Promotion Decision

Unit 9
Concept
Promotion includes all the activities the company
undertakes to communicate and promote its products
to the target market. – Philip Kotler
Promotion is the element in an organization marketing
mix that serves to inform, persuade and remind the
market of the organization and or its products. –
William J. Stanton
Promotion is a tool used by company in order to
communicate products’ features, quality, prices,
ingredients, designs, utility, benefits and so on to the
actual and potential customers and channel members.
Objectives of promotion
Informing
Persuading
Reminding
Reassuring
Image building
 The Communication Process Model

M Sender Encoding Channel Decoding

e
s
s
a
g
e Noise/
Distortion

Feedback Receiver
Barriers to communication
Physical Barrier
Perceptual Barrier
Emotional Barrier
Cultural Barrier
Status Barrier
Language Barrier
Gender Barrier
Fear Barrier
Noise Barrier
Promotion mix and its components
Promotion mix is a specific combination of promotional
methods used for one product or a family of products.
a. Advertising: It is any paid form of non-personal, mass
communication of ideas, products and services by an
identified sponsor.
b. Personal selling: It is the seller explaining about products’
quality, ingredients, features, utility, price, and benefits and
convincing buyer to purchase them.
c. Sales promotion: It is the short term incentives to
persuade potential customer to buy the product and
services.
d. Publicity: It is non-paid and non-personal tool of demand
creation by placing news and views about products or
organization through different communication media.
e. Public relation: It is organization maintaining good public
relation with customers to promote favorable attitudes
Promotion Mix Determination Factors
1. Promotion objectives:
 To build awareness through informing advertising
and publicity is suitable
 To create liking, preference and conviction, person
selling and advertising are suitable
 To get order for the product, personal selling and
sales promotion are suitable
 To get customer attention through reminding,
advertising is suitable
 Brand loyalty through reinforcement, advertising
and publicity are suitable
2. Nature of the product:
Low cost convenience products require emphasis on
national advertising and sales promotion
High-cost shopping products require emphasis on
personal selling and local advertising
Specialty products require emphasis on personal
selling and publicity
Industrial products require emphasis on personal
selling
3. Nature of the target market:
Consumer markets need more emphasis on sales
promotion and advertising
Industrial markets need more emphasis on personal
selling and service delivery
Channel members need emphasis on personal selling
and trade promotion
The market coverage: small markets need emphasis on
personal selling, local advertising and sales promotion.
Large markets need emphasis on national advertising
and trade promotion
4. Stage of product life cycle:
Introduction stage needs emphasis on advertising,
sales promotion and publicity
Growth stage needs emphasis on advertising for brand
preference and acceptance
Maturity stage needs emphasis on sales promotion,
advertising is done to support sales promotion
Decline stage needs de-emphasis on all promotion
tools
5. Size of promotion budget
Advertising requires ample resources
Personal selling is suitable for small organizations but
large sales force is expensive
Sales promotion can be launched with a specified
budget
Publicity is free when it appears in the media.
However, there are costs to develop public relations
Advertising
In general sense, advertising is paid form of non-
personal presentation of ideas, products or services by
an identified sponsor.
In business sense, advertising is a subtle strategy of
communicating information for promoting, alluring
and convincing people to act accordingly and as
expectedly to achieve satisfying results in form of
generation of sale of ideas, goods, services and/or
events.
Features of advertising
It is a Mass communication
It is Informative in Action
It is a persuasive Act
- A = Drawing ATTENTION;
- I = Creating INTEREST in the consumer’s mind;
- D = Arousing DESIRE for the intended product;
- A = Converting Desire into ACTION.
It is a Competitive Act
It is a Paid Form of Communication
It has an Identified Sponsor
It is N0n-personal Presentation
Objectives of advertising
Informing
Persuading
Reminding
Reassuring
Image Building
Media of Advertising
Print media
Visual media
Audio media
Audio-visual media
Internet
1. Print media: Also known as press media advertising is
a form of advertising that uses physically printed
media. They are:
a. Newspapers: Daily, weekly, monthly, bimonthly
newspapers and can be of local level, regional level,
national or international levels.
b. Magazines: Can be published in fortnightly, monthly,
bimonthly, yearly publications.
c. Others: Loose leaf, yellow pages, catalog, package
print, mail, brochure, prospectus, bulletins, business
diary etc.
2. Visual media: It consists of eye catchy and attractive pictures with
writing which is creative and effective. It consists of:
a. Poster advertising: Prepared by printing or writing and can be
pasted on walls, pillars etc.
b. Travelling display: Advertising materials are pasted, hung on
