MBA –III-semester

Promotion and Distribution Management

Marketing Minor
Integrated Marketing Communication

The strategy of communication and persuasion used by the company for obtaining maximum
possible awareness about brand/company/product.

It is different from using any one form of communication, for understanding the concept of IMC
one must understand the various forms of communication the company uses for creating
awareness among customers, the various of forms of communications are

1.Advertsimnet : It is a paid form of non personal presentation of idead and thoughts through an
identified sponsor, this communication element is the most widely used tool of communication.

2.Sales promotion : The use of various schemes and coupons, sweepstakes etc, for promoting the
maximum awareness in shortest period of time

3.Personal selling : Another form of communication tool in which the company creates
awareness about product by sending the executive to the place of customer availability

4.Direct Marketing : This form of communication is the results of advancements in the field of
communication technology, in this the awareness is created directly to the customers by using
their personal e mail ids, mobile numbers, fax, etc.

5.Public Relations : The method of communication in which the company takes up some
community benefit programs such as public awareness campaign,

The concept of IMC is that in which the company considers various forms of communications
from the above and design the communication strategy. The idea behind IMC is maximum
promotion in shortest time.

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1. Identify the target audience

a) First step is to measure target audience’s knowledge of the subject

using a familiarity scale

b) Second step is to determine feelings toward the product using a

favorability scale

2.Determine the communication objectives

based objectives on the hierarchy-of-effects model (hierarchy: awareness,

knowledge, liking, preference, conviction, purchase)

3.Design the message (AIDA model)

4.Select the communication channels

Personal communication channels—direct (advocate, expert and social)

Non personal communication channels—indirect (media, atmospheres,

events)

5.Establish the total marketing communications budget

Affordable method

Percentage-of-sales method

Competitive-parity method

Objective-and-task method

6.Deciding on the marketing communications mix

Promotional tools—benefits of each tool (advertising, sales promotion, public

relations and publicity, personal selling, direct marketing)

7.Managing the integrated marketing communications process

Evaluates the strategic roles of a variety of communications disciplines

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Marketing communication Process and Planning

Establishing objectives and budgeting for the promotional program

The Promotional Program is an essential component to any successful program. Promotion attempts to
inform, educate and persuade individuals The best program in the world will fail if no one knows about it.
The basis for all promotional efforts is effective communication. The company must communicate
customers, target markets and media agencies in a very effective way.

The objectives of promotion campaign covers many areas important the communication, decision
making, advertisement outcomes etc. In order to set the objectives of promotion one needs to carry out

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based on DAGMAR approach, Defining Advertising Goals for Measured Advertising Results
(DAGMAR).
The major thesis of the DAGMAR model is that communications effects are the logical basis for
advertising goals and objectives against which success or failure should be measured.

The objectives of promotion program must be as shown under

Types of Promotion Objectives

 Build Awareness – New products and new companies are often unknown to a market,
which means initial promotional efforts must focus on establishing an identity.
 Create Interest – Moving a customer from awareness of a product to making a purchase
can present a significant challenge.
 Provide Information – Some promotion is designed to assist customers in the search
stage of the purchasing process.
 Stimulate Demand – The right promotion can drive customers to make a purchase. In
the case of products that a customer has not previously purchased or has not purchased in
a long time, the promotional efforts may be directed at getting the customer to try the
product.

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  Reinforce the Brand – Once a purchase is made, a marketer can use promotion to help
build a strong relationship that can lead to re- purchaser
 To remind the product or brand and enhance the retention in the minds of cutomers etc.

 Establishing and Allocating the Promotional Budget

Factors considered in Budget Setting

 Product Factors

 Market Factors

 Customer Factors

 Strategy Factors

 Cost Factors

The most common used for designing the adverting budget is any one of the following

a) Top-Down Budgeting

b) Bottom-Up Budgeting

c) Interactive Budgeting approach

d) The Affordable Method

e) Arbitrary Allocation

f) Percentage of Sales

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 Unit – II: Developing Integrated Marketing Communications:

The creative process of advertising is guided by specific goals and objectives and requires the
development of a creative strategy or plan of action for achieving the goal. Creative strategy
development actually begins with a thorough assessment of the marketing and promotional
situation and a determination of what needs to be communicated to the marketer’s target
audience. Creative strategy should also be based on a number of other factors that are as given
under
A. Copy Platform—A copy platform provides a plan or checklist that is useful in guiding the
development of an advertising message or campaign

