Dr.S.

John Mano Raj

Promotion Decision Promotion Decision
Dr.S.John Mano Raj
Promotion Mix = Marketing
Communication Mix
Dr.S.John Mano Raj
Promotion
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Dr.S.John Mano Raj
Objectives of Promotion
Provide information to consumers and
others;
Increase demand;
Differentiate a product;
Accentuate a product's vaIue;
uiId up brand equity
Dr.S.John Mano Raj
Objectives of Promotion
Provide Information Provide Information
nform the market about the availability of a
particular good or service
Increase Demand Increase Demand
Some promotions are aimed at increasing
primary demand, the desire for a general
product category
More promotions are aimed at increasing
selective demand, the desire for a specific
brand
Dr.S.John Mano Raj
Differentiate the Product Differentiate the Product
Homogenous demand for many products
results when consumers regard the firm's
output as virtually identical to its
competitors' then, the firm has virtually no
control over marketing variables
Accentuate the Product's VaIue Accentuate the Product's VaIue
Promotion can explain the greater ownership
utility of a product to buyers, thereby
accentuating its value and justifying a higher
price
Dr.S.John Mano Raj
$tabiIize $aIes $tabiIize $aIes
For the typical firm, sales
fluctuations may result from
cyclical, seasonal, or irregular
demand
Stabilizing these variations is often
an objective of promotional
strategy
Dr.S.John Mano Raj
15 - 8
Definition
arketing Communications ix ( Promotion ix) arketing Communications ix ( Promotion ix)
A company's total marketing communication A company's total marketing communication
program is called as " program is called as " Promotion Mix Promotion Mix
Promotion Mix Promotion Mix Consists of specific mix of Consists of specific mix of
advertising, personal selling, sales promotion, advertising, personal selling, sales promotion,
and public relations tools that the company and public relations tools that the company
uses to pursue its advertising and marketing uses to pursue its advertising and marketing
objectives. objectives.
Dr.S.John Mano Raj
15 - 9
Communications efforts should be viewed Communications efforts should be viewed
from the perspective of managing customer from the perspective of managing customer
relationships over time. relationships over time.
The communication process begins with an The communication process begins with an
audit of all potential contacts. audit of all potential contacts.
Effective communication requires knowledge Effective communication requires knowledge
of how communication works. of how communication works.
The Communication Process
Dr.S.John Mano Raj
Iements in the communication process
Sender Sender Receiver Receiver
Encoding Encoding
Decoding Decoding
Media Media
Message Message
Feedback Feedback Response Response
Noise Noise
Sender`s Iield oI experience
Receiver`s Iield oI experience
Dr.S.John Mano Raj
$teps in DeveIoping ffective
Communication
dentiIying the Target Audience dentiIying the Target Audience
Determining the communication
objectives
Determining the communication
objectives
Designing a Message Designing a Message
Choosing Media Choosing Media
Selecting the Message Source Selecting the Message Source
Collecting Feedback Collecting Feedback
Dr.S.John Mano Raj
15 - 12
$tep 1: $tep 1: dentifying the Target Audience dentifying the Target Audience
Affects decisions related to what, how, when, Affects decisions related to what, how, when,
and where message will be said, and where message will be said,
as well as who will say it as well as who will say it
$tep 2: $tep 2: Determining Communication Determining Communication
Objectives Objectives
Six buyer readiness stages Six buyer readiness stages
Developing Effective Communication
Dr.S.John Mano Raj
Buyer-Readiness Stages
Dr.S.John Mano Raj
$tep 3: Designing a message
Message content Message content
Message structure
& Message format
Message structure
& Message format
What to say? What to say?
How to say? How to say?
Dr.S.John Mano Raj
Step 3: Designing a message
Content
Type of appeal
Structure
One-sided, two sided and
strongest argument first or last
Format
Visual and aural; impact of
colour
Dr.S.John Mano Raj
Message Content
Rational appeal
Economy (Price), Quality, Value, Features and Benefits of the products Economy (Price), Quality, Value, Features and Benefits of the products
Emotional
attempts to stir up either positive or negative emotions to that can attempts to stir up either positive or negative emotions to that can
motivate purchase. motivate purchase.
