Chapter 7

PROMOTION

In marketing, the word promotion is used in many ways. For instance, it is sometimes used to
refer to a specific activity, such as advertising or publicity. In general sense promotion has been
defined as "any identifiable effort on the part of the seller to persuade buyers to accept the seller's
information and store it is retrievable form"
When a company develops a new product, changes an old one or simply wants of increase sales
of an existing product or service, it must transmit its selling messages to potential customers. In
today’s competitive and volatile environment all marketers communicate with their target
markets. The promotional function of any organization involves the transmission of message to
present, past, and potential customers. At the very least, potential customers need to be made
aware of the existence of a product or service. Eventually, in some way, they should be
influenced to ward purchase.

Promotion is one of the important components of company’s total marketing mix. Its intent is to
inform, persuade and influence people. Promotion involves an ongoing process of communication
between an organization and its target market.
“Promotion is the element in an organization’s marketing mix that serves to inform, persuade and
remained the market of a product and/or the organization selling it, in hopes of influencing the
recipients feelings, beliefs, or behavior” W. J. Stanton

PROMOTION AS COMMUNICATION
As we know that the key elements of the definition of marketing is the exchange. The exchange
process involves communication-the importing of thoughts opinions or information by speech,
writing or signs. Promotional communication is not always directed towards ultimate consumer.
It can be for industrial customers, institutions or sometimes towards middlemen. Promotion is an
important tool for both the profit as well as non profit organizations. As we know that most often
it is being used to sell a product or services, it is also being accepted in the marketing of social
services. Political candidates and ideas.

Who uses What is promotion’s How is promotion Who is

Promotion? Role? Carried on? The target?

Business Industrie
Product Advertisin s
Middlemen
Personalselling
Government Price Promotion Opinion
Publicity leaders
Placement Public
Other relations Other
institutions Consumers

Fig: The Role of Promotion in Marketing Communication

THE COMMUNICATION PROCESS

Promotion involves an ongoing process of communication between an organization and its target
markets.

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 Communication is the process of influencing other’s behaviors by sharing ideas, information and
feeling with them. Two major participants in communication are sender (marketer) and the
receiver.

ENCODING THE MESSAGE CHANNEL DECODING THE

MESSAGE (Advertising media or MESSAGE (compare to
(Ad, display, or sales sales promotion) frame of reference,
promotion) market memory, and
experience)

MESSAGE OR NOISE (competing MESSAGE AS

INTENDED (Sales idea ads, other sales RECEIVED
or proposition) people distractions) (knowledge, beliefs, or
feelings)

FEED BACK RESPONSE

(Sales reports, attitude (Interest, desire or
research) purchase)

Fig. Communication process in promotional programs.

The communication occurs a) when sender transmits the message and b) and a receiver receives
that message and c) the sender and the receiver have a shared meaning.

As illustrated in the figure, fundamentally, there are five elements in the communication process.
A) The Message b) The sender c) The receiver d) Communication channel and e) Feed back.

The message which is being sent by the sender is being encoded into transmitted form and then it
is being passed through channel and then message is being received and decoded. All stages and
be affected by the noise the factor which resist the flow.
THE PROMOTIONAL MIX AND ITS OBJECTIVES
Having considered “who says what to whom and for what purpose”, the next area of concern is
“how”. Developing the promotion mix entails selecting and blending different channels of
communication in order to achieve the promotional objectives of the marketing mix. Typically
promotion objectives might be these:

1) To develop an awareness of, and an interest in, the organization and its
products and services
2) To communicate the benefits of buying a product services
3) To influence eventual purchase of the product or service
4) To build the positive image of the organization
5) To differentiate the product/service from its competitors
6) To remind the people of the existence of the product/service and the
organization
Ideally, these objectives should be quantified as far as possible.

The promotion mix, the one of the four major components also involves the careful blending of
several elements like advertising, sales promotion, personal selling, publicity and public relations
to accomplish the organization’s promotional objectives.

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 a) Personal selling is face to face contact between seller’s representative and buyer. Non
profit organizations, political candidates, firms and individuals use personal selling to
communicate with the public.
b) Advertising: It is paid form of non personal mass communication by an identified
sponsor. The mass media used include print media, direct mail, TV, radio, billboard etc.
c) Sales promotion: sales promotion includes activities that seek to directly induce or
indirectly serve as incentives to motivate, a desired response on the part of the target
customers, company sales people and middleman and their sales force. These activities
and value to the product.
d) Publicity: Publicity is the news carried in the mass media about a firm and its products,
policies, personnel or actions. It is non paid form of promotion [News releases, press
conferences of philosophies]
e) Public Relations: It creates, develops and maintains a bright image of an organization on
the public. It is a planned effort by an organization to influence the attitudes and opinions
of a specific group. The target may be customers, stockholders, a government agency or a
special interest group.