B. Advertising Campaigns—Most advertisements are part of a series of messages that make up

an advertising campaign, which consists of multiple messages,

C. The Search for the Major Selling Idea—An important part of creative strategy development is
determining the central theme that will become the major selling idea or big idea for the ad
campaign.
1. The unique selling proposition, each advertisement must make a proposition to the consumer

• the proposition must be one that the competition either cannot or does not offer

• the proposition must be strong enough to pull over new customers to your brand

2. Creating a brand image—

D. Positioning—the basic idea is that advertising is used to establish or “position” the product or
service in a particular place in the consumer’s mind. The creative strategy must be based on the
given points, these points are very important to considered.

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Appeals, execution styles and creative tactics

Advertising Appeal is an igniting force which stimulates the customer mindset towards the
product or services. It not the only factor in the marketing mix which initiates a consumer for
buying the product but it is certainly one of the advertisers' most important creative strategy
decisions involves the choice of an appropriate appeal.

Advertising appeals are designed in a way so as to create a positive image of the individuals who
use certain products. Advertising agencies and companies use different types of advertising
appeals to influence the purchasing decisions of people some of the widely used appeals are
given below

1. Feature appeals
2. Competitive advantage appeals
3. Favorable pricing appeals
4. News appeals
5. Product popularity appeals
6. Emotional appeals
7. Combining rational and emotional appeals

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 8. Straight-sell or factual message
9. Scientific/technical evidence
10. Demonstration
11. Comparison
12. Testimonials
13. Slice of life.
14. Animation
15. Personality symbol
16. Fantasy
17. Dramatization.
18. Humor

Media planning & Strategy

Media planning is generally outsourced to a media agency and entails sourcing and selecting

optimal media platforms for a client's brand or product to use. The job of media planning is to

determine the best combination of media to achieve the marketing campaign objectives.

Media planning's major steps include:

 1 - Targeting,

 2 - Environmental scan,

 3 - Understanding the audience,

 4 - Determination of content,

 5 – Control

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 Major steps in media planning process

Unit – III: Personal Selling

Personal selling is where businesses use people (the "sales force") to sell the product after
meeting face-to-face with the customer. The sellers promote the product through their attitude,
appearance and specialist product knowledge. They aim to inform and encourage the customer to
buy, or at least trial the product.

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Stages of Personal Selling Process
1.Prospecting.

Prospecting is all about finding prospects, or potential new customers

2.Pre approach.

This is the preparation that a salesperson goes through before they meet with the client

3. Sales Presentation/ approach

Focus on the real benefits of the product or service to the specific needs of your client, rather
than listing endless lists of features.

4.Objection Handling.

Objection handling is the way in which salespeople tackle obstacles put in their way by clients.
Some objections may prove too difficult to handle, the executive must answer the questions of
customers

5. Closing the Sale.

This is a very important stage. Often salespeople will leave without ever successfully closing a
deal. Therefore it is vital to learn the skills of closing.

6. Follow up

In this the executive must enquire about the customer satisfaction and try to get feedback from
him about the product, this may ensure good customer relationship management and may lead to
customer retention also.\

Personal Selling Approaches

To market their product to customers, organizations use different approaches, depending on the

nature of product or services, resources of the organization, expertise or others. Initially there

were four approaches which were being practiced but later one more approach came into

practice.

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1.Stimulus response selling

It is the simplest approach to selling. It uses structured questions and statements, which act as

stimuli for the customer and sales person get the desired response in their favor.

2.Mental State Selling:

It is formula approach to selling. In this approach the Mental states are AIDA (Attention,

Interest, Desire, Action).

3.Need Satisfaction selling

In this approach, first of all the problem is identified. What does customer need to solve his

problem? Sales person first listen to customer and solve the problem

4.Problem Solving Selling:

In this approach problem is already identified, sales person need to define it to the customer and

then tell him all the alternatives available

5.Consultative Selling:

In this approach both buyer and seller works with collaboration.