Love, pride, joy, humor, fear, guilt, shame Love, pride, joy, humor, fear, guilt, shame
E.g. Crack creams. E.g. Crack creams.
oraI AppeaI oraI AppeaI
eg. $ave environment eg. $ave environment
Dr.S.John Mano Raj
17
Advertising Appeals
!rofit
Health
Love or romance
Fear
Admiration
Convenience
Fun and pleasure
Vanity and egotism
Environmental
Consciousness
!roduct saves, makes, or protects money
Appeals to body-conscious or health seekers
Used in selling cosmetics and perfumes
Social embarrassment, old age, losing health
Reason for use of celebrity spokespeople
Used for fast foods and microwave foods
Key to advertising vacations, beer, parks
Used for expensive or conspicuous items
Centers around environmental protection
Dr.S.John Mano Raj
$tep 4: Choosing media
!ersonal
communication
channel
!ersonal
communication
channel
Word-of-mouth
influence
Word-of-mouth
influence
Non-personal
communication
channel
Non-personal
communication
channel
Dr.S.John Mano Raj
Choosing Media
Personal and non-personal channels
Personal communications (face to face,
telephone, e-mail)
May be controlled by company ie with
salesperson or independent (word of mouth from
family or friend)
Personal influence especially important for
expensive, risky or highly visible products
Dr.S.John Mano Raj
Choosing Media ...
Marketers want to influence opinion
leaders
Non-personal channels carry messages
without personal contact or feedback
(major print, broadcast and display media)
Mass media influences opinion leaders
who then carry message
Dr.S.John Mano Raj
Marketing Communication
Categories of
Communication
Categories of
Communication
InterpersonaI InterpersonaI
Communication Communication
InterpersonaI InterpersonaI
Communication Communication
ass ass
Communication Communication
ass ass
Communication Communication
New Trend OId Trend
Dr.S.John Mano Raj
The Changing
Communications Environment
Two Factors
are Changing the Face of Today's
Narketing Communications:
!mprovements in
!nformation Technology
Has Led to
Segmented Narketing
Nore Narrowcasting
Narketers Have Shifted
Away From Nass
Narketing
Less Broadcasting
Dr.S.John Mano Raj
15 - 23
Highly credible sources are more persuasive Highly credible sources are more persuasive
A poor spokesperson can tarnish a brand A poor spokesperson can tarnish a brand
Eg. Company, salesperson, media, reference Eg. Company, salesperson, media, reference
group group
$tep 5: $tep 5: Selecting the Message Selecting the Message
Source Source
Dr.S.John Mano Raj
$tep 6: $tep 6: Collecting Feedback Collecting Feedback
Recognition, recall, and behavioral Recognition, recall, and behavioral
measures are assessed measures are assessed
How many times did target market see
message, what do they remember, how do
they feel about it, what were past and
present attitudes. Did they discuss it, visit
the store, buy it?
Responses may suggest changes to
product or promotion
Dr.S.John Mano Raj
Response Hierarchy Models
Dr.S.John Mano Raj
nverted Pyramid of Communications Effects
Awareness
7 Knowledge
4 Liking
25 !reference
2 Trial
5 Use
Dr.S.John Mano Raj
Budgeting for Promotional
Strategy
Percentage-of-sales method
Fixed-sum-per-unit method
Meeting competition method
Task-objective method
Dr.S.John Mano Raj
Method Description Example
!ercentage-of-
sales method
!romotional budget is set as a
speciIied percentage oI either
past or Iorecasted sales.
'Last year we spent $ on
promotion and had sales oI $4.
Next year we expect sales to grow to
$48 and we are allocating
$ Ior promotion.
Fixed-sum-per-
unit method
!romotional budget is set as a
predetermined rupees amount
Ior each unit sold or produced.
'Our Iorecast calls Ior sales oI 4
units and we allocate promotion at the
rate oI $6 per unit.
