stor (Marketing Managemen 44 MBA Second Ses BEE Sm, | : promotion Aspects : Tai BC unr 4.1.1. Meaning and Definition of Promotion towards the products and servo ‘The process, through which consumers (or potential consumers) are attracted ; : {or potent commotion or marketing communicadion- This proces Of the manufacturers. Its alsy of different producers or manufacturers, id an informs and reminds the potential consumers about the products an seiviee used to request and persuade the consumers to buy these products and serviS6® Bovey this promotion may either be performed in the presence of the product, or eveh before its market intro ion. According to Philip Kotler, “Promotion compasses all the tools in the marketing mix whose major role jg persuasive communications”. According to Stanton, “Promotion includes, advertising, personal selling, sales promotion and other selling tools”, Hence, different actions of the manfacturers or producers, responsible for stimulating consumers fo buy thei products and services, come under the concept of promotion. Iti a type of marketing cormmunicttion sttvity which is responsible for prompting potential customers to buy, use, recommend or resell the organisational products, services or ideas. are the three basic objectives of promotional communication, which have product life cycle (PLC). For example, promotion is informative Garing launch phase of the PLC; later in the growth stage, it becomes persuasive and at the maturity stage it svorks as reminder as well as persuasion, The end consumer is not the sole target of the promotional activites; institutions, intermedidties or organisational buyers may also be the target of such activities. Therefore, both profit and non-profit institutions use promotion as a significant tool. To inform, to persuade and to remind, to be achieved during different stages of the 4.1.2. Objectives of Marketing Communications Various objectives of marketing communication are as follows: 1) To Modify Behaviour: The primary objective of any marketing communication programme is to modily the thought process and behaviour of individuals (like inducing customers to prefer Coca-Cola over Pepsi) and to maintain this modified behaviour among them (like inducing customers to continue their preferenct for Coca-Cola once they started to use it). Therefore, the aim here is to motivate the customers to buy the organisational goods and services and hence develop a sound image in their minds. 2) To Inform: To inform the widespread market about the organisétion’s products and services is the nx! important objective of any marketing communication programme, This objective is the basis behind designing all the promotional communications. A product or service is largely promoted through informative promotion in its initial phase of product lifecycle so as to enhance its primary demand in he market. Information about the product as well as its features isthe first thing that any customer requites fo" smart decision-making. ‘To Persuade: Another important objective of marketing communication is to persuade the customers for purchasing organisational goods and services thus, increasing the sales. A product of service is angel promoted through persuasive promotion in its growth phase of product lifecycle as both consumer creat ‘and consumer retention objectives are simultaneously targeted here. Despite of enhancing the currents e sometimes organisations aim to develop a positive image among consumers so as to aia a long-term ga _———————————__satff Scanned with CamScanner 3)agosion Aspects (Unit) 145 pet ‘To Remind: Reminding customer about the available organisational products and services is also aa important objective of marketing communication Programme, Under this objective, organisations refresh ine memory of customers (since they assume that organisational products and services are known 10 customers) s0 as fo make them aware that the particular product or service is still satisfying their demands. Incase the prodvet is in maturity phase of product life cycle, this objective is targeted by the organisation. The whole idea behind this marketing communication objective is to maintain the position of the product or service in the minds of customers, Demand goal Deman it ee emand goal with promotion promotion Price ; Quantity (ay ‘Quantity () Figure 4.1: Objective of Promotion is to Change the Shape of Demand Curve 5) To Change Demand Pattern: The overall objective of marketing communication is to change the demand patter of the organisational product or service. All the promotional objectives like behaviour modification, informative promotion, persuasive promotion and reminding, are centrally focussed towards changing the demand pattern for a particular product or service. Economically, the objective of promotion is to affect the shape and location of the demand curve. It also means to affect the demand curve even temporarily or shifting it upwards, > 41.3. Communication Process The process of communication is not so simple. The words used, the way of presentation, the clue or indication and even the silence, should be in coordination with the objective of the communication. The fundamental component in any communication process is ‘commonness’. If the message is same or common for the sender and receiver, it would be termed as communication. The receiver needs to understand the information provided bythe sender. The message conveyed in the communication may be silent or using subtle or verbal language. It may be in written form or image form. Thus, the words used, images drawn or any other indication is termed as communication when the sender and the receiver make out the same meaning of the stated messages, The different elements of communication process are as follows: Se ee ee 4 < Noise > ¥ Feed back Figure 4.2: Communication Process }) Source: The source of communication is the entity which sends a message or a place where a message gets generated, The source may be a sponsor, advertiser, sales representative or anyone, who encodes a message. For communication or message of advertising, spokesperson acts as a source. Message: Message is anything that is transferred from the sender to the receiver in a communication Process. It is the most creative content of any communication. Different words, symbols and pictures, with different presentation styles, may form the message. It may be an appeal or contradiction related to certain issue(s). The message is developed by utilising emotional as well as rational approach. It may be generated ‘o inform the receiver about issues like product, brand, price, quality, etc. 2 3 Perception: Perception is a critical element of the communication process. It denotes the way in which a Dantcular message is interpreted. Factors like interest, nature, culture, action, desire and level of attention ct the receiver affect the perception process, It is also affected by the desire and attitude of the sender. Bi a Scanned with CamScannereon Sass (Markt Manage gy MBA S« a proper channel; it 4) Channel: The message is transmitted to the receiver from the sender ase tferent in ease of ig radio, newspaper, magazine or television. The result of the SAME MENTE scope through a chat channels used. The channels are also called as ‘media’. The transmis nel, however, is always limited by time, money and space. alled ‘receiver’. The Message as wey 5) Receiver: The entity, at which the communication is targeted is Cee i or the receiver tt the whole communication process is designed after analysing the cl _ The channels of communication are also influenced by receiver's charact re cas an aenoee 6) Effect: The overall change in the behaviour or attitude of the receiver after rece Be is Callleg : jon of the receiver. ‘effect’. The nature of effect depends upon the attitude, skills and perception 0” tion process highly effective. It describes iy, 7) Feedback: Feedba making communica arketing 1 cnc oe cae ee rom te sie of receiver, Marketing reeach yy advertising research are the most common tools to get the feedback of receiv« Eh 8) Noise: The noise can be explained as a kind of unintended disturbance in the communication ree, which results in the message being altered as received by the receiver. For example, lability of clear signal, sometimes, a message is misinterpreted by radio listeners. 146 receivers. 4.1.4. _ Role of Marketing Communications in Marketing Effort : The role of marketing communication in communicating value to customers in target market can be explainey with following points: 1) Increasing Awareness: Promotion becomes highly critical activity when a product is at nascent stage inthe ‘market or itis to be launched in a new potential market. Thus, the overall market awareness of the product has to be increased by citing research about the product, validating usefulness and appeal of the product, and by attracting maximum media attention towards the product, to portray a popular image of the product. The existence of the new product in the market has to be effectively conveyed to the target consumers. 2) Increasing Knowledge and Preference: Customers would not directly purchase the new product or brand only by knowing that it exists in the market. Promotion has the responsibility to further communicate the usefulness of the brand to customers by assuring that the product is required by them. Putting together product (or brand) awareness and information, is a way to attract more customers towards the stores for finding promoted products. 3) Increasing Retailers: Promotion communication designed by the organisations, improves the awareness and knowledge of the potential consumers about the new product(s), These consumers seek the promoted product(s) in the retail stores. This prompts the retailers to offer the promoted product(s) in their stores. It motivates the other retailers to offer the same product(s). Therefore, promotion helps in increasing the number of retailers. 4) Increasing Sales and Establishing Brand: Increase in sales is the final measure of a successil promotional strategy. As the three basic objectives of promotion are to inform, to persuade and to remin, an effective promotion strategy leads to the sales increment of a particular product or product-mix. It describes how products and services offered by organisations are dfferemn from those of competitors. TH, it helps in sales increment and thereby building-up of brand loyalty, 5) Maintaining Public Profile: A sound public profile of the organisation and its i al mn roducts is develop through the effective use of promotion. It helps in communicating the capabilities and importance of the organisational products to target customers. Thus it enables the customers to buy more In order to develop an effective marketing communication, good coordination with the customers is equi: This means that in such a case, the customer aets as a focal point on which» he ald emphasise. Ita? needs to ensure that one-on-one communication method is adopted, and the shite on proce 3g is two-wsy where both firm and the customers can give their words, eater Scanned with CamScanneris (Unit 4) 47 jon Aspe pr ives communication can be developed using the following steps: OE entifying Target Audience et Determining Communication Objectives Designing the Message [= | comma eri Collecting Feedback r Deciding the Total Communication Budget a Deciding Marksting Communications Mix ‘Measuring Communication Results Figure 4.3: Developing Effective Communication: Marketing Communiestion Process 42.1. Identifying Target Audience This is the very first step involved in the process of developing effective marketing communication. the target audience is crucial for developing effective marketing communication as several key decisions like what to say, Where to say, when to say and how to say, are dependent on the nature of the target audience. ‘Therefore, it is necessary for the marketers to understand the target audience and their culture as it greatly influences their perception regarding the product. Inorder to develop effective marketing communication programme, marketers must have knowledge of: 1) Entire process of consumer decision-making, 2) Factors affecting buying behaviour, 3) Buying motives and goals of buyers, 4) Process of collecting and using information by consumers for evaluating alternatives, 5) Process of consumer attitude formation, and 6) Method to persuade customers, Inthis way, it becomes essential to understand the culture of the target audience as different cultures have diffrent factors influencing the buying process. Moreover, customers of different cultures interact differently wit the same product. 42.2. Determining Communication Objectives ‘The main aim of any marketer is to achieve his communication objectives. Marketing communication helps the tarketer to take buyers through these stages and induce them to purchase and re-purchase. For this purpose, a ‘marketer must know the exact stage of the buyer and what stage they need to be taken to. Unawareness |p! Awareness |-»| Knowledge |p] Liking. Lemar Poem Lote [at Lol Re-purchases Figure 44: Process of Customer Decision Scanned with CamScannera ‘MBA Second Semester (Marketing Management) SPY The next step in the process of developing effective marketing communication is to determine the communication objectives. Depending on the stage of the brand in product life cycle and type of communication tool used, different communication objectives are designed by the organisations. Affecting the ids of consumers, developing product related positive attitudes, and stimulating consumers to act favourably, are the main objectives of any marketing communication programme. Once set, communication objectives have following significance: | . eet 1) They are used as a guide while making important decisions regarding media, budgeting, innovation, etc,, and 2) They are used as a benchmark to evaluate the success or failure. Time-bound, quantitative, measurable, realistic, specific, and singularity of purpose, are the key features of 00d communication objectives. Irrespective of the type of the culture of the target audience, it is crucial to set communication objectives. 