PROMOTIONAL MIX

The purpose of advertising is to promote a product or service in order to increase sales and
create a branding of the product so that a customer loyalty base will be established.
Without effective and targeted advertising, a business cannot succeed. There are many
types of advertising a business can utilize in effort to increase their sales.

The following lists a number of types of advertising available to businesses: -

Television and Radio

Since television was first introduced, businesses have had tremendous success using it as an
advertising medium. This is due to the increase in consumers watching television. The cost
of television depends on the time of day or night one advertises, the popularity of the
television show (how many viewers,) and the length of the advertisement. Television
advertising can reach millions of people. Radio advertising is a traditional advertising format
that uses voice and jingles.

Print
This includes newspapers, magazines, fliers, brochures..etc. Placing advertisements in
magazines and newspapers is an age old method of advertising. Newspapers and the
magazines sell the advertising space. Prices depend on location, size, graphics, and color.
Advertising success often depends on the number of subscribers. Print advertising allows a
business to target a specific demographic. Fliers and brochures are a great way to advertise
sales and launch special product promotion programs.

Internet Advertising
Online advertising consists of small ads, banner ads, text ads, video ads, pay-per-click
advertising, and reciprocal linking to other websites. The effectiveness of online advertising
depends on exposure and how many people actually view the advertisement. Internet
advertising allows the advertiser to track the number of impressions an ad gets (how many
people see it), and how many visits their business website receives from particular ads,
making it simple to find out what kind of conversion rates the advertisers are obtaining.
Online advertising does not have any time restraints and can be viewed day and night
throughout the world. Businesses also have their own websites as an advertising tool. A
well-designed and well-promoted website can provide a world of customers.

Out-of-Home Advertising
This can include digital signage, billboards, kiosks, tradeshows, and out-of-home advertising.
This is advertising that takes place outside of a customer's home. This form of advertising
has become very popular because it provides a new way to reach targeted customers.
Billboards, kiosks, and tradeshows have been extremely successful advertising tools because
you can take your product or service directly to the consumer. Digital signage is a newer
method of advertising that is growing in popularity. Digital signage is where
monitors/plasma TVs are placed in strategic locations and display advertisements directed
at their targeted customer. Digital signage can deliver messages in the form of text and
digital video. Advertisers have the ability to update content from a remote location. You can
find digital signage in such places as sports arenas, retail stores, department stores, malls,
schools...etc.

Regardless of the state of the economy, businesses have to keep advertising to stay
successful. Because of the broad range of advertising methods now available, businesses
now have the ability to reach their targeted customers at very affordable costs.

Promotion is one out of four basic instruments of marketing that has the purpose to inform about
other instruments of marketing mix and to contribute to sales increase on the long term. The
promotion is always serving to specific goal. These goals can be public informing, demand increasing,
product differentiation, and product value increasing or sales stabilizing. Usually the promotion is
targeting more than one goal.
Promotion is the process of communication between the company that sells the product and the
potential customer, with the purpose of influencing the attitudes and behavior. There are specific
promotional tool that are supporting chosen promotional goal. The promotion mix represents a
combination of different promotional tools. The basic elements of promotional mix are Advertising,
Public Relationship, Personal Sales and Sales Promotion.

1. Advertising is communication with current and potential customers and consumers, done
through paid mass media. The channels of communication can be TV, radio, Internet. 
2. Public Relationship (PR) is communication toward public, but is turned more to
reputation and image of the company, than to its products. The PR activity can be a
press conference, TV interview with company representative, press article about
donation of the company to charity or about latest environmental projects.
3. Personal Sales is a way of promotion activity where sales representative is directly
contacting the customer. This person-to-person contact has the goal of direct
promotion of the product and conclusion of sales.
 4. Sales Promotion represents a set of different promotional activities that has the goal
of animating customers for purchasing. This can be value offer (discount), quantity
offer (2+1), prize drawings, merchandising, direct contact by animators in retail
outlet, etc.
5. The approach to promotion can be different. The push strategy is transferring the
supply pressure downstream through sales channels.
6. The pull strategy is approaching the consumer directly. The consumer's demand is
then creating request for product through supply channel upstream. Usually these
two approaches are interlacing. In the early stage of product life the pull strategy is
more dominant.
7. Later, when the market is saturated with own and competitor's products the push
strategy is predominant.

Introduction to Promotional Mix

It is not enough for a business to have good products sold at attractive prices. To generate sales and
profits, the benefits of products have to be communicated to customers. In marketing, this is
commonly known as "promotion".