Meeting
competition
method
!romotional budget is set to
match competitor`s promotional
outlays on either an absolute or
relative basis.
'!romotional outlays average 4
percent oI sales in our industry.
Task-objective
method
Once marketers determine their
speciIic promotional objectives
the amount (and type) oI
promotional spending needed to
achieve them is determined.
'By the end oI next year we want
percent oI the area highschool
students to be aware oI our new highly
automated IastIood prototype outlet.
How many promotional dollars will it
take and how should they be spent?
Dr.S.John Mano Raj
Measuring the Effectiveness of Promotion
Two basic measurement tools:
Direct saIes resuIts measures the
effectiveness of promotion by revealing the
specific impact on sales revenues for each
rupee of promotional spending
Indirect evaIuation concentrates on
quantifiable indicators of effectiveness like:
RecaII - how much members of the target market
remember about specific products or
advertisements
Readership size and composition of a
message's audience
Dr.S.John Mano Raj
The Value of Marketing Communications
$ociaI Importance $ociaI Importance
Criticisms of promotional messages as tasteless
and lacking any contribution to society sometimes
ignore the fact that society provides no commonly
accepted set of standards
The one generally accepted standard in a market
society is freedom of choice for the consumer
Promotion has become an important factor in
campaigns aimed at achieving socially oriented
objectives like the elimination of drug abuse
Dr.S.John Mano Raj
usiness Importance usiness Importance
Promotional strategy has become
increasingly important to both small and large
firms
ts effectiveness to encourage attitude
changes, brand loyalty and increase sales is
well-documented
Both business and non-business enterprises
recognize the importance of promotional
efforts
Non-business organizations using promotion
include governments and religions
Dr.S.John Mano Raj
conomic Importance conomic Importance
Effective promotion has allowed society to
derive benefits not otherwise available
Promotion increases the number of units
sold; the resulting economies of scale
lower production costs and allows lower
sales prices
Subsidizes the information contents of
newspapers and the broadcast media
Dr.S.John Mano Raj
Promotional Strategy
Competitive Competitive
Advantage Advantage
Promotional Strategy Promotional Strategy
A plan for the optimal use of the elements
of promotion:
Advertising
PubIic ReIations
$aIes Promotion
PersonaI $eIIing
Direct/Interactive
Dr.S.John Mano Raj
PROMOTON DECSON PROCESS
Target Market
Promotion Objectives
Select Promotion
Tools
Select Delivery
Systems
Commit
Resources
Measure Promotion
Effectiveness
Execute Promotion Strategy
Dr.S.John Mano Raj
Integrated arketing
Communications (IC)
The concept under which a company carefully
integrates and coordinates its many
communications channels to deliver a clear,
consistent, and compelling message about the
organization and its products.
Dr.S.John Mano Raj
ntegrated Marketing
Communications
The Marketing Communications Environment is
Changing:
Mass markets have fragmented, causing marketers to
shift away from mass marketing to target marketing.
mprovements in information technology are
facilitating segmentation
Media fragmentation has occurred with companies
doing less broadcasting and more narrowcasting
Dr.S.John Mano Raj
ntegrated Marketing
Communications
The Need for ntegrated Marketing
Communications
Conflicting messages from different sources or
promotional approaches can confuse company or
brand images
The problem is particularly prevalent when
functional specialists handle individual forms of
marketing communications independently
Dr.S.John Mano Raj
Promotional Mix
ix
Advertising
Selling
Promotion
P.R.
Optimal Mix
Advertising Personal Selling
Sales Promotion Public Relations
Dr.S.John Mano Raj
Marketing Communications
(Promotional) Mix
Any Paid Form of
NonpersonaI Presentation by
an Identified $ponsor.
Any Paid Form of
NonpersonaI Presentation by
an Identified $ponsor.
Advertising Advertising
$aIes Promotion
$hort-term Incentives to
ncourage $aIes.
Interactive ktg
Direct Communications With
IndividuaIs to Obtain an
Immediate Response.
PubIic ReIations
uiIding Good ReIations with
Various PubIics by Obtaining
FavorabIe PubIicity.
