Promotion Mix

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 Meaning
• Modern marketing calls for more than just developing a good product, pricing it attractively, and
making it available to the target market. Despite of these functions marketers must communicate
their consumers about the product, price and its availability.
• Matching the specific needs and wants of the buyers, putting price on the product and making
product available to the market only cannot help organizations achieve their objectives of profit
unless buyers are communicated about the product, its price and availability.
• All the activities of an organization associated with communicating about its product, price and
availability is promotion.
• Promotion is the component or element of marketing mix that is associated with informing,
persuading and reminding the market about the product and offers, price, and availability which
directly or indirectly affect the consumer behavior and organizational sales.
• According to Philip Kotler :-" Promotion includes all the activities the company undertakes to
communicate and promote its products to the target market".
• promotion is a tool used by company in order to communicate products' features, quality, prices,
ingredients, design, utility, benefits and so on to the actual and potential customers and channel
members. It consists of advertising, personal selling, publicity, sales promotion and public relation
function. These tools are used to increase sales, build brand value and recognition, strengthen market
positioning, and lunch new products.
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Promotion Mix
• A company’s total marketing communication mix – also called as promotion mix
consists of the specific blend of advertising, sales promotion, public relation,
personal selling, and direct marketing tool that the company uses to pursue its
advertising and marketing objectives.
i. Advertising: any paid form of non-personal presentation and promotion of
ideas, goods or services by and identified sponsor.
ii. Sales promotion: Short term in incentives to encourage the purchase or sale
of a product or service.
iii. Public relations: 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.
iv. Personal selling: personal presentation by the firm’s sales force for the
purpose of making sales and building customer relationships.
v. Direct marketing: direct connections with carefully targeted individual
consumers to both obtain an immediate response and cultivate lasting
customer relationships through the use of telephone, mail, fax, e-mail, internet
and other tools to communicate, directly with specific consumers. 3
Factors Affecting Determination of promotion Mix
1. Promotion Objective
2. Promotion Budget
3. Nature of Market
4. Nature of Product
5. Product Life Cycle
6. Promotion Strategy
(push, pull, interpersonal, Mass communication)

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Promotion Objective
• For clear information objective – Advertisement and propagation
• For assurance objective – Personal Selling and Advertisement
• For order/demand objective – Personal selling and Sales promotion
• For reminding objective - Advertisements
Nature of Market
• Small Market – One way method/Personal selling
• Big market – More than one medium
• Consumer Market – Advertisement and Sales promotion
• Industrial Market- Personal sales and Promotional Sale
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Nature of Product
For Consumer goods – Advertisement
For Industrial goods- Personal selling
For low priced goods –Advertisement and Sale promotional
For high priced goods-Personal Selling and Local advertisement
For Special goods – Personal selling and propagation

Product life cycle

@ Introduction stage –Advertisement and propagation

@Growth Stage-Advertisement
@Maturity- Rapid Advertisement
@Decline – Personal selling, Sales Promotion and Propagation 6
Advertisement
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Advertising/ Advertisement
• Advertising is nothing but a paid form of
non-personal presentation or promotion of
ideas, goods or services by an identified
sponsor with a view to disseminate
information concerning an idea, product or
service.
• This is a powerful element of the promotion
mix. Essentially advertising means spreading
of information about the characteristics of
the product to the prospective customers
with a view to sell the product or increase
the sales volume. 9
The main features of advertise are as under:
 It is directed towards increasing the sales of business.
 Advertising is a paid form of publicity
 It is non-personal. They are directed at a mass
audience and nor at the individual as is in the case of
personal selling.
 Advertisement are identifiable with their sponsor of
originator which is not always the case with publicity
or propaganda.

