Download 5.9 Online Sales Promotion - KV Institute of Management and

Advertisement and sales promotion
Unit-5
Sales Promotion Campaign
Sales promotion – Requirement identification – Designing of sales promotion campaign – Involvement
of salesmen and dealers – Out sourcing sales promotion national and international promotion strategies
– Integrated promotion – Coordination within the various promotion techniques – Online sales
promotions- case studies.
Table of Contents
5.1Introduction .......................................................................................................................................... 2
5.1.1 The Purposes of sales promotion Vs. Advertising ........................................................................... 2
5.1.2 Promotional Activities .............................................................................................................. 3
5.2 Involvement of Salesmen and Dealers ................................................................................................ 9
5.3 Outsourcing Sales Promotion ............................................................................................................ 11
5.3.1 Measuring Impact of Sales Promotion ....................................................................................... 13
5.4 National promotion Strategies ........................................................................................................... 14
5.5 International Promotion Strategies .................................................................................................... 16
5.5.1 Types of International Promotion Strategies .............................................................................. 18
5.6 Meaning and Definition of Integrated Promotion / IMC .................................................................. 19
5.6.1 Objectives of IMC ...................................................................................................................... 20
5.7 Need for co-ordination within various promotion techniques is raised due to: ............................... 25
5.8 Communication Mix: Elements Of Imc ............................................................................................ 27
5.8.1 Factors Determining Communication Mix ................................................................................ 32
5.9 Online Sales Promotion ..................................................................................................................... 33
5.9.1 Tools of Online Sales Promotion ................................................................................................ 35
5.9.2 Importance of Online Sales Promotion ................................................................................... 36
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5.1Introduction
Sales promotions are the set of marketing activities undertaken to boost sales of the product or service.
There are two basic types of sales promotions: trade and consumer sales promotions.
Sales promotion is any activity designed to boost the sales of a product or service. It may include;
advertising campaigns, increased Public Relations activity, setting up competitions with attractive
prizes, free-sample campaign, offering free gifts or trading stamps, temporary price reductions,
demonstrations or exhibitions, door-to-door calling, telemarketing, personal letters or other methods.
Sales promotion is any initiative undertaken by an organisation to promote an increase in sales, usage
or trial of a product or service.
5.1.1 The Purposes of sales promotion Vs. Advertising
SMS campaigns are a great way to instantly inform your customer database of your
latest sales promotion. Your audience is permanently ‘switched-on’, a simple text
message with promotional details of an upcoming sale or special offer can be delivereddirectly into the
palm of your customers hand.
‘Sales promotion campaign’ is important and widely used series of sales promotion 5 efforts in
a common theme for pushing sales of products The Sales promotion campaign must be well planned
and strategically drafted using the right campaigns as well as strong, persuasive and attention grabbing
words Companies introduce sales promotion campaigns for capturing market. Price discounts and
schemes like buy one, get one free are also offered as sales promotion. Various sales promotion
techniques are introduced at the consumer and dealer levels. Window display, provision of after sales
services and coordinal public relations also facilitate sales promotion, Massive advertising is useful to
support the sales promotion campaigns.
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5.1.2 Promotional Activities
Promotional activity is above all a communication instrument for introducing our products to
consumers and for trying to influence their purchasing decisions. There are four types of promotional
activities: Direct Sales, Advertising, Public Relations and Sales Promotions, which mainly differ in the
media used to communicate with the target market.
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5.1.4 Requirement Identification of Sales Promotion Campaign
Sales promotion usually involves non-recurring and no-routine methods, in contrast with the routine
and recurring nature of advertising and personal selling. Though almost all companies resort to sales
promotion techniques, only some of them go about the job in a planned way. Others mostly view sales
promotion as a weapon that can be taken out just like that and used in an emergent situation. Sales
promotion yields the intended results only when it meets certain basic requirements. These basic
requirements that must be identified by the marketer before going for sales promotion are as follows:
I) Identifying the Need:
The first requirement is to identify the specific needs of the firm in resorting to sales promotion. The
firm finds-out its need:
i) Is it to bring in substantial extra sales immediately?
ii) Is it to offload accumulated stocks?
iii) Is it to regain loosing consumer interest in the product?
iv) Is it to enlist some support for the advertising effort that is already on?
2) Identifying the Right Promotion Program:
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The next step is to identify the appropriate program. The firm has to select the program suitable to the
current need and situation. Should it go in for product demonstration? Or free samples of the product?
Or should it go in for a large-scale consumer contest? The choice of the program will be primarily
decided by the resources available with the firm. A big consumer contest cannot be organized and
implemented unless the firm can command substantial resources and organizing capacity.
3) Enlisting the Involvement of Salesmen:
Often, sales promotion programs are conceived and planned at the head office of the firm and
implemented in a hurry without enlisting the cooperation and involvement of the field salespeople. For
the campaigns to succeed, it is essential that the salesmen be briefed on the context and content of the
program.
4) Enlisting the Support of the Dealers:
It is also essential to enlist the support of the dealers in any large-scale sales promotion venture. Since a
major part of the activity has to take place around the dealer shop, the campaign may flop if the dealer
is not motivated to support it. The POP materials and the product under campaign will get the required
prominence only if the dealer so desires.
5) Enlisting the Advertisement Agency’s Support:
The advertisement agency’s support is also essential for the successful working of a sales promotion
campaign. Carrying-out a sales promotion campaign is as challenging as conducting an advertising
campaign. In fact, for an advertisement campaign, quite often the results do not lend for immediate
measurement. For the sales promotion campaign, the results are readily available to be measured. So
companies while committing heavy funds for sales promotion make it a point to ensure that they benefit
from the experience and expertise of their agency.
6) Maintaining the Tempo:
Sometimes the sales promotion campaigns are launched with great publicity and fanfare. But
subsequently the tempo of the program is allowed to die out. It is essential that the initial tempo built
around the program be maintained through the entire period of the campaign, through advertising and
POPs.
7) Timing of the Campaign:
Timing of the campaign is another factor that decides its success. The sales need of the company is of
course the prime factor that decides the timing. But the firm also has to consider factors like seasonality
of purchase of the product, climate conditions, festival seasons, etc., in timing the campaign.
8) Coordination with Other Elements of Promotion:
Sales promotion programs yield the best results when they are well-coordinated with the other elements
of promotion — advertising, personal selling, and publicity. Sales promotion program cannot be run
totally independent of these major promotion variables. When used in combination with them, sales
promotion stands a better chance of meeting its aims. The requirement of right sales promotion is set on
the basis of two criteria as, cost of reaching an audience member and acceptability of the tools to be
used. These criteria are developed taking into consideration the following variables/factors:
1) Kinds of Product:
The product is one of the factors determining the form of promotion. Toys, toilet soaps, and cosmetics
are effectively shown on television. Mass selling consumer goods can be easily promoted through radio
and television. Industrial and specialty goods should be promoted through technical journals and
through sales engineers.
2) Buyer:
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If the marketers are to provide realistic solutions to the problem of buyers, they must know their
customers, their needs and desires, their attitude, values, aspirations, and expectations. Hence marketers
must have up-to-date information about customer demand and customer behavior. If the buyers are
educated then demonstrations or instructions can be used as sales promotion technique. Similarly,
contests and quizzes can be used if buyers are of young age and educated.
3) Nature and Size of Market:
The number, geographical location, and purchasing power of potential customers exercise a significant
impact on the sales promotion. Sampling, coupon, money-refund orders, premium offer, price-off and
trading stamps, etc., are suitable for sales promotion in local markets. On the other hand, fairs,
exhibitions, and fashion shows are more appropriate for sales promotion on the national level
particularly for garments, books, and electronic items.
4) Stages in Product Life Cycle:
This is an important managerial tool in sales promotion. A product life cycle consists of four stages:
i) Introduction: Introduction of the product requires lot of energy to create awareness, acceptance, and
demand for the product. Introducing a new product for most companies is a costly and difficult exercise
that is why they mostly depend on middlemen.
ii) Growth: It includes a fast growth both in sales volume and profit
iii) Maturity: This stage is longer. But the speed in achieving sales volume reduces during this stage.
Profit also starts declining much faster than the sales.
iv) Declining: This is the last stage in product life cycle. After a period of stability, the buyers loose
interest on the product and sales start falling more quickly. At this stage either high cost sales
promotion technique may be used or existing product may be improved.
5) Management Policy:
In the management policy, first of all, sales promotion objectives are set, then communication tools
required to achieve these objectives are designed, and the third step is to determine the cost required to
execute promotional activities and programs. In short sales promotion expenditure is directly related to
the objectives to be achieved.
6) Budget Allocation Available:
The decision on how much to spend on promotion is externally difficult on account of multitude of
promotion tools on the one hand and varieties of products and markets on the other For example, the
greater the geographical dispersion of a target market the greater the communication expenditure
required Similarly if an offering is in its early lifecycle, there is a greater need of expenditure But
promotion budget should always justify the tasks to be undertaken. A basic principle would be the cost
and returns of sales promotion tools to be adopted. Hindustan Lever has its well drawn-up sales
promotion budget. If any business house does not have its promotion budget fixed, then promotion
programs will have to be designed to support the marketing plan.
7) Government Regulations:
Government has passed various laws and made rules to protect the consumer interest, such as the
prevention of Food Adulteration Act, the Drugs and Magic Remedies (Objectionable Advertisements)
Act, and Drugs and Cosmetics Act, etc Sales promotion policy must take into consideration the
government regulations relating to the particular product, e.g., the commodity rates must be- specified
on the package and in case of medicines drug contents and date of manufacturing, date of expire, and
price must be specified.
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5.1.5 Designing of Sales Promotion Campaign
A sales promotion is a short-term program that aims to intensify the sales of a product or service. It
usually works to increase the value of the product in the consumer’s mind, forcing the consumer take
action. To make the product more valuable to a consumer, a sales promotion often offers a reduced cost
or heightened product benefit. The major steps involved in designing a sales promotion campaign are:
1) Establishing Objectives:
Sales-promotion objectives are derived from broader promotion objectives, which are derived from
more basic marketing objectives developed for the product. The specific objectives for sales promotion
vary with the target market. For consumers, objectives include encouraging purchase of larger-size
units, building trial among nonusers, and attracting switchers away from competitors’ brands. For
retailers, objectives include persuading retailers to carry new items and higher levels of inventory,
encouraging off-season buying, encouraging stocking of related items, offsetting competitive
promotions, building brand loyalty, and gaining entry into new retail outlets. For the sales force,
objectives include encouraging support of a new product or model, encouraging more prospecting and
stimulating off-season sales.