A promotional plan involves the following steps: (Fig. 21.9)

(a) Setting objectives

(b) Identifying the Target Market
(c) Developing a budget
(d) Choosing a message
(e) Determining the Promotional Mix
(f) Selecting the Media Mix
(g) Measuring effectiveness
(h) Following up and modifying the promotion campaign

Establishment Target Budget Message

of objectives identificatio development selection
n

Campaign
Promotion Media mix Measurement of follow-up and
Tool mix effectiveness modification
Fig. 21.9: The Promotion Plan

(a) Setting Objectives: Setting the specific and realistic objectives is the starting point for
any promotional campaign. It is impossible to plan a promotional program unless the
marketing manger knows what goals he is trying to achieve.
(b) Identifying the Target Market: The target market for which the firm wants to promote
should be carefully selected and explicitly defined demographically and psycho
graphically.
(c) Developing a Budget: After the identification of objectives and selection of target
market, the marketing manger has to develop a budget. It i s not a simple task. Each and
every activity is to be defined and how much to spend on each activity is to be specified.
(d) Choosing A Message: After the first three decision are taken, the manger has to think in
terms of preparation of right message to reach the target. The nature of the message will
vary depending upon the goals of the promotion. For example, if the product is in the
introduction stage of product life cycle, the message is more informative.
(e) Determining the Promotional Mix: Often different message themes are developed of
reach promotional tool. For example, the positive corporate image, public relations may

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 be used. Advertising will focus on corporate image, personal selling to interact with the
customers etc.
(f) Selecting the Media Mix: the marketer has to decide which media is to be used for
channeling the message. There are different media like audio, audio visual, Print,
Outdoor and specialty media.
(g) Measuring Effectiveness: After taking the pre-discussed decisions, the marketer is to
ensure that the decision which he is taking would be effective. The effectiveness of
various tools is measured quite differently. Without any defined procedure of measuring
the effectiveness of various tools, it would be difficult to determine whether their
objectives are being met or not.
(h) Following up and Modifying the Promotion Campaign: After measuring the outcome
of the promotional effort, the necessary charges are to be made according to the
requirements. The firm should learn from its mistakes and try that their mistakes should
be avoided in the future.

ADVERTISING

Advertisement has the prominent place among the techniques of mass education and persuasion
on the public. It is not of a modern origin. It has been used form immemorial period. In earlier
periods, advertisement was displayed in the form of signboards, writing on historical buildings or
inscriptions on stones, stone pillars, stone walls etc. The development of printing has greatly
boosted the ideas of advertising through newspapers, magazines, hand-books etc.

A basic responsibility of the marketing manger is to ensure that the company's message reach its
potential customers. A main method by which companies deliver their messages to groups of
customers and, in fact, make their initial contact with most potential customers is through the
advertising.

Advertising is any paid form of non-personal communication through the mass media about a
product or idea by an identified sponsor. It is a powerful promotional tool which individuals,
businesses and non business organizations use for informing, persuading and reminding their
target audiences.

DEFINITIONS

"Any paid form of non personal communication of ideas, goods or services by business firms
identified in advertising message intended to lead to sales immediately or eventually"
American Marketing Association

"Advertising is mass communication of information intended to persuade buyers so as to

maximize profits"

"Advertisement as a machine-made, mass production method of selling, supplements the voice

and the personality of a salesman, just as in the manufacturing, the machine supplements the
hands of the craftsman"

ADVERTISING OBJECTIVES

It is just not enough to manufacture a product. People must be informed of its existence and
should be given good reasons to buy it. This is a job which is sought to be done by advertising.
Without advertising, people will neither be aware of the attributes of the product nor of its price.
Personal selling and other forms of promotions are supported by advertisement. It is the main
objective. The long term objectives of advertising are broad and concerned with the achievement
of overall company objectives.
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 1. To do the entire selling job (as in mail order Mktg.)
2. To introduce a new product (By making brand awareness among potential buyer)
3. To force middlemen to handle to product (Pull strategy)
4. To build brand preference (By making it more difficult for middlemen to sell
substitutes)
5. To remind users to buy the product (retentive strategy)
6. To popularize some change in marketing strategy (change in price, improvement
in the product, etc.)
7. To provide rationalization (i.e., Socially acceptable excuse)
8. To combat or neutralize competitor's advertising

To acquaint buyers and prospects with the new uses of the product (To extend the PLC)

In sum, the primary objective of advertising is to increase sales. The following brief points carry
the objectives:

