Download advertising and sales promotion

4 Ps of Marketing Mix
Product
Place
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Price
Promotion
Utilities created by marketers for
customers:
Product or service utility
Possession utility / price utility
Time utility
Place utility
What is promotion……?

Modern marketing calls for more than
just developing a good product, pricing
it attractively, and making it available to
target customers. Companies also must
communicate with their customers, and
what they communicate should not be
left to chance. For most companies, the
question is not whether to
communicate, but how much to spend
and in what ways.
What is promotion……?

“ Promotion is the co-ordination of
seller’s efforts to set up channels of
information and persuasion to facilitate
the sales of goods/services or
acceptance of an idea. ”
What is promotion……?
To Inform
To Persue
PROMOTION
To Modify Behavior
To Remind
What is promotion……?


“Promotion is an act of communication”
“It includes all those activities which are
aimed at creating and stimulating
demand”
In our daily life we all are exposed to
various tools of promotion aiming at
communicating one thing on other to us.
For our convenience, all those
promotional tools can be categorized in
five major components, constituting the
promotion mix
PROMOTIONAL TOOLS
(THE PROMOTION MIX)
Advertising
Publicity
PROMOTION
Sales
Promotion
Direct
Personal
Marketing Selling
THE PROMOTION MIX


The Promotion Mix (5 tools of promotion) is the
company’s primary communication activity, the
entire marketing mix (4 Ps) - promotion and
product, price and place - must be coordinated
for greatest communication impact.
Actually, communication goes beyond the 5
specific tools of promotion. The product’s
design, its price, the shape and colour of
package, and the stores that sell it - all
communicate something to buyer.
ELEMENTS OF PROMOTION
MIX
Five
Major
promotion
methods
used
(Promotion Mix)
for
1.Advertising : Any paid form of non-personal
presentation and promotion of ideas, goods or
services by an identified sponsor.
2.Publicity : Non-personal stimulation of demand for
a product or service or business unit by planting
commercially significant news about it in a
published medium or obtaining favorable
presentation of it upon radio, T.V., or stage that is
not paid for by the sponsor.
ELEMENTS OF PROMOTION
MIX
3.Personal Selling : Oral presentation in a conversation
with one or more prospective purchasers for the
purpose of making sales.
4.Sales Promotion : All those marketing activities –
other than advertising, publicity and personal
selling that stimulate consumer purchasing and
dealer effectiveness such as displays, shows &
exhibition, demonstrations and various non –
recurrent selling efforts. These are usually short
term activities
ELEMENTS OF PROMOTION
MIX
5.Direct Marketing : Has several forms - direct mail,
telemarketing, electronic marketing and so on. It has a
few distinctive characteristics non – public / customized /
Up- to- Date (Messages can be prepared very quickly for
an individual) .
NATURE OF EACH
PROMOTIONAL TOOL

Each Promotional Tool has unique
characteristics and costs.
1. ADVERTISING


Public Presentation (Public mode of
communication)
Pervasiveness (Permits seller to repeat the
message many times. It also allows buyer to
receive and compare the massage with
competitors.)
NATURE OF EACH
PROMOTIONAL TOOL
(1. ADVERTISING…….contd.)
• Amplified Expressiveness (Provides
opportunities for dramatizing the company and
its products through the artful use of print,
sound, colour etc.)
• Impersonality (It can not be as compelling as a
co’s sales representative.)
NATURE OF EACH
PROMOTIONAL TOOL
2. PUBLICITY


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High credibility (news features and stories
seem more authentic and credible to
readers/viewers than ads do.)
Off guard (can reach many prospects who
might avoid sales people and ads. The
message gets to the buyers as news.)
Dramatization (like advertising it also has a
potential for dramatizing a co. or its
products.)
NATURE OF EACH
PROMOTIONAL TOOL
3. PERSONAL SELLING



Personal confrontation (Both way
communication)
Cultivation (all kinds of relationships short time or long time)
Response (makes the buyer feel under
some obligation)
NATURE OF EACH
PROMOTIONAL TOOL
4. SALES PROMOTION