2) Select the Tools:
There are three types of tools:
i) Selecting Consumer-Promotion Tools:
The promotion planner should take into account the type of market, sales promotion objectives,
competitive conditions, and each tool’s cost effectiveness.
ii) Selecting Trade-Promotion Tools:
Manufacturers use, a number of trade- promotion tools. Surprisingly, a higher proportion of the
promotion pie is devoted to trade-promotion tools than to consumer promotion with media advertising
capturing the remaining 25.2 percent. Manufacturers award money to the trade for four reasons:
a) To Persuade the Retailer or Wholesaler to Carry the Brand:
Shelf space is so scarce that manufacturers often have to offer prices off, allowances, buyback
guarantees, free goods, or outright payments (called slotting allowances) to get on the shelf, and once
there, to stay on the shelf.
b) To Persuade the Retailer or Wholesaler to Carry More Units than the Normal Amount:
Manufacturers will offer volume allowances to get the trade to carry more in warehouses and stores.
Manufacturers believe the trade will work harder when they are “loaded” with the manufacturer’s
product.
c) To Induce Retailers to Promote the Brand by Featuring, Display, and Price Reductions:
Manufacturers might seek an end-of-aisle display, increased shelf facings, or price reduction stickers
and obtain them by offering the retailers allowances paid on “proof of performance”.
d) To Stimulate Retailers and their Sales Clerks to Push the Product:
Manufacturers compete for retailer sales effort by offering push money, sales aids, recognition
programs, premiums, and sales contests.
iii) Selecting Business and Sales Force Promotion Tools:
Companies spend billions of rupees on business- and sales force promotion tools. These tools are used
to gather business leads, impress and reward customers, and motivate the sales force to greater effort.
Companies typically develop budgets for each business-promotion tool that remain fairly constant from
year to year.
3) Developing the Program:
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In planning sales-promotion programs, marketers are increasingly blending several media into a total
campaign concept. In deciding to use a particular incentive, marketers have several factors to consider:
i) Size: They must determine the size of the incentive. A certain minimum is necessary if the
promotion is to succeed. A higher incentive level will produce more sales response but at a diminishing
rate.
ii) Conditions: The marketing manager must establish conditions for participation. Incentives might
be offered to everyone or to select groups A premium might be offered only to those who turn in proofof-purchase seals or UPC codes.
iii) Duration: The marketer has to decide on the duration of promotion. If the period is too short,
many prospects will not be able to take advantage of it. If the promotion runs too long, the deal will
lose some of its “act now” force.
iv) Distribution Vehicle: The márketer must choose a distribution vehicle. A fifteen- cents-off coupon
can be distributed in the package, in stores, by mail, or in advertising. Each distribution method
involves a different level of reach, cost, and impact.
v) Timing: The marketing manager must establish the timing promotion. For example, brand
managers develop calendar dates for annual promotions. These dates are used by the production, sales,
and distribution departments.
vi) Sales-Promotion Budget: The marketer must determine the total sales- promotion budget. The
budget can be built from the ground up, with the marketer choosing the individual promotions and
estimating their total cost. The cost of a particular promotion consists of the administrative cost
(printing, mailing, and promoting the. deal) and the incentive cost (cost of premium or cents-off,
including redemption costs), multiplied by the expected number of units that will be sold on the deal.
4) Pre-testing the Program: Although most sales-promotion programs are designed on the basis of
experience, pretests should be conducted to determine if the tools are appropriate, the incentive size
optimal, and the presentation method efficient.
5) Implementing and Controlling the Program:
Marketing managers must prepare implementation and control plans for each individual promotion.
Implementation planning must cover lead time and sell-in time. Lead time is the time necessary to
prepare the program prior to launching it: initial planning, design, and approval of package
modifications or material to be mailed or distributed; preparation of advertising and point-of-sale
materials; notification of field sales personnel; establishment of allocations for individual distributors;
purchasing and printing of special premiums or packaging materials; production of advance inventories
in preparation for release at a specific date; and, finally, the distribution to the retailer. Sell-in time
begins with the promotional launch and ends when approximately 95% of the deal merchandise is in
the hands of consumers.
6) Evaluating Results: Manufacturers can use three methods to measure sales-promotion
effectiveness: sales data, consumer surveys, and experiment. A long-term promotion can cause
participants to lose interest. In order to sustain awareness, keep: participants informed of their status in,
the program, encourage them with other offers and send out small gifts or incentives during the
promotion. At the end of the promotion, publish the results and send them to all participants.
5.2 Involvement of Salesmen and Dealers
Many of the biggest and most high profile promotion are developed
and implemented.
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
They are often
insuranceagencies.

They derive much of their income from fees rather than commission.

Sales promotion firms also derive a proportion of their income from
sellingartwork, merchandise, print and other services. which is normally
p r a c t i c e d among consultancies.
called
“consultancies”
because
unlike
adve rtising
and
how they work:
 they charge for creative and conceptual work on a fee basis that reflects their timeinput.
 They are normally equipped to supply design art work premium sourcing and a host
of other services that are promotionally happens.
 They are involved in a broad range of marketing service.
 Accounts handlers are heavily involved in the creative process.
5 key attributed that a company normally look for a campaign is:
The involvement of salesmen and dealers can work wonders for sales promotion activities. However it
is a task which demands, sincere efforts.
1) Sales Force Participation:
The participation of sales forces is indicated by how frequently sales managers requested information
from salespeople, and how often they (i.e., sales managers) received information requests from upper
management. The frequency of requests made directly to salespeople from other departments was also
obtained. Although sales managers are probably aware of these direct requests, they do not necessarily
coordinate responses with salespeople. In addition to these questions indicating the frequency of
requests, they were asked how effectively their salesforce are used by the firm as information sources:
i) Many of the biggest and most high profile promotion are developed and implemented.
ii) They are often called “consultancies” because unlike advertising and insurance agencies.
iii) They derive much of their income from fees rather than commission.
iv) Sales promotion firms also derive a proportion of their income from selling artwork, merchandise,
print and other services, which is normally practiced among consultancies.
How they Work
i) They charge for creative and conceptual work on a fee basis that reflects their time input.
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ii) They are normally equipped to supply design art work premium sourcing and a host of other
services that are promotionally happens.
iii) They are involved in a broad range of marketing service.
iv) Accounts handlers are heavily involved in the creative process.
2) Dealer Participation:
Dealers consider sales promotion to be important because it involves cheaper rates being offered to
customers. Dealer loader is an incentive given to induce a retailer to purchase and display a product.
These are ways of encouraging dealers to build-up their stocks in sufficient time, so that inadequate
supplies and last- minute transport problems are avoided. For example, offering discounts on orders
taken early and progressive, volume discounts on large orders (quantity discounts). These discounts
can, of course, be passed on to the customer. Involvement of dealer in sales promotion activity can be
understood in following points:
i) Maximum Cooperation: Dealers aim at obtaining maximum cooperation from distribution channels
such as wholesalers, semi-wholesalers, and retailers who form the vital links in the distribution chain.
ii) Providing Location and Display: Manufacturers want preferred store locations and special
displays. They want the product to he displayed in those retail outlets where it is possible to attract the
maximum number of consumers.
iii) Free Samples: Dealers can give out samples of new varieties. The indiscriminate use of free
samples can be counterproductive, however, as the farmer may not achieve a good result and blame the
variety or may not use the sample as it was free.
iv) Seed Exchange: Seed can be exchanged for farmers’ grain to overcome initial resistance to buying
and using improved seed. This is perhaps more of an extension practice which should be organized by
the seed company on a direct basis.
v) Coupon Offer: Refundable coupons can be used offering ‘money off’ the next purchase to
encourage repeat orders or purchases of other products in the company’s range.
vi) Price Reduction: This will obviously be popular but the danger is that revenue will simply be
reduced without significantly increasing sales so the technique needs to be used selectively.
vii) Competition: Competitions only create interest if they capture the imagination, e.g., a yield
competition and membership to a ‘yield club’ for a certain achievement. They can be organized on a
village level or directed at a certain group, such as young farmers.
viii) Premium Offers: The offer of an extra product for a promotional price can be made This could be
a Joint promotion with a non-seed product or linked to seed of another species that could be grown by
the farmer.
ix) Field Demonstrations and Group Discussions: These are both very effective ways of promoting
seed products and supporting the local dealer. These topics are dealt with later when seed extension and
demonstration are considered.
Dealer participation in sales-promotion activities is aimed at obtaining extended or more focused
distribution of a product or more attractive presentation of the product, at the point of sale.
5.3 Outsourcing Sales Promotion
Some companies outsource certain sales promotions. In this section, several types of outsourced
sales people are introduced, as well as the reasons for and challenges associated with outsourcing
various sales activities are elaborated. A company can outsource part or all of the sales cycle. When a
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company hires a call center to make phone-calls, and set-up appointments, it is outsourcing only the
lead to- suspect conversion portion of the sales cycle In other words, every appointment the center setsup would be with a suspect. The suspect-to prospect and prospect to-customer conversions could then
be the responsibility of either the outsourcer or another type of sales organization it hires for that
purpose.
Independent agents are salespeople who are not employees of the company. They set their own hours,
determine their own activities, and for the most part, manage themselves. Typically, they are paid on a
straight commission basis — i.e., based only on the revenues they generate for the company.
Sometimes, however, they receive base pay, too Independent agents often sell competing products from
copeting companies and are common in insurance markets. In other industries agents are less likely to
sell for competing companies. From the buyer’s point of view, an independent agent representing
multiple products lines should mean the buyer is in a better position to find the best offering with the
least amount of hassle.
A manufacturer’s representative is an agent that sells a manufacturer s product Typically, they do not
sell competing products, rather, they sell complementary products, i e, products that the same buyer
wants to purchase, e g, an agent that sells bathroom faucets for one manufacturer might sell bathroom
towel-rods and mirrors for another manufacturer When a company hires a manufacturer’s
representative, it does so because the representative is already selling to the desired market Buyers are
more willing to see the representative because of the broad array of products he or she offers.
Distributors often have salespeople who complete the entire sales cycle However, they may or may not
take title to the inventory before reselling it Industrial distributors often employ both field salespeople,
who call on customers where they are located, and employ inside salespeople, who may sell products
by phone or by e-mail at the distributors’ locations as well as handle customers who come to those
locations Distributors are like manufacturer’s representatives in that they can sell offerings from
multiple manufacturers Some distributors are exclusive, meaning they sell the products of only one
manufacturer
Outsourcing the sales promotion can be done through distributors, independent agents, and
manufacturers’ representatives, as well as other types of sales organizations. The entire sales cycle can
be outsourced or only parts of it. Outsourcing can cost less, and requires less investment than a
company-employed salesforce. Moreover, independent agents, distributors, and manufacturers’
representatives often have established relationships that make it easier for a company to enter and
penetrate new markets.
Outsourcing the sales promotion(s) means that a company will lose some control over its sales
activities To counteract that loss of control, companies try to devise attractive compensation schemes,
as well as effective marketing strategies for the independent sales organizations and people, with whom
they work Companies also hire sales managers to manage the relationships with the outsourced sales
staff.
Advantages of Outsourcing Sales Promotion
Outsourcing some of its sales efforts can provide, a producer with several advantages. Having a
broad array to choose from is more desirable from a buyer’s perspective. Moreover, outsourced
salespeople have existing relationships with the buyers that can be leveraged. Thus, entering new
markets, such as new product markets or new countries via distributors, independent agents, or
manufacturer’s representatives can increase the speed at which the company’s offerings penetrate a
market. These people and organizations also possess key market information and understand
competitors and their strategies — information marketers can leverage.
