PROMOTION

AdvertisingSales PromotionPublic RelationsPersonal Selling Direct Marketing

Elements of the Promotion MixAdvertisingIngredientsof thePromotionMixPublic RelationsPersonal SellingSales Promotion

Advertising Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Advertising DecisionsThere are four important decisions.

Setting Advertising Objectives. Setting the Advertising Budget. Developing Advertising Strategy. Evaluating Advertising Campaign.

Setting Advertising Objectives

A specific communication task to be accomplished with a specific target audience during a specific period of time.

Classification of AdvertisingObjectives

Informative AdvertisingPersuasive AdvertisingReminder Advertising

Informative AdvertisingTelling the market about a new productSuggesting new uses for a productExplaining how the product worksDescribing available servicesReducing consumers fearsBuilding a company image

Persuasive Advertising

Building brand preferenceEncouraging switching to your brandChanging customers perception of product attributesPersuading customer to purchase now

Reminder AdvertisingReminding consumer that product may be needed in the near futureKeeping it in consumers mind during off-seasonsReminding consumer where to buy itMaintaining its top-of- mind awareness

I know that half of my advertising budget goes wasted, but I dont know which half.

John wanamaker

Setting the advertising budget After determining the advertising objectives, the company next sets its advertising budget for each product.There are four common methods used to set the total budget for advertising.

Affordable methodPercentage-of-sales methodCompetitive-parity methodObjective-and-task method

Affordable methodSetting the advertising budget at the level management thinks the company can afford.Small business often use this method.

Percentage-of-sales methodSetting the advertising budget at a certain percentage of current or forecasted sales or a percentage of the unit sales price. Pharmaceutical companies use 20% of their sales in advertising.

Competitive-parity methodSetting the advertising budget to match competitors outlays.

Objective-and-task methodDeveloping the advertising budget by

Defining specific objectivesDetermining the; tasks that must be performed to achieve these objectives and Estimating the cost of performing these tasksThe sum of these tasks is the proposed advertising budget.

Factors affecting advertising budgetFollowing are some specific factors that should be considered when setting the advertising budget.

Product life cycle stageNew product typically need large advertising budget to build awareness and to gain consumer trial.Aag TV channel (musical channel)Mature brand usually require lower budgets as a ratio to sales.Automobiles such as Honda CD 70

Market shareBuilding the market or taking share from competitors requires large advertising spending than simply maintaining current share.Low-share brand usually need more advertising spending as a percentage of sales.Telenor, warid are trying to capture market share from Mobilink.

CompetitorsBrands in a market with many competitors and high advertising clutter must be advertised more heavily to be noticed above the noise in the market.

Home appliances such as waves, Pel, Dowlance used heavy advertising budget because of strong competition.

Product differentiationUndifferentiated brands may require heavy advertising to set them apart.Soft drinks, laundry, detergents need large advertising budget.In differentiated brands the advertising can only be used to point out the differences to consumers. Siemens used marketing for its home appliances to just pin point the difference because it is completely different brand from others home appliances.

Type of product/marketBusiness to consumers(B2C) firms tend to spend too much o advertising.

Unilever, Nestle, Procter & Gamble use strong advertising budget.

Business to business(B2B) firms generally underspend on advertising and relay too heavily on their sales forces to bring in orders.

Huawe, Nokia, Ericson used almost no advertisements.

Developing AdvertisingStrategyAdvertising StrategyAdvertising strategy consist upon both Art & Science of advertisingArt of AdvertisingThe art comes from writing, designing & producing the message.Science of AdvertisingThe science comes from Strategy Thinking.

Strategy Thinking

The way through which we achieve our advertising goals.For example Increase of Sales.

Developing Advertising strategy consists of two major elements:

Creating advertising message.Selecting advertising media.

Creating Advertising Message

Our message must be well Communicated & gain Attention of Viewers.

Breaking Through The Clutter

Confusion (Disorder) creates problem for the consumers as well as for the advertisers, on the other hand Viewers want commercial free program. e.g. Commercial during a popular Prime-time program

How the advertiser can achieve his advertising goals?

Advertisement should be entertaining, more rewarding, imaginative & better planned. e.g. U Phone Co. Starting their commercial by saying that now you can SMS only for 12 paisa

Message Strategy

To decide what general message will be communicated to consumers.