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Objective / Functions of advertising
Preparing Ground for New Product
New product needs introduction because potential customers have never used such
product earlier and the advertisement prepare a ground for that new product.
Creation of Demand
The main objective of the advertisement is to create a favorable climate for maintaining
of improving sales. Customers are to be reminded about the product and the brand. It may
induce new customers to buy the product by informing them its qualities since it is possible that
some of the customers may change their brands.
Facing the Competition
Another important objective of the advertisement is to face to competition. Under
competitive conditions, advertisement helps to build up brand image and brand loyalty and
when customers have developed brand loyalty, becomes difficult for the middlemen to change
it.
Creating or Enhancing Goodwill: Large scale advertising is often undertaken with the
objective of creating or enhancing the goodwill of the advertising company. This, in turn,
increases the market receptiveness of the company’s product and helps the salesmen to11 win
customers easily.
Objective / Functions of advertising
Informing the Changes to the Customers
Whenever changes are made in the prices, channels of distribution or in the
product by way of any improvement in quality, size, weight, brand, packing, etc., they
must be informed to the public by the producer through advertisement.
Neutralizing Competitor’s Advertising
Advertising is unavoidable to complete with or neutralize competitor’s advertising.
When competitors are adopting intensive advertising as their promotional strategy, it is
reasonable to follow similar practices to neutralize their effects. In such cases, it is essential for
the manufacturer to create a different image of his product.
Barring New Entrants
From the advertiser’s point of view, a strongly built image through long advertising
helps to keep new entrants away. The advertisement builds up a certain monopoly are for the
product in which new entrants find it difficult to enter.
• In short, advertising aims at benefiting the producer, educating the consumer and
supplementing the salesmen. Above all it is a link between the producer and the consumer.
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Types of Advertising

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Types of advertising
• Print Advertising - The print media has been used for advertising since long. The
newspapers and magazines are quite popular modes of advertising for different
companies all over the world. Using the print media, the companies can also promote
their products through brochures and fliers. The newspaper and magazines sell the
advertising space and the cost depends on several factors. The quantity of space, the
page of the publication, and the type of paper decide the cost of the advertisement. So
an ad on the front page would be costlier than on inside pages. Similarly an ad in the
glossy supplement of the paper would be more expensive than in a mediocre quality
paper.
• Broadcast Advertising - This type of advertising is very popular all around the world.
It consists of television, radio, or Internet advertising. The ads on the television have a
large audience and are very popular. The cost of the advertisement depends on the
length of the ad and the time at which the ad would be appearing. For example, the
prime time ads would be more costly than the regular ones. Radio advertising is not
what it used to be after the advent of television and Internet, but still there is specific
audience for the radio ads too. The radio jingles are quite popular in sections of
society and help to sell the products. 14
Types of advertising
• Outdoor Advertising - Outdoor advertising makes use of different tools to gain
customer’s attention. The billboards, kiosks, and events and tradeshows are an effective
way to convey the message of the company. The billboards are present all around the
city but the content should be such that it attracts the attention of the customer. The
kiosks are an easy outlet of the products and serve as information outlets for the
people too. Organizing events such as trade fairs and exhibitions for promotion of the
product or service also in a way advertises the product. Therefore, outdoor
advertising is an effective advertising tool.
• Covert Advertising - This is a unique way of advertising in which the product or the
message is subtly included in a movie or TV serial. There is no actual ad, just the
mention of the product in the movie. For example, Tom Cruise used the Nokia phone
in the movie Minority Report.
• Public Service Advertising - As evident from the title itself, such advertising is for
the public causes. There are a host of important matters such as AIDS, political
integrity, energy conservation, illiteracy, poverty and so on all of which need more
awareness as far as general public is concerned. This type of advertising has gained
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much importance in recent times and is an effective tool to convey the message.
Advertising Budget
• “Money does matter a lot.”
• Advertising Budget is the amount of money which can be or has to be spent on
advertising of the product to promote it, reach the target consumers and make the
sales chart go on the upper side and give reasonable profits to the company.
• Before finalizing the advertising budget of an organization or a company, one has to
take a look on the favorable and unfavorable market conditions which will have an
impact on the advertising budget.
• The market conditions to watch out for are as follows:
Frequency of the advertisement
Competition and Clutter
Market Share of the Product
Product Life Cycle Stage

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Advertising Budget considerations
i. Frequency of the Advertisement
This means the number of times advertise has been shown with the description of the product or service, in the
granted time slots. So here, if any company needs more advertising frequency for its product, then the company
will have to increase its advertising budget.

