CHAPTER EIGHT

PROMOTION
 WHAT IS PROMOTION?
A firm communicates with its middlemen, consumers, and various publics. Its middlemen
communicate with their customers and various publics. Consumers engage in words-of-mouth
communication with other consumers and publics. Meanwhile each group provides
communication feedback to every other group. Thus communication requires mutual
understanding.
Promotion is a technique of communication related to the selling effort in order to express
the merits/benefits of a product so as to enhance sales. Promotion, also called marketing
communication, is defined as the element of marketing mix that assists and/or persuades a
prospective customer to buy a product or to act favorably up on and that has commercial
significance to the seller. It is a firm’s marketing activity used to inform, persuade, or remind
people about its products, services, image, ideas, community involvement, or impact on society.

For new products customers must be informed about the items and their attributes to make them
develop favorable attitude toward them.

Marketing communication includes brand names, packaging, personal sales force, trading
stamps, coupons, and mass media (newspapers, television, radio, direct mail, billboards, and
magazines). It can be paid or non-paid, company sponsored or controlled by independent media.

The promotional activities must be coordinated and consistent with the other elements of the
marketing strategy. It should be integrated with the product, price, and distribution activities
with regard to company resources and other factors.

8.4.1. THE IMPORTANCE OF PROMOTION

Promotion enables a firm to establish an image, interact with channel members, provide
customer service and complement other marketing activities. It also improves employment
opportunities. The major advantages of promotion can be listed as follows:

 Establishing a company or product / service image, such as, prestige, discount or

innovative

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  Creating awareness for new products
 Keeping existing products popular
 Repositioning the images or uses of faltering products
 Locating where products can be purchased
 Justifying prices
 Providing after sales service for consumers
 Placing the company and its products or services in a favorable light relative to
competitors.
8.4.2. THE PROMOTIONAL MIX ELEMENTS

Basically, the promotional activity in marketing is an exercise in communication.

Communication involves a source (sender) sending a message through a channel to a
receiver. In carrying out its marketing communication process, a firm uses four major tools
or elements, namely, advertising, personal selling, sales promotion, and publicity.

I. Advertising
Advertising is any paid form of non-personal, oral and / or visual openly sponsor-identified
message concerning goods, services or ideas. The distinguishing features of advertising are that
the firm pays for its message, a set format is delivered to the entire audience through mass
media, the name of the sponsor is clearly presented, and the company controls the message. The
definition implies that advertising is a process – it is a series of activities necessary to prepare
the message and get it to the intended market. The message disseminated is called
advertisement.

 The nature of advertising

Because of the many forms and uses of advertising, it is difficult to make all- embracing
generalizations about its distinctive qualities as a component of the promotional mix. Yet
the following characteristics can be noted.

 Public presentation- Advertising is a highly public mode of communication because it

attracts a large and geographically dispersed market. A broad range of media is available
and many persons receive the same message with a very minimum cost per watcher or
listener.

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  Pervasiveness -Advertising is a pervasive medium that permits the seller to repeat a
message many times, especially with print media. The firm has control over all aspects of
advertising including message content, graphics, timing, size or length of message, and the
demographics of the audience. It also allows the buyer to receive and compare the
messages of various competitors.
 Amplified expressiveness – advertising provides opportunities for dramatizing the
company and its products through the artful use of print, sound and color.
 Impersonality- Advertising cannot be as compelling as a sales representative. The
audience does not feel obligated to pay attention or respond because it is non-personal and
one-way communication.
On the one hand advertising can be used to build up a long-term image for a product, and on the
other to trigger quick sales. It is an efficient way to reach numerous geographically disperssed
customers at a low cost per exposure in a short period of time.

Objectives of advertising

Every advertising and advertising campaign should have clearly defined objectives that should
grow out of the firm’s overall marketing strategy. The real goal of advertising is effective
communication. Depending on the purpose of the message the general advertising objectives
can be informing, persuading, or reminding something.

The objective of advertising can be informing for newly introduced products, such as
 Telling the market-about a new product
 Informing the market of a price change
 Explaining how the product works
 Describing available services
 Correcting false impressions
Reminding can also be another objective of advertising. It is designed to keep the consumer
thinking about the product.
Advertising decisions require the following tasks:

1. Setting Advertising Objectives

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Setting advertising objectives is the first step in developing an advertising program. These
objectives should be based on past decisions about the target market, positioning, and
marketing mix, which define the job that advertising must do in the total marketing program. An
advertising objective is a specific communication task to be accomplished with a specific
target audience during a specific period of time. Advertising objectives can be classified by
primary purpose as:
a. Informative advertising, which is used to inform consumers about a new product or
feature or to build primary demand.

