Promotion Mix

5.1 INTRODUCTION

Modern marketing calls for than developing a good product pricing it attractively, and making it accessible to target customers.  Companies must also communicate with their present and potential customers, retailers, suppliers, other stakeholders, and the general public.  Every company is inevitable cast into the role of communicator and promoter.  For most companies, the question is not whether to communicate but rather what to say, to whom, and how often.

The marketing communications mix (also called the promotion mix consists of five major modes of communication:

Advertising:-  Any Paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor

Sales promotion: -A variety of short-term incentives to encourage trial or purchase of a product or service

Public relation & Publicity: A variety of programs designed to promote and/or protect a company's image or its individual products.

Personal selling: Face -to -Face interaction with one or more prospective purchasers for the purpose of making presentation, answering questions, and processing orders.

Direct Marketing: Use of mail, telephone, fax, e-mail, and other non personal contact tools to communicate directly with or solicit a direct response from specific customers and prospects. 

 

The starting point in the communication process is thus an audit of all the potential interactions target customers may have with the product and company.  For example, someone purchasing a new computer would talk to others, see television ads, read articles in newspaper and magazines, and observe computers in a store.  The marketer needs to assess which of these experiences and impressions will have the most influence at the different stage of the buying process.  This understanding will help marketers allocate their communication dollars more efficiently.

To communicate effectively, marketers need to understand the fundamental elements underlying effective communication.  The major parties in a communication - sender & receiver.  The major communication tools - message & media.  The major communication functions - encoding, decoding, response and feedback.  The last element in the system is noise.

The model underscores the key factors in effective communication.  Senders must know what audience they want to reach and what responses they want.  They must encode their messages in a way that takes into account how the target audience usually decodes messages.  They must also transmit the message through efficient media that reach the target audience and develop feedback channels to monitor the receivers response to the message.  The meaning and importance of communication and the process involved in communication briefly discussed as follows:-

      THE COMMUNICATION PROCESS

The communication process involves the sender, the transmission of a message through a selected channel and the receiver.

The sender of the message: -  Communication begins with the sender, who has a thought or an idea which is then encoded in a way that can be understood by both sender and the receiver.

Use of channel to transmit the message: - The information is transmitted over a channel that links the sender with the receiver.  The message may be oral or written and it may be transmitted through a memorandum, a computer, the telephone, a telegram or a television.

The receiver of the message: - The receiver converts the message into thoughts (decoded).  Accurate communication can occur only when both the sender and the receiver attach the same or at least similar meanings to the symbols that compose the message.

Noise and feedback in communication: - Unfortunately, communication is affected by "Noise" which is anything - whether in the sender, the transmission, or the receiver - that hinders communication.  For example,

a) Understanding can be obstructed by prejudices;

b) Inaccurate reception may be caused by inattention;

c) Encoding may be faculty because of the use of ambiguous symbols. Etc.

An organizations combination of personal selling, advertising, sales promotion, public relations, and publicity to help in achieving its marketing objectives is its promotional mix.  An effective promotional mix is a critical part of virtually all-marketing strategies.  Product differentiation, market segmentation, trading up and trading down, and branding all require effective promotion.  Designing an effective promotional mix involves a number of strategic decisions.

The following factors should be taken into account when determining the promotional mix:

1. The target market

2. The nature of the product

3. The stages of the product life cycle

4. The amount of money available for promotion 

 

   5.2.1 Target Market

As in most areas of marketing, decisions on the promotional mix will be greatly influence by the audience or target market.  At least four variables affect the choice of a promotional method for a particular market:

a) Readiness to buy

A target market can be in any one of six stages of buying readiness. These stages awareness, knowledge, liking, preference, conviction, and purchase are called the hierarchy of effects because they represent stages a buyer goes through in moving toward a purchase and each defines a possible goal or effect of promotion.

1. Awareness stage - the seller's task is to let the buyers know the product or brand exists.

2. Knowledge -  goes beyond awareness to learning about a product's features

3. Liking -  refers to how the market feels about the product or brand

4. Preference -  involves distinguishing among brand such that the market prefers your.

5. Conviction - entails the actual decision or commitment to purchase

6. Purchase -  can be delayed or post phoned indefinitely, even for customers who are convinced they should buy a product, i.e. lack of money 

b) Geographic scope of the market

Personal selling may be adequate in a small local market, but as the market broadens geographically, greater emphasis must be placed on advertising.

c) Type of customers

Promotional strategy depends in part on what level of the distribution channel the organization hopes to influence.  Final consumers and middlemen sometimes buy the same product, but they require different promotion.  Another consideration is the variety among the target markets for a product.  A market with only one type of customers will call for a different promotional mix than a market with many target markets.

d) Concentration of the market

The total number of prospective buyers is another consideration.  The fewer potential buyers there are, the more effective personal selling is, compared with advertising.

