Advertising and Sales Promotion UNIT - 5

Unit 5 Sales Promotion campaign 5.1 Sales Promotion requirement identification: The need for sales promotion activities is vast and varied. A company may offer high quality goods of reasonable price with attractive package, etc. The company might have spent a lot on advertising and have good sales force. Still the product may not sell by itself. Here lies the importance of sales promotion. The need for sales promotion arises due to following reasons: To secure attention towards new products and product improvement. To improve the market share of a company To avoid duplication of goods To create awareness among consumers about new brands To face competition in the market To create talking points for their sales force.

5.2Developing the Sales Promotion Campaign: Defining the Sales promotion Target

Selecting the Communication Channels:

Setting the objectives

Determining the Promotion Mix

Develop Your Promotional Message

Develop the Promotion Budget

Determine Campaign Effectiveness

Advertising and Sales Promotion UNIT - 5

Step 1: Defining the Sales promotion Target

It's important in this first step to examine and understand the needs of your target market. Who is your message going out to? Current users, influencers among individuals, decisionmakers, groups, or the general public?. The potential customers for the sales promotion are decided.

Step 2: Selecting the Communication Channels:

In the first step of planning, the markets, products, and environments are defined. This information will assist in deciding which communication channels will be most beneficial. Will you use personal communication channels such as face to face meeting, telephone contact, or perhaps a personal sales presentation? Or will the non personal communication such as newspapers, magazines, or direct mail work better.

Step 3: Setting the objectives:

From the target customers, sales promotion objectives are determined. The objectives in a promotional campaign are slightly different from your marketing campaign. Promotional objectives should be stated in terms of long or short-term behaviours by people who have been exposed to your promotional communication. These objectives must be clearly stated, measurable, and appropriate to the phase of market development.

Step 4: Determining the Promotion Mix

Numerous decisions are to be taken in developing a sales promotion strategy like the size and duration of the promotion. This is the stage resources must be allocated for sales promotion, advertising, publicity, and of course personal selling activities. Don't skimp on either of these areas as it is must to create awareness among the buyers in order for your promotional campaign to succeed. A well rounded promotion will use all these methods in some capacity.

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Advertising and Sales Promotion UNIT - 5

Step 5: Developing the Promotional Message

In this step it is needed to sit down with the team and focus on the content, appeal, structure, format, and source of the message. Keep in mind in promotional campaigns appeal and execution always works together.

Step 6: Developing the Promotion Budget

After deciding the sales promotion target and objectives, the budget for the sales promotion activities are to be decided. This involves determining cost breakdowns per territory and promotional mix elements. The budget must highlight the total breakdown allocations and determine the affordability, percent of sales, and competitive parity. By breaking down these costs we will get a better idea on gauging the success potential of your campaign. The budget must also cover the administrative cost and the total incentive cost.

Step 7: Determining Campaign Effectiveness

Before implementing the sales promotion programme, pre testing of the programme has to be done. Pre testing means testing the sales promotion programme before it is being implemented. It is desirable to test the programme before its implementation to find out whether the tools are appropriate and the size of the incentive is sufficient and timing perfect. The approaches to sales programme evaluation include consumer panels, consumer surveys and experiments. It is also needed to determine how you will measure the effectiveness once it is implementing. How did the actual performance measure up to planned objectives. You'll need to gather this information by asking your target market whether they recognized or recall specific advertising messages, what they remember about the message, how they felt about the message, and if their attitudes toward the company was affected by the message.

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Advertising and Sales Promotion UNIT - 5

5.3 Involvement of Salesmen and Dealers (Methods of Sales Promotion) Method 1: Sales Force (Sales men) Promotion: The personal selling is very essential in marketing. To make personal selling highly effective, sales force promotion is essential. The tools of sales force promotion are bonus, sales force contests and sales meetings and conferences. Bonus is usually offered to salesmen who sell in excess of the quota. Similarly sales force contests are arranged to stimulate the efforts of the salesmen. The sales promotion department usually arranges such contests to increase the efforts and energies of the sales force. Sales meetings and conferences are also arranged for the purpose of educating and inspiring the sales force. In such conventions and conferences, the sales promotion department exposes the salesmen to the latest sales techniques and latest methods of promotion of goods. The sales promotion department assist the salesmen to contact the prospective customers. Sometimes, it prepares the ground for the sales men to meet the prospects by sending those circular letters and sales literature. This helps the salesmen a lot while selling. Features of Salesmanship: Salesmanship is personal selling and it is the oldest form of selling. It is the most important form of promotional mix It is the art of selling a product or service It is a creative art. It creates new wants. To be very effective, salesmanship also has to be carried on continuously tp perpetuate the demand created once. It is an educational process. Salesman provides information about the products, their unique features and their utility. Qualitative (long term) objectives of a Salesman: To undertake to do the entire selling activity To serve the existing accounts in terms of their orders, requirements, schedule of supply, level of performance and payments. To generate new enquiries To convert some of the new prospects into long term customers