Communication (they gain attention and
usually provide information that may lead
the consumer to the product)
Incentives (gives value to the consumer)
Invitation (to engage in the transaction
now)
NATURE OF EACH
PROMOTIONAL TOOL


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5. DIRECT MARKETING
Non–public (message is addressed to
specific person/group)
Customized (to appeal to the addressed
individual )
Up–to–date (messages can be prepared
very quickly for delivery to an individual)
ADVANTAGES AND DISADVANTAGES OF
PROMOTIONAL COMPONENTS
Promotional
compo.
Scope
Cost
Advantages
Dis -Advantages
Allows
expressiveness
and control over
message
Has high degree
of credibility
Hard to measure
results
Costs more than all
other forms per
contact
Advertising
Mass
Relativity
Inexpensive per
contact
Publicity
Mass
Inexpensive
Personal selling
Personal
Expensive per
contact
Permits flexible
presentation &
gains immediate
response
Sales
Promotion
Mass
Can be costly
Gains attention Easy for others to
and has
imitate
immediate effect
Not as easily
controlled as other
forms
(***Packaging and public relations also play Imp.
role in promotion mix.)
OBJECTIVES OF PROMOTION

To Increase Sales

To Increase Market Share

To Build Brand Loyalty

To Build Product Differentiation in
Consumers’ mind
DETERMINING THE
PROMOTION MIX
(FACTORS IN SETTING THE PROMOTION MIX)
I. Type of Product :


For consumer products – Heavy Advertising
For Industrial products – More Personal Selling
Personal
Selling
Personal
Selling
Sales
Sales
Promotion
Promotion
Publicity
Publicity
Advertising
Advertising
Consumer Products
Industrial Products
DETERMINING THE
PROMOTION MIX
(FACTORS IN SETTING THE PROMOTION MIX)
II. Nature of Market :

Locational Characteristics of consumers

Demographics of the customers

Intensity of the competition

Requirements of channel members
DETERMINING THE
PROMOTION MIX
(FACTORS
IN SETTING
THE PROMOTION
III. Buyer
Readiness
stage : MIX)

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Un-aware
Informed
Aware
Interested
Not-interested
Having full knowledge
Comprehension
Conviction
ordering
Reordering etc
DETERMINING THE
PROMOTION MIX
(FACTORS IN SETTING THE PROMOTION MIX)
IV. Product Life Cycle Stage:
Sales
Intro. Growth Maturity Decline
Time
DETERMINING THE
PROMOTION MIX
(FACTORS IN SETTING THE PROMOTION MIX)
V. Push v/s Pull strategy:
Marketing
Activities
Push
Mfr
Demand
Intermediaries
End User
Demand
Marketing
Activities
Pull
Mfr
Demand
Intermediaries
Demand
End User
DETERMINING THE
PROMOTION MIX
(FACTORS IN SETTING THE PROMOTION MIX)
VI. Co. Market Rank : (Top ranking
brands derive more benefit from
advertising than sales promotion.)
VII. Available Budget
VIII. Company Policy and Objectives
IX. Competitive Promotional
Strategy(Competitors’ role and reaction)
X. Market Trend and Consumer
Attitude
“PROMOTION IS AN ACT OF
COMMUNICATION”


The word ‘communication’ is based on the Latin
word meaning “COMMON”. Thus the term
communication has come to mean sharing
something of common use.
Since, marketing communications aim at
influencing the consumer behavior in favour of
the firm’s offerings, these are persuasive in
nature. These persuasive communications are
more commonly called “PROMOTION” and
constitute one of the 4Ps of the marketing mix.
“PROMOTION IS AN ACT OF
COMMUNICATION”

Modern marketing calls for more than developing a good
product, pricing it correctly and making it easily
available to the customer. The company that wants more
than ‘walk in’ sales must develop an effective program of
communication & promotion.