PersonaI $eIIing PersonaI $eIIing
PersonaI Presentations
by a Firm's $aIes Force.
Dr.S.John Mano Raj
Porf (I):
1. Promot|on N|s.
2. Persona| & non-
persona| e|ements.
3. what |s persona|
se|||ng?
4. wh, persona| se|||ng?
5. Promot|on Strateg|es.
1. Promot|on N|s.
Promot|on
N|s
Ad.ert|s|ng
Puh||c|t,
Sa|es
Promot|on
Persona|
Se|||ng
2. Persona| & non-
persona| e|ements.
Dr.S.John Mano Raj
Direct marketing
You see a gorgeous girI
at a party. You go up to
her and say, "I am very
rich. arry me!"
That's Direct arketing.
Dr.S.John Mano Raj
Advertising.
You're at a party with a
bunch of friends and see
a gorgeous girl.
One of your friends goes
up to her and pointing at
you says, "He's very rich.
Marry him."
That's Advertising.
Dr.S.John Mano Raj
TeIemarketing
You see a gorgeous girl at a
party. You go up to her
and get her telephone
number. The next day you call
and say, "Hi, 'm very rich.
Marry me."
That's TeIemarketing.
Dr.S.John Mano Raj
PubIic ReIations.
You're at a party and see a
gorgeous girl. You get up and
straighten your tie, you walk up to
her and pour her a drink.
You open the door for her, pick up
her bag after she drops it, offer her
a ride, and then say,
"By the way, 'm very rich. Will you
marry me?"
That's PubIic ReIations.
Dr.S.John Mano Raj
rand Recognition.
You're at a party and see a
gorgeous girl.
She walks up to you and
says, "You are very rich.."
That's rand Recognition.
Dr.S.John Mano Raj
Customer Feedback
You see a gorgeous girl at a
party. You go up to her and
say, "'m rich. Marry me"
She gives you a nice hard
slap on your face.
That's Customer Feedback
!!!!!
Dr.S.John Mano Raj
Competition
You see a gorgeous girl at
a party. You go up to her
and before you say, " am
very rich. Marry me!"
she turns her face towards
you ------------ she is your
wife !
That's competition eating
into your market share
Dr.S.John Mano Raj
Promotion ix Iements Promotion ix Iements
- The direct presentation of a product to a prospective
customer by a representative of the organization
selling it
- t takes place face-to-face or over the phone
- t may be directed to a business person or a final
customer
- Across all organizations, more money is spent on
personal selling than on any other form of promotion
!ersonal selling
Dr.S.John Mano Raj
Promotion ix Iements Promotion ix Iements
- Nonpersonal communication paid for by a clearly
identified sponsor promoting ideas, organizations, or
products
- Most familiar outlets are broadcast (TV, radio) and
print (newspapers, magazines) media
- However, there are many other advertising vehicles,
from billboards to T-Shirts and, more recently, the
nternet
Advertising
Dr.S.John Mano Raj
Promotion ix Iements Promotion ix Iements
- A sponsor-funded, demand-stimulating activity
designed to supplement advertising and facilitate
personal selling
- Frequently consists of a temporary incentive to
encourage a sale or purchase
- ncluded are a wide spectrum of activities, such as
event sponsorships, frequency programs, contests,
trade shows, in-store displays, rebates, samples,
premiums, discounts, and coupons
$ales promotion
Dr.S.John Mano Raj
Promotion ix Iements Promotion ix Iements
- Unlike most advertising and personal selling, it does not include a
specific sales message
- PR can take many forms, including newspapers, annual reports,
lobbying, and support of charitable or civic events
- Publicity
- is a special form of PR that involves news stories about an
organization or its products
- Like advertising, it consists of an impersonal message that
reaches a mass audience
- But: Placement is not paid for, the organization that is the