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Advertising and Sales Promotion UNIT - 5

To regularly inform customers about product characteristics, technical up gradation and companys commitment to quality. To co-ordinate with distribution channel members to improve sales and market share. To collect information from markets, customers, suppliers, distribution channel members and consultants for use by company management.

Quantitative (Short term) objectives of a Salesman: To obtain orders and execute them to the customers. To meet the sales target To maintain present accounts and add new customers To maintain market share and competitive edge. To achieve sales volume and satisfy companys product mix To submit sales reports regularly as per companies policies.

Functions/Duties and Responsibilities of Salesmen in sales promotion: 1. Selling The fundamental duty of a sales man is selling. This duty includes meeting the prospects, presenting and demonstrating the products, inducing the prospects to buy, taking orders and effecting sales. 2. Guiding the buyers- A salesman should guide the buyers in buying the goods they want. 3. Attending the complaints: A salesman should attend to the complaints of the customers immediately and try to settle their grievance quickly and sincerely. 4. Collection of bills: Sometimes, a salesman may be required to collect the outstanding bills relating to the goods sold by him. He has to collect the bills and remit the amount to his firm. 5. Collection of credit information: A salesman may, sometimes, be required to collect information about the credit worthiness of the customers. In such a case, he has to collect detailed information and submit it to his firm in time. 6. Reporting: A salesman, especially a travelling salesman is required to send daily, weekly or monthly reports to his firm. 7. Arranging for packing and delivery: A salesman i.e, a counter sales man, has to arrange for the packing of the goods and the delivery of the packages to the buyers.

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Advertising and Sales Promotion UNIT - 5

8. Window and Counter Displays: A salesman has to arrange the window and counter displays of the products in an attractive manner so as to attract and induce the prospects to buy. 9. Promotion of Goodwill: Every salesman has to build up satisfied clientele (Customers) for his employer and thereby promote the goodwill of his firm. 10. Working with middlemen: Salesmen establish direct relations with middle men distributors, wholesalers etc and collect market information and pass it on to their firm. Method 2: Sales Promotion of Dealers There is a need for a cordial relationship between the manufacturer and the dealers i.e wholesalers and retailers including the agent middlemen. It is highly essential because it is only through dealers that a manufacturer sells his goods. The sales promotion department is responsible for maintaining such a cordial relationship with dealers so that the goods move quickly along the channel of distribution. Dealers can be helped in many ways and the following are the popular form of assistance: a. By provision of management aids: Modern management offers a variety of management aids to dealers. Management aids include technical guidance and assistance like specific layout to the stores, arrangement of goods in the stores, lightning arrangement etc. b. Sharing of information: The manufacturer sometimes conveys all information about a product to the dealers such as information relating to production process etc. The dealer also informs the manufacturer about the consumers demand pattern, their likes and dislikes, preference and complaints and so on. c. Training of dealers: The sales promotion department arranges to train dealers about the various aspects of sales. They are trained for arranging sales talk, sales approach and methods of meeting customer objection. d. Furnishing dealers with sales literature and display materials: The dealers are supplied with pamphlets, circulars, booklets to describe product features, constituent parts and various uses. e. Attractive terms of sale: Producers offers buying allowances, deduction rates and credit terms to the dealers to induce them to buys products. f. The manufacturer and the dealer may undertake cooperative advertising campaign.
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g. Taking the goods back: Sometimes, the manufacturer promise the dealer to take back the goods if they remain unsold. Old stocks and old models are also taken back by the manufacturers. These kinds of incentives inspire the dealers to stock and sell goods more vigorously and enthusiastically. Method 3: Sales Promotion of Consumers Consumer promotion includes samples, coupons, money refund offers, price offs, premiums, contests, demonstrations and trading stamps. Samples are free distribution of a product for the purpose of obtaining consumer acceptance. Coupons offer a discount on new purchases of a product. Money refund is granted to purchasers. Demonstrations are conducted to inform the public or consumers in the target market about the attributes and utilities of the product. Trading stamps are a special type of premium received by the customers. Method 4: Sales Promotion of Industrial Products Sales promotion plays a vital role in industrial marketing. However industrial marketing does not uses advertising as much as consumer marketing but uses sales promotion. The assessment of the situation of the promotion of industrial products is based on the following observation: a. Identify the extra benefits your competitors are offering and assess whether you can offer all or some of these benefits. b. Offer extra benefits perhaps with marginal price and the customer will be satisfied with your efforts. c. Consider all the extra benefits and make priority of these benefits with a view to offering these to customers depending upon a particular sales situation Method 4: Sales Promotion of Services The following promotion work well in services marketing: Joint promotion which link the buying of one service to another