4.2.3. Designing a Message | : After determining the communication objective, the next step of marketing communicator is to design an effective message for the target audience. This message should be designed under the AIDA framework, ie, it should grab Attention, hold Interest, stimulate Desire and gain Action, A marketer can take the customer from awareness stage to purchase stage after few messages, but AIDA suggests some essential requisites of a good message. While designing the message, the marketer must decide the content, structure and format of the ‘message. These are explained as follows: 4.2.3.1. Message Content Here the advertiser has to select the message appeal. The appeal of the message or advertisement refers to the central message of the advertisement. It refers to a distinctive declaration. ‘The advertising appeal for goods and services can be formulated by first recognising the sound reason for which ‘customers should purchase it. Its objective is to influence the thinking of the target audience and convince them that purchasing some products would prove to be advantageous for them. The buying decisions of the customers are greatly influenced by the message of these advertising appeals. A significant creative strategy decision to be taken by the advertiser is to find out a suitable appeal. A few advertisements are planned to touch the logical and rational features of the decision making of the consumer, while, others are planned to touch their emotions. Several experts have an opinion that advisement campaign can by efficient by combining the rational grounds with emotional values. Different Kinds of Communication Appeals Communication appeals can be divided into following types: 1) Rational or Logical Appeal: As suggested by the term, rational appeal’, its primary objective is to fulfil the rational, practical or logical needs of the consumer for a specific product or service. These appeals highlight the distinctive features and benefits of the products and services. The use of rational appeal is well suited for print media. The print media is also appropriate for complicated products which require intensive concentration and participation, For example, insurance policy plans ate normally explained through brochures as they need an in-depth consideration, 2) Emotional Appeal: Emotional appeal is associated with the psychological or social needs of the consumers for purchasing goods or services. Several people are inclined to buy a product as they are emotionally attached to it; they give more importance to the sentiments attached with the product, instead of product benefits and traits. Rational appeal which is information laden is considered to be monotonous by some advertisers. Several advertisers have a belief that emotions play a prominent role in influencing the purchasing decisions of the consumers as there is slight rational difference between the products. An ‘emotional appeal influences the psychological and social makeup of the person while making purchasing decision. Several people do shopping due to emotional motivation. Hence, the primary objective of the advertisers is to encash the emotional appeal and this is specifically true for the products where the rational difference between different brands is not apparent. Scanned with CamScanner9 aon Aspets (Ui) 149 ‘Additional Appeals: It is not possible to place all kinds of advertisements in the categories of rational or emotional appeals ‘he other types of appeals are as follows: iy Star are - ae pare bypes of advertisements, celebrities are shown to support the product. = maj of advertisements is that i in deawis attention of the people malsess ofthe quality of the product at it helps in drawing the attention of peo] ji) Reminder Appeal: The idea is to remind people about the existence of a product in the market Usually, these types of advertisements are suitable for the products which are in the maturity stage of their life. Reps For example, the advertisements of the soft drink kings Pepsi and Coca Cola through eiectronic and print media help in reminding the people about their products. New advertisements are launched by Rasna every summer to remind the consumers that Rasna is a summer drink. ii) Teaser Appeals: Through these advertisements, a small preview is shown about the product. The idea js to evoke interest and curiosity of the consumers. If the advertisement is able to raise the curiosity of the people in the beginning, its eventual success in attracting the consumer is quite certain. Usually, these advertisements are shown prior to launch of a new product, movie or TV soap. Usually, no specific idea is conveyed through these. A good example of this is preview of some scenes before the premiere of the movie. Frooti also used this approach where it was shown as a youthful drink by “DigenVerma’. iv) Scarcity Appeals: One of the appeals which are used on occasions is scarcity appeal. Limited supply of the product helps in raising its demand. Due to restricted supply of the product in the market, it's worth rises. The scarcity appeal encourages the consumers to avail the benefits of the product as it is limited in number. The limitation can be in terms of the quantity or the availability of the product for a restricted period. It comes out of the restricted supply of the preduct or its availability for a limited period. They are usually used along with advertising techniques, such as ‘limited offer’, ‘discount sale’, contest, sweepstakes, eit. y) Snob Appeal: This appeal is the most appropriate for the goods which help in arousing feeling of pride for the users and jealousy for all others. Usually, such advertisements are used for the products which are luxurious and elegant. vi) Masculine Womanly Appeal: This type of appeal is mainly used for the products such as clothes and cosmetics. It portrays that by using the product the person would appear as the ideal person. The idea is that by using the product the person would acquire the perfection or the desired traits. vii) Brand Name Appeal: This appeal is especially meant for brand conscious people who desire to make specific brands as their signature brands. viii)Less than Perfect Appeal: Usually, this appeal tries to convince consumers that by buying certain products they would be able to overcome their deficiencies. It makes people feel that they are not perfect ‘and are not satisfied with their existing condition. It is mainly used for the beauty and healthcare products. ix) Plain Appeal: It is designed for day-to-day products and urges the common man to use the goods or services, x) Bandwagon Appeal: This appeal is based on the notion that ‘it should be done as itis done by all’. Itis based on the popularity of the people who are using it. 42.3.2, Message-Structure Generally, there are a number of points which the communicator/advertiser wants to communicate through the ‘advertising message. One of the crucial aspects of the message plan is to devise a strategy through which the nnessage can be most effectively conveyed, leaving no room for contradictory ideas that can be opposed. Several researches have been widely conducted to analyse the impact of the message structure, message Sidedness, order of presentation, inference, refutation on its efficiency, and verbal vs. visual message attributes. }) Order of Presentation: The fundamental point to consider while designing a persuasive message is the order of presentation, ie. if the core message should be placed in the beginning, middle or at the end. 2) Conclusion Drawing: The marketing communicators have to take decision regarding whether the messages bm Would clearly state the conclusion or they would Ieave it to the audience/readers to draw the inference. Usually i has been proposed through the studies that the way conclusion is to be drawn, should be decided on the basis of the target group, message topic/issue and the current circumstances, Scanned with CamScanner130 [MBA Second Semester (Marketing Management) SPPU 3) Message Sidedness: One of the other decisions regarding the message structure is the messi sidedness, Only the advantages or affirmative aspects of the message are spelled out through ‘one-sided message. However, both positive and negative points are presented through a ‘two-sided messin: One-sided messages have been proved to be the most efficient when the topic already holds a pest image in the target group. They are also efficient with group which is not much educated. ‘Two-sided messages prove to dees erent cient in case of highly educated group which is familiar with the contrary ideas. However, a two-sided message makes the advertiset more trustworthy and reliable. 4) Refutation: Refutational appeal is a special kind of two-sided message in which opposing ideas are presented aA then the refuting points are opposed by the communicator As the refuttional appeals immuhe® the target troup agninst the opposing ideas placed by te rivals inthe market, this approach proves © ‘be more effective thanone sided messages as consumers have prior information regarding the opposite message. 5) Verbal versus Visual Messages: Several advertisements opt 0 convey the mentee through visual elements, Mainly pictures are used in such advertisements for conveying oF supporting the idea of the message. In the processing of the advertisement both visuals and verbal message are equally important, Based on the visual elements like illustrations in print media and scenes In the electronic media, audience ccan formulate impressions or images regarding the advertised message. 4.2.3.3, Message-Format , ‘The format of the message refers to the order and the way in which the message is placed in front of the Ae canes he most efficient way, Message format is also known as ‘layout of advertising copy”. The format of the message is decided on the basis of kind of medium to be used. Inthe print media, the advertiser has to fake vital decisions regarding colour, pictures, headlines and printing. Success of a radio message highly Gepends on good choice of words, quality of voice (speech rate, articulation tone, pitch, rhythm, ete.) and vevalisation (sighs, pauses, yawns, etc). While designing the television advertisements, voice quality, Words, gestures, posture, body language, intonation and tone of voice are very important. The actors in the TV Advertisements have to be careful about their dress, hairstyle, facial expression, gesture, posture, etc. i i 1 4 i } Ina Print Advertisement Decide onthe headline, copy, illustation, and colour. In a Product Ina Radio Packaging Advertisement Advertisement ae ‘Choose words and : J4——| Message || voice qualities (speech Pay attention o colour Format "a hth pc, texture, seen, size, articulation) and and shape. vocalisation (pauses, signs, yaw). Ina TV Advertisement ‘Allof the aforementioned plus body language (Facil expression, gestures, des, pasture, hairstyle, igure 43: Message Format ‘The format of the message refers to its manner of presentation. Hence, itis vital that 2 : . Hence, t the format of the message should bé such that t immediately grabs the attention of the viewersheaders. Ideally, the format of the mao shouldbe simple, rational and appealing. Usually, ifthe strongest point is stated fis, it leaves a lasting impact and helps in easly drawing the attention of the target group Iti specifically tre in case of the print media, such as advertisements where the audiences do not even bother to read the complete message. For example, words lke ‘Bumper Sale’, ‘Diwali dhamaka’, ‘Fat 60% off, ‘Buy two and get one free’ Fre, fee, re"; immediately hep in drawing the attention ofthe target group. Pint media involves taking judicious decisions about the pictures, colous and headlines. Television advertisements call for careful planning bout gestures, body language, hairstyles, communication, etc. The outline of advertisement copy for various media is depicted through figure 4.5, a Scanned with CamScannerpromotion Aspects (Unit 4) ‘The consumes iS fautious about the desires of the advertisers; hence, it is specifically difficult to convince himlher is Wied through some TV advertisements to depict the frank interviews with some housewives t0 raise their message reliability. In such interviews the housewives are questioned about the reasons Tor buying & specific brand, they are also asked to exchange that particular brand with some other product by giving some incemives, for example, they are asked to exchange one bottle of usual dishwasher with two of the other brand: and they simply deny the offer. Another way is to ask the consumers to compare two hidden products: and to the surprise of the consumers the sponsors brand shows amazing results in comparison to the usual brands (e.g. Dove's 5 days test). In these advertisements, the advertisers are trying to be objective while showing the trustworthiness of the content, In case the source appears as an ‘expert speaker’ in front of the audience, possibly the one with suitable Anowledge, information about the advertisement com tent, the source would succeed in his purpose to alter the ideas of audience regarding the ad message, For example, in the ad of Oral-B toothbrush, the message is given by a dentist. A dietician suggests that drinking Horlicks can help in making children ‘stronger, taller and sharper’. Such advertisement in which the message is given by an expert appears to be trustworthy to the consumers. Perceived status or the reputation of the message source is also responsible for making the messages dependable. Tt is not only related with the class of the person but also his role as per the situation. A person plays several roles in the society, for example, of a father, brother, manager, employer, husband, a member of Charitable Trust, ete. Prestige or status is attached with each of these roles. Generally, an individual detaches himself from other roles and accepts only the one which is the most suitable for the given circumstances. Message is usually more acceptable if it is conveyed by a source with higher status. It is specifically right in case the source is telling about a specific role. 42.4. Choosing Media Once designing of the communication message is over, the next step is to select the communication media channels through which the message will be transmitted to the customers. These communication channels refer to the various media used in the communication process. Media selection involves selecting the highly cost-effective media for advertising purpose, in order to fetch the required coverage/exposures concerning the target audience. It is focussed towards economic as well as cilicient transmission of advertising message to the concemed market or customers. Selecting an appropriate Vehicle or medium of advertising and using it efficiently over a defined period is called ‘media selection’. Availablity of appropriate message, organisational budget and the characteristics of the target customers, are the major complications in media selection. Hence, it is very crucial for the media planners to analyse these Constraints efficiently. The media characteristics, which affect the functioning and effectiveness of a particular ‘medium are class/type of medium, number of media vehicles and the usage of medium in different time periods. Therefore, these characteristics should also be considered in media selection, Choosing a wrong media will decrease the effectiveness of the message no matter how good the communication idea is. Hence, the communicator should select the appropriate channel of communication. The two broad channels of communication are explained below: 14 . 