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BASIC PRINCIPLES OF ADVERTISING AND SALES PROMOTION by Charles Owusu T937-Copy ISBN 1.86083 049 8 British Library Cataloguing in Publication Data . A catalogue record for this book is available from the British Library. © Charles Owusu Published by First & Best in Education Ltd, 34 Nene Valley Business Park. Oundle, Peterborough. PES 4HL. BASIC PRINCIPLES OF ADVERTISING AND SALES PROMOTION (INTRODUCTORY TEXT) Introduction Advertising and sales promotion constitute a significant component of the broad discipline of Marketing, which may be pictured as the bridge between the Producer and the Consumer or User. The objective of marketing may be stated as: Getting the right product for the customer, at the right place, right time and at the right price. The Marketing Mix The Marketing Mix refers to the range of activities involved in directing the flow of goods and services from the Producer to the Consumer or User. These activities have been conveniently grouped under what is referred to as the Four ‘P's of Marketing. They are:i. ii. iii. iv. Product Price Place Promotion Product: In Marketing, a product is anything which possesses utility, i.e. anything which satisfies a need or a want. 'Product' in the marketing mix embraces all activities directed at packaging goods into convenient and attractive packs or sizes and offering services in an efficient and user-friendly way. Price: Price is the money value of a product. In the marketing mix, 'price' embraces all activities directed at determining the money value of a product which the market will bear and which will secure a reasonable level of profit. Place: 'Place' in the marketing mix involves all the activities necessary to get products where they are wanted and when they are wanted. Promotion: 'Promotion' in the marketing mix involves all activities aimed at stimulating demand for a product. In this text, we shall focus our attention on 'Promotion'. The Promotional Mix The range of techniques or strategies which a firm can apply to stimulate demand for its products is referred to as the Promotional Mix. The Promotional Mix consists of: I ii. iii. iv. v. vi. Advertising Sales Promotion Techniques Personal Selling Point-of-Sale Promotion Trade Fairs or Exhibitions Public Relations Advertising Advertising may be defined as any communication about an organisation, a product, a person or an idea, aimed at a mass audience and which is paid for by a sponsor. From the definition we can derive the main features of advertising. * It is a form of communication * It is directed at a mass audience and not at individuals * * It is paid for, i.e. it is not free publicity * It is sponsored, i.e. a person or organisation presents the advertising message and pays for its publication or broadcasting. The Objects of Advertising The objects of advertising may be summarised as:a. To Inform b. To Persuade c. To Remind 2 a. To Inform * To inform people about a firm's range of products * To inform people about the firm itself * To inform people about the introduction of a new product * To inform people about the characteristics or features of a product * To inform people about the uses of a product * To inform people about the prices or changes in the prices of a firm's products * To inform people about the stores or shops where they can obtain a firm's products To inform people about a special sales effort, e.g. clearance sales. J. To Persuade To persuade people to buy a product or more of a product To persuade people to change their preferences To persuade people to change their opinions about a product or the firm which supplies it * To persuade Wholesalers and Retailers to stock a firm's products. c. To Remind * To remind people about anything that advertising informs them about. 3 Major Types of Advertising Primary Demand Advertising Primary demand advertising is advertising with the objective of stimulating demand for a product without reference to any particular brand. Such advertising is usually undertaken by Trade Associations embracing firms in a particular industry. Selective Demand Advertising Selective Demand Advertising is advertising with the objective of stimulating demand for a particular brand of a product. Consumer Advertising Consumer Advertising is advertising aimed at the ultimate or final consumer. Industrial Advertising Industrial Advertising is advertising aimed at manufacturers, wholesalers, retailers, schools, hospitals and other institutions. Product Advertising Product Advertising is advertising directed towards promoting a positive image of a product. Institutional Corporate/Prestige Advertising This refers to advertising directed towards promoting the reputation or goodwill of an organisation. Emotional Appeal Advertising Emotional Appeal Advertising refers to any advertising which seeks to achieve its objectives by appealing to the emotions of people, e.g. love, fear, desire for success, etc. Factual Appeal Advertising Factual Appeal Advertising refers to any advertising which seeks to achieve its objective by using objective data, Le. facts and figures. 