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A PROJECT ON
PROMOTIONALMIX &
ADVERTISEMENTSubmitted by :-Riaz Ahemad
MBA
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PROMOTIONAL MIX
The purpose of advertising is to promote a product or service in order to increase sales and create a
branding of the product so that a customer loyalty base will be established. Without effective and
targeted advertising, a business cannot succeed. There are many types of advertising a business can
utilize in effort to increase their sales.
The following lists a number of types of advertising available to businesses:
Television and Radio
Since television was first introduced, businesses have had tremendous success using it as an
advertising medium. This is due to the increase in consumers watching television. The cost of
television depends on the time of day or night one advertises, the popularity of the television show(how many viewers,) and the length of the advertisement. Television advertising can reach
millions of people. Radio advertising is a traditional advertising format that uses voice and jingles.
Print
This includes newspapers, magazines, fliers, brochures..etc. Placing advertisements in magazines
and newspapers is an age old method of advertising. Newspapers and the magazines sell the
advertising space. Prices depend on location, size, graphics, and color. Advertising success often
depends on the number of subscribers. Print advertising allows a business to target a specific
demographic. Fliers and brochures are a great way to advertise sales and launch special product
promotion programs.
Internet Advertising
Online advertising consists of small ads, banner ads, text ads, video ads, pay-per-click advertising,
and reciprocal linking to other websites. The effectiveness of online advertising depends on
exposure and how many people actually view the advertisement. Internet advertising allows the
advertiser to track the number of impressions an ad gets (how many people see it), and how many
visits their business website receives from particular ads, making it simple to find out what kind of
conversion rates the advertisers are obtaining. Online advertising does not have any time restraints
and can be viewed day and night throughout the world. Businesses also have their own websites as
an advertising tool. A well-designed and well-promoted website can provide a world of customers.
Out-of-Home Advertising
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This can include digital signage, billboards, kiosks, tradeshows, and out-of-home advertising. This
is advertising that takes place outside of a customer's home. This form of advertising has become
very popular because it provides a new way to reach targeted customers. Billboards, kiosks, and
tradeshows have been extremely successful advertising tools because you can take your product or
service directly to the consumer. Digital signage is a newer method of advertising that is growing
in popularity. Digital signage is where monitors/plasma TVs are placed in strategic locations and
display advertisements directed at their targeted customer. Digital signage can deliver messages in
the form of text and digital video. Advertisers have the ability to up date content from a remote
location. You can find digital signage in such places as sports arenas, retail stores, department
stores, malls, schools...etc.
Regardless of the state of the economy, businesses have to keep advertising to stay successful.
Because of the broad range of advertising methods now available, businesses now have the ability
to reach their targeted customers at very affordable costs.
Promotion is one out of four basic instruments of marketing that has the purpose to inform about otherinstruments of marketing mix and to contribute to sales increase on the long term. The promotion is
always serving to specific goal. These goals can be public informing, demand increasing, product
differentiation, and product value increasing or sales stabilizing. Usually the promotion is targeting more
than one goal.
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It is not enough for a business to have good products sold at attractive prices. To generate sales and
profits, the benefits of products have to be communicated to customers. In marketing, this is
commonly known as "promotion".
Promotion is all about companies communicating with customers.
A business' total marketing communications programme is called the "promotional mix" and
consists of a blend of advertising, personal selling, sales promotion and public relations tools. In
this revision note, we describe the four key elements of the promotional mix in more detail.
It is helpful to define the four main elements of the promotional mix before considering their
strengths and limitations.
(1) Advertising
Any paid form of non-personal communication of ideas or products in the "prime media": i.e.
television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to
persuade and to inform. The two basic aspects of advertising are the message (what you want your
communication to say) and the medium (how you get your message across)
(2) Personal Selling
Oral communication with potential buyers of a product with the intention of making a sale. The
personal selling may focus initially on developing a relationship with the potential buyer, but will
always ultimately end with an attempt to "close the sale".
(3) Sales Promotion
Providing incentives to customers or to the distribution channel to stimulate demand for a product.
(4) Publicity
The communication of a product, brand or business by placing information about it in the media
without paying for the time or media space directly. otherwise known as "public relations" or PR.
