MM 16 Promotion 2019 Part 2 C

ADVERTISING
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The Nature and Types of Advertising
• Advertising
– Paid nonpersonal communication about an
organization and its products transmitted
to a target audience through mass media
The Nature and Types of Advertising
Type Purpose
Institutional Promotes organizational images, ideas, and political issues
Advocacy Promotes a company’s position on a public issue
Product Promotes products’ uses, features, and benefits
Pioneer Tries to stimulate demand for a product category rather
than a specific brand by informing potential buyers about
the product
Competitive Points out a brand’s special features, uses, and advantages
relative to competing brands
Comparative Compares two or more brands on the basis of one or more
product characteristics
Reminder Reminds consumers about an established brand’s uses,
characteristics, and benefits
Reinforcement Assures users they chose the right brand and tells them
how to get the most satisfaction from it

Developing an Advertising Campaign
• Advertising Campaign
– The design of a series of advertisements
and placing them in various advertising
media to reach a particular target audience

General Steps in
Developing and
Implementing an
Advertising
Campaign
FIGURE 19.1
(cont’d)
• Identifying and Analyzing the Target

Audience
– The group of people at whom
advertisements are aimed
• Location and geographic distribution
• Distribution of demographic factors
• Lifestyle information
• Consumer attitudes

(cont’d)
• Defining the Advertising Objectives

– What does the firm hope to accomplish
with the campaign?
• Objectives should be clear,
precise, and measurable.
• Increased sales (units or
Rupee) and/or increased
product or brand awareness

(cont’d)
• Creating the Advertising Platform
– Basic issues or selling points to be
included in the advertising campaign
• Issues in the selection and use of the product
that are important to customers
• Determining the Advertising
Appropriation
– Advertising budget for a specified period
• Geographic size of the market and distribution
of buyers within the market are important
factors in determining the size of the budget

(cont’d)
• Determining the Advertising

Appropriation (cont’d)
Budgeting Approach Methodology
Objective-and-Task Determining advertising objectives and then
calculating the cost of all the tasks needed to attain
them
Percent-of-Sales Multiplying the firm’s past and expected sales by a
standard percentage based on what the firm has
traditionally spent on advertising and the industry
average for advertising spending
Competition-Matching Setting the advertising budget to match competitors’
spending on advertising
Arbitrary Setting the advertising budget at a level specified by
a high-level executive in the firm

(cont’d)
• Developing the Media Plan
– Specifies media vehicles (e.g., magazines, radio,
and television stations, and newspapers) and the
schedule for running the advertisements
– Plan objectives focus on achieving the reach and
frequency that the budget will allow.
• Reach: the percentage of consumers in a target market
exposed to an advertisement in a specified period
• Frequency: the number of times targeted consumers
are exposed to an advertisement in a specified period

(cont’d)
• Developing the Media Plan (cont’d)
– Cost comparison indicator
• A means of comparing the cost of vehicles in a
specific medium in relation to the number of
people reached
• The indicator is stated as the cost for exposing
one thousand people (CPM) to an
advertisement in a medium.
– Media scheduling types
• Continuous
• Flighting
• Pulsing
Choosing Media
• Selecting media timing and allocation
Copyright © 2016 Pearson Education, Inc. 18-12

(cont’d)
• Creating the Advertising Message

Product Features, Uses,
and Benefits
Characteristics of the Form and

Target Audience
Content of
Advertising Campaign Advertising
Objectives and Platform Message
Choice of Media

Types of Advertising Appeal
• Rational
• Emotional
-Positive
-Negative/Fear
• Moral

(cont’d)
• Creating the Advertising Message (cont’d)
– Copy: the verbal portion of advertisements
• Includes headlines, subheadlines, body copy,
and signature
– Copy guidelines
• Identify a specific desire or problem
• Recommend the product as the best
way to satisfy the desire or solve
the problem
• State product benefits
• Substantiate advertising claims
• Ask the buyer to take action

(cont’d)

(cont’d)
– Storyboard: A mockup combining copy and
visual material to show the sequence of
major scenes in a commercial
Plugged Unplugged Leap Upset

“Hum” “Buzz” “Yeah” “Oops”
(cont’d)
(cont’d)
– Artwork
• An ad’s illustration and layout
– Illustrations
• Photos, drawings, graphs,
charts, and tables used to
spark audience interest
– Layout
• The physical arrangement of an ad’s
illustration and copy

(cont’d)
• Executing the Campaign

– Planning and coordination
– Implementation
• Detailed scheduling of campaign phases
• Evaluation and
corrective action as
necessary to make
the campaign more
effective