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Advertising and Sales Promotion UNIT - 5

Promotion based on price creativity, where additional benefits are informed through price adjustments as used in restaurants, clinics and hospitals. The use of premium in the direct mailing and selling of financial offers of financial services. 5.4 National and International Sales Promotional strategies: Sales promotion activity in international markets is growing due in part to the transfer of promotion concepts and techniques from country to country and in part to the proliferation of media. The growth also stems from the liberalization of trade, the rise of global brands, the spread of cable and satellite TV, and the deregulation and/or privatization of media. Sales promotion and direct-response agencies have been becoming more common, particularly in Europe and more recently in South American, Asian, and Middle Eastern countries. In many less developed countries, spending on sales promotion often exceeds media spending on TV, radio, and print ads Companies increasingly rely on consumer- and trade oriented sales promotion to help sell their products in foreign markets as well. Many of the promotional tools that are effective in the United States, such as free samples, premiums, event sponsorships, contests, coupons, and trade promotions, are also used in foreign markets.

A type of promotion that has become very popular in foreign markets is event sponsorship. Many companies sponsor sporting events, concerts, and other activities in foreign countries to promote their products and enhance corporate image. Sponsorship of sporting events has become a cornerstone of the Coca-Cola Companys promotional efforts. The company is now the largest corporate sports sponsor in the world, spending nearly $1 billion a year on global= sports sponsorships. Unlike advertising, which can be done on a global basis, sales

promotions must be adapted to local markets.

They include the stage of economic development, market maturity, consumer perceptions of promotional tools, trade structure, and legal restrictions and regulations:

Economic development: In highly developed countries such as the United States, Canada, Japan, and Western European nations, marketers can choose from a wide range of promotional tools. But in developing countries they must be careful not to use promotional tools such as in- or on-package premiums that would increase the price of the product beyond the reach of most consumers. Free samples and demonstrations are widely used, effective
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Advertising and Sales Promotion UNIT - 5

promotional tools in developing countries. But coupons, which are so popular with consumers in the United States, are rarely used because of problems with distribution and resistance from retailers. In the United States and Britain, most coupons are distributed through newspapers (including FSIs) or magazines. Low literacy rates in some countries make print media an ineffective coupon distribution method, so coupons are delivered door to door, handed out in stores, or placed in or on packages.

Market maturity: Marketers must also consider the stage of market development for their product or service in various countries when they design sales promotions. To introduce a product to a country, consumer-oriented promotional tools such as sampling, high-value coupons, and cross-promotions with established products and brands are often effective. The competitive dynamics of a foreign market are also often a function of its stage of development. More competition is likely in well-developed mature markets, which will influence the types of sales promotion tools used. For example, there may be competitive pressure to use trade allowances to maintain distribution or consumer promotions that will maintain customer loyalty, such as bonus packs, price-off deals, or coupons.

Consumer perceptions: An important consideration in the design of sales promotion programs is how they are perceived by consumers as well as the trade. Consumer perceptions various sales promotion tools vary from market to market. For example, Japanese women are less likely to take advantage of contests, coupons, or other promotions than are women in the United States.99 Premium offers in particular must be adapted to the tastes of consumers in various markets. Arecent study by Huff and Alden examined consumers opinions toward the use of coupons and sweepstakes in three Asian countries: Taiwan, Malaysia, and Thailand. The study found differences among the three countries with consumers in Taiwan having more negative attitudes and lower levels of use of both sweepstakes and coupons than consumers in Malaysia and Thailand.