Advantages and Disadvantages of Each Element of the Promotional Mix
Mix Element Advantages Disadvantages
Advertising Good for building awareness
Effective at reaching a wide audience
Repetition of main brand and product
positioning helps build customer trust
Impersonal - cannot answer all a
customer's questions
Not good at getting customers to make
a final purchasing decision
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Personal Selling Highly interactive - lots of
communication between the buyer and
seller
Excellent for communicating complex /
detailed product information and features
Relationships can be built up - important
if closing the sale make take a long time
Costly - employing a sales force has
many hidden costs in addition to
wages
Not suitable if there are thousands of
important buyers
Sales Promotion Can stimulate quick increases in sales by
targeting promotional incentives on
particular products
Good short term tactical tool
If used over the long-term, customers
may get used to the effect
Too much promotion may damage the
brand image
Public Relations Often seen as more "credible" - since the
message seems to be coming from a
third party (e.g. magazine, newspaper)
Cheap way of reaching many customers
- if the publicity is achieved through the
right media
Risk of losing control - cannot always
control what other people write or say
about your product
Advertising Advertising is the promotion of a companys products and services carried out primarily to
drive sales of the products and services but also to build a brand identity and communicate
changes or new product /services to the customers. Advertising has become an essential
element of the corporate world and hence the companies allot a considerable amount of
revenues as their advertising budget. There are several reasons for advertising some of
which are as follows:
Increasing the sales of the product/service
Creating and maintaining a brand identity or brand image.
Communicating a change in the existing product line.
Introduction of a new product or service.
Increasing the buzz-value of the brand or the company.
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Thus, several reasons for advertising and similarly there exist various media which can be
effectively used for advertising. Based on these criteria there can be several branches of
advertising. Mentioned below are the various categories or types of advertising:
Print Advertising Newspapers, Magazines, Brochures, Fliers
The print media have always been a popular advertising medium. Advertising products via
newspapers or magazines is a common practice. In addition to this, the print media also offers
options like promotional brochures and fliers for advertising purposes. Often the newspapers and
the magazines sell the advertising space according to the area occupied by the advertisement, the
position of the advertisement (front page/middle page), as well as the readership of the
publications. For instance an advertisement in a relatively new and less popular newspaper would
cost far less than placing an advertisement in a popular newspaper with a high readership. The
price of print ads also depend on the supplement in which they appear, for example an
advertisement in the glossy supplement costs way higher than that in the newspaper supplement
which uses a mediocre quality paper
Outdoor Advertising Billboards, Kiosks, Tradeshows and Events
Outdoor advertising is also a very popular form of advertising, which makes use of several tools
and techniques to attract the customers outdoors. The most common examples of outdoor
advertising are billboards, kiosks, and also several events and tradeshows organized by the
company. The billboard advertising is very popular however has to be really terse and catchy in
order to grab the attention of the passers by. The kiosks not only provide an easy outlet for the
company products but also make for an effective advertising tool to promote the companys
products. Organizing several events or sponsoring them makes for an excellent advertising
opportunity. The company can organize trade fairs, or even exhibitions for advertising their
products. If not this, the company can organize several events that are closely associated with their
field. For instance a company that manufactures sports utilities can sponsor a sports tournament to
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advertise its products.
Broadcast advertising Television, Radio and the Internet
Broadcast advertising is a very popular advertising medium that constitutes of several branches
like television, radio or the Internet. Television advertisements have been very popular ever since
they have been introduced. The cost of television advertising often depends on the duration of the
advertisement, the time of broadcast (prime time/peak time), and of course the popularity of the
television channel on which the advertisement is going to be broadcasted. The radio might have
lost its charm owing to the new age media however the radio remains to be the choice of small-
scale advertisers. The radio jingles have been very popular advertising media and have a large
impact on the audience, which is evident in the fact that many people still remember and enjoy the
popular radio jingles.
Covert Advertising Advertising in Movies
Covert advertising is a unique kind of advertising in which a product or a particular brand is
incorporated in some entertainment and media channels like movies, television shows or even
sports. There is no commercial in the entertainment but the brand or the product is subtly( or
sometimes evidently) showcased in the entertainment show. Some of the famous examples for this
sort of advertising have to be the appearance of brandNokia which is displayed on Tom Cruises
phone in the movieMinority Report, or the use ofCadillac cars in the movie Matrix Reloaded.
Surrogate Advertising Advertising Indirectly
Surrogate advertising is prominently seen in cases where advertising a particular product is banned
by law. Advertisement for products like cigarettes or alcohol which are injurious to heath are
prohibited by law in several countries and hence these companies have to come up with several
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other products that might have the same brand name and indirectly remind people of the cigarettes
or beer bottles of the same brand. Common examples include Fosters and Kingfisher beer brands,
which are often seen to promote their brand with the help of surrogate advertising.
Public Service Advertising Advertising for Social Causes
Public service advertising is a technique that makes use of advertising as an effective
communication medium to convey socially relevant messaged about important matters and social
welfare causes like AIDS, energy conservation, political integrity, deforestation, illiteracy, poverty
and so on. David Oglivy who is considered to be one of the pioneers of advertising and marketing
concepts had reportedly encouraged the use of advertising field for a social cause. Oglivy once
said, "Advertising justifies its existence when used in the public interest - it is much too powerful a
tool to use solely for commercial purposes.". Today public service advertising has
been increasingly used in a non-commercial fashion in several countries across the world in order
to promote various social causes. In USA, the radio and television stations are granted on the basis
of a fixed amount of Public service advertisements aired by the channel.