buses, tempo, train, car, jeep, lorry, truck etc. to disseminate the
messages of products and company.
c. Billboards/hoardings: Are printed advertising hung on the wall,
stand, building etc. around major visible places.
d. Indoor display: Using attractive showcase, window display, trade
fair etc.
e. Outdoor display: It consists of wall painting, sky writing, sandwich
men etc.
3. Audio media: It is the electronic communication
media where sound waves are used to broadcast
advertisings.
a. Radio advertising: It is the wireless transmission of
electromagnetic signals through the atmosphere or
free space. The advertisers disseminate their ad
message in the form of notice, information,
description etc. Advertisements are made in the form
of song, music, short stories etc.
b. Others: It includes audio tapes, CDs, telephone,
mobile, etc.
4. Audio-visual media: The term audio-visual may refer
to works with both a sound and a visual component,
the production or use of such works, or the equipment
used to create and present such works.
a. Television advertising: It is a telecommunication
medium that is used for transmitting and receiving
moving images and sound. A commercial ad on
television is a span of television programming
produced and paid for by an organization, which
conveys a message.
b. Others: It includes film, video tapes, You Tube etc.
5. Internet: It is a form of advertising which uses the
internet to deliver promotional messages to
consumers. It includes email marketing, search engine
marketing, social media marketing, many types of
display advertising including web banner advertising.
Publicity
Publicity is any communication about an
organization, its products, or policies through the
media that is not paid for by the organization. –
William J. Stanton
Publicity is the activity to promote a company or its
products by planning news about it in the media not
paid for by the sponsor. – Philip Kotler
News release, feature articles, publication, and press
conference are the main kinds of publicity.
Features of publicity
Non-paid
Control: beyond company
Mass communication
Credibility
Message
Importance of publicity
Announcement of new product
Announcement of policies
Announcement of technological development
Report about performance
Countering negative publicity
Forms/types of Publicity
News release
Feature articles
Press conference
Publications
Sales Promotion
Sales promotion refers to demand stimulating device
designed to supplement advertising and facilitate personal
selling. – William J. Stanton
Sales promotion consists of a diverse collection of
incentive tools mostly short term, designed to stimulate
quicker and/or greater purchase of particular
product/services by customers or the trade. – Philip Kotler
The purpose of sales promotion is to stimulate, motivate,
and influence the purchase and other desired behavioral
responses of the firm’s customers. It works as the bridge to
link advertising and personal selling.
Types of sales promotion
1. Trade oriented promotions:
a. Contests: Rewards offered to salespersons based upon their
sales volume.
b. Free goods: Goods offered to middlemen for bulk buying
within certain period of time.
c. Trade allowances: Are payments or prices reduction to
reward for participating in advertising and sales support
programs.
d. Trade shows: Exhibition organized by producers or sellers.
e. Gifts: Are provided to channel members to encourage sales.
f. Price-offs: Amount deduction from the list prices
temporarily to encourage the channel members to make
sales .
g. Credit facility: Regular intermediaries are provided credit
2. Consumers oriented promotions:
a. Free samples: Free samples of new product is given to
consumers to taste the product and form the opinion.
b. Coupons: They are inserted into packages which offers
variety of attractive offers.
c. Premiums: Are free gifts and provided at the time of
purchase like free glasses with beer, free spoons with
horlicks etc.
d. Rebates: Money refund on what has already been paid.
e. Price offs: Cut or reduction in price of the product
especially during festive periods.
f. Contests and prizes: It consists of lotteries, questions
asking to customers about company and its products
and giving prizes.
Personal Selling
Personal selling is the personal communication of
information to persuade somebody to buy something. –
Stanton, Etzel and Walker
Personal selling is face to face interaction with one or
more prospective purchasers for the purpose of making
presentation, answering questions, and procuring
orders. – Philip Kotler
Personal selling is an oral presentation in a
conversation with one or more prospective customers
for the purpose of making sales. – American Marketing
Association
Features
Direct relationship
Persuading
Customer satisfaction
Flexible
Informing
Focus on prospective customers
Types of personal selling
According to Location:
Indoor personal selling: Done by indoor salesperson
also known as showroom salesperson
Outdoor personal selling: Done by outdoor
salesperson also known as a travelling salesperson
Indoor and outdoor personal selling
According to employer:
Manufacturer’s salesperson (Trade selling)
Wholesalers salesperson
Retailers salesperson
Process of personal selling: Indoor
Drawing attention