(cont’d)
• Evaluating Advertising Effectiveness

Evaluation Assessment
Pretest Evaluation of ads performed before a campaign begins
Consumer Jury A panel of a product’s actual or potential buyers who
pretest ads
Posttest Evaluation of advertising effectiveness after the
campaign
Recognition Test A posttest in which individuals are shown the actual
ad and asked if they recognize it
Unaided Recall Test A posttest in which respondents identify ads they have
recently seen but are given no recall clues
Aided Recall Test A posttest that asks respondents to identify recent ads
and provides clues to jog their memories

PUBLICITY & PUBLIC
RELATIONS

Public Relations
• Communications efforts used to create

and maintain favorable relations
between an organization
and its stakeholders
• Focuses on enhancing the
image of the total
organization

Public Relations Tools
• News releases
• Brochures
• Newsletters
• Company magazines
• Annual reports
• Corporate identity materials (eg . logos, stationary,
brochures, signs, business forms, business cards, buildings, uniforms and company
cards which identify an organisation visibly)
• Speeches
• Event sponsorship
Publicity
• A news story type of communication
transmitted through a mass medium at no
charge
– News release
• A short piece of copy publicizing an event or a product
– Feature article
• A manuscript of up to 3,000 words prepared for a
specific publication
– Captioned photograph
• A photo with a brief description of its contents
– Press conference
• A meeting used to announce major news events

Publicity (cont’d)
• Advantages
– Credibility
– News value
– Significant word-of-mouth communications
– A perception of being endorsed by the media
• Limitations
– Must be accepted by news media
– Must be timely, interesting, accurate, and in the
public interest
– Inability to control content or time of release to
public

• IS PUBLICITY REALLY FREE?

Dealing with Unfavorable Public Relations
• Prevention of negative incidents and

events
– Safety programs, inspections, and
effective quality control procedures
• Preparedness for negative incidents
and events
– Predetermined policies and procedures
that expedite news coverage
– Being forthright with the press and the
public

PERSONAL SELLING

The Nature of Personal Selling
• Personal Selling
– Paid personal communication that informs
customers and persuades them to buy products.
• Most adjustable to customer information needs
• Most precise (targeted) form of promotion methods
• Most expensive element in promotion mix

CHARECTERISTIC TRANSACTION SELLING RELATIONSHIP SELLING
Time Orientation Short Term (Do the deal Long-Term; (Negotiate a

&Disappear) win-win sales sitaution)
Organization Make the Sale/Selling Emphasis on Retaining the
Orientation/Focus Focus Customer/Relationship
Focused
Customer Service Priority Relatively Low Key Component
Customer Contact Low to Moderate Frequent
Degree of Customer Low/No structure for High/Structure for

Commitment Ongoing Business Supporting Ongoing
Realtionship
Basis for Customer-Seller Conflict, Manipulation Cooperation, Trust
Interaction
General Steps in
the Personal
Selling Process

Elements of the Personal Selling Process
• Prospecting
– Developing a list of potential customers
• Sales records, trade shows, commercial
databases, newspaper announcements, public
records, telephone directories, trade
association directories
• Reponses to advertisements
with information request forms
• Referrals—recommendations
from current customers
20 | 33
(cont’d)
• Preapproach
– Finding and analyzing information about the
prospect
• Specific product needs
• Current use of brands
• Feelings about available brands
• Personal characteristics
– Additional research
• Identifying key decision makers
• Reviewing account histories and problems
• Contacting other clients for information
• Assessing credit histories and problems
• Preparing sales presentations
• Identifying product needs
(cont’d)
• Approach
– The manner in which a salesperson contacts a
potential customer
• Purpose is to gather information about the buyer’s
needs and objectives
• Important to create a favorable first impression and
build rapport with prospective customer
– Typical approaches
• Referral by another customer to a prospective customer
• “Cold canvass” call without prior introduction to the
customer
• Repeat contact based on prior meeting(s) with the
potential customer

(cont’d)
• Making the Presentation
– During the presentation:
• Attract and hold the prospect’s
attention.
• Stimulate interest in the product.
• Spark a desire for the product.
• Listen and respond to the prospect questions and
comments.
– Ways to enhance the presentation’s effects
• Have the prospect touch, hold, or use the product.
• Use audiovisual technology to heighten the impact of
the presentation.

(cont’d)
• Overcoming objections
– Anticipate objections and counter them
during the presentation
– Generally, best to handle objections as
they arise
• Closing the sale
– Closing is the stage in the selling process
when the salesperson asks the prospect to
buy the product.