Celebrity Advertising
Although the audience is getting smarter and smarter and the modern day consumer
getting immune to the exaggerated claims made in a majority of advertisements,
there exist a section of advertisers that still bank upon celebrities and their popularity
for advertising their products. Using celebrities for advertising involves signing up
celebrities for advertising campaigns, which consist of all sorts of advertising
including, television ads or even print advertisements.
personal selling
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Introduction
Personal selling can be defined as follows:
Personal selling is oral communication with potential buyers of a product with the intention of
making a sale. The personal selling may focus initially on developing a relationship with the
potential buyer, but will always ultimately end with an attempt to "close the sale"
Personal selling is one of the oldest forms of promotion.
It involves the use of a sales force to support a push strategy (encouraging intermediaries to buy
the product)
or a pull strategy (where the role of the sales force may be limited to supporting retailers and
providing after-sales service).
What are the main roles of the sales force?
Kotler describes six main activities of a sales force:
(1) Prospecting - trying to find new customers
(2) Communicating - with existing and potential customers about the product range
(3) Selling - contact with the customer, answering questions and trying to close the sale
(4) Servicing - providing support and service to the customer in the period up to delivery and also
post-sale
(5) Information gathering - obtaining information about the market to feedback into the
marketing planning process
(6) Allocating - in times of product shortage, the sales force may have the power to decide how
available stocks are allocated
What are the advantages of using personal selling as a means of promotion?
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Personal selling is a face-to-face activity; customers therefore obtain a relatively high degree of
personal attention
The sales message can be customised to meet the needs of the customer
The two-way nature of the sales process allows the sales team to respond directly and promptly to
customer questions and concerns
Personal selling is a good way of getting across large amounts of technical or other complex
product information
The face-to-face sales meeting gives the sales force chance to demonstrate the product
Frequent meetings between sales force and customer provide an opportunity to build good long-
term relationships
Given that there are many advantages to personal selling, why do more businesses not maintain a
direct sales force?
Main disadvantages of using personal selling
The main disadvantage of personal selling is the cost of employing a sales force. Sales people are
expensive. In addition to the basic pay package, a business needs to provide incentives to achieve
sales (typically this is based on commission and/or bonus arrangements) and the equipment to
make sales calls (car, travel and subsistence costs, mobile phone etc).
In addition, a sales person can only call on one customer at a time. This is not a cost-effective way
of reaching a large audience.
sales promotionIntroduction
A good definition of sales promotion would be as follows:
An activity designed to boost the sales of a product or service. It may include an advertising
campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps,
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arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary
price reductions, door-to-door calling, telemarketing, personal letters on other methods.
More than any other element of the promotional mix, sales promotion is about action. It is about
stimulating customers to buy a product. It is not designed to be informative a role which
advertising is much better suited to.
Sales promotion is commonly referred to as Below the Line promotion.
Sales promotion can be directed at:
The ultimate consumer (a pull strategy encouraging purchase)
The distribution channel (a push strategy encouraging the channels to stock the product). This
is usually known as selling into the trade
Methods of sales promotion
There are many consumer sales promotional techniques available, summarised in the table below:
Price promotions
Price promotions are also commonly known as price discounting
These offer either (1) a discount to the normal selling price of a product, or (2) more of the product
at the normal price.
Increased sales gained from price promotions are at the expense of a loss in profit so these
promotions must be used with care.
A producer must also guard against the possible negative effect of discounting on a brands
reputation
Coupons
Coupons are another, very versatile, way of offering a discount. Consider the following examples
of the use of coupons:
- On a pack to encourage repeat purchase
- In coupon books sent out in newspapers allowing customers to redeem the coupon at a retailer
- A cut-out coupon as part of an advert
- On the back of till receipts
The key objective with a coupon promotion is to maximise the redemption rate this is the
proportion of customers actually using the coupon.
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One problem with coupons is that they may simply encourage customers to buy what they would
have bought anyway. Another problem occurs when retailers do not hold sufficient stocks of the
promoted product causing customer disappointment.
Use of coupon promotions is, therefore, often best for new products or perhaps to encourage sales
of existing products that are slowing down.
Gift with purchase
The gift with purchase is a very common promotional technique. It is also known as a premium
promotion in that the customer gets something in addition to the main purchase. This type of
promotion is widely used for:
- Subscription-based products (e.g. magazines)- Consumer luxuries (e.g. perfumes)
Competitions and prizes
Another popular promotion tool with many variants. Most competition and prize promotions are
subject to legal restrictions.