1. To encourage the potential customers to buy

2. To create an awareness/ introduce new product and services /To inform about the
product's availability
3. To build a good business image
4. To maintain a brand loyalty
5. To introduce price deal /To convince people about the changes in prices
6. To make known the advantage of full use of the product
7. To wipe off the wrong impressions created by competitors.
8. To increase mkt. share
9. To keep good relation with traders
10. To enter into new market
11. To remind the users about the product
12. To combat competitor's advertising
13. To increase the percentage of net profit
14. To retrieve lost sales
15. To make grand and special offer
16. To attract investors

Approaches for setting advertising objectives

Various Approaches for setting advertising objectives

I. DAGMAR Approach

This is the most popular method of setting advertising goals and was proposed by Russel M.
Colley. DAGMAR stands for defining Advertising Goals for Measured Advertising Results.

Coolley out lined this method for turning advertising objectives into specific measurable goals.
The theory is based on the following premise: "The consumer passes through a hierarchy of
stages between the time when the first idea about the product comes to his mind and when he
actually buys"

For example, an advertisement of a generator should high light fuel efficiency, easy start, after
sale service and readily availability of spares.

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 - Initially it would inform us and we shall become aware of such a product. Then through
product endorsement and trial we shall develop a favorable attitude and ultimately we
shall buy the product.
- To set advertising objectives, we shall need to identify the stage in which the product is
available and then we can set the objective.

DAGMAR
Communication
Spectrum

The forces of Mktg.

- Advtg. promotion
The forces that oppose sales
- Packaging
Action - Competition
- Exhibition
Conviction - Memory lapse
- Promotion
Comprehension - Sales Resistance
- Personal selling
Awareness - Market Attrition
- Publicity
Unawareness (Decline)
- Product Design
- Availability
- Display
- Price

II. PRIMARY AND SELECTIVE DEMAND THEORY

According to this approach the advertising objective is categorized into two ways: information
Advertising and persuasive Advertising.

a) Information advertising

This advertising is important when the product is in the pioneering stage and the objective
is to build primary demand. Primary demand is sought to be created especially by concept
selling for a category of products. Some particular conditions are required necessarily to
advertise for creating a primary demand.

- the existence of a strong and basic consumer need

- their must be strong buying motives in existence

Besides social trends, design, price etc. also play a crucial role at this stage

For example, the manufacturer of VIM initially had to inform potential consumers of VIM Bar's
economic benefits and many other advantages.

b) Persuasive Advertising

This becomes important in the competition stage, where a company's objective is to build
selective demand for a particular brand. Most advertising falls in this category. Persuasive
advertising is under taken when a strong primary demand is in existence. While the product

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 should be distinctive, the benefits should be visible. Also strong brand consciousness must
be generated.

c) Surrogated Advertising

In India, advertising for liquor and cigarette is not allowed on T.V. However, to advertise their
products, liquor companies very often advertise for their soda which bears the same name as their
liquor.

MEDIA PROFILE FOR ADVERTISING

Role of Media: Media has a vital role in the process of advertising communication. Effective
advertising is possible only if suitable media are available. The appropriateness of media used
vis-à-vis the target audience and their reach are also of crucial importance.

Advtg. Message Media Mix Target Audience

↓
Result will reflect on the sale graph of the company Maximum Reach

A substantial portion of the advertising budget allocation to the mass media is spent on buying
space and time. Therefore, media decisions assume a considerable importance when financial
implications come to the fore.
DEVELOPING AN ADVERTISING PROGRAM

Because the media costs are high, advertising decisions must be made carefully using a
systematic approach. Advertising Decision Process is divided into three parts.

1. Developing

This part focuses on 4ws.

- who is target Audience?
- what are Advertising objectives?
- when should Advertising be run?
- where should Advertising be run?

2. Executing

This part tries to ensure hat advertising is not wasted. This included

a. Pre-testing of the advertising copy and b) actually carrying out advertising.

Pre testing is carried to determine whether the advertisement communicates the intended message
or to select between alternative versions of the advertisement. Pre tests are conducted before the
advertisements are placed in any medium. Pre testing comprises of.

i) Portfolio Tests. Portfolio tests are used to test copy alternatives. The test
advertisement is placed in portfolio with several other advertisements and stories, and
consumers are asked to read through the portfolio. After words subjects are through
the portfolio. After words subjects are often asked for their impressions of the
advertisements on several evaluative scales such as from “very informative” to “not
very informative.

