Chapter- 7 Promotional tools

Chapter objectives
At the end of this chapter you will be able to:
 Analyze advertising process
 Explain sales promotion tools
Define public relation and publicity
Describe Personal selling
 Definition of promotion
Promotion is a function of informing, persuading
and influencing customers in purchasing decision.
The objective of promotion is:
 To provide information
 To increase demand
 To differentiate the company by its product
 To increase or maintain sales
 To build up company image
 To help sales people in facilitating sales.
 Promotional mix
Promotional mix is the blend of communication or promotion
that will be used to the customer. Promotional mix include
advertisement, sales promotion, personal selling and publicity
1.Advertisement
-It is any paid, purposive, non personal communication and
presentation of message of goods, services, idea, generally
product by a known entity (sponsor).
-According to the definition the paid aspect of reflects the fact
that the space of time for an advertising message generally
must be bought.
 On the other hand non personal component means that
advertising involves mass medial, TV, Radio, magazine, and
news paper that can transmit on message to large group of
individuals; often at the some time.
 The non personal nature of advertisement means that there is
generally no opportunity for immediate feedback from the
message recipient. Therefore, before the message is sent the
advertiser must consider how to audience will integrate and
respond to it
 Advertisement is very important promotional tool specially
these company whose products and service are targeted at
mass consumer markets.
There are five major decision are important in advertising (5ms)
M1 -Mission of the advertisement to uses on what is the
advertising Objective?
M2 -Money (budget)
M3- Message we have to select the right message
M4 -Media we have to select the right media
M5- Measurement (evaluation of advertising)
 Advertisement Objective
• In light of the range of advertisement coverage,
two broad types of advertising can be identified.
– product advertising- is non personal presentation of
message to sell a product (good, service, idea,
organization, person)
– Institutional advertising -is concerned about realizing
message about good will philosophy and discharged
social responsibility of a company person, region, or
government institution.
• In perspective of “Primary Objective of the
message” there are three type of advertisement
 a. Informative advertisement
One of its aspect is simply means of transmitting information
It is applied during introductory stage of new product. In addition to this
its primarily objective is to build the primary demand.
b. Persuasive Advertisement
The type of advertisement is important when the product offers to the
growth stage of the product life cycle.
- As this stage competition increase, so a company objective is to build a
selective demand for a particular brand by comparing its product
unique feature among other.
c. Reminder Advertisement.
This is highly demanded when the product enter in to the maturity stage
of the product life cycle. The maturity stage of a product is a time of
profit for most companies and the longest part of the PLC.
 B. The advertising Budget
There are different factor to consider before setting certain
determined levels of annual budget for advertising. The
variable can either be internal or external
I Internal consideration
Product differentiation: when the difference is wider, it would
be easy to show the product position. Visa vis competitors
Stage in the product life cycle : the cost of advertisement
different when the product is in the introductory stage and in
the maturity stage
Advertising frequency: If the firm plans to advertise often, its
advertisement budget is higher.
 External consideration
– Competition: if there is strong competitors exist there
must be frequent advertisement. Thus, it demand
higher budgets
– Market share – Large advertisement spending is
necessary to protect a well known and high market
share.
– Product substitutability – If the product /brand/ is
less substitutable than the advertising spending will
be less.
There are four methodology of allocating advertisement budget.
1) Affordable approach
 In the affordable approach, the budget is simply on the basis
of an assessment of what the company can afford to spend the
for the coming financial year.
 A company that follows this method considers advertisement
as an investment rather than expenditure.
2) Competitive partly methods.
 When applying this principle the advertiser sets the budget at
a level to match the advertising outlay of a competition.
 3) Percentage of sales methods.
 Percentage of sale is one of the most popular methods of
determining advertising budgets.
 The percentage of sales method sets the advertising as a
percentage of the value sales achieved in the previous financial
prior
4) Objective and task method
 A firm can intend a set of objectives to attain and develop
strategies (tasks) of achieving the objectives. Finally, it will
estimate the total expenditure required for performing these
tasks.
 C. Media selection

Media is broadly categorized in to broadcast and printed

media. In the broad cast media we have television and radio
while the printed media includes news paper, direct mail,
magazines and outdoor (billboards and painted bulletins)
advertising (Read Kotler and Armstrong 11thed) about the
media selection and its advantage and disadvantages.
 D. Message Decision
The firms will focus on the benefit of the product
The message should be
a) meaningful pointing out benefit
b) Believable persuading as customers that the firm
really provides the stated benefits
c) Distinctive depicting the firm is better than
competitors
 E. Evaluating Advertising
Advertising should evaluate through two ways.
A. The communication effect B. sales effect
A. Measuring communication effect of adverting
 By using copy testing- this tells whether the advertising is
communicate well
 It can be done before or after an ad. is printed or broadcast.
Before the ad. is placed, the advertiser can show it to consumer,
ask how they like it and measure message recall or attitude
changes resulting from it
 After the ad. run the advertiser can measure how the ad affected
customer recall or product awareness, Knowledge, and
preference.
 B. The sales effect of advertising
It is often hard to measure the communication
effect of advertisement; because sales are affected by many
variables such as product feature, price, and availability.
There are ways to measure sales effect of advertising
 By comparing past sales with past adverting expenditure
 Throng experiment- e.g. to test the advertising in different
market area and different advertising spending level. Coca
cola could vary the amount it spend on advertising in different
market areas and measure the different in the result of sales
level.
 Also more complex experiments could be designed to include
other variable, such as difference in the ads. on media used
 B. Sales promotion.

it defined as a short term, immediate purchase resulting, and

specific target market aiming incentive that facilitates
customer purchasing rate.
There two corresponding sub – divisions
A. Consumer promotion tools
 Samples -fear supply of new or old but unique goods
 Coupons -legal paper or receipt that offers discount from face
value the regular price.