The purpose of advertising is to get customers to think about or react to the product in a certain way.

Message Strategy (Contd)Message must be Straight Forwarde.g.Call Rate of Mobilink

Advertising must be Appealed somethingMeaningfulBelievableMust be distinctive from Competitors

Message Execution Styles The impact of an advertisement depends not only upon what is said but also upon how it is said. It is the task of the creative people in the advertising agency to find the style, tone, words, and format factors that make or an effect message execution strategy.

Executional Styles for AdvertisingMood or ImageMusicalDemon-strationScientificReal/AnimatedProductSymbolsFantasyLifestyleSpokes-person/TestimonialSlice-of-LifeHumorousCommonExecutionalStyles

Slice-of-Life This shows one or more persons using the product in a normal setting.

Life Style This emphasizes how a product fits in with a life style.

Fantasy This creates a fantasy about what might happen in connection with the use of a product.

Mood or Image This builds an evocative mood or image around the product - beauty, love or serenity. No claim is made about the product except through suggestion.

Musical This shows one or more persons or characters singing a song or jingle involving the product.

Personality Symbol This creates a character that represents or personifies the product.

Technical Expertise This features the care that the company exercises and the experience it has in selecting the ingredients for this product or in manufacturing the product.

Scientific Evidence This presents survey or scientific evidence that the brand is preferred to or outperforms one or more other brands.

Testimonial Evidence This features a highly credible or likable source endorsing the product.

HumorThis execution is designed to attract attention using humorous illustrations or humorous messages appropriate to the message strategy.

Words & TonesThe advertisers must also use memorable and attention-getting words and tones in the ads.

Selecting Advertising MediaBusiness owners and managers must advertise to create product and service awareness, built their company image and reputation, and generate sales leads and revenues.

Major steps in media selection are:

Deciding on reach, frequency and impactChoose among the major media typesSelecting specific mediaDeciding on media timing

Deciding on reach, frequency and impact

Reach is a measure of percentage people in the target market who are exposed to the ad campaign during a given period of time.

Frequency is a measure of how many times the average person in the target market is exposed to the message.

Impact is the qualitative value of a message exposure through a given medium.

Choose among the major media typesBy considering:

Consumer media habits, nature of the product, types of messages, and costs Major Media TypesNewspapersTelevisionDirect Mail

RadioMagazinesOutdoorInternet

Profiles of major media typesMediumNewspaper

Television

Direct mail

Radio

Magazines

Out door

Internet Advantages Limitations Flexibility ;timeless; good local mkt Short life; poor production quality; small passCoverage; broad acceptability; high -along audiencebelievabilityGood mass mkt coverage; low cost per High absolute cost; high culture; fleeting Exposure; combine sight, sound and exposure; less audience selectivityMotion; appealing to the senses High audience selectivity; flexibility; no Relatively high per exposure; junk mailAd competition within the same medium; image Allows personalizationGood local acceptance; high geographic Audio only, fleeting exposure; low attentionAnd demographic selectivity; low cost (the half heard medium); fragmented audienceHigh geographic and demographic Long ad purchase lead time; high cost; noSelectivity; credibility and prestige; high guarantee of position Quality reproduction; long life and goodPass-along readershipFlexibility; high repeat exposure; low Little audience selectivity; creative limitations Cost, low message competition; goodPositional selectivityHigh selectivity; low cost; immediacy; Small demographic skewed audience; Interactive capabilities relatively low impact; audience controls exposure

Selecting specific media vehiclesThe media planner now must choose the best media vehicles-specific media within general media type.Media planner must compute the cost per thousand persons reached by vehicle.The media planner must also consider the costs of producing ads for different media.The planner should balance costs against the media vehicles audience quality.The media planner should consider audience attention. The planner should assess the vehicles editorial quality.

Deciding on media timing The advertiser must also decide how to schedule the advertising over the course of year.Some marketers do only seasonal advertising.The advertiser has to choose the pattern of ads;Continuity means scheduling ads evenly within a given period.Pulsing means scheduling ads unevenly over a given time period.

Sales Promotion

Sales promotions are short-term incentives to encourage the purchase or sale of a product or service.

Sales PromotionExamples

Hello calling cards Ufone packageHKB & Sons

Rapid Growth of Sales PromotionsThere are some factors which contribute to the rapid growth of sales promotion.

