the agency or agencies involved so that

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they understand how they are being evaluated and what you are seeking in a relationship.

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EVALUATING THE SOCIAL, ETHICAL AND ECONOMICAL ASPECTS OF ADVERTISING

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Advertising and Ethics Two Viewpoints Proponents Critics Advertising… Advertising… Provides

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information Creates needs and Encourages a standard faults of living improvement More propaganda than
Produces jobs information Promotes competition Promotes materialism
Ethics in Advertising Ethics: Moral principles and values that govern the actions of and individual or
group. Not all issues can be regulated A marketing or promotion action may be legal but not considered
ethical Marketers must make decisions regarding the appropriateness of their actions Companies are
scrutinized for their ethics
Social and Ethical Criticisms of Advertising Advertising as untruthful or deceptive Advertising as
offensive or in bad taste – Advertising of personal products – Sexual appeals Advertising and Children
Social and Cultural Consequences – Making people buy things they don’t need – Encouraging materialism
– Stereotyping – Advertisings’ influence on the media
Social and Ethical Criticisms of Advertising Advertising as untruthful or deceptive – General mistrust of
ads – Deliberately untruthful or misleading vs. puffery – Problems often more at local level rather than
national Advertising as offensive, in bad taste, or irritating – Advertising of personal products – Sexual
appeals Suggestive, demeaning, raunchy Shock advertising
Many people found Benetton’s “Death Row” ad campaign offensive
Bijan used shock advertising to get attention Source: Courtesy Bijan Designer for Men, Beverly Hills,
California

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 American Advertising Federation Advertising Principles 1. Truth Advertising shall reveal the truth, and
shall reveal significant facts, the omission of which would mislead the public. 2. Substantiation
Advertising claims shall be substantiated by evidence in possession of the advertiser and the advertising
agency prior to making such claims. 3. Comparisons Advertising shall refrain from making false,
misleading, or unsubstantiated statements or claims about a competitor or his products or service. 4. Bait
advertising Advertising shall not offer products or services for sale unless such offer constitutes a bona
fide effort to sell the advertised products or services and is not a device to switch consumers to other goods
or services, usually higher priced.
American Advertising Federation Advertising Principles 5. Guarantees and warranties Advertising of
guarantees and warranties shall be explicit, with sufficient information to apprise consumers of their
principal terms and limitations or, when space or time restrictions preclude such disclosures, the
advertisement shall clearly reveal where the full text of the guarantee or warranty can be examined before
purchase. 6. Price claims Advertising shall avoid price claims that are false or misleading, or savings

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claims that do not offer provable savings. 7. Testimonials Advertising containing testimonials shall be

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limited to those of competent witnesses who are reflecting a real and honest opinion or experience. 8.

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Taste and decency Advertising shall be free of statements, illustrations, or implications that are offensive

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to good taste or public decency.

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Advertising and Children Children's TV Watching Behavior Children between ages 2-11 watch on average

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21.5 hours of TV per week and may see 22,000 commercials per year Television is an important source of
information for children about products

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Advertising and Children Some studies have shown… Children lack experience and knowledge to evaluate

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advertising critically They can not differentiate between commercials and program (fantasy vs. reality)

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Children are vulnerable to advertising …while other studies argue Children must learn through the

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consumer socialization process; need to acquire skills to function in the marketplace Acquired skills have

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helped teens evaluate ads and recognize persuasion techniques

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Social and Cultural Consequences of Advertising Does advertising encourage consumption, or merely
reflect our society’s need for it? “Advertising and its related arts thus help develop the kind of man the
goals of the industrial system require—one that reliably spends his income and works reliably because he
is always in need of more…” John Kenneth Galbraith “To blame advertising now for those most basic
tendencies in American history is to miss the point…The people who have created modern advertising are
not hidden persuaders pushing our buttons…they are just producing an especially visible manifestation,
good and bad, of the American way of life.” Stephen Fox The Mirror Makers: A History of American
Advertising and Its Creators
Social and Cultural Consequences of Advertising Advertising makes people buy things they don’t need
Advertising may encourage materialism Information versus persuasion dichotomy Does advertising really
have that much power? Freedom of choice
Advertising and Stereotyping Portrayal of women Gender stereotyping Portrayal of women as sex objects
Role portrayal of women to reflect changing role in society Blacks and Hispanics Gays Elderly
Advertising and the Media Arguments supporting advertiser control of the media Advertising pays the bills
therefore they exert influence on the character, content, and coverage of certain issues. Arguments against
advertiser control of the media To retain public confidence the media must report the news fairly and
accurately. Advertisers need the media more than the media needs any particular advertiser.

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 Economic Effects of Advertising Effects on consumer choice Differentiation Brand loyalty Effects on
competition Barriers to entry Economies of scale Effects on product costs and prices Advertising as an
expense Increased differentiation
What is advertising’s Role in the Economy? Advertising Advertising = Market Power Advertising
= Information Advertising affects consumer Advertising informs preferences and tastes, consumers about
product changes product attributes, attributes but does not and differentiates the product change the way
they value from competitive offerings. those attributes.
What is advertising’s Role in the Economy? Consumer Buying Behavior Advertising = Market Power
Advertising = Information Consumers become brand Consumers become more loyal and less price
sensitive price sensitive and buy best and perceive fewer “value.” Only the substitutes for advertised
relationship between price brands. and quality affects elasticity for a given product.
What is advertising’s Role in the Economy? Barriers to entry Advertising = Market Power Advertising =
Information Potential entrants must Advertising makes entry overcome established brand possible for new

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brands loyalty and spend relatively because it can more on advertising. Communicate product attributes to

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consumers.