4 Testimonial Appeal Advertising L The Print Media The Print Media refers to newspapers, magazines and other publications like telephone directories and year books which are used for the communication of advertising messages. Since the main channels of communication under the print media are newspapers and magazines, it is worthwhile identifying the factors which need to be taken into consideration in deciding on the type of newspaper or magazine to use. They are:- * The circulation of the publication, i.e. the average number of copies sold in a given period * The readership, i.e. the number and sort of people who read the publication * The frequency of publication, whether daily, weekly, monthly, etc. * The physical characteristics of the publication, e.g. quality of paper used, quality of pictures and illustrations, the use of colour, attractiveness of the layout, etc. * The cost of placing an advertisement in the publication. Other Relevant Points to Note about Newspapers & Magazines Newspapers There is a wide range of local and national newspapers to choose from. They reach a vast number of people but have a rather short life. Advertisements in newspapers suffer greatly from waste circulation, Le. the probability that the reader may not notice or read an advertisement. However, newspaper advertisements can take advantage of current events relevant to the product being advertised, e.g. one may use a major sporting event to advertise sports goods. Magazines Magazines tend to have a selective readership and thus may be used to reach particular target markets. For example, a gardeners' magazine may be used to advertise garden tools. Magazines tend to lie about in the house or office for a relatively long time and are read by people during leisure hours. Thus the probability of an advertisement being noticed and read is greater. The use of quality paper and colour in magazines tends to make advertisements placed in them appear more attractive. However, it is more expensive to advertise in magazines than in newspapers and the relatively long interval 7 between publications means that they cannot always carry advertisements which would want to take advantage of current events. ii. The Broadcast Media The Broadcast Media refers to the use of radio, television, films and videos for the communication of advertising messages. With the increase in the number of 'specialised commercial radio stations, radio can be used to target particular audiences with significant effect. For example, dealers in jazz music can advertise their products on the radio station targeted largely at jazz music lovers. The listener can be doing other things while listening to the radio. However, radio messages tend to be rather short and when listeners are not paying attention they may not achieve their desired effect. I Television Since television like films and videos combine speed, vision, mobility and sound, it is a very effective medium for advertising. A product can be shown on the move, all in a split second. However, television advertising is very expensive and the viewer has to make a deliberate effort to watch it. Films and Videos Advertising messages can be made into films or videos and shown at commercial cinemas. Where the audience level is high, the advertiser has a good captive audience. Note that a captive audience refers to any group of people who because of their confinement in a particular area cannot avoid seeing or reading an advertisement. Films and videos are rather expensive to make. iii. Outdoor Media The outdoor media refers to the use of hoardings or billboards and tablets as well as the use of the interior and exterior of different modes of transportation (buses, coaches, vans, taxis, trains, etc) for .the communication of advertising messages. Hoardings tend to be located in public places like markets, sports-stadia, transport terminals, as well as on major transport routes. Advertising messages carried on posters displayed on hoardings tend to be short as the audience are normally 'on the move', either on foot or in vehicles or are watching a spectacle, e.g. a football game. However, it is a relatively cheap medium of advertising. Most hoardings are owned and maintained by advertising agencies. 8 Ethical Aspects of Advertising (Arguments For and Against Advertising) Arguments in Favour of Advertising * Advertising stimulates demand. The increase in demand for goods and services as a result of advertising leads to an increase in the production of goods and services which in turn may lead to an increase in employment. * Increases in the level of production as a result of increases in demand arising out of advertising enables firms to benefit from economies of scale. This results in lower cost of production and thus lower prices for products. * Advertising encourages competition. Such competition ensures that firms produce more efficiently in order to survive. It may also lead to improvements in the quality of goods and services produced. * Advertising encourages the introduction of new and better products because of the information it provides about new products to stimulate their demand. * Advertising enables people to make informed choices because of the data it provides about different brands of products. * Revenue from advertising is the main source of revenue for the mass media: newspapers magazines, radios, television. Such revenue helps to maintain the independence of the mass media which is necessary for the development of stable democratic structures, essential for sustained economic development. * The advertising industry directly and indirectly offers employment to a significant number of people in the economy. ii . Arguments Against Advertising * Advertising tends to increase the debt problems of society by encouraging people to buy products they cannot afford. * The cost of advertising in some cases is so high that it wipes out any cost savings arising from economies of scale. * The use of the sex appeal in some advertisements tends to be offensive. 