Money refunds
Here, a customer receives a money refund after submitting a proof of purchase to the manufacturer.
These schemes are often viewed with some suspicion by customers particularly if the method of
obtaining a refund looks unusual or onerous.
Frequent user / loyalty incentives
Repeat purchases may be stimulated by frequent user incentives. Perhaps the best examples of this
are the many frequent flyer or user schemes used by airlines, train companies, car hire companies
etc.
Point-of-sale displays
Research into customer buying behaviour in retail stores suggests that a significant proportion of
purchases results from promotions that customers see in the store. Attractive, informative and well-
positioned point-of-sale displays are, therefore, very important part of the sales promotional
activity in retail outlets.
push and pull strategies
"Push or Pull"?
Marketing theory distinguishes between two main kinds of promotional strategy - "push" and
"pull".
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Push
A push promotional strategy makes use of a company's sales force and trade promotion activities
to create consumer demand for a product.
The producer promotes the product to wholesalers, the wholesalers promote it toretailers, and the retailers promote it toconsumers.A good example of "push" selling is mobile phones, where the major handset manufacturers such
as Nokia promote their products via retailers such as Carphone Warehouse.
Personal selling and trade promotions are often the most effective promotional tools for companies
such as Nokia - for example offering subsidies on the handsets to encourage retailers to sell higher
volumes.
A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g.selling insurance or holidays directly). With this type of strategy, consumer promotions and
advertising are the most likely promotional tools.
Pull
A pull selling strategy is one that requires high spending on advertising and consumer
promotion to build up consumer demand for a product.
If the strategy is successful, consumers will ask theirretailers for the product, the retailers will
ask thewholesalers, and the wholesalers will ask the producers.A good example of a pull is the heavy advertising and promotion of children's toys mainly on
television. Consider the recent BBC promotional campaign for its new pre-school programme
the Fimbles. Aimed at two to four-year-olds, 130 episodes of Fimbles have been made and are
featured everyday on digital children's channel CBeebies and BBC2.
As part of the promotional campaign, the BBC has agreed a deal with toy maker Fisher-Price to
market products based on the show, which it hopes will emulate the popularity of the Tweenies.
Under the terms of the deal, Fisher-Price will develop, manufacture and distribute a range ofFimbles products including soft, plastic and electronic learning toys for the UK and Ireland.
In 2001, BBC Worldwide (the commercial division of the BBC) achieved sales of 90m from its
children's brands and properties last year. The demand created from broadcasting of the Fimbles
and a major advertising campaign is likely to pull demand from children and encourage retailers
to stock Fimbles toys in the stores for Christmas 2002.
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public relations
Introduction
The Institute of Public Relations defines public relations as follows:
The planned and sustained effort to establish and maintain goodwill and mutual
understanding between an organisation and its publics
What is meant by the term publics in the above definition?
A business may have many publics with which it needs to maintain good relations and build
goodwill. For example, consider the relevant publics for a publicly-quoted business engaged in
medical research:
Employees
Shareholders
Trade unions
Members of the general public
Customers (past and present)
Pressure groups
The medical profession
Charities funding medical research
Professional research bodies and policy-forming organisations
The media
Government and politicians
The role of public relations is to:
Identify the relevant publics
Influence the opinions of those publics by:
o Reinforcing favourable opinions
o Transforming perhaps neutral opinions into positive ones
o Changing or neutralising hostile opinions
Public relations techniques
There are many techniques available to influence public opinion, some of which are more
appropriate in certain circumstances than others:
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Consumer communication
Customer press releases
Trade press releases
Promotional videos
Consumer exhibitions
Competitions and prizes
Product launch events
Celebrity endorsements
Web sites
Business communication
Corporate identity design
Company and product videos
Direct mailings
Web site
Trade exhibitions
Internal / employee communication
In-house newsletters and magazines
Intranet
Notice boards
Employee conferences
Email
External corporate communication
Company literature (brochures, videos etc.)
Community involvement programmes
Trade, local, national and international media relations
Financial communication
Financial media relations
Annual report and accounts
Meetings with stock market analysts, fund managers etc
Shareholder meetings (including the annual general meeting
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Given the wide range of techniques used in public relations, how is it possible to measure the
effectiveness of public relations?
It is actually quite difficult to measure whether the key messages have been communicated to the
target public. In any event, this could be quite costly since it would involve a large amount of
regular research. Instead, the main measures of effectiveness concentrate on the process of public
relations, and include:
Monitoring the amount of media coverage obtained (press cuttings agencies play a role in
keeping businesses informed of this)
Measuring attendance at meetings, conferences
Measuring the number of enquiries or orders received in response to specific public relations
efforts.
marketing planning - setting marketing
objectives
Introduction
Objectives set out what the business is trying to achieve.