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 ii) Jury Tests. Jury tests involve showing the advertisement copy to a panel of
consumers and having them rate how they liked it, how much it drew their attention,
and how attractive they thought it was. This approach is similar to portfolio test in
that consumer reactions are obtained. However, unlike the portfolio test a test
advertisement is not hidden within other tests.
iii) Theater tests. This is most sophisticated form of pre-testing. Consumers are invited to
view new television shows or movies in which test commercials fare also shown.
Viewers register their feelings about the advertisements either on hand-held
electronic recording devices used during the viewing or on questionnaires afterward.

b. Carrying out the Advertising Program

The responsibility for actually carrying out the advertising program can be handled in one of
the three ways, the full-service agency (does research, selects media, develops copy and
produces out work), Limited Service agency (Specializes in one aspect of creative process,
usually provides creative product work and buys previously unpurhcased media space) and in
House agency (provides range of services, depending on company needs).

3. Evaluating the Advertising Program

This comprises of:

a) Post testing Advertising

And advertisement may go through post tests after it has been shown to the target audience to
determine whether it accomplished its intended purpose. Five approaches common in post testing
are
i) Aided Recall (Recognition – Reader ship)

The respondents are asked whether their previous exposure to it was through reading, viewing, or
listening. The starch test uses aided recall to determine the percentage:-
- who remember seeing a specific magazine advertisement (Noted)
- who see or read any part of advertisement identifying the product or brand seen
associated.
- Who read at least hald of the advertisement (read most)

Elements of the advertisement are them tagged with the results.

ii) Unaided Recall. Asking people if they can remember seeing any advertisements with
in an identified product category. (what advertisements do you remember seeing yesterday?).
Respondents are asked without any prompting to determine whether they saw or heard
advertising messages.
iii) Attitude tests: Respondents are asked questions to measure changes in their attitudes
after an advertising campaign, such as more favorable attitude toward advertisement.
iv) Inquiry Tests. Additional product information, product samples, or premiums are
offered to an advertisement’s readers or viewers. Advertisements generating the most inquiries
are presumed to be the most effective.
v) Sales tests. Sales tests involve studies such as controlled experiments (for example,
using radio advertisements in one market and newspaper advertisements in another and
comparing the results) and consumer purchase tests (measuring retail sales that result form a
given advertising campaign).

b) Making needed changes

Results of post testing the advertising copy are used to reach decision about change in the
advertising program.

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EFFECTIVENESS OF ADVERTISING

Advertising can be effective if

1. clear and unambiguous messages are used

2. build on word of moth
3. provide tangible cues (personalities or physical evidence)
4. promise what can be delivered
5. aim advertising at employees too
6. remove post purchase anxiety.

ADVERTISING STRATEGY

Advertising strategy. Advertising strategy consists of two major elements – creating advertising
messages and selecting advertising media.

1. Creating Advertising Messages

Two advertisers can spend the same amount on advertising, yet have very different results.
Advertising can succeed only if commercials gain attention and communicate well.

- The changing Message Environment. Good advertising messages are especially important
in to day’s costly and cluttered advertising environment. More no of Tv stations and
thousands of magazines.
- Message strategy. Message strategy statements tend to be plain, start forward out lines of
benefits and positioning points that eh advertiser wants to stress.
- Message execution: The import of the message depends not only on what is said, but also
on how it is said. The advertiser now has to turn the “big idea” into an actual
advertisement execution that will capture the target markets attention and interest.

Any message can be presented in different executive styles,

 Slice of life (Two mothers discussing the nutritional benefits of peanut butter at a picnic)
 Life style (how product fits in with particular life style.)
 Fantasy (creates fantasy around the product or product use.)
 Mood or image (builds mood or image around the product, such as beauty love etc.)
 Musical (This simple shows one or more people or cartoon characters singing song about
the product)
 Personality symbol (creates character that represents product)
 Technical expertise (This style shows the company’s expertise in making the product)
 Scientific evidence (Presents survey or scientific evidence that brand is better e.g. crest
tooth paste better than other brands at fighting cavities)
 Testimonial evidence (This style feature a highly believable or likeable source that
endorsees the product) ordinary people saying how much they like product.

2. Selecting Advertising Media

The major steps are

i) Deciding on reach, frequency and impact

ii) Choosing among major media types
iii) Selecting specific media vehicles
iv) Deciding on media timing

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 Media Planning

Advertising becomes effective only when it reaches the desired audience. The value of
advertisement is determined by the number of persons selling it, reading it and thus becoming
aware of the product or the service.

Media Selection

Each media has "specific function to perform and its selection depends upon the requirements of
the job. Media can be divided into two categories

Main Media- also called above the line use single group media e.g. news-papers, TV, Radio,
Magazines, etc.
Secondary Media - also called below the line media, eg., hoarding, direct mail, point of
purchase mtl. etc. these are also known as reminder media.