Product manager face greater pressure to increase their sales.Because of high competitive environment, competitors are using sales promotion as a tool to differentiate their offers.

Advertising efficiency has been decline because of rising costs, media culture and large restaurants.Consumers have become the deal oriented and ever larger retailer are demanding more deal from manufacturer.Rapid Growth of Sales Promotions

Sales PromotionObjectives:

Increase distribution of a product.Dispose of inventories currently held by the company's distribution channels in order to make room for new products.Introduce a new image, logo or product. Improve competitive standing of an already-accepted product.Amplify results of concurrent advertising campaign.

Sales Promotion Tools Many tools can be used to accomplish sales promotion objectives. some of which are as follows.

Consumer Promotion ToolsTrade Promotion ToolsBusiness Promotion Tools

Consumer Promotion Tools Sales promotions targeted at the consumer are called consumer sales promotions

SamplesCouponsCash Refunds (Rebates)Price packs (cents-off deals)Advertising Specialties

PremiumsPatronage RewardsPoint-of-Purchase CommunicationsContests, Games, and Sweepstakes

Samples

A small amount of a product offered to consumers for trial. Sampling is most effective but most expensive way to introduce a new product.

Example: Pharmaceutical Companies, Olpers milk Sales Promotion Tools

Coupon

Certificate that gives buyers a saving when they purchase a specified product.

Example: Paints, PTCSales Promotion Tools

Cash refunds offer

Offer to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer.

Sales Promotion Tools

Price packs (cents-off deal)

Reduce price that is marked by the producer directly on the label or package.

Examples: Two for the price of one

Sales Promotion Tools

Premium

Goods offered either free or at low cost as an incentive to buy a product.

Sales Promotion Tools

Example of PremiumIn an exhibition at Alhamra Complex, if you buy a TV costing Rs. 95,000, a 14 TV will be given to you as a free. 14

Advertising specialty

Useful article imprinted with an advertisers name, given as a gift to consumers.Sales Promotion Tools

Example of Advertising Specialty BATA & Service offers a tennis ball with shoes printed with the advertisers name on the ball.

Patronage reward

Cash or other awards for regular use of a certain companys product or services.Sales Promotion Tools

Example of Patronage rewardMobilink is offering an indigo package in which if you call an amount of 50 rupees then you are awarded with an amount of 0.5 rupees. When you will pay the bill then Mobilink will give a card through which you can purchase some things from recommended shops.

Point Of Purchase (POP) Promotion

Display & demonstration that take place at the point of purchase or sale.Sales Promotion Tools

Example of Point-of-purchaseTo promote the sales, Ufone fixes the cardboard, signboard and posters on the shops. Pepsi and Mountain Dew.

Contests, sweepstakes, games

Promotional events that give consumers the chance to win something-such as cash, trips, or goods-by luck or through extra efforts.Sales Promotion Tools

Example of Contests, sweepstakes, gamesWARID

Win 50 Motorola SLRV L6 & L7 everyday (for info sms MOTO to 7070)L7L6

Sales Promotion Tools Trade Promotion Tools

Discounts: (also called price-off, off-list, and off-invoice)

A Straight reduction in price on purchases during a stated period of time.

Examples Of Discounts:

HANGTEN introduced 50%Off on it's Entire stock.

PEPSI recently introduced 5% per litre price-off.

Trade Promotion Tools

Allowances:

Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturers products in some way. Trade Promotion Tools

Types Of Allowances:

Advertising allowancesDisplay allowancesFree goodsPush moneySpecialty advertising items

Trade Promotion Tools

Business Promotion Tools

Includes many of the same tools used in consumer and trade promotions Two additional tools:

Conventions and trade shows Sales contests

Sales Promotion Tools

Trade Shows: An event at which goods & services in a specific industry are exhibited and demonstrated. Many organizations uses trade shows to promote their product sales. Karachi EXPO promotion centre held The exhibition on ELECTRONICS From 9th to 11th sep this year.Business Promotion Tools

Sales contest:A trade tool for sellers or dealers to motivate them to increase their sales performance over a given period. Work best when tied to measurable and achievable sales objective. e-g LAKSON TOBACCO. Business Promotion Tools

Sales Promotion Tools Trade Promotion Tools

Discounts: (also called price-off, off-list, and off-invoice)

A Straight reduction in price on purchases during a stated period of time.