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Advertising helps new companies such as Daewoo enter the market Source: Courtesy Daewoo Motor

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America, Inc.

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 UNIT-IV SALES
PROMOTION

Sales promotion is the process of persuading a potential customer to buy the product. Sales promotion is
designed to be used as a short-term tactic to boost sales – it is rarely suitable as a method of building long-term
customer loyalty.
Some sales promotions are aimed at consumers. Others are targeted at intermediaries and at the firm's sales
force.
When undertaking a sales promotion, there are several factors that a business must take into account:
 What does the promotion cost – will the resulting sales boost justify the investment?
 Is the sales promotion consistent with the brand image? A promotion that heavily discounts a product with
a premium price might do some long-term damage to a brand
 Will the sales promotion attract customers who will continue to buy the product once the promotion ends,

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or will it simply attract those customers who are always on the look-out for a bargain?

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There are many methods of sales promotion, including:

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Money off coupons – customers receive coupons, or cut coupons out of newspapers or a products packaging

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that enables them to buy the product next time at a reduced price

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Competitions – buying the product will allow the customer to take part in a chance to win a prize

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Discount vouchers – a voucher (like a money off coupon)

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Free gifts – a free product when buy another product

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Point of sale materials – e.g. posters, display stands – ways of presenting the product in its best way or show the
customer that the product is there.

Loyalty cards – e.g. Nectar and Air Miles; where customers earn points for buying certain goods or shopping at
certain retailers – that can later be exchanged for money, goods or other offers

Loyalty cards have recently become an important form of sales promotion. They encourage the customer to return
to the retailer by giving them discounts based on the spending from a previous visit. Loyalty cards can offset the
discounts they offer by making more sales and persuading the customer to come back. They also provide
information about the shopping habits of customers – where do they shop, when and what do they buy? This is
very valuable marketing research and can be used in the planning process for new and existing products.
The main advantages and disadvantages of sales promotion are:

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 . c o m
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ha
Objectives of Sales Promotion:
Sales promotion is a vital bridge or a connecting link between personal selling and advertising.

a c
Sales promotion activities are undertaken to achieve the following objectives:

on
1. To increase sales by publicity through the media which are complementary to press and poster advertising.

r
2. To disseminate information through salesmen, dealers etc., so as to ensure the product getting into

d
satisfactory use by the ultimate consumers.

e
3. To stimulate customers to make purchases at the point of purchase.
4. To prompt existing customers to buy more.
5. To introduce new products.
6. To attract new customers.
7. To meet competition from others effectively.
8. To check seasonal decline in the volume of sales.

Importance of Sales Promotion:

The importance of sales promotion has increased tremendously in the modern times. Lakhs of rupees are
being spent on sales promotional activities to attract the consumers in our country and also in other countries of the
world.
Some large companies have also begun to appoint sales promotion managers to handle miscellaneous
promotional tools. All these facts show that the importance of sales promotion activities is increasing at a faster
rate
Sales promotion is a tool used to achieve most of the five major promotional objectives discussed in the

Promotion Decisions tutorial:

 Building Product Awareness – Several sales promotion techniques are highly effective in exposing
customers to products for the first time and can serve as key promotional components in the early stages of
new product introduction. Additionally, as part of the effort to build product awareness, several sales
promotion techniques possess the added advantage of capturing customer

Page 35
 information at the time of exposure to the promotion. In this way sales promotion can act as an effective
customer information gathering tool (i.e., sales lead generation), which can then be used as part of follow-
up marketing efforts.

 Creating Interest – Marketers find that sales promotions are very effective in creating interest in a
product. In fact, creating interest is often considered the most important use of sales promotion. In the
retail industry an appealing sales promotions can significantly increase customer traffic to retail outlets.
Internet marketers can use similar approaches to bolster the number of website visitors. Another important
way to create interest is to move customers to experience a product. Several sales promotion techniques
offer the opportunity for customers to try products for free or at low cost.
 Providing Information – Generally sales promotion techniques are designed to move customers to some
action and are rarely simply informational in nature. However, some sales promotions do offer customers
access to product information. For instance, a promotion may allow customers to try a fee-based online

m
service for free for several days. This free access may include receiving product information via email.

o
 Stimulating Demand – Next to building initial product awareness, the most important use of sales

c
promotion is to build demand by convincing customers to make a purchase. Special promotions, especially

.
those that lower the cost of ownership to the customer (e.g., price reduction), can be employed to stimulate

y a
sales.

r
 Reinforcing the Brand – Once customers have made a purchase sales promotion can be used to both

ha
encourage additional purchasing and also as a reward for purchase loyalty (see loyalty programs below).
Many companies, including airlines and retail stores, reward good or “preferred” customers with special

c
promotions, such as email “special deals” and surprise price reductions at the cash register.