1) Personal Communication Channels: Personal communication channels are considered as the most effective way of communicating with the audience, In this channel, one-to-one communication takes place between two of more people over the phone or face-to-face. Other options include fax machine, mail, internet, text messaging, etc. 2) Non-Personal Communication Channels: As the name suggests, these communication channels do not involve any personal contact or feedback process while transmitting the message. In such communication channels, there is no personal contact between the marketer and the audience. The communication is held Di Scanned with CamScannerq 152 MBA Second Semester (Marketing Management) SPPU through television, radio, posters, billboard, etc. Various media like print media, broadcast media, display media, online media, ete., are involved in it. For example, radio, television, newspapers, magazines, sign- boards, posters, websites, etc, Several atmospheres and events are also involved in this. Here, atmosphere ‘means, the designed environment created by the marketers for attracting the customers to buy the product, 4.2.5. Collecting Feedback Once the message is sent, its impact on target audience should be researched and analysed by the ‘communicator. Here it is important that the communicator questions the target audience about things like ~ can they recollect the message, how much do they recall, how many time did they saw it, what are they their past and present attributes regarding the company and its products. The communicator should also strive to evaluate the response of the target audience to the message, i., how many products were purchused, how many customers visited the store, how many referrals were made, etc. Brand A BrndB ‘ofthe 308 who ted 20% disappointed In Figure 18.4, a pair of hypothetical brands is taken as an example for explaining about feedback measurement, For Band X, only 20 percent of total market customers are satisfied after trying the product, while 80 percent of, them are aware of the brand and 60 percent of the aware customers have tried it. On the bases of these outcomes it can be said that although the communication programme is successful in creating awareness, the product is not successful in satisfying the customers as per their expectations. Hence, the company should focus on improving the product offering while following the same communication programme. In comparison to Band X, Brand Y has 80 percent of satisfied market customers, but out the total market only 40 percent of the customers are aware of it and 30 of the aware customers have tried the brand, Here Brand ¥ needs to develop a strong communication programme to exploit it brand power to capture more market share. 4.2.6. Deciding the Total Communication Budget After deciding about the communication channel the marketer needs to decide the communication budget. In literal meaning, the term ‘budget’ refers to the quantitative or financial statement prepared before a specific time period of the policy for which budgeting is done so as to achieve the required objectives. However, it is very difficult to decide about how much expenditure should be involved while planning the communication budget. In case of product promotion, budget is prepared by the promotion manager after consulting the marketing manager. Such budget involves estimates of funds required for promotional tools to be used as well as allocation of funds in different media, sales activities, sales territories, etc. Following are the budgeting methods used in determining the promotional budget: 1) Percentage of Sales Method: In this method, the advertising budget is determined by the product of the value of previous year’s sales or estimated sales for the specified budget period and a pre-determined percentage. Advertising Budget Amount = Past Year's Sales or Anticipated Sales x Pre-determined Percentage Several factors such as nature of product, stage of product life cycle, availability of ‘capital, level of ‘competition faced in the market, amount of funds spend by rivals on advertising, etc., influence the pre- determined percentage, while calculating advertising budget. The total percentage of sales appropriated for Scanned with CamScannerpotion Aspects (Unit 4) 153 advertising budget differs from industry to industry. For example, companies dealing in consumer durable ods such as cosmetic brands, appropriate 30-40 per cent of sales for advertising budget, while other ‘companies from steel or mining industry appropriate 1-2 per cent of sales for advertising. 2) Competitive Parity Method: In this method, the same amount or proportion of fund as that of the competitors is used by the firm for advertising. This traditional method is chosen to make the firm at par with competitors. In this approach, advertising is considered as a safeguarding mechanism and not an aggressive or combative mechanism. With a view to avoid any drawback, the company devotes same amount of funds as spent by the competitors. It includes gathering relevant information about the funds allocated by the competitors towards advertising. The basic postulation of this approach is that the company under consideration is aware about the activities being planned and executed by its competitors. 3) Objective and Task Method: Objective and task method is the most preferred and prudent approach of establishing advertising budget. The basis of this technique is to establish the advertising objectives and spot the different activities to be executed to accomplish those objectives. The initial step would be to ascertain the advertising objectives and goals. And then, the various tasks to be conducted to attain these advertising objectives are recognised. Later on, the costs to be incurred for all these tasks are evaluated and the advertising budget is computed by adding these costs. Some amount of fund is also allocated for contingencies. 4 Judgement Method: The judgement of experienced and senior managers of the firm forms the basis of determining the advertising budget under the judgement method. Under this method, the premises of deciding advertising budget are not the scientific lines, but the subjective or irrational thinking of few experienced managers. Through the years, these managers gain sufficient experience which makes them competent to strike the relevant advertising budget figure by using their own judgment. Various pertinent factors such as availability of funds, cost of employing different media, objectives of advertising, stage in product life cycle, nature of consumers, activities and related responses of competitors, ete., are considered by these managers while determining the entire amount of advertising budget. 5) Incremental Concept Approach: It is also known as “Increase over Last Year's budget’. It is a customary approach to budgeting. The previous year’s budget is taken as the baseline by the managers for computing ad budget of the current year either by adding or subtracting from it as per the estimated requirements of the company. Increasing the previous year’s budget by a fixed percentage to facilitate a company to think about raising advertising expenditure and to render for planned increase in sales is included in this method. Advertising cost is increased due to increase in price level of advertising inputs. Therefore, this method is also called as ‘incremental budgeting’. 6) Return on Investment (ROI) Method: Here, costs incurred for advertising is regarded as an investment and not as usual revenue expenditure. Therefore, the return on investment is completely a different approach in comparison with other methods used for preparing ad budget. Advertising is also projected to contribute definite returns in the same way as any other investments of the company. An Intangible asset “brand equity” is established due to advertising which has a certain market value and can be sold at any stage in the market. Brand equity is pertinent to brand preference and brand acceptance. Usually, this income generated from advertising by the company, extends over a particular time-period. 42.7, Deciding Marketing Communications Mix: Shaping the Overall Promotion Mix While deciding about the marketing communication mix, wide-ranged alternatives are available in front of the macketing managers, out of which one or more can be chosen. Here, marketing managers have to take decisions regarding the marketing commonication tools. They need to take decisions about the advertising, selling, Promotional activites, public relation, direct marketing, etc. Different media may be used at different stages of the product life cycle by the firm so as to fulfi its marketing objectives in the best possible way. ‘The allocated amount of budget for one communication tool may be more than the other. The major objective behind selecting an optimal media mix is to establish such a pattern that leads to optimum utilisation of Spending in all media and helps in achieving the corporate objective of the firm. — er Scanned with CamScanner154 MBA Second Semester (Marketing Management) SPPU 4.2.8. Measuring Communication Results ‘The lest step in developing effective communication programme is to measure the communication results. Therefore, marketers prefer 10 evaluate the effectiveness of the communication programmes. Tt Helps in evaluating the altemative communication strategies and prevents costly mistakes: Such assessment should be in line with the firm's objectives. The evaluation process can be conducted at two levels, i.e. before the commencement of the ‘communication (pre-testing) or after the commencement of the communication (concurrent testing). In pre- testing, different aspects of the communication Tike message format, content, media, ete. 4° evaluated. In Sonetetent testing, communication programme is evaluated so as to add any required changes. As disoussed earlier, cultare has deep influence on the audiences, hence while evaluating the results via research, cultural differences must be considered, INTEGRATED MARKETING COMM NICATION (IMC) 43.1. Concept of Integrated Marketing Communications (IMC) ‘When all marketing practices, resources and tools are used (for an organisation) in an integrated manne’ fo eee he nie of customers at maximum level along with maximising the organisational profit at minimal ost iti called Integrated marketing communication, In general, marketing begins with " Marketing Mix”. ‘Marketing communication or promotion is one ofthe elements of Marketing Mix. Advertising using different tnedia, personal selling, sales promotions (sales and trade promotion), sponsorship marketing, database tnarketing, public relation, direct marketing and internet marketing are the activities included in promotion. So, the integrated marketing communication is the integration of all these tools with other marketing mix a Minents in onder to a get competitive advantage. ‘Integrated Promotion Mix’ is the other term used broadly for Integrated Marketing, Communication (IMC). In conventional marketing, different professional agencies are appointed for the promotional activities. Here, the effect of marketing communications is not evenly distributed caret results in contradictory communications making the customers confused. Therefore, money, time and ifort, all are wasted. IMC, on the other hand, maximises the marketing impact on customers as well as other end-users with minimum expense. ‘A holistic approach to promotion is integrated marketing communication which has the purpose of ensuring ‘According to The American Marketing Association, “IMC is a planning process designed to assure that all ‘uniformity of the message and the complementary use of media. Both ontine and offline marketing channels are included in this concept. ‘According to American Association of Advertising Agencies, “IMC is a concept of marketing communication planning that recognises the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication discipline”. brand contacts received by a customer or prospect for a product, service, or organisation are relevant to that person and consistent over time”. 43.2. Objectives of IMC Integrated marketing communication has following main objectives: Objectives of IMC ‘To Create Brand Equity ‘To Provide Information oar cece Lach ‘To Position Products/Brands | Scanned with CamScannersation Aspects (Unit 4) ie 155 ‘9 Create Brand Equity: Creati 1) Sea osgn ie ate : Creating brand equity through developing global brand as well as effective ‘which is the reason behind i ‘ain objectives of IMC. The set of specific features associated with the brand, ty’. With the combina increased demand of brand among businesses and consumers, is called ‘brand equity". i combination of integrated marketing communication and quality products, these specific features can be increased. Due to increased brand eq) : ran ; sei distinct benefit tothe ommanaiee \d equity, more customers move towards brand, this in turn, Ne aie wer the process of building brand equity. Being “top of mind” and being real aa obea eet the two main features of suse band. One peu brand is always estioned to name a brand in a gi i i Ffand name has the feature of being top of mind. rand in a given product category. This particular 2) To Provide Information: Along with having objective of creating brand equity, IMC is also focussed towards other objectives. One such objective is to provide useful information to consumers as well as ‘organisational buyers. Information provided to customers may involve store hours of a particular retailer, detailed description of a particular product, or even business location. Complete and relevant information helps in making the purchase process convenient and quite simple. It induces the consumer to select a store and complete the purchasing process. 3) To Influence Consumer Choices: Another objective of IMC is to influence the consumer choices, It acts like a guide or counsel for customers and makes them use their dominance power (king of the market) in the most effective way. By providing updated and complete information about available products and services, IMC enables the customers to purchase sensibly. It is the objective of IMC to show customers the superiority of a particular brand over another brand, It also highlights the consequences of avoiding a particular brand. It is very difficult to modify coasumer attitudes and thereafter convince them to sustain the new choice. 4) To Differentiate Product: Differentiating the organisational product with that of the competitors’ is another important objective of IMC. The process through which, a perceived difference between organisational products and competitors’ products is developed in the mind of consumers, is called ‘differentiation’. Through this definition, it is clear that consumer perception is the basis of brand differentiation. The perceived difference developed through differentiation can be tangible or sometimes intangible (based on image or style) in nature. By describing performance features or developing a nique brand image, IMC creates a perceived difference between organisational brand and competitors’ brands in the minds of target customers. 5) To Position Produets/Brands: Along with differentiating the product, positioning the produet/brand is also an important objective of IMC. Process of developing a brand in such a way that i ‘occupies a distinct and respective position (with respect to the other brands) inthe minds of target consumers and then highlighting thie distineriveness through promotional efforts is called positioning. As in case of differentiation, perceived image of product features (tangible or intangible) is also an important factor here. A perceived image or perceptual space is how customers see a particular brand in comparison to other brands on the basis of eeunber of dimensions like price, quality, taste, or social display value. 