Professional Documents
Culture Documents
Emerging Issues communication for disseminating the relevant and pertinent marketing information
about the product availability, features and terms and explain how these will provide
the benefits to the target market. Therefore, every company in order to survive and
grow has to play the role of an effective communicator in the present competitive
environment.
The company's communication responsibility of disseminating marketing information
goes beyond the target market. It has to communicate to its various marketing
intermediaries in its microenvironment. In addition it has also to communicate to its
different external publics such as its shareholders, the financial community, and
independent media and to its internal publics. This means that a company should have
the knowledge of how to market itself to various groups in order to obtain their
confidence and goodwill. In this unit, an attempt is made to describe the meaning and
importance of marketing communication, communication process and its components,
the procedure of developing effective marketing communication, the concept and
components of promotion mix, various factors that influence promotion mix, the
methods of setting promotion budget, and the concept of integrated marketing
communication.
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3) In what way marketing communication strengthens brand loyalty?
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4) State whether the following statements are True or False:
i) A company has to communicate only to its target market.
ii) The 4 Ps of marketing mix has been popularized by Philip Kotler.
iii) Promotion is necessary to build brand loyalty for existing brands.
iv) Promotion provides information for new brands and brand extensions to
the consumers.
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4. Channel: This is also known i s medium. It is the way by which the sender
conveys the message to the receiver. At the broadest level, channels of
communication are of two types, personal and non-personal. Personal channel of
communication are direct interpersonal (face-to-face) contakt with target individuals
or groups. For example, in personal selling a salesperson contacts the customers and
directly communicates about the sales message to the prospective customers. Here,
communication flows in both directions and the salesperson receives immediate and
dlrect feedback. This enables the salesperson to have greater control over the
communication process. Non-personal channel of communication are those that that
carry a message without interpersonal contact between sender and receiver. Non-
personal channels of communication are generally referred to as the mass media or
mass cor~~nzunicution, since the message is sent to many individuals at one time.
Non-personal channel of communication consist of two major types, print and
broadcast. Print media include newspapers, magazines, direct mail, and billboards;
broadcast media include television, and radio.
5. Receiver: The party for whom the message is intended and is an active part of
the communication process. Generally, receivers are the consumers in the target
market or audience who read, hear, andlor see the marketer's message and
6. Decoding: Just as the sender encodes the message, the receiver must decode it.
Decoding IS the process by which the receiver attempts to convert symbols conveyed
Promotion Decisions and by the sender into a message. Receivers may decode or interpret the message in
Emerging Issues different ways because of their individual characteristics, experiences and
backgrounds. For effective communication to occur, the message decoding process of
the receiver must match the encoding of the sender. Simply put, this means the
receiver understands and correctly interprets what the sender is trying to
communicate.
7. Response: The receiver's set of reactions after seeing, hearing or reading the
message is known as a response. The receiver's response can range from
nonobservable actions such as storing information in memory to immediate action
such as visiting a dealer's shop or purchasing the product. Thus, response is a set of
reactions a receiver has after being exposed to the message.
8. Feedback: It is the communication from a receiver to the sender about how he/
she understood the message and reacted to it. In this reverse flow of communication,
receivers encode their messages and send them to the sender. The sender must then
decode the feedback message. The longer it takes the sender to receive and decode
the feedback, the less valuable it becomes. Feedback is more direct, more frequent
and more immediate when interpersonal communication (sales personnel) channels
are used e.g. salesperson to prospect. Good salespeople receive feedback directly
and immediately from their prospects and can modify their sales presentations to suit
the prospect's requirements. It is usually indirect, slow and hard to obtain when the
communication is through mass media. In fact it can be obtained only if the sender
has made some arrangement to receive. Sender may have to carry out marketing
research to determine whether the receivers have received the message, how many
times, whether they can recall the message, or not, etc.
9. Noise: Throughout the communication process, the message is subject to
extraneous factors that can distract or interfere with its reception. This unplanned
distortion or interference is known as noise. Noise can affect any or all elements of
the communication process. For example, if there are too many advertisements of the
same product (different brands) in a single newspaper or magazine, it can create
distraction. Noise may also occur because the field of experience of the sender and
receiver do not match. Lack of common ground may result in improper encoding of
the message-using a sign, symbol, or words that are unfamiliar or have different
meaning to the receiver. The more common ground there is between the sender and
the receiver, the less likely it is this type of noise will occur.
Successful marketing communication is accomplished when the marketer selects an
appropriate source, develops an effective message or appeal that is encoded properly,
and then selects the channel that will best reach the target audience so that the
message can be effectively decoded and delivered.
In order to know the audience a company may use one important marketing tool,
which is known as imuge analysis. Before sending the message a company should
assess its current image, image of its products and the images of its major
competitors. Image analysis will help the company in finding out its strengths and
.weakness vis-a-vis its competitors and thus help in developing relevant and
appropriate marketing communication to the target customers.
2. Determining the Response Sought or the Communication Objective: After
haying identified the target audience, the sender decides on what response he is
expecting from the receiver. The marketer may be seeking a cognitive, affective or
behavioral response. Of course, in most cases, the final response is purchase. But
purchase is the result of long process of consumer decision making. The marketing
communicator needs to know where the target audience now stands and to what
state it needs to be moved. The response sought depends on the consumer readiness
states. There are six readiness states. These are awareness, knowledge, liking,
prc.fcre~zcr,corlvictiorz ond purchase. These six states are shown in Figure 16.2.
,
Figurel6.2: Consumer Readiness Sptes
The message developed should be in tune with the consumer readiness state. For
example, if the target audience is totally unaware of the product then the
communicator should build awareness and knowledge. If the target audience knows
the product then the communicator should try to build liking, preference and
conviction. Finally, some section of the target audience might be convinced about the
product, but they have not decided to purchase it. The communicator must lead them
to take the final step i.e. purchase.
3. Dedgning the Effective Message: After deciding about the type of response
sought from the receiver, the next step for the communicator is to develop an
effective message. The message should be able to attract the receiver's attention,
arouse interest, kindle desire for the product or service, and finally get a desired
action i.e. the actual purchase.
Promotion Decisions and There are four important decisions which marketing communicator has to keep in
Emerging Issues mind while designing an effective mat communication message. The important
decision areas relating to message design are: 1) message content (what to say?),
2) message structure (how to say it logically?), 3) messuge format (how to say it
symbolically?), and 4) message source (who should say it?). Let us discuss these
four dimensions of message design in somewhat detail.
Message Content: This dimension is related with the key or central idea or the
appeal of a promotional message that will produce the desired response from the
target audience. For instance, the central idea or appeal in the Pepsi TV
advertisement is "Yeh Dil Mange More". When an appeal or central idea is used
unchanged over a long period of time to lend consistency to the series of promotional
message: it is called a Theme. The appeal or theme in most promotional messages
relates to product features or claims about the product.
Marketers use three basic types of appeals in their marketing communication. They
are: i) ~ationalappeals, ii) emotional appeals, and iii) moral appeals.
Rational appeals show that the product will deliver the claimed benefits. These
appeals relate to a product's quality, economy (price), value or performance. In
fact most consumer durable marketers such as refrigerators, automobiles, air
conditioners, washing machines and other major appliances, and industrial
products, use rational appeals in their promotional messages including
advertising.
Emotional Appeals attempt to stir up either negative or positive emotions that
may motivate the target audience to purchase the product or brand of the
company. Such appeals use either negative emotions (such as fear, guilt. shame)
or positive emotions (such as love, joy, pride, humor) to stimulate action or
purchase. For example, fear appeal is often used by Life Insurance Corporation
(LIC) to encourage people to insure themselves. Emotional appeals are used for
the fast moving consumer goods (FMCGs), services, and some consumer
durable products. Examples include clothing, ready made garments,
perfumes, cosmetics, etc. Horlicks, a health drink uses love appeal in its
advertisements.
Moral Appeals aim to give the audience a sense of what is right and good.
They are often used to support various social causes such as planned family,
clean environment, and equal rights for women, etc. Moral appeals are used
seldom as far as commercial products are concerned.
Message Structure: Message effectiveness depends on structure as well as content.