9 * Advertising which makes misleading claims, induces people to buy products which are either useless or harmful to their health. Even though the regulatory authorities may step in to prosecute such advertisers, some harm may be caused to the general public by the time the misrepresentation is detected. Sales Promotion Techniques The major types of sales promotion techniques are as follows:a. Free Samples b. Coupons c. Promotional Vouchers d. Trading Stamps e. Multi-packs or Banded Packs f. Premium Offers g. Competitions or Prize Promotions h. Loss Leaders i. Direct Mail j. Product Differentiation 10 a. Free Samples Free Samples are small packs of a product given freely to customers of selected retail outlets or distributed door to door to potential consumers or users. It is a technique used mainly for the promotion of new products. b. Coupons A coupon is a detachable part of an advertisement in a print media or a detachable part of a product package which entitles the holder to a price discount on the subsequent purchase of the product. Coupons are also referred to as off-price slips and are used mainly to promote brand loyalty. c. Promotional Vouchers A promotional voucher is a slip of paper bearing a stated sum of money which the holder can use to buy any of the products of a particular firm or to buy products in a particular store. This technique may be used to promote brand loyalty or to increase store traffic. d. Trading Stamps Trading stamps are small sized slips of paper (usually in the shape of postage stamps) given by a retailer to customers to encourage them to shop regularly at the store. A stated number of the stamps collected entitles the customer to a particular gift or a choice of gifts. Trading stamps are used mainly to increase store traffic. e. Multi-Packs or Banded Packs Multi-packs or banded packs involve the wrapping or binding together of two or more products. There are two variations of this technique. i. Buy Two. Get One Free Type of Offer This type of multi-pace offer involves the binding together of three similar or identical products, e.g. soap, toothpaste, or toilet rolls. By paying for the price of two, you get one free. ii. Complementary Products This type of multi-pack offer involves the binding together of two products which are usually used together, e.g. writing pad and pen, coffee and coffee whitener, shampoo and conditioner. The price you pay for the two will be less than the price you will pay if you were to buy the two products separately. II f. Premium Offers A premium offer is any product which is offered as a gift or at a discounted price to induce consumers to buy another product. There are three main variations o' the premium offer:Outright Gift The gift offered may take anyone of the following forms:- * Items like toys, clothing pegs, face towels, etc. which are packed with the product being promoted. The container of the product itself, e.g. storage jars made of ceramics. * An amount of the product in excess of the normal quantity contained in a package (often used for liquid and powdered products). * Proof of Purchase Premium A proof of purchase premium refers to any gift offered in exchange for proof of purchase of the product being promoted. The proof of purchase required might be a label, a cap, a cork or a detachable part of the package. A Discounted Price Premium A discounted price premium is any product which is offered at a discount, e.g, a cut price holiday, in return for proof of purchase of the product being promoted. g. Competitions or Prize Promotions A competition or prize promotion refers to the type of sales promotion technique which combine the exercise of some mental skill, proof of purchase of a product, and luck, in order to win a prize. The mental skill aspect of the competition may take various forms:- * Slogan Writing Completion of a Crossword * Unscrambling Anagrams Spotting the Difference in pictures or illustrations Spotting the location of the ball in a picture depicting a ball game * Answering general knowledge questions Writing an essay * Solving a puzzle Completing a sentence(s) * Making a number of words out of a long word In each case the accepted or correct entries qualify for participation in a lottery. The holders of the numbers drawn in the lottery are awarded prizes. Note that the object is to promote the sale of a product and thus proof of purchase is usually required for entry into the competition. h. Loss Leaders Loss leaders are products which are deliberately priced below cost to induce people to patronise a particular store. It is hoped that the increase in store traffic as a result of the attraction caused by the loss leader would lead to an increase in demand for other products sold at the store at normal prices. 1. Direct Mail Direct mail refers to the use of the postal service and the distribution service of newspapers for the distribution of promotional items, like sales letters, leaflets, handbills, catalogues, etc. to potential customers. Sales promotion by direct mail is cost effective for the small local firm because the promotional message is targeted at people living within the locality in which the firm is based. J. Product Differentiation Product differentiation refers to the techniques applied by a firm to distinguish its range of products from that of other firms. The major techniques used which are of relevance to sales promotion are:- * Trademark * Brand Name * Packaging * Product Design Trademark: A trademark refers to the name, symbol, emblem or distinctive mark used by a firm to distinguish its range of products from that of other firms. A trademark can be registered