43.3. Factors Contributing to IMC The it IMC are as follows: zi 7 factors contributing to \dous increase in the availability of media options for 1) Fragmentation of Media: There has been a tremen : i : ing by broadcast media known as “narrowcasting”. and Jn counters through the new offering by " Jha supermarkets ca cdia has also witnessed remarkable growth, For example, ‘here was s ine when United States brought up 197 different sports magazines in the ‘market, As a result of mass fragmentation, Daited States brows dependent on mass media and have inereased their focus on additional options for ar promotion such as POP (Point-of-Purchasc), event sponsorship, etc. ci th techniques have been introduced for the 2 unt; More accurate and specific researel ; rae Assessment get particular market segments like teenagers, old-age people, Dual-Income marketers to recognise. DINK), Asian-Americans, Hispanics, ete This has led the marketers to serve ieee with ne ments Wil tools rather than using mass media. specific target ses th the help of promotional a TT ES Scanned with CamScanner156 3) 4) » 6) n (MBA Second Semester (Marketing Management) SPPU consumers are more aware, informed and empowered. These smaller families, single-person households, and needs and are usually PVR/TIVoIDVR play Consumer Empowerment: Nowadays, powerful consumers are mostly highly educated people, experienced consumers. They demand for customised information just related to their doubtful about commercial messages. For this purpose, technological systems such as a crucial role in controlling the empowered consumers Increased Advertising Clutter: Consumers are becoming bored and cynical and this is the reason they are transforming themselves as more advanced and revolutionary. The rapid increase of advertising stimuli has Weakened the effect of single advertising messages. The rise in the messages has no end, they will be increasing simultaneously. Database Technology: Various communication opportunit assemble and manage databases. These databases can be us Marketers can undertake direct-response marketing and tel information. This can be enhanced more with the growth of internet. Channel Power: In several product and market segments, there has been a transfer of power from the big manufacturers to big retailers. “Power retailers” like Big Bazaar and Spencer are charging fees and allowances from manufacturers to promote their products in special events and various other retail promotional events, Accountability: In order to attain increased accountability, companies are adopting short-term promotional methods such as direct mail, sales promotion, ete, instead of using advertising methods. ties have been created for marketers to generate, ed to create customer and non-customer profiles. Jemarketing programmes with the help of this 4.3.4. Importance of IMC Importance of IMC is as follows: dy 2 3) Importance of IMC ‘Consistent Delivery of Messages ‘Corporate Cohesion CClient-Agency Relationship I-{ strategic Development Motivation ‘Team Spirit Measurability Hees as Cost-Effective Budget Consistent Delivery of Messages: When a company follows its ist it Q planning process in a holistic manner, it attempts to make sure that all the communication tools are conveying the same message to the target audience, Most significantly, it demands to implement same strategy for the brand instead of developing separate strategies for different tools of marketing communication, Here, the prime concern of any effective ‘communication programme isthe clarity of messages. : : Corporate Cohesion: IMC is considered as a strategic method of the company in communicating the corporate image and benefits ofits products and services. It significantly affects the company at both extemal and intemal levels. The intent of IMC is to portray the company's image in an effective manner as inclination of customers is usually towards the companies with whom they feel contented. For this, the introduction of cohesive communication pro i ygramme in the company is essential. It enables all the employees to understand the company’s goals and motives. Where: raally helps 1 : . Whereas, i the employes understand he con cohesiveness externally helps in Client-Agency Relationship: IMC plays a maj i cat 7 sor role in developing the communication programme in agency and hence has become an important part of the relationship. Rather than Perfomning one ot fe tsk, the markt commnicitor mast fol responsible for teenie communication programme and is related requirements. It will aid the company to implement significant strategic positi i provide advantages over its competitors. 7 cee Scanned with CamScannerPromotion Aspects (Unit 4) 37 1 4) Strategic Development: IMC facilitates improved communication and builds strong relationship between jubany. Due to this, information is communicated freely among the participants; s Sing More on organisational goals than on their individual agendas. 3) Dolan IMC acts as @ motivator for agencies. It instils a sense of motivation among all the participants, Ul ihe stakeholders). As a result, the employees are able to show their reativity and potential, 6 ar Spirit: Each of the participants owns the company’s final plan. They think together, implement the inv ead gee 2¥O%ding all the intemal politics. This helps to resolve the issues which usually arse in individual departments, 7) Measurability: Measuring the reaction and responsibility for the communication programme is one of the most important benefits of IMC. 8) Technology Based: Techn tology advancements are introducing new methods to reach out customers in a better way but this is adve r way b rsely affecting the traditional media, The scope of radio, television, newspapers, clc., is getting fragmented and limited to the audience. The emergence of e-commerce and intemet has changed the company's way of doing the business and interacting with its customers. Some of the developing trends are database marketing, online marketing, etc. 9) Cost-Effective Budget: The new marketing communication tools are evolving which are cost-effective and more target specific compared to other traditional media. Companies are now shifting their marketing budget from advertising to other promotional methods like consumer and trade promotions. IMC is considered as the most appropriate method for allocation of budget. 4.3.5. Challenges in IMC IMC is the most favourable way of promoting the products and services of the company, but itis relatively a slow process. The reason behind this is various challenges faced by the company during the implementation of IMC. Some of them are as follows Challenges in IMC H Organisational Barriers Functional Specialisation, ‘Top Management Support CCulturad Factors Lf Decentralisation = ‘Short-Term Planning Budget Allocation H ‘Unwillingness to Change 1) Top Management Support: The implementation of IMC involves a number of changes at organisational level which is not possible without the consent of the company. Hence, top management plays a erucial role in the successful implementation of IMC. Sometimes, top management may not allow the IMC process implementation due to their ego problems or different viewpoints. 2) Organisational Barriers: Company's organisational structure acts as another challenge in the implementation of IMC. Typically, companies consist of several departments having their own set of duties whereas IMC requires a hierarchical organisational structure which is flexible in nature. A flexible structure helps the company to incorporate all the communication function in a centralised manner. There are many companies which are still persuading Strategic Business Units (SBUs) strategy and functional strategy, where each unit takes their own decisions. In such a situation, it becomes difficult for a company to integrate its communication programme. 3) Cultural Factors: The organisational culture may also hinder the implementation of IMC. For successful integrated marketing communication, cooperation and coordination among the employees is important. If the organisational culture is unwilling to adopt the changes, then this may cause problem in the implementation process. Mainly, government-controlled companies are unlikely to adopt any changes. 4) Functional Specialisation: The specialised function of employees also acts as a barrier in integrating ‘marketing communication process. The IMC theory states that the members of top management of any Scanned with CamScanner158 MBA Second Semester (Marketing Management) SPPU s, The concept of IMC encompasses a broader view of the organisation should be communication general marketplace, customers, competition and communication. : In reference to the IMC theory, companies are training their employees to become specialist in a specific field, But, the specialists hardly communicate with other functional groups, All the functional groups work towards their own objectives following a specific procedure within a limited budget. 5) Decentralisation: Decentalisation is the process of redistributing the power and authority of decision- making powers among all the employees so that they can be responsive to the needs of consumers instanty. Various, management theories also follow the concept of decentralised decision-making instead of the ttaditional one, where decision is taken by top management by using the top-down approach it gets ‘conveyed at all the levels of organisation. Bt, despite all this, the concept of decentralised decision-making communication programme. 6) Short-Term Planning: One of the prime concerns of IMC is to adopt long- to create a positive image of itself among its customers and stakeholders. prefer short-term planning to achieve their financial goals rather than focussing ‘Therefore, short-term planning is also a barrier in the implementation of IMC. 7) Budget Allocation: Successful implementation of IMC requires cooperation among the departments and employees, But, the allocation of resources and budget intensifies the competition between the departments, which makes the IMC implementation almost impossible. For budget allocation, performance evaluation of various departments is done but due to their long-term goals and choice of different communication tools, it becomes difficult for the organisation to compare different departments. tis not possible ¢o assess all communication activities but sales promotion activities can be evaluated as they provide instant results of their cost and returns received. 8) Unwillingness to Change: Another barrier for implementation of IMC is the unwillingness to change. Fear ‘of change may arise because of the complex nature of IMC which may affect the areas other than the territory in which itis implemented. The reasons behind unwillingness to change are uncertainty, threat to self-interest, feeling of loss, etc. Out of all the factors, uncertainty is the biggest fear. MARKETING COMMUNICATION M 4.4.1. Introduction Promotion/marketing communication is one of the components of marketing mix. Traditionally, promotion included advertising (through various media), sales promotions and personal selling techniques. In modesn times, variety of promotional tools with widespread scope is available in the market. These include e- commerce/fonline marketing, point-of-purchase displays, sponsorship, teade shows, exhibitions, event marketing, packaging, customer service and corporate communications. The process of combining all the promotional tools and techniques with the other elements of marketing mix in order to achieve competitive advantage is called ‘promotion mix’. is a barrier for integrating the marketing term planning process in order However, many organisations 1g on customer requirements ‘Thus, it can be concluded that Promotion Mix or Marketing Communication Mix involves the combined use of different promotional tools (like advertising, sales promotion, personal selling, publicity and personal relations) by an organisation to generate, sustain and improve the demand of its products and services. According to Philip Kotler, “A company's total marketing communication mix also called promotion mix consists of specific blends of advertising, personal selling, sales promotion, public relations and direct marketing tools that the company use to pursue its advertising and marketing objectives”. Generally, an organisation uses more than a single method of promotion. The manager of the organisation is responsible for taking decisions regarding the selection of promotional tools and finalising the promotional campaign. Thus, a promotion mix is designed for effectively communicating with target customers. In case these promotional tools are strongly integrated to attain and even exceed the particular promotional objective, i is called Integrated Marketing Communication (IMC). Marketers prefer IMC over other methods as it is the most suecessful way of promoting a particular brand ina given situation Scanned with CamScannerony Aspests (Unita) 199 promotion Aspect 44.2. Strategi Following are the Wo v 's of Marketing Communications: Promotional Mix Strategy n marketing promotion strategies: Push Strategy: When market intermediaries of the distribution channel are targeted to design the promotional programme, it iy called push strategy. In this strategy, market intermediaries are encouraged t© buy or stock the organisational products, promote them and ultimately sell them to target customers & given in figure 4.6, Here, different incentive schemes are offered to the market intermediaries (distributors, wholesiers and retailers) for pushing the product in the market, Through this strategy, distributors are encouraged to offer the products to the wholesalers, who then persuade the retailers to buy these products, and finally encourage the target customers to buy it Fa "| chamet Fad customer inverediary | Figure 462 Pu In push strategy, promotional techniques like sales promotions, personal selling, trade shows and contests for salespersons are used. Push strategy is best applied under condi i) The brand clutter or bi lemtity is weak, Product differentiation is not available, ) Access ti media is not possible, iv) The budget for promotion is low, ¥)_ There is availability of low wages, i.c., low cost of employing salespersons as compared to advertising cost, vi) Brand loyalty is low, vii) Marketing channels are short and direct, Products are industrial in nature, ix) Appreciating product benefits is difficult, and x) Institutional sales are present. Push strategy is frequently used (to move products through the distribution channel) by the firms having low budgets for promotion. Moreover, it is hard for the customers to make a difference between the competing brands due to brand commoditisation, which makes push strategy more operative, Pull Strategy: In the pull strategy customers are encouraged to purchase the product from the retailers through promotional programmes, as shown in figure 4.7. Due to this strategy, customers demand the promoted product from ret Consequently, retailers demand the given product from the wholesalers, who, in tum, demand the product from distributors, and finally, distributors order the product from organisations. Product Channel Pratoct Jmermediny Firm ‘request M 0 Figure 47: Pll Stateny Pull strategy is best applied under the conditions, wher i) Brand identity is strong, Category of the product is high-involvement product, i) There is perceived product differentiation, iv) Brand loyalty is high ¥) Promotional budgets are high, and Vi) Retail includes self-service, i.e., supermarket culture. 