a
Sales promotion can be classified based on the primary target audience to whom the promotion is directed.

on
These include:

r
 Consumer Market Directed - Possibly the most well-known methods of sales promotion are those

d
intended to appeal to the final consumer. Consumers are exposed to sales promotions nearly everyday, and

e
as discussed later, many buyers are conditioned to look for sales promotions prior to making purchase
decisions.
 Trade Market Directed – Marketers use sales promotions to target all customers including partners
within their channel of distribution. Trade promotions are initially used to entice channel members to carry
a marketer’s products and, once products are stocked, marketers utilize promotions to strengthen the
channel relationship.
 Business-to-Business Market Directed – A small, but important, sub-set of sales promotions are targeted
to the business-to-business market. While these promotions may not carry the glamour associated with
consumer or trade promotions, B-to-B promotions are used in many industries.

INCENTIVES TO MIDDLEMEN

The other name for dealer promotion is trade promotion. Manufacturers use a number of techniques to
secure the co-operation of wholesalers, retailers or the middlemen. These activities, which increase the interest and
enthusiasm of dealers and distributors, are called dealer or distributor sales promotion. It is the middlemen who are
important persons for the fast movements of products. Hence this must be offered with some incentive.

Page 36
Following are the dealer sales promotion devices:

1. Buying Allowance:
It is an offer of money off or temporary reduction to dealers for purchasing in stipulated period of time. It is a very
effective method to introduce new products in the market. It encourages the dealers to buy a quantity that they will
not buy in ordinary time. This buying allowance gives the dealers immediate profit, and price redemption. A wet
grinder producer will give one grinder free if one purchases five wet grinders at a time.

2. Merchandise Allowance:
An advertising allowance is given to the dealers for advertising the features of the manufacturer’s product. A
display allowance is given to them for arranging special displays of the product. After verifying the promotional
work of the dealer, the manufacturers will give a certain amount of money for promotional activities.
They hope that additional efforts will be taken to increase the sales at retail level. Some manufacturers, as an

m
encouragement, offer additional quantities of merchandise. This technique is known as merchandise deal e.g.,

o
Godrej company offers the dealers one extra soap cake, free of cost, when one purchases a dozen soap cakes.

a . c
3. Price Deals:

y
Apart from the regular discount, special discounts are also allowed to the dealers for a specified quantity of

r
purchase. This special discount is over and above the regular discount. For instance, a regular discount of Rs. 10

ha
per case is allowed; and if the dealer purchases 100 cases at a time, he will be given a discount of Rs. 12 per case,
i.e., Rs. 200 extra for the purchase of 100 cases.

a c
on
4. Push Money or Premium:
Manufacturers may offer push money. It is a payment in cash or gifts given to dealers or to their sales force to push

r
the manufacturer’s product. To push his brand, the manufacturer will offer free specialty items that carry

d
company’s name, such as pens, pencils, calendars, match boxes, memo pads and yard sticks etc. This is a device

e
for aggressive selling.

5. Co-operative Advertising:
Dealers spend money in advertising manufacturer’s product with the consent of the manufacturers. The dealer can
claim an allowance by giving the proof of the advertisement. This is an indirect advertising for the manufacturer. It
will increase the sales of the manufacturer’s product. But it is a burden on the manufacturer’s budget.

6. Dealer Sales Contests:

This is an indirect way of boosting the sales. This type of contest is conducted at the level of retailers and
wholesalers. This is in the form of window display, store display, sales (volume) etc. Prize is awarded to the
outstanding achievements. This method is aimed at stimulating and motivating distributors, dealers, sales-staff etc.

7. Dealer’s Listed Promotion:

Listing dealer is an advertisement. It gives a list of dealers or retailers who stock the product or who are engaged in
its promotion. For example, the advertisement of Bombay Dyeing in newspapers carries the names of the stockiest
of their products. The consumer can buy the product from anyone of the listed

Page 37
dealers. This method induces the dealers to stock the products; and the consumers are encouraged to buy the
products from the listed dealers.

8. Dealer’s Gift:
Manufacturers give attractive and useful articles to dealers against their order. The articles are transistor, radio,
television set, clock, watch etc. Some manufacturers offer free holidays family tours to dealers who place more
orders. Ralli Fan Co., arranges for free holidays tours to those who sell the maximum fans in a year.

9. Point-of-purchase:
This plays the role of silent salesman. Point-of-purchase is also known as dealer-aids, dealer displays, and dealer
hopes etc. The competition among the retailers or traders has encouraged point-of-purchase advertising, which is a
significant method for sales promotion. It means advertising at the point of purchase by the consumers.
It is generally at the level of retailer’s shop. For instance floor displays, stands, overhead signs, wall signs, posters

m
etc., are examples of point-of-purchase materials. Again, it may be exterior or interior items. Exterior items like

o
banners, displays are utilized by firms like service station.

c
Interior items like floor display, end of counter displays, displays at walls, shelves, hanging from ceiling etc. are

a .
found in the store. Retailers adopt this method to draw the attention of customers and create an interest in the

y
minds of the prospects. This method is suitable for consumer goods as well as industrial goods.