For example, a communicator may think that one sided arguments or presentations
that praise a product would be more effective than two-sided arguments or
presentations that also mention some of the shortcomings of the product. Yet two-
sided messages may be more appropriate, especially when some negative association
must be overcome. Two-sided messages are found to be more effective in case of
educated audiences al~dthose who initially had a negative feeling towards the
product. The second issue in the context of message structure is the order of the
presentation. The order in which arguments are presented is also an important part of
message structure. It is observed that in case of one-sided message, presenting the
strongest argument'first has the advantage of attracting attention and interest. This is
important in newspapers and other media where the audience often does not attend to
the whole message. In case of a two-sided message, if the audience is initially
opposed, the communicator might start with the other side's argument and conclude
with the strongest argument.
Message Format: The communicator must develop a strong message format. For
example, if the message has to be used in a printed advertisement in newspapers or
magazines, the sender has to decide on the type and length of headline, the illustration
(or photograph), the copy (the written part of the advertisement, other than the
headline), colour etc. For radio, the communicator has to choose words, voice
qualities, and vocalization. If the message is to be carried in TV or in person, all of
these elements plus body language (nonverbal actions such as gestures, hand
movements etc) have to be planned. If the message is carried by the product or its
packaging, the communicator has to pay attention to colour, texture, smell, size and shape.
Message Source: The fact of how the target audience perceives the sender (or
source) can have a great impact on communication effectiveness. Messages
delivered by attractive or popular sources achieve higher attention and recall, which is
why advei-tifers often use celebrities as spokespersons. In particular, messages
delivered by highly credible sources are more persuasive, so pharmaceutical
companies use doctors to testify their products benefits because doctors command
high credibility. Source credibility refers to the target receivers' perception of the
sender's bel~evab~l~ty (i.e., how believable is the source or the sender?). Source
credibility has an influence on how target receivers will evaluate and react to the
message. There are three factors that underly source credibility: expertise,
rru.stworthiizess, and likeuhility.
e Expertise refers to the specialized knowledge which the sender is expected to
have by virtue of his professidn, occupation or experience. For example, doctors,
scientists, engineers, professors and other technical experts are rated high on
expertise in their respective areas.
Trristworthiness is related to how objective and honest the source is perceived
to be. Friends are trusted more than strangers or salespersons, and people who
are not paid to endorse a product are seen as more trustworthy than people who
ale paid. In fact tnistworthiness is related to expertise. If a well known expert
promotes a product, histher statements will be trusted more. If a company with
an excellent track record of producing high quality products launches a new
product, its product claims are more likely to be trusted than those of an
unknown company making the same product.
e Likeability describes or reflects the source's general attractiveness to the
audience (receivers). Qualities such as straight-forwardness, humor, naturalness,
good looks (appearance), good voice, etc., make a source more likeable to the
The source with the highest credibility would be one which has the best combination
of all the three factors described above.
4. Selecting Communication Channels: Once the promotional message has been
designed, the communicator must select efficient communication channels to cany it.
There are two broad types of communication channels through which the message
may reach to the audience. They are prsonal communication channels and
nottpersonal communication channels. -
Personal Communication Channels: Personal communication channels invoije two
or more persons communicating directly with each other face to face, person to
audience, over thetelephone, or through e-mail. These channels' effectiveness
depends to a great extent on the opportunities of individualizing the presentation and
feedback. For example, Redeffusion.com inv~teson-line customers to sign up for e-
mail services and recommendations from experts in their choice of various products
available on-line. These channels are of three types: advocate, expert and social
communication channels.
Advocate Channels consist of company salespeople contacting buyers in the
Promotion Decisions and Expert Channels consist of independent experts making statements to target
Emerging Issues buyers.
Social Channels consists of neighbors, friends, family members, and associates
talking to target buyers. The last channel is also popularly known as word-of-
mouth influence and may wield considerable influence in many product
categories.
Personal influence carries especially great weight in two situations. One is with '
products that are expensive, risky or purchased infrequently. The other situation is
where the product suggests something about user's status or taste. In both cases,
consumers will obtain information from others before making a purchase decision.
Companies can take several steps to stimulate personal influence channels to work on
their behalf:
Identify influential individuals and companies and devote extra efforts to them.
Create opinion leaders-people whose opinions are sought by others-by supplying
certain people with the product on attractive terms.
Work through community influentials such as local well known persons and head
of the civic organizations.
Use influential or believable people in testimonial advertising.
Develop word-of-mouth referral channels to build business.
Nonpersonal Communication Channels: Nonpersonal communication channels are
media that carry messages without personal contact or feedback. Nonpersonal
communication channels include media, atmospheres, and events.
Media consist of print media (newspapers, magazines, direct mail), broadcast
media(radi0, television), electronic med~a(audiotape, videotape, CD-ROM,
DVD, Web page), and display m d i a (billboards, signs, posters). Most
nonpersonal messages come from these media which are normally paid by the
marketers.
Atmospheres are designed environments that create or reinforce the
consumer's leanings towards product purchase. For example, many restaurants
decorate their dinning halls to attract consumers, advocates or law offices are
decorated with fine rugs, books and furniture to communicate confidence and
success, pharmaceutical companies insist their salespeople to wear specific
dress while making visits to the doctors for creating good impressions.
Events are occurrences designed to communicate particular messages to target
audiences. Companies through their public relation departments organize press
conferences, grand openings, cultural events, arts exhibitions, and other events to
communicate with specific audiences.
Although personal communiccltion is often more effective, nonpersonal channels
affect personal attitudes and behaviour through a two-step-flow of communication
process. Ideas often flow from radio, print, television, and Internet sources to opinion
leaders and from these to less media involved population groups. This two-step flow
has several implications. First, the influence of nonpersonal channels on public opinion
is mediated by opinion leaders, people whose opinions are sought or who carry their
opinion to others. Second, the two-step flow shows that people interact primarily
within their own social group and acquire ideas from opinion leaders in their group.
Third, two-step communication suggests that marketers using nonpersonal channels
should direct messages specifically to opinion leaders and let them carry the message
to others.
5. Measuring the Communication Results. After implementing the promotional
program, the marketing communicator must measure its impact on the target
points they recall, how they felt about the message, and whether they have changed I
the product, liked it, and talked to others about it. This step is also known as I
feedback.
19
- Push Strategy
I I Consumers
early 1980s but its advertising increased tremendously with the entry of Japanese
motorcycles in the Indian market. In recent times we have seen the advertising
war between soft drink giants Coca Cola and PepsiCo.
16.5.1 Top-downApproaches
Here a budgetary amount is established or set by the top management and then the
funds are passed down to the various departments. Top-down methods include: ( 1)
affordable method, (2) percentage of sales. (3) unit of sales, and (4) competitive
parity method.
1. Affordable Method: This method is also known as all-you-can-afford or funds
available method. Under this method the company determines th'e amount to be spent
in various areas such as production and operations. Then it allocates what is left to
advertising and promotion, considering this to be amount it can afford. The task to be
performed by the advertising/promotion function is not considered, and the likelihood
of under-or overspending is high, as no guidelines for measuring the effectiveness of
various budgets are established. There are three fundamental weaknesses of this
method. Firstly, it does not encourage the development of long term planning of
promotion expenditure (the amount the company can afford to spend may vary
greatly from year to year and these variations can not easily be predicted). Secondly,
short term promotion opportunities are likely to be overlooked.Thirdly, this method
completely ignores the role of promotion as an investment. Despite these
weaknesses, many companies use the affordable method-both small and big.
2. Percentage-of-sales Method: Of the numerous approaches to determining the
promotion budget, the concept of percentage-of-sales is the most popular. In its
simplest form percentage-of-sales involves applying a predetermined percentage
figure to the value of sales achieved in the previous financial year. This percentage
figure remains constant for a number of years. Thus if the company had sales in the
previous year of Rs.10 crore and the percentage figure company has used in the past
is 5%, the budget for the current year is Rs. 5,000,000. A slight variation which has
gained acceptance in recent years involves the percentage being applied not to the
previous year's sales, but to a forecast of sales for the period covered by the budget.