Objectives can be set at two levels:
(1) Corporate level
These are objectives that concern the business or organisation as a whole
Examples of corporate objectives might include:
We aim for a return on investment of at least 15%
We aim to achieve an operating profit of over 10 million on sales of at least 100 million
We aim to increase earnings per share by at least 10% every year for the foreseeable future
(2) Functional level
e.g. specific objectives for marketing activities
Examples of functional marketing objectives might include
We aim to build customer database of at least 250,000 households within the next 12 months
We aim to achieve a market share of 10%
We aim to achieve 75% customer awareness of our brand in our target markets
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Both corporate and functional objectives need to conform to the commonly used SMART criteria.
The SMART criteria (an important concept which you should try to remember and apply in exams)
are summarised below:
Specific - the objective should state exactly what is to be achieved.
Measurable - an objective should be capable of measurement so that it is possible to determine
whether (or how far) it has been achieved
Achievable - the objective should be realistic given the circumstances in which it is set and the
resources available to the business.
Relevant - objectives should be relevant to the people responsible for achieving them
Time Bound - objectives should be set with a time-frame in mind. These deadlines also need to be
realistic.
marketing planning - the link with strategic
planning
Introduction
Businesses that succeed do so by creating and keeping customers. They do this by providing better
value for the customer than the competition.
Marketing management constantly have to assess which customers they are trying to reach and
how they can design products and services that provide better value (competitive advantage).
The main problem with this process is that the environment in which businesses operate is
constantly changing. So a business must adapt to reflect changes in the environment and make
decisions about how to change the marketing mix in order to succeed. This process of adapting and
decision-making is known as marketing planning.
Where does marketing planning fit in with the overall strategic planning of a business?
Strategic planning (which you will cover in your studies of strategy is concerned about the
overall direction of the business. It is concerned with marketing, of course. But it also involves
decision-making about production and operations, finance, human resource management and other
business issues.
The objective of a strategic plan is to set the direction of a business and create its shape so that
the products and services it provides meet the overall business objectives.
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Marketing has a key role to play in strategic planning, because it is the job of marketing
management to understand and manage the links between the business and the environment.
Sometimes this is quite a straightforward task. For example, in many small businesses there is only
one geographical market and a limited number of products (perhaps only one product!).
However, consider the challenge faced by marketing management in a multinational business, with
hundreds of business units located around the globe, producing a wide range of products. How can
such management keep control of marketing decision-making in such a complex situation? This
calls for well-organised marketing planning.
What are the key issues that should be addressed in marketing planning?
The following questions lie at the heart of any marketing (or indeed strategic) planning process:
Where are we now?
How did we get there?
Where are we heading?
Where would we like to be?
How do we get there?
Are we on course?
Why is marketing planning essential?
Businesses operate in hostile and increasingly complex environment. The ability of a business to
achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-
connected. It makes sense to try to bring some order to this chaos by understanding the commercial
environment and bringing some strategic sense to the process of marketing products and services.
A marketing plan is useful to many people in a business. It can help to:
Identify sources of competitive advantage
Gain commitment to a strategy
Get resources needed to invest in and build the business
Inform stakeholders in the business
Set objectives and strategies
Measure performance
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direct marketing
Introduction
Direct marketing is concerned with establishing an individual relationship between the business
offering a product or service and the final customer.
Direct marketing has been defined by the Institute of Direct Marketing as:
The planned recording, analysis and tracking of customer behaviour to develop a relational
marketing strategies
The process of direct marketing covers a wide range of promotional activities you may be familiar
with. These include:
Direct-response adverts on television and radio
Mail order catalogues
E-commerce (you bought this marketing companion following tutor2us direct marketing
campaign!)
Magazine inserts
Direct mail (sometimes also referred to as junk mail)
Telemarketing
Direct mail
Of the above direct marketing techniques, the one in most widespread use is direct mail.
Direct mail is widely thought of as the most effective medium to achieve a customer sales
response.
Why?
The advertiser can target a promotional message down to an individual level, and where possible
personalize the message. There are a large number of mailing databases available that allow
businesses to send direct mailing to potential customers based on household income, interests,
occupation and other variables
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Businesses can first test the responsiveness of direct mailing (by sending out a test mailing to a
small, representative sample) before committing to the more significant cost of a larger campaign
Direct mailing campaigns are less visible to competitors it is therefore possible to be more
creative, for longer
However, direct mail has several weaknesses:
A piece of direct mail is less interactive than a television or radio advert, although creative
packaging can still stimulate customer response
Lead times to produce direct mailing campaigns can be quite long
There is increasing customer concern with junk mail the receipt of unsolicited mail which
often suggests that the right to individual privacy has been breached.