 

   5.2.2 Nature of the Product

Several product attributes influence promotional strategy.  The most important are:-

a) Unit value

A product with low unit value is usually relatively uncomplicated, involves little risk for the buyer, and must appeal to a mass market to survive.  As a result advertising would be the primary promotional tool.  In contrast, high unit value products often are complex and expensive.

b) Degree of customization

If a product must be adapted to the individual customer's needs, personal selling is necessary.  Thus, you would expect to find an emphasis on personal selling for something like home remodeling, or an expensive suit of clothing.  However, the benefits of most standardized products can be effectively communicated in advertising.

c) Presale & post sale service

Products that must be demonstrated, for which there are trade-ins, or that require frequent servicing to keep them in good working order lend them selves to personal selling.  i.e. personal computers

 

   5.2.3 The Stages of the PLC

Promotion strategies are influenced by a product life cycle stage.  When a new product is introduced, prospective buyers must be informed about its existence and its benefits, and middlemen must be convinced to carry it.  Thus both advertising (to consumers) and personal selling (to middlemen) are critical in a product's introductory stage.  At introduction a new product also may be something of a novelty, offering excellent opportunities for publicity.  Later, if a product becomes successful, competition intensifies and more emphasis is placed on persuasive advertising.

 

   5.2.4 The Amount of Money/Funds Available

Regardless of what may be the most desirable promotional mix, the amount of money available for promotion is the ultimate determinant of the mix.  A business with ample funds can make more effective use of advertising than a firm with limited financial resources.  Small or financially weak companies are likely to rely on personal selling.

Lack of money may limit the options a firm has for its promotional effort.  For example, television advertising can carry a particular promotional message to for more people and at a lower cost per person than can cost most other media.  Yet a firm may have to rely on less expensive media, such as yellow pages advertising, because it lacks the funds to take advantage of television's efficiency.

 

Producers aim their promotional mix at both middlemen and end users.  A promotional program aimed primarily at middlemen is called a push strategy, and a promotion program directed primarily at end users is called a pull strategy.

   5.3.1 Push Strategy

Using a push strategy means a channel member directs its promotion primarily at the middlemen that are the next link forward in the distribution channel.  The product is "pushed" through the channel.

   5.3.2 Pull Strategy

With a pull strategy, promotion is directed at end users usually ultimate consumers.  The intention is to motivate them to ask retailers for the product.  The retailers, in return will request the product from the wholesalers, and the wholesalers will order it from the producer.  In effect, promotion to consumers is designed to "pull" the product through the channel.  This strategy relies on heavy advertising and various forms of sales promotion such as premiums, samples, or in-store demonstration.

 

Establishing promotional budget is extremely challenging because management lacks reliable standards for determining how much to spend all together on advertising or personal selling, and how much of the total budget to allocate to each promotional-mix elements.  Rather than one generally accepted approach to setting promotional budgets, there are four common promotional budgeting methods:

1. Percentage of sales

2. All available funds

3. Following the competition and

4. Budgeting by task or objective

   5.4.1 Percentage of Sales

The promotional budget may be related in some way to company income, as a percentage of either past or anticipated sales.  A common approach for determining the sales base is to complete an average between the previous year's actual sales and expected sales for the coming year.  Some businesses prefer to budget a fixed amount of money per unit of past or expected future sales.  The percentage - of - sales method is simple to calculate, it is probably the most widely used budgeting method.  Moreover, it sets the cost of promotion in relation to sales income, making it a variable rather than a fixed expense.
   
   5.4.2 All Available Funds

A new company or a firm introducing a new product frequently plows all available funds into its promotional program.  The objective is to build sales and market share as rapidly as possible during those early, critical years.  After a time, management generally finds it necessary to invest into other things, such as new equipment or expanded production capacity, so the method of setting the promotional budget is changed.  
   
   5.4.3 

Following Competition

A weak method of determining the promotional budget, but one that is used occasionally is to match the promotional expenditures of competitors or to spend in proportion to market share.  Sometimes only one competitor is followed.  In other cases, if management has access to industry average expenditures on promotion through a trade association, these become company benchmarks.
   
   5.4.4 

Budgeting by Task or Objectives

The best approach for establishing the promotional budget is to determine the task or objectives the promotional program must accomplish and then decide what they will cost.  The task method forces management to realistically define the goal of its promotional program.  In this method, the promotional budget is build up by adding up the costs of the individual promotional tasks needed to reach the goal of entering a new territory.

 

   5.5.1 Advertising

Advertising, sales promotion, and public relations are the mass communication tools available to customers. As its name suggests, mass communication uses the same message for everyone in an audience. The mass communicator trades off the advantage of personal selling, the opportunity to tailor a message to each prospective customer, for the advantage of reaching many people at a lower cost per person.