ha r
INCENTIVES TO CONSUMER

a c
Activities aimed at reaching the consumer at his home or in his office may be called consumer sales

on
promotion. It is aimed to inform or educate the consumers and to stimulate the consumers. Success in sales
depends on consumers’ co-operation. Consumer sales promotion increases the use of product by the consumers,

r
attracts new customers and stands straight among the competitors, to introduce new products and to promote

d
established products.

e
The following are the various sales promotion schemes used at the consumers’ level:

1. Sampling:
Free samples are given to consumers to increase their interest in the product. They are also given to introduce a
new product and expand the market. It increases the sales volume when the product is a new one to the customers.
It is an effective device when the product is purchased often, e.g., soaps, detergents, tea or coffee etc.
It is a method of demand creation. Sampling gives a chance to the consumers to compare the products with other
substitutes. Samples are given to doctors by medical representatives. Specimen copies of books are given to
professors. The idea behind this is that they recommend their products for use to patients or students.
The samples may be delivered door to door, sent by mail, picked up in a store, attached to another product etc. It is
the most effective way to introduce a new product. It is costly to produce a sample. It is the most expensive
method. It is costly to distributors also. It is not justifiable for well-established product, a product with slow
turnover, a product having less profit, perishable products etc.

2. Coupons:

Page 38
Coupons are supplied along with a product. It is a certificate that reduces prices. Coupons can be mailed, enclosed
in the packets or printed in the advertisements. The purpose is to attract the customers and bring them to a
particular shop to increase the sales of a particular brand.

The coupons are used:

(1) To introduce new products,
(2) To increase the sale of an established product,
(3) To sell new and larger size of a product,
(4) To encourage repeated sales, and
(5) To switch on consumer from one brand to another brand. It is a short-run stimulus.

3. Demonstration:
It is the instructions to educate the consumers in the manner of using the product. It is a promotional tool to attract

m
the attention of the consumers. When products are complex and of a technical nature, demonstration is necessary,

o
e.g., computers, field machinery, electrical pumping set etc. Demonstration is done in front of consumers for mix,

. c
wet grinder in retail shops etc.

r y a
4. Contests:

ha
These are conducted to attract new customers or to introduce new products. The consumers are asked to state in a
few words why they prefer a particular product. To enter into the contest, the consumers must purchase a product

c
and submit the evidence (a label or package or a card attached to the product) with the entry form for contest.

a
To take part in the contest the consumers must be interested in the product. Consumers’ skill and their ideas are

on
tested and the prize is given to the best entry. It stimulates sales at the retail level. Entry forms correctly filled are
submitted to the panel of judges. They will select the best and prizes will be given to the successful consumers.

r
Like contest, sweepstakes and games are also employed in sales promotions, and prizes are offered to the winners.

e d
5. Money Refund Offers:
If the purchaser is not satisfied with the product, a part or all of the purchaser’s money will be refunded. It is stated
on the package. It will create new users and strengthen the brand loyalty. Sometimes, the money will be refunded
if 10 top covers or 10 empty bottles or 10 packages are sent back to the manufacturers.

6. Premium Offers:
It is a temporary price reduction which increases the instinct of the buyers. Products are offered free or at a reduced
cost as an inducement for purchasing. It is offered to consumers for consumer goods like soap, brush, paste,
washing powder, glucose etc. For instance, when the customer buys two soaps, a soap box is given free along with
the soaps. The soap box is a premium. In certain cases, the price is reduced. The reduced amount is a premium.

There are many types of premium offers:

(a) Direct premium
(b) A reusable container
(c) Free-in-mail premium
(d) A self-liquidating premium
(e) Trading stamps.

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7. Price off Offer:

It stimulates sales during a slump season. It gives a temporary discount to the consumers, i.e., goods are offered at
a rate less than the labelled rate. Fans are sold at a reduction rate in rainy season.

8. Consumer Sweepstakes:
Consumers submit their names for inclusion in a list of prize-winning contest. A ticket (like a lottery ticket) is
given to the consumer of a specific brand. At the specified time, lots will be drawn. The prize- winner gets the
prize. This system is followed by retail businessmen to promote sales.

9. Buy-back Allowance:
Allowance is given following a previous trade deal. That is, trade deal offers a certain amount of money for new
purchases based on the purchased quantity. It prevents decline in post-trade deal. Buyers’ motivation is increased

m
because of their cooperation on the first trade deal, e.g., when cinthol and marvel soaps are concerned, the

o
salesmen give one mug and two coupons free. If we purchase the two soaps by giving the coupons to the shop, the

. c
seller will reduce Rs. 2/- from the original price.

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10. Free Trials:

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It consists of inviting prospective purchasers to try the product without cost, in the hope that they will buy the

ha
product. Thus, buyers are encouraged by free trial to stimulate purchase interest.

a c
DESIGN, IMPLEMENTATION AND EVALUATION OF EFFECTIVENESS OF SALES

on
PROMOTION
An effective sales promotion gives you a way to attract customers while introducing and building your

r
brand. Sales promotion programs need to be sporadic events so your customers feel as if they’re getting a real deal

d
and need to jump on it immediately. Otherwise, if you put on too many sales events, your customers may decide to

e
just wait until the next sale to buy your company’s offerings, and then you’ll see a decline in your overall profit.