Trade structure:

In areas with highly concentrated retailing systems, such as northern

Europe, the trade situation is becoming much like the United States and Canada as pressure grows for more price-oriented trade and in-store promotions. In southern Europe, the retail industry is highly fragmented and there is less trade pressure for promotions. The willingness and ability of channel members to accommodate sales promotion programs must also be
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Advertising and Sales Promotion UNIT - 5

considered. Retailers in many countries do not want to take time to process coupons, post promotional displays, or deal with premiums or packaging that require special handling or storage. In countries like Japan or India, where retailing structures are highly fragmented, stores are too small for point-of purchase displays or in-store sampling.

Regulations: An important factor affecting the use of sales promotions in foreign countries is the presence of legal restrictions and regulations. Laws affecting salespromotions are generally more restrictive in other countries than in the United States. Some countries ban contests, games, or lotteries, while others restrict the size or amount of a sample, premium, or prize. For example, fair-trade regulations in Japan limit the maximum value of premiums to 10 percent of the retail price; in France the limit is 5 percent. Canada prohibits games of pure chance unless a skill element is used to determine the winner. In Japan the amount of a prize offer is limited to a certain percentage of the product tied to the promotion.101 In some countries, a free premium must be related to the nature of the product purchased. Many countries have strict rules when it comes to premium offers for children, and some ban them altogether. The appendix at the end of this chapter shows the restrictions on various sales promotion tools in a number of different countries. Variations in rules and regulations mean marketers must often develop separate consumer sales promotion programs for each country. Many companies have found it difficult to do any promotions throughout Europe because sales promotion rules differ so from one country to another. While the treaty on European Union may result in a more standardized legal environment in Europe, laws regarding sales promotion are still likely to vary. This is why many companies use local agencies or international sales promotion companies to develop sales promotion programs for foreign markets.

5.5 Integrated Promotion / Integrated marketing Communication Integrated Marketing Communication (IMC) involves the idea that a firms promotional efforts should be coordinated to achieve the best combined effects of the firms efforts. Resources are allocated to achieve those outcomes that the firm values the most. Promotion involves a number of tools we can use to increase demand for our most well known component of promotion is advertising, but we can also use tools such as the following:
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Advertising and Sales Promotion UNIT - 5

Public relations (the firms staff provides information to the media in the hopes of getting coverage). This strategy has benefits (it is often less expensive and media coverage is usually more credible than advertising) but it also entails a risk in that we cant control what the media will say. Note that this is particularly a useful tool for small and growing businessesespecially those that make a product which is inherently interesting to the audience.

Trade promotion. Here, the firm offers retailers and wholesalers temporary discounts, which may or may not be passed on to the consumer, to stimulate sales.

Sales promotion. Consumers are given either price discounts, coupons, or rebates. Personal selling. Sales people either make cold calls on potential customers and/or respond to inquiries.

In-store displays. Firms often pay a great deal of money to have their goods displayed prominently in the store. More desirable display spaces include: end of an aisle, freestanding displays, and near the check-out counter. Occasionally, a representative may display the product.

Samples Premiums

Integrated Marketing Communications is a simple concept. It ensures that all forms of communications and messages are carefully linked together. At its most basic level, Integrated Marketing Communications, or IMC, as we'll call it, means integrating all the promotional tools, so that they work together in harmony. Promotion is one of the Ps in the marketing mix. Promotions have its own mix of communications tools. All of these communications tools work better if they work together in harmony rather than in isolation. Their sum is greater than their parts - providing they speak consistently with one voice all the time, every time. This is enhanced when integration goes beyond just the basic communications tools. There are other levels of integration such as Horizontal, Vertical, Internal, External and Data integration. Here is how they help to strengthen Integrated Communications.

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Advertising and Sales Promotion UNIT - 5

Horizontal Integration occurs across the marketing mix and across business functions - for example, production, finance, distribution and communications should work together and be conscious that their decisions and actions send messages to customers. While different departments such as sales, direct mail and advertising can help each other through Data Integration. This requires a marketing information system which collects and shares relevant data across different departments. Vertical Integration means marketing and communications objectives must support the higher level corporate objectives and corporate missions. Check out the Hall Of Fame later for more about missions. Meanwhile Internal Integration requires internal marketing - keeping all staff informed and motivated about any new developments from new advertisements, to new corporate identities, new service standards, new strategic partners and so on. External Integration, on the other hand, requires external partners such as advertising and PR agencies to work closely together to deliver a single seamless solution - a cohesive message an integrated message. The many benefits of IMC are examined in the section called, 'Benefits of IMC'. Benefits of IMC Although Integrated Marketing Communications requires a lot of effort it delivers many benefits. It can create competitive advantage, boost sales and profits, while saving money, time and stress. IMC wraps communications around customers and helps them move through the various stages of the buying process. The organisation simultaneously consolidates its image, develops a dialogue and nurtures its relationship with customers. This 'Relationship Marketing' cements a bond of loyalty with customers which can protect them from the inevitable onslaught of competition. The ability to keep a customer for life is a powerful competitive advantage.