The Direct marketing database
Direct mailing is based on the mailing list a critical part in the direct marketing process. The
mailing list is a database which collects together details of past, current and potential customers. A
properly managed mailing database enables a business to:
Focus on the best prospective customers
Cross-sell related products
Launch new products to existing customers
How is the mailing database compiled?
The starting point is the existing information the business keeps on its customers. All forms of
communication between a customer and the business need to be recorded so that a detailed, up-to-
date profile can be maintained.
It is also possible to buy mailing lists from elsewhere. There are numerous mailing list owners
and brokers who sell lists of names. The Internet, directories, associations and other sources are
good sources.
The promotional mix
Promotional mix
It is helpful to define the five main elements of the promotional mix before considering their
strengths and limitations.
Advertising
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Advertising is any paid form of non-personal communication of ideas or products in the "prime
media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is
intended to persuade and to inform.
The two basic aspects of advertising are the message (what you want your communication to say)
and the medium (how you get your message across)
Direct marketing
Direct marketing creates a direct relationship between the customer and the business on an
individual basis.
Personal Selling
Personal selling refers to oral communication with potential buyers of a product with the intention
of making a sale. The personal selling may focus initially on developing a relationship with the
potential buyer, but will always ultimately end with an attempt to "close the sale".
Sales Promotion
Sales promotion refers to the provision of incentives to customers or to the distribution channel to
stimulate demand for a product.
Public Relations
Public relations is the communication of a product, brand or business by placing information about
it in the media without paying for the time or media space directly
Factors that determine the type of promotional tools used
Each of the above components of the promotional mix has strengths and weaknesses. There are
several factors that should be taken into account in deciding which, and how much of each tool to
use in a promotional marketing campaign:
(1) Resource availability and the cost of each promotional tool
Advertising (particularly on television and in the national newspapers can be very expensive). The
overall resource budget for the promotional campaign will often determine which tools the
business can afford to use.
(2) Market size and concentration
If a market size is small and the number of potential buyers is small, then personal selling may be
the most cost-effective promotional tool.
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A good example of this would be businesses selling software systems designed for supermarket
retailers. On the other hand, where markets are geographically disperse or, where there are
substantial numbers of potential customers, advertising is usually the most effective.
(3) Customer information needs
Some potential customers need to be provided with detailed, complex information to help them
evaluate a purchase (e.g. buyers of equipment for nuclear power stations, or health service
managers investing in the latest medical technology). In this situation, personal selling is almost
always required - often using selling teams rather than just one individual.
By contrast, few consumers need much information about products such as baked beans or bread.
Promotional tools such as brand advertising and sales promotion are much more effective in this
case.
Rural Marketing - A Critical Review
Prime Minister Manmohan Singh recently talked about his vision for rural India: "My vision
of rural India is of a modern agrarian, industrial and services economy co-existing side by
side, where people can live in well-equipped villages and commute easily to work, be it on
the farm or in the non-farm economy. There is much that modern science and technology
can do to realize this vision. Rural incomes have to be increased. Rural infrastructure has to
be improved. Rural health and education needs have to be met. Employment opportunities
have to be created in rural areas."
'Go rural' is the slogan of marketing gurus after analyzing the socio-economic changes in
villages. The Rural population is nearly three times the urban, so that Rural consumers have
become the prime target market for consumer durable and non-durable products, food,
construction, electrical, electronics, automobiles, banks, insurance companies and other
sectors besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides
and farm machinery. The Indian rural market today accounts for only about Rs 8 billion of
the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly
there seems to be a long way ahead. Although a lot is spoken about the immense potential
of the unexplored rural market, advertisers and companies find it easier to vie for a share of
the already divided urban pie.
The success of a brand in the Indian rural market is as unpredictable as rain. It has always
been difficult to gauge the rural market. Many brands, which should have been successful,
have failed miserably. More often than not, people attribute rural market success to luck.
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Therefore, marketers need to understand the social dynamics and attitude variations within
each village though nationally it follows a consistent pattern looking at the challenges and
the opportunities which rural markets offer to the marketers it can be said that the future is
very promising for those who can understand the dynamics of rural markets and exploit
them to their best advantage. A radical change in attitudes of marketers towards the vibrant
and burgeoning rural markets is called for, so they can successfully impress on the 230
million rural consumers spread over approximately six hundred thousand villages in rural
India.
What rural market buys?
Rural India buys small packs, as they are perceived as value for money. There is brand
stickiness, where a consumer buys a brand out of habit and not really by choice. Brands
rarely fight for market share; they just have to be visible in the right place. Even expensive
brands, such as Close-Up, Marie biscuits and Clinic shampoo are doing well because of deep
distribution, many brands are doing well without much advertising support Ghadi, a big
detergent brand in North India, is an example.
Why Rural Market?