b. Persuasive advertising which is used to build selective demand for a brand by

persuading consumers that it offers the best quality for their money.
c. Comparison advertising which is advertising that compares one brand directly or
indirectly to one or more other brands.
d. Reminder advertising, which is used to keep consumers thinking about a product.
This form of advertising is more important for mature products.
2. Setting the Total Promotion Budget
One of the hardest marketing decisions facing a company is how much to spend on promotion.
How does a company decide on its promotion budget? We look at the common methods used to
set the total budget for advertising: the affordable method, the percentage-of-sales method, and
the competitive parity method.
a. Affordable Method
Some companies use the affordable method. They set the promotion budget at the level they
think the company can afford. Small businesses often use this method, reasoning that the
company cannot spend more on advertising than it has.
b. Percentage-of-Sales Method
Other companies use the percentage-of-sales method; setting their promotion budget at a
certain percentage of current or forecasted sales. Or they budget a percentage of the unit
sales price. The percentage-of-sales method has advantages. It is simple to use and helps
management think about the relationships between promotion spending, selling price, and
profit per unit.
c. Competitive-Parity Method

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Still other companies use the competitive-parity method; setting their promotion budgets to
match competitors' outlays. They monitor competitors' advertising or get industry
promotion
spending estimates from publications or trade associations, and then set their budgets
based on the industry average.
Some specific factors that should be considered when setting the advertising budget are:
1. Stage in the product life cycle:- New products typically need large advertising budgets.

2. Market share:- High-market share brands usually need more advertising.

3. Competition and clutter:-More advertising is usually required in a market with many
more competitors and their advertising clutter.
4. Product differentiation:- When a brand closely resembles other brands in its product
class, more advertising (and therefore budget) is needed
3. Setting the advertising message
The message should be meaning full (point out the benefits of the product), distinctive (shows
that the firm is better than other competitors) reliable (should persuade customers that the firm
will provide the stated benefits).No matter how big the budget, advertising can succeed only if
commercials gain attention and communicate well.
1. Message Generation: The product's "benefit" message should be decided as part of
developing the product concept.
2. Message Evaluation and Selection: messages be rated on desirability, exclusiveness, and
believability.
3. Message Execution: The message's impact depends not only upon what is said but also
on how it is said. Can be
a. Rational appeals: these relate to the audience's self interest. They show that the product
will produced desire benefits.
b. Emotional appeal: these attempts to stir up negative or positive emotions that will
motivate purchase.
c. Moral appeals: attempt to direct the audience's sense of what is right and wrong.
4. Social Responsibility Review: Advertisers and their agencies must be sure their "creative"
advertising doesn't overstep social and legal norms.

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 4. Media selection
To select media, the advertiser must decide what reach and frequency are needed to achieve
advertising objectives. Reach is a measure of the percentage of people in the target market who
are exposed to the ad campaign during a given period of time. For example, the advertiser might
try to reach 70 percent of the target market during the first three months of the campaign.
Frequency is a measure of how many times the average person in the target market is exposed to
the message. For example, the advertiser might want an average exposure frequency of three.
The advertiser also must decide on the desired media impact— is the nature of the media to
influence customers. It is the qualitative value of a message exposure through a given medium.
For example, for products that need to be demonstrated, messages on television may have more
impact than messages on radio because television uses sight and sound. The same message in
one magazine may be more believable than in another. In general, the more reach, frequency,
and impact the advertiser seeks, the higher the advertising budget will have to be.
5. Measuring advertisement effectiveness: The result of the advertising campaign must be
evaluated against is planned performance.
II. Sales Promotion
Sales promotion consists of short-term incentives to encourage the purchase or sale of a product
or service. Whereas advertising and personal selling offer reasons to buy a product or service,
sales promotion offers reasons to buy now.
Major Sales Promotion Tools
Many tools can be used to accomplish sales promotion objectives. The main consumer
promotion tools include samples, coupons, cash refunds, price packs, premiums, advertising
specialties, patronage rewards, point-of-purchase displays and demonstrations, and contests,
sweepstakes, and games.
 Samples are offers of a trial amount of a product. Sampling is the most effective but most
expensive— way to introduce a new product.
 Coupons: Certificates offering a stated saving on the purchase of a specific product.
 Premiums are goods offered either free or at low cost as an incentive to buy a product.
 Advertising specialties are useful articles imprinted with an advertiser's name given as
gifts to consumers.

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  Patronage rewards are cash or other awards offered for the regular use of a certain
company's products or services. E.g. Sheba miles
 Contests, sweepstakes, and games give consumers the chance to win something, such as
cash, trips, or goods, by luck or through extra effort.
Trade sales promotion tools
 Price-Off (off-invoice or off-list): A straight discount off the list price on each case
purchased during a stated time period.
 Allowance: An amount offered in return for the retailer’s agreeing to feature the
manufacturer’s products in some way.
 It can be an advertising allowance or display allowance.
 Free Goods: Offers of extra cases of merchandise to intermediaries who buy a certain
quantity or who feature a certain flavor or size.
III. Personal Selling
The direct presentation of a product to a prospective customer by a representative of the selling
organization is termed as personal selling. Personal selling is the personal communication of
information to persuade somebody to buy something. Personal Selling occurs when a company
representative comes in direct contact with a customer in order to inform a client about a good or
service to get a sale. Personal selling is especially important for business-to-business marketers
since products and services are complex and expensive. In many companies, personal selling is
the largest single operating expense.
Personal selling has great advantage over the other forms of promotion, the quality that makes
it so essential, and its flexibility. Salespeople can tailor their presentations to fit the needs and
behavior of customers-responding to questions, handling objections, foreseeing a customer’s
particular problems, and making necessary adjustments on the spot. Also, it permits a minimum
of wasted effort because a company has an opportunity to pinpoint its target market far more
effectively than with any other promotional tool. In most situations, it is personal selling those
results in the actual sale. Advertisements can attract attention and arouse desire, but they do not
arouse buying action or complete transfer of the title as in the case of personal selling. Despite
the above-mentioned qualities, personal selling has a major limitation that its cost is high.