Persuasive communication is said to take place when a
communicator very consciously develops his messages
to have a calculated impact on the attitude and/ or
behavior of a target audience.

A study of ‘Marketing communication’ is a study of
promotion function of marketing.
THE COMMUNICATION MODEL
WHO…... SAYS WHAT….. HOW..… TO WHOM...…
(In what
channel)
Communicator
Message
Channels
With what effect
Audience
HOW COMMUNICATION WORKS .........? THE
PROCESS OF COMMUNICATION
Sender
(Source)
Encoding
(of
message)
Message
and
Media
Decoding
Of
Message
Receiver
Noise
Response
Feedback
ELEMENTS OF THE COMMUNICATION
PROCESS
 (1) Source or sender or communicator

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(2) Encoding (Putting the thought or idea in
symbolic form)
(3) Message ( The set of symbols for
transmission)
(4) Media (The path through which the
message moves) from Sender to Receiver.
(5) Decoding (Assigning meanings to the
symbols transmitted by the sender)
(6) Receiver or audience or destination
(7) Response ( The set of reactions that the
receiver has after having been exposed to the
message)
(8) Feedback
COMMUNICATION PROCESS (a view)

In view of the new electronic technologies,
companies must ask not only “How can we
reach our customers?” but also “How can we
find ways to let our customers reach us?”

For a message to be effective, the sender’s
encoding process must mesh with the
receiver’s decoding process. Thus the best
messages are essentially signs that are
familiar to the receiver.
COMMUNICATION PROCESS (a view)


The sender’s task is to get his or her
message through to the receiver. The
target audience may not receive the
intended message for any of three
reasonsSelective attention
Selective distortion ( people may twist the
message to hear what they want to hear.Receivers have
set attitudes, they will hear what fits into their belief
system.)

Selective recall
COMMUNICATION PROCESS (a view)


Fiske and Hartley have outlined some general
factors that influence the effectiveness of a
communication :
1. The greater the monopoly of the
communication source over the recipient, the
greater the recipient’s change effect in favour
of the source.
2. Communication effects are greatest where
the message is in line with the receiver’s
existing opinions, beliefs, and disposition.
(contd.)
COMMUNICATION PROCESS (a view)



3. Communication can produce the most
effective shifts on unfamiliar, lightly felt,
peripheral issues, who do not lie at the center
of the recipient’s value system.
4. Communication is more likely to be
effective where the source is believed to have
expertise, high status, objectivity, or likability,
but particularly where the source has power
and can be identified with.
5. The social context, group, or reference
group will mediate the communication and
influence whether or not the communication
is accepted.
Models That Help to Conceptualize the
Buying Process

Two very specific models that aid in
understanding the buying process,
as well as in framing communication
are:(1) A I D A Model
(2) Hierarchy–of–effects model
(1) A I D A MODEL
Attention (awareness)
Interest
Desire
Action
According to ‘AIDA’ model, A marketer should
begin by winning attention or gaining
awareness, creating interest, inspiring desire
and precipitating the action for purchase, in
the prospects in order to enable its product to
be adopted by the target public.
(2) Hierarchy–of–effects model
Awareness
Knowledge
Liking
Preference
Conviction
Purchase
(2) Hierarchy–of–effects model

The buyers’ purchase decision is
preceded by such as conviction about the
product benefits, preference for the
brand, liking for the brand, knowledge
relating to the benefits and features of the
product after an awareness of the product
has been gained.
PERSONAL SELLING

Personal Selling consists of Individual
Personal Communication.

It is oral presentation in a conversation
for the purpose of making sales.