Advertising is one of the most common tools companies use to direct persuasive communication to target buyers and publics.  Advertising can be defined as follows:-

"Advertising is any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor."

Advertisers include business firms but also museums, charitable organizations, and government agencies that advertise to various target publics.  Ads are a cost effective way to disseminate messages, whether to build brand preference or to educate a nation's people to avoid hard drugs.

     5.5.1.1 Major Decisions in Developing an Advertising Program

In developing an advertising program, marketing, managers must always start by identifying the target market and buyer motives.  Then they can proceed to make the five major decisions in developing an advertising program, known as the five Ms:

Mission:                       What are the advertising objectives?

Money:                        How much can be spent?

Message:                     What message should be sent?

Media:                         What media should be used?

Measurement:              How should the results be evaluated?

     5.5.1.2 Advertising Objectives

The purpose of advertising is to sell something a good, service, idea, person, or place either now or later. This goal is reached by setting specific objectives that can be expressed in individual advertisement that are incorporated into an advertising campaign.  Thus, the immediate objective of an advertisement may be to move target customers to the next stage in the hierarchy say, from awareness to interest.

These objectives must flow from prior decisions on the target market, market positioning, and marketing mix.  The marketing positioning and marketing mix strategies define the job that advertising must do in the total marketing program.

Advertising objectives can be classified according to whether their aim is to inform, persuade, or remind:

• Informative advertising:- figures heavily in the pioneer stage of a product life category, where all objectives is to build primary demand.
  

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• Persuasive advertising:-  becomes important in the competitive stage, where a company's objective is to build selective demand for a particular brand.  Some persuasive advertising has moved into the category of comparative advertising, which seeks to establish the superiority of one round through specific compression of one or more attributes with one or more brands in the product class.

• Reminder Advertising:-  is highly important with mature products.  A related form of advertising is reinforcement advertising, which seeks to assure current purchasers that they have made the right choice.  

The choice of advertising objective should be based on a thorough analysis of the current marketing situation.  For example, if the product class is mature, the company is the market leader, and brand usage is low, the proper objective should be to stimulate more brand usage.  If the product class is new, the company is not the market leader, but the brand is superior to the leader, then the proper objective is to convince the market of the brand's superiority. 

     5.5.1.3 Advertising Budget

After determining advertising objectives, the company can proceed to establish its advertising budget for each product.  The role of advertising is to increase demand for the product.  The company wants to spend the amount required to achieve the sales goal.  But how does a company know if it is spending the right amount?  If the company spends too little, the effect will be insignificant.  If the company spends too much on advertising, then some of the money could have been put to better use. 

In setting the advertising budget, the following factors must be considered. 

i) Stages in the product life cycle

A new product typically receives large advertising budgets to build awareness and to gain consumer trail.  Established brands usually are supported with lower advertising budgets as a ratio to sales.

ii) Market share and consumer base:

High market share brands usually require less advertising expenditure as a percentage of sales to maintain their share.  To build share by increasing market size requires larger advertising expenditures.

iii) Competition and clutter

In a market with a large number of competitors and high advertising spending, a brand must advertise more heavily to be heard above the noise in the market.  Even simple clutter from advertisements not directly competitive to the brand creates a need for heavier advertising. 

iv) Advertising frequency

The number of repetitions needed to put across the brand's message to consumers has an important impact on the advertising budget.

v) Product substitutability

Brands in a commodity class (e.g. cigarettes, beer, soft drinks) require heavy advertising to establish a differential image.  Advertising is also important when a brand can offer unique physical benefits or features. 

Media Selection

The appeal and the target audience determine the message and the choice of media.  Advertisers need to make decisions at each of three successive levels to determine which specific advertising media to use:-

• Which type of media will be used?   

• Which category of the selected medium will be used?

• Which specific media vehicles will be used? 

Factors Determining Media Selection

Media selection involves finding the most cost effective media to deliver the desired number of exposure to the target audience.

Here are some general factors that will influence media choice:-

1. Objective of the advertisement

The purpose of a particular advertisement and the goals of the entire campaign influence which media to use.  For example, if an advertiser wants to induce quick action, newspaper or radio may be the medium to use.

2. Audience Coverage

The audience reached by the medium should match the geographic area in which the product is distributed.  Furthermore, the selected medium should reach the desired types of prospects with a minimum of wasted coverage.  Wasted coverage occurs when an advertisement reaches people who are not prospects for a product.

3.Requirements of the message

The medium should fit the message.  For example, food products, floor coverings, and apparel are best presented visually.  If the advertiser can use a very brief message, as is common with reminder advertising, billboards may be a suitable medium.

