Chapter Seven: Promotion

7.1. Meaning and significance of promotion

7.2. The promotion mix elements
7.2.1. Advertising
7.2.2. Personal selling
7.2.3. Sales promotion
7.2.4. PR and publicity
7.2.5. Direct Marketing
7.1. Meaning and Definition of promotion.

Promotion is a term taken from Latin word promovere . It means ‘move towards’. In marketing,
promotion means all those tools that a marketer uses to take his product from the factory to the
customer and hence it involves advertising, sales promotion, personal selling, and public relation.
It is necessary to flow the information about the product from the producer to the consumer
either along with the product or well in advance of the introduction of the product. This role is
played by promotion. In the words of Masson and Ruth, ”Promotion consists of those activities
that are designed to bring a company’s goods or services to the favorable attention of
customers”.

7.2. Importance of Promotion:

It may be studied in the following heads:-

Importance to Business:- Now a days, it is very necessary to communicate information

regarding quality, features, price uses etc. of the product to the present and potential customers.
Then only the consumers will select the product from a wide range of competing products. Most
modern institutions cannot survive in the long run without performing promotion function
effectively.
Economic importance: In economic sense, it helps to generate employment opportunities to
thousands of people. As a result of promotion sales will increase and it brings economies in the
production process and it reduces per unit cost of product.
Social importance: Promotion has become an important factor in the campaign to achieve some
socially oriented objectives. eg. Advertising against smoking, drinking etc. It is also helpful to
provide informative and educational service to the society

Importance to non business organizations: The non business organizations like govt. agencies,
religious institutions, educational institutions etc also realized the importance of promotion and
they are using the various elements of promotion mix very widely

7.3. Promotional Mix Elements

A firm's promotional mix is the combination of one or more of the promotional elements it
chooses to use. The tools used to accomplish an organization’s communications objective. The
promotion mix consists of advertising, sales promotion, public relation and publicity, personal
selling and direct marketing. Three of these elements – advertising, sales promotion, and
publicity – are often said to use mass selling, because they are used with groups of prospective
buyers. In contrast, personal selling and direct marketing uses interpersonal selling because the
seller usually talks person-to-person with the individual who is a prospective buyer. It is possible
to achieve a given sales level with varying promotion mixes. Each of the promotional tool
elements has unique characteristics and plays a distinctive role in an integrated promotion.
The five promotional tools are;
7.3.1. Advertising
Advertising– is any paid form of non-personal communication regarding goods, services or
ideas that is transmitted through various media by a business firm or not for profit organizations.
Advertising provides opportunities for dramatizing the company and its product through the
artful use of printed, sound and color.
Advertising: Any paid form of non-personal presentation and promotion of ideas, goods, or
services by an identified sponsor.
Features of Advertising:
It is a mass communication medium.
It is a paid form of communication by an identified sponsor.
It is a non personal communication.
It helps to stimulate sales.
It may be written or spoken.
There are different advertising Medias. Some of them are:
 Newspaper – As an advertising medium, newspaper are flexible and timely. Newspaper can
be used to reach an entire citizen. It also provides very intensive converge of a local market
because most people’s read them. Their limitation is they are usually discarded after being
read.
 Television – Advertisement through television use combination of motion and sound where
by product or service can be demonstrated as well as described. It provides a wide
geographic coverage but it is relatively expensive.
 Direct-mail – It reaches only to precise audience i.e. to the people the advertising wishes to
conduct. So there is almost no waste of circulation. Printing and postage fees make the cost
of direct mail per person quite high.
 Magazine – It is an excellent medium when high quality printing and colors are described in
advertisement. It can reach a national market at a relatively low cost per reader.
 Radio – It is frequently selective and has low cost. It makes only an audio impression relying
entirely on the listener’s ability to retain information after hearing it.

Medium Advantages Limitations

Newspapers Flexibility; timeliness; good local market Short life; poor reproduction quality;
coverage; broad acceptance; high believability small "pass along" audience
Television Combines sight, sound, and motion; appealing High absolute cost; high clutter; fleeting
to the senses; high attention; high reach exposure; less audience selectivity.
Direct mail Audience selectivity; flexibility; no advertising Relatively high cost;
competition within the same medium, "Junk mail" image
Personalization.
Mass use; high geographic and demographic Audio presentation only lowers attention
Radio selectivity; low cost than television; non-standardized rate
structures; fleeting exposure.
Magazines High geographic and demographic selectivity; Long advertise purchase lead-time; some
credibility and prestige; high quality waste circulation; no guarantee of
reproduction; long life; good pass-along position.
 readership

Outdoors Flexibility, high repeat exposure; low cost; low No audience selectivity; creative
competition limitations.