The obvious attraction of the percentage-of-sales is its simplicity. In addition, the
amount of money allocated to promotion will tend to vary with what the company can
afford, and, assuming that competitors tacitly agree to let promotion expenditures
follow a percentage-of-sales, some degree of competitive stability may result.
However, despite these advantages, this method represents a very mechanical
approach to decision making, and is hard to support analytically. The disadvantages of
this method are; First, that circular reasoning is employed as sales act to determine
promotion, rather than the other way round. Second, because the funds made
22
engaging in long term planning ofqromotion programs. Third, there is no apparent Communication
logical figure which should be employed for setting promotion budget. In addition,
implicit in this method is the fact that once the percentage figure has been decided it
is adhered to rigidly. This inflexibility is obviously undesirable in the face of changing
goals and market conditions and is likely to lead to short term opportunities being
overlooked. Fourth, having used percentage of sales to determine the budget, there is
tendency to allocate the budget in the same way rather than in a more innovative
fashion such as on the basis of opportunities. Finally, this method does not encourage
building the promotion budget by determining what each product and territory
deserves. Thus, despite its popularity, the percentage-of-sales method has no
apparent logical foundation and, like the affordable method, is unlikely to lead the
company to the profit maximizing outlay.
3. Unit of Sales Method: A variation on the percentage-of-sales method that a
company may use is the unit-of-sales method, which simply allocates a specified
rupee amount of promotion to each unit of a brand sold (or expected to be sold). This
i s merely a translation of the percentage-of-sales method into rupees spent per unit.
The budget is then determined by multiplying the individual unit figure by the forecast
of the sales for the forthcoming period. Thus, if the unit promotion expenditure on a
refrigerator is Rs.200 and sales of 80,000 units are forecast, the promotion budget is
Rs. 16,000,000. The unit-of-sales method has the same advantages and disadvantages
as that of percentage-of-sales method.
4. Competitive Parity Method: This is also referred to as share of marketlshare
rf voice method. Some companies set their promotion budget to achieve share-of-
voice parity with competitors. In this method, a company monitors the amount spent
by various significant competitors on promotion and allocates an equal amount or an
amount proportional to (or slightly greater than) the firm's market share relative to the
competition. To use this method it is necessary to collect data on total sales and total
pi-oinotionexpenditure by all firms in the market. If, having collected this information,
a correlation appears to exist between promotion expenditure and subsequent sales
performance it is possible to compute approximately how much funds need to be
spent on promotion to achieve any given market share. An illustration of this method
is shown in the Table 16.1 below.
Table 16.1: illustration of Competitive Parity Method
On the basis of the figures given in the Table 16.1 the company can conclude that for
I
I
3. Estimate costs associated with each task and each element
of promotion mix
services and often used on a per project basis. Public relations agencies were used to
manage the organization's publicity, image, and affairs with relevant publics on an
ongoing basis but were not viewed as integral participants in the marketing
requires that a firm find the right combination of promotional tools and techniques,
defines their role and the extent to which they can or should be used, and coordinate
their activities.
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2) List out different promotion budgeting methods under top-down approach.
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3) State the steps involved in setting the objective and task promotion budget.
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4) Indicate whether the following statements are True or False:
i) Top-down approaches of promotion budgeting are more popular.
i i ) In competitive parity method the collective wisdom of the industry is taken
into consideration.
iii) The objective and task method is the logical method of promotion budgeting.
iv) Through the integrated marketing communication the company can achieve
synergy in communication effort.
Promotion Decisions and
Emerging Issues 16.7 LET US SUM UP
Promotion is one of the four major components of marketing mix. A company has to
play the role of a good communicator. Promotion may be defined as applied
communication used by marketers to exchange persuasive messages and information
between the organization and its various publics.
It includes all the activities designed to stimulate demand. Effective communication
performs three important functions. They are: providing information and persuasion
for the existing and new products, building brand loyalty, and helping consumer5 in
taking purchase decisions. Thus, promotional strategy is designed to infoim, persuade
and remind about the existence and benefits of a product, a service or an idea.
Communication occurs when a sender transmits a message, a receiver receives that
message and the sender and the receiver have a shared meaning. The communication
process consists of nine components: sender, receiver, encoding, decoding, message.
media, response, feedback, and noise. Marketers must understand the process, of
communicating effectively with their target markets and the factors that are important
in developing effective communication are: 1) identifying the target audience
characteristics, 2) determining the response sought or communication objectives, 3)
designing effective message in terms of content, structure, format, and source 4)
selecting the most efficient communication channels, and 5) measuring the
communication results.
The promotion mix is the careful blending of the five components of promotion i.e.,
advertising, personal selling, sales promotion, public relations and publicity, and direct
marketing for the purpose of achieving communication objectives. Advertising is
defined as any paid form of nonpersonal communication through mass media about a
product by an identified sponsor. Personal selling is a face-to-face direct interaction
between the buyer and the seller, Sales promotion is short term promotional activity
that offers an incentive for a limited time period to increase sales and enhance dealer
effectiveness. Public relations and publicity is a non-personal, non-paid form of mass
communication not identified by a sponsor where the company strives to obtain
favourable media coverage. Direct marketing refers to the use of mail, telephone. fax,
e-mail or Internet to communicate directly with or solicit response or dialogue from
specific customers or prospects.
There are four factors that influence the use and relative emphasis of various
promotional tools. These are: 1) product-specific factors, 2) customer-specific
factors, 3) company-specific factors, and 4) situation-specific factors.
Deciding on the promotion budget is one of the most difficult recurrent marketing
decisions. Over the years various companies have developed a number of promotion
budgeting methods through practice and experience. These methods of budgeting can
be broadly divided into top-down and bottom-up approaches. Top-down methods
include: (1) affordable method, (2) percentage of sales, (3) unit of sales, and (4)
competitive parity method. The most popular build-up budgeting method is objective
and task method.
During the 1980s, many companies came to see the need for the integration of their
promotional tools. These firms began moving toward the process of integrated
marketing communication (IMC), which involves coordinating the various promotional
elements and other marketing activities that communicate with a firm's customers to
take advantage of synergy among various communication tools. The IMC approach
helps companies identify the most appropriate and effective methods to contact
customers as well as other stakeholders such as employees, suppliers, investors,
media, and the general public.
Marketing
16.8 KEY WORDS Communication
I Pull Strategy: A promotion strategy that calls for spending a lot on advertising and
consumer promotion to build up consumer demand.
Push Strategy: A promotion strategy that calls for using sales force and trade
promotion to push the product through channels.
Rational Appeals: Appeals that show that the product will deliver the claimed
benefits.
Receiver: The party for whom the message is intended.
Response: The receiver's set of reactions after seeing, hearing or reading the
message.
Sales Promotion: It is defined as a variety of short term incentives to encourage
trial or purchase of a product or service.
Sender: The person or organization that has the information to share with another
person or group of persons.
Top-down Approaches: Promotion budgeting methods where a budgetary amount is
established or set by the top management and then the funds are passed down to the
various departments.
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17.0 OBJECTIVES
After studying this unit, you should be able to:
explain the nature and role of personal selling and sales promotion;
list different types of selling jobs and qualities of a good salesperson;
describe the steps involved in the selling process;
discuss the process involved in planning sales promotions; and
explain the methods of sales promotion.
17.1 INTRODUCTION
In contrast to advertising and publicity, which use impersonal methods of
communication, personal selling makes use of direct personal communications to
~nfluencethe target customers. Personal selling is a highly distinctive method of
I
promotion, and makes use of ofal presentation in conversation with existing and
potential customers, for the purpose of making a sale.
It is one of the oldest methods of business promotion. The contributions made by
I personal selling in making the promotion function more effective have earned the
use of it, and a good number of them realise that they cannot, perhaps, live without it. I
Promotion Decisions and You have already studied that promotion mix consists of four components, viz.,
Emerging Issues personal selling, advertising, publicity and sales promotion. This unit discusses in detail
two components i.e., Personal Selling and Sales Promotion.
The importance of Personal Selling in the Indian context stands out due to the !
following factors: I
1) In the absence of the availability of all India media many companies find it expedient
to extensively use personal selling to achieve their promotional objectives.
2) Companies which cannot afford a large outlay for advertising on a regular basis
also find personal selling a more reliable method.