4. Media Cost

The cost of each medium should be considered in relation to the amount of funds available to pay for it and its reach or circulation.

Types of Advertising Media

Media is a vehicle through which an advertiser communicates their message to likely customers or prospects with a view to influencing them in terms of the advertising objectives.  The advertising media can be classified on the following basis.

1. Broadcast media (Indoor Advertising)

     Television

     Radio

     TV screen slides

     Films

2. Press Advertising (Indoor Advertising)

     Newspaper

     Magazines

     Trade Journals

     Business Directory

3. Direct Mail

     Circular

     Sales letters

     Price lists

     Catalogues

     Brochures

     Leaflets, pamphlets, diary, calendar

4. Outdoor advertising

     Posters

     Hoarding

     Vehicular advertising

     Sky advertising

     Sandwich bill boards

     Electric light signs

 

1. (Indoor Advertising) Broadcast media

Indoor advertising includes, television, radio, In slides and cinema as a media to disseminate advertising messages.

Television combines motion, sound, and special visual effects.  Products can be demonstrated as well as described on TV.  It offers wide geographic coverage and flexibility in when the message can be presented.  However, television is a relatively expensive medium.  

Radio is the most effective media that has enjoyed a rebirth as an advertising and cultural medium.  When interests on television increased, radio audiences (especially for national network radio) declined so dramatically that some people predicted radio's demise.  Radio makes only an audio impression, relying entirely on the listener's ability to retain information heard and not seen.  Also audience attention is often at a low level, because radio is frequently used as background for working, studying, or some other activity.

TV slides and cinemas reaches a relatively small audience but can be effective particularity in advertising to local shops.

2. Press Advertising (Indoor)

Press advertising includes advertising in newspaper, magazines, trade journals, & business directory.  The newspaper is the most popular form of advertising.  It constitutes a valuable medium for disseminating news and molding public opinions and therefore plays an important role in social and political life.

As an advertising medium, newspaper is flexible and timely.  Advertising can be inserted or cancelled on very short notice, and can vary in size from small classifieds to multiple pages.  Pages can be added or dropped, so newspapers are not limited.  Newspapers can be used to reach an entire city, or, where regional editions are offered, selected areas.

Cost per person reached is relatively low.  On the other hand, the life of newspapers is very short they are discarded soon after being read.  They are viewed as providing fairly complete coverage of a local market.  Also, because newspapers don't offer much format variety, it is difficult to design advertisement that stands out.

Magazines are the medium to use when high quality printing and color are desired in advertising.  Magazines can reach a national market at a relatively low cost per reader.  Through special interest magazines or regional editions of general interest magazines, an advertiser can reach a selected audience with a minimum of wasted circulation.

Trade journals are the medium used by an advertiser to reach among a particular class of persons such as doctors and engineers.  Thus, where the objective of advertising is to reach such a specific class of persons, trade journals become very suitable as a form of advertising.

Business directory Yellow pages as we know it today a printed directory of local business names and phone numbers organized by type of product has been around since the late 1800's.  Yellow pages advertising revenue exceeded both radio and magazines. 

3. Direct Mail

Direct mail, also known as direct marketing, is the most personal and selective of all media.  Printing and postage fees make the cost of direct mail per person reached quite high compared with other media.  However, because direct mail goes only to the people the advertisers wishes to contact, there is almost no wasted coverage.  Reaching the prospect does not, however, ensure that the message is received.  Direct mail is pure advertising.  Therefore, a direct advertisement must attract its own readers.

4. Outdoor Advertising

It will be realized that press advertising is generally read when the subscriber or reader are indoors.  As against this, there are other media, which are noticed by persons when he is outdoors.  This media includes billboards, posters, vehicular advertisement sky advertising, electrical signs.  But because it is seen by people "on the go" outdoor advertising is appropriate only for brief messages. 

Historically, the cigarette and tobacco industries have been the heaviest outdoor advertisers, in part because they are banned from the broadcast media.  However, the effectiveness of billboards for reminder advertising has also made them attractive to other industries.  Recent advances in computerized billboard paintings have greatly speeded up the production of boards and standardized their quality.  Billboards provide flexibility in geographic coverage and can provide intense coverage within an area.  However, unless the advertised product is a widely used good or service, considerable wasted circulation will occur, since many of the passer by will not be prospects.  

In summary, there are many forms of advertising media from which the marketing manager has to make an appropriate decision.  The main yardstick for selection of a media should lie on reach of the maximum number of potential buyers at a minimum cost.  Therefore the advertiser should determine the prospective customer or the market segments at which the advertising is to be directed.  The messages or copies should also be appropriate for the type of media and the nature of the product involved.

 

   5.6.1 Meaning of Sales Promotion

Sales promotion is a key ingredient in marketing campaign.  