giving the owner the exclusive use of it. Trademarks of non-commercial organisations, e.g. a charity, are referred to as their logo. A trademark which stands out can be an effective promotional tool. Brand Name: A brand name or trade name or commercial name refers to the name given to a particular product among the range of products of a firm. A brand name like a trademark can be registered, and like a trademark a brand name which is catchy can be an effective promotional tool. Packaging: Packaging may refer to the wrapping of a product or the putting of a product into containers: cans, bottles, tubes, boxes, cartons, etc. Attractive packaging coupled with glossy labelling can promote the sale of a product. But always remember that no amount of glossy packaging can promote the sale of a shoddy product. Product Design: Product design refers to the particular structure, size, shape, or style of a product. The aesthetic features of the design may make a product visually appealing and induce consumers to buy it. Some Interesting Developments in Sales Promotion * Reciprocal sales arrangements with suppliers. Under this arrangement, a firm undertakes to purchase products from a particular supplier in return for the supplier agreeing to buy some of its requirements from the firm. * Skywriting of promotional messages using helicopters. * The use of airships with promotional messages inscribed on them. * Electronic motion display of promotional messages on screens at major public places like post offices, supermarkets, and transport terminals. * Gymnastic displays spelling the name of a firm or a product or depicting a promotional message. * Fireworks displaying a promotional message. * Planted flower arrangements on a firm's premises spelling the name of the firm or a product or depicting a promotional message. * Tattooing of promotional messages or inscriptions on the human body!! 14 111. Personal Selling Personal selling in the promotional mix refers to the direct contact made with potential customers either face to face or over the telephone, to persuade them to buy a product. This is carried out by sales persons. A sales person might be a sales representative of a manufacturing firm, a telesales person of a newspaper or magazine, a financial adviser of a financial services firm, a sales negotiator of a real estate agency, or a sales assistant in a shop. The techniques, practices or skills applied by sales persons in the process of persuading people to buy a product are referred to as Salesmanship. a. The Goals of a Sales Person The goals of a sales person might be summarised by what is referred to as the A.I.D.A, concept, Le. * Arouse the ATTENTION of the potential customer. * Generate the INTEREST of the customer in the product * Create a DESIRE for the product in the customer * Obtain a definite ACTION from the customer, Le. successfully persuade the customer to buy the product. In short, the ultimate goal of a sales person is to convert a potential customer to an actual customer. b. The Functions of a Sales Person A sales person might perform all or some of the following functions:- * Contacting potential customers to persuade them to buy a product * Contacting and taking orders from existing customers * Delivering products to customers * Advising customers on the types of products which will best meet their needs * Explaining or demonstrating the use of a product to a customer * Negotiating the terms of a sales contract * Completing a sale by collecting payment and issuing a receipt 15 * Dealing carefully and promptly with customer complaints * Building goodwill by making regular calls on existing customers and helping them deal with any problems arising out of the use of the product * Assisting channel members (wholesalers, retailers, etc.) by providing them with promotional materials and general advice on the sale of the product * Obtaining marketing information which will enable the supplier of the product to better satisfy the needs of customers c. Forms of Remuneration of Sales Persons There are three ways in which sales persons can be paid for their services. Straight Salary: A straight salary is usually offered in the case of full time sales assistants in shops and stores and sales representatives of firms which sell products in wide demand. Commission Only: Commission only is the form of remuneration offered to independent sales persons. The commission is usually a given percentage of sales. Salary Plus Commission This is the form of remuneration used by many firms. The salary provides a basic income, whilst the commission provides the motivation to work hard and earn extra money. d. Some Essential Qualities of a Good Sales Person * Good Communication Skills * Good Human Relations or Inter-Personal Skills * Enthusiasm or Zeal * Integrity * Adequate knowledge of the product(s) * Adequate knowledge of major distributors and institutional buyers of the product(s) 1 6 * Smart Appearance * Good Judgement * Initiative * Perseverance Point of Sale Promotion iv . Point of sale promotion in the promotional mix refers to all marketing activities aimed at promoting the sale of products at the point of sale, i.e. at the store, shop or stall in which the products are sold. It embraces:a. Point of Sale Promotional Materials b. Store Display a. Point of Sale Promotional Materials Point of Sale Promotional Materials refer to such items as:- * Posters displayed outside or inside a shop * Cards, stickers and leaflets on the counters and shelves * A banner in front of a store conveying a promotional message * Dummies for the display of products * Videos for product information and demonstrations b. Store Display Store display refers to all activities directed towards making a store and the products sold in it visually appealing, as well as measures to make the store a comfortable place in which to shop. It involves the following activities and measures:- * The bold and attractive display of the store's name . * The bold and attractive display of relevant information, e.g. prices of items, location of departments/sections, lifts, toilets, etc. 17 * A layout which ensures the efficient allocation of floor space among various departments, and the efficient arrangement of shelves, counters, display racks, cabinets, check out points, etc. * The attractive and efficient display of products in window dressing as well as shelves, racks, ledges, etc. * The smart appearance of sales assistants and other store personnel * The maintenance of an appropriate thermal environment, i.e. appropriate conditions of heat and cold * The right choice of interior decor, wall paint, wall paper, curtains, carpeting, etc. * A suitable choice of music where relevant. v, Trade Fairs or Exhibitors A Trade Fair or Trade Exhibition refers to the public display of the products of several rims, either in a particular industry or across a range of industries. The object is to create an opportunity for participating firms to establish contact with potential customers and receive sales orders where possible. Trade Fairs may also be used as a venue for disclosing a firm's plans in terms of new product development. It is worth mentioning that products displayed at a Trade Fair are usually not for sale. vi. Public Relations Public Relations practitioners deal with the relationship between an organisation and the various strands of the public. Their goal is to enhance a positive image of the organisation in the eyes of the public. Major public relations practices which stimulate sales are:- a. Sponsorship b. Celebrity Appearances c. Distribution of Novelty Products 18 a. Sponsorship Sponsorship refers to the public relations practice in which a firm fully or jointly bears the cost of staging an event in return for some promotional benefits. The events commonly sponsored by firms, area sporting events, arts festivals and musical shows. The promotional benefits may include:- * Publicising the firm's name as sponsor of the event * Publicising the firm's name, trademark or promotional message in the publicity materials of the event: press advertisements, leaflets, programmes, etc. and even on tickets. * Where legal, allowing the firm exclusive selling rights for its brands of products at the venue of the event. * Placing the firm's trademark or promotional message on uniforms and other items worn by participants and organisers as well as on stationery used by the organisers and officials. * Using some of the firm's products in the award of prizes * Including senior or senior personnel of the firm in the team of award presenters * Granting a photo opportunity to a senior personnel of the firm standing alongside outstanding participants in the event. This is particularly significant where the photograph would form part of a press coverage of the event. A firm may also sponsor an arts organisation, a sports club, or an outstanding sports person in return for promotional benefits. b. Celebrity Appearances A celebrity appearance refers to the public relations practice in which a famous person, e.g. the author of a popular book, or the singer of a popular song, is invited to a store to promote the sale of the product. It usually takes the form of the famous person autographing copies of the product sold while he or she is in the store. It is hoped that a celebrity appearance would increase store traffic, so as to boost the sales not only of the product in question but also of other products. 19 c. Distribution of Novelty Products Novelty products include such items as diaries, writing pads, rulers, pens, pencils, calendars, key-holders, etc. which bear the trademark of a fir, pictures of the firm's products or a promotional message, and which are distributed freely to regular and potential customers. The main object is to obtain repeat orders from existing customers and to induce potential customers to buy the firm's products. Conclusion There is a saying that "if a person builds a better mousetrap, the whole world would beat a path to his door". However, people would beat a path to his door only when:i. They know that he has built a better mousetrap ii. They know the directions to his door. Advertising and sales promotion seek to achieve those objectives for builders of better mousetraps and other products. 20 BASIC PRINCIPLES OF ADVERTISING AND SALES PROMOTION INTRODUCTORY TEXT, REVIEW QUESTIONS AND ANSWERS (GNVQ - LEVEL III A. MULTIPLE CHOICE QUESTIONS 1 . There are __ main techniques or strategies in the Promotional Mix:(a) 4 (b) 5 (c) 2. Which of these descriptions is not true of advertising? (a) It is a form of communication (b) It is a form of promotion ( c) It is sponsored (d) It is free publicity 3. Which of these statements is not an objective of advertising? (a) To inform (b) To entertain (c) To persuade (d) To remind 4. There are advertising: (a) 2 5 . 6 (d) 7 main channels of communication in the broadcast media of (b) 3 (c) A client of an Advertising Agency is referred to as:(a) A Customer (b) An Account (c) An Agent (d) A Presenter 21 4 (d) 5 6 - 10. Choose from the following list of types of advertising the term which best fits each of the definitions given over:(a) (b) ( c) (d) (e) (f) (g) (h) Classified Advertisement Factual Appeal Advertising Primary Demand Advertising Industrial Advertising Selective Demand Advertising Display Advertising Testimonial Appeal Advertising Institutional Advertising 6 . Advertising with the objective of stimulating demand for a particular brand of a product. 