CHAPTER SEVEN

PROMOTION

The Meaning of Promotion

Promotion has been defined as the coordination of all seller initiated efforts to set up channels of
information and persuasion in order to sell goods and services or promote an idea. While implicit
communication occurs through the various elements of the marketing mix, most of an
organization’s communications with the marketplace take place as part of a carefully planned
and controlled promotional program. The basic tools used to accomplish an organization’s
communication objectives are often referred to as the promotional mix.

The Promotion Mix Elements

A company's total marketing communications mix—also called its promotion mix consists of the
specific blend of advertising, personal selling, sales promotion, public relations, and direct
marketing tools that the company uses to pursue its advertising and marketing objectives. Each
promotion tool has unique characteristics and costs. Marketers must understand these
characteristics in selecting their tools. The company now must divide the total promotion budget
among the major promotion tools— advertising, personal selling, sales promotion, public
relations, and direct marketing. The concept of integrated marketing communications suggests
that it must blend the promotion tools carefully into a coordinated promotion mix. But how does
the company determine what mix of promotion tools it will use? Companies within the same
industry differ greatly in the design of their promotion mixes. We now look at factors that
influence the marketer's choice of promotion tools.

Sales Promotion

Sales promotion is generally defined as those marketing activities that provide extra value or
incentives to the sales force, the distributors, or the ultimate consumer and can stimulate
immediate sales. Sales promotion includes a wide assortment of tools—coupons, contests, cents-
off deals, premiums, and others—all of which have many unique qualities. They attract
consumer attention, offer strong incentives to purchase, and can be used to dramatize product
offers and to boost sagging sales. Sales promotions invite and reward quick response—whereas
advertising says, "Buy our product," sales promotion says, "Buy it now." Sales promotion effects
are often short lived, however, and often are not as effective as advertising or personal selling in
building long-run brand preference.

Sales promotion is generally broken into two major categories: consumer-oriented and trade-
oriented activities.

Consumer-oriented sales promotion is targeted to the ultimate user of a product or service and
includes couponing, sampling, premiums, rebates, contests, sweepstakes, and various point-of-
purchase materials. These promotional tools encourage consumers to make an immediate
purchase and thus can stimulate short-term sales. Trade-oriented sales promotion is targeted
toward marketing intermediaries such as wholesalers, distributors, and retailers. Promotional and
merchandising allowances, price deals, sales contests, and trade shows are some of the
promotional tools used to encourage the trade to stock and promote a company’s products.

Among many consumer packaged-goods companies, sales promotion is often 60 to 70 percent of

the promotional budget.

In recent years many companies have shifted the emphasis of their promotional strategy from
advertising to sales promotion. Reasons for the increased emphasis on sales promotion include
declining brand loyalty and increased consumer sensitivity to promotional deals. Another major
reason is that retailers have become larger and more powerful and are demanding more trade
promotion support from companies

Public Relations and Publicity

Public relations is defined as “the management function which evaluates public attitudes,
identifies the policies and procedures of an individual or organization with the public interest,
and executes a program of action to earn public understanding and acceptance.”

Public relations generally has a broader objective than publicity, as its purpose is to establish and
maintain a positive image of the company among its various publics. Public relations uses
publicity and a variety of other tools—including special publications, participation in community
activities, fund-raising, sponsorship of special events, and various public affairs activities—to
enhance an organization’s image. Organizations also use advertising as a public relations tool.

Traditionally, publicity and public relations have been considered more supportive than primary
to the marketing and promotional process. However, many firms have begun making PR an
integral part of their predetermined marketing and promotional strategies. PR firms are
increasingly touting public relations as a communications tool that can take over many of the
functions of conventional advertising and marketing

Public relations are very believable—news stories, features, and events seem more real and
believable to readers than ads do. Public relations can also reach many prospects who avoid
salespeople and advertisements—the message gets to the buyers as "news" rather than as a sales
directed communication. As with advertising, public relations can dramatize a company or
product. Marketers tend to under use public relations or to use it as an afterthought. Yet a well-
thought-out public relations campaign used with other promotion mix elements can be very
effective and economical.