Identify Your Target Market

All sales promotion programs start with identifying your primary and secondary target markets. If you sell directly
to consumers, take a look at the characteristics of the market to learn about their buying habits, demographics and
the media outlets to which they pay attention. If you sell to channels, look for their common characteristics so you
learn what gets their attention and compels them to give you more shelf space or get the dealers enthusiastic about
your product.

Setting Goals
Determine the goals for your promotion, and include actual sales figures you want to reach. Your goals may
include introducing your brand to your target market or building your database of customers so you can market to
them in the future. If you sell your product through distribution channels, your goal may include encouraging those
channels to give you optimal shelf space and getting their customers enthused about your offerings.

Choosing the Mix

Most sales promotion plans require a mix of media to reach the target market. You may need to get
announcements into customers' mailboxes, in print publications, or on the radio and television. Plan a

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 RAMARAJA INSTITUTE OF TECHNOLOGY & SCIENCE
ICET CODES: RMRJ

social media campaign that includes updating your website with the sales promotion information and postings via
Facebook and Twitter that get people enthused about the event. If you sell to channels, involve your sales force and
use trade shows as ways to build enthusiasm. Include a press campaign to build buzz about your promotion.

Creating the Message

The design of your message needs to appeal to your target market, so use graphics, headlines and copy that grab
attention and cause the reader to take action. Offer coupons or discounts to entice prospects to buy. If you rely on
your sales staff to push your product, give them an incentive to get the word out and increase orders.

Implementation
Knowing your target market and its buying habits helps you decide on the best time to implement your sales
promotion. Your promotion must also match up with your ability to provide enough product to fill orders. If you
use direct marketing tactics to get in front of prospects, include enough time to test the piece so you can make

m
changes that make the message more compelling.

. c o
Tracking

a
Keep an eye on the ongoing promotion to make sure everything stays on track. You also need to evaluate the

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promotion once it finishes to determine the success of the event and how goals were met.

ha r
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dr on
e

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 UNIT – V
CONSUMER PROMOTION
CONSUMER PROMOTION TOOLS

Activities aimed at reaching the consumer at his home or in his office may be called consumer sales
promotion. It is aimed to inform or educate the consumers and to stimulate the consumers. Success in sales
depends on consumers’ co-operation. Consumer sales promotion increases the use of product by the consumers,
attracts new customers and stands straight among the competitors, to introduce new products and to promote
established products.

m
The following are the various sales promotion schemes used at the consumers’ level:

c o
1. SAMPLING:

.
Free samples are given to consumers to increase their interest in the product. They are also given to

y a
introduce a new product and expand the market. It increases the sales volume when the product is a new one to the

r
customers. It is an effective device when the product is purchased often, e.g., soaps, detergents, tea or coffee etc.

ha
It is a method of demand creation. Sampling gives a chance to the consumers to compare the products with other
substitutes. Samples are given to doctors by medical representatives. Specimen copies of books are given to

c
professors. The idea behind this is that they recommend their products for use to patients or students.

a
The samples may be delivered door to door, sent by mail, picked up in a store, attached to another product etc. It is

on
the most effective way to introduce a new product. It is costly to produce a sample. It is the most expensive

r
method. It is costly to distributors also. It is not justifiable for well-established product, a product with slow

d
turnover, a product having less profit, perishable products etc.

e
2. COUPONS:
Coupons are supplied along with a product. It is a certificate that reduces prices. Coupons can be mailed,
enclosed in the packets or printed in the advertisements. The purpose is to attract the customers and bring them to a
particular shop to increase the sales of a particular brand.
The coupons are used:
(1) to introduce new products,
(2) to increase the sale of an established product,
(3) to sell new and larger size of a product,
(4) to encourage repeated sales, and
(5) to switch on consumer from one brand to another brand. It is a short-run stimulus.

3. REBATES
A rebate is an amount paid by way of reduction, return, or refund on what has already been paid or
contributed. It is a type of sales promotion that marketers use primarily as incentives or supplements to product
sales. The mail-in rebate (MIR) is the most common. A MIR entitles the buyer to mail in a coupon, receipt, and
barcode in order to receive a check for a particular amount, depending on the particular product, time, and often
place of purchase. Rebates are offered by either the retailer or the manufacturer of the chosen product.

Page 42
4. PRICE OFF OFFER:
It stimulates sales during a slump season. It gives a temporary discount to the consumers, i.e., goods are
offered at a rate less than the labelled rate. Fans are sold at a reduction rate in rainy season.

5. PREMIUM OFFERS:
It is a temporary price reduction which increases the instinct of the buyers. Products are offered free or at a
reduced cost as an inducement for purchasing. It is offered to consumers for consumer goods like soap, brush,
paste, washing powder, glucose etc. For instance, when the customer buys two soaps, a soap box is given free
along with the soaps. The soap box is a premium. In certain cases, the price is reduced. The reduced amount is a
premium.