3) The vast network of our distribution system needs the support of the
manufacturer sales force for market combing as well as development.
4) Low levels of literacy and lack of adequate customer education regarding
Promotion Decisions and .............................................................................................................................
Emerging Issues
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Up to this point we were discussing the role of personal selling and the degree of
creativity required in a salesperson to perform his task satisfactorily. Now we will
take a look at the selling process followed for completing a sale. Though the steps in
the selling process discussed below will be applicable to most of the selling situation,
what will differ will be the degree of importance given to each step of the process
under different selling situations. The basic steps in the selling process are given in
Figure 17.1. A salesperson must become accomplished at performing the selling
steps. These steps are explained below.
SALES
PRESENTATION Arouse Desire
Preparation: Before starting the selling job, a salesperson should make a valuable
investment of time and resources to know the products he will be selling, know the
customers (i.e. customer types, buying motives and buying proces) to whom he will
be selling, know the competitors against whom he will be selling, and finally know the
philosophy, policies and range of products of his company. In short, he should be well
equipped with the fundamentals of selling.
Prospecting: This step of the selling process deals with locating and preparing a list
of prospective customers. Prospects can be located through (1) identifying the
potential of buying more in the existing customers, (2)recommendations of existing
customers, (3) winning back lost customers, (4) attracting competitor's customers,
(5) customers' information request from advertisement, (6) newspaper
announcements, (7) public records, (8) directories like telephone,-trade association
etc., (9) other salesmen, (10) references from friends, neighbours and business
associates, and (1 1 ) cold canvasing, that is, going from door-to-door.
Promotion Decisions and The located prospects should first be qualified broadly in terms of (i) whether they
Emerging Issues want the product and how intense their want is, (ii) whether they have the adequate
purchasing power, and (iii) whether and who possesses the power or authorisation to
purchase and spend the required money. The qualifying of prospects is the process of
separating the prospects from the suspects.
It is worth mentioning here that the ability to prospect is the most essential ability of a
successful salesperson. A good salesperson keeps examining, weeding out the
already tapped prospects and updating his lists of prospects, and remains in constant
search of new prospects.
These doubts ok objections should be welcome and they should be answered with
confidence. There is certainly no doubt that the prospect has to be thoroughly
convinced that the product would satisfy his need. The ability of the salesperson of
mind reading of the prospects, enables him to anticipate the prospect's objections and
The golden rules for handling objections are: (1) welcome the objection and show
respect to the prospect, and (2) do not argue with the prospect. Even when the
objections raised are half-baked or trivial in nature, the salesperson should handle the
situation tactfully. Even under these circumstances courtesy should not be lost sight
of, and while the discussion is on, the salesperson should start recounting the benefits
of the product agreed upon, and lead the prospect to make a favourable decision. It
should be remembered that handling objections sharpens the selling skills of the
Closing the Sale: Closing is that aspect of the selling process in which the
salesperson asks the prospect to buy the product. There is a critical point during each
presentation when the salesperson should ask for the order. Pending the location of .
the critical point, as the objections are being met, the salesperson should help reduce
the choice of options, summarise the benefits of buying, and the consequences of not
buying, and if need be, make use of the big idea appeal of buying' 'now' at that
The salesperson should have the ability of catching the buying signals given by the
prospect and should act on them fast. Some such signals are changing the sitting/
standing position and moving closer to the product; reading the instructions on the
product; perusing the testimonials; showing hesitation in being able to afford; asking
for another demonstration, if applicable; checking the warranty or asking questions
relating to warranty terms. These signals, show that the time is ripe to start taking the
Post-sale Follow-up: The selling process does not come to an end by writing the
order. A few repetitions reassuring the benefits of the product keep the customer
sold. Follow-up provides an opportunity to ensure that the product is being rightly
used, and if necesary to re-explain the method of using, handling, and storing of the
22) Poise: His maturity is reflected in his behaviour. He should be positive and
confident, energetic and businesslike. He should be able to demonstrate to your
customers that he knows what he is talking about.
23) Self-control: He can handle difficult people and situations calmly.
24) Self-starter: Your man works well without constant supervision and is able to
make decisions on his own.
25) Speech: He can speak clearly and maturely in a natural tone. He can
emphasize sales points with sincerity and friendliness.
Promotion Decisions and Check Your Progress C
Emerging Issues
State whether following statements are true or false.
i) Personal selling provides marketers with greatest opportunity to adjust a
message to satisfy customers' information needs.
ii) The personal selling process begins with approaching the customer.
iii) An important function of the technical salesperson 1s to provide advice on the
application of the product.
iv) Missionary salesperson is aposition where salesperson builds goodwill and
educates the consumer while talung orders and selling the firm's goods and services.
V) Getting the order is called closing the sale.
Dlrecred ar
Non-users TraddSuppliers Salesforce
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Table 17.2: Sales Promotion Methods: Meaning and Objectives Personal Selling and
2. Quantity-off offers Offering more quantity of the same To encourage moreilonger duration
product at no extra cost or with a consumption, higher or excess
very nominal increase in the price quantity movement from the
of the larger quantity packs. factory, trade up consumer for
higher quantity pack size.
h ) Banded Premium Where the premium article is Sampling new products, adding
banded to the package of the speed to slow moving products.
product say with cellotape etc.
. c ) Over-the-counter When the premium article is neither To counter competition, improve
(OTC) Premium inserted inside nor banded to the inventory clearance at the trade
product package but is given away level.
to the consumer over the counter
alongwith the product package.
When the product itself is placed in
an attractive and reusable container As a durable reminder at home.
which serves as a gift.
e) Self-liquidating Where the consumer usually is
asked to pay a specified amount to To induce consumer to appropriate
liquidate or offset a part or full cost premium article, reinforce brand
of the premium article or the image, encourage more consumption,
scheme administration costs. enables sponsor to offer better
quality premium.
f ) Personality Where the consumer is required to
redeem a specified proof-of- To build loyalty and reward the
purchase for the premium article. consumer for that to counter
Proof-of-purchase may be labels, competitively offers.
pack tops, bottle tops, corks, etc.
When the consumer is entitled to
redeem a specific standard To encourage product trial, build
certificate for a product/article free loyalty, trade-up regular users,
o r in part payment. Coupons are stimulate re-purchase rate, solicit
used by both the manufacturer and inquiries.
the dealers for sales promotion.
I
Coupons may be distributed by
mail, by media advertisements,
door-to-door, inside product
package or by dealers on purchase.
5. Refund offers Offer of a refund of money to To induce trial from primary users,
consumer for mailing in a motivate several product purchases,
proof-of-purchase of a obtain displays at the retailers, help
particular product(s). ' retailers tie-in with other products,
switch competing brand users to
sponsor's brand, loading dealers
with increased stock.
Table 17.2 (contd.)
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Promotion Decisions and Sales Promotions Meaning Objectives
Emerging Issues
6. Trading stamps Organised by Trading Stamp To encourage consumer loyalty to
companies or large retailers. certain retail stores.
Trading stamps are a kind of
discount coupons offered to
consumers linked with the quantum
of their purchase. On enough
accumulatio~~ these are redeemable
for various kinds of merchandise.
7. Consumer contests Where individuals are invited to To create brand awareness and
and Lucky draws compete on the basis of creative stimulate interest in the brand,
skills. The latter is based on the acquaint consumers with brand
chance or luck factor. usage and benefits, build traffic at
the store precipitate brand purchase,
obtain consumer feedback, promote
advertising theme of the company.
* The format of this Table is based on Donald W'Cowell's article on Sales Promotion and the Marketing
of Local Govelnment Recreation and Leisure Services. European Journal of Marketing, 18,2.
Though ideal for consumer goods, sales promotions are also used for promoting
industrial goods. The difference in the use lies in the types of schemes offered, and in
the frequency of their offer. Sales promotion schemes offered to industrial customers,
besides thc usual gifts, price-off coupons and contests, include product demonstration,
training to customer staff, offer of interest-free instalment payment plan, ready and
regular availability of repairs and spares, and posting of trained staff to assist/
supel-vise in the working of the equipment in the client's premises, at the
manufacturer's cost. The sales promotion schemes offered at the level of industrial
distributors include: provision of extended credit, and p;ovision of specialised sales/
technical staff at the manufacturer's cost, besides the usual cooperative advertising
and sales promotion, gifts, and organisation of distributors contests. The sales
promotion schemes pdpular~yused to motivate industrial salesforce are: prizes and
awards on special achievements, sales contests, new accounts contests and prompt
service awards.
