PM - Unit 1

Promotion
Management
Unit - 1
Lecture Session
By
K.Sampath Kumar
Assistant Professor, Management Sciences
DJ Academy for Managerial Excellence

Avoiding Marketing Myopia
Marketing
Myopia is • To avoid marketing myopia,
management’s companies must broadly
failure to define organizational goals
recognize the toward consumer needs
scope of its • Focus on benefits
business.
Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 2

TECHNOLOGICAL FACTORS
 Technologies for nations
 Technologies for product and

services
 Technologies for business models

SOCIAL-CULTURAL FACTORS
Values
Time-starved
customers
Multiple lifestyles
The changing
structures of families

DEMOGRAPHIC FACTORS
Adolescents
Youth
People between 35 to 45
People between 45 and

60
People above 60

POLITICAL-LEGAL ENVIRONMENT
Legal
Framework Every Aspect
Governments
Within Which Of The
Stability Of And
The Marketing
The Businesses
Marketing Mix Is Subject
Government Need Each
Department To Laws And
Other
Has To Restrictions
Function
Wednesday, August 31, 2022 6

Sampath Kumar Kumaraswamy
COMPETITIVE ENVIRONMENT
Number of competitors a company faces
Relative size of competitors
Degree of interdependence within the industry
New technologies

IMC Communication Tools
IMC Communication Tools
Direct Interactive/
Advertising Marketing Internet Marketing
Sales Publicity/Public Personal

Promotion Relations Selling

What is Advertising?
Any form of non personal presentation and promotion

of ideas, goods, or services by an identified sponsor.
U.S. advertisers spend in excess of $175 billion each

year.
Advertising is used by:

• Business firms,
• Nonprofit organizations,
• Professionals,
• Social Agencies.

10 Wednesday, August 31, 2022 Sampath Kumar Kumaraswamy
Campaign Evaluation
Media Decisions Message Decisions
Budget Decisions
Objectives Setting
Major Decisions in Advertising
11 Wednesday, August 31, 2022 Sampath Kumar Kumaraswamy
Comparison
Reminder Advertising
Keeps Consumers Thinking Advertising
About a Product. Compares One Brand to
Another
Persuasive Advertising Informative Advertising
Build Selective Demand Build Primary Demand
During a Specific Period of Time
Target Audience
Accomplished with a Specific
Specific Communication Task
Setting Objectives
Examples of Promotion Objectives
Objective: To Inform (Awareness)

To increase the top-of-mind awareness level for Peter Pan
peanut butter from 16 percent to 24 percent
Objective: To Persuade (Attitudinal)

To increase the percentage of parents who feel that Peter Pan
peanut butter is the best peanut butter for their children from
22 percent to 35 percent
Objective: To Remind
To remind consumers that Peter Pan peanut butter is the
creamiest peanut butter and is available at their nearest grocery
and convenience stores

Elements of the Promotion Mix
Advertising
Ingredients Public Relations

of the
Promotion
Mix Personal Selling
Sales Promotion

Push Versus Pull
Push Policy Pull Policy

Producer Producer
Wholesaler Wholesaler
Retailer Retailer
Consumer Consumer
Information Flow
Wednesday, August 31, 2022 Sampath Kumar Kumaraswamy 14

The Communication Process
Noise
Sender Encoding Channel Decoding Receiver
Channel

Goals and Tasks of Promotion
Informing Reminding
Target
Audience
Persuading

AIDA and the Hierarchy of Effects
Purchase
Conviction
Preference
Liking
Knowledge
Awareness
Attention Interest Desire Action

Factors that Affect the Promotion Mix
Nature of the Product
Stage in the Product

Life Cycle
Target Market Characteristics
Type of Buying Decision
$$$
Available Funds
Push–and–Pull Strategies

Creating a Promotion Plan
Analyze the Marketplace
Identify Target Market
Set Promotion Objectives
Develop Promotion Budget
Choose Promotion Mix

Criteria for Setting Promotion Objectives
Promotion objectives should:
be measurable, concrete
be based on sound research, with a

well-defined target audience
be realistic
reinforce the overall marketing plan and

relate to specific marketing objectives

Techniques for Setting Promotion Budgets
• All - You - Can - Afford
• Competitive Parity
• Percent of Sales
• Market Share
• Objective and Task

Designing The Sales Force
Sales force size
Decided by workload approach
Based on calculation of total annual calls

required per year divided by the average calls
per year that can be expected from one
salesperson

Designing The Sales Force
Sales force organization
Geographic
Product
Customer-based
Key account management
Emerging trends in sales force organization

MANAGEMENT OF THE SALES FORCE
• Individual sales people need to have

their own sales targets
Setting • Increasingly profit targets are being
used
objective • Criteria such as time spent developing
s new accounts, time spent introducing
new products, specify number of calls
expected per day etc.