There are many types of premium offers:

(a) Direct premium

m
(b) A reusable container

o
(c) Free-in-mail premium

. c
(d) A self-liquidating premium

a
(e) Trading stamps.

r y
ha
(a) Direct Premium:
A with-pack premium accompanies the product inside (in pack) or outside (on-pack) the package e.g., one plastic

c
spoon in Taj tea or one steel spoon inside glucose-D or Cadbury sweets inside the bourn-vita refill pack etc.

on a
(b) A Reusable Container:
It is a container which can be reused after the product is used. Point soap powder, sway soap powder etc. are in

r
plastic buckets or plastic containers.

e d
(c) Free in Mail Premium:
Premium items are sent by the company by mail to consumers who are requested to send the proof of their
purchase. For instance cigarette companies offer a packet of 10 cigarettes against 10 empty covers.

(d) A Self-liquidating Premium:

It is an item sold below its normal retail price to consumers. The cost of the additional product is collected from
the buyer at a concessional rate. For instance, a steel tumbler is given free of cost if you buy a packet of 200 gms of
sunrise instant coffee; or a soap powder manufacturer offers two kilograms of soap powder along with a plastic
bucket at 50% off price. This method increases sales and brings benefits.

(e) Trading Stamps:

It is given for purchasing the product in a particular shop. It is a premium given to the consumers by the seller in
the form of stamps. These stamps are redeemable at the stamp redemption centres. To attract customers the retail
shops use trading stamps.

6. PRIZES
Apart from the regular discount, special discounts are also allowed to the dealers for a specified quantity of
purchase. This special discount is over and above the regular discount. For instance, a regular

Page 43
discount of Rs. 10 per case is allowed; and if the dealer purchases 100 cases at a time, he will be given a discount
of Rs. 12 per case, i.e., Rs. 200 extra for the purchase of 100 cases.

7. CONTESTS
These are conducted to attract new customers or to introduce new products. The consumers are asked to
state in a few words why they prefer a particular product. To enter into the contest, the consumers must purchase a
product and submit the evidence (a label or package or a card attached to the product) with the entry form for
contest.
To take part in the contest the consumers must be interested in the product. Consumers’ skill and their ideas are
tested and the prize is given to the best entry. It stimulates sales at the retail level. Entry forms correctly filled are
submitted to the panel of judges. They will select the best and prizes will be given to the successful consumers.
Like contest, sweepstakes and games are also employed in sales promotions, and prizes are offered to the winners.

m
8. SWEEPSTAKES

o
Consumers submit their names for inclusion in a list of prize-winning contest. A ticket (like a lottery

c
ticket) is given to the consumer of a specific brand. At the specified time, lots will be drawn. The prize-winner gets

a .
the prize. This system is followed by retail businessmen to promote sales.

r y
9. GAMES

ha
Games will also promote sales, recent days lot of companies are concentrated to promote their products in
popular games like football and cricket. In recent trends they are launching their products also in games. This is

c
one of the sales promotion weapon used by companies to attract game lovers.

on a
10. PATRONAGE AWARDS

r
Awards provided by companies to promote and encourage the purchasing of their products are called

d
patronage rewards. This tactic helps the companies in promoting their product by giving rewards to the customer

e
for every purchase in form of points. These points can be later redeemed for different rewards specified by the
company.

11. FREE TRIALS

It consists of inviting prospective purchasers to try the product without cost, in the hope that they will buy
the product. Thus, buyers are encouraged by free trial to stimulate purchase interest.

12. PRODUCT WARRANTIES

Types of warranties to offer your customers

A warranty will protect a consumer from problems with the goods or services they buy. Depending on
what type of warranty it is, it could be a protection that a consumer:
 is legally entitled to access
 can choose to buy.
The following clip from our Australian Consumer Law film explains the different types of warranties.

Consumer guarantees
Consumer guarantees are your customer’s rights whenever you sell goods and services. These rights used to be
known as a ‘statutory warranty’. You can not deny a customer their consumer guarantee rights.

Page 44
If goods or services fail to meet a consumer guarantee, you must fix the problem. We call this a ‘remedy’. This will
usually be as a refund, repair, exchange or repeat service. Consumer guarantees apply for the reasonable life of the
product, even if other forms of warranty have run out.

Express warranties
You must honour any promise you make about your goods or services. These might be spoken or written claims.
These include:
 whether your goods or services are high quality
 what state they are in, and how long this will last
 whether they are in good condition, and how long they will stay like that
 whether they do their job properly, and for how long
 what specific characteristics they have, and how long these will last.

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Warranties against defects

. c o
Also known as ‘manufacturer’s warranties’.

a
You might offer a warranty against defects (also called a manufacturer’s warranty) when a customer buys your

y
goods. A warranty against defects doesn’t promise anything about the product itself. It simply makes a promise to

r
fix faults or problems—for example, you might give the customer a replacement.

ha
This type of warranty usually comes with a time limit.

c
You must give the customer the warranty in writing. It will need to:

a
 state the terms clearly and legibly in plain language

on
 provide the warrantor’s name, business address, phone number and email
 outline any time limits

r
 explain details and procedures (such as authorised repairers or transportation)

d
 tell your customers that the warranty won’t affect their consumer guarantees.

e
If you provide a warranty against defects you must comply with the details in that warranty.
A warranty against defects is provided in addition to consumer guarantees and does not limit or replace them.