The Nature of Personal Selling

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 1. Brings the human element in to marketing transaction
2. Makes the buyer to act immediately
3. Increases customer confidence in the supplier and
4. Simplifies the handling of individual customer problems
Types of personal selling
 Deliverer: A salesperson whose major task is the delivery of a product (milk, bread, or
fuel).
 Order taker: A salesperson who acts predominantly as an inside order taker (the
salesperson standing behind the counter) or outside order taker (the soap salesperson
calling on the supermarket manager).
 Missionary: A salesperson whose major task is to build goodwill or to educate the actual
or potential user, rather than to sell (the medical “detailer” representing an ethical
pharmaceutical firm).
 Order Getter (Demand creator): It is creative selling ad and more time consuming. It is
used for selling products to new prospects (pioneers) and to sell to continuing customers
(account managers).
 Solution vendor: A salesperson whose expertise lies in solving a customer’s problem,
often with a system of the firm’s goods and services (such as computer and
communications systems).
IV. Publicity and Public Relation
Public relations are wider than marketing, which focuses on markets, distribution channels,
and customers. By communicating to other groups, public relations create an environment in
which it is easier to conduct marketing. Public relations activities include publicity, seminars- by
arranging special events, such as, news conferences, seminars, exhibitions, anniversaries, and so
on, that will reach the intended audience; publications- such as written materials to reach and
influence the intended audience like annual reports, brochures, articles, and company newsletters
and magazines; and charitable donations- like contributing money and time to good courses,
financing special sport games, providing fund to charity organizations in the cases of draught, or
any emergency activities. It can accomplish many objectives:

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 Prestige and reputation: it can foster prestige and reputation which can help companies to
sell products, attract and keep good employees, and promote favorable community and
government relations.
 Promotion of products: the desire to buy a product can be helped by the unobtrusive things
that people read and see in press, radio, television. Awareness and interest in products and
companies can be generated.
 Overcoming misconceptions: managing misconceptions about a company so that unfounded
opinions do not damage its operations.
Generally they perform the following five functions:
 Press relations: Presenting news and information about the organization in the most
positive light.
 Product publicity: Sponsoring efforts to publicize specific products.
 Corporate communication: Promoting understanding of the organization through internal
and external communications.
 Lobbying: Dealing with legislators and government officials to promote or defeat
legislation and regulation.
 Counseling: Advising management about public issues and company positions and
image. This includes advising in the event of a product mishap.
Publicity

Publicity is an important element in public relations. It can be defined as the communication

about a product or organization by the placing of news about it in the media without paying for
the time or space directly. It is any promotional communication regarding an organization and/or
its products where the message is not paid for by the organization benefiting from it. Usually,
publicity promotion is a non-personal news story appearing in a mass medium.

Publicity can be used for a wide variety of purposes in a company. It may be used as one means
of promoting the product of the company. A company may also publicize its new policies
(credit, price discounting etc.), its people (employee achievement, executive promotions,
employee civic service), research and development successes, financial reports, or its progress on
pollution control. A company may use publicity to counteract an unfavorable image,
unfavorable reports in the media, or an unfavorable news release from other outside people.

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Three key tasks of publicity

1. Responding to requests from the media. Although a passive service functions, it requires
well-organized information, and prompt response to media requests.
2. Supplying the media with information on events and occurrences relevant to the
organization. This requires general internal communication channels and knowledge of the
media.
3. Stimulating the media to carry the information and view point of the organization. This
requires creative development of ideas, developing close relationships with media people and
understanding their needs and motivation.
Publicity can be done through news and speeches. This can be implemented by finding and
creating favorable news about the company and/or its products or people so that the mass media
will print or orally report the information. A message that appears as news is more likely to be
read than the same message appears in a company advertisement. Publicity people can also
deliver speeches on trade associations or sales meetings.
Characteristics of publicity

a. The message has high credibility: Since it appears to the reader in the form of news and it is
written by independent media person, it has high credibility than advertising.
b. No direct media cost: since space or time in the media is not bought there is no direct media
cost.
c. Lose control of publication: unlike advertising, there is no guarantee that the news will be
published. This decision is taken out of the control of the organization and into the hands of
an editor. A key factor in this decision is whether the item is judged to be newsworthy.
d. Lose control of content: there is no way of insuring that the view point expressed by the
news supplier is reflected in the published article.
e. Lose control of timing: an advertising campaign can be coordinated to achieve maximum
impact. The timing of the publication of news items, however, cannot be controlled.

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