PROMOTION

PROMOTING THE PRODUCT

Marketing and the Internet The Internet enables marketers to promote products
and services to millions of potential customers through the World Wide Web.

Advertising, personal (face-to-face) or direct selling, sales promotion, and

relationship building are the primary methods companies use to promote their
products.

ADVERTISING
Advertising is often used to make consumers aware of a product’s special low
price or its benefits. But an even more important function of advertising is to
create an image that consumers associate with a product, known as the brand
image. The brand image goes far beyond the functional characteristics of the
product. For example, a soft drink may have a particular taste that is one of its
benefits. But when consumers think of it, they not only think of its taste, but
they may also associate it with high energy, extreme action, unconventional
behavior, and youth. All of those meanings have been added to the product by
advertising. Consumers frequently buy the product not only for its functional
characteristics but also because they want to be identified with the image
associated with the brand.

By adding meaning to a product, advertising also adds value. For example,

when Philip Morris Companies Inc. purchased Kraft Foods, Inc. in 1988 for
nearly $13 billion, Philip Morris paid 600 percent more than Kraft’s factories
and inventory were worth. Over 80 percent of the purchase price was for the
current and future value of the Kraft brand, a value that was created in large part
by advertising. Advertising plays such an important role in promoting products
and adding value to brands that most companies spend considerable sums on
their advertising and hire specialized firms, known as advertising agencies, to
develop their advertising campaigns.

Advertising is most frequently done on television, radio, and billboards; in

newspapers, magazines, and catalogs; and through direct mail to the consumers.
In recent years, numerous advertising agencies have joined forces to become
giant agencies, making it possible for them to offer their clients a
comprehensive range of worldwide promotion services. See Advertising.
DIRECT SELLING
Where advertising reaches a mass audience, personal or direct selling focuses
on one customer at a time. That kind of individual attention makes direct selling
expensive, but it also makes it effective. As the costs of personal selling have
risen, the utilization of salespeople has changed. Clerks complete simple
transactions. Salespeople are now used primarily where the products are
complex and require detailed explanation, customized application, or careful
negotiation over price and payment plan. But whether the sale involves an
automobile or a customized computer network, personal selling involves much
more than convincing the customer of the product’s benefits. The salesperson
helps the customer identify problems, works out a variety of solutions, assists
the buyer in making decisions, and provides arrangements for long-term service.
Persuasion is only part of the job. A much more important part is problem
solving.

Because the selling process has become much more complicated, most
companies now provide extensive training for the sales force. The average
length of the initial training program is four months. A training program for new
members of the sales force teaches them about such matters as company history,
selling and presentation techniques, listening skills, the manufacture and use of
the company’s products, and the characteristics of both the industry and its
customers. Moreover, because the sales force plays such a critical role in the
marketing process, most companies provide on-going training for all members
of the sales force to help them deepen their product knowledge and improve
their interpersonal and negotiating skills.

With the increasing complexity of business problems and products, effective

sales solutions often require more knowledge than any one person can master.
As a result many companies now use sales teams to service their largest and
most complicated accounts. Such teams might include personnel from sales,
marketing, manufacturing, finance, and technical support.

SALES PROMOTION
The purpose of sales promotion is to supplement and coordinate advertising and
personal selling; this has become increasingly important in marketing. While
advertising helps build brand image and long-term value, sales promotion builds
sales volume. Sales promotions are designed to persuade consumers to purchase
immediately by providing special incentives such as cash rebates, prizes, extra
product, or gifts. Promotions are an effective way to spur sales, but because they
involve discount coupons and contests with valuable prizes, they are also
expensive and so reduce profits.

Promotion Communication that facilitates exchanges by influencing

 the audience to accept a product.