subject of the publicity has little or no control over it, it appears
as news and therefore has greater credibility than advertising
- Organizations should try to provide the material for good
publicity
!:-lic relations
Dr.S.John Mano Raj
Promotional Mix Characteristics
Dr.S.John Mano Raj
managing
marketing
InternationaI arketing ix Decisions
Creative Challenges in nternational Communications
Legal and tax considerations
Language limitations
Cultural diversity
Media limitations
Production and cost limitations
Legal and tax considerations
Language limitations
Cultural diversity
Media limitations
Production and cost limitations
Dr.S.John Mano Raj
Nature of Product Nature of Product
Stage in PLC Stage in PLC
Price Price
Funds Available Funds Available
Factors that influence
the effectiveness of a
promotional mix:
Nature of the market
Nature of the product
Stage in the product
life-cycle
Price
Funds available for
promotion
Nature of Market Nature of Market
DEVELOPNG AN OPTMAL
PROMOTONAL MX
Dr.S.John Mano Raj
Visual of Factors Affecting Promo
Mix
Dr.S.John Mano Raj
Push versus puII promotion strategy

!roducer !roducer
Retailer &
wholesalers
Retailer &
wholesalers
Consumers Consumers
!roducer !roducer
Retailer &
wholesalers
Retailer &
wholesalers
Consumers Consumers
!roducer
marketing
activities
Reseller
marketing
activities
Demand
Demand
!roducer marketing activities
!ush strategy
!ull strategy
Dr.S.John Mano Raj
Push and Pull Strategies
anufacturer anufacturer
promotes to promotes to
whoIesaIer whoIesaIer
anufacturer anufacturer
promotes to promotes to
whoIesaIer whoIesaIer
WhoIesaIer WhoIesaIer
promotes to promotes to
retaiIer retaiIer
WhoIesaIer WhoIesaIer
promotes to promotes to
retaiIer retaiIer
RetaiIer RetaiIer
promotes to promotes to
consumer consumer
RetaiIer RetaiIer
promotes to promotes to
consumer consumer
Consumer Consumer
buys from buys from
retaiIer retaiIer
Consumer Consumer
buys from buys from
retaiIer retaiIer
PU$ $TRATGY PU$ $TRATGY
Orders to manufacturer
anufacturer anufacturer
promotes to promotes to
consumer consumer
anufacturer anufacturer
promotes to promotes to
consumer consumer
Consumer Consumer
demands demands
product product
from retaiIer from retaiIer
Consumer Consumer
demands demands
product product
from retaiIer from retaiIer
RetaiIer RetaiIer
demands demands
product product
from whoIesaIer from whoIesaIer
RetaiIer RetaiIer
demands demands
product product
from whoIesaIer from whoIesaIer
WhoIesaIer WhoIesaIer
demands demands
product from product from
manufacturer manufacturer
WhoIesaIer WhoIesaIer
demands demands
product from product from
manufacturer manufacturer
Orders to manufacturer
PULL $TRATGY PULL $TRATGY
Dr.S.John Mano Raj
Nature of the market Nature of the market
Personal selling may prove effective with a market
composed of a limited number of buyers
Advertising is more effective when a market has large
numbers of potential customers scattered over sizable
geographic areas
Personal selling often works better for intermediary
target markets
Nature of the product Nature of the product
Highly standardized products with minimal servicing
requirements usually need less personal selling than
custom products with complex features and/or
frequent maintenance needs
Consumer products are more likely to rely heavily on
advertising than are business products
Dr.S.John Mano Raj
Customer nvolvement
Dr.S.John Mano Raj
Product Life Cycle and the
Promotional Mix
Light
Advertising,
pre-
introduction
PubIicity
eavy use of
advertising,
PR for
awareness;
saIes
promotion
for triaI
AD/PR
decrease
Limited
$aIes
Promotion,
PersonaI
$eIIing for
distribution
Ads
decrease.