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In terms of a company’s costs, outsourcing can be less expensive The company that outsources the
work does not bear the responsibility and expense of training the salespeople, except to inform them
about the company’s products In addition, because the salespeople often work on a straight commission
basis, the company only pays them when they sell its products.
Disadvantages of Outsourcing Sales Promotion
The disadvantages of outsourcing can be boiled-down to one word — control. Distributors,
manufacturer’s representatives, and agents are independent They can decide what to sell and when to
sell it Unlike an employee who can be required to offer a particular product, they can choose to offer a
customer a competing product or simply a different product than the one being sold Nor can anyone
force them to make sales calls.
To deal with control issues, companies often create incentive programs to motivate independent agents
and manufacturer’s representatives Attractive commissions are more likely to get a particular product
mentioned on every call. So are spiffs. Spiffs (which is an acronym for Special Promotion Incentive
Funds) are short-term bonus payments companies use to encourage salespeople to sell certain products.
Also keep in mind that salespeople want to pitch products that are easy to sell and have short sales
cycles. Why? because they get rewarded for making sales. To the extent you can shorten a product’s
sales cycle and increase their conversions, you will gain their attention, time, and effort.
In addition to creating incentives for independent salespeople, a company will usually employ a sales
manager to work independently with them. The sales manager’s job is about selling as much as it is
about managing, though. The manager has to constantly sell the agents on selling the company’s
offerings, and provide them with product information and tips that help them do so.
Finally, just as they listen to their on sales forces, good marketing professionals pay attention to what
the independent salespeople and organizations they work with are saying Not only can marketing
managers create better strategies by doing so they will create strategies that get used In other words, the
salespeople will be more likely to support those strategies with their own efforts because they believe in
them.
5.3.1 Measuring Impact of Sales Promotion
Measures to evaluate the effectiveness of promotion program, although difficult and costly, are
essential parts of any marketing plan. Without an assessment strategy, marketers will not know whether
their sales promotion technique achieves the objectives of the marketing plan or whether the rupees in
the sales promotion budget are well spent. There can be three types of testing for sales promotion
effectiveness which are as follows:
1) Pre-Testing: Pre-testing is preferred because it enables one to know how effective an sales
promotion is likely to be, before spending the budget and adopting sales promotion technique The
marketer should use only those sales promotion techniques which prove to be the strongest in
producing the desired results.
2) Concurrent Testing: Concurrent or coincidental testing is that which takes place while the sales
offers are run The feedback is received from such testing and corrective actions can be taken While the
campaign is on. These tests are used to determine the sales promotion effectiveness.
3) Post Testing: It is applied after the sales promotion has ended to find out how far it has been
successful. The objective of sales promotion is to arouse consumer stimulation, persuasion brand
loyalty and brand switching as per his/her interest, desire and attitude to the product.
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5.4 National promotion Strategies
The major sales promotion strategies pertaining to the national context are as follows:
1) Pull Strategy:
The pull strategy is directed toward the final buyers. It persuades the buyers to go to the sellers to buy.
Sales promotion, particularly customer promotion is an important form of the pull strategy. Customer
promotion may call for the offer of samples money-refund offers, prices off, premiums, and so on.
Pull strategies depend upon mass communication. Products are literally pulled by buyers through the
channels on the basis of mass promotional efforts. In a pull strategy, the product is pulled through the
channel by creating end-user demand. Customers force retail shops to stock those mass-promoted
products. In turn, retailers demand the highly advertised product from wholesalers. The firms having
well- known brands can exercise control over channels through pull promotion strategies. Personal
salesmanship plays a secondary role in pull promotion. Marketer rely on intensive distribution. Dealer
margins are also lower in pull promotion.
2) Push Strategy:
The push strategy asks the sellers or retailers to attract the layers. Trade promotion is thus the main
form of the push strategy. Trade promotions refer to buying allowances, free goods, cooperative
advertising, push money, sales contests, and so on. The marketing manager has to adopt both these
strategies to promote sales.
Industrial marketing strategies are mostly the push type strategies relying primarily on personal selling
Also in the sale of medical products and in life insurance, marketers have to employ a lot of salesmen
to call on physicians and prospects for life insurance In push type promotion, personal selling expenses
are considerable and dealer margin is also higher In this, after sale service is also important and
marketers rely on selective distribution.
3) Push-Pull Strategy:
Most consumer goods manufacturers generally employ a push pull (combination) strategy to sell their
products. The ratio of pull to push may differ according to the requirements of market situation
Salesmen are used to push the goods through the marketing channel, while advertising and sales
promotion will support personal selling to accelerate sales Thus, all tools of promotion work together.
4) Sustaining Promotional Strategy:
The main aim of this strategy is to stabilize the market share. Sales promotion becomes necessary to
sustain a market share. At a laggard stage, the markets may shrink. Unless appropriate steps are taken,
the marketer may find that the market may be slipping away for, to his product. But this strategy can be
adopted only after employing the penetrating strategy. That is, the market share should not decline after
a higher level of sale has been attained. The sustaining promotional strategy stabilizes the market share.
Salesforce promotion by way of bonus and other incentives many contain the market from slipping
away. Steps are taken to prevent the salesforce from going across to the competitors. Brand loyalty of
customers is fostered and reinforced.
5) Developmental Promotional Strategy:
The introduction of new products may require expansion of the market. Innovators need to have a
developmental strategy. New products or brands are popularized by offering trade discounts, cash
rebates, premiums, money refunds, and so on. The new consumers are given effective after-sales
service. Consumer franchise building is done with development strategy. The promotional mix for a
brand not yet popular may require emphasis on both personal selling and sales promotion.
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6) Promotional Appropriation:
Promotional objectives determine promotional appropriation. The forms of promotion, the costs of
each component of promotion, the activities to be performed and appropriation on personal selling,
sales promotion, advertising, and publicity are determined under this strategic approach. The marketing
Manager has to arrive at the optimum promotional mix of the given objectives. And this requires proper
planning and program evaluation.
Product attributes, brand differentiation, purchase frequency, the nature of the market, the size of
market and its location, the nature of prospective buyers, their purchase frequency, distribution, and
price strategies are evaluated before the formulation of an appropriate sales promotion strategy.
7) Product Life Cycle Strategy:
The promotional tools vary in their cost effectiveness at different stages of the product life cycle.
In the introduction stage, advertising and publicity have high cost effeteness, followed by sales
promotional to induce trial and personal selling to gain distribution coverage. In the growth stage, all
the tools can be toned down because demand has its own momentum through word-of-mouth. In the
maternity stage, sales promotion, advertising, and personal selling all become more important in that
order. In the decline stage, sales promotion continues strong, advertising, and publicity are reduced and
salespeople give the product only minimal attention.
8) Cross Promotion:
Under this sales promotion strategy, the manufacturer may use all the potential tools such as
advertisement, personal selling, and sales promotion to hit the market simultaneously so that the buyer
will be induced to buy a product. For example, when Deccan Chronicle, a daily newspaper, was
introduced in Chennai, the management had used all promotional activities, such as display, holding,
price-off, and media to influence the reader to buy the paper. This promotional strategy is called cross
promotion.
9) Surrogate Selling:
Under this strategy, when the manufacturer is unable to sell his product in the market he may handover
the product to a well-known organization to sell on behalf of the manufacturer. This strategy is called
surrogate selling.
For example, shampoo products are manufactured at Puducherry by a number of small and medium
manufactures. But they find it difficult in selling the product in the market. What they have done was,
handing over the finished product to Hindustan lever, proctor and gamble who have sufficient logistics
in selling the product, thereby relieving the burden of converting the product into cash. They have in
fact act as a surrogate in selling their merchandise in the market.
10) Bait and Switch Advertising:
Bait means something that is meant to tempt someone. Under this strategy, the Marketing Manager use
AIDAS formula to tempt someone to look the advertisement and influence him to buy a product. For
example, Bharat Sanchar Nigam Limited has used 10 paisa prominently in its advertisement to bring
the attention of its users in mind which will influence them to go for using the BSNL service. This way
of tempting the viewer to opt for BSNL is called Bait advertising.
Switch means a device that is pressed or turned to stop or start something working especially by
electricity. Switch advertising means when an advertisement is released, it should ignite the minds of
the buyer to notice the advertisement and take a decision to buy the product. For example, during
festival times manufacturer may offer some discount on cash price to the buyer on some selected
products. So he has put this in the local newspaper —which would have ignited the minds of the
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buyers. Buyers will certainly be influenced to buy the product. This strategy is called switch advertising
strategy.
5.5 International Promotion Strategies
INTERNATIONAL CONSUMER PROMOTION PROGRAMS:
•Integrate marketing communications means the firm must develop on
o v e r a l l , global IMC program. Each country or each region requires some flexibility
inorder to adapt marketing activities, including consumer promotions, to fit local needs.
• Although the desire may be to centralize global consumer promotions
p r o g r a m , this process can be difficult. Customs, laws and views toward various type
of s a l e s p r o m o t i o n s d i f f e r t h r o u g h o u t t h e w o r l d . E v e n w i t h i n E u r o p e , t h e
l a w s governing consumer promotions are not consistent. For example, in France andEngland, contests
offering free prizes are legal; in Germany, the Netherlands, andthe Belgium, they are illegal.
Coupons, which are common in the United States,are legal in all Europe countries except
Germany.• C o u p o n s a r e n o t a s p r e v a l e n t i n t h e U n i t e d S t a t e s . C u l t u r a l l y, c o u p o n
r e d e m p t i o n is associated with being underprivileged in England. Customers fear that
usingcoupons will causes the cashier to judge them to be poor and needy. Still, couponredemption
rates are higher in Europe than they are in the United States.• C o n t e s t s a n d s w e e p s t a k e s a r e
s u c c e s s f u l i n m a n y c o u n t r i e s . M a r k e t e r s m u s t b e careful to research the laws, regulations
and most importantly, consumer attitudestoward contests and sweepstakes. A cultural assimilator helps
the company assetsthe potential impact of local attitudes toward the contest.
•In order to manage the consumer promotion function within a global
m a r k e t successfully, a company needs an experienced international sales
p r o m o t i o n coordinator are:
•Promoting the transfer of successful consumer promotion Ideas
a m o n g t h e company’s brands from one country to another.
• Proposing and soliciting ideas for consumer promotion wit hin and
a c r o s s e a c h r e g i o n or country.
•Developing and presenting training on consumer promotion planning to each local region
that is responsible for developing them.
•Gathering performance data on each sales promotion program and
m a k i n g t h e information available to each regional sales promotion manager.
•Developing methods for measuring the effectiveness and efficiency of the
v a r i o u s consumer promotions.
•Coordinating relationships with all sales promotion agencies that are being used.