Management of The Sales Force
• Preparation of job description and

personnel specifications
Recruitmen • Identification of source of requirement
t and and method of communication
• Design of application form
selection • Interview
• Supplementary selection aids

Management of The Sales Force (Contd.)
Training
• Include product knowledge and development of selling skills
• Should include knowledge about the company, products, competitors and
their products, selling procedures and techniques, work organization
including report preparation and relationship management
• In-the-field training after in-house training

• Tasks of sales managers in

motivating salespeople
• Understand salespeople
• Types of salespersons
Motivation
• Sales people differentially
and
motivated
compensatio
n • Types of compensations
plans
• Fixed salary, Commission
only, Salary plus
commission

• Quantitative measures of performance

• Output criteria
Evaluatio •
•
Input criteria
Qualitative measures of performance
n of sales • Sales skills; Customer relationships;
Product knowledge; Self management;
people Cooperation and attitudes
• Use of quantitative and qualitative
measures inter-related

Management of The Sales Force (Contd.)
Evaluatio • Need to be in
n& control of their
Control of sales operation
total
sales • Take drastic steps
operation if necessary

PROBLEMS OF SALES MANAGEMENT
Salesperson’s
Geographic Repeated personality and Oversimplificatio
separation rejections realities of the n of task
job

TYPES OF ADVERTISING
Corporate Image
Institutional
Advertising
Advocacy Advertising
(energy crisis, end of war)
Types
of
Advertising
Pioneering
Product Competitive
Advertising
Comparative

Effects of Advertising
Diminishing
returns
Return on Advertising Expenditures
on additional
spending
Increasing efficiency
as ad budget becomes
sufficient
Advertising Spending
Advertising Campaign Decision Process
Determine the campaign objectives.
Make creative decisions. Make media decisions.
Evaluate the campaign.

The Tools of Public Relations
New Product Publicity
Product Placement
Customer Satisfaction
Major Phone Lines
Tools
Used By Consumer Education
PR
Professionals Event Sponsorship
Issue Sponsorship
Web Sites
Advantages of Personal Selling
Detailed
Information
Message Control
Targeted
Cost Control
Closing Sales

Advertising Versus Personal Selling
Personal Selling is more important if...

The product has a high value.
It is a custom-made product.
There are few customers.
The product is technically complex.
Customers are geographically concentrated.
Advertising/Sales Promotion is more important if...

The product has a low value.
It is a standardized product.
There are many customers.
The product is simple to understand.
Customers are geographically dispersed.

Personal Selling & Sales Promotion
Sales Promotion- It refers to short-term use of incentives

like discounts, free samples, displays, exchange offers,
free gifts, exhibitions, road shows to attract the potential
customers and to achieve more sales value.
Personal Selling is performing the task of selling through

individual or representative by face to face interaction
with customer. It is also known as salesman-ship.

Differences Between Traditional & Relationship Selling
Traditional Personal Selling Relationship Selling

Sell products (goods and services) Sell advice, assistance, and counsel
Focus on closing sales Focus on improving the customer’s bottom line
Limited sales planning Considers sales planning as top priority
Spend most contact time telling Spend most contact time attempting to build a
customers about product problem-solving environment with the customer
Conduct “product-specific” needs Conduct discovery in the full scope of the
assessment customer’s operations
“Lone-wolf” approach to the account Team approach to the account
Proposals and presentations based Proposals and presentations based on profit
on pricing and product features impact and strategic benefits to the customer
Sales follow-up focused on product Sales follow-up is long term, focused on
delivery long-term relationship enhancement

Steps in the Selling Process
Generating Sales Leads
Qualifying Sales Leads
Basic Making the Sales Approach

Steps in
Making the Sales
the Presentation
Selling
Process Handling Objections
Closing the Sale
Following Up
Break-Even Analysis
Total Revenue
Break Even Profits

Price (in INR)
Total Costs
Fixed Costs
Losses
Quantity (units)
Customer Relationship
Management
“Process of creating and maintaining relationships with

business customers or consumers”
“A holistic process of identifying, attracting,

differentiating, and retaining customers”
“Integrating the firm’s value chain to create enhanced

customer value at every step”
“An integrated cross-functional focus on improving

customer retention and profitability for the company.”