$aIes
Promotion,
PersonaI
$eIIing
Reminder &
Persuasive
Advertising,
PR, rand
IoyaIty
PersonaI
$eIIing for
distribution
Introduction Introduction
Growth Growth
aturity aturity
DecIine DecIine
$
a
l
e
s

(
$
)
$
a
l
e
s

(
$
)
Time Time
Dr.S.John Mano Raj
$tage in the product Iife $tage in the product Iife- -cycIe cycIe
Promotional mix must be tailored to the products
stage in the product life-cycle
n the introductory stage, there is a heavy emphasis
on personal selling to the to the intermediaries
However, advertising and sales promotion help to
create awareness and stimulate initial purchases
n the growth and maturity stages, advertising gains
relative importance
Personal selling efforts at marketing intermediaries to
expand distribution is continued
n the maturity and early decline stages, firms
frequently reduce advertising and sales promotion
expenditures
Dr.S.John Mano Raj
Type of Buying Decision
Advertising
$aIes Promotion
Type of Type of
uying Decision uying Decision
affects affects
PromotionaI PromotionaI
ix Choice ix Choice
Type of Type of
uying Decision uying Decision
affects affects
PromotionaI PromotionaI
ix Choice ix Choice
CompIex CompIex CompIex CompIex
Routine Routine Routine Routine
PersonaI $eIIing
Not Routine Not Routine
or CompIex or CompIex
Not Routine Not Routine
or CompIex or CompIex
Advertising
PubIic ReIations
Dr.S.John Mano Raj
Buyer Readiness Stage
Action
Desire
Interest
Attention
Cognitive (thinking)
Affective (feeling)
Conative (doing)
Dr.S.John Mano Raj
ADA Concept
Attention Attention Interest Interest Desire Desire Action Action
Advertising Advertising
!:-lic !:-lic
Relations Relations
$ales $ales
!romotion !romotion
!ersonal !ersonal
$elling $elling
Very
effective
$omewhat
effective
Not
effective
Dr.S.John Mano Raj
Communication Effectiveness

f
f
e
c
t
i
v
e
n
e
s
s
P.R.
Adv.
Sponsorships
Sales
promotion
Personal
selling
Attention nterest Desire Action
Dr.S.John Mano Raj
Price Price
Advertising dominates the promotional mix for low-
unit-value products due to the high personal contact
costs of personal selling
Consumers a high-priced items like luxury cars
expect lots of well-presented information via
videocassettes, CDs, fancy brochures, and personal
selling
Funds avaiIabIe for promotion Funds avaiIabIe for promotion
A critical element in the promotional strategy is the
size of the promotional budget
While the cost-per-contact of a $2 million, 30-second
TV commercial during the Super Bowl is relatively
low, such an expenditure exceeds the entire
promotional budgets of many, if not most firms
Dr.S.John Mano Raj
nfluencing Factors
!ersonal Selling Advertising
Nature of the market
Number oI buyers
Geographic
concentration
Type oI customer
Limited number
Concentrated
Business purchaser
Large number
Dispersed
Ultimate consumer
Nature of the product
Complexity
Service requirements
Type oI good or
service
Custommade complex
Considerable
Business
Standardized
Minimal
Consumer
Stage in the product life
cycle
OIten emphasized at every
stage; heavy emphasis in the
introductory and early growth
stages in acquainting marketing
intermediaries and potential
consumers with the new good
or service
OIten emphasized at every
stage; heavy emphasis in
the latter part oI the
growth stage as well as
the maturity and early
decline stages to persuade
consumers to select
speciIic brands
!rice High unit value Low unit value
Dr.S.John Mano Raj
Setting the
Promotional Mix
Checklist: ntegrating the Promotion Mix
Analyze trends (internal and external)
Audit communications spending
dentify all points of contact
Team up in communications planning
Make all communication elements compatible
Create performance measures
Appoint an MC manager
Dr.S.John Mano Raj
Socially Responsible
Communications
Advertising and Sales Promotion
Avoid false and deceptive advertising
Trade promotions can not favor certain
customers over others
Use advertising to promote socially
responsible programs and actions
Dr.S.John Mano Raj
Socially Responsible
Communications
Personal Selling
Salespeople must follow the rules of "fair competition
Business-to-business selling
Bribery, industrial espionage, and making false and
disparaging statements about a competitor are
forbidden
Dr.S.John Mano Raj