'n pull strategy promotional tools like advertising and sales promotion campaigns (such as gift vouchers, Samples, discounts, etc), are used which are targeted at potential customers. Moreover, long-term brat loyalty can be developed among customers through pull strategy. A suitable mix of push and Pull strategies ay also be used in case ofa situation resembling any of the above mentioned factors and situations, Scanned with CamScannerio MBA Second Semester (Marketing Management) SPU 4.4.3. Factors in Setting Marketing Communication Mix In order to have an effective promotional programme, the marketer should combine various components of communication mix together, Therefore, the marketers do not depend on a single promotional (oo) bot its Combination, Each tool. is having iis own slrengths and weaknesses. While developing, an effective communication mix, the firms must give consideration to various factors, some of which are as follows: Factors in Selting Marketing, ‘Communication Mix a ‘Nature of Market [igs a Det Aality ‘Stage inthe Product Life Cycle |_ ‘Company Policy ‘Type of Product Market Buyer-Readiness Stage ities or communication mix related with a product depends on its paste, soap, soft-drinks, ete.) require more promotion familiar with the brand and get convinced to buy the fe scale communication campaign is designed with cinema slides, contests, magazine ads, 1) Type of Product: The promotional acti type. For example, low priced FMCG products (toot and frequent reminder so that the customers remain product. Therefore, for such kinds of products larg increased frequency. Different tools like TV spots, press ads, incentive offers, etc., may be used. 2) Nature of Market: The communication mix is also influe competition in the market, demographic features of the const intermediaries, collectively affect the communication mix o! target audience, only advertising and sales promotion wou different regions of the country. Stage in Product Life Cycle: The communication mix strategies also differ with the change in the stage of the product life cycle in which the product to be marketed is present. When a product is present in its {introduction or early growth stage, the need is to create awareness among the customers and persuade them to try the product. A promotion mix that involves advertising, consumer sales promotions, trade promotions, publicity, spreading information, etc, is considered to be the best one. In the later stages ofthe product life cycle, ie. in the maturity stage, the marketer needs to promote and maintain brand loyalty among its customers. 4) Budget Availability: Budget is also one of the important factors that determine the decision regarding communication mix. With the addition of each promotional tool, the overall cost of communication mix increases, The firms which do not have enough budgets go for cheaper promotional strategies like dealer display, hoardings, wall paintings, persoral selling, ete. However, the companies having large scale funds may go for better promotional strategies, which may involve the use of technology such as internet marketing, broadcasting, et. 5) Company Policy: When the marketer is deciding upon the marketing and communication mix strategies, he needs to ensure that they are in line with the company policy. Desired public image, market strategy and top management's believe in the promotion, collectively influence the communication mix. 6) Type of Product Market: There are different types of product markets, namely, consumer and business market, depending upon which the communication mix strategies will vary. For example, the consumer rarkets require more of the promotional activities like advertising and sales promotion, while the business markets emphasise more on personal selling. The reason for more focus on personal selling in business ‘market is due to the involvement of risky, expensive, and complex goods with varying number of sellers. 7) Buyer-Readiness Stage: Buyer-readiness also affects the communication mix strategy, as the cost- effectiveness of the communication tools differ at different stages of buyer-readiness to buy the product. At the stage of comprehension, advertising and personal selling are effective. Conviction stage is characterised by use of personal selling, At the stage of closing the sales, marketers use sales promotions and personal selling. At re-ordering stage, again sales promotions and personal selling are effective. SS Scanned with CamScanner inced by nature of the target market, Level of sumers and needs and demands of the channel f the organisation. In case of widely spread Id be helpful as it can serve consumers in 3) 2, Aapromotion Aspects (Unit 4 2 44.4. Communication Mix Elements Te emotion mix/communication mix areas follows: 1) ae ares oheee a kind of promotional message developed by organisations that influence the aeeedio and television toon Product(s). This is done through different paid media like commercials sdvertising, a ads in newspapers, etc, Now-a-days, ‘product placement’ is used for ‘Communication Mix Elements ; ards, es — Hes “(Cprecie = Becton HL ———— wetoeueat ‘Online Marketing 2) Sales Promotion: Apart from advertising, another significant promotional tool is sales promotion, which helps in improving the sales by influenci : ing the potential customer to buy the promoted product. The different sales promotion techniques include sample distribution, point of purchase display, premium coupon, off-price selling, etc, 9) Personat Selling: Personal selling is the personal interface (telephonic or face-to-face) between the prospective buyer and the seller. Influencing the buyer to acknowledge a particular issue, convincing the buyer to follow a particular course of action or building a sound customer relationship, are the primary intentions of this interface. 4) Publicity: Publicity is an impersonal not-paid technique of promotion, where the demand for organisational producis and services is enhanced through devising editorial remark or supporting news within the print media or through finding an encouraging presentation of it on stage, TV or radio. 5) Public Relations: Generally, the public relations (PR) is a prom maintaining the brand image of an individual, public. In terms of PR, a public is someone, institution or organisation, mal tool responsible for developing and institution or organisation, within the eyes of the concerned who can draw an opinion about the concerned individual, ©) Direct Marketing: Sometimes, organisations directly approach to prospective customers to develop feedback and/or build sales. Conventionally, direct marketing has not been included in the promotional mix. But, now- ‘days, as it encompasses different strategies, budgets and purposes, and is utilised by different organisations 4s a part of their IMC plan, marketers regularly claim direct marketing as a part of the promotion mix. 7) Word-of-Mouth: Word-of-mouth is referred to as the transiting of information from individual to individual, Initally, the term was associated only with oral communication. But, now it covers all kinds of human interfaces, such as face-to-face interaction, email communication, telephone and through sending texts. A Positive word-of-mouth promotion is not possible until the customers have positive experience with an organisation. Such word-of-mouth promotions can be developed through providing services of high standards, §) Online Marketing: Online marketing or interactive marketing is the new technique of promotion. Apart {rom other conventional forms of promotion like advertising, personal selling or sales promotion, which are directed towards the customers only, this interactive marketing facilitates the target customers to interact. with the organisation also. This includes responding to promotional questions, making queries, receiving and editing information and images. Besides Intemet, there ate other interactive media forms like interactive television, CD-ROMS, and kiosks. The interactive Internet containing World Wide Web, however, persists to be the most influential and impactful method of marketing. 4.4.5, isi A Pasian uc elt the prospective customers to take or continue a particular decision, with the ‘lp of a commercial offering, is called Advertising. The ttle ‘advertising’ is taken froma Latin word ‘advertere’ eating “to turn toward’. The advertisements are capable of diverting the attention of the viewers, listeners, Raders or the onlookers towards a particular brand, product, service or an idea. Thus, any piece of information ‘hat diverts the attention of the target customers towards a brand/product/service/idea, can be called ‘advertising’, Da Scanned with CamScanner162 MBA Second Semester (Marketing Management) SPPU According to American Marketing Association, “Advertsing is any paid form of non-personal presentation ‘of ideas, goods or services by an identified sponsor”. [According to Wheeler, “Advertising is any form of paid non-personal presentation of ideas, goods or Services for the purpose of inducing people to buy”. [Adverisements, being the vital element of promotion, are public notices, introduced by organisations, o make the target castomers informed and stimulated towards their offerings. Altering the buying behavior. the theught process ofthe target customers and making them convinced to take certain course of zetion (esi by the organisations) isthe main purpose of advertising. When advertisements ao circulated through radio or tolevicon, they are called ‘commercials’. With the advent of television, different types of products, services or ideas, have been promoted through different commercials. 445.1. Objectives of Advertising Following are the main objectives of advertising: 1) To Inform: Providing product information is the key purpose of advertising. The organisation’. May broadcast existing or nw products and services offered tothe public through advertisements. Advertsing is also heipfal in informing the target audience about the business of a new organisation. The advertisernenis strategically focus on dravvng the attention of potential customers, through wilisng effective verbal and communication techniques thet become highly appealing. 2) To Tnfluence: Sometimes, informing target customers about products and services does not generate required results. So, org? ations start using advertising to influence the consumers to buy their offerings. For this purpose, suitable languages and pictues/images are utilised by organisations in their advertisement programs to influence the customers. These languages end images, when used effectively in ady rtisements, result in highlighting the strong points of a product or service, thus influencing the buying decisions of the customers. 3) To Remind: Reminding the customers about offered products and services, is also an objective of advertising. As numerous brands exist ina single product category, it may make the customers forget about some brands, The advertisements, thus, remind the customers about the brand/organisation and position its offerings in the minds of the customers. 4) To Ada Value: Advertising sims at presenting the product or service to the audience in a positive light, so as to add value to the organisation's brand. While preparing an advertisement, an advertiser focuses on increasing brand value by emphasising on the product's strengths. As the basic character of advertising is to persuade, a brand’s value can be increased by using advertising elements like pictures/images and texts. For example, an advertisement fora school in a particular magazine, highlighting the positive points (ike facilites, security and availability of skilled stafi), results in adding brand value by way of promising best education for children. 5) To Assist in Other Company Activities: Apart from the above objectives, advertising also aims at aiding “other activities like informing the customers regarding sales promotion offers like — discounts and gift cards. Use of advertising is also profitable for the organisation, as it instructs the customers about different uses of the product or service before they purchase it, This also helps the salesmen, as it saves the time jncurred on describing the product functioning and use. Consequently, the saved time is implemented in achieving sales. 4.45.2. 5Ms of Advertising uh While developing an ad programme, the first step for the marketing managers should be identification of target markets and the buyers’ motives. The managers can follow these five major steps for developing the advertisement programme viz, setting ad objectives, establishing the ad budget, choosing and creating ad message, selecting and scheduling ad media and lastly, evaluating the ad results. These five major steps are popularly known as the SMs of advertising ie. Mission, Money, Message, ‘Media and Measurement. ‘ Scanned with CamScannerPromotion Aspects (Unit 4) 163 Hence, the five major decisions of advertising are discussed below: Mission ~ Setting Ad Objectives Message ~ Choosing and Designing Message ¥ “Media ~ Planning, Selecting and Scheduling Media ¥ ‘Measure ~ Evaluation and Control of Advertising Figure 48: Ms of Advertising 1) Mission ~ Setting Ad Objectives: The main objective or reason behind the advertising programme is defined as ‘mission’. The purpose of ad programme may vary in accordance with the company such as Providing information and guidance to customers, developing brand personality, establishing goodwill, Promoting sales, facing market competition and introducing new products. The decisions related to the mission must be taken carefully as other decisions of ad program are based on the main purpose of advertising. For example, sales promotion, marketing competition and building brand image can be the mission of ad programme of FMCG products. ‘The target market and positioning strategy of an organisation determine the main purpose of advertising Programme. The goal of the ad program is the outcome of the communication held between the recipient and the advertiser. On the basis of the advertiser's need, the mission of the ad programme can be classified to cognitive, emotional, and conative goals. Money — Establishing Ad Budgets: Ad budget is mainly concerned the costs incurred in developing the ad programme. It is the total budget allocated by the company for advertisement. Money acts as-a restraining factor towards the success of advertising programme as the advertising effectiveness, media used and its coverage largely depends upon the funds provided by the company. Advertising is a costly affair and companies may have to spend a lot of money for its success. However, advertising programme should be designed within the limits of the funds provided. The decisions made in the ad programme should be adjusted or changed according to the budget allocated by the company. Many FMCGs like toothpastes, soaps, etc., have many substitutes which are easily available in the market. For this, extensive advertising through newspapers, T.V., radio, etc., is required and these methods ate very costly. The setting of ad budget is generally based on some important factors such.as existing consumer base, market share, market competition, product lifecycle, substitutability of the offer and buying frequency. Cértainly, ad budget alters with the choices of media and technology. Message — Choosing and Designing Message: Message refers to the text or content of the advertisement, This can be designed by using words, slogans, pictures, etc. A message is used to inform, guide and stimulate the potential