ii. Competition and Clutter

The companies may have many competitors for its product. And also there are plenty of advertisements shown
which is called clutter. The company has to then increase their advertising budget.

iii. Market Share

To get a good market share in comparison to their competitors, the company should have a better product in
terms of quality, uniqueness, demand and catchy advertisements with resultant response of the customers. All
this is possible if the advertisement budget is high.

iv. Product Life Cycle Stage

If the company is a newcomer or if the product is on its introduction stage, then the company has to keep the
budget high to make place in the market with the existing players and to have frequent advertisements. As the
time goes on and product becomes older, the advertising budget can come down as then the product doesn’t
need frequent advertising.
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Methods for setting Advertising Budget
i. Percentage Of Sales: In this method, the budget is decided on the basis of the sales
of the product from previous year records or from the predicted future sales. This is
a pure prediction based method and best applicable to the companies which have
fixed annual sales. But if in case there is a requirement for more promotional
activities then this method has a disadvantage because there will be decrease in
advertisements as the budget is fixed.
ii. Affordability: this method is generally used by the small companies. Only the
companies which have funds and can afford advertising opt for this method. The
companies can go for advertising at any time in whole year whenever they have
money to spend. The amount spent also varies from time to time as per the
advertisements takes place.
iii. Best guess: This method is basically for newcomers who have just entered the
market and they have no knowledge or say they are not aware of how the market is
and how much to spend on advertising. Thus, this method is applied by the higher
level executives of the company as they are the only experienced people.
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Advertising Media
Newspapers
 Advertisers can choose from a wide range of different types of newspapers, including local, regional or
national titles published in daily, evening, weekly or Sunday editions. Newspapers target different
readerships with a mix of content, often including sports, entertainment, business, fashion and politics in
addition to local, national or world news. Advertisers can buy different sizes of advertising space, from
small classified ads with text only, to display ads featuring text, photographs, illustrations and graphics in
sizes up to a full page or even a double-page spread.
Magazines
 Magazines offer advertisers extensive choices of readership and frequency. Consumer magazines cover a
wide range of interests, including sport, hobbies, fashion, health, current affairs and local topics. Many
business and trade magazines provide coverage of specific industries, such as finance or electronics.
Others cover cross-industry topics, such as communications or human resources, while still others focus
on job-specific areas, such as publications for executives, marketing professionals or engineers.
Publishing frequency is typically weekly, monthly or quarterly. As with newspapers, advertisers can take
advertising spaces from classified ads to full page ads in black and white or color.
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Advertising Media
Billboards and Posters
 Advertising on billboards and posters gives advertisers the opportunity to
reach consumers on the move. Putting posters in retail malls, for example,
helps advertisers reach consumers close to the point of purchase. Posters or
billboards in train stations, airports or busy town centers have the potential to
reach large groups of consumers. Advertisers can change the messages on
billboards and posters at a frequency of their choice.
Direct Mail
• Advertisers use direct mail to reach smaller target audiences or selected
prospects. Direct mail often take the form of a letter, brochure or flyer sent via
the postal service. Advertisers can compile their own list of prospects and
customers for the mailing, or rent a mailing list from a specialist firm.
Active media
• Active media for advertisement includes TV and Radio. These media are more
interactive to the target audience. It can support audio and video effect in
advertisement. But cost more in terms of expenses.
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Sales promotion

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 Sales Promotion

“A direct inducement that offers an extra value or

incentive for the product to the sales force, distributors,
or the ultimate consumer with the primary objective of
creating an immediate sale.”

An extra A tool to
incentive to buy speed up sales

Targeted to
different parties
 Sales Promotion Tools
Consumer-Oriented Trade-Oriented
Samples Contests, dealer incentives

Coupons Trade allowances

Premiums Point-of-purchase displays

Contests/sweepstakes Training programs

Refunds/rebates Trade shows

Bonus packs
Packs Cooperative advertising

Price-off deals

Frequency
Loyalty programs
programs

Event marketing
FREE SAMPLES
These are distributed to attract consumers to try
out a new product and thereby create new
customers. Some businessmen distribute samples
among selected persons in order to popularize the
product.
Common examples - shampoo, washing powder,
coffee powder, etc.
 Premiums