Promotion is all about companies communicating with customers.

A business' total marketing communications programme is called the "promotional mix" and consists
of a blend of advertising, personal selling, sales promotion and public relations tools. In this revision
note, we describe the four key elements of the promotional mix in more detail.

It is helpful to define the four main elements of the promotional mix before considering their
strengths and limitations.

Advertising
Any paid form of non-personal communication of ideas or products in the "prime media": i.e.
television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to
persuade and to inform. The two basic aspects of advertising are the message (what you want your
communication to say) and the medium (how you get your message across)

Personal Selling

Oral communication with potential buyers of a product with the intention of making a sale. The
personal selling may focus initially on developing a relationship with the potential buyer, but will
always ultimately end with an attempt to "close the sale".

Sales Promotion

Providing incentives to customers or to the distribution channel to stimulate demand for a product.

Publicity

The communication of a product, brand or business by placing information about it in the media
without paying for the time or media space directly. otherwise known as "public relations" or PR.
Advantages and Disadvantages of Each Element of the Promotional Mix

Mix Element Advantages Disadvantages

Advertising Good for building awareness Impersonal - cannot answer all a

customer's questions
Effective at reaching a wide audience
Not good at getting customers to
Repetition of main brand and product
make a final purchasing decision
positioning helps build customer trust

Personal Selling Highly interactive - lots of Costly - employing a sales force has
communication between the buyer and many hidden costs in addition to
seller wages

Excellent for communicating complex / Not suitable if there are thousands of

detailed product information and important buyers
features

Relationships can be built up - important

if closing the sale make take a long time

Sales Promotion Can stimulate quick increases in sales by If used over the long-term, customers
targeting promotional incentives on may get used to the effect
particular products
Too much promotion may damage
Good short term tactical tool the brand image

Public Relations Often seen as more "credible" - since the Risk of losing control - cannot always
message seems to be coming from a control what other people write or
third party (e.g. magazine, newspaper)
 Cheap way of reaching many customers say about your product
- if the publicity is achieved through the
right media

Advertising

Advertising is the promotion of a company’s products and services carried out primarily to
drive sales of the products and services but also to build a brand identity and communicate
changes or new product /services to the customers. Advertising has become an essential
element of the corporate world and hence the companies allot a considerable amount of
revenues as their advertising budget. There are several reasons for advertising some of
which are as follows:
1. Increasing the sales of the product/service
2. Creating and maintaining a brand identity or brand image.
3. Communicating a change in the existing product line.
4. Introduction of a new product or service.
5. Increasing the buzz-value of the brand or the company.

Thus, several reasons for advertising and similarly there exist various media which can be
effectively used for advertising. Based on these criteria there can be several branches of
advertising. Mentioned below are the various categories or types of advertising:

Print Advertising–Newspapers, Magazines, Brochures, Fliers

The print media have always been a popular advertising medium. Advertising products via
newspapers or magazines is a common practice. In addition to this, the print media also
offers options like promotional brochures and fliers for advertising purposes. Often the
newspapers and the magazines sell the advertising space according to the area occupied by
the advertisement, the position of the advertisement (front page/middle page), as well as
the readership of the publications. For instance an advertisement in a relatively new and
less popular newspaper would cost far less than placing an advertisement in a popular
newspaper with a high readership. The price of print ads also depend on the supplement in
which they appear, for example an advertisement in the glossy supplement costs way higher
than that in the newspaper supplement which uses a mediocre quality paper.

Outdoor Advertising – Billboards, Kiosks, Tradeshows and

Events

Outdoor advertising is also a very popular form of advertising, which makes use of several
tools and techniques to attract the customers outdoors. The most common examples of
outdoor advertising are billboards, kiosks, and also several events and tradeshows organized
by the company. The billboard advertising is very popular however has to be really terse and
catchy in order to grab the attention of the passersby. The kiosks not only provide an easy
outlet for the company products but also make for an effective advertising tool to promote
the company’s products. Organizing several events or sponsoring those makes for an
excellent advertising opportunity. The company can organize trade fairs, or even exhibitions
for advertising their products. If not this, the company can organize several events that are
closely associated with their field. For instance a company that manufactures sports utilities
can sponsor a sports tournament to advertise its products.