Welcome

Inquiry

Demonstration

Meeting objections

Closing the sales

Additional sales

Seeing off with praise

Process of personal selling: Outdoor
Prospecting of customers

Pre-approach

Approach

Presentation and Demonstration

Meeting objections

Closing the sales

Follow up
Relevance of Personal Selling
Flexible Promotional Tool
Two-way Communication
Best means of Persuasion
Represents the Whole Company
Reliable Source of Information
Minimizes Wasted Efforts
Results in the Actual Sale
Public Relations
Public relation is a management tool designed to
favorably influence attitudes towards an organization,
its products, and its policy. – William J. Stanton
Public relation is building good relations with the
company’s various public by obtaining favorable
publicity, building-up a good ‘corporate image’, and
handling or heading off unfavorable rumors, stories,
and events. – Philip Kotler and Gary Armstrong
Tools of public relations
 Special public events: Sports, cultural programs, contests, grand
openings, society aiding programs etc.
 Press conferences
 Newsletters: Published means or bulletin issued periodically to the
customers, members of a society or other organizations
 Lobbying: It is the act of attempting to influence decisions made by
officials in the government, most often legislators or members of
regulatory agencies.
 Product publicity
 Corporate communication
 Mobile marketing: To build one to one relationship with targeted
consumers
 Stakeholder relations
Concept of Direct Marketing
The use of consumer-direct channels to reach and deliver
goods and services to customers without using marketing
middlemen. These channels include direct mail, catalogs,
telemarketing, interactive TV, Kiosks, Web sites, and mobile
devices. – Philip Kotler
An interactive marketing system that uses one or more
advertising media to effect a measurable response and/or
transaction at any location. – Direct Marketing Association
Using advertising to contact consumers who, in turn,
purchase products without visiting a retail store. Direct
marketing includes direct mail, catalog retailing, and
televised shopping. – Stanton
Methods of Direct Marketing
Direct Mail Marketing: It involves sending an offer,
announcement, reminder, or other items such as letters,
brochures and even the product sample to a person, and
asks him to purchase by mail or telephone.
Direct Selling: It is selling goods to the customers
through direct personal contact or face-to-face contact.
Catalog Marketing: In this case, companies may send or
mail full-line merchandise catalogs, especially
consumer catalogs and business catalogs in printed
form, to consumers or make them available at retail
stores to facilitate selection of goods.
Telemarketing: It involves the use of telephone call centers to
attract prospects, sell to existing customers, and provide
service by taking orders and answering questions.
Televised Shopping: Under this method, television channels
and shows are used to describe about the product, display the
use of the products with direct response and request the TV
audience to buy the product or to send order for the product.
Kiosk Marketing: It refers to computer-linked vending
machines and “customer-order-placing machines”, which are
placed in stores, airports, and other locations.
E-marketing: It is the application of a broad range of
information technology, particularly internet, for
transforming traditional marketing activities.
Benefits/Relevance of Direct Marketing
Benefits to Customers:
Convenient shopping
Saves time
Larger selection of merchandise
Sufficient information about products
Heavy discounts on goods

Benefits to Sellers:
Detail information about market
Builds long-term relationship
Minimizes expenses