The Indian rural market has a huge demand base and offers great opportunities to
marketers. Two-thirds of Indian consumers live in rural areas and almost half of the national
income is generated here. The reasons for heading into the rural areas are fairly clear. The
urban consumer durable market for products like color TVs, washing machines, refrigerators
and air conditioners is growing annually at between 7 per cent and 10 per cent.
The rural market is zooming ahead at around 25 per cent annually. "The rural market is
growing faster than urban India now," says Venugopal Dhoot, chairman of the Rs 989
-crore(Rs billion) Videocon Appliances. "The urban market is a replacement and up
gradation market today," adds Samsung's director, marketing, Ravinder Zutshi.
Reasons for improvement of business in rural area
Socio-economic changes (lifestyle, habits and tastes, economic status)
Literacy level (25% before independence more than 65% in 2001)
Infrastructure facilities (roads, electricity, media)
Increase in income Increase in expectations
MART, the specialist rural marketing and rural development consultancy has found that 53
per cent of FMCG sales lie in the rural areas, as do 59 per cent of consumer durable sales,
said its head Pradeep Kashyap at the seminar. Of two million BSNL mobile connections, 50
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per cent went to small towns and villages, of 20 million Rediffmail subscriptions, 60 per cent
came from small towns, so did half the transactions on Rediff's shopping site.
Special features of rural market
Unlike urban markets, rural markets are difficult to predict and possess special
characteristics. The featured population is predominantly illiterate, have low income,
characterized by irregular income, lack of monthly income and flow of income fluctuating
with the monsoon winds.
Rural markets face the critical issues of Distribution, Understanding the rural consumer,
Communication and Poor infrastructure. The marketer has to strengthen the distribution and
pricing strategies. The rural consumer expects value for money and owing to has unsteady
and meager status of weekly income; increasing the household income and improving
distribution are the viable strategies that have to be adapted to tap the immense potential
of the market.
Media reach is a strong reason for the penetration of goods like cosmetics, mobile phones,
etc., which are only used by the urban people. Increasing awareness and knowledge on
different products and brands accelerate the demand. The rural audience are however
critical of glamorous ads on TV, and depend on the opinion leaders who introduce the
product by using it and recommending it.
Opinion leaders play a key role in popularizing products and influence in rural market.
Nowadays educated youth of rural also influences the rural consumers. Rural consumers are
influenced by the life style they watch on television sets. Their less exposure to outside
world makes them innocent and fascinated to novelties. The reach of mass television media,
especially television has influenced the buying behaviour greatly
Creating brands for rural India
Rural markets are delicately powerful. Certain adaptations are required to cater to the rural
masses; they have unique expectation and warrant changes in all four parameters of
product, price, promotion and distribution.
A lot is already emphasized on adapting the product and price in terms of packaging,
flavouring, etc and in sachets, priced to suit the economic status of the rural India in sizes
like Rs.5 packs and Re.1 packs that are perceived to be of value for money. This is a typicalpenetration strategy, that promises to convert the first time customers to repeated
customers.
The promotion strategies and distribution strategies are of paramount importance. Ad
makers have learnt to leverage the benefits of improved infrastructure and media reach.
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The television airs advertisements to lure rural masses, and they are sure it reaches the
target audience, because majority of rural India possesses and is glued to TV sets!
Distributing small and medium sized packets thro poor roads, over long distances, into deep
pockets of rural India and getting the stockiest to trust the mobility is a Herculean task.
Giving the confidence those advertisements will support. Sales force is being trained to win
the confidence of opinion leaders. Opinion leaders play an important role in popularizing the
brand. They sometimes play the role of entry barriers for new products.
The method of promotion needs to be tailored to suit the expectations of the market.
Techniques that have proved to be successful are Van campaigns, edutainment films,
generating word of mouth publicity through opinion leaders, colourful wall paintings. The
Wide reach of television has exposed the other wise conservative audience to
westernization. Panchayat televisions in Tamilnadu carries message that are well received
and contribute to community development.
Dynamics of rural markets differ from other market types, and similarly rural marketing
strategies are also significantly different from the marketing strategies aimed at an urban or
industrial consumer. This, along with several other related issues, have been subject matter
of intense discussions and debate in countries like India and China and focus of even
international symposia organized in these countries.
Rural markets and rural marketing involve a number of strategies, which include:
* Client and location specific promotion
* Joint or cooperative promotion
* Bundling of inputs
* Partnership for sustainability
Client and Location specific promotion involves a strategy designed to be suitable to the
location and the client. Joint or co-operative promotion strategy involves participation
between the marketing agencies and the client. 'Bundling of inputs' denote a marketing
strategy, in which several related items are sold to the target client, including arrangements
of credit, after-sale service, and so on. Media, both traditional as well as the modern media,
is used as a marketing strategy to attract rural customers.