7. Newspaper and Magazine advertisements which cover several columns and may include a picture or an illustration. 8 . Advertising with the objective of promoting the reputation or goodwill of an organisation 9 . Advertising which seeks to achieve its objective by using objective data. 10 . Advertising aimed at manufacturers, wholesalers, retailers, schools and other institutions. 11 . 'The Circulation' of a Magazine refers to:(a) (b) ( c) (d) 12 . The sort of people who read it The number of people who read it The number of copies issued in a given period The number of copies sold in a given period 'Waste Circulation' in advertising refers to:(a) The number of copies of a Newspaper unsold (b) The number of unsold copies of a Newspaper recycled (c) Unnoticed or unread advertisements in a Newspaper (d) Advertisements which do not stimulate sales 22 13 . Which of these is not part of the broadcast media of advertising? (a) (b) (c) (d) 14 . Which of these is not a function of a Sales Person? (a) (b) (c) (d) 15 . Taking orders from customers Dealing with customer complaints Entertaining customers Negotiating the terms of a sales contract 'Trademarks' are used mainly for:(a) (b) (c) (d) 16 - 20 Radio Telephone Television Film Product Pricing Product Packaging Product Research Product Differentiation Choose from the following list of types of sales promotion techniques the term which best fits each of the definitions given below(a) (b) (c) (d) (e) (t) (g) (h) Loss Leader Premium Offer Promotional Voucher Coupon Trading Stamp Multi-Packs Free Samples Product Differentiation 16. Any product which is offered as a gift or at a discounted price to induce consumers to buy another product. 17 . A product which is deliberately priced below cost to induce people to patronise a particular store. 18 . The techniques applied by a firm to distinguish its range of products from that of other firms. 23 19. A slip of paper bearing a stated sum of money which a holder can use to buy any of the products in a particular store. 20 . Small packs of a product given as gifts to potential consumers to induce them to buy the product. 21. The 4 'P's of the Marketing Mix are:(a) (b) (c) (d) 22. A 'Prize Promotion' is:(a) (b) (c) (d) 23. Advertising Personal Selling Transportation Trade Fairs Which of these groups of advertising media combine 'Sound', 'Vision' and 'Movement' . (a) (b) (c) (d) 25. An Advertising Strategy A Sales Promotion technique A Pricing Strategy None of the above Which of these activities is not part of the Promotional Mix? (a) (b) (c) (d) 24. People, Price, Product, Promotion Promotion, People, Place, Product Price, Place, Product, People Product, Place, Promotion, Price Radio, Television, Film, Video Television, Film, Video Television, Film, Radio Television, Radio 'Advertising copy' refers to:(a) The text of an advertising message The illustrations of an advertising message (b) The text and illustrations of an advertising message (c) The draft copy of the text of an advertisement (d) 24 26. An Advertiser may be described as:(a) (b) (c) (d) 27. A Newspaper or Magazine Proprietor A Radio or Television Proprietor or A Cinema Proprietor A Sponsor of an advertising message Which of these groups of people do not usually constitute 'a captive audience' in advertising? (a) (b) (c) (d) Spectators at a football match Passengers in a train An audience at a cinema A crowd at a wedding reception 28. Which of these is not a 'Point of Sale' promotional material? (a) Posters displayed outside or inside a shop (b) Posters displayed on major transport routes (c) Cards and stickers on shop counters and shelves (d) Dummies for the display of products 29. Which of these items is not part of 'direct mail' sent to potential customers? (a) (b) (c) (d) 30. Catalogue Sales letter Trade invoice Leaflet 'Buy Two, Get One Free' type of offer is an example of a:(a) (b) (c) (d) Premium Offer Free Sample Multi-Pack Offer Promotional Voucher 25 31 - 40 Choose from the following list of basic terms relating to sales promotion and advertising the term which best matches each of the definitions given over:(a) (b) ( c) (d) (e) (f) (g) (h) (i) Promotional Mix Consumer Advertising Advertising Advertising Campaign Advertising Media Brand Name Salesmanship Sponsorship Celebrity Appearance G) Marketing Mix (k) (I) (m) (n) (0) Novelty Products Corporate Advertising Trademark Trade Fair Spot Advertising 31. A co-ordinated and sustained effort aimed at promoting the sale of a product using different advertising media. 32. The various channels of communication which may be used to convey an advertising message. 33. The name, symbol, emblem or distinctive mark used by a firm to distinguish its range of products from those of other firms. 34. The techniques, practices or skills applied by sales persons in the process of persuading people to buy a product. 35. The range of activities involved in directing the flow of goods and services from the producer to the consumer or user. 36. The name given to a particular product of a firm. 37. A public display of the products of several firms either in a particular industry or across a range of industries. 26 38. The Public Relations practice in which a firm fully or jointly bears the cost of staging an event in return for some promotional benefits. 