Broadcast advertising – Television, Radio and the Internet

Broadcast advertising is a very popular advertising medium that constitutes of several

branches like television, radio or the Internet. Television advertisements have been very
popular ever since they have been introduced. The cost of television advertising often
depends on the duration of the advertisement, the time of broadcast (prime time/peak
time), and of course the popularity of the television channel on which the advertisement is
going to be broadcasted. The radio might have lost its charm owing to the new age media
however the radio remains to be the choice of small-scale advertisers. The radio jingles have
been very popular advertising media and have a large impact on the audience, which is
evident in the fact that many people still remember and enjoy the popular radio jingles.
Covert Advertising – Advertising in Movies
Covert advertising is a unique kind of advertising in which a product or a particular brand is
incorporated in some entertainment and media channels like movies, television shows or
even sports. There is no commercial in the entertainment but the brand or the product is
subtly (or sometimes evidently) showcased in the entertainment show.

Surrogate Advertising – Advertising Indirectly

Surrogate advertising is prominently seen in cases where advertising a particular product is

banned by law. Advertisement for products like cigarettes or alcohol which are injurious to
heath are prohibited by law in several countries and hence these companies have to come
up with several other products that might have the same brand name and indirectly remind
people of the cigarettes or beer bottles of the same brand. Common examples include
Fosters and Kingfisher beer brands, which are often seen to promote their brand with the
help of surrogate advertising.

Public Service Advertising – Advertising for Social Causes

Public service advertising is a technique that makes use of advertising as an effective

communication medium to convey socially relevant messaged about important matters and
social welfare causes like AIDS, energy conservation, political integrity, deforestation,
illiteracy, poverty and so on. David Oglivy who is considered to be one of the pioneers of
advertising and marketing concepts had reportedly encouraged the use of advertising field
for a social cause. Oglivy once said, "Advertising justifies its existence when used in the
public interest - it is much too powerful a tool to use solely for commercial purposes.” Today
public service advertising has been increasingly used in a non-commercial fashion in several
countries across the world in order to promote various social causes. In USA, the radio and
television stations are granted on the basis of a fixed amount of Public service
advertisements aired by the channel.
Celebrity Advertising
Although the audience is getting smarter and smarter and the modern day consumer getting
immune to the exaggerated claims made in a majority of advertisements, there exist a
section of advertisers that still bank upon celebrities and their popularity for advertising
their products. Using celebrities for advertising involves signing up celebrities for advertising
campaigns, which consist of all sorts of advertising including, television ads or even print
advertisements.

Personal Selling

Introduction
Personal selling can be defined as follows:
Personal selling is oral communication with potential buyers of a product with the intention
of making a sale. The personal selling may focus initially on developing a relationship with
the potential buyer, but will always ultimately end with an attempt to "close the sale"

Personal selling is one of the oldest forms of promotion. It involves the use of a sales force
to support a push strategy (encouraging intermediaries to buy the product) or a pull
strategy (where the role of the sales force may be limited to supporting retailers and
providing after-sales service).

What are the main roles of the sales force?

Kotler describes six main activities of a sales force:

(1) Prospecting - trying to find new customers

(2) Communicating - with existing and potential customers about the product range
(3) Selling - contact with the customer, answering questions and trying to close the sale
(4) Servicing - providing support and service to the customer in the period up to delivery and
also post-sale
(5) Information gathering - obtaining information about the market to feedback into the
marketing planning process
(6) Allocating - in times of product shortage, the sales force may have the power to decide
how available stocks are allocated

What are the advantages of using personal selling as a means of promotion?

• Personal selling is a face-to-face activity; customers therefore obtain a relatively high
degree of personal attention
• The sales message can be customised to meet the needs of the customer
• The two-way nature of the sales process allows the sales team to respond directly and
promptly to customer questions and concerns
• Personal selling is a good way of getting across large amounts of technical or other
complex product information
• The face-to-face sales meeting gives the sales force chance to demonstrate the product
• Frequent meetings between sales force and customer provide an opportunity to build
good long-term relationships
Given that there are many advantages to personal selling, why do more businesses not
maintain a direct sales force?

Main disadvantages of using personal selling

The main disadvantage of personal selling is the cost of employing a sales force. Sales
people are expensive. In addition to the basic pay package, a business needs to provide
incentives to achieve sales (typically this is based on commission and/or bonus
arrangements) and the equipment to make sales calls (car, travel and subsistence costs,
mobile phone etc). In addition, a sales person can only call on one customer at a time. This is
not a cost-effective way of reaching a large audience.

