Unit1
PromotionSubhajit Sanyal
PROMOTION IS THE ELEMENT IN AN ORGANIZATION’S MARKETING MIX THAT SERVES TO INFORM, PERSUADE,
AND REMIND THE MARKET REGARDING THE ORGANIZATION AND/OR ITS PRODUCTS.
• It includes all the means by which a company communicates directly with potential customers.
• It is an attempt to influence feelings, beliefs, or behavior.
• A blend of communication media that is targeted at creating some form of change (attitudinal / behavioural) in the target audience.
PROMOTION AND SEGMENTATION
• The audience of communication must correspond closely to a firm’s target market
• Many approaches to defining audiences and target markets
Remember Models of Consumer Buying Behaviour
Awareness
Interest
Evaluation
Trial
Adoption
Mass communication sources - television,press/magazines, radio
Mass communication sources - press/magazines television, radio
Personal sources - relatives, friends, colleagues
Personal sources - sales people, relativesfriends
Personal sources and mass media communication (for re-assurance).
KEY ELEMENTS OF THE PROMOTION MIX
• Advertising - any paid form of non personal communication of ideas goods or services delivered through selected media channels
• Selling and Sales Management - the personal interface between a company and its customers, aimed at achieving a sale.
• Personal selling: The direct presentation of a product to a prospective customer by a representative of the selling organization.
• Sales promotion: Demand-stimulating activity designed to supplement advertising and facilitate personal selling.
• Public relations: A planned communication effort by an organization to contribute to generally favourable attitudes and opinions toward an organization and its products.
• Publicity: A special form of public relations that involves news stories about an organization or its products.
• Direct marketing - Direct communication using direct mail, telephone response media and more recently the Internet
Promotional Tools
Personal SellingBranding
Sales Promotion
Public relations
Merchandising
Direct Marketing
ExhibitionsWord of Mouth
Internal Marketing
Corporate Image
Packaging
Sponsorship
Advertising
The Customer
Advertising“ Non- personal paid for communications targeted
through mass media with the purpose of achieving set objectives such as creating awareness or encouraging trial. It is a means of reaching large audiences in a cost effective manner”
• Advertising Plan - the message, the media and the timing
• Used to differentiate, remind, inform and persuade• To be effective - must be likeable - interesting,
meaningful & relevant to the brand and target audience.
ccccAdvertising uses
Promote products, organisations and causes
Stimulate primary and selective demand
Offset competitors’ advertising
Aid sales personnel
Increase uses of a product
Remind and reinforce
Reduce sales fluctuations
Major uses of advertising
Identify and analyse advertising target
Define advertising objectives
Create advertising platform
Determine advertising budget
Evaluate advertising effectiveness
Execute campaign
Create advertising messages
Develop media plan
General steps for developing and implementing an advertising campaign
Sponsorship
Potential opportunities
• Exposure to audiences that each event attracts to convey awareness-based brand messages
• To suggest to the target audience that there is an association between sponsored & sponsor
• To allow target audience to perceive sponsor through a third party & diffuse any negative effects
• To blend a variety of promotional tools more efficiently and effectively
PERSONAL SELLING
• Sales techniques• Sales force deployment & structure• Incentives & rewards• Recruitment & training• Remuneration• Sales force effectiveness
Sales personnel
Organisational climate
Sales meetings
Financial compensation
Sales support systems
Perks
Incentive programmes
Motivating sales force performance through an organised set of activities
Sales Promotion • An activity or material(s) which act(s) an an inducement
and offers added value or incentive to buy.• Usually short term• Usually to promote trial• Usually for FMCGs• Long term value?• Usually in store• Literature• Exhibitions• Retailer & distributor incentives• Point of purchase sales • Consumer gifts & incentives• Loyalty programmes
Manufacturer Sales force Distributor Consumer
(Consumer promotion)
(Trade promotion)
Initiator of promotion Audience for promotion
Consumer: Coupons, free samples, demonstrations, competitionsTrade (at wholesalers, retailers, salespeople): Sales competitions, free merchandise, P.O.S. displays, plus trade shows and conferences
(Sales force promotion) (Retail promotion)
SOURCE: John Rossiter and Larry Percy, Advertising and Promotion Management. Copyright 1987 by McGraw-Hill, Inc. Used with permission of The McGraw-Hill Companies.