It can be defined as follows:

"Sales promotion consists of a diverse collection of incentives tools mostly short term designed to stimulate quicker and/or greater purchase of particular products by consumer or the trade."

In other words sales promotion is a demand stimulating devices designed to supplement advertising and facilitate personal selling.

Where advertising offers a reason to buy, sales promotion offers an incentive to buy.  Sales promotion includes tools for consumer promotion (samples, coupons, cash refund offers, prices off, premium, prizes, patronage rewards, free trails, warranties, tie in promotions, cross promotions, point of purchase displays, and demonstrations).  Trade promotion (prices off, advertising, display allowances, and free goods).  And business and sales force promotion (trade shows and conventions, contents for sales representatives, and specialty advertising).

Sales promotion is conducted by producers and middlemen.  The target for producers' sales promotions may be middlemen, end users households or business users or the producer's own sales force, middlemen direct sales promotion at their sales people or prospects further down the channel of distribution. 

 

   5.6.2 Management of Sales Promotion

Sales promotion should be included in a company's promotion plans, along with advertising and personal selling. This means setting sales promotion objectives and strategies, determining sales promotion objectives and strategies, determining a sales promotion budget, selecting appropriate sales promotion techniques, and evaluating the performance of sales promotion activities. 

One problem management faces is that many sales promotion techniques are short run, tactical actions, coupons, premiums, and contests, for example, are designed to produce immediate (but short-lined) responses.  As a result, they tend to be used stopgap measures to reverse in expected sales decline rather than as integrated parts of a marketing program.

     5.6.2.1 Determining Objectives and Strategies of Sales Promotion

The objectives of a sales promotion may be the following:

• Stimulating business user or household demand for a product

• Improving the marketing performance of middlemen and sales people

• Supplementing advertising and facilitating personal selling.

One sales promotion technique may accomplish one or two but probably not all of these objectives.

More specific objectives of sales promotion are much like those for advertising and personal selling.  Examples are:-

1. ​​​​​​To gain a trial for a new or improved product

2. To disrupt existing buying habits

3. To attract new customers

4. To combat a competition's promotional activity

5. To increase impulse buying

6. To get greater retailer cooperation

The choice of sales promotion techniques should be dictated by the objectives of the total marketing program.  Consider the following situations and the different strategies available:

A firm's objective is to increase sales by entering new geographic markets.  A pull strategy is one way to encourage product trial and lure consumers away from familiar brands.  Possible sales promotion tactics are coupons, cash rebates, free samples, and premiums.

A firm's objective is to protect market share in the face of intense competition.  This goal suggests a push strategy to improve retailer performance and goodwill's Training retailers' sales people, supplying effective point of purchase displays, and granting advertising allowances would be appropriate sales promotion options.

     5.6.2.2 Determining Budgets

The sales promotion budget should be established as a specific part of the budget for the total promotional mix.  Including sales promotion in an advertising or public relation budget is not likely to foster the development of a separate sales promotion strategy.  And as a result, sales promotion may be overlooked or poorly integrated with the other components of promotion. Setting a separate budget for sales promotion forces a company to recognize and manage it.

 

     5.6.2.3 Selecting the Appropriate Techniques

Common sales promotion techniques used by a company based on the target audience are as follows. 

1) Business users or households

For business users, the most common sales promotion is a trade discount in the form of a reduced price or free merchandise.  Some other common promotion techniques used are:-

• Coupons

• Cash rebates

• Premium (gifts)

• Free Samples

• Contests

• Point of purchase displays

• Product demonstrations

• Trade show & exhibitions

• Advertising specialties

2) Middlemen

Trade associations in industries as diverse as shoes, travel, and furniture sponsor trade shows that are open only to wholesalers and retailers.  Many producers also spend considerable time and money to train the sales force of their wholesalers and retailers.  Some other common promotion techniques used are:-

• Trade shows and exhibition

• Point of purchase displays

• Free goods

• Advertising allowances

• Contests for sales people

• Training middlemen's sales forces

• Product demonstration

• Advertising specialties 

3. Producers' Sales Force

There is overlap between the devices directed at middlemen and those designed for the producer's own sales force.  Sales contests are probably the most significant of these.  The most common incentive is cash, used in over half of all contests.  Sales promotion tools for sales people also includes packet of promotional materials, visual sales aids (flipcharts, slides), and brochures to reinforce sales presentation.

A key step in sales promotion management is deciding which devices will help the organization reach its promotional goals.  Factors that influence the choice of promotional devices include:

a) Nature of the target audience

Is the target group loyal to a competitive brand?  If so, a high value coupon may be necessary to disrupt customers' purchase patterns.  Is the product bought on impulse?  If so, an eye-catching point of purchase display may be enough to generate sales.

b) The organization's promotional objectives

Does a pull or push strategy best complement the rest of the promotion program

c) Nature of the product

Does the product lend it self to sampling, demonstration, or multiple item purchases?

d) Cost of the device

Sampling to a large market may be prohibitively expensive.

e) Current economic conditions  

Coupons, premiums, and rebates are good options during period of recession or inflation, when consumers are particularly price conscious.