(cont’d)
• Closing strategies
– “Trial” closing: asking questions (what, how, or
why) that assume the customer will buy the
product
– Asking for a tryout order: low-risk way for
customer to try out the product
• Following up
– Determining if the delivery and setup of order was
completed to the customer’s satisfaction
– Ascertaining the customer’s future product needs

Types of Salespeople
• Order Getters
– The salesperson who sells to new customers and
increases sales to current ones
– Creative selling
• Current-customer sales
• New-business sales
• Order Takers
– The salesperson who primarily
seeks repeat sales
• Inside order takers
• Field order takers

Types of Salespeople (cont’d)
• Support Personnel: sales staff members who

facilitate selling but usually are not involved
solely with making sales
– Missionary salespeople
• Support salespersons who assist the producer’s
customers in selling to their own customers
– Trade salespeople
• Salespersons involved mainly in helping a producer’s
customers promote a product
– Technical salespeople
• Support salespersons who give technical assistance to
a firm’s current customers

Managing the Sales Force
Establishing Sales
Force Objectives
Determining Sales
Force Size
Recruiting &
Selecting
Training
Compensating
Motivating
Evaluating
Managing the Sales Force
• Establishing Sales Force Objectives

– Objectives tell salespeople what they are to
accomplish during a specified time period.
– Objectives for the total sales force
• Sales volume: total units or Rupee of product sold for a
period of time
• Market share: unit or Rupee percentage share of the
total market for a product
• Profit: Rupee or percentage of return on investment
(ROI)
– Objective for individual salespersons
• Quotas: Rupee or units sold, or average order size,
average number of calls, or ratio of orders to calls by an
individual salesperson

Managing the Sales Force (cont’d)
• Determining Sales Force Size

– Size of sales force affects
• compensation methods for salespersons.
• morale of salespersons.
• overall sales force management.
– Methods for determining optimal sale force size:
• Dividing the number of sales calls necessary to serve
customers by the number of sales calls a salesperson
makes annually
• Adding additional salespersons until the cost of adding
one more salespersons equals the additional sales that
would be generated by that person

• Recruiting and Selecting Salespeople

– Recruiting
• Developing a list of qualified applicants for sales
positions
– Establish a set of qualifications that best match
the firm’s particular sales tasks
• Prepare a job description listing specific tasks
• Analyze successful salespeople among current
employees
– Sources of applicants
• Other departments in the company, other firms,
employment agencies, educational institutions, job ad
respondents, employee referrals

• Training Sales Personnel

– What to teach?
• The company, its products, or selling methods
– Whom to train?
• Newly hired or experienced salespeople, or both
– When/where to train?
• In the field, at educational institutions, in company
facilities
• Before or after initial field assignment
• Frequency, sequencing, and duration of periodic
training

• Training Sales Personnel (cont’d)

– Who will train?
• Sales managers, technical personnel, outside
consultants
– How to train?
• Materials and
instructional methods

• Compensating Salespeople
– Compensation objectives
• Attract, motivate, and retain effective salespeople
• Maintain the desired level of control
• Provide acceptable levels
of income, freedom, and incentive
• Encourage proper
treatment of customers
- Compensation Method
• Straight Salary
• Straight Commission
• Combination
• Motivating Salespeople
– Motivation should be provided on a continuous
basis.
– Motivational incentives
• Enjoyable working conditions
• Power and authority
• Job security
• Opportunities to excel
– Motivational methods
• Sales contests
• Recognition programs
• Awards (travel, merchandise, and cash)

• Managing Sales Territories

– Creating sales territories
• Based on similar sales potential or requiring
about the same amount of work
• Setting differential commission rates to
compensate for differences in the
characteristics of
territories (density
and distribution of
customers)

• Managing Sales Territories (cont’d)

– Routing and scheduling considerations
• Geographic size and shape of the territory
• Number and distribution of customers
• Sequence of customer calls
• Routes and distances traveled
• Minimizing salesperson’s
travel and lodging costs

• Controlling and Evaluating Sales Force

Performance
– Sales objectives, determined by the sales
manager, stated in terms of
• Sales volume
• Average number of calls per day
• Average sales per customer
• Actual sales relative to sales potential
• Number of new customer orders
• Average cost per call
• Average gross profit per customer

SALES PROMOTION

The Nature of Sales Promotion
• Sales Promotion
– An activity and/or material that acts as a direct
inducement to resellers or salespeople to sell a product
or consumers to buy it ( of limited duration)
– A collection of incentive tools, mostly short term, designed
to stimulate quicker or greater purchase of particular
products or services by consumers or the trade
– It is most effective when it facilitates or is facilitated by
personal selling and advertising.
– Its use has grown dramatically in recent years .

• Advantages & Disadvantages
of Sales Promotion ?