Customer Relationship Management
Bottom-line:
The use of information-enabled systems for

enhancing individual customer relationships
to ensure long-term customer loyalty and
retention

CRM Objectives
Lifetime Value (LTV)
• Refers to the net present value of the potential

revenue stream for any particular customer over a # of
year
• Starts with current purchase activity then extrapolates

to include potential additions from cross-selling,
upgrades, total ownership, etc.
Customer Ownership
• Attempts to “own” the lion share of
customer spending and/or “share of mind”
in a particular product category
• Building brand equity, maintaining vigilant
customer contact, keeping current with the
market trends is critical
• 5% points increase in customer
retention=20-125% increase in profit

Areas of CRM Activity
Sales Force Automation (SFA)
Customer Service and Support (CSS)
Help Desk
Field Service
Marketing Automation
Making CRM Happen
Evaluate products and processes customers’ terms.
Analyze the multiple channels through which the company interacts with
customers.
Examine how the company understands its customers. Does it keep good data?
How does it get that data? Does information flow between functional areas?
Provide fingertip access to all information.
Analyze human resources and ensure that everyone has an understanding of

philosophy of CRM

Marketing Intelligence
The seven most used activities for collecting MI in product software industries
are:
Product Testing
Industry Intelligence
Sales/service
Trade shows
Channels
Qualitative Methods (small “focus groups” and personal interview)
Aggregate Data

Product Life Cycles and the Boston Matrix
Sales
Development Introduction Growth Maturity Saturation Decline
Time
Wednesday, August 31, 2022 47
The Boston Matrix
A means of analysing the product

portfolio and informing decision
making about possible marketing
strategies
Developed by the Boston Consulting
Group – A Business Strategy and
Marketing Consultancy in 1968

022
The Boston Matrix / Classifications
Problem Children Stars

High
Dogs Cash Cows

Growth
Market
Low Market Share

49 High 4
2
The Product Life Cycle and the Boston Matrix
(2) Cash from ‘B’
used to support ‘C’
through growth (3) Cash from ‘C’
stage and to used to support
launch ‘D’. ‘A’ now growth of ‘D’ and
Sales possibly a dog? possibly to finance
extension strategy
50
for ‘B’?
(1) ‘A’ is at (1) (2) (3)
maturity stage –
cash cow.
Generates funds
for the
development of
‘D’
B
A C
Importance of maintaining a
balance of products in the
The product portfolio – Time
portfolio at different stages of four products in the
the PLC – Boston Matrix helps portfolio
with the analysis Sampath Kumar Kumaraswamy Wednesday, August 31, 2022
Product Life Cycles & The Boston
Matrix
Sales
Effects of Extension
Strategies
Time

Product Life Cycles & The Boston Matrix
Sales/Profits PLC and Profits
PLC
Profits
Time
Losses
Break Even

End of Unit 1

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Promotion

Assistant Professor, Management Sciences

DJ Academy for Managerial Excellence

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 2

 Technologies for nations

 Technologies for product and

 Technologies for business models

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 3

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 4

People between 45 and

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 5

Wednesday, August 31, 2022 6

Number of competitors a company faces

Relative size of competitors

Degree of interdependence within the industry

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 7

IMC Communication Tools

Sales Publicity/Public Personal

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 8

Any form of non personal presentation and promotion

U.S. advertisers spend in excess of $175 billion each

Advertising is used by:

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 9

Objective: To Inform (Awareness)

Objective: To Persuade (Attitudinal)

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 12

Ingredients Public Relations

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 13

Push Policy Pull Policy

Wednesday, August 31, 2022 Sampath Kumar Kumaraswamy 14

Sender Encoding Channel Decoding Receiver

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 15

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 16

Attention Interest Desire Action

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 17

Stage in the Product

Target Market Characteristics

Type of Buying Decision

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 18

Analyze the Marketplace

Identify Target Market

Set Promotion Objectives

Develop Promotion Budget

Choose Promotion Mix

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 19

Promotion objectives should:

be based on sound research, with a

reinforce the overall marketing plan and

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 20

• All - You - Can - Afford

• Objective and Task

Sales force size

Decided by workload approach

Based on calculation of total annual calls

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 22

Sales force organization

Key account management

Emerging trends in sales force organization

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 23

• Individual sales people need to have

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 24

• Preparation of job description and

Sampath Kumar Kumaraswamy Wednesday, August 31, 2022 25