     5.6.2.5 Evaluating Sales Promotion

Evaluating the effectiveness of sales promotion is much easier and the results more accurate than evaluating the effectiveness o an advertising.  For example, to a premium offers or a coupon with a specified closing date can be counted and compared to a similar period where there were no premiums or coupons offered.  It is easier to measure sales promotion because:-

1. Most sales promotion have definite starting & ending points
2. Most sales promotions are designed to impact sales directly

However, there are some pitfalls in measuring sales promotion effects.  First, not all sales promotions meet the conditions just mentioned.  For instance, training given to a distributor's sales force may be valuable, but may not produce immediate results.  Second, current sales promotion results may be inflated by sales "Stolen" from the future.  That is, a sales promotion may get buyers to act now when they would have brought the product in the future anyway.  An indication of this cannibalizing effect is a lower level of sales after the promotion ends compared to before the sales promotion began.  Third, any attempt at measurement must take into consideration external conditions such as the behavior of competitions and the state of the economy.  A firm is market share may not increase following an expensive sales promotion.  For example, a promotion may have offset the potentially damaging impact of a competitions promotional activity. 

 

Like advertising and sales promotion, public relation is an important marketing tool.  Not only must the company relate constructively to its customers, suppliers and dealers, but it must also relate to a large set of interested publics.  Public relation may be defined as follows:

   5.7.1 Meaning of Public Relation/Publicity

"A public is any group that has an actual or potential interest in or impact on a company's ability to achieve its objectives.  Public relations (PR) involve a variety of programs designed to promote and/or protect a company's image or its individual products.

Public relations is a management tool designed to favorably influence attitudes toward an organization, its products, and its policies.  It is an often-overlooked form of promotion.  In most organizations this promotional tool is typically a stepchild, relegated far behind personal selling, advertising, and sales promotion.  There are several reasons for management's lack of attention to public relations:

a) Organizational Structure:

In most companies, public relations are not the responsibility of the marketing department.  If there is an organized effort, it is usually handled by a small public relation department that reports directly to top management.

b) Inadequate definitions

The term public relations are used loosely by both business and the public.  There are no generally accepted definitions of the term.  As a result, what actually constitutes an organized public relations effort often is not clearly defined.

c) Unrecognized benefits

Only recently have many organization come to appreciate the value of good public relations. As the cost of promotion has gone up, firms are realizing that positive exposure through the media or as a result of community involvement can producer a high return on investment of time and effort.

   5.7.2 Activities of Public Relation/ Publicity

Publicity is any communication about an organization, its products, or policies through the media that is not paid for by the organization.  Publicity usually takes the form of a news story appearing in a mass medium or an endorsement provided by an individual, either informally or in a speech or interview.  This is good publicity.

There are three means for gaining good publicity:

1. Prepare a story (called a news release) and circulate it to the media.  The intention is for the selected newspapers, television stations, or other media to report the information as news.

2. Personal communication with a group.  A press conference will draw media representatives if they feel the subject or speaker has news value.  Company tours and speeches to civic or professional groups are other forms of individual to group communications.  

3. One on one personal communication often called lobbying.  Companies lobby legislators or other powerful people in an attempt to influence their opinions, and subsequently their decisions.Presenting news and information about organization in the most positive light

Publicity can help to accomplish any communication objective.  It can be used to announce new products, publicize new policies, or report financial performance.  If the message, person, or group, or event is viewed by the media as news worthy. 

Public relation departments perform the following five activities, not all of which support marketing objectives.

1. Press relation
   Presenting news and information about organization in the most positive light
2. Product publicity
   Sponsoring various efforts to publicize specific products
3. Corporate Communication
   Promoting understanding of the organization with internal and external communications
4. Lobbying
   Dealing with legislators and government officials to promote or defeat legislation and regulation
5. Counseling
   Advising management about public issue and company positions and image.  This includes advising in the event of a product mishap when the public confidence in a product is shaken.

To summarize, publicity, a part of public relations, is any communication about an organization, its products, or policies through the media that is not paid for by the organization.  Typically these two activities are handled in a department separate form the marketing department in a firm.  Nevertheless, the management process of planning, implementing, and evaluating should be applied to their performance in the same way it is applied to advertising, sales promotion, and personal selling.

The goal of all marketing efforts is to increase profitable sales by offering want satisfaction to consumers over the long run. Personal selling is by far the major promotional method used to reach this goal.