Check Your Progress D
State whether the following statements are true or false.
i) Sales promotion tends to be used to build up brand loyalty.
ii) The short-tesm trade promotion used frequently with the introduction of a new
product is a buying allowance.
iii) Cons~unersales promotion schemes stimulate trade to carry a product and
promote it aggressively.
iv) Sales promotion activities are only appropriate when directed at the salesforce
level.
17.10 LETUSSUMUP
Personal selling is a direct person-to-person selling and promotion method. The
specific role and goals of personal selling vary from firm to firm depending upon
nature of goods marketed, distribution system used, and the sales strategy adopted by
a firm. The changing market environment calls upon the salesforce to transform itself
in order to perform a more creative role.
Based on the degree of creativity required, McCurry classifies the sales positions into
seven types-merchandise deliverer, inside order-taker, outside order-taker,
missionary salesperson, sales engineer, tangible product seller and intangible product
Promotion Decisions and seller. To accomplish the job of making a sale satisfactorily, a salesperson should
Emerging Issues follow the basic elements of the selling process. These are: preparation, prospecting,
preapproach, approach, sales presentation, handling objections, closing the sale and
post-sale follow up. An understanding of these elements helps a salesperson in
developing skills necesary for successful selling.
Sales promotion, of late, has emerged as one of the more popular methods of
promotion in the case of consumer goods. Stated simply, sales promotion deals with
offering something extra as an incentive to motivate an early purchase. Sales
promotions can be offered at the level of the consumer, trade and salesforce. Sales
promotion schemes used to attain consumer pull include free samples, price-offs,
premium give aways, coupons and contests. Schemes offered for gaining the push
cover promotional allowances, gifts, discounts, cooperative promotions, contests and
awards. To save a sales promotion programme from getting misfired, it should be /
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planned and managed in a systematic manner. i
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Promotion is an important marketing function of each firm. And, rare will be a firm
which makes use of only one promotional method. The commonality in the ultimate
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goal of all the promotional methods apart, their limited suitability in influencing only a
1
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specific part of the consumer adoption process calls for the need to use the
promotional mix in an integrative manner. Given the complexities in the management i
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of the promotion function and its vulnerability to failure, it is desired that the function
be managed professionally.
' Advertising is the poetry of marketing. In this section we are going to diicuss about
various definitions of advertising, their relevant meaning, objective and function of
advertising.
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I 18.2.1 The Meaning of Advertising
The word advertising has been derived form the Latin word "Advert ere" which
rneans to turn (the mind) to. Broadly speaking, advertising does turn the attention of
people to a commodity or service. One of the earliest attempts in defining advertising
was as follows:" The dissemination (spreading) of information concerning a product,
service or idea to compel action in accordance with the intent of the advertiser".
This definition could include persuasive selling tbough personal communication. It
was, therefore, considered necessary to avoid this overlap. The American Marketing
Association defined advertising as "any paid form of non personal persuasion and
promotion of ideas, goods or services, by an identified sponsor". So advertising is a
paid, non personal (mass) communication with an identified sponsor with two distinct
goals of informing( for persuasion and influence) people( communication goal) and
increasing sales (sales goal). Rephrasing this definition we might say that following
are some of the key features of advertising:
1. Advertising is a form of communication for which payment has been made to
the media composite which has carried the communication. When there is no
direct payment or no payment, it is called publicity
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2. The communication process is non perscnal as nobody has personally conveyed
the message 1.e there is no personal contact between the sender and the
receiver of the message. When a retail salesman speaks to us in the sales
counter, we can call it as personal selling as there is direct interaction between
the receiver ( buyer) and the sender( the salesman)
3. The presentation of the message is for promoting ideas, places, concepts, people,
pxtles, goods, services, organizations to create awareness and assist in the
process of consumer decision making. The awareness may lead to persuasion
and hence the consumer may be triggered to take a decision about buying the
product or service being advertised.
4. The sponsor is ~dentifiedin the advertisement either in the form of the brand
name or in the form of the company which produces it. This is relevant as the
ownership of tnessage communicated rests with the sender. If the sponsor is not
identified then the objective of the message will be lost as the potential buyer is
not sure where to search for further information in the form of enquiry or to go
for a consumption choice.
Pmmotinn Decisions and The theory of advertising says that most contacts with consumers or end users, which
Emerging Isbues are individually relatively low in value, must inevitably be handled by indirect means.
Of these the main process used to talk to consumers is advertising. Farris and Buzzell
concluded that advertising1promotion ratios are higher where
The product is standardized, rather than produced to order
There are many end users (almost all households)
The typical purchase amount is small
Sales are made through channel intermediaries rather than the direct to users
1. Define advertising
3. Select any five TV advertising campaigns and identify the following in each case
a. Target audience
b. Sponsor
c. The advertising agency
d. Various media through which it comes
e. The message it wants to give to the audience
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18.2.2 Objectivesof Advertising I
Attention
This model highlights the importance of attracting the attention of the prospects and
creating interest through the advertising messages and its presentation. The desire to
obtain advertised goods/services may be generated to various degrees among
different prospects because of advertising. The final stage of action will depend not
only on the determination of the prospect but also on other factors, such as
availability, which is a function of distribution and logistics.
Lavidge and Steiner propound the second model. This gives much importance to the
Advertising and
Publicity
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combined effect of product characteristics and their relevance to the target audience
and of advertising.
Awareness Knowledge Liking -b
Rogers propounded the third model, which is known as Innovation -Adoption Model.
This model has relevance to new product introductions and is particularly useful for
adoption of non-commercial services or practices in developing countries. The stages
of evaluation and trial before adoption (or purchase) are considered significant in the
design of advertising program. The decision in favor of making an evaluation is likely
to be influenced by information available from various sources including advertising.
Evaluatio~~ constitutes a major step towards the adoption of the product or service.
ii. Advertising Increases Cost: Since the price of a product also indudes the
expenditure on advertising, the consumer tends to pay a higher price.
...
ur. Advertising Leads to Monopoly: Advertising usually lays emphasis on
brands. This emphasis makes the consumer a slave of a particular brand.
Therefore, existing large producers tend to block new competitors from
entering the market, by creating a high degree of brand loyalty though -
advertising.
iv. Advertising Multiplies Needs and Wants: It takes business from one
concern and gives it to another. For example, people today are familiar with
soap, toothpaste, talcum powder. When a new kind of talcum powder is
introduced, advertising will only help to shift demand from one product to
another.
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Advertising has also a brighter side and you as a manager are free to weigh the pros
and cons of advertising before taking a decision for developing a campaign and its
overall impact on the society.
1. Benefits to Producers: Advertising is beneficial to producers in the following
i. Advertising stresses quality and very often prices. This forms an indirect
guarantee to customers. Furthermore large scale production assured by
advertising enables the seller to reduce the production cost and sell the
product at a lower price.
11. - It helps the customers to know where and when the products are available.
This reduces their shopping time.
12. H~~nzoris also used as an effective creative platform. We have seen campaign
of Dabur hajmola candy, Titan watches and BPL mobile on creative platform
with humor as a potent storyline. Humor in India is not much used as its
acceptance in social setting is not healthy in India.
13. Fear is a critical platform, as managers have to be careful in using fear as a
creative platform. Research suggest that smaller amount of fear in the storyline
does not bring the desired change in the attitude of the people where as excess
use of fear creates a self-defensive mechanism among people and hence
reduces its effectiveness on people. Therefore, a moderate amount of fear is
useful. This is called the "Cap Theory of Fear Research" Life Insurance
Corporation, Insurance companies in general, Anti AIDS campaign use fear as a
creative platform.
14. Scx is also used in advertising as a creative platform. Creative directors were
using sex for advertising products related to sexual power enhancing pills and
other consumer shy products like condoms, pills and inner garments. Of late the
use of sex platform is gaining popularity due to changes in the social setting in
b our country and hence we see the advertisements of Tuff shoe, MR Coffee, Lee
Cooper shoe using sex platform. As every society has its own permissibility limit
a manager should be careful while using sex as a platform for advertising.