Traditionally, international promotion referred to promotion undertaken beyond a company’s
domestic market, using a common message to a definable international audience. It was accepted that,
within the domestic market, a company’s market penetration was greater than in the international arena,
its local market was broader, its sales message was more detailed, and its advertising was created to
match actual or perceived local nuances. ‘International’ usually meant using different advertising for
each country covered so that a Multi-National Corporation (MNC) such as Gillette might have different
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toothpaste campaigns appearing in Spain, Sweden or Hong Kong, although some of these markets
might have a translated version of the same copy line. These campaigns were seen as attacking a ‘local’
market. With all but a few exceptions, international promotion was limited to products and services that
were common across borders and were associated with the frequent traveler, e.g., cigarettes, up-market
drinks, expensive luxury goods, hotels and airlines.
As MNCs have extended their product coverage globally, international promotion has evolved more
global images and applications, with the same, or similar, messages being promoted worldwide. Such
promotion has been dependent on the existence of an international medium that was, and still is,
predominantly the published word, using English or English/American. But this has been changing. As
the press sector has moved towards providing publications with cross-border coverage so, too, have
broadcasting media, both television and radio, extended their services beyond national borders in
Europe, the Middle-East and Asia. Improved telecommunications with 24-hour computer links, e-mail,
internet and facsimile transmission have all contributed to making international operations more
feasible.
The traditional international advertisers have been the Fast Moving Consumer Goods (FMCG)
mass market producers, such as Coca-Cola, Heinz, Kodak, Nestle and Unilever. Over time, as
international trading has encompassed other diverse businesses, in particular the financial services, so
promotion and media have had to expand across national borders to meet their demands. As more
executives have become involved in contacts either within their own MNC, or with their clients in other
countries, management strategy and marketing have become more internationalized. International
promotion has been evolving to meet the associated demand. However, while promotion has become
increasingly internationalized, it is not necessarily global promotion. Hanger distinguished between
international and global promotion in the following way:
1) ‘Global’ implies a universal way of thinking of acting, a common product and a common message.
In that respect, precisely the same promotion campaign is seldom, if ever, used worldwide. Rather, the
same image may be used and it is likely to be adjusted to suit the expectations of the populations of the
different countries targeted. On occasion, in place of global, some promotion campaigns can be
considered to be multinational, covering groups of countries with the same campaign.
2) ‘Multinational’ suggests a common promotion message being used in different countries with
different implementation methods for each group of countries and with different languages to match
customer demand. For example, Coca-Cola used the same theme across the core European countries
when it showed Coca-Cola consumption against background scenes associated with the major
European cities including Barcelona, Paris and London, targeting the fashion-conscious European
consumer.
3) ‘International’ promotion implies covering markets beyond the domestic market. Traditionally, this
form of promotion used a common message and, often, a single language. Intentional marketing is
expanding towards multinational marketing with the goal of achieving global marketing. However, few
companies have the resources for global marketing, which places a constraint on reaching this goal. The
terms ‘global’ and ‘international’ are converging and moving towards multinational geographic
coverage, but implementation is dependent on resources. International promotion is used for promotion
strategies that are implemented across groups of countries, many of which often coincide with
economic groupings such as the EU and ASEAN.
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5.5.1 Types of International Promotion Strategies
Whichever structure a firm has adopted, there remain three quite different forms of international
promotion activity. These are promotions that are planned in one country, but run in another country;
the almost, but not quite, mythical pan-European or pan-world promotions; and the relatively new
phenomenon of promoting within a well-defined market that just happens to be global. These three
types can be described in shorthand as ‘single country’, ‘multiple country’ and ‘borderless’.
1) Single Country:
The process for promoting in another country is little different to that for promoting in the home
country, it is required for a promoter to imagine the expectations of the people of the country, and what
is allowed by law and by custom in that country. Not all that long ago, an English company decided to
promote its products in an Irish chain of supermarkets by offering a free draw for a tea set to be won in
each store, every day for one week. By 11 o’clock on the first day, all the free draw entry forms had
been used-up. All the stores were so jammed with people that no business could be done until new
entry forms Shad been delivered and the crowds dispersed. It is hard to believe, but it is true. Not a
good promotion. If only the promoter had realized that housewives in Eiré were far less promotionally
sophisticated than in the countries, all using a modified form of the U K catalogue. An important sales
opportunity is presented each year by the need to buy new clothes for growing children at the beginning
of the school year in September. Thus, a form of ‘Back to school’ promotion has proved successful in
every market. The promotion itself may be simple and similar in every market What is different is the
timing In Japan and Europe, it is possible to promote in August, when mothers are beginning to think of
the peace and quiet that lies ahead when the children return to school In the Middle East, families tend
to stay abroad on holiday until much later and therefore the timing of the promotion needs to be as
much as two months later, in late September/early October.
2) Multiple Country:
If a promotion is to run across several countries, it is likely that the greater the number of countries will
be included, the simpler will be the promotion. Often it will become a basic theme that may then be
implemented locally using a variety of techniques Coca Cola and Pepsi-Cola are well known for their
global promotional themes In 1996, Shell became the world’s largest distributor of the cast model cars,
selling over 26 million via its worldwide ‘Colleczione’ promotion. The international objective was to
reinforce Shell’s sponsorship of the Ferrari formula one team. The model Ferrari cars were offered by
the local Shell companies in any appropriate way they saw fit. Some gave them away with oil
purchases, some redeemed them free on petrol sales while others offered only a discount on the car in
return for a smaller purchase of petrol.
The promotional objectives were selected locally as the local situation dictated. In this type of
international promotion, the global theme provides a stronger tool than any of the individual companies
could afford to provide for themselves as advantage can be taken of tremendous economies of scale.
Multiple country promotions on a regional basis are becoming increasingly possible as trading
groups harmonize their laws and companies set-up a single structure to market their products across a
group of countries. This has long been the pattern in Northern Europe, and will be extended by the
completion of the Single Market. It is also more and more the case in South East Asia. If, as some
argue, the fundamental building block of the future is regions rather than individual countries, sales
promotion will increasingly, take place on a multiple country basis rather than either globally or
nationally.
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3) Borderless:
The world is shrinking rapidly. There are now well defined markets that cross geographical borders.
While the customers may be from many different countries, they are often more similar to each other
than they are to their fellow citizens. These markets may well-increase rapidly. once the Internet
becomes a true marketplace out, until then, perhaps the best example is that of the frequent? business
traveler. These people stay at the same hotels, and fly on the same aeroplanes. The brands to be found
in international airports are already identical across the world, and hotel chains are similarly
interchangeable from country to country. Loyalty is what the hotels and airlines want to promote, and
they do this by a variety of frequent flyer and frequent visitor promotions. The key point is that the
structure for truly global promotion is in place. The communication appears mainly at the point of use
or by direct mail Customers are more similar than different.
5.6 Meaning and Definition of Integrated Promotion / IMC
Integrated marketing communication is integration of all marketing tools, approaches, and
resources within a company which maximizes impact on consumer mind and which results into
maximum profit at minimum cost. Generally, marketing starts from “Marketing Mix”. Promotion is one
element of Marketing Mix. Promotional activities include Advertising (by using different media), sales
promotion (sales and trades promotion), and personal selling activities. It also includes internet
marketing, sponsorship marketing, direct marketing, database marketing, and public relations. And
integration of all these promotional tools along with other components of marketing mix to gain edge
over competitor is called integrated marketing communication.
Promotion mix refers to the combination of various promotional elements viz. advertising, personal
selling, publicity and sales promotion techniques used by a business firm to create, maintain and
increase demand of the product. It involves an integration of all the above elements of promotion.
Usually a firm chooses more than one type of promotional tools and the manager of the firm is to
decide how he is going to choose the communication media and blend them into an effective promotion
program. Promotion mix is the name given to the combination of methods used in communicating with
customers.
According to The American Marketing Association, “IMC is a planning process designed to assure
that all brand contacts received by a customer or prospect for a product, service, or’ organization are
relevant to that person and consistent over time”.
Integrated Marketing Communication (IMC) is also broadly known as the term ‘Promotion Mix’. In
traditional marketing, promotion activities are handled, by various specialist agencies. The marketing
effect is fragmented and the result could be conflicting communications that confuse the customer. The
result is wasted time, money, and effort. Integrated Marketing Communication (IMC) is the
coordination and integration of all marketing communication tools, avenues, and sources within a
company into seamless program that maximizes the impact on consumers and other end-users at a
minimal cost.
‘Integrated marketing communications’ is a term used to describe a holistic approach to marketing
communication. It aims to ensure consistency of message and the complementary use of media. ‘The
concept includes online and offline marketing channels. Online marketing channels include any emarketing campaigns or programs, from Search Engine Optimization (SEO), pay-per-click, affiliate, email, banner to latest web-related channels for webinar, blog, micro-blogging, RSS, podcast, Internet
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Radio, and Internet TV. Offline marketing channels are traditional print (newspaper, magazine), mail
order, public relations, industry relations, billboard, radio, , and television. A company develops its
integrated marketing communication program using all the elements of the marketing mix (product,
price, place, and promotion).
5.6.1 Objectives of IMC
1) Building Brand Equity:
One of the most important IMC goals is to build a global brand and corporate image. These, in turn,
generate brand equity. Brand equity is a set of characteristics that makes a brand more desirable to
consumers and businesses. These benefits can be enhanced when effective advertising combined with
quality products. Higher levels of brand equity give the company a distinct advantage as consumers
move towards purchase decisions.
IMC is a critical component in the effort to build brand equity Successful brands have two
characteristics being:
i) “Top of mind”, and
ii) The consumers’ “top choice”
When consumers are asked to identify brands that quickly come to mind from a product category, one
particular brand is nearly always mentioned. That name has the property of being a top of mind brand.
2) Providing Information:
Besides building brand recognition and equity IMC serves other goals. For example advertising often
is used to provide information to both consumers and business buyers. Typical information for
consumers includes a retailer’s store hours, business location, or sometimes more detailed product
specifications. Information can make the purchasing process appear to be convenient and relatively
simple, which can entice customers to finalize the purchasing decision and travel to the store.
3) Manage Demand and Build Sates:
IMC can convince consumers that a particular brand is superior to other brands. They can show
consumers the negative consequence of failing to use a particular brand. Changing consumer attitudes
and persuading them to consider a new purchasing choice is a challenging task.
4) Differentiate Products:
Differentiation is the process of creating a perceived difference, in the mind of the consumer, between
an organization’s brand and the competition’s. This definition emphasizes that brand differentiation is
based on consumer perception. The perceived differences can be tangible differences, or they may be
based on image or style factors.
When advertising is used to help create a difference in the mind of the consumer between an
organization’s brand and its competitors’ brands, the ad may emphasize performance features, or it may
create a distinctive image for the brand.
5) Influence Perceptions:
Positioning is the process of designing a brand so that it can occupy a distinct and valued place in the
target consumer’s mind relative to other brands and then communicating this distinctiveness through
advertising. Positioning, like differentiation, depends on a perceived image of tangible or intangible
features. The importance of positioning can be understood by recognizing that consumers create a
perceptual space in their minds for all the brands they might consider purchasing. A perceptual space is
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how one brand is seen on any number of dimensions-such as quality, taste, price or social display value
– in relation to those same dimensions in other brands.