Premium: an offer of an item of merchandise

or service either free or at a low cost that is an
extra incentive for customers

Two Types of Premiums

Self-liquidating Premiums:
Free Premiums:
require consumer to pay
Only require purchase of the
some or all of the cost of the
product
premium
COUPONS
Sometimes, coupons are issued by manufacturers
either in the packet of a product or through an
advertisement printed in the newspaper or magazine
or through mail. These coupons can be presented to
the retailer while buying the product. The holder of
the coupon gets the product at a discount. Best
example for this is coupons distributed by the pizza
restaurants like dominos, pizza hut, etc
Contests and Sweepstakes

Contest: a promotion where consumers compete for prizes or money on

the basis of skills or ability. Winners are determined by judging entries
or ascertaining which entry comes closes to some predetermined
criteria

Sweepstakes/games: a promotion where winners are determined

purely by chance and cannot require a proof of purchase as a condition
for entry. Winners are chosen by random selection from a pool of
entries or generation of a number to match those held by game
entrants.
BONUS REWARDS/ POINTS
Certain retail shops will have a scheme which
will require the customer to be a member of
the shop and to acquire membership card for
the same. And every time the customer makes
a purchase bonus points are added to the card
and at the end of the year gifts are given for
the points earned.
Example – coffee day bonus points card,
Moore super markets, Reliance fresh.
MONEY BACK OFFER/ REFUNDS
Under this scheme customers are given assurance
that full value of the product will be returned to
them if they are not satisfied after using the
product.
When customers doubt the quality or reliability of
your product or service, offer a money-back
guarantee. Give a detailed explanation of eligible
returns and refunds available for customer
reference.
Eg : Telebrands shopping
PRICE OFF DEALS / DISCOUNTS
Exchange offer

Scratch and win offer Bonus offer

Price-off offer
TRADE PROMOTION
 What is Trade Promotion?
• Marketing or Promotional activities undertaken to promote a new or
existing product, increase sales of existing products, expand market share
or create brand awareness among the distribution channels wholesalers,
retailers, etc.

• The word Trade Promotion encompasses virtually all forms of Product

Promotion and Demand Creation.

• Trade shows, special pricing, sales incentives, discounted or free display

fixtures, demonstrations and freebies such as tickets to sporting events,
movies or novelties (pens, paperweights, calculators), etc are few
examples of promotional activities.
Trade Sales Promotion

Objectives of Trade Sales Promotion:

• Gain/maintain distribution
• Influence resellers to promote product
• Influence resellers to offer price discount
• Increase reseller inventory
• Defend against competitors
• Avoid reduction of normal prices
Tools of Trade-Oriented Promotions
Contests and Incentives

Trade Allowances Buying Allowances

Point-of-Purchase Displays Promotional

Allowances

Sales Training Programs

Slotting Allowances

Trade Shows

Cooperative Advertising
Trade Contests
 Used to achieve sales targets.
 Funds known as “spiff money.”
 Rewards can be prizes or cash.
 Can be designed for various channel
members.
 Some organizations do not allow trade
contests because of possible conflict of
interests.
TRADE INCENTIVES
 Cooperative merchandising agreement
(CMA)
 Corporate sales program (CSP)
 Producing plant allowance (PPA)
 Back haul allowance (BHA)
 Cross-dock or Pedal runs
 Premium or bonus pack
TRADE SHOWS
 Ranks 3rd in B-to-B marketing expenditures.
 Manufacturers spend huge amounts of money per show....
Largest trade shows all over the world are:
 International CES ( consumer electronic and technology shows )
 The Super Show ( Texas car & vehicle shows )
 Miami International Boat Show & Strictly Sail
 International Housewares Show
 Mid-America Trucking Show
Egs in India are auto expos (last year jan 5 to jan 11 ),vivah mumbai
( 2-4th august), food fairs etc .
Trade Allowances
Off-invoice allowance: a per-case rebate paid to
retailers for an order.
Drop-ship allowance: money paid to retailers
who bypass wholesalers or brokers for pre-
planned orders.
Slotting fees: money paid to retailers to stock a
new product.
Exit fees: money paid to retailers to remove an
item from their inventory