Example

A consumer buys a deck chair. The chair comes with a written warranty, which states that the manufacturer will
replace the chair if it breaks within 2 years. The chair falls apart after 18 months. The consumer is entitled to the
remedy of having the chair replaced.
Extended warranties
You might offer your customer an extended warranty. This extends the customer’s time to make a claim on an
express warranty or a warranty against defects. Consumer guarantees may entitle your customer to a repair, refund
or replacement even if a warranty period is over.
A consumer does not need to purchase an extended warranty if it only covers a length of time that it would be
reasonable to expect the goods to last for anyway. If you sell extended warranties, you must ensure you are
offering something of value to the customer and not something that is already their legal right.
A business must be fair and honest about this type of warranty. You are not allowed to:
 put undue pressure on the customer to buy it

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  use unfair tactics to sell it
 Mislead anyone about their legal rights.

Example

A consumer buys a $3,000 TV. The TV comes with a 1-year warranty against defects, but she decides not to buy a
3-year extended warranty. 18 months later, the TV stops working. The consumer is entitled to a remedy even
though she did not buy the extended warranty. This is because a $3,000 TV should last for more than 18 months.

12. TIE-IN PROMOTION

Special marketing displays and gimmicks that relate to an ongoing advertising campaign. A tie-in
promotion will carry the same basic theme as the campaign and may be in the form of a sweepstakes offering, a
point-of-purchase advertising display, a premium giveaway, or anything else that will create immediate sales, help

m
to introduce a product, or otherwise enhance the advertising campaign.

. c o
13. CROSS PROMOTION

a
A cross-promotion is a marketing program that targets buyers of a product with an offer to purchase a

y
related product. For example, a buyer purchasing a shirt may be shown a picture of a pair of pants that coordinate

r
with the shirt, or a buyer of a computer program may receive an email offering a reduced price on a guide to using

ha
that program.

a c
14. POP DISPLAYS

on
This plays the role of silent salesman. Point-of-purchase is also known as dealer-aids, dealer displays, and
dealer hopes etc. The competition among the retailers or traders has encouraged point-of- purchase advertising,

r
which is a significant method for sales promotion. It means advertising at the point of purchase by the consumers.

d
It is generally at the level of retailer’s shop. For instance floor displays, stands, overhead signs, wall signs, posters

e
etc., are examples of point-of-purchase materials. Again, it may be exterior or interior items. Exterior items like
banners, displays are utilized by firms like service station.
Interior items like floor display, end of counter displays, displays at walls, shelves, hanging from ceiling etc. are
found in the store. Retailers adopt this method to draw the attention of customers and create an interest in the
minds of the prospects. This method is suitable for consumer goods as well as industrial goods.

15. DEMONSTRATIONS
It is the instructions to educate the consumers in the manner of using the product. It is a promotional tool
to attract the attention of the consumers. When products are complex and of a technical nature, demonstration is
necessary, e.g., computers, field machinery, electrical pumping set etc. Demonstration is done in front of
consumers for mix, wet grinder in retail shops etc.

Further examples:

Demonstration at retail shops:

Sometimes, the demonstrations are organised at the retail stores by company salesmen for the benefit of retailers as
well as consumers.

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School Demonstrations:
When the products happen to be a costly one and a hi-tech one, companies arrange demonstrations in schools or
hotels. Here the consumers are invited to a particular place and demonstrations are arranged.

Door-to-door Demonstrations:
Consumer products companies quite often resort to house- to-house demonstrations. It is considered a highly
specialized field of sales promotion. Eureka Forbes, the consumer appliances firm etc. popularized their products
through door-to-door demonstrations. Demonstrations to key people: Sometimes, demonstrations are organised for
the benefit of key people and influential persons. It is a good selling technique.

TRADE PROMOTION TOOLS

The other name for trade promotion is dealer promotion. Manufacturers use a number of techniques to

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secure the co-operation of wholesalers, retailers or the middlemen. These activities, which increase the interest and

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enthusiasm of dealers and distributors, are called dealer or distributor sales promotion. It is the middlemen who are

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important persons for the fast movements of products. Hence this must be offered with some incentive.

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1. PRICE OFF

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The other name for dealer promotion is trade promotion. Manufacturers use a number of techniques to

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secure the co-operation of wholesalers, retailers or the middlemen. These activities, which increase the interest and

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enthusiasm of dealers and distributors, are called dealer or distributor sales promotion. It is the middlemen who are

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important persons for the fast movements of products. Hence this must be offered with some incentive.

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2. ALLOWANCES

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Discount offered by producers or marketers to distribution channel members (distributors, wholesalers,
retailers) usually as a short-term promotional incentive. Its objective is to effect a lower retail price to stimulate
sales. Not to be confused with trade discount.

Off-Invoice Allowances
Here marketers allow wholesalers and retailers to deduct a set amount from the invoice they receive for
merchandise.
The incentive for the trade with this programme is that the price reduction increases the margin (and profits) a
wholesaler or retailer realizes on the off-invoiced brand.
This scheme is in general available for many products, where if the bill amount is above a certain amount you get a
certain percentage discount. The % varies from around 2% to 10%, from company to company and also from time
to time.