 Advertising qualities can be noted as follows:

1. Public presentation:-advertising have public nature that confers a kind of legitimacy on
the product and also suggest a standardized offering.
2. Pervasiveness:- advertising permits the seller to repeat a message many times. It also
allows the buyer to receive and compare the message of various competitors.
3. Amplified expressiveness:- advertising provides opportunities for dramatizing the
company and its products through the artful use of print, sound, and color.
4. Impersonality:- The audience does not feel obligated to pay attention or respond to
advertising. Advertising is a monologue in front of, not a dialogue with, the audience.
7.3.2. personal selling
Personal selling– It is a face-to-face interaction with one or more prospective purchaser for the
purpose of making presentation, answering question and processing orders. Personal selling:
Personal presentation by the firm's sales force for the purpose of making sales and building
customer relationships.
On the positive side, personal selling is the most flexible tool because the seller can see or hear
the buyer’s reaction. Feedback is immediate and precise since the customer can generally assess
the impact of sales presentation. On the negative side personal selling is costly that means the
costs of operating a sales force is high. Personal selling includes sales presentations, trade shows,
and incentive programs.
FEATURES OF PERSONAL SELLING
 It is one of the important tools for increasing sales.
 It is a two way communication between salesmen and the prospect.
 It is a persuading process to buy the goods and services.
 The objective of personal selling is to protect the interest of both seller and buyer.
  The essence of personal selling is interpretation of product and service features in terms
of benefit and advantages.
There are two kinds of personal selling:
 Where the customers come to the sales people. Sometimes called across-the-counter
selling, it primarily involves retail-store selling.
 Where the sales people go to the customers. In this group is what we call outside sales
forces – that is, sales representatives engaged in field selling. These people sell in person
at a customer's place of business or home. Outside sales forces usually represent
producers or wholesaling middlemen, selling to business users and not to household
customers.
 personal selling has three distinctive qualities:
1.Personal confrontation:-it involves an immediate and interactive relationship between two or
more persons.Each party is able to observe the others reaction.
2. Cultivation:-it permits all kinds of relationships to spring up, ranging from a matter-of-fact
selling relationship to a deep personal friendship.
3. Response:-it makes the buyer feel under some obligation for having listened to the sales talk.

7.3.3. Sales Promotion– Definitions of Sales Promotion.

According to A. H. R. Dalens “Sales promotion means any steps that are taken for the purpose of
obtaining or increasing sales”. According to William. J. Stanton “Sales promotion is an exercise
in information, persuasion and influence” Sales promotion consists of all those activities that
supplement, co-ordinate and make more effective and efforts of personal selling, Advertising
and distributors to increase the sales and stimulate the customers in buying more.
 are those promotional activities that are intended to stimulate customer demand and improve
the marketing performance of sellers. Sales promotion: Short-term incentives to encourage
the purchase or sale of a product or service. Companies use sales promotion tools to create a
stronger and quicker response. Sales promotion offer three distinctive benefits:
1. Communication-they gain attention and usually provide information that may lead the
consumer to the product
2. Incentive-they incorporate some concession or inducement that gives value to the consumer;
and 3. Invitation-they include a distinct invitation to engage in the transaction now.
SALES PROMOTION TOOLS (TYPES/KINDS OF SALES PROMOTION)
The sales promotion tools can be seen from the angle of dealers, consumers and sales force.
1. Dealer promotion/Trade promotion: Trade promotion objectives are to motivate market
intermediaries to invest in the brand and aggressively push sales. It includes
Price deals: Under this method, special discounts are offered over and above the
regular discounts.
Free goods: Here, the manufactures give attractive and useful articles as presents to
the dealers when they buy a certain quantity.
Ad Materials: In this case, the manufacturer distributes some ad materials for
display purpose.
Trade allowance: It includes buying allowance, promotional allowance and slotting
allowance.
Dealer contests: It is a competition organized among dealers or salesmen.
Trade shows: Trade shows are used to familiarize a new product to the customers.
2. Consumer Promotion: The broad objective of consumer promotion is to create pull for the
brand and it includes-
 Rebates: Simply it is a price reduction after the purchase and not at the retail shop.
 Money refund offer: Here, if the customer is satisfied with the product, a part or whole
of the money will be refunded.
 Samples: While introducing a new product, giving samples to the customers at their
doorstep.
 Price packs: In this method the customer is offered a reduction from the printed price of
product.
 Premium offer: Here goods are offered at a lower price or free as an incentive to
purchase a special product.
 Consumer contests: Various competitions are organized among the customers. The
winners are given prizes.
 Free trials: In this case, inviting the buyers to try the product without cost
3. Sales force promotion: It includes
  Sales force contests: Sales contests are declared to stimulate the sales force increase their
selling interest.
 Bonus to sales force: Bonus is the extra incentive payment made for those who cross the
sales quota set for a specific period.
 Sales meeting conventions and conferences: Sales meeting and conferences are
conducted with a view to educate, train and inspire the salesmen
7.3.4. Publicity/Public Relations

Another important component of an organization’s promotional mix is publicity/ public relations.