6) Influence attitude and buyer behavior:
IMC affects favorably the consumer choice because; it helps the consumer to exercise his power of
sovereignty in the most appropriate way, by acting as a counsel, as a guide to the consumer – the king
of the market. IMC provides detailed and up-to-date information regarding the various products
available in the market so that the consumer would decide to buy wisely. That is, selection of the best
product or service depends on his ability to get and analyze the knowledge about the markets.
Importance of IMC
Some of the reasons for growing importance of IMC include the following:
1) Marketing budget is being shifted from advertising to other forms of promotion, particularly
consumer and trade promotions.
2) Retailers are becoming more powerful and dominating than the manufacturers.
3) New tools of marketing communication are emerging that are economical and target specific
rather than the mass media.
4) The internet and e-commerce have emerged which have redefined the way business is done and
the way companies interact and communicate with consumers.
5) Companies are giving emphasis on communication with the consumers.
6) Advertisers are emphasizing more accountability on the part of the ad agencies and the change
is taking place in the way ad agencies are compensated.
7) There is rapid growth and development of database marketing.
Factors affecting IMC
1) Nature of Products:
Nature of product affects the selection of communication mix. The product may be consumer product
or industrial product Consumer products are directly consumed by ultimate consumers. Their number
of customers is very large. It is communicated with masses so mass communication i.e, advertising and
publicity are more effective. Industrial products are not directly consumed, but are used in
industry for example, plant and machinery, furnace, Ultra sound machine, X-ray machine etc. These
products are expensive and often very technical in nature. Hence it requires appointment of experts as
sales-personnel to explain the technical nature of the product to potential buyer Industrial customers
may have technical questions while buying the product. These questions can better be answered by
experts. So personal selling is a better communication/promotional tool in case of Industrial products.
2) State of Product Life Cycle:
Product passes through different stages of product life cycle, viz introduction growth, maturity, decline
and obsolescence During these stages promotion may have different objectives So different elements of
communication are used in these different stages of product life cycle
i) Introduction Stage: In this stage, high level of advertising is done to make the target customers
aware of the product. At the same time, personal selling is used to find good channel members (wholesellers, retailers) and to persuade them to carry the new product.
ii) Growth Stage: In this stage, advertising is used to persuade customers to buy and keep buying the
company’s product. But personal selling is also used for expanding the channel members (whole
sellers, retailers) to increase the number of outlets for sale.
iii) Maturity Stage: In this stage, level of competition is very high, so advertising has to be supported
with sale promotion devices like coupons, free sample contests, discounts etc, to retain the present
customers and to persuade customers to stay with company’s product.
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iv) Decline Stage: In this stage, sales are declining. Company starts cutting promotional expenses. As
the company is left with very less number of customers so personal selling is more economical than
advertising.
v) Obsolescence Stage: In this stage the product is withdrawn from the market so all communication
efforts are stopped.
3) Nature of Target Market:
For following characteristics of target market affect the communication mix for a product:
i) Size of Market: Market size refers to number of present and potential customers of a product. If size
of market is small, personal selling will be more effective and economical. On the other hand, if size of
market is large, then advertising will be more economical.
Advertising can reach very large number of people and hence cost per individual becomes less, for
example, ad in TV or newspaper may seem to be very expensive but as it can reach very large number
of people, so cost per audience becomes very low. On the other hand, if number of audience is small
then advertising proves costly. Here, personal selling direct mail, telephonic contacts with target
audience are more effective.
ii) Concentrated or Scattered Customers:
If customers are located and concentrated in one geographical area, then personal selling is more
feasible as cost of contacting customers in one geographic area will be cheaper. If customers are
scattered over a vast geographic areas, i.e., some customer are in one state and the other customers are
in different states, then advertising will be more feasible as compared to personal selling; because
salesmen will have to move from one state to other state to contact the potential customer and the
expenses of personal selling will increase.
iii) Socio-Economic Characteristics of Customers:
Socio-economic characteristics like age, income, education etc. also affect the type of promotional
techniques to be used. For example, for communicating with less educated people, audio-visual
advertisement and sales promotion will be more effective than print advertisement. If target customers
are kids, then advertising is more effective than personal selling. If target group consists of persons of
low income group then sales promotion schemes are more effective.
iv) Intensity of Market Coverage: When a product is marketed through intensive distribution, firms
mainly depend on advertising. Intensive distribution here means firm has many distributors to sell its
products. For example, in case of products like toothpaste, washing powder, salt, soap, pens etc., where
intensive distribution is done, advertising is more effective. Where marketers have opted for selective
distribution, personal selling is more effective. Selective distribution here means distributors are very
few in number. Products like very expensive watches, very high quality furniture, rare leather products,
gems and jewellery etc., are sold through selective distribution. Here expert sales personnel are to be
appointed to persuade the customers to buy these rare products.
4) Size of Promotion Budget:
The amount of money available with the firm for promotional activities affects the choice of
promotional methods. If amount of promotion budget is small, then firm cannot afford to invest heavily
in advertising and sales promotion as these are very costly. On the other hand if amount of promotion
budget is large, then firm can afford advertising through costly media like TV, national newspaper, and
sales promotion activities. If promotion budget is less then advertisement on cable TV, pamphlets,
banners, posters etc., are more suitable.
5) Push and Pull Strategy:
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Push and Pull strategy also affect the choice of promotional tools. In push strategy, the producer
promotes the product only to the wholesalers. The wholesaler promotes the product to the retailers.
Then retailers promote the product to the final consumers. Thus, in push strategy each channel member
promotes the product to the next channel member in downward direction. Push strategy usually relies
on personal selling and sales promotion for dealers to promote the product.
In pull strategy, product is promoted directly to the consumers through mass communication tools like
advertising. In this strategy first consumer demand is created, and then they demand the product from
retailers, who in turn demand it from wholesalers. Then wholesalers demand the product from the
producer. The policy is thus intended to pull the product upward through the channel by creating
demand at the consumer level. In this strategy advertising and sales promotion to consumers are used to
promote the product.
6) Promotional Objectives:
If the company’s objective is to create mass awareness of a new product then its promotional mix is
heavily oriented towards advertising, and publicity. If the company’s objective is to educate the
potential consumers about the product, (like to explain the technicalities of product, the method of
using the product) then personal selling can be used along with advertising. If firm’s objective is
immediate increase in sales, then sales promotion activities are used along with advertising. If firm’s
objective is to take immediate feedback of consumers regarding test marketing of its new product then
personal selling and direct marketing can be use.
7)Price Policy:
If the product is high priced, then personal selling is needed to persuade the customers to buy the
product, as in case of high priced products, customer’s associate greater risk with the purchase of
expensive product, and they need advice of salesmen. At the same time, advertising is required for
brand-popularity.
For example, in case of products like A.C., car, scooter, T.V., computers, microwave- oven etc.
companies do advertising for brand-popularity and appoint salesmen to explain the technical nature of
product to customers. But in case of low-priced products like tooth paste, tooth brush, soap, etc.
customers do not associate risk with the purchase of product and do not need salesmen to advise them,
so only advertising is done for brand-popularity.
8) Distribution Policy:
If the product is sold directly to the ultimate user, the company mainly relies on personal selling and
direct marketing (telemarketing, direct mail etc.), while advertising has a supporting role. In this case
the company appoints efficient sales- personnel to persuade the potential customers to buy the product.
If products are sold through longer channels (i.e., through wholesalers, retailers), the marketers rely
more on advertising. In this case, marketer mainly depends on advertising because middlemen will be
easily available if brand is popular. In this case sale promotion for dealers is also done so as to maintain
their interest in company products.
9) Availability of Promotional Methods:
The availability of promotional method may also affect promotional mix.
For example, a firm may wish to increase the size of its sales force, but is unable to find skilled and
experienced sales personnel. So in such case company will have to select promotional method out of
available promotional methods.
10) Level of Competition:
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If level of competition is very high then company will have to use all the components of
communication mix to retain its market share. On the other hand, if level of competition is low only
informative advertising by mass media will serve the purpose.
11) Degree of Brand Familiarity:
If the product has brand familiarity and brand preference then, only reminder type advertising is
required to promote the product. For example, Cadbury chocolate has brand preference; hence it needs
only reminder type advertising in its promotional programs. Popular brands easily get dealers and
distributors. On the other hand if brand is not familiar and is unpopular, then sale promotion and
personal selling for dealers and customers is required along with advertising.
12) Branded/Unbranded Products:
If the firm sells branded products, advertising is to be done for brand popularity. If the firm sells
unbranded products, advertising is not done as the product has no brand name. In this case sale
incentive to salesmen and dealers is best promotional tools. For example, in case of products like sugar,
unbranded tea, pulses, flour, broom etc., advertising is not done.
13) Seasonal Products: Seasonal products are the products whose demand varies with change in
climatic and weather conditions, such products like A.C., coolers, heat convectors, woolen garments,
rain-coats, umbrellas etc., have seasonal demands. In some months their demand is very high, while in
off-seasons, their demand is very low. In on- season time, marketers do only advertising to attract the
customers. But in the off-season- time marketers provide various sale-promotion schemes like offseason discount, free gifts, extra warranty, etc. so that seasonal product can be sold throughout the year.
Challenges in IMC
Though there is increased interest in IMC by marketers, adopting the process is relatively slow. This is
because of impediments that companies face while implementing the IMC approach. Let us look at
some factors that pose a challenge to companies while implementing IMC:
I) Top Management Support:
IMC requires an organization wide change, which cannot be implemented without the consent and
support of top management. The support extended by the top management plays a major role in
successful implementation of IMC. In some cases, the CEO may resist the change owing to ego
problems and his own views on the IMC process.
2) Organizational Barriers:
Another key barrier that prevents a company from fully implementing IMC is the organizational
barrier. The traditional organizational structure consists of various departments taking care of different
functions. As IMC requires a flexible structure that helps in integrating all communication functions
under one umbrella, the hierarchical structure of the organization will impede the implementation of
IMC. Some organizations pursue a Strategic Business Units (SBUs) strategy, where each SBU has the
authority to take its own decisions. Such a set up makes it difficult to centralize marketing
communication functions.
3) Cultural Barriers:
The culture of the organization may also impede implementation of IMC. Integration of marketing
communications requires coordination, and cooperation between employees. A corporate culture that
reflects a reluctance to change can become a major barrier for implementation. This reluctance is more
observed in old economy companies and government controlled companies.
Coordination within Various Promotion Techniques
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Integrated promotion is the coordination and integration of all marketing communication tools,
avenues, and sources within a company into a seamless program that maximizes the impact on
consumer and other end users at a minimal cost.
Integrated promotion can also help to kick start the event industry if it is failing. It can be an efficient
use of the funding to assist a country or region reach its economic development objectives. It requires
cooperation from a large number of stakeholders and competing events. To be successful on the
international arena an integrated promotion needs complete political and bureaucratic support.