The Nature of Sales Promotion (cont’d)
• Deciding Which Sales Promotion

Method to Use
– Product characteristics
– Target market characteristics
– Distribution channel(s)
– Number and types of
resellers
– Competitive and legal
environment

14-60
Types of Sales Promotion Activities

Consumer Sales Promotion Methods
• Encourage or stimulate consumers to

patronize specific stores or to try
particular products

(cont’d)
• Coupons and Rupees-Off Offers
– Coupons
• Written price reductions used to encourage consumers
to buy a specific product
• Effective coupons are easily recognized and state the
offer clearly.
• The nature of the product is the prime consideration in
setting up a coupon promotion.
• Advantages: generate brand
awareness and interest and reward
brand loyalty
• Disadvantages: Fraud and
misredemptions; consumer ill-will
from stock-outs during promotions

(cont’d)
• Coupons and Rupee-Off Offers (cont’d)
– Rupee-off offers
• Promotions that let buyers pay less than the regular
price to encourage purchase
• Refunds/Rebate
• Sending consumers money when they submit a proof of
purchase, usually for multiple product purchases

(cont’d)
• Frequent User Incentives
– Frequent-user incentives
• Incentive programs that foster consumer loyalty by
rewarding customers’ repeat (frequent) purchases
• Point-of-Purchase Materials
– Point-of-purchase displays
• Signs, window displays, display racks, and similar
means used to attract customers and to encourage
immediate purchases
– Demonstrations
• Manufacturers use it temporarily to encourage trial use
and purchase of a product or to show how a product
works.
• Highly effective yet costly in practice
(cont’d)
• Free Samples and Premiums
– Free samples
• Samples of a product given out to encourage trial and
purchase
• Used to increase sales volume and obtain desirable
distribution for fast turnover products
• The most expensive form of sales promotion
– Premiums
• Items offered free or at a minimal cost as a bonus for
purchasing a product
• Premium must match both the target market and the
brand’s image.
• Premiums must be easily recognizable and desirable.

(cont’d)
• Consumer Games, Contests, and
Sweepstakes
– Consumer contests and games
• Individuals compete for prizes based on analytical or
creative skills.
• Competitions for prizes are used to generate retail
traffic and to increase exposure to promotional
messages.
– Consumer sweepstakes
• A sales promotion in which entrants submit their names
for inclusion in a drawing for prizes
• Used more than contests and attract more widespread
interest
Trade Sales Promotion Methods
• Ways of persuading wholesalers and

retailers to carry a producer’s products
and to market them aggressively

Trade Sales Promotion Methods (cont’d)
• Trade Allowances
– Buying allowance
• A temporary price reduction to resellers for purchasing
specified quantities of a product
– Merchandise allowances
• A manufacturer’s agreement to help resellers pay for
special promotional efforts

• Cooperative Advertising and Dealer

Listings
– Cooperative advertising
• Sharing of media costs by manufacturer and
retailer for advertising the manufacturer’s
products
– Dealer listings
• Ads promoting a product and identifying
retailers that sell the product; influences
retailers to carry the products, builds traffic at
the retail level, and encourages consumers to
shop at participating dealers
• Free Merchandise and Gifts

– Free merchandise
• A manufacturer’s reward given to resellers for
purchasing a stated quantity of goods
• Usually takes the form of a reduced invoice
– Dealer loader
• A gift, often part of a
display, offered to a
retailer who purchases
a specified quantity of
merchandise
• Premium (Push) Money

– Extra compensation to salespersons for
pushing a line of products
• Sales Contests
– A means of motivating
distributors, retailers, and
salespeople by recognizing
outstanding achievements

At the end of this Session you should:
• Understand the major purposes of

personal selling.
• Know the basic steps in the personal
selling process.
• Be able to identify the types of sales
force personnel.
• Have insight into sales management
decisions and activities.

At the end of this Session you
should(contd.):
• Be aware of what sales promotion

activities are and how they can be used.
• Be familiar with specific consumer and
trade sales promotion methods.

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ADVERTISING

Copyright © Houghton Mifflin Company. All rights reserved. 20 | 1

Copyright © Houghton Mifflin Company. All rights reserved. 19 | 3

Copyright © Houghton Mifflin Company. All rights reserved. 19 | 4

• Identifying and Analyzing the Target

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• Defining the Advertising Objectives

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• Determining the Advertising

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Copyright © Houghton Mifflin Company. All rights reserved. 19 | 10

Copyright © 2016 Pearson Education, Inc. 18-12

• Creating the Advertising Message

Characteristics of the Form and

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Copyright © Houghton Mifflin Company. All rights reserved. 19 | 16

• Creating the Advertising Message

Plugged Unplugged Leap Upset

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• Executing the Campaign

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• Evaluating Advertising Effectiveness

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• Communications efforts used to create

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• Prevention of negative incidents and

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Time Orientation Short Term (Do the deal Long-Term; (Negotiate a

Customer Contact Low to Moderate Frequent

Degree of Customer Low/No structure for High/Structure for

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• Support Personnel: sales staff members who

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• Establishing Sales Force Objectives

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• Determining Sales Force Size

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• Recruiting and Selecting Salespeople

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• Training Sales Personnel

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• Training Sales Personnel (cont’d)

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• Managing Sales Territories

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• Managing Sales Territories (cont’d)

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• Controlling and Evaluating Sales Force

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