buyers. Meaningful and eye-catching messages generate positive response from the buyers and hence provide profitable results. Various creative writers and artists are hired for formulating attractive advertisement messages. After all this, it is the job of advertiser to choose the most appropriate message, to decide the degree of creativity to be used, to select the media for communicating the message, to choose the specific target audience for the message, etc. The ad message should also be interrelated with the mission and money provided for advertising. ‘The formulation and designing of ad message is a systematic and creative activity. Consequently, marketing research is used as it helps in finding out where, how, what and to whom the message to be delivered. On the basis of this information, advertiser is able to decide targeting, positioning, frequency and other aspects. of ad messages. Other than this, the conception of logo, tagline, layout, design, etc., involves creativity. Lastly, “The ad’s impact depends not only on what is said, but often more importantly, on how it says it”, Tt is also suggested-by McLuhan that, the medium influences the perception of any message. If’ new technologies are introduced in the process, then advertising will generate more impact on customers. ~ Scanned with CamScannera ee 164 ‘MBA Second Semester (Marketing Management) SPPU 4) Media - Planning, Selecting and Scheduling Media: After deciding‘ the advertisement message, the advertiser has to decide the right media for reaching its target audience. The advertising media mainly used are newspapers, television, radio, posters, hoardings, direct mails, intemet; etc. Media selection is a very “racial decision taken by the advertiser which basically depends upon the ad budget provided, products to be Ssdvertised, characteristics of potential buyers, etc. Selection of wrong media for a product may result in monetary loss and negative response from the audience. Hence, itis recommended that the advertising media Should be selected carefully. For advertisement of a product used by children; like kids bicycles, the media to be used involves television advertising preferably cartoon channels, kid’s books or comics, radio programmes, hoardings, ete. The type of media differs from each other on different grounds, ie. reach (percentage of the target market exposed to the medium), frequency (e.g. frequency of message display), or impact ce, petsuasiveness of the medium). In general, the tendency of the advertiser is to find the best media having a proper balance betwen reach, frequency and impact, keeping the advertising budget in mind. 5) Measure ~ Evaluation and Control of Advertising: The final phase of developing the ad program is to measure the effectiveness of advertisement, For an advertiser, it is necessary to evaluate whether the signed ad programme for the target audience is effective or not. And if the designed advertisement is not effective it is improved or withdrawn, Evaluation is essential for eliminating the additional costs incurred fon the ads which are not giving positive results. The advertiser should frequently measure the effectiveness of its ad programme and take suitable decisions. The decision-making of the advertiser is very important in context with the effectiveness of the advertisement programme. By evaluating the ad at right time, advertiser may adopt remedial measures, if required. With reference to the above example, the effectiveness of the kids bicycle advertisement programme can be measured by its percentage of increased sales after the advertising. Some considerations in measuring the effectiveness of ad programme include demand creation in new market segments and success of sales promotion programmes. 44.5.3. Steps in Ad Campaign Planning ‘Advertising campaign is an organised series of advertisement messages with a particular idea and theme to promote a product or service. It can be broadcast through several media channels such as TV, radio, internet, etc, In a broader view, a campaign is a systematic course of action that is specifically designed to attain a set of objectives and to resolve certain issues in a particular timeframe, ie., a year or less. According to Dunn and Barban, “An advertising campaign includes a series of ads, placed in various media, which ate designed to meet objectives, and are based on analysis of marketing and communication situations”. Planning of advertising campaign is an extended process and is very significant for the successful execution of the ‘campaign. Many organisations appoint advertising agencies for planning and implementing the ad campaign. ‘The advertising agency has to perform an extensive research during the planni ise di | planning process and then finalise differen aspect of thea eampaign. Generally, the planning process of ad campaign consists of following seps: ; ‘Appraisal of Advertising Opporunity ¥ ‘Analysing and Defining the Target Market ¥ Seting Advertsing Objectives poe Determining Adverising Budget, _ Deciding Media and Creative Strategy ¥ ‘Creating ods, retest and Release Ads ¥ Evaluating End Results (Postesting) Figure 49: Stepsin Ad Campaign Planning : Scanned with CamScannerPromotion Aspects (Unit 4) es 165, 1) Appraisal of Advertising Opportunity: It is not necessary for a marketer to adopt advertising as their promotional tool. marketer should decide whether advertising is suitable for its marketing strategy or not. According to Neil H. Borden, there are five conditions that govern the advertising opportunity: i) Presence of Positive Primary Demand: When there is high demand for a particular product, then the chances of advertiser's success are more. This is more likely to happen, when a product i at the growth stage of its lifecycle, ii) Good Chances of Product Differentiation: There ate several products which are viewed same as the other products by consumers. They require no or less advertising. iii) Presence of Powerful Emotional Buying Motives: If a product exhibits a strong emotional buying ‘motive or if the consumers’are emotionally attached with the product, then the need for advertising does not exist. iv) Availability of Sufficient Funds: If sufficient funds are not available for establishing an advertising ‘budget then less focus should be given on ad campaigns, Hence, the first condition relates with the nature of the market, remaining conditions relates with the consumer's perceptions and the products itself. If the above conditions are present, then the effective advertising helps the company in attaining the marketing objectives. Conversely, if these conditions are absent, then advertising has made negligible contribution. 2) Analysing and Defining the Target Market: Market analysis for different products has different outcomes. For established products, market analysis will provide a past data of what has been done previously. While in case of a new product, an in-depth research will be required to find out new insights. ‘The basic requisite of good advertising is to have a clear understanding of marketing objectives which are based on the detailed market analysis, The main objective of the advertising is to answer two basic questions, i.c., where are we today? And, how did we get here? A proper marketing planning provides all the information related to the specific product such as brand share, market conditions, competitors’ share and legal/ political constraints. | 1 1 | | 3) Setting Advertising Objectives: A specific set of objectives must be determined by the promotion or brand manager for an advertising campaign and also for each advertisement with their opted medium. While setting the objectives of ad campaign, generally managers use ‘hierarchy of effects model’. By using this model, all the elements of the campaign support each other which may create positive response from the audience. This route leads the advertisers from the communication objectives to sales objectives and this is referred as ‘awareness advertising to direct-action advertising’. 4) Determining Advertising Budget: Advertising objectives define the milestones to be achieved from an ad campaign in a specified time. A budget sets a limit and controls all proposed expenses related to the ad campaign. Several approaches ate used for determining the ad budget and different companies adopt different approaches for proper allocation of their ad budget. It is a critical decision-making process as it involves a large amount of moncy and it is difficult for the advertiser to analyse the market situations that : will produce profitable results. Generally, the top management has great concern towards the accountability of advertising budget. 5) Deciding Media and Creative Strategy: ‘The advertising strategies involve important decisions related to ‘media selection and creation of ads. The media plan and the creative plan are developed simultaneously. ‘Though, many times, the promotion manager decides the media and then establishes the ad design. Media planning is a complex process as different types of media have different characteristics. Media plan provides the best way to reach the target audiences with the ad message. Here, the main aim of the advertiser is to deliberately choose the media that is best suitable to reach large number of target audience at the lowest possible cost. 6) Creating Ads, Pre-Test and Release Ads: Pre-testing of the ad campaign is essential before introducing it into the market, Some of the reasons for pre-testing include increasing media costs, competitor's ad message, audience apathy and dislikes of ads, etc. Therefore, itis important for the companies to ensure that campaign message is clearly understood by the audience. Pre-testing is approved by all top management authorities before actual execution of advertisement in order to avoid any kind of mistakes and to increase company’s effectiveness. For this purpose, various techniques of pre-testing are adopted by the companies such as market tests and surveys, focus groups, computer simulation tests, etc. Scanned with CamScanner16 MBA Second Semester (Marketing Management) SPPU 7) Evaluating the End Results (Post-Testing): Post-testing is concerned with the evaluation of final results in order to measure the effectiveness of the ad campaign. Pre-testing is done to evaluate the effectiveness before it execution in the market. Whereas, on-going testing is carried out when the ad ‘campaign is running in the market, It helps the advertiser to evaluate the extent to which the message is being reached to the audience, and whether it is being interpreted correctly. Post-testing is performed at the end to evaluate the accomplishment of advertising objectives. It helps to make future plans and provide feedback to promotion managers. 445.4, Advantages of Advertising Organisations are benefited through various advantages of advertising which are as follows: a 1) Advantages to Manufacturers: “It pays to advertise”, is quite a rational statement as advertising is beneficial for manufacturers in many ways: i) Increased Sales: The primary purpose of every producer engaged in advertisement of the products ‘manufactured, is to stimulate and increase sales of the product. Goods manufactured on a large scale are ‘marketed by advertising, which is a common influential method. Advertising assists in increasing the sales figures. Frequent and persistent broadcasting of an advertisement will help the producer, to grab attention of more customers and increase its market coverage apart from the current markets. It helps in indicating additional benefits of the product to potential customers. ii) Steady Demand: Seasonal fluctuations cause decrease in demand of the product. But advertising | ~ regulacises these variations in demand for various products. Producers are always. searching for new ~ Denefits and features of a seasonal product, to advertise and attract new customers. For example, new and innovative products like cold coffee and ice-tea have become popular beverages in the month of summer. These beverages are preferred by customers thus increasing the demand. Refrigerator can be considered as another example which has similar demand pattern. iii) Lower Costs: Advertsing acts as a motivator for sales and an enormous increase in the turnover ratio is observed. This is beneficial in two ways, ie., firstly, advertising expenses (included in the total f selling costs) get evenly distributed over huge sales volume, which ultimately reduces per unit selling cost, And secondly, the per unit production cost is reduced due to inerease in production levels initiated by inicrease in turnover ratio. iv) Greater Dealer Interest: Retailers receive a considerable amount of help, while performing their task of selling goods (which are being advertised by the manufacturers). Retailers are always interested in selling advertised goods, because advertising creates demand for such goods in the market and hence, they are never concerned about increasing sales of such goods. v) Quick Turnover and Smaller Inventories: A well-regulated and efficient advertising campaign enables expeditious tumover of products due to creation of a highly reactive market. It also decreases the inventory cost due to constant demand. vi) Supplementing Salesmanship: The most essential premise for selling a product is done by advertising. Advertising simplifies the job ofa salesman. It supplements the work of the salesman as he has to only feos stiggest the product which the prospective buyer is already acquainted with (by way of advertisements). vii) Encouragement to Better Performance: Advertising of the products manufactured by the organisation gives a proud feeling and sense of self-esteem to the employees of that organisation as they are part of the whole process. It increases efficiency levels of employees and workers and also § ‘motivates them to inerease their efforts. This raises the team spirit and confidence of the employees of the organisation. viii) Creation of Goodwill: The advertising benefits the manufacturer by establishing a good reputation for it. It makes the organisation a producer who has developed a positive image of delivering quality products to the society. 2). Advantages to Consumers: Following points highlight the advantages of advertising to consumers: i) Facility of Purchasing: The shopping experience of customers is simplified due to advertising, ‘because the re-sale value of products sold by retailers is predetermined, which is mentioned in the ads. ‘An explicit and absolute commitment is given by an advertisement to target audience that the product offered is not excessively priced, thus, making the customer comfortable while finalising their choice. ‘i. = ——l Scanned with CamScannerPromotion Aspects (Unit 4) 167 ii) Improvement in Quality: Usually, names, Thus, when a customer decid assurance which helps him to prefe organisations promote their products under the respective brand sto bay product after watching the advertisement, itis the brand iim t the product over other similar options available under different ica Coos ene rganisation can expect regular orders from the customer if he gets the anticipated Henan Be Product. If not, the organisation may experience a steep fall in the sales, once the anticipated quality is not received by the customer. 