   5.8.1 Meaning of Personal Selling

Personal selling can be defined as follows:-

" Personal selling is the personal communication of information to persuade somebody to buy something"

Personal selling is the individual, personal communication of information, in contrasts to the mass, impersonal communication of advertising, sales promotion, and other promotional tools.

This means that the personal selling is more flexible than these other tools. Sales people can tailor their presentation to fit the needs and behavior of individual customers. Sales people can see their customer's' reaction to a particular sales approach and make adjustments on the spot.

Also, personal selling usually can be focused or pinpointed on prospective customers, thus minimizing wasted effort. In contrast, much of the cost of advertising is spent on sending messages to people who is no way are real prospects.

Another advantage of personal selling is that it's goal is to actually make a sale. Other forms of promotion are designed to more a prospect closer to a sale.

Advertising can attract attention, provide information, and arouse desire, but seldom does it stimulate buying action or complete the transfer of title from seller to buyer.

A major limitation of personal selling is its high cost. Even though personal selling can minimize wasted effort, the cost of developing and operation sales force is high. Another disadvantage is that a company often is unable to attract the quality of people needed to do the job.

   5.8.2 Types of Salesman

The types of selling jobs and the activities involved in them covers a wide range. One way of classify sales jobs is on the basis of the creative selling skills required, from the simple to the complex

Robert Mcmurry, classified sales jobs as follows:-

     5.8.2.1 Driver- salesman

In this job the sales person primarily delivers the product-for example, soft drinks or fuel oil. The selling responsibilities are secondary; few of these people originate sales.

     5.8.2.2 Inside Order Taker

This is a position in which the sales person takes orders at the seller’s place of business- for example, a retail clerk standing behind the counter, or a telephone representative at a catalog retailer.  Most customers have already decided to buy, and the sales person’s job is to serve them efficiently.

     5.8.2.3 Outside Order Takes

In this position the sales person goes to the customer in the field and accepts an order. An example is a hardware sales person calling on a retail hardware store, or a sales representative for a radio station who sells advertising time to local business. The majority of these sales are repeat orders to established customers, although these sales people occasionally do introduce new products to customers.

     5.8.2.4 Missionary Sales Person

These types of sales job is intended to build good will, perform promotional activities, and provide information and other services for the customers. This sales person is not expected to solicit an order.

     5.8.2.5 Sales Engineer

In this position the major emphasis is on the sales person's ability to explain the product to a prospective customer, and also to adapt the product to the customers particular needs. The products involve here typically are complex, technically sophisticated items. A sales engineer usually provides technical support, and works with another sales representative who calls regularly on a given account.

     5.8.2.6 Creative Sales Person- An Order Getter

This involves the creative selling of goods & intangibles- primarily services, but also social causes and ideas (don't do drags, stop smoking, obey speed limit etc.). This category contains most complex, difficult selling jobs- especially the creative selling of intangibles, because you can't see, touch, taste, or smell them. Customers often are not aware of their needs for a seller’s product, or they may not realize how that product can satisfy their wants better than the product they are now using.

 

   5.8.3 Changing Patterns in Personal Selling

Traditionally, personal selling was face-to face, one -on-one situation between a sales person and a buyer. This situation is existed both in retail sales involving ultimate consumers and also in business-to-business transaction. In recent years, however, some very different selling patterns have emerged. These new patterns reflect a growing purchasing expertise among consumers and business buyers, which, is turn, has fostered a growing professionalism is personal selling. Let’s discuses four of these emerging patterns.

     5.8.3.1 Selling Centers- Team Selling

To match the expertise on the buying side, especially in business markets, a growing number of firms on the selling side have adapted the organizational concept of a selling center. A selling center is a group of people representing a sales department as well as other functional areas in a firm such as finance, production, and research and development. Team selling is expensive, and is used only when there is a potential for high sales volume and profit. 

     5.8.3.2 System Selling

The concept of systems selling means selling a total package of related goods and services- a system- to solve a customer’s problem. The idea is that the system-the total package of goods and services – will satisfy the buyer’s needs more effectively than selling individual products separately.

     5.8.3.3 Relationship Selling

Developing a mutually beneficial relationship with selected customers over time is relationship selling. It may be an extension of team selling, or individual’s sales representative in their dealings may develop it with customers. The seller attempts to develop a deeper, linger-lasting relationship built or trust with key customers- usually large accounts.

Unfortunately, often there is not much trust found in buyer- seller relationships, neither in retailer- consumer selling nor in business-to- business selling. How do you build this trust? The following behavioral traits in selling can be effective trust builders.

• Candor – Be truthful in what you say

• Dependability – Behave in a reliable manner

• Competence- Display your ability, knowledge and resources

• Customer orientation – Place you customers’ needs and interest on a pan with you own

• Liability – Seek a similarity of personality between you and the customers, and commonality of interest and goals.     