Uses of sales promotion in the marketing channel
Types of Direct Marketing
• Direct Mail• Telemarketing• Door-to-Door Selling• DRTV• Internet based home shopping• Home Shopping Networks - Sky• Door Drops
Direct mail• Printed advertising material delivered to the
door - business or domestic premises.
• Can be used for domestic products or services
• Often used by non business organisations (esp. charities)
• Success depend on targeting
• Open to noise * Nuisance?
Public Relations
The art and science of analysing trends, predicting their consequences, counselling organisation leaders and implementing planned programmes of action which will serve both the organisation’s and the public interest.
OR
The development and maintenance of good relationships with different publics.
The tools of Public Relations• Press releases
• Lobbying
• Education and training
• Exhibitions and shows
• In-house journals
• Sponsorship
The Role of Marketing Communication
• Inform• Persuade• Build relationships• End-term goal is to influence demand
and generate sales
Marketing Communications Decisions
• Identification of target audience• Determination of response sought• Choice of message
– AIDA – model– A - Attention (Awareness): attract the attention of the customer.
– I - Interest: raise customer interest by demonstrating features, advantages, and benefits.
– D - Desire: convince customers that they want and desire the product or service and that it will satisfy their needs.
– A - Action: lead customers towards taking action and/or purchasing.
– Message content – What to say?• Rational appeals• Emotional appeals• Moral appeals
– Message structure and format – How to say it
Sales Force – (Face to Face Selling)
Appropriate when
• The product is complex and needs detailed information
• The product is adaptable top the client’s needs• The potential sales value is high• The prospective clients expect a sales visit• The market is highly competitive
Sales Promotions / Point-of-Sale
• Designed to stimulate short-term revenues of immediate sales (i.e. launch of new product, filling periods of low demand)
• Must conform with current marketing objectives and be consistent with current brand image
• Must be competitive• Must be properly budgeted• Must be creative• Must run over the right period of time
Public Relations
• The focus of PR is to generate positive publicity for the company in the media
• The PR role includes managing publicity aimed at financial stakeholders, governmental bodies as well as promoting the image of the parent company and specific brands
• Crucial in crisis management
Direct Marketing
• Direct-to-consumer communication– Mail shots
– SMS and Email promotions
• Some forms of direct marketing, i.e. birthday cards, personalized promotions require an updated guest database
• Effective tool in terms of relationship marketing
Integrated Marketing Communication
• Consistently designed marketing communication strategy that includes different types of media
• All marketing communications material should be reflecting the brand image
Types of Media• Print Material• CD-ROMs / Videos• Websites• Advertisements
– Newspapers– Magazines– Tourist Board Publications– Television– Cinema– Radio
PROMOTION IS COMMUNICATION, AS SUCH IT HAS FOUR BASIC ELEMENTS:
• A message• A source of the message• A communication channel• A receiver
AAND SEVERAL IMPORTANT COMPONENTS:ND SEVERAL IMPORTANT COMPONENTS:
Encoding Decoding Response Feedback Noise
Components of the Linear Model
• Source - the individual or organisation sending the message
• Encoding - transferring the message to symbolic format• Signal - message transmission using media• Decoding - understanding the symbolic format• Receiver - the individual or organisation receiving the
message• Feedback - the receivers communication back to the
source• Noise - distortion or interruption of the communication
format
MESSAGE CHANNEL
Select the mediaor other vehicle
to carry the message
MESSAGE CHANNEL
Select the mediaor other vehicle
to carry the messageDECODING
THE MESSAGEReceiver compares
message toframe of reference
DECODINGTHE MESSAGE
Receiver comparesmessage to
frame of reference
MESSAGE AS RECEIVED
Knowledge, beliefs,or feelings of
receiver changed
MESSAGE AS RECEIVED
Knowledge, beliefs,or feelings of
receiver changed
RESPONSERanges from simple
awareness topurchase
RESPONSERanges from simple
awareness topurchase
FEEDBACKImpact measured
using research, sales,or another measure
FEEDBACKImpact measured
using research, sales,or another measure
ENCODING THEMESSAGE
Create an ad,display, or sales
presentation
ENCODING THEMESSAGE
Create an ad,display, or sales
presentation
MESSAGE ASINTENDED
A promotional idea inmarketer’s mind
MESSAGE ASINTENDED
A promotional idea inmarketer’s mind
NOISECompeting ads,
other distractions
Source Coded message
Medium of transmission
Decoded message
Receiver or
audience
NOISE NOISE
Feedback
Figure 16.2 The communication process
What is Communication ?