'H) Elimination of Unnecessary Intermediaries: Advertising builds up a direct link between the producer and the consumer. This association can help o reduce the price ofthe product which has been increased due to middlemen margins and subsequently inerease the profit margin of the producer. It implies that Consumers are being offered products at low rates and huge earnings are generated by the producer. iv) Consumer’s Surplus: Many people discover the value of products through advertisements, as it results in increased utility of available products. In case of products with higher utility rate, advertising adds more points to their popularity. It will lead to consumer's surplus with reference to the additional satisfaction obtained from the products, if these products are made available at cheaper rates, ¥) Education of Consumers: Advertising is a powerful and informative concept. It is a medium to inform and educate the consumers about various innovative products being launched in the market and their Uses and benefits, Thus, it induces them to shun their old behavioural pattern and embrace modem lifestyle. Hence, it leads the customers to a superior standard of living. 4.45.5. Disadvantages of Advertising Advertising executes three major roles namely; “inform”, “persuade” and “remind”, i.e. to educate, convince and make the consumers remember the product. But advertising has often been criticised, as it has been misused by few dishonest people who neglect the overall interest of business over their own selfish motives. The main disadvantages of advertising are as follows: 1) Multiplication of Needs: Advertisers force customers to purchase unwanted or unnecessary products. Human beings always have the urge to own quality goods, have a positive image and stature in the society, which is evoked by advertisers to sell their products. They make an earnest request, which inspires the customers to buy products. Thus, ads evoke various emotions and sentiments to win over new customers, 2) Misrepresentation of Facts: Goods not having any actual worth are sold to customers, when misleading facts and uses are conveyed through ads. Extravagant claims made by the advertisers are profitable for them but are totally unfavourable for the customers. 3) Consumer's Deficit: Advertising gives a sense of contentment to the users of the product, although it can also lead to dissatisfaction among people who wish to buy products, but are unable to do so because of lack of funds. Such dissatisfaction is detrimental or unpleasant, if it affects a major segment of the society. This discontentment can be significant, if it inspires any societal change. 4) Increased Cost: It is a debatable issue, whether advertising increases per unit cost of the, product (to be borne by the buyer) or not. It is a fact that advertising expenses form a certain percentage of per unit cost of product. It would be unfair to conclude that the product offered would cost less, if the advertising expenses are reduced from the total expenses. Even though it increases the cost, it also reclaims the same during the distribution activities. 5) Wastage of Natural Resources: Advertising faces a major opposition that it ruins the utility value the product even before the expiry of its shelf life. For example, in the automotive industry, when a new vehicle is advertised with great deal of persuasion, it compels the firm to dispose of the earlier launched models in spite of the fact that they have not become incompetent. 6) Barriers to Entry: To some extent, ads influence distribution of production in the industry. The nature of individual trade, technical aspects of production and the amount of product promotion done, are few reasons for the fluctuating industrial concentration, Facts confirm that the relationship between industrial concentration and advertising is not effective as per expectations. 7) Product Proliferation: Advertising often faces criticism that it influences unwanted product multiplication, causing lot of wastage of resources, The resources wasted on producing similar goods can be used for ‘manufacturing new useful products. Scanned with CamScanner\ | 168 [MBA Second Semester (Marketing Management) SPPU 8) Inefficient Manufacturers Stay in Business: One of the major drawbacks of advertising is that it allows incompetent producers to continue functioning in the market, by substantial advertising of low quality or inferior products. It is harmful as the consumers are induced to buy inferior goods. 9) Propensity of Consume: It is assumed that advertising increases the tendency to purchase more than required. This increased tendency can be detrimental as it causes apparent consumption of products. It leads to wastage of funds and less savings, thus hampering the investment prospects. 10) Deferred Revenue Expenditure: Advertising is unearned income, as its benefits are not derived immediately but delayed over few months or years. Thus, the advantages derived from advertising are limited, as the advertising cost constitutes a major part of the total costs, which becomes deferred expenditure for the organisation. Hence, investing huge amount on advertising does not assure instant results. 11) Managerial Difficulties: Regulating the amount to be allocated towards advertising, selecting various media vehicles, assessing different functions and coordinating them properly, the outlook of management while forming advertising targets, are certain factors which determine productivity of advertising towards a product or the organisation offering the product. As variety of essentials is to be managed for effective advertising, it leads to complex situation for advertisers, and thus, probability of efficient advertising reduces. 4.4.6. Sales Promotion Sales promotion is very important component of the marketing, especially the promotion mix. In actual, it acts like an instant stimulus for prospective buyers, It focuses on encouraging the potential customers/retailers to buy the products or services of an organisation, by enhancing its value. Sales promotion helps in increasing sales for short-term period; however, it is not helpful enough to generate long-term customer loyalty. It is designed for potentiat customers, for distribution channels and also for sales force of the organisation, According to William J. Stanton, “Sales promotion is an exercise in information, persuasion and infiuence”. According to American Marketing Association, “These marketing activities, other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness such as display shows and exhibitions, demonstrations and various non-recurrent selling efforts not in the ordinary routine”. According to Philip Kotler, “Promotion encompasses all the tools in the marketing mix whose major role is persuasive communication”. Thus, it can be said that any action focussed towards enhancing sales as well as usage or trial of a product or service, is called ‘sales promotion’. It fills in the area that is not covered by any other element of the marketing communication or promotion mix. There are different types of sales promotion and each is given importance, depending on the circumstances or situations, like: 1) ‘Consumer-based sales promotion’ is used to enhance the sale of seasonal products during off-seasons. 2) ‘Middlemen or channel-based sales promotion’ is used in case when the middlemen or channel intermediaries are more close to customers than original manufacturers. 3) ‘Salesmen-based sales promotion’ is used to motivate sales people when the focus of sales is to remove old inventory. 44.6.1. Difference between Advertising and Sales Promotion Basis of Difference ‘Advertising Sales Promotion 1) Approach ‘As there is no direct contact between the sender and receiver of the advertisement message, itis, a non-personal type of _ communication. Different suitable media vehicles are used to convey the advertisement messages to the prospective customers. The approach of sales promotion may be personal as well as impersonal, As sales promotions are designed to enhance the sales, it ean be done via direct as well as indirect approaches. 2) Objective ‘Advertising is focussed towards informing, persuading and reminding target customers about the offerings of an organisation. This type of| ‘communication indirectly influences the sales. Promoting an increase, in sales, through adding values in the products and services, is the basic objective of sales promotion, Scanned with CamScannerPromotion Aspects (Unit 4) 169 3) Short-term Long-term ‘Advertising is beneficial in both short-run and long-run... Through advertising, brand awareness as well a5 brand preference is developed within the customers, which provide both the short-term and long-term benefits to the organisation. Sales promotion schemes or plans are generated for a specific time-period, s0 as to enhance the sales in that particular time. ‘Therefore, these schemes may be beneficial for short-run only. 4) Extra Value Tt is not the objective of advertising to add value to the product, however, in certain cases, it may generate extra value. Sales promotion is not possible without offering extra value or any incentive to customers, retailers or channel intermediaries. 5) Target Group ‘Advertising is more generic in nature and hence, it is not possible to target specific Br oups. Not only the end users of product, but’ retailers and salesmen, are also targeted for sales promotions. 6) Frequency "The frequency of conveying advertising message is very high. It is repetitive in nature, as a single message can be conveyed to the ass in a very short span of tim Sales promotion program is designed oceasionally by organisations to deal with poor sales. It is not frequently and regularly implemented. 7) Cost ‘AS advertising message is developed for mass, the cost per audience is less. Sales promotion is a costly method because incentives given (such as free samples, extra, discounts, free gifts, off-season discounts, etc,,) to offer value to customers, cost a lot to the organisation, Tn case, the approach of sales promotion is personal, effective feedback can be generated, 8) Feedback ‘As non-personal (ype of communication is used in advertising, it is not possible to get immediate feedback. The audience cannot immediately contact the advertiser for their {queries/confusions. 4.4.6.2. ‘Tools and Techniques for Sales Promotion For consumes as well as middlemen promotion, different sales promotion tools are utilised. They are as follows: 1) Consumer Promotion: Consumer-based sales promotion focuses on increasing the usage of a product among current users or adding new customers to the product. It can also be taken-up to respond to competitor's sales promotion campaign ot other activities. The different tools used for consumer-based sales promotion are as follows: i) Free Distribution of Samples: Free samples are distributed to the end users. These samples may be provided with any particular product purchased. They may also be distributed in a retail store or even door-to-door approach may be used for the free distribution, Coupons: Generally, coupons are provided to customers for influencing their buying activity and to promote the sales of a particular product. These coupons are the tools, providing a certain amount of saving on the purchase of a particular product. These coupons are generated by the manufacturers and are offered to customers with the help of different retailers, More commonly, these coupons are packaged along with the product, ii) iii) Premiums or Bonus Offers: When customers buy a definite amount of a particular product from a shop, a certain amount is offered free of cost. It is called ‘bonus or premium offers’. iv) Money Refund Offer: This is also called ‘money back offer’. The producer uses media advertising to convey that full price of the product would be returned to consumer within defined time-period, if the product is not upto the stated level. v) Contests or Sweepstakes: There are times, when an organisation may arrange a contest to attract new customers towards its products. The contest gives a chance to the consumer to win in cash or kind, Tt could be a free air ticket or it can be anything. The launch of new product may involve such sales promotion. Sweepstakes is similar to participating in a lottery. vi) Bonus Stamps: Manufacturers of retailers, provide bonus stamps to different consumers, based on their size and quantity of purchases. These bonus stamps are collected by the consumers, $0 as to make it huge enough io exchange them with desired merchandise. Scanned with CamScannerenn 170 MBA Second Semester (Marketing Management) SPPU vii) Draw: In this system, every purchaser is issued a token or coupon when he buys a specified product or a specified quantity of that product in a given time-period. After the end of that period, a ‘lucky’ draw is performed and winners are given different prizes, viii) Cheap Bargain or Self Liquidating Premium: In this method, on purchasing a particular product, the manufacturer or retailer provides another product at decreased price rate. For example, on buying one kg pack of ‘Surf’, a bucket worth 100 is provided at %50. 2) Middlemen Promotion: The vital elements of any distribution channel are retailers, distributors and wholesalers. Middlemen-based sales promotion plans are designed to attain desired coordination between these intermediaries. Manufacturers design variety of discounts, offers and schemes in order to motivate middlemen for achieving required sales. Some of them are as follows: i) Buying Allowance/Discount: In order to attract the retailers or wholesalers, a significant allowance or discount is provided by manufacturers on purchase of their products. The manufacturer may provide discount on list price or on the amount of cash paid, ii) Buy-back Allowance: Based on the size of purchases made by retailers or wholesalers at the time of their first deal, the manufacturer offers a specific amount of money to them to buy additional products. iii) Display and Advertising Allowance: Manufacturers also provide display and promotion allowances to different retailers in order to effectively display the traditional and new products of the manufacturers. The ‘amount of allowance is determined by the display space provided to the manufacturer’s product in the shop. iv) Dealer-Listed Promotion: Different publicity instruments (like diaries, calendars, key rings, etc.) and advertisement messages are designed by manufacturers containing the name and address of their dealers, in order to promote them. v) Push Money or PMs: In order to promote or push the sales at a pre-determined rate, manufacturers sometimes offer incentives (in the form of cash or something else) to the salesmen or retailers for every unit of products sold vi) Sales Contests: Sales contests are designed by manufacturers in order to motivate sales people, retailers and distributors as well. The entity (distributor, retailer or salesman) making highest sales is provided the gifts or cash prizes. Since there is chance of winning the contest, sellers eagerly participate in such kind of motivational contests. vii) Advertising Material: Manufacturers design different advertising instruments or materials for retailers or distributors to promote the sales of their products. These may include signboards, new-year diaries, calendars, packing bags, posters, literature, etc. viii) Credit Facility: In order to promote bulk quantity purchases, the manufacturers offer credit to different dealers based on the quantity of their previous purchases. 