Other creative platforms include computer graphics and animation, pure product
information and emotional platform. Since we have discussed fear, sex, association
which are constituent of the emotion domain as creative platform , we conclude the
description of the creative platform here.
1) Types of Media
Advertising media can be categorized into five broad types: i) Print media,
ii) Broadcast media, iii) Direct media, iv) Outdoor media, and v) Interactive media.
However, within each of these four categories there will be several classes. For
example, print media includes both newspapers and magazines. Under newspapers
we might have such classifications as daily newspapers, weekly newspapers, morning
newspapers, evening newspapers, and so on. In the case of broadcast media the
choice of units is limited to channels or stations. Let us ekamine various types of
media in detail.
i) Print Media: Print medium comprises newspapers and magazines. The main
difference between newspapers and magazines is the periodicity of their publication.
Netvspapers are published daily, whereas magazines are published periodically i.e.,
weekly, fortnightly, monthly, quarterly or biannually. In both cases, however, the
message is conveyed through words in print, sometimes along with pictures or
photographs. Words in print can be made as attractive, appealing and informative as
possible, so also the accompanying picture. But newspapers and magazines have
certain distinct features of their own, which are outlined below.
Newspapers: Published in different languages, newspapers are widely and
regularly read by the educated public. Reading newspaper is the daily habit of
many people in cities and towns and some literate people in the villages. Many
have also become accustomed to advertisements in newspapers and look for
them as sources of information. The circulation of some of the national dailies in
India runs into several million. Newspapers published in regional languages have
also wide circulation, sometimes in more than one state. Thus, as a medium of
advertising, newspapers reach a very large number of people. Secondly, 1
newspaper advertising is relatively cheaper than other media like radio and
television. The space to be used can be decided in accordance with the need
and cost involved. 'Thirdly, newspapers provide the facility of repeating the 4
message every day, if necessary. Besides, in case of urgency there is scope for
inserting an advertisement without much loss of time. Finally, it is possible to
select a particular newspaper suitable for the audience in view. For national
coverage, a newspaper which has nationwide circulation can be selected. For
regional coverage, a newspaper published in that regional language can be
selected. Since newspapers are read by the general public, they may be used as
suitable media for goods of mass consumption. Many people read the
newspapers in the morning and put them aside afterwards. So, the life of the
advertisement in a newspaper is short.
Magazines: Magazines are also called periodicals as they are published at
periodical intervals - weekly, fortnightly, monthly and so on. Different types of
magazines are published for different categories of readers. For example, there
are popular general magazines containing features articles, news and stories e.g.
India Today, Frontline, Dhann Yug, etc.
There are magazines for children (e.g. Target, Chandamama, etc.) which
include stories of their interest. There are magazines like Business India,
Fortune, Commerce, etc., for businessmen arid executives. Similarly, there are
sports magazines (e.g., Sports Week, Sports Star, etc.) women's magazines (e.g. Advertising and
Femina, Women's Era), professional magazines (e.g. Indian Journal of
Marketing, Indian Medical Journal, etc.), film magazines (e.g. Star & Style,
Filmfare, etc.) and so on.
Apart from the media discussed above, there are several other types of media used
for outdoor advertising. Some such media are slide projection in cinema houses,
films, exhibitions, display in show-cases, etc. Projection of slides in the cinema
theatre before and during the film show is one of the cheaper means of advertising.
Projection of short-films before the commencement of feature film is a relatively
more expensive medium of advertising. But it has the advantages similar to that of
television advertising. Moreover these short films are usually of longer duration
(about 5 minutes) than TV commercials. However, only local people present in the
theatre view slides or films during the show time.
Exhibitions also provide opportunities for advertising goods. Consumer goods can be
displayed and the use of industrial gqods like machinery can be demonstrated in the
exhibition. The limitation of exhibition is that their duration is restricted to specified
period. Showcases displaying goods are located in public places like railway stations,
airports, bus terminals, etc. to attract the attention of the public. Rent is payable for
v) Interactive Media: Nowadays more and more people are using the computers
and interactive media to gather information and entertain themselves. This invites us
to look at internet as a potential media for communication and product information
dissemination. interactive mediaallows an individual to seek information, ask
questions and get answers without the assistance of human beings.
A company website is one of the most common forms of internet advertising.
Consu~nerscan find answers to frequently asked questions from the website which is
normally done by a salesperson. A company web site is an ideal way to reach
. consumers who want details about specific products, as interactive media can provide
large amount of information. The problems of interactive media can be categ0rized.a~
tion Decisi~nsan* how to build traffic to the site, how to get the traffic stay longer at the site and how to
ng Issurb get the viewers to return to the site again for the content.
One of the ways to build traffic is to advertise on other popular and well-trafficked
websites. Advertising Banners (go to site www.vahoo.com to see an advertising
banner) is another form of Internet advertising. The company purchases the space on
a search engine or on the commercial website of an information provider like
ndtv.com or email facility provider like yahoo or hotmail. A typical objective for a
banner ad is to increase brand name recognition. Banners can go beyond achieving
brand awareness because they are hypertext links to the advertiser's website. The
advantage of such an advertisement is that the audience has self selected the topic,
so the marketer's message reaches the involved, highly targeted market.
Pop-up boxes are a refined version of banner advertising A visitor to a particular
website might find that window providing information for subscription pop ups after
the web page loads. The viewer typically has to close the window or enter a response
to the advertisement.
Streaming Media is multimedia content such as audio, video that can be accessed
on the internet without being downloaded first. Software like Realplayer and Apple's
QucikTime allows the internet users to access multimedia content such as audio and
video streams. When visitors to a site use such software to view a program or an
advertisement, they are said to be viewing streaming media. Streaming ads are more
effective than banners and pop ups. Today three dimensional computer generated
video can create phoio realistic results, which, users can either watch linearly or
interact with it. Interactive animated environment will take internet advertising to a
different sphere in coming future. Streaming media advertisements will become more
prevalent with the availability of higher bandwidth on broadband technology.
Broadband technology allows the transfer of data over internet at high speeds
creating a virtual reality.
Computer software programs like Smart Agents or Intelligent Agents find
~nformationwithout the user's having to do any searching function. They store that
information-sometimes that entire websites, complete with images and links on the
user's computer for later viewing. These kind of smart agents that leans the
consumer's preferences and searches out information is making advertising on the
internet and other interactive media more targeted and effective.
Email as an Advertising Medium: The use of email advertising as a promotional .
medium is gaining prominence after advent of internet technology and ecommerce.
This media has the advantage of personification, speed and interactivity. Advertising
via email is very similar to traditional direct mail advertising. Data mining and data
base management are extremely important as they allow the marketers to create
customer profiles and tailor message and products to them. Use of email makes it
easier for the marketer to measure the effectiveness of the medium. A major
disadvantage of email advertising is that the receiver may not read it because he or
she considers it spam, which is the term, used for unsolicited and unwanted email. If
the company sends too many emails, it may decrease the value of the information and
customer may start avoiding the information. Effective marketers have started
sending emails to people who allow them to do so voluntarily through a process called
as Permissive Marketing.
2) Media Scheduling
The media schedule is a time schedule identifying the exact media to be used and the
dates on which advertisements are to appear. Media planners select not only the
general media category but also the specific media vehicles. Selecting specific media
vehicles requires advertisers to consider reach, frequency and timing of the media.
Reach is the percentage of people exposed to an advertisement in a specified Advertising and
medium selected for advertising. This is an important factor for determining the media
use. The advertiser aspiring to reach the maximum audience also has to make cost
comparisons. The major element of the media selection is deciding about the cost per
reach per medium. For example in medium A the tariff is Rs 2001 per column
centimeters and in B it is Rs 2501. If the circulation of the medium A is 50,000 and
medium B is 70,000; the readership ratio (readers per one print) is 1 :2.5 and 1:1.5
respectively for both the medium then the advertising manager has to calculate the
cost per reach for an impression of 15 centimeter by Zcolumn advertisement ( 30
Col. Cms.). The cost for both the medium will be Rs 200* 30= Rs 60001 and Rs
250*30=Rs7500 and the reach will be 50,000*2.5=112500and 70,000*1.5= 105000
respectively. Now the cost per reach will be Rs60001 11 2500=5.33 paisa per person
and Rs 75001105000= 7.14 paisa per person respectively. Therefore, the decision is to
go for Medium A than B though B has higher circulation Hence the cost per reach is
a criteria for deciding a particular media.