Major functions of Public Relations

Public relations involves building good relations with the company’s various publics by
obtaining favorable publicity, building up a good corporate image, and handling or heading off
unfavorable rumors, stories, and events. Major functions are:

1) Press relations or press gentry.

2) Product publicity.
3) Public affairs.
4) Lobbying.
5) Investor relations.
6) Development.

Public relations are used to promote products, places, ideas, activities, organizations, even
nations.
The Role and Impact of Public Relations

Public relations can have a strong impact on public awareness at a much lower cost than
advertising. Despite its potential strengths, public relations are often described as a marketing
stepchild because of its limited and scattered use. This may be changing, however. Many
companies today are looking for public relations to take a more active role in marketing and
promotion planning.

Marketing public relations departments are being formed. Public relation tools are being used by
the companies in evaluating public attitudes, identifying the issues of public concern and to
execute the different programs that can gain public acceptance. It means that the public relations
is that marketing function which evaluates public attitudes, identifies areas within the
organization that the public may be interested in, and executes a program of action to earn public
understanding and acceptance.

Major Public Relations Tools

Major tools include:

a) News.
b) Speeches.
c) Special events (mobile marketing).
d) Written materials (such as annual reports, brochures, articles, and company newsletters).
e) Audiovisual materials (such as films, slide-and-sound programs, video and audio
cassettes).
f) Corporate identity materials (such as logos, stationery, brochures, signs, business forms,
business cards, buildings, uniforms, and company cars and trucks).

Companies also improve public relations by contributing time and money to public service
activities. A company’s Web site can be a good public relations vehicle. Consumer and members
of other publics can visit the site for information and entertainment.
Major public relations decisions include:

 Setting public relations objectives.

 Choosing public relations messages and vehicles.
 Implementing the public relations plan.
 Evaluating the results.

Publicity

Publicity refers to non-personal communications regarding an organization, product, service, or

idea not directly paid for or run under identified sponsorship. It usually comes in the form of a
news story, editorial, or announcement about an organization and/or its products and services.
Like advertising, publicity involves non-personal communication to a mass audience, but unlike
advertising, publicity is not directly paid for by the company. The company or organization
attempts to get the media to cover or run a favorable story on a product, service, cause, or event
to affect awareness, knowledge, opinions, and/or behavior. Techniques used to gain publicity
include news releases, press conferences, feature articles, photographs, films, and videotapes.

An advantage of publicity over other forms of promotion is its credibility. Consumers generally
tend to be less skeptical toward favorable information about a product or service when it comes
from a source they perceive as unbiased. For example, the success (or failure) of a new movie is
often determined by the reviews it receives from film critics, who are viewed by many
moviegoers as objective evaluators.

Public information is information about a company’s goods or services appearing in the mass
media as a news item. Stimulation of demand for a good, service, place, idea, person, or
organization by unpaid placement of commercially significant news or favorable media
presentations. Publicity is more credible to consumers than any other promotional mix element
Although publicity is generally thought of as not paid for, firms incur publicity-related expenses
that include the cost of employing marketing personnel assigned to create and submit publicity
releases, printing and mailing costs, and related expenses.
Advertising

Any paid form of non-personal presentation and promotion of ideas, goods, or services by an
identified sponsor is termed as advertising.

Advertising can reach masses of geographically dispersed buyers at a low cost per exposure, and
it enables the seller to repeat a message many times. For example, television advertising can
reach huge audiences. Beyond its reach, large-scale advertising says something positive about
the seller's size, popularity, and success. Because of advertising's public nature, consumers tend
to view advertised products as more legitimate. Advertising is also very expressive—it allows
the company to dramatize its products through the artful use of visuals, print, sound, and color.
Advertising also has some shortcomings. Although it reaches many people quickly, advertising is
impersonal and cannot be as directly persuasive as company salespeople. For the most part,
advertising can carry on only a one-way communication with the audience, and the audience
does not feel that it has to pay attention or respond. In addition, advertising can be very costly.
Although some advertising forms, such as newspaper and radio advertising, can be done on
smaller budgets, other forms, such as network TV advertising, require very large budgets

Advertising decisions

Marketing management must take five important decisions when developing an advertising
program:

A. Setting advertising objectives.

B. Setting advertising budgets.
C. Developing advertising strategy.
 Message decisions.
 Media decisions.
D. Evaluating advertising campaigns.