5.7 Need for co-ordination within various promotion techniques is raised due to:
1) Market fragmentation has resulted in media fragmentation,
2) Alternative media channels abound, and
3) All messages seen as one single message to consumer.
Advertising is a non-personal form of mass communication, paid for by an identified sponsor. Personal
selling involves a seller attempting to persuade a potential buyer to make a purchase. Sales promotion
encompasses short-term activities such as giving coupons, free samples, etc., that encourage quick
action by buyers. The company has control over these three variables, but has little control over the
fourth variable, publicity/public relations. This is another non-personal communication method that
reaches a large number of people, but it is not paid for by the company and is usually in tile form of
news or editorial comment regarding a company’s product or service. Companies can gain some
control over the publicity it receives by the release of news items.
Put together, these promotional activities make-up the promotional or communications mix with
varying emphasis on each element according to the type of product or service, characteristics of
consumers, and company resources. Company size, competitive strengths and weaknesses, and style of
management all influence the promotional mix.
Other communications elements with which promotion must be coordinated are the product itself, price
and distribution channels used. Product communication, including brand name, design of packaging,
and trade-marks are all product cues which convey a message about the total product offering. Price can
communicate different things under varying circumstances, e.g., conveying ‘prestige appeal’ for those
buyers who perceive that a high price is equal to quality and prestige. The place in which the products
are to be found also has notable communications value. Retail stores have ‘personalities’ that
consumers associate with the products they sell. Products receive a ‘halo effect’ from the outlets in
which they can be found and two stores selling similar products can project entirely different product
images. For example, a perfume sold through an upmarket store will have a much higher quality image
than one sold through supermarkets.
The various promotional tools can be coordinated to give a synergistic effect to marketers’ objectives in
a following manner:
I) Coordinating Sales Promotion and Advertising:
Those involved in the promotional process must recognize that sales promotion techniques usually
work- best in conjunction with advertising and that the effectiveness of an ad campaign can be
enhanced by consumer-oriented sales promotion efforts. Rather than separate activities competing for a
firm’s promotional budget, advertising, and sales promotion should be viewed as complementary tools.
When properly planned and executed to work together, advertising and sales promotion can have a
synergistic effect much greater than that of either promotional mix element alone.
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Proper coordination of advertising and sales promotion is essential for the firm to take advantage of the
opportunities offered by each tool and get the most out of its promotional budget. Successful
integration of advertising and sales promotion requires decisions concerning not only the allocation of
the budget to each area but also the coordination of the ad and sales promotion themes, the timing of
the various promotional activities, and the target audience reached.
2) Coordinating Personal Selling with other Promotional Tools:
Like the other program elements personal selling is usually one component of the integrated marketing
communications program. Rarely, if ever, is it used alone. Rather, this promotional tool both supports
and is supported by other program elements.
3) Coordinating Personal Selling and Advertising:
With specific market situations and communications objectives, the advantages of advertising make it
more effective in the early stages of the response hierarchy (e.g., in creating awareness and interest),
whereas personal selling is more likely to be used in the later stages (e.g., stimulating trial and getting
the order). Thus, each may be more or less appropriate depending on the objectives sought. These
elements can be combined in the promotional mix to compensate for each other’s weaknesses and
complement each other.
4) Coordinating Personal Selling and Public Relations:
The job descriptions demonstrate that personal selling involves much more than just selling products
and/or services. The personal selling agent is often the firm’s best source of public relations. In their
day-to-day duties, salespeople represent the firm and its products. Their personalities, servicing of the
account, cooperation, and empathy not only influence sales potential but also reflect on the
organizations they represent.
5) Coordinating Personal Selling and Direct Marketing:
Companies have found that integrating direct marketing, specifically telemarketing, into their field
sales operations makes their sales efforts more effective. The cost of a sales call and the cost associated
with closing the sale are already very high and on the increase. Many marketers have reduced these
costs by combining telemarketing and sales efforts (a typical telesales call costs about 11 cents for each
$1 in revenue generated). A number of companies now offer consulting services to help organizations
in the sales process including assisting in direct-marketing methods.
6) Coordinating Personal Selling and Sales Promotion:
The program elements of sales promotion and personal selling also support each other. For example,
many of the sales promotions targeted to re-sellers are presented by the salesforce, who will ultimately
be responsible for removing or replacing them as well. While trade sales promotions are designed to
support the re-seller and are often targeted to the ultimate consumer, many other promotional tools are
designed to assist the sales staff.
7) Coordinating Personal Selling with the Internet:
The increasing use of the internet - as a support to personal selling is a latest trend now. The internet
has been used to provide product information, generate leads, screen prospects, and build and market
from databases. While many marketing mangers see the internet taking business away from channel
members and direct sales, few are ready to relinquish their salesforce.
It is important that the elements of the promotional program work together, as each has its specific
advantages and disadvantages. While personal selling is valuable in accomplishing certain objectives
and supporting other promotional tools, it must be supported by the other elements. Ads, sales
promotions, and the like may be targeted to the ultimate user, re-sellers, or the organization’s
salesforce.
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Benefits of Coordination within Various Promotion Techniques
1) Budget Allocation:
While many companies are spending more money on sales promotion than on media advertising, it is
difficult to say just what percentage of a firm’s overall promotional budget should be allocated to
advertising versus consumer and trade-oriented promotions. This allocation depends on a number of
factors, including the specific promotional objectives of the campaign, the market and competitive
situation, and the brand’s stage in its lifecycle.
2) Coordination of Ad and Promotion Themes:
To integrate the advertising and sales promotion programs successfully, the theme of consumer
promotions should be tied in with the advertising and positioning theme wherever possible. Sales
promotion tools should attempt to communicate a brand’s unique attributes or benefits and to reinforce
the sales message or campaign theme. In this way, the sales promotion effort contributes to the
consumer franchise building effort for the brand. At the same ‘time, media advertising should be used
to draw attention to a sales promotion program such as a contest, sweepstakes, or event or to a special
promotion offer such as a price reduction or rebate program.
3) Media Support and Timing:
Media support for a sales promotion program is critical and should be coordinated with the media
program for the ad campaign. Media advertising is often needed to deliver such sales promotion
materials as coupons sweepstakes, contest entry forms, premium offers, and even samples. It is also
needed to inform consumers of a promotional offer as well as to create awareness, interest, and
favorable attitudes toward the brand.
By using advertising in conjunction with a sales promotion program, marketers can make consumers
aware of the brand and its benefits and increase their responsiveness to the promotion. Consumers are
more likely to redeem a coupon or respond to a price-off deal for a brand they are familiar with than
one they know nothing about.
Moreover, product trial created through sales promotion techniques such as sampling or high-value
couponing is more likely to result in long-term use of the brand when accompanied by advertising.
Using promotion without prior or concurrent advertising can limit its effectiveness and risk damaging
the brand’s image. If consumers perceive the brand as being promotion dependent or of lesser quality,
they are not likely to develop favorable attitudes and long- term loyalty. Conversely, the effectiveness
of an ad can be enhanced by a coupon, a premium offer, or an opportunity to enter a sweepstakes or
contest.
5.8 Communication Mix: Elements Of Imc
Introduction
Communication / Promotion is one element of Marketing Mix. Promotional activities include
Advertising (by using different media), sales promotion (sales and trades promotion), and personal
selling activities. It also includes Internet marketing, sponsorship marketing, direct marketing, database
marketing, and public relations. And integration of all these promotional tools along with other
components of marketing mix to gain edge over competitor is called promotion mix.
Communication/Promotion mix refers to the combination of various promotional elements viz,
advertising, personal selling, publicity and sales promotion techniques used by a business firm to
create, maintain and increase demand of the product. It involves an integration of all the above
elements of promotion.
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Usually a firm chooses more than one type of promotional tools and the manager of the firm is to
decide how he is going to choose the communication media and blend them into an effective promotion
program. Promotion mix is the name given to the combination of methods used in communicating with
customers.
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”.
According to Gary Armstrong, “A company’s promotional mix includes advertising, personal selling,
sales promotion, public relations, direct marketing. It also includes product design, shape, package,
color, label etc. as all these communicate something to buyer”.
When these tools are integrated in a harmonious manner to reach and exceed the promotion objective,
the outcome is called Integrated Marketing Communication (IMC).’ IMC has been adopted as the best
possible way to promote one’s offering according to the situation.
Elements of IMC
Marketers have at their disposal the major methods of promotion i.e. advertising, sales promotion,
publicity, pubic relation, personal selling and word of mouth. Taken together these comprise the
promotion mix. But in the present scenario, the promotional tools have widened their scope and number
of types.
There are many other promotional tools also which are considered under the promotion mix. IMC
involves coordinating with various elements of promotion that communicates to the customers.
Most of the tools used in IMC are complimentary in nature, i.e., mutually help each other in attracting
the customers towards products and services. Latest entrant to the IMC is the Internet.
1) Advertising:
Advertising includes any informative or persuasive message carried by a non-personal medium and
paid for by a sponsor whose product is in some way identified in the message. Traditional mass media,
such as television and magazines, are most commonly used. However, the direct mailing of catalogues,
electronic media advertisements featuring, computerized ordering and other direct-response vehicles
are becoming increasingly popular.
2) Personal Selling:
Personal selling is a person-to-person dialogue between buyer and seller. The purpose of the
interaction, whether face-to-face or over the phone, is to persuade the buyer to accept a point of view,
to convince the buyer to take a specific course of action, or to develop a customer relationship.
3) Sales Promotion:
It includes activities other than advertising, personal selling publicity and public relations which are
used in promoting sales of the product or in persuading the customer to purchase the product.
Distribution of samples, premium coupon, point of purchase display, off-price selling, etc. is the
examples of sales promotion techniques.
4) Publicity:
Publicity is a non-personal not paid stimulation of demand of the products or services or business units
by planting commercially significant news or editorial comment in the print media or by obtaining a
favorable presentation of it upon radio, television or stage.
5) Public Relations:
Most firms in today’s environment are not only concerned to customers, suppliers and dealers but also
concerned about the effect of their actions on people outside their target markets. It is a planned effort
by an organization to influence the attitudes and opinions of a specific group by developing a long term
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relationship. There target may include a large number of interested public (customers, stock holders,
government agencies, special interest groups).
6) Direct Marketing:
In Direct Marketing, organizations communicate directly with target customers to generate a response
and/or a transaction. Traditionally, direct marketing has not been considered an element of the
promotional mix. However, because it has become such an integral part of the IMC program of many
organizations and often involves separate objectives, budgets, and strategies, we view direct marketing
as a component of the promotional mix.
Direct marketing is much more than direct mail and mail order catalogs. It involves a variety of
activities, including database management, direct selling, telemarketing, and direct response ads
through direct mail, the Internet, and various broadcast and print media.