Media Planning Process

The various steps involved are

1. Media planning and buying space is the financial side of Advtg.

2. It interacts with the creative process to form an important part of the over all mktg.
process
3. Where as the creative process is a descriptive process, the media process is one of
transforming their description to the public, ie., a vehicle of communication.
4. The primary responsibility of media practitioners is to ensure that the advertising
message is seen, read or recognized by the target audience. We believe this is a crucial
role as there is no point in having the best advertising if no body sees the advertisement.

Role of Media in the Advertising process

Mktg. objectives

Mktg. Strategy

Advtg. Objectives

Advtg. Strategy

Creative Strategy Media Strategy

Impact on tgt. audience

Product sales

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 Fulfilling Advertising and Mktg.
objectives

MEDIA SELECTION DECISIONS

While selecting the advertising media the following factors should be borne in mind.

a. Cost of advertisement,
b. Nature of the product
c. Comparison of the medium selected with other media
d. Popularity of media
e. Characteristics of consumers, and
f. Competition in the market.

TYPES OF MEDIA FOR ADVERTISING

Print Media Electronic Media Outdoor Media Direct Mail

- Newspapers - TV - Billboards - Price Lists
- Magazines - Video - Hoardings - Catalogues
- Folders - Radio - Balloons - Personal letters
- Product Literature - Voice mail - Advertising on - Circulars
transport means
- Journals - Cinema - Electric Display

STRENGTHS AND WEAKNESSES OF EACH TYPE OF MEDIA

A. Press

Advantages Disadvantages
 News value and immediacy  Casual readers not reading the
 Area and ethnic selectivity whole magazine or newspaper
 Wide market coverage  High cost of brand usage
 Advertisement flexibility  Little demographic selectivity
 Allow long message  Short message life
 Moderate cost  Suitable only for educated class
 Publication with pictures possible  Poor quality of printing creating
 Continuous publication readers' aversion
 Lack of faith in what appears in
the Press.

B. Magazines

Strengths Weaknesses
 Long shelf life  Small reach
 Durability of ad message  Slow exposure build up
 Ad size flexibility  Less impact than T.V
 Quality reproduction  Lack of urgency
 Demographic selectivity
 May cater to special interest groups

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  More affluent audience
 Increased response of the consumers
in response to the magazine ad.
 Possibilities of reproducing full
color effect.

C. Outdoor-Hoardings, etc.

Advantages Disadvantages
 Attractive  Limited scope
 Long life  Lack of personal touch
 Advertising at specific places

D. Direct Mail

Advantages Disadvantages
 Possibilities of covering a wide  Difficult to obtain the right mailing
audience lists.
 Economy  Possibility of misleading
 Flexibility information
 Easy to answer  Frequent changes in mailing list
 Personal Touch

E. Radio

Advantages Disadvantages
 Low production cost  No visual information
 Wide coverage  No visual impact
 High frequency possible  Low recollection
 Audience segmentation like  Short message life
 Flexibility of timing  Small audience per station
 Catching attention of listeners  Very often message not clear
 Low attention value
 Lack of detailed advertising

F. Television

Strengths Weaknesses
 Attractiveness  Relative high cost
 Wide reach  Very brief, lacking details
 Opportunity for high frequency  Short message life
campaign  production expensive and
 Demonstration "how it works" complicated
 prestige  Long production lead time
 Emotionally involving  Lack of TV ownership by all.

G. Cinema

Advantages Disadvantages
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  Allow product demonstration  Short message life
 Emotionally involving  Cinema losing popularity because of
 Appropriate for products catering cable operation.
to low income segments  Slow exposure build up
 Long production lead time.

Effectiveness of each model of media

Model Verbality Visual Color Processing Reach Frequency

Impact Time
TV Low High High Low High Very High
Radio High - - Low high High
Newspapers High OK - High High Low
Magazines High High High High Low Low
Outdoor Can be high High High High Low Low
POP Can be high High High High Low Low
Direct Mail Very High High High High Very Depends Very low

Clients' Expectations

 Account Service: Responsive - prompt - accessible - listens - economical.

 Creativity Review: Provide innovative proposals - ideas - visuals.
 Production Review: Quality - timeliness - accuracy - economical.
 Media Planning: Innovative media strategy - capable of coping with the budget changes
- provides media trends update.
 Buying Media Space: explore cost effective alternatives - ability to negotiate attractive
terms.
 Market Research: Relate existing studies to the specific situation of the client - organize
timely and meaningful research.
 Retail Advertising and Sales promotion: Innovative ideas - POP material, creative
events - timeliness - economical.
 Financial Control: Detailed estimates - accuracy in billing - reasonable rates - mutual
trust.