Sales Promotion

Introduction
A good definition of sales promotion would be as follows:
“An activity designed to boost the sales of a product or service. It may include an advertising
campaign, increased PR activity, a free-sample campaign, offering free gifts or trading
stamps, arranging demonstrations or exhibitions, setting up competitions with attractive
prizes, temporary price reductions, door-to-door calling, telemarketing, personal letters on
other methods”.
More than any other element of the promotional mix, sales promotion is about “action”. It
is about stimulating customers to buy a product. It is not designed to be informative – a role
which advertising is much better suited to.
Sales promotion is commonly referred to as “Below the Line” promotion.
Sales promotion can be directed at:
• The ultimate consumer (a “pull strategy” encouraging purchase)
• The distribution channel (a “push strategy” encouraging the channels to stock the
product). This is usually known as “selling into the trade”

Methods of sales promotion

There are many consumer sales promotional techniques available, summarized in the table
below:-

Price promotions
Price promotions are also commonly known as” price discounting”
These offer either (1) a discount to the normal selling price of a product, or (2) more of the
product at the normal price.
Increased sales gained from price promotions are at the expense of a loss in profit – so
these promotions must be used with care.
A producer must also guard against the possible negative effect of discounting on a brand’s
reputation.

Coupons
Coupons are another, very versatile, way of offering a discount. Consider the following
examples of the use of coupons:
- On a pack to encourage repeat purchase
- In coupon books sent out in newspapers allowing customers to redeem the coupon at a
retailer
- A cut-out coupon as part of an advert
- On the back of till receipts
The key objective with a coupon promotion is to maximize the redemption rate – this is the
proportion of customers actually using the coupon.
One problem with coupons is that they may simply encourage customers to buy what they
would have bought anyway. Another problem occurs when retailers do not hold sufficient
stocks of the promoted product – causing customer disappointment.
Use of coupon promotions is, therefore, often best for new products or perhaps to
encourage sales of existing products that are slowing down.

Gift with purchase

The “gift with purchase” is a very common promotional technique. It is also known as a
“premium promotion” in that the customer gets something in addition to the main
purchase. This type of promotion is widely used for:
- Subscription-based products (e.g. magazines)- Consumer luxuries (e.g. perfumes)

Competitions and prizes

Another popular promotion tool with many variants. Most competition and prize
promotions are subject to legal restrictions.

Money refunds
Here, a customer receives a money refund after submitting a proof of purchase to the
manufacturer. These schemes are often viewed with some suspicion by customers –
particularly if the method of obtaining a refund looks unusual or onerous.
Frequent user / loyalty incentives
Repeat purchases may be stimulated by frequent user incentives. Perhaps the best
examples of this are the many frequent flyer or user schemes used by airlines, train
companies, car hire companies etc.

Point-of-sale displays
Research into customer buying behaviour in retail stores suggests that a significant
proportion of purchases results from promotions that customers see in the store. Attractive,
informative and well-positioned point-of-sale displays are, therefore, very important part of
the sales promotional activity in retail outlets.

Push and Pull strategies

"Push or Pull"?
Marketing theory distinguishes between two main kinds of promotional strategy - "push"
and "pull".

Push
A “push” promotional strategy makes use of a company's sales force and trade promotion
activities to create consumer demand for a product.
The producer promotes the product to wholesalers, the wholesalers promote it to
retailers, and the retailers promote it to consumers.
A good example of "push" selling is mobile phones, where the major handset manufacturers
such as Nokia promote their products via retailers such as Car phone Warehouse.
Personal selling and trade promotions are often the most effective promotional tools for
companies such as Nokia - for example offering subsidies on the handsets to encourage
retailers to sell higher volumes.
A "push" strategy tries to sell directly to the consumer, bypassing other distribution
channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer
promotions and advertising are the most likely promotional tools.

Pull

A “pull” selling strategy is one that requires high spending on advertising and consumer
promotion to build up consumer demand for a product. If the strategy is successful,
consumers will ask their retailers for the product, the retailers will ask the wholesalers,
and the wholesalers will ask the producers.
A good example of a pull is the heavy advertising and promotion of children's’ toys – mainly
on television. Consider the recent BBC promotional campaign for its new pre-school
programme – the Fimbles. Aimed at two to four-year-olds, 130 episodes of Fimbles have
been made and are featured everyday on digital children's channel CBeebies and BBC2. As
part of the promotional campaign, the BBC has agreed a deal with toy maker Fisher-Price to
market products based on the show, which it hopes will emulate the popularity of the
Tweenies. Under the terms of the deal, Fisher-Price will develop, manufacture and
distribute a range of Fimbles products including soft, plastic and electronic learning toys for
the UK and Ireland.
In 2001, BBC Worldwide (the commercial division of the BBC) achieved sales of £90m from
its children's brands and properties last year. The demand created from broadcasting of the
Fimbles and a major advertising campaign is likely to “pull” demand from children and
encourage retailers to stock Fimbles toys in the stores for Christmas 2002.