Examples Of Discounts:

HANGTEN introduced 50%Off on it's Entire stock.

PEPSI recently introduced 5% per litre price-off.

Trade Promotion Tools

Allowances:

Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturers products in some way. Trade Promotion Tools

Types Of Allowances:

Advertising allowancesDisplay allowancesFree goodsPush moneySpecialty advertising items

Trade Promotion Tools

Business Promotion Tools

Includes many of the same tools used in consumer and trade promotions Two additional tools:

Conventions and trade shows Sales contests

Sales Promotion Tools

Trade Shows: An event at which goods & services in a specific industry are exhibited and demonstrated. Many organizations uses trade shows to promote their product sales. Karachi EXPO promotion centre held The exhibition on ELECTRONICS From 9th to 11th sep this year.Business Promotion Tools

Sales contest:A trade tool for sellers or dealers to motivate them to increase their sales performance over a given period. Work best when tied to measurable and achievable sales objective. e-g LAKSON TOBACCO. Business Promotion Tools

Public Relations

Building good relations with the companys various publics by obtaining favorable publicity and handling or heading off unfavorable rumors

Public relations departments Press relations or press agency: Creating and placing news worth information in the news media product publicity: Publicizing specific products public affairs: Building and maintaining national or local community relations

Public relations departments Lobbying: Building relations with legislators and government officials Investor relations: Maintaining relationship with shareholders and other in financial community

Public relations departments

Development: Public relations with donors or members of not-for-profit organizations to gain financial support

The Communication ProcessReceiverDecodingChannelEncodingSenderNoiseChannel

Goals and Tasks of PromotionInforming

Reminding

PersuadingTargetAudience

AIDA and the Hierarchy of EffectsAttentionInterestDesireActionAwarenessKnowledgeLikingPreferenceConvictionPurchase

When Elements of Promotion Are Most Useful

AdvertisingPersonalsellingSalespromotionPublicrelations Either not effective or inefficientVery effectiveSomewhat effectiveAwarenessKnowledgeLikingPreferenceConvictionEffectivenessPurchase

Factors that Affect the Promotion MixPushandPull StrategiesNature of the ProductStage in the ProductLife CycleTarget Market CharacteristicsType of Buying DecisionAvailable Funds$ $ $

Creating a Promotion PlanChoose Promotion MixDevelop Promotion BudgetSet Promotion ObjectivesIdentify Target MarketAnalyze the Marketplace

Criteria for Setting Promotion Objectives

Promotion objectives should:be measurable, concretebe based on sound research, with a well-defined target audiencebe realisticreinforce the overall marketing plan and relate to specific marketing objectives

Examples of Promotion ObjectivesObjective: To RemindTo remind consumers that Peter Pan peanut butter is the creamiest peanut butter and is available at their nearest grocery and convenience storesObjective: To Inform (Awareness)To increase the top-of-mind awareness level for Peter Pan peanut butter from 16 percent to 24 percentObjective: To Persuade (Attitudinal)To increase the percentage of parents who feel that Peter Pan peanut butter is the best peanut butter for their children from22 percent to 35 percent

Techniques for Setting Promotion Budgets Arbitrary Allocation

All - You - Can - Afford

Competitive Parity

Percent of Sales

Market Share

Objective and Task

Regulation of PromotionSelf-Regulation

National Advertising Division (NAD)

National Advertising Review Board (NARB)Federal Regulation

Federal Trade Commission (FTC)

Effects of AdvertisingAdvertising SpendingReturn on Advertising ExpendituresIncreasing efficiencyas ad budget becomessufficientDiminishingreturnson additionalspending

Major Types of AdvertisingCorporate ImageAdvocacy AdvertisingTypesofAdvertisingPioneeringCompetitiveComparativeProductAdvertisingInstitutionalAdvertising

Advertising Campaign Decision ProcessDetermine the campaign objectives.Make creative decisions.Make media decisions.Evaluate the campaign.