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Advertising and Sales Promotion UNIT - 5

IMC also increases profits through increased effectiveness. At its most basic level, a unified message has more impact than a disjointed myriad of messages. In a busy world, a consistent, consolidated and crystal clear message has a better chance of cutting through the 'noise' of over five hundred commercial messages which bombard customers each and every day. At another level, initial research suggests that images shared in advertising and direct mail boost both advertising awareness and mail shot responses. So IMC can boost sales by stretching messages across several communications tools to create more avenues for customers to become aware, aroused, and ultimately, to make a purchase Carefully linked messages also help buyers by giving timely reminders, updated information and special offers which, when presented in a planned sequence, help them move comfortably through the stages of their buying process... and this reduces their 'misery of choice' in a complex and busy world. IMC also makes messages more consistent and therefore more credible. This reduces risk in the mind of the buyer which, in turn, shortens the search process and helps to dictate the outcome of brand comparisons. Un-integrated communications send disjointed messages which dilute the impact of the message. This may also confuse, frustrate and arouse anxiety in customers. On the other hand, integrated communications present a reassuring sense of order. Consistent images and relevant, useful, messages help nurture long term relationships with customers. Here, customer databases can identify precisely which customers need what information when... and throughout their whole buying life. Finally, IMC saves money as it eliminates duplication in areas such as graphics and photography since they can be shared and used in say, advertising, exhibitions and sales literature. Agency fees are reduced by using a single agency for all communications and even if there are several agencies, time is saved when meetings bring all the agencies together - for briefings, creative sessions, tactical or strategic planning. This reduces workload and subsequent stress levels - one of the many benefits of IMC.

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Advertising and Sales Promotion UNIT - 5

5.6 Online Sales promotion: Sales promotion activities are widely used on the web. Most online sales promotions are targeted at consumers and are used in combination with advertising. Viral marketing and viral advertising use customers' own social circles and social networking sites to boost sales. Your sales message can be delivered by personal email and/or enhanced by rich-media online designs such as film clips, games, and worthwhile 'pure' non-sales content. Viral marketers target users with the buying profile your business caters to. They then create viral messages specifically to appeal to this customer segment. Sales incentives, such as ecoupons, vouchers, discount codes, or some free content, work well. See the page in this guide on community building and social media. E-coupons and vouchers: E-coupons and vouchers offer your online business the opportunity to increase sales in much the same way as conventional coupons do for traditional businesses. They can be used creatively in a number of different ways:

frequent shoppers can be rewarded when they reach a certain level of value or purchases shoppers can be encouraged to return with an e-coupon or voucher towards future purchases

incentives can be used to encourage customers to purchase immediately rather than waiting for a better deal or shopping elsewhere

first time customers can be offered special deals in order to help turn them from browsers into purchasers

subscriber-only e-coupons can be used to encourage customers to sign up for enewsletters, with the newsletter helping to increase sales and build your customer database

Coupons and vouchers usually include a code that the customer is required to enter before they finalise their order to receive the discount. Sampling: Some e-commerce sites allow users to sample digital products prior to purchase. Many software companies, for example, provide free downloads of demo software that normally
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Advertising and Sales Promotion UNIT - 5

expire after 30 to 60 days. At that time, the user can then choose to purchase the full product if they wish. Gift certificates and wish lists: Providing existing site visitors with the facility to build a personal wishlist, which they forward themselves to their own contacts, will attract new visitors to your site. Free content: Offering valuable content on a site - a useful guide to a subject, expert advice on product choice, impartial reviews, or news and views from your sector - can attract users. Many marketers insist that firms only offer their most valuable information in exchange for user registration and an email address - but others explain that registration reduces users greatly, and that your business benefits more from many more people consuming and spreading freely available content.

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