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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.