Setting advertising objectives is the first step in developing an advertising program. These
objectives should be based on past decisions about the target market, positioning, and marketing
mix, which define the job that advertising must do in the total marketing program. An
advertising objective is a specific communication task to be accomplished with a specific target
audience during a specific period of time. Advertising objectives can be classified by primary
purpose as:

1) Informative advertising, which is used to inform consumers about a new product or

feature or to build primary demand.
2) Persuasive advertising which is used to build selective demand for a brand by
persuading consumers that it offers the best quality for their money.
3) Comparison advertising which is advertising that compares one brand directly or
indirectly to one or more other brands.
4) Reminder advertising, which is used to keep consumers thinking about a product. This
form of advertising is more important for mature products.

Personal Selling

The direct presentation of a product to a prospective customer by a representative of the selling

organization is termed as personal selling. Personal selling is the personal communication of
information to persuade somebody to buy something. Personal Selling occurs when a company
representative comes in direct contact with a customer in order to inform a client about a good or
service to get a sale. Personal selling is especially important for business-to-business marketers
since products and services are complex and expensive. In many companies, personal selling is
the largest single operating expense.

Personal selling is the most effective tool at certain stages of the buying process, particularly in
building up buyers' preferences, convictions, and actions. It involves personal interaction
between two or more people, so each person can observe the other's needs and characteristics and
make quick adjustments. Personal selling also allows all kinds of relationships to spring up,
ranging from a matter-of-fact selling relationship to personal friendship. The effective
salesperson keeps the customer's interests at heart in order to build a long-term relationship.
Finally, with personal selling the buyer usually feels a greater need to listen and respond, even if
the response is a polite "no thank you."
These unique qualities come at a cost, however. A sales force requires a longer-term
commitment than does advertising—advertising can be turned on and off, but sales force size is
harder to change.

The Nature of Personal Selling

Selling is one of the oldest professions in the world. Today, most salespeople are well-educated,
well-trained professionals who work to build and maintain long-term relationships with
customers. They build these relationships by listening to their customers; assessing customer’s
needs, and organizing the company’s efforts to solve customer problems. The term salesperson
covers a wide variety of positions and responsibilities. The person can be:

1). An inside order taker.

2). An order getter (a great amount of creative selling skills are demanded in this position).

Personal selling is likely to be emphasized in a promotional mix when the market is concentrated
or the product has a high unit value, is technical in nature, and requires a demonstration. It is also
useful if the product can be tailored to an individual customer’s need, or the product is in the
introductory stage of the product life cycle

The characteristics of personal selling

Personal selling is having flexibility of system it provides one to one contact between the buyers
and sellers. It Identify specific sales prospects the first step in the selling process is prospecting
identifying qualified potential customers. Approaching the right potential customers is crucial to
selling success. Direct contact with the potential buyers provides opportunity to demonstrate the
product and to customers and to answer the queries and questions of the customers. Answer
questions during the presentation step of the selling process, the salesperson tells the product
"story" to the buyer, showing how the product will make or save money. The salesperson
describes the product features but concentrates on presenting customer benefits. Using a need-
satisfaction approach, the salesperson starts with a search for the customer's needs by getting the
customer to do most of the talking. During demonstration there can be certain objections raised
by the customers, which can be overcome at very same time. Customers almost always have
objections during the presentation or when asked to place an order. The problem can be either
logical or psychological, and objections are often unspoken. In handling objections, the
salesperson should use a positive approach, seek out hidden objections, asks the buyer to clarify
any objections, take objections as opportunities to provide more information, and turn the
objections into reasons for buying. Every salesperson needs training in the skills of handling
objections.

The advantages of personal selling over the other promotion tools:

 It can be adapted for individual customers.

 It can be focused on prospective customers.
 It results in the actual sale, while most other forms of promotion are used in moving the
customer closer to the sale.