The successful salesperson cares first for
the customer, second for the products.
ADVANTAGES OF PERSONAL
SELLING


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Flexible in operation
Minimum of wasted efforts
Many times results in actual sales
Sales persons can perform many other
services
Recognizing and solving customers’
problems
LIMITATIONS OF PERSONAL
SELLING

High cost

High caliber of SRs is required

Large number of SRs is required to to
cover the total market

Administration is complex
THE PERSONAL SELLING PROCESS
( consists of 5 Ps )
PREPARATION
PROSPECTING
PRE-APPROACH
POST-SALES
ACTIVITIES
PRESENTATION
SPECIFIC TASKS TO BE PERFORMED
BY SALESPEOPLE


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Prospecting : (searching for prospects,or
leads)
Targeting : (deciding how to allocate their
time among prospects and customers)
Communicating : (communicating
information about the company’s
products and services)
(contd.)
SPECIFIC TASKS TO BE PERFORMED
BY SALESPEOPLE

Selling : (approaching, presenting, answering objections,
and closing sales)

Servicing : (providing various services to the customers consulting on problems, rendering technical assistance,
arranging financing,, expediting delivery)

Information Gathering : (conducting market research and
doing intelligence work)

Allocating : (deciding which customers will get scarce
products during product shortages)
RANGE OF POSITIONS COVERED BY
SALESFORCE
Mc Murry distinguished six sales positions, ranging from the
least to the most creative types of selling.

Deliverer : (a salesperson whose major task is the delivery
of a product - milk, bread, cig., agarbatti etc.

Order taker : (a salesperson who acts predominantly as an
inside order taker i.e. the salesperson standing behind the
counter, or outside order taker i.e. booking orders with
merchants in the market)
RANGE OF POSITIONS COVERED BY
SALESFORCE


Missionary : (a salesperson who is not expected
or permitted to take an order but whose major
task is to build goodwill or to educate the actual
or potential user e.g.. Pharmaceutical selling)
Technician : (a salesperson with a high level of
technical knowledge e.g.. The engineering
salesperson who is primarily a consultant to the
client companies)
RANGE OF POSITIONS COVERED BY
SALESFORCE


Demand creator : (a salesperson who
relies on creative methods for selling
tangible products e.g.. Vacuum cleaners,
refrigerators, etc. or intangibles e.g..
Insurance, advertising services, and
education etc.)
Solution vendor : (a sales person whose
expertise is in the solving of a consumer’s
problem, often with a system of the
company’s products and services e.g..
Computer and communications systems)
MEETING OBJECTIONS

Salesmanship is a difficult job. It
is persuasion and inducement
of an unwilling buyer to make
him buy. Since majority of
buyers object, salesmen must
cope with objections.
REASONS FOR OBJECTIONS
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Natural Process
Not appreciate the benefits of product
Have not understood presentation
properly (Poor sales talk)
Sometimes to test salesman
In comparison to competitive products
Un-pleasing experience with product
unqualified prospect ( not fulfilling
requirements )
Un-pleasing experience with tricks of
salesman
To secure more information
SOME COMMON OBJECTIONS

Price Objection : ( salesman can offer - some
substitute product, discount offer, justify the
price - show profits )

Quality Objection

Payment Objection

Service Objection
HANDLING THE OBJECTIONS


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
Listening attentively
Cushioning the jolt (make the shock of
objection lighter by giving examples of
third party)
Anticipating objection
Preventing objection
METHODS OF HANDLING
OBJECTIONS
(1) Direct Denial Method
(2) Indirect Denial or Yes….But…..Method
(3) Reverse Position Method / Why Method
(4) Compensation Method
(5) Interrogation Method
(6) Pass up Method
THE SUCCESS OF SALESMANSHIP
DEPENDS ON THREE MAJOR
FACTORS
Personality of the salesman
 Knowledge of the product
 Knowledge and psychology of
the customers

QUALITIES OF A GOOD SALESMAN
Desired traits may be grouped under four categories :
(1) Physical Qualities : Health, Posture, Voice,
Appearance
(2) Mental Qualities : Alertness, Imagination, Self
confidence, Initiative, Memory, Observation,
Cheerfulness
(3) Social Qualities : Ability and eagerness to meet
people, Effective speech, Courtesy, Tact, Co-operation,
Good manner, Patience and tolerance
(4) Character Qualities : Honesty, Courage, Loyalty,
Determination
STEPS IN SALES FORCE
MANAGEMENT
(1) Establishing sales force objectives
(2) Determining sales force strategy,
structure, size, shape and compensation
(3) Recruiting and selecting SRs
(4) Training SRs
(5) Supervising SRs
(6) Evaluating SRs
1. ESTABLISHING SALES FORCE
OBJECTIVES
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