Public Relations

Introduction

The Institute of Public Relations defines public relations as follows:

“The planned and sustained effort to establish and maintain goodwill and mutual
understanding between an organisation and its publics”

What is meant by the term “publics” in the above definition?

A business may have many “publics” with which it needs to maintain good relations and
build goodwill. For example, consider the relevant “publics” for a publicly-quoted business
engaged in medical research:

1. Employees
2. Shareholders
3. Trade unions
4. Members of the “general public”
5. Customers (past and present)
6. Pressure groups
7. The medical profession
8. •Charities funding medical research
9. Professional research bodies and policy-forming organisations
10. The media
11. Government and politicians

The role of public relations is to:

• Identify the relevant publics

• Influence the opinions of those publics by:
 Reinforcing favourable opinions
 Transforming perhaps neutral opinions into positive ones
 Changing or neutralising hostile opinions

Public relations techniques

There are many techniques available to influence public opinion, some of which are more
appropriate in certain circumstances than others:

Consumer communication

Customer press releases

Trade press releases
Promotional videos
Consumer exhibitions
Competitions and prizes
Product launch events
Celebrity endorsements
Web sites

Business communication

Corporate identity design

Company and product videos
Direct mailings
Web site
Trade exhibitions

Internal / employee communication

In-house newsletters and magazines

Intranet
Notice boards
Employee conferences
Email

External corporate communication

Company literature (brochures, videos etc)
Community involvement programmes
Trade, local, national and international media relations

Financial communication

Financial media relations

Annual report and accounts
Meetings with stock market analysts, fund managers etc
Shareholder meetings (including the annual general meeting)
Given the wide range of techniques used in public relations, how is it possible to measure
the effectiveness of public relations?
It is actually quite difficult to measure whether the key messages have been communicated
to the target public. In any event, this could be quite costly since it would involve a large
amount of regular research. Instead, the main measures of effectiveness concentrate on the
process of public relations, and include:
• Monitoring the amount of media coverage obtained (press cuttings agencies play a role in
keeping businesses informed of this)
• Measuring attendance at meetings, conferences
• Measuring the number of enquiries or orders received in response to specific public
relations efforts.

Marketing Planning - Setting Marketing Objectives

Introduction
Objectives set out what the business is trying to achieve.
Objectives can be set at two levels:

(1) Corporate level

These are objectives that concern the business or organisation as a whole
Examples of “corporate objectives might include:
• We aim for a return on investment of at least 15%
• We aim to achieve an operating profit of over £10 million on sales of at least £100 million
• We aim to increase earnings per share by at least 10% every year for the foreseeable
future

(2) Functional level

E.g. specific objectives for marketing activities
Examples of functional marketing objectives” might include

• We aim to build customer database of at least 250,000 households within the next 12
months
• We aim to achieve a market share of 10%
• We aim to achieve 75% customer awareness of our brand in our target markets
Both corporate and functional objectives need to conform to the commonly used SMART
criteria.
The SMART criteria (an important concept which you should try to remember and apply in
exams) are summarized below:
Specific - the objective should state exactly what is to be achieved.
Measurable - an objective should be capable of measurement – so that it is possible to
determine whether (or how far) it has been achieved
Achievable - the objective should be realistic given the circumstances in which it is set and
the resources available to the business.
Relevant - objectives should be relevant to the people responsible for achieving them
Time Bound - objectives should be set with a time-frame in mind. These deadlines also need
to be realistic.

Marketing Planning - the link with strategic planning

Introduction
Businesses that succeed do so by creating and keeping customers. They do this by providing
better value for the customer than the competition.
Marketing management constantly have to assess which customers they are trying to reach
and how they can design products and services that provide better value (“competitive
advantage”).
The main problem with this process is that the “environment” in which businesses operate
is constantly changing. So a business must adapt to reflect changes in the environment and
make decisions about how to change the marketing mix in order to succeed. This process of
adapting and decision-making is known as marketing planning.

Where does marketing planning fit in with the overall

strategic planning of a business?

Strategic planning (which you will cover in your studies of “strategy” is concerned
about the overall direction of the business. It is concerned with marketing, of course. But it
also involves decision-making about production and operations, finance, human resource
management and other business issues.