Partnership for sustainability involves laying and building a foundation for continuous and
long lasting relationship.
Innovative media can be used to reach the rural customers. Radio and television are the
conventional media that are reaching the rural audience effectively. But horse cart, bullock
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cart and wall writing are the other media, which can carry the message effectively to the
rural customers.
Rural marketing is an evolving concept, and as a part of any economy has untapped
potential; marketers have realized the opportunity recently. Improvement in infrastructure
and reach, promise a bright future for those intending to go rural. Rural consumers are keen
on branded goods nowadays, so the market size for products and services seems to have
burgeoned. The rural population has shown a trend of wanting to move into a state of
gradual urbanization in terms of exposure, habits, lifestyles and lastly, consumption
patterns of goods and services. There are dangers on concentrating more on the rural
customers. Reducing the product features in order to lower prices is a dangerous game to
play.
http://www.edocfind.com/download/ppt/MEDIA%20AND
%20RTI/aHR0cDovL3d3dy5ydGkub3JnLmluL0RvY3VtZW50cy9DYXNlJTIwU3R1ZGllcy9
QcmVzZW50YXRpb25zL1JUSSUyMFBPV0VSLU9jdC0xL01lZGlhJTIwYW5kJTIwUmlnaHQl
MjBUbyUyMEluZm9ybWF0aW9uLnBwdA
PRICE:-
The Price is the one of components of marketing Mix, along with Promotion,
Product Distribution and Product. The price is usually defined as financially
expressed value of the product or service at the market. Price levels are
forming the public opinion about a specific supplier. For modern shopper the
price is not only the expression of money outflow, but also represent a certain
value, benefit or satisfaction perceived by certain product / service.
The price has specific relationship with other components of marketing mix. Actually the price is the only
component that generates revenue, while other components generate costs. Manufacturing of the
product represent the cost. The distribution of the product also generate the cost. The promotion usually
creates the increase of demand for the product/service, but directly also creates costs. All these costs
needs to be covered through the price.
Still, the goal of the price is not only to cover the basic costs of manufacturing, distribution and
promotion. The function of the price is much more complex and depends on different variables. Goals of
price depends on company's policy against various relationships:
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Profit oriented goals are including three main variables. Profit maximizing has the goal of extraction ofmaximal possible profit. Satisfactory profit goals target the specific profit rate. Return on investment
pricing is primarily focused on direct return of investment to the investor.
Sales oriented goals can have two main targets. Market share approach is targeting a specific pricelevel that should bring the company to the specific position in the market. Sales maximizing prices is
supposed to bring direct increase of profit.
Competit ion variable is very important, therefore the company can adopt several price policies thatshould address the competition in appropriate way. Competition avoiding process have a goal of avoiding
clashes ( price wars ) with competition. Repelling prices policy has the aim of discouraging the
competition from entering the new market or product category. Stabile prices policy is the common price
strategy that brings balance between attractiveness to shoppers and challenge to competition.
Prestige price positioning have relatively high price level. There is a certain segment of customers thatare willing to pay high premium price in order to distinguish themselves from the majority of the market.
These customers are building their lifestyle image by purchasing exclusive and luxury products.
Status Quo is pricing policy when company does not want to make to make disturbances in the market.This is the case with the products that have the specific position in the market, while any bigger
alteration in price policy would not bring much value.
Publ ic relat ionship is one of the elements of company promotion withinactivities of marketing mix. Public relationship represent communication of
company and establishment of relationship with different stakeholder groups:
consumers, employees, shareholder, government and different social groups.
Contemporary market trends require companies to move from occasional communication to continuous
public relationship communication in organized and planned manner. The main goal of public relationship
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is building of prestige and image through formal communication.
The medias for public relationship communication are:
Newspaper & magazine Articles
Press conferences
Sponsored events
Press releases
Animation of Experts for purposes of PR
Publicity is spontaneous manifestation of positive information publishing, not initiated by company.
Publicity is considered as a part of public relationship, since it serve to the common goal. Publicity is
shown through news, stories, newspaper columns, editor's comments, ...
Unfortunately, there is negative publicity too. Negative news, articles or comments can be published
occasionally, as a result of different factors. Negative publicity can result with sales decrease, image
deterioration or even lead to serious business crisis. The goal of public relationship is to alleviate
negative effects of negative publicity by planned PR activity.
The main problem with positive and negative publicity is the fact that there is no real control of media.
The only way of influencing the media and public opinion is choosing a right corporate social
responsibility policy and PR approach that will minimize possibility for negative publicity and maximize
positive public opinion of the company.
BIBLIOGRAPHY:-
http://www.biz-development.com/Marketing/5.7.Marketing-Mix-Promotion.htm
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