4.4.63. Process of Planning Sales Promotion Programme: Sales Promotion Plan Different types of media are used by marketers in any sales promotion plan. A typical sales promotion plan includes following steps: 1) Establishing Objectives: The very first step of sales promotion plan is to establish sales promotion ‘objective(s), Product related marketing as well as promotion objectives help in designing the sales promotion objectives. Different sales promotion objectives are established for different target markets. For example, sales promotion objectives established for consumers may include prompting bulk purchases (or purchasing large units), getting switchers back and encouraging nonusers to purchase organisational products and services. 2) Select the Tools: In the second step, as per the sales promotion objective(s), promotion tools are selected Different promotion tools are as follows: i) Consumer-Promotion Tools: Here, tools targeted at consumer-promotion are selected by the promotion planner. Factors like expense,.target market, competitive conditions and sales promotion objectives are considered for suitable tool selection. ii) Trade-Promotion Tools: According to the objective, most of the times trade promotion tools are selécted by promotion planner. In a particular sales promotion pie chart, largest section is covered with trade-promotion tools, whereas consumer-promotion tools and media advertising cover the rest. “ie az Scanned with CamScannerPromotion Aspects (Unit 4) im 3» 4) 5) 6) 44 iti) Business and Sales Force Promotion Tools: In order to fulfil certain business and sales force related promotion objectives like collecting leads, motivating sales force to improve its performance and impressing and rewarding customers, organisations generally use business and sales force promotion tools. An annual budget for different business promotion tools is designed by the organisation. Thus, billions of rupees are spend on designing and utilising swch tools. Developing the Plan: The next step is devoted to the development of sales promotion plan. Following factors should be considered while developing the sales promotion plan: i) Size: Determining the size of the promotion tool is very crucial for effective sales promotion. An appropriate size of the promotion is required for successful sales promotion as using huge promotion tool may lead to improved sales but with fading rate, Conditions: It is also essential to draw the conditions for consumers to avail such promotion tools. Either it may be targeted at every individual or some specific person or group. Person or group of persons having UPC codes (or proof-of-purchase seals) may avail premiums of the promotion. iii) Duration: The appropriate duration of the sales promotion tool(s) should also be decided by the promotion planner. It should not be too short (so that majority of prospects remain unserved) or too Tong (so that it diminishes its value). iv) Distribution Vehicle: A distribution vehicle is also necessary for serving sales promotion tools to consumers, The promotion planner is required to select a suitable distribution vehicle (according to cost, extent of reach and effect) for each promotion tool. For example, simple mail, advertisement, package of the product or even the store may be used as distribution vehicle for offering fifteen per cent off coupon, vy) Timing: The timing of offering a particular sales promotion is also considered before finalising the sales promotion plan. For example, different calendar dates are selected by brand managers to offer sales promotion tools and production, sales and distribution departments of the organisation manage their operations as per these dates. Sales-Promotion Budget: The last factor considered while developing the sales promotion plan is the budget of the sales promotion. This budget may be developed by estimating the cost individually or collectively. Sum of promotion tool cdst (like cost incurred on discounts or premiums) and administrative cost (like cost of mailing, printing and communicating) is multiplied with possible number of units to be sold, to determine the total cost of the promotion. Pre-Testing the Programme: After developing sales promotion plan, itis essential to pre-test it. Although a list of factors is considered while developing the plan, pre-test highlights its merits and demerits. Several aspects of the promotion tool like its size, distribution method, suitability, etc, are analysed withthe help of pre-test. Implementing and Controlling the Program: The next step includes the formulation of implementation and control plan $0 as to manage every sales promotion tool. Two important aspects, ie. lead time and sellin time are covered under implementation plan. ‘The time elapsed in developing the sales promotion plan prior to its launch is called Lead time, It starts from initial planning and lasts upto final distribution to the dealer, involving several important happenings (like.,, designing and selection of package materials, finalising promotion and sale materials, informing and preparing salespersons, allocating distributors and producing inventories). The time elapsed from launch of sales promotion tool to the sale of approximately ninety five per cent of the promoted product to the consumer is known as Sell-in time, Evaluating Results: The last step of sales promotion plan includes the evaluation of the sales promotion effectiveness. Sales data, experiments and consumer surveys are mainly used for evaluating the sales promotion effectiveness. The findings must be share with all the participants. Advantages of Sales Promotion ‘The major advantages of sales promotion are briefly explained below: ) 2 Getting New Customers for Existing Product: Every organisation strives to acquire more customers for their existing products. The job of the organisation is to extend incentives at the right time so that new customers aré attracted to the existing product. Stimulating Middlemen: It is absolutely necessary to continuously motivate the middlemen to enhance the sales of the organisation. This is done by giving incentives, discounts, etc. Scanned with CamScannerMBA Second Semester (Marketing Management) SPPU In ason: It is a demand for seasonal products falls after tivating Demand during Off-season: It is a proven fact that den ; 3 etomnon gets over, For example, sales of air conditioners and ceiling fans decline after summer (except Mumbai). It is the objective of sales promotion to try and see that the sales do not suffer too maintained. in cities Ii I much and some uniformity 4), Motivating the Sales Representatives: The soles representatives of the organisation need fo be mativated always. This is because they play a very important role in increasing sales, Sales promotions result in ‘motivating sales people. 5) Facing the Competition: Sales promotion helps in designing new and unique ways to enhance sales, Different competitors develop different methods to deal with competition, 6) Extra Benefits: Different types of benefits at different timeframes are offered to the customers. For example, free samples before the actual purchase, gifts and discounts during the purchase and after-sales-service after the purchase, are the few benefits which are provided to the customers through sales promotion. 7) Information of Latest Products: Sales promotion helps in informing the target customers about the latest products and services of the organisation, This helps in increasing the sales of such products and services. By consuming such new products and services, the standard of living of customers increases. ‘ 8) Helps in Managing Budget: Every customer has limitations on their monthly and yearly budget. It is for the customers to utilise fallin prices and various sales promotion schemes in order to keep their purchases within family budget. 4.4.6.5, Disadvantages of Sales Promotion F Every coin has two sides, i., positive and negative, Sales promotion is also no exception. It has several disadvantages or limitations as well. They are given below: 7 1) Increased Price Sensitivity: Since, sales promotion activity is an integra? part of marketing and sales, the ‘consumers begin to wait for promotional deals. Branded goods with brand loyalty are no exception. Hence, they wait for discounts, stock clearing sales, monsoon sales, festive promotion deals, etc. 2) Quality Image may become Tarnished: If an organisation focuses less on promotion, it may adversely affect its brand image. Its quality image in the public may become poor. 3) Merchandising Support from Dealers is Doubtful: There are issues with the dealers as well. They may not pass on the benefit of discounts to the customers. As they may not have sufficient space to store the goods, the product may not be popular in their shops or the benefit offered is less than the effort required, the dealer may not be interested in organisational products. 4) Short-Term Orientation: Short-term benefits accrue because of the sales Promotion activities. But sometimes, if these methods are not properly applied and implemented, then can have opposite effects on the future of the organisation, 5) Attracting New Customers at the Cost of Existing Ones: The organisation has to be very careful while making promotional offers. It should not end hurting the sentiments of existing customers. For example, if an organisation offers a discount on its products only for new customers, then the existing customers may feel that they have been ignored. Its therefore necessary to make such offers on personal basis so that only non-customers know about these offers. ©) Easy Imitation: In ase of being highly productive, the sales promotion techniques used by an organisation can be easily copied by the competitors. Competitors, generally, imitate successful sales promotions, 7) Lower Margins: In the absence of exceptional benefits (of the product) from that of the competitors, customers can be compelled to purchase the product only in case of lower prices during promotion, However, it results in lower profit margin as well. 4.4.7. Personal Selling Pessoal selling can be defined as a ciect and feceto-face communication between seller and buyer, in which the seller provides information about the firm and its products tothe buyer so that he or she can make the decision abone Purchase. Iisa two-way communication, allowing the buyers to actively participate in the commtnication prose According to American Marketing Association, “Personal selling i oral presentation in @ conversation with one or more prospective purchasers for the purpose of making sales” According to Richard Bushirk, “Personal selling consists of contacting prospective buyers personally”, Scanned with CamScannerPromotion Aspeets (Unit 4) Personal selling builds the relationship between sellers and the customers, of selling. It is an only method promotion, it also incurs a huge cost, 173 which in turn makes it a unique form Of direct sales promotion. Although, itis a flexible and efficient method of sales Personal Selling ‘AS a direct contact between the seller and buyer Ts ‘made in personal selling, itis @ type of personal communication, ‘As personal selling involves selling a particular product to an individual personally and no mass media is required here, it is a type of individual communication. ‘As personal selling involves direct Interaction between the seller and buyer, itis possible to get immediate feedback. Prospective buyers can easily ask the salesman about their queries/confusions ‘The salesperson is free fo alter or modify the message of the selling process, according to the situation or requirement and background of the prospective customer, The same message can be Selivered to different customers indifferent ways. Personal selling is focussed towards selling the product to prospective buyer, Therefore product selling isthe main objective here. Personal selling is mainly used for selling industial 200d ‘AS personal selling involves interacting with different customers individually, cost per audience is more here, ‘As every individual is contacted personally by the salesperson to convey the message, the spreading ‘speed of the message in personal selling is very low. 44741, _ Difference between Advertising and Personal Selling Basis of Difference ‘Advertising 1) Personal, Non- As there is no direct ‘contact between the sender and Personal receiver of the advertisement message, it is a non- ersonal type of communication, 2) Individual, Mass [As the adverisement message is Communeaied t Communication | mass, trough afferent media having mass coverage like newspaper, radio or television, it isa (pe of mass comninication, 3) Feedback ‘As non-personal jype of communication is wed Fa advertising, it is not possible to get immediate feedback. The audience cannot immediately contact ‘he advertiser for thee querievcontusons, 4) Adjustability of [in case, the advertisers want to ‘change or alter their Message saverisement messages as per the preferences and background of individual audienes itis not possible ‘All prospective audience receive the same message 5) Objective | Adverising is focussed towards Tafoaning, Persuading and reminding target customers about the offecings "of an organisation. This type of communication indirectly influences the sales. © Usefulness Advertsing is mainly used for promoting consumer goods TD Coster As advertising message is developed for mass the Audience cost per audiences less here, ® Speed The spreading speed of the message In adverising Is ‘very high, as mass media is used for conveying the message 4.4.7.2, Personal Selling Process Personal selling is the systematic process through which the identifying the prospects, approaching them, presenting the products and services to them, handling their objections, closing the sales and finally ends with following up the customers. The steps in the personal selling process salesperson closes a sale. It starts with are described below: Pre-sale Preparation Lo Prospecting ee Pre-approach 1) Presale Preparation: It is the first step in personal selling process. Here, the sales personne! try to acquise the background knowledge about customers and their needs and wants, In this step, the sales personnel also try to gain the knowledge about market, product, its features, ‘products of competitors, and ‘methods of selling. The sales personnel should know the benefits and disadvantages of their own product as well as the products of their competitors. This step is carried out to ensure that sales Personnel are having the knowledge about important aspects related to selling. This knowledge helps the sales personnel in persuading the customers, by providing them useful information and handling their queries, Prospecting: The next step in the personal selling is prospecting, It is concerned with the identification of potential customers Potential customers are those who have a need, have the purchasing power'and are willing to pay. In this step, i Approach to the Customer Sales Presentation & Demonstration Handling Customer Objections —_ > ‘Closing the Sate rr —__ Post Sales Follow-up 2 Figure 4.10: Personal Selling Process the salesperson makes a list of prospective customers Scanned with CamScanner