The objective of a strategic plan is to set the direction of a business and create its shape so
that the products and services it provides meet the overall business objectives.
Marketing has a key role to play in strategic planning, because it is the job of marketing
management to understand and manage the links between the business and the
“environment”.

Sometimes this is quite a straightforward task. For example, in many small businesses there
is only one geographical market and a limited number of products (perhaps only one
product!).

However, consider the challenge faced by marketing management in a multinational

business, with hundreds of business units located around the globe, producing a wide range
of products. How can such management keep control of marketing decision-making in such
a complex situation? This calls for well-organized marketing planning.
What are the key issues that should be addressed in
marketing planning?
The following questions lie at the heart of any marketing (or indeed strategic) planning
process:
• Where are we now?
• How did we get there?
• Where are we heading?
• Where would we like to be?
• How do we get there?
• Are we on course?

Why is marketing planning essential?

Businesses operate in hostile and increasingly complex environment. The ability of a
business to achieve profitable sales is impacted by dozens of environmental factors, many of
which are inter-connected. It makes sense to try to bring some order to this chaos by
understanding the commercial environment and bringing some strategic sense to the
process of marketing products and services.
A marketing plan is useful to many people in a business. It can help to:
• Identify sources of competitive advantage
• Gain commitment to a strategy
• Get resources needed to invest in and build the business
• Inform stakeholders in the business
• Set objectives and strategies
• Measure performance
 Direct Marketing

Introduction
Direct marketing is concerned with establishing an individual relationship between the
business offering a product or service and the final customer.
Direct marketing has been defined by the Institute of Direct Marketing as:
The planned recording, analysis and tracking of customer behaviour to develop a relational
marketing strategies
The process of direct marketing covers a wide range of promotional activities you may be
familiar with. These include:
• Direct-response adverts on television and radio
• Mail order catalogues
• E-commerce (you bought this marketing companion following tutor2u’s direct marketing
campaign!)
• Magazine inserts
• Direct mail (sometimes also referred to as “junk mail”)
• Telemarketing

Direct mail
Of the above direct marketing techniques, the one in most widespread use is direct mail.
Direct mail is widely thought of as the most effective medium to achieve a customer sales
response.
Why?
• The advertiser can target a promotional message down to an individual level, and where
possible personalize the message. There are a large number of mailing databases available
that allow businesses to send direct mailing to potential customers based on household
income, interests, occupation and other variables
• Businesses can first test the responsiveness of direct mailing (by sending out a test mailing
to a small, representative sample) before committing to the more significant cost of a larger
campaign
• Direct mailing campaigns are less visible to competitors – it is therefore possible to be
more creative, for longer
However, direct mail has several weaknesses:
• A piece of direct mail is less “interactive” than a television or radio advert, although
creative packaging can still stimulate customer response
• Lead times to produce direct mailing campaigns can be quite long
• There is increasing customer concern with “junk mail” – the receipt of unsolicited mail
which often suggests that the right to individual privacy has been breached.

The Direct marketing database

Direct mailing is based on the “mailing list” – a critical part in the direct marketing process.
The mailing list is a database which collects together details of past, current and potential
customers. A properly managed mailing database enables a business to:
• Focus on the best prospective customers
• Cross-sell related products
• Launch new products to existing customers

How is the mailing database compiled?

The starting point is the existing information the business keeps on its customers. All forms
of communication between a customer and the business need to be recorded so that a
detailed, up-to-date profile can be maintained.
It is also possible to “buy” mailing lists from elsewhere. There are numerous mailing list
owners and brokers who sell lists of names. The Internet, directories, associations and other
sources are good sources.

The Promotional Mix

Promotional mix
It is helpful to define the five main elements of the promotional mix before considering their
strengths and limitations.

Advertising
Advertising is any paid form of non-personal communication of ideas or products in the
"prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc.
Advertising is intended to persuade and to inform.
The two basic aspects of advertising are the message (what you want your communication
to say) and the medium (how you get your message across)

Direct marketing
Direct marketing creates a direct relationship between the customer and the business on an
individual basis.

Personal Selling
Personal selling refers to oral communication with potential buyers of a product with the
intention of making a sale. The personal selling may focus initially on developing a
relationship with the potential buyer, but will always ultimately end with an attempt to
"close the sale".

Sales Promotion
Sales promotion refers to the provision of incentives to customers or to the distribution
channel to stimulate demand for a product.