PERSONAL SELLING
Personal Selling has been defined as the oral presentation to prospective customers of one’s
goods and services for the purpose of ultimately making sale. Personal selling involves the two-
way flow of communication between a buyer and seller, often in a face to face encounter,
designed to influence a person’s or a group’s purchase decision. How ever, with advances in
telecommunications, personal selling also takes place over the telephone, through video
teleconferencing, and through interactive computer links between buyer and sellers.
Personal Selling remains a highly human-intensive activity despite the use of technology. In
personal selling, some kind of a lasting and social relationship develops. This personal touch can
only come in personal selling. Another advantage in personal selling is that it can be used for
consumer as well as for industrial goods.

When personal selling is required

1. When the product requires some kind of demonstration.
2. When the market under consideration is comparatively smaller.
3. For the specific needs of the consumer, i.e., in case of industrial goods.
4. For selling a service, e.g., five star hotels, banking, etc., sales people have got an edge.
5. When you have got an edge.
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 6. When you have got big orders.
7. When confidence is to be built up in the minds of customers.
Objective of Personal Selling
Objectives of personal selling can be briefly stated as sales, profits and growth for the
organization in order to ensure its survival. The following are qualitative objectives achieved
through personal selling:

1. To carry out the complete selling job when some elements of the promotion mix are
missing.
2. To serve the existing customers efficiently and effectively.
3. To look for new prospective customers for new/more orders.
4. To encourage the existing customers for their co-operation in the promotion of the
various products of the company.
5. To keep the consumers informed time after time about the various changes in aspects of
the marketing strategy and the product line of the company.
6. To provide complete assistance to the customers for selling the product line.
7. To provide proper assistance and advice to the customers regarding certain complicated
products and the products for specific uses.
8. To assist and advise regarding the training programmes for the sales personnel of the
middlemen/dealers.
9. To help the dealers in their management and related problems.
10. To collect recent information regarding the market and report this to the company
(Information of company's use).
The quantitative objectives are assigned for a short term and they keep on changing depending
upon the market situation from time to time. They are:

1. To retain the existing market share and try for increasing it.
2. To increase the sales volume and hence the profits. it also includes the striking of a
proper balance between the different elements of the marketing mix of the different
products of the company.
3. To make attempts to open new accounts and maintain the existing ones properly,
effectively and efficiently.
4. To exercise expense management and to keep the expenses within limits.
5. To achieve the targets and try to exceed them.

The personal Selling Process

Prospecting Pre-approach
Identifying Potential
Customers

The Approach Flow up

Presentatio Closing
n
Approach
Demonstration

MARKETING POLICIES AND PERSONAL SELLING STRATEGY

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These marketing policies determine the selling strategies in order to achieve the qualitative and
quantitative personal selling objectives. These strategies provide guidance on what to sell, whom
to sell, etc, decisions. These questions give answer to the kind and size of the sales force required
and also the pricing policies to be followed, etc. The kind of sales personnel can be determined by
carrying out the following analysis:
1. Product Market Analysis
2. Sales person's order securing analysis
3. Choice of the basic selling style:
(a) Trade selling
(b) Missionary selling
(c) Technical selling
(d) New business selling
The size of the sales force can be determined by utilizing one or more of the following methods
in combination with each other:
1. Work Load Method
2. Sales Potential Method
3. Incremental Method
INDIVIDUALIZING SELLING STRATEGIES TO CUSTOMER
The acid test of the appropriateness of personal selling strategy comes when particular
salespersons interact with particular customers. The management makes its first key decision on
personal selling strategy. When it determines the size of the company's sales force, each
salesperson must individualize his own dealings either each customer. The decisions of the above
kind are implemented after the required kind and size of the sales force has been recruited, trained
and assigned their fields and territories. The strategies

should be such so as to benefit the customer and help the firm in achieving its objectives. The
strength of the sales force depends upon its communication and convincing power to persuade the
customer to buy the product. The approach of the sales person towards different buyers is a
matter of his selling skills. The skill is the function of the preplanning and performance of the call
of the sales person itself.

The individual members of the sales force determine the success and failure of the company's
overall personal selling strategy and sales management. The efficiency and effectiveness of the
sales persons in accomplishing their tasks gives the effectiveness of the sales management in the
personal selling field. The sales persons should combine their efforts in such a way so as to
achieve their personal objectives through the achievement of the firm's objectives.

Organizing the sales force is a typical sales management task, since it has direct impact on the
sales manger's job performance. The universal adoption of the marketing concept has meant that
most companies have reorganized their sales and marketing activities to reflect the stronger
commitment to their customers. This trend has enhanced the importance of sales force
organization.