7) E-commerce/Internet Marketing:
As the new millennium, begins we are experiencing perhaps the most dynamic and revolutionary
changes of any era in the history of marketing, as well as advertising and promotion. These changes are
being driven by advances in technology and developments that have led to dramatic growth of
communication through interactive media, particularly the Internet. Interactive media allow for a backand-forth flow of information whereby users can participate in and modify the form and content of the
information they receive in real time. Unlike traditional forms of marketing communications such as
advertising, which are one-way in nature, the new media allow users to perform a variety of functions
such as receive and alter information and images, make inquiries, respond to questions, and, of course,
make purchases. In addition to the Internet, other forms of interactive media include CD-ROMs, kiosks,
and interactive television. However, the interactive medium that is having the greatest impact on
marketing is the Internet, especially through the component known as the World Wide Web.
While the Internet is changing the ways companies design and implementing their entire business and
marketing strategies, it is also affecting their marketing communications programs. Thousands of
companies, ranging from large multinational corporations to small local firms, have, developed
websites to promote their products and services, by providing current and potential customers with
information, as well as to entertain and interact with consumers. Perhaps the most prevalent perspective
on the Internet is that it is an advertising medium, as many marketers advertise their products and
services on the websites of other companies. and/or organizations.
8) Sponsorship:
Sponsorship can be defined as “an investment in cash or kind in an activity, in return for access to the
exploitable commercial potential associated with this activity”. Although sponsorship does not merit a
share of the total budgetary appropriation, it is still recognized worldwide as an important tool for
marketing communications.
With increasing resistance towards advertising, sponsorships can be a blessing for marketers.
Sponsorship is a sort of commercial agreement in which the sponsor facilitates the activity of the
person, team or organization sponsored, in kind or in cash, and in return convinces the latter to assist in
the fulfillment of the objective desired by the sponsoring company. If the recipient’s cooperation is not
sought, then it is nothing other than charitable patronage, directed towards the benefit of society.
9) Exhibitions:
Trade exhibitions bring various constituents of a market — buyers, sellers and competing firms — to a
common platform. Here, all the firms in a particular industry get together in a bid to attract the
prospective customer’s attention.
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Exhibitions hold lot of importance for electronics, computer and other types of companies where
personal demonstration of products is necessary. The underlying concept here is “Seeing is Believing”.
Though trade shows have the advantages of promoting and selling products, gathering competitive
information, face to face contact with the customer, demonstrating the product, providing necessary
information, answering queries, taking down orders, noting customer reactions and suggestions, it is
not a worthwhile activity due to the following disadvantages. Even if it helps to demonstrate technical
products, the cost of transporting and installing these products can be high. It necessitates not only the
construction of a stand which might cost thousands of rupees but also extra staffing, which results in
loss of normal calls Incoming customers are sometimes to be entertained and this also requires a lot of
product literature.
10) Packaging:
The function of a package is not just limited to wrapping the product or protecting it from damage or
deterioration. It has become a medium for branding and improving brand recall.
Managers today expect packaging to act as a silent, ever present salesman, beckoning customers to
“pick me”. The importance of packaging has gained Importance with the ‘self service” concept being
implemented by big format retailers.
Packaging can reinstate a desired image for the product through attributes such as color, nature of
container, label, etc. It should stand out on the store shelf, helping customers to notice a particular
brand. The brand name must be strongly visible, highlighting the USPs and lending convenient usage
tips. Even the package design is known to develop competitive advantage for a company by adding
value, demanding stronger shelf space and enhancing customer relationships by means of product
associations. A good package design always remains consistent with the brand’s core qualities and
conveys the same image and personality as highlighted by the brand message. Consistency of design in
packaging creates a high level of brand awareness, which is why sometimes consumers prefer buying a
particular brand.
11 ) Point-of-Purchase Displays:
While advertising budgets are being overshot to create awareness, not much is invested to attract the
customer through creative Point of Purchase (POP) displays. Only companies marketing cosmetics and
some other impulse products like confectionaries paid special attention to improving the attractiveness
of the point-of purchase displays. But companies from across all the sectors, consumer to industrial,
now recognize that well-planned displays can induce brand switching and impulse purchases. Today,
marketers, especially from the consumer durables sector, are starting their own exclusive stores to
provide the right ambience to display their product. Marketers are acknowledging that a carefully
designed display can communicate the right image of the product and at times influence the customers’
perceptions of a brand. With in store brands competing for shelf space and consumer attention and with
the increase in the number of brands in the same product category, it becomes imperative to bring in
creative thinking and innovative displays to ensure the success of the brand. The need for innovative
thinking is required in industrial wholesale outlets where merchandising facilities are still untapped.
12) Corporate Communications / ldentity:
Corporate identity can change the market conditions for a company. It is a symbolic, visual system that
embraces everything from the company logo and signage, to its brochures, advertising, and even the
company’s website. It even includes the working ambience inside the office.
It is corporate identity that sets the corporate image in the minds of the people. It is possible that the
major reason for the high sales volume and revenue of a company is its corporate identity, which the
company is unaware of. Hence, it is necessary to build a corporate identity that reinforces the image
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and personality the company desires to highlight. A positive corporate identity ensures that all
investments towards the operations of the company are paid off. This has led companies to think
seriously about developing their corporate identity through identity programs. A meticulously
organized and managed identity program can considerably reduce the number of bottlenecks in its
operations, resulting in the manufacture of premium quality products thereby ensuring increased sales
and revenue, It is necessary that the corporate identity is reflected through all the different promotion
materials of the company from envelopes, letterheads and business cards to the websites.
An identity development program also includes exploiting the competitor’s weaknesses and making the
most of the advantages of one’s own corporate identity. With the Internet becoming the buzzword,
more and more companies are using it to develop their websites and access the global marketplace.
Since the Internet provides the best way of mass marketing, it becomes imperative to maintain
consistency in terms of the corporate identity by a tactful combination of quality content and superior
technology.
13) Word-of-Mouth:
Of course, an organization’s image can be projected through channels other than the formal
communication process. There is a lot of evidence, for example, that, when differentiating between a
variety of professional and personal services providers, customers prefer to be guided by information
from friends and other personal contacts rather than the usual promotion mix. Of course, positive wordof- mouth recommendation is generally dependent on customers having good experiences with an
organization, and studies have shown how unexpectedly high standards of service from a company can
promote recommendation.
14) Event Marketing:
Special events combine many IMC tools like advertising, sales promotion, public relations, etc., in
linking the brand to a specific event. Organizations can arrange special events themselves or participate
in events organized by other parties to create exciting product-related experiences for their consumers.
Special events are different from sponsorships where the company’s association is limited to financial
or in-kind support.
15) Trade Shows and Exhibition:
Trade shows or fairs are exhibitions where companies in a specific industry get together to showcase
their new or prominent products, called exhibits, in specially designed booths. They are attended by
members of the industry, suppliers and buyers, media, and at times by the general public during certain
hours. The primary objectives are to provide information to highly targeted audiences and get visibility.
16) Customer Service:
The services that customers receive from organizations during and after the purchase process, also go
on to communicate about the organization’s ethos.
Services include after-sales services like home delivery, installation, warranties and guarantees, and
other services in managing customer relations like answering queries, assisting selection,
troubleshooting, etc. The ‘no questions asked’ return policies of many U S companies communicate
about their commitment to quality and customer satisfaction.
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5.8.1 Factors Determining Communication Mix
Companies must consider several factors in developing their communications mix. Following are the
major factors considered by companies while determining the promotion mix strategy:
1) Type of Product:
The promotion task depends on the type of product marketed. Low-priced, frequently purchased
consumer goods like toilet soap, toothpastes, soft drinks, etc., will need frequent repeat messages to
influence and remind the existing consumers about the brand and to persuade new consumers to buy.
Advertising is used for such products on a mass scale at a high frequency. The promotion mix will
consist of press ads, magazine ads, TV spots, cinema slides, incentive offers, contests, etc.
For an industrial product of high value and high technology which is purchased infrequently, personal
selling, product demo, exhibition, and sales presentations become the necessary promotion mix.
2) Nature of Market:
The intensity of competition in the market, locational characteristics of the consumers, and the
requirements of channel members also influence the promotion mix decision. If the target audience is
large and widely spread-out in different parts of the country, advertising and sales promotion will be
effective and economical. For example, consumer goods.
3) Stage in the Product Life Cycle:
Based on the stage at which the product is in the PLC the promotion mix has to change. When the
product is in the introduction and early growth stages, the tasks involved are awareness creation and
motivating product trials. The best promotion mix will consist of publicity, spreading information
advertising, consumer sales promotions and trade promotions. Later, as the product reaches the
maturity stage, the objectives of maintaining brand loyalty and creating brand preferences become more
important. Aggressive brand advertising and dealer promotions become important components of the
promotion mix at that stage.
4) Budget Availability:
Using each promotion tool adds to the cost. Hence, the budget availability with a company has to be
considered while deciding the promotion mix. Companies with limited resources will have to go for
localized activities like dealer display, wall paintings, and personal selling. Companies with larger
resources can go for large scale and more sophisticated promotion tools.
5) Company Policy:
All the considerations given above should fit in with the overall marketing and promotion policy of the
company, while deciding the promotion mix. The conviction of the top management in the role of
promotion, the product market strategy, and the type of corporate image it wants to project are factors
influencing the decision.
6) Type of Product Market:
Communications-mix allocations vary between consumer and business markets. Consumer marketers
tend to spend comparatively more on sales promotion and advertising; business marketers tend to spend
comparatively more on personal selling. In general, personal selling is used more with complex,
expensive, and risky goods and in markets with fewer and larger sellers (hence, business markets).
7) Buyer-Readiness Stage:
Communication tools vary in cost-effectiveness at different stages of buyer readiness. Advertising and
publicity play the most important roles in the awareness-building stage. Customer comprehension is
primarily affected by advertising and personal selling. Customer conviction is influenced mostly by
personal selling. Closing the sale is influenced mostly by personal selling and sales promotion. Re32
ordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder
advertising.
5.9 Online Sales Promotion
Introduction
Online sales promotions have expanded dramatically in recent years. Marketers are now spending
billions of dollars annually on such promotions. Sales promotions online have proved effective and
cost-efficient, generating response rates three to five times higher than those of their offline
counterparts. The most effective types of online sales promotions are free merchandise, sweepstakes,
free shipping with purchases, and coupons.
Eager to boost traffic, internet retailers are busy giving away free services or equipment, such as
personal computers and travel, to lure consumers not only to their own websites but to the internet in
general. Another goal is to add potential customers to their database.
Marketers have discovered that online coupon distribution provides another vehicle for promoting their
products. Online coupons have redemption rate of around 15 per cent, five to eight times the
redemption rate for traditional coupons. In facts, nearly 50 per cent of consumers who purchase
something online use a coupon or discount promotional code. In addition, e-coupons can help
marketers lure new customers.
Online versions of loyalty programs are also popping-up, and although many types of companies have
these programs, the most successful are those run by hotel and airline companies.
Online sales promotion is quickly becoming a pervasive mode of communication with prospective
consumers Whether the promotion involves sweepstakes, printed coupons promotional pricing, or other
strategies, companies find that consumers around the world respond well to aggressive online
promotions Most of the communications firms (the former traditional advertising firms) now serve their
clients by providing to target consumers extensive interactive sales promotion that is inline with the
company’s other types of communications.