Public Relations
Public relations is the communication of a product, brand or business by placing information
about it in the media without paying for the time or media space directly
Factors that determine the type of promotional tools used
Each of the above components of the promotional mix has strengths and weaknesses. There
are several factors that should be taken into account in deciding which, and how much of
each tool to use in a promotional marketing campaign:

(1) Resource availability and the cost of each promotional tool:

Advertising (particularly on television and in the national newspapers can be very
expensive). The overall resource budget for the promotional campaign will often determine
which tools the business can afford to use.

(2) Market size and concentration:

If a market size is small and the number of potential buyers is small, then personal selling
may be the most cost-effective promotional tool.
A good example of this would be businesses selling software systems designed for
supermarket retailers. On the other hand, where markets are geographically disperse or,
where there are substantial numbers of potential customers, advertising is usually the most
effective.

(3) Customer information needs:

Some potential customers need to be provided with detailed, complex information to help
them evaluate a purchase (e.g. buyers of equipment for nuclear power stations, or health
service managers investing in the latest medical technology). In this situation, personal
selling is almost always required - often using selling teams rather than just one individual.
By contrast, few consumers need much information about products such as baked beans or
bread. Promotional tools such as brand advertising and sales promotion are much more
effective in this case.

Rural Marketing - A Critical Review

Prime Minister Manmohan Singh recently talked about his vision for rural India: "My vision
of rural India is of a modern agrarian, industrial and services economy co-existing side by
side, where people can live in well-equipped villages and commute easily to work, be it on
the farm or in the non-farm economy. There is much that modern science and technology
can do to realize this vision. Rural incomes have to be increased. Rural infrastructure has to
be improved. Rural health and education needs have to be met. Employment opportunities
have to be created in rural areas."
'Go rural' is the slogan of marketing gurus after analyzing the socio-economic changes in
villages. The Rural population is nearly three times the urban, so that Rural consumers have
become the prime target market for consumer durable and non-durable products, food,
construction, electrical, electronics, automobiles, banks, insurance companies and other
sectors besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides
and farm machinery. The Indian rural market today accounts for only about Rs 8 billion of
the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly
there seems to be a long way ahead. Although a lot is spoken about the immense potential
of the unexplored rural market, advertisers and companies find it easier to vie for a share of
the already divided urban pie.
The success of a brand in the Indian rural market is as unpredictable as rain. It has always
been difficult to gauge the rural market. Many brands, which should have been successful,
have failed miserably. More often than not, people attribute rural market success to luck.
Therefore, marketers need to understand the social dynamics and attitude variations within
each village though nationally it follows a consistent pattern looking at the challenges and
the opportunities which rural markets offer to the marketers it can be said that the future is
very promising for those who can understand the dynamics of rural markets and exploit
them to their best advantage. A radical change in attitudes of marketers towards the vibrant
and burgeoning rural markets is called for, so they can successfully impress on the 230
million rural consumers spread over approximately six hundred thousand villages in rural
India.

What rural market buys?

Rural India buys small packs, as they are perceived as value for money. There is brand
stickiness, where a consumer buys a brand out of habit and not really by choice. Brands
rarely fight for market share; they just have to be visible in the right place. Even expensive
brands, such as Close-Up, Marie biscuits and Clinic shampoo are doing well because of deep
 distribution, many brands are doing well without much advertising support — Ghadi, a big
detergent brand in North India, is an example.

Why Rural Market?

The Indian rural market has a huge demand base and offers great opportunities to
marketers. Two-thirds of Indian consumers live in rural areas and almost half of the national
income is generated here. The reasons for heading into the rural areas are fairly clear. The
urban consumer durable market for products like color TVs, washing machines, refrigerators
and air conditioners is growing annually at between 7 per cent and 10 per cent.

The rural market is zooming ahead at around 25 per cent annually. "The rural market is
growing faster than urban India now," says Venugopal Dhoot, chairman of the Rs 989
-crore(Rs billion) Videocon Appliances. "The urban market is a replacement and up
gradation market today," adds Samsung's director, marketing, Ravinder Zutshi.

Reasons for improvement of business in rural area

 Socio-economic changes (lifestyle, habits and tastes, economic status)
 Literacy level (25% before independence – more than 65% in 2001)
 Infrastructure facilities (roads, electricity, media)
 Increase in income 
 Increase in expectations
MART, the specialist rural marketing and rural development consultancy has found that 53
per cent of FMCG sales lie in the rural areas, as do 59 per cent of consumer durable sales,
said its head Pradeep Kashyap at the seminar. Of two million BSNL mobile connections, 50
per cent went to small towns and villages, of 20 million Rediffmail subscriptions, 60 per cent
came from small towns, so did half the transactions on Rediff's shopping site.