P
R
Information about
O
the customers and M
marketing Organization O
environmental T
forces I
O
N

FIG- INFORMATION FLOWS INTO AND OUT OF ORGANIZATION

PROMOTION AND COMMUNICATION MIX

Communication A sharing of meaning
Source A person, group or organization with a meaning it wants
and tries to share with an audience.
Communication A sharing of meaning
Receiver The individual, group or an organization that decodes the
coded message.
Coding process Converting meaning into series of signs.
Medium of The means of carrying the coded message from source to
transmission receiver.
Decoding Converting signs into ideas and concepts.
process
Decoding Converting signs into concepts and ideas.
process
Noise Whatever reduces a communication’s clarity and
accuracy
Feedback The receiver’s response to message.
Channel The limit on the volume of information a communication
capacity channel can handle effectively.

MEDIUM
CODED OF TRANSMISSION DECODED
SOURCE MESSAGE MESSAGE RECIEVER

FIG- THE COMMUNICATION PROCESS

OBJECTIVE OF PROMOTION
a. Create awareness
b. Stimulate demand
c. Encourage product trial
d. Identify prospects
e. Retain loyal customers
f. Facilitate reseller support
g. Combat competitive promotional efforts
h. Reduce sales fluctuations

PUBLICITY AS SUB STRATEGY OF A MASTER MARKETING STRATEGY

 Product MARKETS
 Price
 Place

TARGET CUSTOMERS
 Advertising AND TARGET
 Sales Promotion AUDIENCE
MARKETING  Personal Selling
STRATEGY  Publicity
(Marketing
Mix)

MARKETS

PROMOTION MIX
Promotion Mix is a combination of promotional methods used to promote
specific products.

The four possible elements of promotion mix are-

 Advertising
 Personal Selling
 Public Relations
 Sales Promotions

PERSONAL PUBLIC
SELLING RELATIONS

ADVERTISING SALES
PROMOTIONS
FIG-THE FOUR POSSIBLE ELEMENTS OF PROMOTION MIX

Advertisemen A paid form of non-personal communication about an

t organization and/ or its products that is transmitted to a
target audience through a mass medium.
The mass media used include print media, direct mail, audio-visual media,
billboards etc. Sponsors may be non-profit organizations, a political candidate, a
company or an individual. Advertising is used when sponsors want to
communicate with a number of people who cannot be reached economically or
effectively through personal means.

Merits
1. Can be reached to many consumers simultaneously
2. Relatively low cost per exposure
3. Excellent for creating brand images
4. High degree of flexibility and variety of media to choose from.
5. Can accomplish many different types of promotion objectives.

Demerits
1. Many consumers reached are not potential buyers (waste of promotion
money)
2. High visibility makes advertising a major target of marketing critics.
3. Advertising exposure time is usually brief.
4. Consumers usually quickly and easily screen out advertisements.

Personal Personal, paid communication that attempts to inform

Selling customers and persuade them to purchase products in
exchange situation.
It is a face-to-face contact between a seller’s representative and those people
with whom the seller wants to communicate. Non-profit organizations, political
candidates, firms and individuals use personal selling to communicate with the
public.

Merits
1. Can be most persuasive promotion tool; sales people can directly
influence the purchase behaviour.
2. Allows two way communication
3. Often necessary for technically complex products.
4. Allows direct one to one targeting of promotional efforts.
Demerits
1. High cost per contact.
2. Sales training and motivation can be expensive and difficult.
3. Personal Selling has a poor image making sales force recruitment
difficult.
4. Poorly done sale presentations can hurt sales as well as company,
products and brand images.

Public A broad set of communication activities used to create and

Relations maintain favourable relations between organization and
public, such as customers, employees, stockholders,
government officials, and society in general.
Publicity is news carried in mass media about a firm and its products, policies,
personnel or actions. The unique feature about the publicity is that it is a non-
paid form of promotion. Organizations frequently provide material for publicity
in the form of new releases, photographs and press conferences.

Merits
1. As ‘free advertising’, publicity can be positive and stimulate demand at
no cost.
2. May be perceived by consumers as more credible because, the seller does
not pay it.
3. Consumers may pay more attention to these messages because they are
not quickly screened out as many advertisements.

Demerits
1. Publicity is not always possible because it is not in hand of seller.
2. Limited repetition of publicity material.
3. Publicity can be negative and can hurt sales and company image.
4. Company cannot completely control the content of publicity messages.