Publicity refers to non personal communications regarding an organization, product, service, or
idea not directly paid for or run under identified sponsorship. It usually comes in the form of a
news story, editorial, or announcement about an organization and/or its products and services.
Like advertising, publicity involves non personal communication to a mass audience, but unlike
advertising, publicity is not directly paid for by the company. The company or organization
attempts to get the media to cover or run a favorable story on a product, service, cause, or event
to affect awareness, knowledge, opinions, and/or behavior. Techniques used to gain publicity
include news releases, press conferences, feature articles, photographs, films, and videotapes.

An advantage of publicity over other forms of promotion is its credibility. Consumers generally
tend to be less skeptical toward favorable information about a product or service when it comes
from a source they perceive as unbiased. For example, the success (or failure) of a new movie is
often determined by the reviews it receives from film critics, who are viewed by many
moviegoers as objective evaluators.

Another advantage of publicity is its low cost, since the company is not paying for time or space
in a mass medium such as TV, radio, or newspapers. While an organization may incur some
costs in developing publicity items or maintaining a staff to do so, these expenses will be far less
than those for the other promotional programs.

Publicity is not always under the control of an organization and is sometimes unfavorable.
Negative stories about a company and/or its products can be very damaging. For example, a few
years ago negative stories about abdominal exercise machines appeared on ABC’s “20/20” and
NBC’s “Dateline” newsmagazine TV shows. Before these stories aired, more than $3 million
worth of the machines were being sold each week, primarily through infomercials. After the
negative stories aired, sales of the machines dropped immediately; within a few months the
product category was all but dead.

Public Relations It is important to recognize the distinction between publicity and public
relations. When an organization systematically plans and distributes information in an attempt to
control and manage its image and the nature of the publicity it receives, it is really engaging in a
function known as public relations. Public relations are defined as “the management function
which evaluates public attitudes, identifies the policies and procedures of an individual or
organization with the public interest, and executes a program of action to earn public
understanding and acceptance.”

Public relations generally has a broader objective than publicity, as its purpose is to establish and
maintain a positive image of the company among its various publics. Public relations uses
publicity and a variety of other tools—including special publications, participation in community
activities, fund-raising, sponsorship of special events, and various public affairs activities—to
enhance an organization’s image. Organizations also use advertising as a public relations tool.
For example, in Exhibit 1-14 a corporate ad for DuPont shows how the company uses science to
make life better.

Traditionally, publicity and public relations have been considered more supportive than primary
to the marketing and promotional process. However, many firms have begun making PR an
integral part of their predetermined marketing and promotional strategies. PR firms are
increasingly touting public relations as a communications tool that can take over many of the
functions of conventional advertising and marketing.

Functions of public relations

The functions of public relations are given below:-

 Creating awareness for a company or client and building a positive image for them through
articles and stories in the various channels of media.
 Keeping eyes on all media channels for any public feedback on the client, company or its
products.
 Crisis management in cases where the company may be endangered.
 Building goodwill and rapport with customers through special events, charity and community
work.

7.3.5. Direct marketing

Direct marketing is much more than direct mail and mail order catalogs. It involves a variety of
activities, including database management, direct selling, telemarketing, and direct response ads
through direct mail, the Internet, and various broadcast and print media. Dell Computer and
Gateway have experienced tremendous growth in the computer industry by selling a full line of
personal computers through direct marketing.

One of the major tools of direct marketing is direct response advertising, whereby a product is
promoted through an ad that encourages the consumer to purchase directly from the
manufacturer. Traditionally, direct mail has been the primary medium for direct-response
advertising, although television and magazines have become increasingly important media.
Direct-response advertising and other forms of direct marketing have become very popular over
the past two decades, owing primarily to changing lifestyles, particularly the increase in two-
income households. This has meant more discretionary income but less time for in-store
shopping. The availability of credit cards and toll-free phone numbers has also facilitated the
purchase of products from direct-response ads. More recently, the rapid growth of the Internet is
fueling the growth of direct marketing. The convenience of shopping through catalogs or on a
company’s website and placing orders by mail, by phone, or online has led the tremendous
growth of direct marketing.

Direct-marketing tools and techniques are also being used by companies that distribute their
products through traditional distribution channels or have their own sales force. Direct marketing
plays a big role in the integrated marketing communications programs of consumer-product
companies and business-to-business marketers. These companies spend large amounts of money
each year developing and maintaining databases containing the addresses and/or phone numbers
of present and prospective customers. They use telemarketing to call customers directly and
attempt to sell them products and services or qualify them as sales leads. Marketers also send out
direct mail pieces ranging from simple letters and flyers to detailed brochures, catalogs, and
videotapes to give potential customers information about their products or services.

Direct-marketing techniques are also used to distribute product samples or target users of a
competing brand.