Sales Management

Sales management refers to the administration and planning, implementation, and control of
sales programs, as well as recruiting, training, motivating, and evaluating members of the sales
force. Sales management is just one facet of a company's overall marketing mix, which
encompasses strategies related to the "four Ps": products, pricing, promotion, and place
(distribution)

Although the role of sales managers is multidisciplinary in scope, their primary responsibilities
are: 1) setting goals for a sales force; 2) planning, budgeting, and organizing a program to
achieve those goals; 3) implementing the program; and 4) controlling and evaluating the results.

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PLANNING, BUDGETING, AND ORGANIZING sales force

After goals are set, the sales manager may accept, or be required to modify, the general approach
to sales in the current year. Both ongoing patterns and new ones require budgeting and,
occasionally, changes to the organization.

IMPLEMENTATION

Implementation of the plan will have different emphases depending on whether the operation is
up and running or required to be built or rebuilt. Recruiting, training, and setting compensation
are primary implementation activities

Designing Territories and Allocating Sales Efforts

In addition to recruiting, training, and motivating a sales force to achieve the company's goals,
sales managers at most small businesses must decide how to designate sales territories and
allocate the efforts of the sales team. Territories are geographic areas assigned to individual
salespeople. Allocating people to different territories is an important sales management task.

CONTROLLING AND EVALUATING

After the sales plan has been implemented, the sales manager's responsibility becomes
controlling and evaluating the program. During this stage, the sales manager compares the
original goals and objectives with the actual accomplishments of the sales force. The
performance of each individual is compared with goals or quotas, looking at elements such as
expenses, sales volume, customer satisfaction, and cash flow.

Managing and motivating a sales team is essential to the success of any business. Sales
professionals are the fuel that drives an organization.

Steps in sales Management

1. Set clear goals.

2. Develop key metrics.

3. Sales planning

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 4. Recruiting / staffing

5. Training

6. Controlling / directing

7. Evaluating

8. Effectiveness / efficiency

9. Compensation

Unit – IV: Sales Promotion and Support media

Sales promotion is one of the five aspects of the promotional mix Sales promotion is any

initiative undertaken by an organization to promote an increase in sales, usage or trial of a

product or service Examples include contests, coupons, freebies, loss leaders, point of purchase

displays, premiums, prizes, product samples, and rebates.

Sales promotions can be directed at either the customer, sales staff, or distribution channel

members (such as retailers). Sales promotions targeted at the consumer are called consumer

sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales

promotions.

Consumer sales promotion types

-pack/Bonus

upons: coupons have become a standard mechanism for sales promotions.

mobile phone to a salesperson for redemption.

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 Promotion game:

eepstake

Trade sales promotion

Sales promotions targeted at retailers and wholesale are called trade sales promotions.

Premium promotion
Sales promotion technique in which two or more complementary products are sold together at a
price lower than their combined price.

off-the-shelf promotion
It is the promotion offered on the products which are ready to use without any modifications

Support media – Elements of Support media and their role

Support media are media such as directories or out-of-home media that may be used to reach
people who are not reached by mass media advertising, some of the support media are given
under

1. Out-of-home media
2. Billboards,
3. transit ads,

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 4. in-store media
5. �Promotional Products (Specialty advertising)�
6. Yellow Pages Advertising
7. �Advertising in Movie Theaters and Videos�Product Placements in Television and
Movies
8.In-flight ads
9�Sky Banners
8. �Sky Writing
9. �Mobile
Billboards
10. �Trucks
11. �Vans
12. �Trailers
13. �Signs/Banners/Displays
14. displays
15. Kiosks , Eg ATM, Coffee machines

Direct marketing is a channel-agnostic form of advertising which allows businesses and

nonprofit organizations to communicate straight to the customer, with advertising techniques that
can include cell phone text messaging, email, interactive consumer websites, online display ads.
Direct marketing is a very popular and widely used method of informing people about products
and services. It's a method of contacting customers and potential customers directly, rather than
having an indirect medium between the company and the consumer, such as mail, telephone
calls, emails, e-brochures, and coupons.

Types of direct marketing

 Direct mail
 Telemarketing
 Email marketing
 Text (SMS) marketing
 Leaflet marketing using letterbox drops and handouts
 Social media marketing
 Direct selling

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Challenges for Direct Marketing

Public Relations (P.R.) — "The profession or practice of creating and maintaining goodwill
of an organization's various publics (customers, employees, investors, suppliers, etc.), usually by
various forms of communication. These efforts may also include support of arts, charitable
causes, education, sporting events, and other civic engagements."