SALES PROMOTION
SALES PROMOTION has more restricted and technical meaning and has been defined by
American Marketing Association as follows;

"Those marketing activities, other than personal selling, advertising and publicity, that stimulate
consumer purchasing and dealer effectiveness, such as display, shows and exhibitions,
demonstrations, and various non-recurrent selling efforts not in the ordinary routine"

This definition illustrates that the term sales promotion is used for categorizing selling activities
that can not be conveniently classified as one of the other types of promotion.

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Some other definitions are:

"Sales promotion means any steps that are taken for the purpose of obtaining or increasing sales"
A.H.R. DELENS

"Sales promotion as a tool of market's promotion gives rise to increase in product usage as well as
expansion of markets for a product or introduction of a new product"
JOHN 1. LUICK AND WILLIAM LEE ZIEGLER

"Sales promotion represents those marketing efforts that are supplementary in nature, are
conducted for limited period of time and seek to induce buying"
DAVIS

In simple words, sales promotion can be defined as "short term incentives given to consumers to
encourage their purchasing"

CLASSIFICATION OF SALES PROMOTION

There are three types of sales promotion

1. Customer promotion
2. Trade promotion
3. Sales force promotion

Sales Promotion

The Trade
Trade
Promotion
Company
sales Force
Sales force
Target Mktg. Promotion
Customer
Promotion

1. Customer Promotions: here the target beneficiaries are the customer. Here offers are
meant for the ultimate customers. Such an offer is always for a short period. If the period
increases the validity of the promotional measures decreases.
2. Trade Promotions: Here the target is middlemen. They are being offered the incentives
with the hope that they will stock more and push the product to the customers. This type
of sales promotion is a very important effort to seek cooperation of the middlemen.

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 3. Sales force Promotion: This is targeted at sale force in order to increase and boost up the
morale of the sales people. They are being offered commissions, bonus and other
incentives for increased sales so that they work dedicatedly.

Sales promotion is supplemental ingredient of the promotional Mix and is not as visible as
advertising, but more than $100 billion is spent annually on sales promotion in U.S.

OBJECTS AND FUNCTIONS OF SALES PROMOTION

From the classification three objects of sales promotion can be derived:

1. To influence the customers for purchasing the product or service instantly because the
sales promotion time is very limited and if the customers do no respond to it quickly, they
may loose the offer.
2. To encourage the middlemen to buy and store more units of the products by offering
them incentives for bulk purchases and increased sales.
3. To motivate the salesmen to participate enthusiastically in the work. It is sales person
who are in direct contact with the customers and if salespersons get satisfied, they can
push the product or service. Often customers decide to purchase or not to purchase on the
basis of the opinion of the sales person.

Table Sp-1 Summarizes the objectives of sales promotion falling in the above discussed
three broad categories.

Table Sp-1 Sales Promotion Objectives

1. To encourage trial purchases of new products by consumers

2. To encourage middlemen to increase their order size
3. To encourage consumers to buy several units of the product at a one time.
4. To encourage middleman's sale force to give extra selling effort to generate more
feed back from retailers.
5. To encourage retailers to devote more shelf space to the product.
6. To encourage wholesalers to cooperate in a manufacturer's effort to generate more
feedback from retailers.
7. To encourage voters to vote for particular candidate
8. To encourage company sales personnel to increase sales effort for a new product.
9. To acquaint consumers or industrial users with product modifications.
10. To identify new consumers or industrial users
11. To develop a mailing list
12. To build customer loyalty
13. To encourage brand switching by consumers
14. To encourage off season purchases by retailers
15. To gain entry in to new retail outlets.

PLANNING FOR SALES PROMOTION PROGRAMME

Developing sales promotion plan involves the following steps as exhibited in the figure.

1. Defining the Sales Promotion Target

↓

Setting Sales Promotion Objectives

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 2.

3. Setting the Sales Promotion Budget

4. Developing the Sales Promotion Strategy

↓
5.
Selecting Type of Sales Promotion
↓
Coordinating the Plan
6.

Evaluating Sales Promotion

↓ Effectiveness
7.

fig. SP2 - Steps in sales promotion.

1. Defining the Sales Promotion Target

In this step potential customers for the sales promotion are decided. It can be directed towards
ultimate end users, or to wards its own sales force, to wards its middle men and/or middlemen’s
sale’s personnel.

 Coupons  Sales meetings and auxiliary sales

 Cents off offers materials
 Money and refund offers  Sales contests
 Premiums  Point-of-purchase decisions
 Contests  Trade shows
 Additional product deals  Store demonstrations
 Trading stamps  Special services
 Exhibitions  Dealers contests and premiums
 Dealer sales people incentives

2. Defining sales promotion objective

From the target customers’ sales promotion objective can be defined. Sales promotion
objectives are drawing from the overall objectives of the promotion. Different types of
objectives can be set.
3. Setting the Budget: After deciding the sales promotion target and objectives, the budget for
sales promotion activities are decided. Sales promotion budget must be approved before the
campaign is commenced. The budget must highlight the total administrative cost of promotion as
well as the total incentive cost.