Special features of rural market

Unlike urban markets, rural markets are difficult to predict and possess special
characteristics. The featured population is predominantly illiterate, have low income,
characterized by irregular income, lack of monthly income and flow of income fluctuating
with the monsoon winds.

Rural markets face the critical issues of Distribution, Understanding the rural consumer,
Communication and Poor infrastructure. The marketer has to strengthen the distribution
and pricing strategies. The rural consumer expects value for money and owing to has
unsteady and meager status of weekly income; increasing the household income and
improving distribution are the viable strategies that have to be adapted to tap the immense
potential of the market.

Media reach is a strong reason for the penetration of goods like cosmetics, mobile phones,
etc., which are only used by the urban people. Increasing awareness and knowledge on
different products and brands accelerate the demand. The rural audience are however
critical of glamorous ads on TV, and depend on the opinion leaders who introduce the
product by using it and recommending it.

Opinion leaders play a key role in popularizing products and influence in rural market.
Nowadays educated youth of rural also influences the rural consumers. Rural consumers are
influenced by the life style they watch on television sets. Their less exposure to outside
world makes them innocent and fascinated to novelties. The reach of mass television media,
especially television has influenced the buying behaviour greatly

Creating brands for rural India

Rural markets are delicately powerful. Certain adaptations are required to cater to the rural
masses; they have unique expectation and warrant changes in all four parameters of
product, price, promotion and distribution.
A lot is already emphasized on adapting the product and price in terms of packaging,
flavouring, etc and in sachets, priced to suit the economic status of the rural India in sizes
like Rs.5 packs and Re.1 packs that are perceived to be of value for money. This is a typical
penetration strategy that promises to convert the first time customers to repeated
customers.

The promotion strategies and distribution strategies are of paramount importance. Ad

makers have learnt to leverage the benefits of improved infrastructure and media reach.
The television airs advertisements to lure rural masses, and they are sure it reaches the
target audience, because majority of rural India possesses and is glued to TV sets!

Distributing small and medium sized packets thro poor roads, over long distances, into deep
pockets of rural India and getting the stockiest to trust the mobility is a Herculean task.
Giving the confidence those advertisements will support. Sales force is being trained to win
the confidence of opinion leaders. Opinion leaders play an important role in popularizing
the brand. They sometimes play the role of entry barriers for new products.

The method of promotion needs to be tailored to suit the expectations of the market.
Techniques that have proved to be successful are Van campaigns, edutainment films,
generating word of mouth publicity through opinion leaders, colourful wall paintings. The
Wide reach of television has exposed the otherwise conservative audience to
westernization. Panchayat televisions in Tamilnadu carries message that are well received
and contribute to community development.

Dynamics of rural markets differ from other market types, and similarly rural marketing
strategies are also significantly different from the marketing strategies aimed at an urban or
industrial consumer. This, along with several other related issues, have been subject matter
of intense discussions and debate in countries like India and China and focus of even
international symposia organized in these countries. 

Rural markets and rural marketing involve a number of strategies, which include:
* Client and location specific promotion
* Joint or cooperative promotion
* Bundling of inputs
* Partnership for sustainability
Client and Location specific promotion involves a strategy designed to be suitable to the
location and the client. Joint or co-operative promotion strategy involves participation
between the marketing agencies and the client. 'Bundling of inputs' denote a marketing
strategy, in which several related items are sold to the target client, including arrangements
of credit, after-sale service, and so on. Media, both traditional as well as the modern media,
is used as a marketing strategy to attract customers.

Partnership for sustainability involves laying and building a foundation for continuous and
long lasting relationship. Innovative media can be used to reach the rural customers. Radio
and television are the conventional media that are reaching the rural audience effectively.
But horse cart, bullock cart and wall writing are the other media, which can carry the
message effectively to the rural customers. 

Rural marketing is an evolving concept, and as a part of any economy has untapped
potential; marketers have realized the opportunity recently. Improvement in infrastructure
and reach, promise a bright future for those intending to go rural. Rural consumers are keen
on branded goods nowadays, so the market size for products and services seems to have
burgeoned. The rural population has shown a trend of wanting to move into a state of
gradual urbanization in terms of exposure, habits, lifestyles and lastly, consumption patterns
of goods and services. There are dangers on concentrating more on the rural customers.
Reducing the product features in order to lower prices is a dangerous game to play.