Frequency is another factor with cost implications, which highlights the nature and
size of repetition. This is the number of times the advertisement should come in a
specified period. It reflects the an average number of times an average individual is
expected to be exposed to an advertiser's message. The trade off for an advertiser is
between the reach and frequency. If one wants to increase the reach, within a given
budget, he has to trade off with the frequency. In repetitive advertisements the
frequency is more whereas the size of the advertisement is normally small.
However, cost is a significant factor but in large number of cases, strategic and
clualitative issues are also given importance. For example, a factor like the quality of
the reach is a deciding factor over the cost factor. The vernacular media is always
chosen ahead of the English language media due to the coverage. An English
newspaper may have a wider circulation but a vernacular media is a better choice
when one has to decide an entry in to the rural market. Factors like editorial climate,
printing quality, reputation of the media, size of the media and coverage of locality are
qualitative factors having significance on media decisions.
Emerging Issues taken and changes can be made to the communication message through a modified
campaign. Advertising research can be divided in to two categories (I) the pretesting
methods and (2) post testing methods.
Pretesting Methods: Marketers are hesitant to spend a huge sum on advertising
campaign without testing the effect of the advertisement. Pretesting helps managers
to know the likely response of the designed advertisement on audience. The purpose
of advertising is to limit or at best to eliminate the risk of failure. Pretesting can be
conducted from the beginning of conception of an advertisement until the final
advertisement is ready for release. The basic appeal or the concept around which the
advertisement is built can be tested. Then the key constituent of the body copy
including the headline, slogan, body text can also be tested. These can be shown to
the sample audience and its appeal and believability of the claim can be gauged.
Focus group discussions with audience and experiments can be done for testing the
likely affect of a planned campaig.3. Most commonly used method is a consumer jury
test where a consumer panel is asked about their impression on the campaign.
Similarly, many advertisers test the print advertisement through a portfolio test. In a
portfolio method, the real advertisement to be tested is shown with a series of dummy
and competitor advertisements and the respondents give their liking on these
advertisements. There are various laboratory methods like psycho-galvanometer, eye
camera, pupil meter etc used for this purpose. Rough or near finalized television
commercials are shown in consumer homes through a method called in home
projector test or in specially equipped buses or trailers parked in shopping malls
(called trailer tests). After showing the trailer researchers use a consumer survey or
personal interview to obtain viewer's reaction. Pretesting attempts to evaluate the
effectiveness of an advertisement before that advertisement is placed in the mass
media.
Posttesting Methods: Once an advertisement has been run in the chosen media
schedule, post testing is done to determine whether the advertrsemer~thas met the
objectives set by management. Posttests measure hrand awareness through a
nieasure of TOMA (Top of the mind awareness), changes in attitude towards the
brand or/ and nunzher of inquiries generated aboul the product afzcr the
advertisenien~s.Advertisers must gain attention of buyers and get them to remember
the names of the brands or the stores in which the brand can be found. Many
posttests are designed to evaluate recognition and recall. Well known advertisers also
need to test the capability of a particular campaign in reinforcing the previously
established good images.
Recall test can take different forms. In an unaided test, the interviewer does not give
any clue as to the brand whereas in an aided recall test product category clues are
given to derive the brand name. Aided recall tests are not a strong method of \
measuring attention and memory as unaided recall test. Advertisers are also
interested in related recall-the ability of a person who has seen the advertisement to
repeat or playback, specific sales messages or images. These types of tests allow the
researcher to measure the level of achievement of the advertising goal set forth for
the purpose.
Measuring changes in attitude towards a product is more difficult as it demands the
measurement of attitude before exposure and after exposure. So a two part before
and after study is done in these situations.
Measuring inquiries about the product in a traditional media can be done through a
retailer survey. Advertisers of organizational products frequently compare the
numbers of inquiry generated by different magazine advertisements to measure
70 advertising effectiveness. Many advertisers have a toll free number to call for enquiry
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advertising, web traffic analysis software can inform about the site traffic, the pages
viewed, number of FAQs attended and inquiries generated through the email route
to the company. When sales volume is the primary concern, test marketing research
and laboratory experiments are designed to simulate sales behavior though an
increase in sales cannot be solely attributed to advertising alone.
18.5 PUBLICITY
We have discussed the elements of promotion mix that includes advertising, sales
promotion, personal selling and now we will discuss the issues related to Publicity
which is gaining prominence in India as well as in global corporate scenario.
Publicity is defined as the non-personal stimulation of demand for a product, service
or business unit by planting commercially significant news about it in apublished
medium or obtaining favorable presentation of it on radio, televisidn or stage that is
not paid for by the sponsor. The salient features of this definition include
I) Non-Personal/Mass Media: Like advertising, publicity also reaches a very
large number of people at the same time (hence non-personal) through mass
media such as newspapers, radio, TV, etc.
2) Comnzer-cially Sign$icant News: This is one of the features that distinguishes
publicity from advertising. When information about a product or company is
considered newsworthy, mass media tend to communicate that information free
of cost. Since most publicity appears in the form of news items or articles
originating from the media, rather than the advertiser, it has higher credibility
Promotior! I>ecisions and 3) No Sponsor: Since the information originates from the media, there is no
Emerging Issues sponsor, that means the messages are unsigned. This is another point of
difference between advertising and publicity
4) Not Paid For: Since sponsor is not identified in publicity and the information is
not disseminated at his behest, he does not pay for it. This is the third feature
that differentiates publicity from advertising.
5) Purpose: 111some situations, where publicity is properly planned, it may lead to
the creation or reinforcement of a favorable impression about the company and
its products in the minds of people receiving the message. This may lead to a
failorable attitude towards the product or company and, thus, leads to increased
demand for the product.
The recent success of Maruti's public offer oversubscription is a case in point where
publicity was extensively used by the firm for creating investors goodwill. Similarly,
Reliance Infocom used publicity as a support for advertising blitz for launching their
Reliance Mobile business.
Negative publicity can damage the company or product's image, resulting in reduced
demand for the product. For instance, a great deal of adverse publicity was generated
when different media condemned the Union Carbide's negligence in Bhopal gas
tragedy through articles and editorials. Similarly Sterilte industries takeover bid of
Balco created negative publicity in Indian corporate world.
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I. Payment The sponsoring organization has Since the message is-designed
to pay for media space and/or and printed by media, the
time company does not have to pay
Publicity when managed properly can yield better results in building the corporate
image and saving the organization'at the crises. Publicity has advantages and
disadvantages as per the following.
Advantages: Publicity offers several advantages as a promotional tool.
1) It may reach people who do not ordinarily pay any attention to advertising, sales
promotion or sales people.
2) It has greater credibility than advertising because it appears in the context of
editorials or articles.
3) It is relatively inexpensive and provides coverage that would cost lakhs of
1) Advertisers have very little control over what media editors do with the publicity
material that advertisers prepare.
2) Media people disregard material that they do not consider newsworthy - subject
matter that is untimely, uninteresting or not accurate.
3) Even if the material is found newsworthy, the advertiser has no control over how
media people edit the content or schedule the appearance etc.
I People on the line of crisis management should be involved in the press briefings as
they can explain the real situations and measures already taken to arrest the problem.
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ii) Advertising is different from Publicity
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2. Given here under are four situations. Which of these can be classified as
advertisements, publicity, or neither?
ii) Sales executive of a leading 5 star hotel visits the General Manager of a w
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iii) A customer walks into a general merchant's shop and while buying 'Lux'
soap discovers that she can get a stainless steel spoon free if she buys
I 74 'Hamam' soap. Therefore, she bought 'Haman' soap.
.......................................................................................... Advertising and
..........................................................................................