Online sales promotion offers can build brands, increase website visitors and length of stay at the site,
build databases, and support increased online or offline sales. As with other types of marketing
communication, most promotional dollars are spent offline; however, a few important online tacties are
important in the consumer market like coupons, sampling, contests, and sweepstakes. Among those,
sampling, sweepstakes, and contests are the most effective.
Some companies offer samples from their own home pages, however, most farm-out the efforts to
online companies that specialize in handling sample offers and fulfillment. Some of these online
sampling companies are — freesampleclub corn, startsampling corn, freesamples.com, and
sampleville.com. There are also freebie portals such as amazingfreebies corn, nojunkfree com, and the
freesite.com that have endless offers for gratis goodies. Sampling over the internet is not cheap for
companies. Although traditional store sampling costs 17 cents per sample, and event sampling runs
about 25 cents per sample, online sampling costs 75 to 90 cents. The reason for the high cost is the
money it takes to set-up and run the website.
Components of Online Sales Promotion
1) Website Design:
A website is a collection of web pages populated with text, images, audio, and video content that best
describe a business, company or product. The primary aim of a website is to carry information, news
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and views to a wide audience, preferably a targeted group of people exclusively interested m receiving
information about a particular company, business or product.
Some of the obvious advantages of having a website is its ability to reach people across geographical
boundaries. The global market is enormous and websites primarily help businesses to reach its rich
bank of consumers through the web. Furthermore, as a marketing technique, it lets the business stay in
touch with its customers around the clock
A website is the virtual face of any business. Hence, not only should the website be visually appealing,
but also be able to clearly promote the company or products to its customers. A well-designed website
is the foundation stone for business expansion in the web market. Hence aesthetics intelligent concepts,
and an user-friendly interface are prime imperatives to follow for quality website designing.
2) Sales Page Designing:
A sales page, quite simply, is a webpage that is written like an advertisement for the product. Sales
pages usually urge positive customer action i e, by including a ‘buy now’ or ‘visit now’ button, it asks
customers to buy the company s products, fill in surveys, etc
Most product based websites include sales pages to exclusively market their products. Sales page
designs should be a reflection of the website so far as the color scheme and layout is concerned. It
should be captivating well-written and include images and audio or video in controlled frequency that
will help to advertise the product without overdoing the sales pitch, or delaying page load time.
A good sales page design follows the basic rules of website designing:
i) Attractive but not too flashy.
ii) Simple without being sketchy.
iii) A business relevant theme.
iv) Includes a logo, product image known aspects of the company/business/product.
v) Strategically placed content, images, audio, video, ‘buy now’ button, etc.
3) E-mail Marketing Design:
E-mails are online pamphlets that talk about a business, which one can send out to the prospective
customers or dedicated buyers. Spam is universally hated and while conducting email marketing
campaigns, the emails run the risk of negative association. While one may want to continue association
with an existing customer base or build new contacts with targeted prospects, it is important that to
conduct e-mail marketing right.
Newsletters can be sent out either in plain text or in html format. Plain text formats are usually safe,
they take-up low bandwidth and there is the assurance that all recipients will be able to read it. Html
formats on the contrary, while they are more attractive, may or may not load as desired due to a
recipient’s e-mail or computer configurations
4) Banner Design:
Banners bearing the company logo, motto or product ads are excellent ways to advertise the business
on other relevant sites. Needless to mention, a banner’s design should follow along the lines of the
website design. Note however, since banners are not direct extensions of the website like a sales page
or newsletter, one may exercise creative liberties and come-up with fresh color schemes that will make
the business stand out among its competitors on other sites. Alternatively, one can play with color
shades to make the banner similar, yet exclusive of the site’s design.
Whatever chosen, banners must be attractive and appealing. Avoid over- crowding with too many
images or text, or their combination. Usually, banners with creative images and witty texts have a better
visitor click-rate than those without.
5) Social Media:
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Social media advertising is one sales technique that rarely fails. If a promoter manages to find a slot for
the business in social sites like twitter, facebook, myspace, etc, rest assured to see an increased traffic
flow to his website. Social media helps in connecting the target audience effectively. Developing
facebook applications that will promote business or placing ads on relevant pages, ensures a better
visitor click-rate.
Banner advertising is a fantastic way to get the business noticed on social networks. To conclude, the
internet is a powerful and effective medium to promote the company and products. Where a quality
website design helps is gain prominence among millions of similar business websites across the web.
Of course, several search engine marketing factors come into play in the run for good rankings.
However, where good website designing helps is retaining the visitors long enough to convert them into
customers.
5.9.1 Tools of Online Sales Promotion
It is very essential for the marketers that customers are able to find the name of promoted company.
Once customers locate the promoted company, it is necessary to engage them in the browsing or buying
process, depending on site objectives, using various promotional tools and techniques to enhance the
online experiences. Some attention gainer tools are explained below:
1) Feedback Forms:
Before asking to the customer about their need this is better to find out that what is the perception of the
customers for the company. Using customer feedback marketers can improve site and provide better
service to the customers. Using feedback forms also shows customers that company is interested in
their service, and provides an opportunity to build relationships with them. For instance, marketer may
send out an email thanking a particular customer for bringing an issue to the promotion and follow-up
with a coupon to show appreciation. The disadvantage with a feedback form is the type of information
people provide or the questions they may ask. If customers cannot find answers on company’s site, they
may resort to using the feedback form. To receive targeted feedback, it is useful to develop an online
form for customers to complete that leads them through the feedback process.
2) Bookmarking:
A good way to encourage customers is to visit company’s site and to ask them to bookmark it. Through
bookmarking, they have easy access to company’s site and do not have to remember site’s exact URL
to visit. Bookmarking a site is particularly beneficial for web surfers who like to follow links. It enables
them to go back and take a more in-depth look at what is the company’s offerings form which
customers are looking for.
3) Content:
Content is a strong driver for encouraging repeat visits by customers, particularly when it is fresh,
timely, and gives customers a reason to visit regularly. For example, perhaps customer has a ‘Tip of the
Day’ or a regular visit by an ‘expert’ well-known in field of business who provides online advice.
Content is useful for the visitors and will enable them to leave with new knowledge will attract them to
company’s site and encourage them to check back regularly.
4) Daily Give-Away/Coupons/Contests:
Sites that offer regular promotions such as a ‘give-away’, coupons and contests are in a solid position to
capture a regular audience. While the promotion acts as the driver that attracts customers to visit
initially, it provides an opportunity to showcase new products and services, and deliver important news
about company. For instance, marketer may initiate a ‘giveaway’ that is a printer, but also take the
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opportunity to tell customers about a printer sale next week. Promotional tools not only bait customers
to the site, but it also increases the likelihood of getting a sale. Offering various promotions also
enables to obtain customer information that a marketer can use in future marketing campaigns.
5) Surveys:
Surveys provide an effective avenue through which to gather important customer data that will help to
improve business and plan for the future. To encourage visitors to complete the survey, marketers can
provide an incentive such as an opportunity to win a prize.
6) Awards/Testimonials:
Awards and testimonials on company’s site will provide credibility to business. They will also provide
a foundation for building rapport and trust with the customers, who will be more willing to visit a site
they can trust.
7) Online Chat:
Online chat mechanisms provide a forum where customers can come together and share their
experiences with each other and company through the site. This interactive tool allows the marketer for
accessing directly to customer opinions where marketer can consider trends and determine their views
on the industry.
8) Tours:
Online tours provide an opportunity to showcase particular products and services and highlight their
key benefits.
5.9.2 Importance of Online Sales Promotion
I) It is Simple:
Promotions can be implemented without making a change to the back- office.
2) It is Automatic:
An automate management for the period of the promotion is achieved, one can set how many orders the
promotion is available for (after completion the promotion will stop by itself), automate discount (no
need for an additional discount coupon).
3) Control:
You get a wide range of reports that show you important information — sales, volumes, and sites that
send you most buyers, etc.
4) Easy coupon delivery:
Coupons can be delivered via the internet. Several sites have been designed for this. Catalina’s Value
Page website (www.valupage.com) allows users to print coupons that they can use at 7,000
supermarkets. The coupon is printed with a bar code and is used with the shopper’s store card. If Corn
Crunchies were to offer coupons this way, the site could link the shopper’s internet information with
store card information, which the Corn Crunchies brand manager could use in determining whether the
coupon strategy was effective.
5) Sweepstakes and contests:
Sweepstakes and contests are effective promotional tools for driving people to marketers’ internet sites.
America Online has conducted numerous promotions to drive users to its advertisers’ sites. One recent
promotion gave visitors a chance to win a $1 million drawing, one of the dozens of daily prizes
including merchandise emblazoned with the online service’s logo. The results from internet
sweepstakes can be huge.
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Trends in Online Sales Promotion
I) Electronic Delivery:
Sales promotions are delivered to customers in many ways such as by mail, in-person or within print
media. However, the Internet and mobile technologies, such as cellphones, present marketers with a
number of new delivery options. For example, the combination of mobile devices and geographic
positioning technology will soon permit marketers to target promotions to a customer’s physical
location. This will allow retailers and other businesses to issue sales promotions, such as electronic
coupons, to a customer’s mobile device when they are near the location where the coupon can be used.
2) Internet Communication:
For many years consumers typically became aware of sales promotions in passive ways. That is, most
customers obtained promotions not through an active search but by being a recipient of a marketer’s
promotion activity (e.g., received coupons in the mail). The Internet is changing how customers obtain
promotions. In addition to websites that offer access to coupons, there are a large number of community
forum sites where members share details about how to obtain good deals which often include
information on how or where to find a sales promotion. Monitoring these sites may offer marketers
insight into how customers feel about certain promotions and may even suggest ideas for future sales
promotions.
3) Clutter:
In the same way an advertisement competes with other ads for customers’ attention, so to do sales
promotions. This is particularly an issue with inserted coupon promotions that may be included in
mailing or printed media along with numerous other offerings. The challenge facing marketers is to
find creative ways to separate their promotions from those offered by their competitors.
4) Tracking:
Tracking customer’s response to marketers’. promotional activity is critical, for measuring success of
an advertisement. In sales promotion, tracking is also used. For example, grocery retailers, whose
customers are in possession of loyalty cards, have the ability to match customer sales data to coupon
use. This information can then be sold to coupon marketers who may use the information to get a better
picture of the buying patterns of those responding to the coupon.
5) Customers Expectations:
Marketers who employ sales promotion as a key component in their promotional strategy should be
aware of how the climate for these types of promotions is changing. For example, the onslaught of sales
promotion activity over the last several decades has eroded the value of the short-term requirement to
act on sales promotions. Many customers are conditioned to expect a promotion at the time of purchase
otherwise they may withhold or even alter their purchase if a promotion is not present. For instance,
food shoppers are inundated on a weekly basis with such a wide variety of sales promotions that their
loyalty to certain products has been replaced by their loyalty to current value items (i.e., products with a
sales promotion). For marketers the challenge is to balance the advantages short- term promotions offer
versus the potential to erode loyalty to the product.
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