The disadvantages of personal selling:

 The major disadvantages of the personal selling are:

 Expensive per contact
 Many sales calls may be needed to generate a single sale
 Labor intensive
 It is costly to develop and operate a sales force.
 It may be difficult to attract high-caliber people

Types of the personal selling

There are two types of personal selling:

1) The customers come to the salespeople. Mostly involves retail-store selling. Most
salespeople fall into this category.
2) The salespeople go to the customers. Usually represent producers or wholesaling
middlemen and sell to business users. Some outside selling is relying more on
telemarketing.
 Salesperson Attributes:

Salesperson is an individual ( like: Serving, and Information gathering Salespeople, sales

representatives, account executives, sales consultants, sales engineers, agents, district managers,
marketing representatives, account development reps, etc) acting for a company by performing
one or more of the following activities. Salesperson is an individual acting for a company by
performing one or more of the following activities: Prospecting, The first step in the selling
process is prospecting—identifying qualified potential customers. Approaching the right
potential customers is crucial to selling success. Than during the presentation step of the selling
process, the salesperson tells the product "story" to the buyer, showing how the product will
make or save money. The salesperson describes the product features but concentrates on
presenting customer benefits.

Using a need-satisfaction approach, the salesperson starts with a search for the customer's needs
by getting the customer to do most of the talking. To be more effective in this process sales
person should possess certain attributes, they should be honest should be competent to
demonstrate the products and handle objections should be customer oriented so that customers
can be satisfied, should possess the skills so that potential customers are ready to listen about the
offered products.

Direct Marketing
What is Direct Marketing?

Mass marketers have typically sought to reach millions of buyers with a single product and a
standard message delivered through the mass media. Under this mass-marketing model, most
marketing involved one-way Communications aimed at consumers, not two-way interactions
with them.

Direct marketing consists of direct communication with carefully targeted individual consumers
to both obtain an immediate response and cultivate lasting Customer relationships. Direct
marketers communicate directly with consumers, often on a one to-one, interactive basis. Today,
improved databases permit more sophisticated direct marketing and tailoring of marketing
efforts. Beyond brand and image building, direct marketers seek a direct, immediate, and
measurable consumer response.

Although there are many forms of direct marketing— telemarketing, direct mail, electronic
marketing, online marketing, and others—they all share four distinctive characteristics. Direct
marketing is nonpublic: The message is normally addressed to a specific person. Direct
marketing also is immediate and customized: Messages can be prepared very quickly, and they
can be tailored to appeal to specific consumers. Finally, direct marketing is interactive: It allows
a dialogue between the marketing and the consumer, and messages can be altered depending on
the consumer's response.

Thus, direct marketing is well suited to highly targeted marketing efforts and to building one-to
one customer relationships.

The New Direct Marketing Model

Early direct marketers--catalog companies, direct mailers, and telemarketers--gathered customer

names and sold goods mainly through the mail and by telephone. Today, advancement in
database technologies and new marketing media—especially the Internet and other electronic
channels--direct marketing has undergone a dramatic transformation. Direct marketing may be
perceived as being a distribution function (direct distribution) and a communication function
(direct contact with the consumer). Some firms use direct marketing as a supplemental medium.
However, for many companies today, direct marketing is more than just a supplemental channel
or medium.

The Internet and electronic commerce now constitute a new and complete model for doing
business. Some say the Internet is the foundation for a new industrial order. Some firms (and the
number is growing) use the new direct model as their only approach. Experts envision the day
when all buying and selling will involve direct connections between companies and their
customers. The new model will change customer’s expectations about convenience, speed,
comparability, price, and service.
Benefits and Growth of Direct Marketing

Direct marketing brings many benefits to both buyers and sellers. As a result, direct marketing is
growing very rapidly.

i. Benefits to Buyers

Direct marketing benefits buyers in many ways:

1) It is convenient.
2) Buying is easy and private.
3) Greater product access and selection.
4) Provides a wealth of comparative information.
5) Online buying is interactive and immediate.

ii. Benefits to Sellers

Sellers benefit by:

1) Direct marketing is a powerful tool for customer relationship building.

2) Direct marketing can also be timed to reach prospects at just the right moment.
3) Because of its one-to-one, interactive nature, the Internet is an especially potent
marketing tool. Continuous relationships can be developed.
4) Reduce costs and increase speed and efficiency.
5) Online marketing offers greater flexibility.
6) The Internet is a truly global medium