Buying allowance ( Trade Promotion Technique)

It is similar to the off-invoice allowance. It is a discount for the purchase of the promoted product during
the specified period on the purchase of certain minimum quantity of the product. This trade incentive is often used
to gain more distribution or to maintain the existing one.

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Display and advertising allowance
The retailer is required to arrange the product display in a prominent show-window or offer discount to consumers
and advertise this offer in the local newspaper or arrange a point-of-purchase display on the shelf corner. The
retailer earns the incentive only after meeting the conditions set by the manufacturer.

Buy back allowance

Manufacturers sometimes announce a buy-back allowance to encourage re-stocking by retailers. This promotion
immediately follows another type of deal offered to resellers and offered some incentive for new purchases. When
the manufacturer realizes that after the initial deal the inventory levels at the retail level are quite low or depleted,
such an offer helps in building the inventory level with retailers to normal. Eg. Bread, thepalas, perishable gds.

Bill back allowance

The manufacturer offers a discount for every item purchased during the promotion period. At the end after the

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promotion is over, the dealer counts the discount per unit for all the items bought during the promotion period,

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adds any additional promotional allowances as stipulated by the manufacturer and submits the statement. He also

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needs to submit the bill for all such items.

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Slotting allowance

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These are the fees that a retailer charges the manufacturers to make available the space on the shelf for their new

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products. Retail store owners say that the number of brands in each category is multiplying, there is increasing

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competition and margins are decreasing, hence they have no option but to ask for a fee to keep the product on their

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shelf and use the money to improve their shelf design and promotion, etc.

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Merchandise allowance

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In the form of free products packed with regular shipments, are payments to the trade for setting up and

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maintaining displays. The payments are typically far less than manufacturers would have to spend to maintain the

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displays themselves.

3. FREE GOODS
Free goods are given to the dealers to motivate the customers to purchase the main product of the company. This is
one of the psychological way of approaching the customer to make him buy, even he doesn’t want the product.
Almost all the companies in India giving free goods in the manner of additional product or adding the some more
quantity to the existing products. This technique will be working in the rapidly in recent trends.

BUSINESS AND SALES FORCE PROMOTION TOOLS

As dealer and consumer promotion, the sales force promotion also is a necessary one. The activities of
sales force must be induced. In the channel of distribution the role of salesman is very important. The idea of sales
force promotion is to make the salesman’s effort more effective.

The tools for sales force promotions are:

1. Bonus to Sales Force:

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The manufacturer sets a target of sales for a year. If the sales force sell the products above the targeted sales, bonus
is offered to them. This is an encouragement incentive given to the sales people to sell more products—to cross the
quota or targeted sales.

2. Sales Force Contests:

To increase the interest and efforts of sales by sales force over a specified time, these contests are announced. The
prizes are given to the salesman who secures the maximum sales in sales contests. Thus it stimulates the salesmen
to sell more products.

3. Salesmen Meetings and Conferences:

The idea behind these is to educate, inspire and reward salesmen. Encouragement is given to them during the
discussion. New selling techniques are described to them and discussed in the conference.

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4. Trade shows and conventions

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A trade fair (trade show, trade exhibition, or expo) is an exhibition organized so that companies in a
specific industry can showcase and demonstrate their latest products and services, meet with industry partners and
customers, study activities of rivals, and examine recent market trends and opportunities. In contrast to consumer
fairs, only some trade fairs are open to the public, while others can only be attended by company representatives
(members of the trade, e.g. professionals) and members of the press, therefore trade shows are classified as either
"public" or "trade only". A few fairs are hybrids of the two.
Firms enjoy many benefits by using this tool. Many organizations and trade associations organize Trade Shows
and Conventions in order to showcase and promote their goods. Trade Shows are used to display and show new
products to the industry. Firms find new business leads here, introduce new products, sell to the existing customers
and also distribute informational material to educate the customers about their products. Customers who could not
be reached out using the efforts of the sales force can be met here.Such events help the industrial buyers and sellers
to meet at one place which is centrally located.This is one of the most expensive methods of sales promotion. It is
estimated that in the U.S., approximately $20 billion is the annual expenditure made by manufacturers and
marketers to participate in a trade show. It is a very convenient and attractive way of reaching out to a vast pool of
potential buyers. Display areas are allotted to all the participating marketers so as to draw the attention of buyers,
meet potential customers and present the merchandise. The display areas can be as small as a table to as vast as a
floor.
Another advantage of the trade shows is that they offer the management of various companies to walk around the
exhibitions and inspect the competition. They get ideas to bring about changes and

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improvements in their products. Visibility is another vital advantage offered by an exhibition or trade- show. There
are several advantages of exhibiting at a trade show: it improves the efficiency and effectiveness of the marketer’s
efforts, enhances visibility and goodwill, generates new leads, generates revenue at the trade-show, establishes the
marketer and his presence in the industry, demonstrates product without the use of marketing channels, helps in
meeting customers personally, moreover, the target audience can be educated here.
Every year, from 14-27 November, the “India International Trade Fair” is organized by the “India Trade Promotion
Organization” at Pragati Maidan, Delhi. It brings domestic and foreign traders, manufacturers together. Customers
and visitors turn out in huge numbers. The organizations are given a platform to showcase their products to not just
domestic but international buyers.

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