Common Advertising AppealsProfitHealthLove or RomanceFearAdmirationConvenienceFun and PleasureVanity and EgotismSave money, keep from losing moneyBody-conscious, healthySell cosmetics and perfumesSocial embarrassment, growing old, losing health, powerCelebrity endorsement effectiveFast-food and microwave productsVacations, amusement parksExpensive, conspicuous items

Executional Styles for AdvertisingMood or ImageMusicalDemon-strationScientificReal/AnimatedProductSymbolsFantasyLifestyleSpokes-person/TestimonialSlice-of-LifeHumorousCommonExecutionalStyles

Methods Used to Evaluate Advertising CampaignsPretests

Examples: Consumer jury tests Portfolio or unfinished rough tests Physiological testsPost-testsExamples: Recognition tests Recall tests Attitude measures Audience size measurement

The Tools of Public RelationsMajorToolsUsed ByPRProfessionalsNew Product PublicityProduct PlacementCustomer SatisfactionPhone LinesConsumer EducationEvent SponsorshipIssue SponsorshipWeb Sites

Types of Consumer & Sales Promotion GoalsType of buyerDesired resultsSales promotion examplesLoyal customersReinforce behavior,Loyalty marketing programs,People who buy yourincrease consumption,such as frequent-buyer cardsproduct most or allchange purchase timing or frequent-shopper clubsof the timeBonus packs that give loyalconsumers an incentive to stock up or premiums offeredin return for proofs-of-purchaseCompetitorsBreak loyalty, persuade Sampling to introduce yourcustomersto switch to your brandproducts superior qualitiesPeople who buy acompared to their brandcompetitors productSweepstakes, contests, ormost or all of the timepremiums that create interest in the productBrand switchersPersuade to buy yourAny promotion that lowers thePeople who buy abrand more oftenprice of the product, such asvariety of productscoupons, price-off packages,in the categoryand bonus packsTrade deals that help make theproduct more readily available than competing productsPrice buyersAppeal with low pricesCoupons, price-off packages,People whoor supply added valuerefunds, or trade deals thatconsistently buy thethat makes price lessreduce the price of brand toleast expensive brandimportantmatch that of the brand thatwould have been purchased

Source: From Sales Promotion Essentials, 2E by Don. E. Schultz, William A. Robinson, and Lisa A. Petrison. Reprinted by permission of NTC Publishing Group, Lincolnwood, IL.

Tools for Consumer Sales PromotionCouponsPremiumsFrequent Buyer ProgramsContests and SweepstakesSamplesPoint-of-PurchaseDisplaysSixCategoriesofConsumerSalesPromotions

Tools for Trade Sales Promotion

Advantages of Personal SellingCost ControlMessage ControlTargetedDetailed InformationClosing Sales

Advertising Versus Personal SellingPersonal Selling is more important if...

The product has a high value.It is a custom-made product.There are few customers.The product is technically complex.Customers are geographically concentrated.Advertising/Sales Promotion is more important if...

The product has a low value.It is a standardized product.There are many customers.The product is simple to understand.Customers are geographically dispersed.

Differences Between Traditional & Relationship SellingTraditional Personal SellingSell products (goods and services)Focus on closing salesLimited sales planningSpend most contact time telling customers about productConduct product-specific needs assessment Lone-wolf approach to the accountProposals and presentations based on pricing and product featuresSales follow-up focused on product delivery

Relationship SellingSell advice, assistance, and counselFocus on improving the customers bottom lineConsiders sales planning as top prioritySpend most contact time attempting to build a problem-solving environment with the customerConduct discovery in the full scope of the customers operationsTeam approach to the accountProposals and presentations based on profit impact and strategic benefits to the customerSales follow-up is long term, focused on long-term relationship enhancement

Source: Robert M. Peterson, Patrick L. Shul, and George H. Lucas, Jr., Consultative Selling: Walking the Walk in the New Selling Environment, National Conference on Sales Management, Proceedings, March 1996.

Steps in the Selling ProcessBasicSteps intheSellingProcessGenerating Sales LeadsQualifying Sales LeadsMaking the Sales ApproachMaking the Sales PresentationHandling ObjectionsClosing the SaleFollowing Up

Functions of Sales ManagementMotivate Sales ForceEvaluate Sales ForceManage TurnoverTrain Sales ForceDevelop Compen-sation PlanStructure Sales ForceDetermine Sales Force SizeRecruit Sales ForceSet Sales ObjectivesMajor Tasks of Sales Management

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