Publicity — "Type of promotion that relies on public relations effect of a news story carried
usually free by mass media. The main objective of publicity is not sales promotion, but creation
of an image through 'independent source' commentary. The publicist is a non paid form of
awareness creation by the public

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 Unit – V: Distribution Management
The management of resources and processes used to deliver a product from a production location
to the point-of-sale, including storage at warehousing locations or delivery to retail distribution
points. Distribution management also includes determination of optimal quantities of a product
for delivery to particular warehouses or points-of-sale in order to achieve the most efficient
delivery to customer. A distribution channel is the network of individuals and organizations involved in
getting a product or service from the producer to the customer. Distribution channels are also known as
marketing channels or marketing distribution channels.

Marketing channels serve many functions some of the main functions are as follows

1) Information Provider:

Middlemen have a role in providing information about the market to the manufacturer.

2) Price Stability:

Maintaining price stability in the market is another function the channel performs.

3) Promotion:

Promoting the product/s in his territory is another function that the channel perform.

4) Financing:

Middlemen finance manufacturers’ operation by providing the necessary working capital in the
form of advance payments for goods and services.

5) Help in Production Function:

The producer can concentrate on the production function leaving the marketing problem to
middlemen who specialize in the profession.

7) Matching Demand and Supply:

The chief function of intermediaries is to assemble the goods from many producers in such a
manner that a customer can affect purchases with ease. The goal of marketing is the matching of
segments of supply and demand.

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Distribution Systems
Distribution Systems can be defined as the sequential flow of procedures, systems, and activities
which are designed and linked to facilitate and monitor the movement of goods and services
from the source to the consumer. Essentially, distribution is about making products and services
available to the end user when and where they need them.

key attributes associated with distribution systems and the benefit they offer are outlined:

• Time - when the consumer wants to obtain the product or service.

• Place - the place attribute is where the consumer wants to obtain the product or service.

• Control - consumer ownership of the product or service.

• Method - the specifics to the distribution channel, i.e. a private label grocery product being
manufactured by different producer

Marketing Channels
Sets of interdependent organizations involved in the process of making a product or service
available for use or consumption.

Channel Levels

Each intermediary that performs work in bringing the product & its title closer is a channel level.

 Zero-channel level (direct-marketing channel) consists of a manufacturer selling directly

to the final customer (i.e. door-to-door sales, mail order. Telemarketing, TV selling)

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  One level channel contains one selling intermediary (i.e. retailer)
 Two level…(wholesalers, retailers)
 Three level…(wholesalers, jobbers, retailers)

Channel-Design Decisions

Designing a channel system calls for analyzing customer needs, establishing channel objectives,
& identifying & evaluating the major channel alternatives.

1. Establishing the Channel Objectives & Constraints

2. Identifying the Major Channel Alternatives
3. Evaluating the Major Channel Alternatives
4. Channel-Management Decisions
5. Selecting Channel Members
6. Motivating Channel Members
7. Evaluating Channel Members
8. Modifying Channel Arrangements

Types of Chanel designing

Conventional marketing channel

 Comprises an independent producer, wholesaler(s) & retailer(s).

 Each is a separate entity.

Vertical Marketing Systems

1. Producer, wholesaler(s) & retailer(s) act as a unified system.

2. They all cooperate.

Horizontal Marketing Systems

Two or more unrelated companies put together resources or programs to exploit an emerging
marketing opportunity.

Multichannel Marketing Systems

A single firm uses two or more marketing channels to reach one or more customer segments. By
adding more channels,

Channel Cooperation, Conflict & Competition

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Types of conflict & competition

 Vertical channel conflict exists when there is conflict between different levels within the
same channel.
 Horizontal channel conflict exists when there is conflict between members at the same
level within the channel.
 Multichannel conflict exists when the manufacturer has established two or more
channels that compete with each other in selling to the same market.