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iv) A toothpaste manufacturing company advertisement claims its brand
whitens teeth. Some days later, a report from a Dental Surgeons'
Conference was published in a newspaper stating that there is no ingredient
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3. Explain how public relation can help in crisis situations of a firm ?
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4. How can a manger create a positive image by using the publicity? Explain this
.with three recent examples.
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19.0 OBJECTIVES
After studying this unit, you should be-able to: 1
In Unit 1 you have studied that the marketing process consists of four steps: (1)
analyzing the marketing opportunities, (2) selecting target markets, (3) developing the
. marketing mix,'and (4) implementing and controlling. From Units 2 to 18 you have
already studied all aspects relating to these four steps. However, as a marketing .
, ,~r execut~veyou may come across certain terminology and issues which are not Emerging Issues in
discussed in the previous units. For instance, you may come across the concept of Marketing
Relationship Marketing, which speaks about establishing long-term relationships with
the stakeholders. How Internet technology is used for marketing? How different it is
to market products or services in the rural markets? How different it is to market the
ideas or concepts like Eradication of Polio, AIDS Control, Population Control, etc., to
the general publics? Some such issues are addressed in this Unit. In specific, this unit
,r is intended to introduce you to a variety of emerging concepts such as Relationship
, Marketing, Services Marketing, Internet Marketing, Green Marketing, Social
Marketing and Rural Marketing.
will make them "human" to their customers. For example, some cookware catalogue
includes recipes and menus; some clothing catalogues include such infonnation as
i how silk fabric is produced or how cashmere sweaters are made. There is also some
I*
evidence that relationship marketing is helping catalogue retailers overcome the
perception thakatalogue prices are higher than store prices. Relationship marketing
is also being practiced by manufacturers and service providers.
Relationship Marketing in Retailing: Today's best retailers realize it is in their
interest to engage in relationship retailing whereby they seek to establish and maintain
long-term bonds with customers rather than activities where by each sales transaction
is a completely new encounter with them. This means the retailers must concentrate
on the total retail experience, monitor satisfaction with customer service and stay in
touch with customers to be effective. In relationship retailing, a firm has to keep t w o
points in mind. Firstly, because it is harder to lure new customers chan to make
existing ones happy, a win-win approach should be enacted. For the retailer to "win"
in the long run (attract shoppers, make sales, earn profits), the customer must also
"win" in the long run (receive good value, be treated with respect, feel welcome by
the retailer). Otherwise, the retailer loses (shoppers patronize competitors) and
customers lose (by having to spend time and money to learn about other retailers).
Secondly, due to advances in computer technology it is now much easier todevelop a
customer database with infonnation on their attributes and past shopping behaviour.
Thus, ongoing customer contact can be better, more frequent and more focused.
Benefits of Relationship Marketing: When a relationship-marketing program is
properly implemented, the firm will begin to focus as much on managing its customers
: as on managing its products. At the same time, companies should realize that while
there is a strong and warranted move toward relationship marketing, it is not effective
i
in all situations. Barbara Jackson (1985) argues that relationship marketing is not
effective in all situations but is extremely effective in the right situations. She sees
transaction marketing as more appropriate with customers who have a short time
horizon and low switching costs, such as buyers of commodities. Relationship
marketing pays off handsomely with customers who have long time horizons and high
switching costs, such as buyers of office automation systems. The customer for a
major system carefully researches competing suppliers and chooses one from whom
it can expect good long-term service and state-of-the-art technology. Both the
customer and the supplier invest a lot of money and time in the relationship. Anderson
and Narus ( 1991) believe that transaction versus relationship marketing is not so
much an issue of the type of industry as of the particular customer's wishes. Some
customers value a high service bundle and will stay with that supplier for a long time.
Other customers want to cut their costs and will switch suppliers for lower costs. In
this case, the company can still retain the customer by agreeing to reduce the price,
provided the customer is willing to accept fewer services. This customer would be
treated on a transaction basis rather than on a relationship-building basis.
81
I
Promotion Decisions and
Emerging Issues 19.3 MARKETING OF SERVICES
You have already studied about services in Unit 7 in Block 3 of this course. You will
study some more details about services marketing in this section.
Marketing theory and practice developed initially in connection with physical products
such as soaps, cars, and other tangible products. However, in the recent years there
has been a phenomenal growth of services. This trend we find world wide. More
than 50% Gross Domestic Product (GDP) is being generated by services and more
than 70% employment in services. More and more tangible or physical products now
contain a service camponent, both to meet the needs of the targeted customer
segment and to create a distinctive differentiation for competitive reasons. Many
manufactured goods are supported by services such as warranties or guarantees.
There are a large rlumber of companies who are mainly in the service business.
Service industries vary greatly in terms of services they provide and their size. In the
present world of information era, many service industries such as b a n h g and other
financial services are not only the mainstay of economy but also dominating Internet
and e-commerce.
iv) Service providers with profit oriented objectives and service providers with
non-profit oriented objectives.
v) Service enterprises under private sector and service enterprises under public
sector.
While the Internet offers a variety of services to users, the most powerful and
popular is the World Wide Web (WWW), commonly referred to as the Web. In fact,
many use the terms Internet and World Wide Web synonymously. For marketers, a
number of Internet features offer potential, but it is the Web that has developed as the
commercial component First, however, it would be useful to examine some of the
Internet terminology.
The Web has the capabilities to move customers and prospects through
successive stages of the buying process.
Web Strategies: Web advertising may take place through the use of display
I~annersand the establishment of a website that provides mare extensive information
There may be n number of potential problems that a firm may face in case of
adopting green marketing approach. One of the main problems is that firms using
green marketing must ensure that their activities are not misleading to consumers or
~ndustry,and do not breach any of the regulations or laws dealing with environmental
Another problem firms face is that those who modify their products due to increased
consumer concern must contend with the fact that consumers' perceptions are
sometimes not correct.
When firms attempt to become socially responsible, they may face the risk that the
environmentally responsible action of today will be found to be harmful in the future.
Given the lim~tedscientific knowledge at any point in time, it may be impossible for a
firm to be certain they have made the correct environmental decision.
While governmental regulation is designed to give consumers the opportunity to make
better decisions or to motivate them to be more environmentally responsible, there is
diff~cultyin establishing policies that will address all environmental issues.
The push to reduce costs or increase profits may not force firms to address the
important issue of environmental degradation. End-of-pipe solutions may not actually
reduce the waste but rather shift it around. While this may be beneficial, it does not
necessarily address the larger environmental problem, though it may minimize its short
term affects. Ultimately most waste produced will enter the waste stream, therefore
to be environmentally responsible organizations should attempt to minimize their
waste, rather than find "appropriate" uses for it.
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2) List out the challenges faced by marketers in rural darketing in India.
19.8 LETUSSUMUP
This Unit discussed a wide range of emerging concepts like Relationship Marketing,
Internet Marketing, Social Marketing, Green Marketing, Rural Marketing, etc.
Relationship marketing builds strong economic, technical and social ties among the
stakeholders. It cuts down on transaction costs and time. In most successful cases,
transactions move from being negotiated each time to being a matter of routine. The
ultimate outcome of relationship marketing is the building of a unique company asset
called a marketing network, which consists of the company and its supporting
stakeholders (customers, employees, suppliers, distributors, retailers, ad agencies, and
others) with whom it has built mutually profitable business relationships. ~ncreasingi~,
the competition is not between companies but between marketing networks. The
cardinal principle is simple: Build an effective network of relationships with key
stakeholders, and profits will follow.
Marketing theory and practice was developed initially for marketing physical products
such as soaps, cars, and other tangible products. However, in the recent years there
has been a phenomenal growth of services. This trend we find world wide. More
than 50% Gross Domestic Product (GDP).is being generated
- -- by services and more
than 70% employment in services. More and more tangible or physical products now
contain a service component, both to meet the needs of the targeted customer
segment and to create a distinctive differentiation for competitive reasons. Many
manufactured goods are supported by services such as warranties or guarantees.
There are a large number of companies who are'mainly in the service business.
Besides the traditional 4Ps (Product, Price, Promotion and Physical distribution),
additional 3Ps are relevant in marketing of services. These additional 3 Ps are: Emerging Issues in
(i) Physical evidence, (ii) Processes and (iii) People. Marketing