SENDER MESSAGE RECEIVER
ENCODE DECODE
FEEDBACK
The Marketing Communications Process
Sender
Encoding
NOISE
Message
Media
FEEDBACK
Decoding
Receiver
INSIGHTS FROM A COMMUNICATIONS PERSPECTIVE INCLUDE:
• The act of encoding allows that messages can take many forms.
• The methods of transmitting a message are limited only by the imagination and creativity of the sender.
• How the message is decoded depends on its form and the capability and interest of the recipient.
• Without measurable objectives, the effectiveness of a message cannot be evaluated.
• Over 40 percent of Americans seek the advice of family and friends when shopping.
• Unhappy customers are likely to share their grievance with at least nine other persons.
• It is possible to generate positive word of mouth.
WORD OF MOUTH IS A SPECIAL FORM OF COMMERCIAL COMMUNICATION
PROMOTION IS NECESSARY IN A FREE MARKET ECONOMY BECAUSE OF:
• Product differentiation• Emotional buying behavior• Less-than-complete market information.
IN ECONOMIC TERMS, THE PURPOSE OF PROMOTION IS TO CHANGE THE LOCATION AND SHAPE OF THE
DEMAND CURVE FOR A COMPANY’S PRODUCT. IT CAN:
• Increase a product’s sales volume at any given price by shifting the demand curve to the right.
• Affect the demand elasticity for a product so that it is more inelastic when price is increased and more elastic when price is decreased.
Pri
ce
Pri
ceQuantity Quantity
Demand goalwith promotion
Demand without
promotion
a. A shift in the demandcurve to the right.
b. Changing the shape(or elasticity)
of the demand curve.
Demand goalwith promotion
Demand without
promotion
FOUR FACTORS SHOULD BE TAKEN INTO ACCOUNT WHEN DETERMINING THE PROMOTIONAL MIX:
• Target market– Readiness to buy– Geographic scope– Type — consumer or middleman– Concentration
• Nature of the product• Stage of the product’s life cycle• Amount of money available for promotion
A BASIC DECISION IS THE CHOICE OF A PUSH OR PULL STRATEGY.
• A push strategy is directing the promotion primarily at the middlemen that are the next link forward in the producer’s distribution channel.
• A pull strategy has the promotion directed at the end users — primarily consumers.
ProducerProducer WholesalerWholesaler RetailerRetailer ConsumerConsumer
ProducerProducer WholesalerWholesaler RetailerRetailer ConsumerConsumer
PUSH STRATEGY
PULL STRATEGY
Product flow Promotion effort
A CAMPAIGN IS A COORDINATED SERIES OF PROMOTIONAL EFFORTS BUILT AROUND A SINGLE THEME
AND DESIGNED TO REACH A PREDETERMINED GOAL.
• A campaign theme is the promotional appeal dressed up in a distinctive, attention-getting form that expresses the product’s benefits.
• The promotional elements are coordinated in a strategy called integrated marketing communications.
• A complete campaign includes the evaluation of results against objectives.
THERE ARE FOUR METHODS OF DETERMINING THE BUDGET FOR PROMOTION
• Regulation by private organizations:– Numerous private organizations, for instance
the Council of Better Business Bureaus.– Media by refusing to accept ads they feel are
false, misleading, or in bad taste.– Some magazine (Good Housekeeping and
Parent) substantiate advertising claims before ads are accepted.
– Some trade associations have established codes of ethics that include standards for sales force behavior and advertising activity.