Sales An activity and/ or material that acts as a direct

Promotion inducement to resellers, sales persons or consumers; it
offers added value or incentive to buy or sell the product.
Sales promotion includes activities that seek to directly or indirectly induce, or
directly serve as incentives to motivate a desired response on part of target
customers, company sales people and middlemen and their sales force. These
activities add value to the product. In sales promotion, the activities like
discounts, gifts, contests, premiums, displays and coupons are included.

Some type of Sales Promotion

  Specialty Ads (imprinted novelties, calendars, match boxes, souvenirs
etc.) and business gifts.
 Temporary price reductions via coupons, extended interest free or low
interest credit; refunds, rebates; price off deals, combination offers, bonus
packs, multiple packs; other methods.
 Promotions designed to get trials such as coupons, refunds, rebates, price-
off deals, bonus packs, samples, offers, trial sizes, free trials, special
guarantees, premium, self liquidating premiums, reusable containers and
souvenirs.
 Business, industrial, traders and magazines, and technical papers;
Journals and Publications.
 Directorate and Buyer Guides
 Trading stamps redemption coupons, dividend coupons and continuity
premiums.

Merits
1. Excellent approach for short-term price reduction for stimulating demand.
2. A large variety of sales programme to choose from.
3. Can be effective for changing a variety of consumer behaviour.
4. Can be easily tied in with other promotional tool.

Demerits
1. May influence primarily brand loyal customers to stock up at lower
price but attract few new customers.
2. May have only short term impact
3. Over use of price related sales promotion tools may hurt brand
image and profits
4. Effective sales promotions can be easily be copied by competitors

DIFFERENCE BETWEEN

Advertising and Personal Selling

To communicate to a larger group To communicate individually and to
(mass communication) small group.
Non-personal communication Personal communication
It is difficult to measure the Sales persons receive the immediate
effectiveness of advertising feed back
People may forget advertising Very intense means of
communication. It is very difficult to
get rid of sales people.
Not inter personal and effective Interpersonal and effective when
when population is large and population is concentrated
scattered

Advertising and Sales Promotion

Slow response Response is immediate
Indirect approach Direct Approach
Advertising is frequent and repetitive Sales promotion is non-recurring
promotional effort

Advertising and Publicity

Paid form, paid by sponsor Non-paid form
Presentation is programmed Presentation is non-programmed
Marketers exercise control Marketers have less control
Advertising is positive Publicity may be positive or negative
 CHARACTERICTICS OF PROMOTIONAL TYPES

FACTOR Advertising Sales Promotions Publicity Personal Selling

AUDIENCE Mass Varies Mass Small

MESSAGE Uniform Varies Uniform Specific

COST Lower per Moderate None to High per

viewer/ per moderate customer
reader customer

SPONSOR Company Company No formal Company

sponsor

FLEXY Low Moderate Low High

High High None High

CONTROL

INTEGRITY Moderate Moderate Moderate High

To appeal To stimulate To reach a To deal with

MAJOR
to a mass short term mass individual
GOAL sales, to
audience at audience consumer, to
Advertising Sales
a Promotions
createPublic Relations
with personal Selling
resolve
reasonable impulse separately questions, to
cost, and purchases reported close sales
create message
awareness
and
favourable
attitude

Poor to Poor Poor to Very Good

COMPLEX
NATURE Good Good

EXAMPLES OF DIFFERENT PROMOTION TOOLS

Print and Contests, Press Kits Sales
broadcast ads games, Seminars Presentations
Packaging-outer sweepstakes, Speeches Sales Meetings
Packaging-inner lotteries. Annual reports Incentive
Motion pictures Premiums & Charitable Programs
Brochures & Gifts donations Samples
booklets Sampling Sponsorship Fairs & Trade
Posters & Fairs & Trade Publications Shows
leaflets Shows Community
Reprints of ads Exhibits relations
Directories Demonstrations Lobbying
Billboards Coupons Identity Media
Display signs Rebates Company
Point of Low-interest Magazine
purchase financing Events
displays Entertainment
Audio & visual Trade-in
material allowances
Symbols & logos Continuity
Video games programs
Tie-ins