Prospecting
Communicating
Selling
Servicing
Information gathering
Allocating
2. DETERMINING SALES FORCE
STRATEGY
(A.) Sales contact approaches to
customers
“5 Types”
- S.R. to buyer
- S.R. to buyer group
- Sales team to buyer group
- Conference selling
- Seminar selling
A co. can have its own Direct sales
Force or can hire the Contractual Sales
Force
2. DETERMINING SALES FORCE
STRATEGY
(B.) Sales Force Structure
The effectiveness of sales force depends on
how it is organized.
A sales force can be organized around Company Territories (Territorial Structured
Sales Force),
Products (Product Structured S.F.),
Customers (Customer Structured S.F.),
Some Mixture of the Three (Complex
S.F. Structure e.g. territory-product,
territory-customer, etc)
2. DETERMINING SALES FORCE
STRATEGY
(C.) Sales Force Size
Companies use the workload approach to
establish the size.
Steps :
i. Customers are grouped into size classes
according to their sales volume
ii. Number of sales calls on an A/C per year
iii.Average number of sales calls an S.R. can
make per year
iv. Divide ii/iii i.e. No. of sales calls on an A/C
per year / Average no. of sales calls an S.R.
can make
2. DETERMINING SALES FORCE
STRATEGY
(D.) Sales Force Functioning
(Territory Shape / Routing)
.
.
.
Circular Territory (Head Quarter in the Centre)
Clover Leaf Pattern (S.R. travels in series of
loops around his territory)
Wedge Shaped Territory (When
total area is too large for one S.R.
to handle)
2. DETERMINING SALES FORCE
STRATEGY
(E.) Sales Force Compensation
(Components :)
i. Fixed Salary / Amount
ii. Variable Amount
(income regularity)
(bonus,commission,profit
sharing)
iii. Expense Allowances
(T.A. , D.A.)
iv. Fringe Benefits
(medical,leave,accident benefits,LIC policies, pension,LTC, etc.)
3. RECRUITING AND SELECTING
SALES REPRESENTATIVES

Mc Murry gave 5 traits for a super
salesman
I. High level of energy
ii. Abounding self confidence
iii. A chronic hunger for money
iv. A well established habit of industry
v. A state of mind that regards each
objection, resistance or obstacle as a
challenge
3. RECRUITING AND SELECTING
SALES REPRESENTATIVES

Mayer and Greenberg gave shortest list of traits for a super
salesman (must have 2 major qualities)
i. Empathy (the ability to feel as the customer does)
ii. Ego drive (strong personal need to meet the challenges)

Recruitment : seeking applicants by various means

Selection : selecting suitable candidates by conducting
tests and interviews
4. TRAINING S.R.
5. SUPERVISING S.R.
6. EVALUATING S.R’S PERFORMANCE
4. TRAINING S.R.
(two approaches)
A. Sales Oriented
B. Customer Oriented
5. SUPERVISING S.R.
(supervision helps in directing and
motivating S.Rs)
6. EVALUATING PERFORMANCE
(quantitative and qualitative methods)
SALES PROMOTION


Sales Promotion consists of a wide
variety of tools designed to stimulate
earlier and stronger market
response.
Sales Promotions are short term
incentives to encourage purchase or
sale of a product or service.
SALES PROMOTION

Sales Promotion deals with
promotion of sales by the offer of
incentives which are essentially nonrecurring in nature. It is also known
by the names of extra purchase value
(EPV) and below the line selling.
SALES PROMOTION


Sales Promotion encompasses all the
tools in the marketing mix whose major
role is persuasive communication.
Sales Promotion is an exercise in
information persuasion and influence.
SALES PROMOTION
Increase Sales Communication
Persuasion
Influence
Information
Purchase &
Sale of goods
TYPES OF SALES PROMOTION

Sales Promotion schemes can be used to
influence the three target groups : Consumers,
Dealers and Sales Force.