Causes of Channel Conflict

 Goal incompatibility
 Unclear roles & rights
 Differences in perception
 Intermediaries’ great dependence on the manufacturer

Managing Channel Conflict

 Some channel conflict can be constructive. It can lead to more dynamic adaptation to a
changing environment. But too much is dysfunctional.
 Perhaps the most important mechanism is the adoption of super ordinate goals. Working
closely together might help them eliminate or neutralize the threat.
 Exchange of persons between two or more channel levels is useful.
 Cooptation is an effort by one organization to win support of the leaders of another
organization by including them in advisory councils, boards of directors, etc.

There are three types of distribution strategies given under

Category Definition

Intensive The producer's products are stocked in the majority of outlets. [1] This strategy is
distribution common for basic supplies, snack foods, magazines and soft drink beverages.

Selective Means that the producer relies on a few intermediaries to carry their product. [1]
distribution This strategy is commonly observed for more specialized goods that are carried

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 through specialist dealers, for example, brands of craft tools, or large appliances.

Means that the producer selects only very few intermediaries. [1] Exclusive
Exclusive distribution is often characterised by exclusive dealing where the reseller carries
distribution only that producer's products to the exclusion of all others. This strategy is
typical of luxury goods retailers such as Gucci.

DISTRIBUTION OF SERVICES

– Channels for services are often direct- from creator of the service directly to the
customer
– Services cannot be owned, there are no titles or rights to most services that can
passed along a delivery channel
– Inventories cannot exist, making warehousing a dispensable function

– Intermediaries may co-produce service, fulfilling service principals’ promises to

customers.

eg: Franchise Services

– They make service locally available

– Provide time and place convenience for the customers
– Provide retailing function for customers because they represent multiple service
principals. eg: travel agents
– Primary types of intermediaries – Franchisees, Agents & Brokers, Electronic
Channel

STRATEGIES FOR EFFECTIVE SERVICE DELIVERY THROUGH

NTERMEDIARIES

Control Strategies

• create standards both for revenues and service performance, measures results, and
compensates or rewards on basis of performance level

Empowerment Strategies

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 • Service principal allows greater flexibility to intermediaries
• Help intermediary develop customer oriented service processes
• Provide needed support systems
• Develop intermediaries to deliver service quality
• Change to a cooperative management structure

Partnering strategies

• Partnering with intermediaries to learn together about end customers, set specifications,
improve delivery, and communicate honestly
• Alignment of company and intermediary’s goals
• Consultation & Cooperation

Market logistics involve planning, delivering, and controlling the flow of physical goods,
marketing materials and information from the producer to a market as necessary to meet
customer demands while still making a satisfactory profit.

Logistics activities and fields

Inbound logistics is one of the primary processes of logistics, concentrating on purchasing and
arranging the inbound movement of materials, parts, and/or finished inventory from suppliers to
manufacturing or assembly plants, warehouses, or retail stores.

Outbound logistics is the process related to the storage and movement of the final product and
the related information flows from the end of the production line to the end user.

Procurement logistics consists of activities such as market research, requirements planning,

make-or-buy decisions, supplier management, ordering,

Distribution logistics has, as main tasks, the delivery of the finished products to the customer. It
consists of order processing, warehousing, and transportation.

Disposal logistics has as its main function to reduce logistics cost(s) and enhance service(s)
related to the disposal of waste produced during the operation of a business.

Reverse logistics denotes all those operations related to the reuse of products and materials.

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Green Logistics describes all attempts to measure and minimize the ecological impact of
logistics activities.

Supply chain management

Supply chain management is a cross-functional approach that includes managing the movement

of raw materials into an organization, certain aspects of the internal processing of materials into

finished goods, and the movement of finished goods out of the organization and toward the end

consumer. Supply chain management (SCM) is the management of the flow of goods and services. It

includes the movement and storage of raw materials, work-in-process inventory, and finished goods from

point of origin to point of consumption. Interconnected or interlinked networks, channels and node

businesses are involved in the provision of products and services required by end customers in a supply

chain Supply chain management has been defined as the "design, planning, execution, control, and

monitoring of supply chain activities with the objective of creating net value, building a competitive

infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring

performance globally.

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Supply chain management flows can be divided into three main flows:

 The product flow

 The information flow
 The finances flow

The product flow includes the movement of goods from a supplier to a customer, as well as any
customer returns or service needs. The information flow involves transmitting orders and
updating the status of delivery. The financial flow consists of credit terms, payment schedules,
and consignment and title ownership arrangements.

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