39. Radio and Television advertising in which the advertiser buys several time slots during which the advertiser's message is transmitted. 40. Any communication about an organisation, a product, a person or an idea, aimed at a mass audience and which is paid for by a sponsor. 27 B. 'TRUE' OR 'FALSE' QUESTIONS INDICATE WHICH OF THESE STATEMENTS ARE TRUE AND WHICH ARE FALSE 1 . Primary demand advertising stimulates demand for a particular brand of a product. 2. An alternative term for institutional advertising is prestige advertising. 3. An advertising agency receives no commission from the media used to convey a client's message. 4 . There are 3 main classes of advertising media. 5 . Newspapers and Magazines are the main channels of communication under the print media. 6 . Magazines tend to have a selective readership. 7 . Magazines unlike Newspapers have a rather short span of life. 8 . Most hoardings or billboards are owned and maintained by local councils. 9. Revenue from advertising is the main source of revenue for Newspapers and Magazines. 10 . Revenue from the sale of the publications is the main source of revenue for Newspapers and Magazines 11 . An alternative name for a coupon is off-price slip 12. Brand names like Trademarks have to be registered for exclusive use 13 . 'Logo' refers to the trademark of a commercial organisation 28 14 . A premium offer is any product which is offered as a gift to induce potential consumers to buy it 15 . There are 3 main ways in which sales persons can be paid for their services 16 . Lineage advertising is also referred to as classified advertising 17 . Lineage advertising is also referred to as spot advertising 18 . A free sample is a premium offer 19 . The use of videos in a store for product information and demonstrations is an example of point-of-sale promotion 20. Advertising is usually directed at individuals 29 C. SHORT ANSWER QUESTIONS Briefly state the objective of marketing Question 1 Answer: The Objective of marketing may be stated as: Getting the right product for the customer, at the right place, right time and at the right price. Question 2 Identify any 3 of the range of techniques in the promotional Mix Answer: Any 3 of the following(i) (i) (iii) (iv) (v) (vi) Question 3 Answer: Question 4 Answer: Advertising Sales Promotion Techniques Personal Selling Point of Sale Promotion Trade Fairs or Exhibitions Public Relations Identify the 5 main factors which need to be taken into consideration in deciding on the type of Newspaper or Magazine in which to place an advertisement (ii) The circulation of the publication The readership of the publication (iii) The frequency of publication (iv) The physical characteristics of the publication (v) The cost of placing an advertisement in the publication (i) Identify the 4 main techniques of Product Differentiation which may be used to promote the sales of a product (i) (ii) (iii) (iv) Trademark Brand Name Packaging Product Design 30 Question 5 Answer Question 6 Answer: Question 7 Answer: Question 8 Answer: Identify any 3 things that advertising may persuade the public about Any 3 of the following:(i) To persuade the public to buy a product (ii) To persuade the public to buy more of a product (iii) To persuade the public to change their preferences (iv) To persuade the public to change their opinions about a product (v) To persuade the public to change their opinions about a firm What is the significance of advertising to wholesalers and retailers? Advertising is significant to Wholesalers and Retailers in two main ways:(i) It informs Wholesalers and Retailers about the sort of products offered by particular firms. (ii) It helps to promote the sales of the products which Wholesalers and Retailers deal in. Briefly explain the expression 'Reciprocal Sales Arrangement' A 'Reciprocal Sales Arrangement' refers to an agreement between a firm and a supplier under which the firm undertakes to purchase products from the supplier in return for the supplier buying some of its requirements from the firm. Using the 'AID' concept, briefly explain how a sales person converts a potential customer to an actual customer. The sales person uses his or her sales talk to arouse the ATTENTION of the potential customer, to generate the INTEREST of the customer in the product, to create a DESIRE for the product in the customer and finally to obtain definite ACTION from the customer, i.e. successfully persuade the customer to buy the product. 31 Question 9 Answer: Question 10 Answer: Question 11 Answer: Identify the 3 types of Premium Offers (i) (ii) (iii) Outright Gift Proof-of-Purchase Premium Discounted Price Premium Identify any 5 essential qualities of a Sales Person Any 5 of the following(i) Good Communication Skills (ii) Good Human Relations or Inter-Personal Skills (iii) Enthusiasm or Zeal (iv) Integrity (v) Adequate knowledge of the product(s) (vi) Adequate knowledge of major distributors and institutional buyers of the product(s) (vii) Smart Appearance (viii) Good Judgement (ix) Initiative (x) Perseverance Define 'Point-of-Sale Promotion'. Give any 3 examples of 'Point-of-Sale' promotional materials (a) Definition: Point-of-Sale Promotion' refers to all marketing activities aimed at promoting the sale of products at the store, shop or stall in which the products are sold (b) Examples: Any 3 of the following(i) Posters displayed inside or outside the shop (ii) Cards and stickers on the counters and shelves (iii) Informational leaflets on counters and shelves 32 (iv) Banner in front of the store (v) Dummies for the display of products (vi) Videos for product information