Keeping in mind the objectives, company can
use the suitable sales promotion schemes.
Consumers- Sales Promotion Schemes
Dealers- Sales Promotion Schemes
Sales Force-Sales Promotion Schemes
SALES PROMOTION OBJECTIVES
(ROLE OF SALES PROMOTION)
1. To increase sales
2. To make the sales of slow moving items faster
3.To stabilize the fluctuating sales pattern
4. To launch a new product quickly (encouraging
customers for quick trial)
5. To educate customers regarding product change
/ improvements
6. To identify and attract new customers
SALES PROMOTION OBJECTIVES
(ROLE OF SALES PROMOTION)
7. To motivate dealers to stock and sell more
8. To attract dealers for better display and sales contests
9. To get more and better shelf space
10. To bring more customers to dealer stores
11. To improve manufacturer dealer relationships
12. To motivate sales force for achieving set targets
13. To reward sales force for rendering better customer
services
14. To counter competitors’ sales promotion and marketing
efforts
SALES PROMOTION
LIMITATIONS
-
1. May increase the price of the product
2. Consumers may feel that goods are
sub-standard
3. Consumers may feel cost of Sales
Promotion scheme has been included
in the prices
4. Gives short term results
5. Often misleading and confusing
6. Give rise to un-healthy competition
DIFFERENT TYPES OF SALES
PROMOTION SCHEMES
1. Price off offers
2. Quantity off offers
3. Premium / free gifts
4. Coupons
5. Refund offers
6. Trading Stamps (A kind of discount
coupons)
7. Consumer contests and lucky draws
8. Dealer stock display contests
DIFFERENT TYPES OF SALES
PROMOTION SCHEMES
9. Dealer sales contests
10. Discounts
11. Trade allowances / trade shows
12. Dealer gifts
13. Additional compensation to sales
force
14. Merchandise deals
15. Point-of-purchase promotions
16. Sales rallies / Exhibitions

……..(Immediate impact and delayed impact schemes)
WHY RAPID GROWTH OF SALES
PROMOTION IN INDIA
1. Market has become more competitive
2. Transformation from sellers’ market to
buyers’ market
3. S.P. makes an immediate effect on sales
4. Measurement of the effectiveness of S.P.
schemes are easier than other methods of
promotion
WHY RAPID GROWTH OF SALES
PROMOTION IN INDIA
5. Channels of distribution are emerging
as powerful entities and demand greater
use of incentives
6. Products are similar and non-price
factors help in increasing sales (greater
value to customers)
7. Impulse buying has increased. S.P.
helps in increasing the number of
marginal customers.
INGREDIENTS OF SUCCESS OF SALES
PROMOTION SCHEMES
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The right offer
The right merchandising back-up
The right timing
The right outlet
the right advertising (right promotion of
S.P. scheme)
Projecting the right image
Greater value for customers
Competitive differential
SOME FINAL DOs AND DON’Ts

Don’t do a promotion at all if the objective can be
achieved more cheaply by other means

Don’t run promotions that you are not sure are going to
be successful

Don’t promote the whole brand if the objective relates
e.g. only to one pack size

Don’t promote the brand too often. Constant, small,
ineffective promotions communicate to the trade and
consumer that the brand is only worth buying when it’s
on promotion
SOME FINAL DOs AND DON’Ts



Keep trade promotions to a minimum.
Otherwise they will become part of
what the trade regards as the brand’s
normal terms of business
Keep it simple. Simple to understand
what’s being offered, simple to sell in,
simple to display, simple for the
consumer to practice
Don’t let your competition do your
planning. Be proactive, not reactive