4. Developing sales Promotion strategy:

Numerous decisions are to be taken in developing a sales promotion strategy like the size of the
incentive, duration of incentive and timing of promotion. A customer would be attracted to the
product if the incentive offered to him is substantial.

Push strategy or pull strategy can be chosen.

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 b) Push strategy: A sales promotion program aimed primarily at channels of distribution is
called a push strategy – Production – Distribution – Wholesaler – Retailer – Consumer
c) Pull Strategy: With pull strategy, promotion is directed to ultimate consumers. The
objective is to motivate than to ask retailers for the product. This strategy relies heavily
on advertising and various firms of sales promotion such as samples, free gifts etc

Producer Wholesaler Retailer Consumer

Product flow
Promotion flow

5. Selecting the Type of Sales Promotion

All the sales promotion methods can be categorized as discussed above. In these categories
the sales promotion methods range far and wide. While choosing among the various sales
promotion methods the following factors are to be considered.
a. Sales promotion objectives
b. Target customer characteristics
c. Marketing channel characteristics
d. Product characteristics
e. Competition (Competitors prices and offers)
f. Economic Environment.

6. Coordinating the plan: As we know that the elements of promotion mix supplement the
efforts of each other so it is essential that sales promotion activities must be well coordinated with
other elements of the promotion mix like:

a) Advertising and sales promotion program should be integrated

b) For the special events, publicity should be generated
c) The sales force should be communicated with all promotions well in
advance and trained to implement them.
d) Sales promotions should be consistent with channel members
objectives and activities.

7. Evaluating Sales promotion Effectiveness:

Before implementing the sales promotion, pre-testing the program is to be done. Pre-testing
means testing the sales promotion program before it is being implemented. It is judicious to test
the program before its implementation to find out whether the tools are appropriate and the size
of incentive is sufficient.

PUBLIC RELATIONS
Public relation is a management tool designed to favorably influence attitudes to wards an
organization, its products, and its policies. It is concerned with building good relations with the
company’s various public by obtaining favorable publicity, building up good “corporate image”
and handling or heading off unfavorable rumors, stories or events.

Public relations is a much broader concept that includes publicity as well as many other activities.
Public relations may perform any or all of the following functions.

1. Press relations or press a gentry- creating and placing newsworthy information in the
media to attract attention to a person, product, or service.
2. Product publishing: Publishing specific products
3. Public affairs: Building and maintaining national or local community relations
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 4. Lobbying: Building and maintaining relations with legislators of government officials
5. Investor relations: Maintaining relationship with share holders and other in the financial
community
6. Development: Public relations with donors or members of non profit organizations to
gain financial or volunteer support.

Major Public relations tools

- News
- Speeches
- Special events – news conferences-press tours, grand openings fire with display,
displays multimedia presenters,
- Written material – reports, brochures architects, news letter etc
- Public service alternatives

Major Public relation decision

1. Setting public relations objects
2. choosing public relation messages and vehicles
3. implementing public relations plan
4. evaluation public relations results

Publicity as a form of public relations

Publicity is any communication about an organization, its products, or policies through media that
is not paid forty the organizational. Publicity usually takes the form of a news story appearing in
a mass media or an endorsement provided by an individual, either informally or in a speech or
interview (this is good publicity). There is also bad publicity (highlighting bad things about the
product/service and company).

Benefits of publicity
1. Lower cost than advertising or personal selling
2. Increased readership
3. More information
4. Timeliness( company can put news release very quickly,

Limitations
1. Loss of control over the message
2. Limited exposure
3. Publicity is not free

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PROMOTIONAL MASS V/S PAYMENT STRENGTHS WEAKNESSES
ELEMENT INTER
PERSONAL
Advertising Mass Fees paid for  Efficient means for  High absolute
space or time reaching large costs
numbers of people  Difficult to
receive good
feed back
Personal Selling Interpersonal Fees paid to  Immediate Feed  Extremely
sales people as back expensive per
either salaries  Very persuasive exposure
or commissions
 Can select
audience
 Can give complex
information
Publicity Mass No direct  Often most  Difficult to get
payment to credible source in media
media consumer’s mind cooperation
Sales Promotion Mass Wide range of  Effective at  Easily abused
fees paid changing behavior  Can lead to
depending on in short run promotion wars
promotion  Very flexible  Easily
selected
duplicated
Fig. The Promotional Mix

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