and demonstrations (vii) Electronic motion display of promotional messages inside the shop Question 12 Identify the 2 main types of advertising which appear in Newspapers and Magazines Answer: (i) Classified or Lineage Advertising (ii) Display Advertising Question 13 Answer: Question 14 Answer: Question 15 Answer: Identify any 2 types of advertising according to the type of appeal used Any 2 of the following:(i) Testimonial Appeal Advertising (ii) Factual Appeal Advertising (iii) Emotional Appeal Advertising What is meant by the 'outdoor media of advertising'? The outdoor media of advertising refers to the use of hoardings or billboards and tablets as well as the use of the interior and exterior of the different modes of transportation for the communication of advertising messages Briefly state the objects of advertising The objects of advertising may be stated as: (i) (ii) (iii) To inform To persuade To remind 33 Question 16 Answer: Question 17 Answer: Question 18 Answer: Question 19 Answer: Identify the 2 main types of Radio and Television advertising (i) (ii) Sponsorship Advertising Spot Advertising State briefly any 3 reasons why advertising needs to be regulated (i) To guard against misleading claims (ii) To guard against the use of pornographic material (iii) To ensure healthy competition Outline the functions of an Advertising Agency. (i) Undertake advertising research for clients (ii) Advise clients on the most effective type of advertising for their products (iii) Create and design advertising copies for clients (iv) Acquire and maintain hoardings or billboards for renting to clients (v) Plan and execute an advertising campaign on behalf of a client (vi) Evaluate the effectiveness of an advertising campaign Identify the 3 main parties or organisations involved in advertising (i) (ii) (iii) The Advertiser or Sponsor The Advertising Agency The Advertising Media 34 Question 20 Answer: Identify any 5 of the Sales Promotion techniques Any 5 of the following:(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Question 21 Answer : Question 22 Answer : Question 23 Answer: Free Samples Coupons Promotional Vouchers Trading Stamps Multi-packs or banded packs Premium Offers Competitions or prize promotions Loss Leaders Direct Mail Product Differentiation Identify the 3 main Public Relations practices which stimulate demand for a firm's products (i) (ii) (iii) Sponsorship Celebrity Appearances Novelty Products What is a 'product' in marketing? In marketing, a 'product' is anything which possesses utility, i.e. anything which satisfies a need or a want. Thus both goods and services are regarded as products in marketing because they satisfy needs and wants. Identify any 5 innovations in Sales Promotion Any 5 of the following:(i) Reciprocal Sales Arrangements (ii) Skywriting of promotional messages using helicopters (iii) The use of airships with promotional messages inscribed on them (iv) Electronic motion display of promotional messages on screens at major public places (v) Gymnastic displays spelling the name of a firm or a product or depicting a promotional message 35 Question 24 Answer: Question 25 Answer: (vi) Fireworks displaying a promotional message (vii) Planted flower arrangements on a firm's premises spelling the name of the firm or a product or depicting a promotional message (viii) Tattooing of promotional messages or inscriptions on the human body. Outline any 5 functions of a Sales Person Any 5 of the following:(i) Contacting potential customers to persuade them to buy a product (ii) Contacting and taking orders from existing customers (iii) Delivering products to customers (iv) Advising customers on the types of products which will best meet their needs (v) Explaining or demonstrating the use of a product to a customer (vi) Negotiating the terms of a sales contract (vii) Completing a sale by collecting payment and issuing a receipt (viii) Dealing carefully and promptly with customer complaints (ix) Building goodwill of existing customers (x) Assisting channel members (xi) Obtaining marketing information State any 5 reasons why advertising is significant to the economy Any 5 of the following reasons:- 36 (i) The advertising industry directly offers employment to a significant number of people in the economy (ii) Advertising by stimulating demand indirectly creates employment (iii) Advertising by promoting sales and thus production enables firms to reap the benefits of economies of scale which in turn leads to affordable prices for products (iv) Advertising encourages competition which leads to improvements in the quality of goods and services produced in the economy (v) By providing an independent source of revenue for the mass media, advertising assists in the development of a strong mass media necessary for the maintenance of stable democratic structures essential for sustained economic development. (vi) Advertising encourages innovation in the economy by stimulating the introduction of new and better products 37 BASIC PRINCIPLES OF ADVERTISING AND SALES PROMOTION INTRODUCTORY TEXT, REVIEW QUESTIONS AND ANSWERS (GNVQ - LEVEL Ill) A. ANSWERS TQ MULTIPLE CHQICE QUESTIONS 1. c 11. d 21. d 31. d 2. d 12. c 22. b 32. e 3. b 13. b 23. c 33. m 4. c 14. c 24. b 34. g 5. b 15. d 25. c 35. J 6. e 16. b 26. d 36. f 7. f 17. a 27. d 37. n 8. h 18. h 28. b 38. h 9. b 19. c 29. c 39. 0 10. d 20. g 30. c 40. c B. ANSWERS TO 'TRUE' OR 'FALSE' QUESTIONS 1. False 6. True 11. True 16. True 2. True 7. False 12. True 17. False 3. False 8. False 13. False ·18. False 4. True 9. True 14. False 19. True 5. True 10. False 15. True 20. False 38