     5.8.3.4 Telemarketing

The telemarketing is the innovative use of telecommunications equipment and systems as part of the “going to customer” category of personal selling.

Telemarketing is growing because:

1. Many buyers prefer it over personal sales calls in certain selling situations, and

2. Many marketers find that it increases selling efficiency.

Buyers placing routine reorders or new orders for standardized products by telephone or computer use less of their time than in –person sales calls. Sellers face increasingly high cost keeping sales people on the road; selling by telemarketing reduces that expense.

Also, routine selling by creating   allows the field sales force to devote more time to creating. Selling, major account selling, and other more profitable selling activities.

 
    5.8.4 Process of Personal Selling

The personal selling process is logical sequence of four steps that a sales person takes in dealing with prospective buyer. This process leads, hopefully, to some desired customer action and ends with a follow-up to ensure customer satisfaction.

The desired action usually is to get the customer to buy a good or a service.

The four-step process may be illustrated as follows.

     5.8.4.1 Prospecting

The first step in the personal selling process is called prospecting. It consists of first identifying potential customers and then qualifying them – that is, determining whether they have the necessary purchasing power, authority, and willingness to buy.

• Identifying prospective customers 

A representative may start the identification process by drawing up a profile of the ideal prospect. Records of past and current customers can help determine characteristics of and ideal prospect. From this profile a seller can start a list of potential customers.

Many other sources can be used to build the list of prospects. The representative’s sales manager may prepare a list; current customers may need leads; trade association and industry directories can be a good source; and leads can come from people mailing in a coupon or phoning.

• Qualifying the prospect 

After identifying prospective customers, a seller should qualify them- that is, determine whether they have the necessary willingness, Purchasing power, and authority to buy.

To determine willingness to buy, a seller can seek information about a prospect’s relationship with its present suppliers.

To determine a prospect’s financial ability to buy, a seller can refer to credit-rating services. For a household consumers or small business in an area, a seller can get information from a local credit bureau.

Identifying who has the authority to buy in a business or a household can be difficult. In a business the buying authority may rest with a committee or an executive. Besides deterring the buying authority, a seller should also identify the one or more persons who influence the buying decision.

     5.8.4.2 Pre-approach to Individual Prospects

Before calling on prospect, sales people should learn all they can about the persons or companies to whom they hope to sell. This Pre-approach in selling might include finding out what products the prospects are now using and their reaction to these products. In business-to- business selling, a sales person selling team should find out how buying decisions are made in customer's organization.

     5.8.4.3 Presenting the Sales Message

With the appropriate Pre approach information, a sales person can design a sales presentation that will attract the prospect's attention. The sales person will then try to hold the prospect's interest while building a desire for the product, and when the time is right, attempt to stimulate action by closing the sale. This approach, called AIDAS (an acronym for Attention, interest, Desire, Action and satisfaction).

• Attract Attention -The Approach
  The first task in a sales presentation is to attract the prospect's attention and to generate curiosity .In cases where the prospect is aware of a need and is seeking a solution; simply stating the seller's company and product will be enough. However, more creativity often is required.

• Hold interest and Arouse desire
  After attraction the prospect's attention, the sales representative can hold it and stimulate a desire for the product with a sales talk, There is no common pattern here. Usually, however, a product demonstration is invaluable. Whatever pattern is followed is the talk; the sales person must always show how the product will benefit the prospect.

     5.8.4.4 Meet Objections and Close the Sale

After exploring the product and its benefits, a sales person should try to close. The sale-that is, obtain the customer's agreement to buy.(Achieving the desired action)

A sales person should encourage buyers to state their objections. Then the sales person has an opportunity to meet the objections and to bring at additional product benefits or reemphasis previously stated points. The toughest objections to answer are those that are unspoken.

    5.8.4.5 Post Sale Services

An effective selling job does not end when the order is written up. The final stage of a selling process is a series of Post sale activities. That can build customer good will and lay the groundwork for future business.

An alert sales person will follow up sales to ensure that no problems occur in delivery, financing, installation, employee training, and other areas that are important to customer satisfaction.

In this final stage of the selling process, a sales person can minimize the consumer's dissonance by:

1. Summarizing the products benefit after the purchase,
2. Repeating why the product is better than alternatives chosen and
3. Emphasizing how satisfied the customer would be with the product.

 

5.9 Summary

Promotion means communication that is passing information from the sender of the message to the receiver through a media. The marketing promotion mix available to the seller includes; advertising, sales promotion, personal selling and public relation/ publicity.

Advertising is a paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.

Developing advertising programs involves a five-step process. First, marketers must set advertising objectives, they must decide whether their advertising is to inform, persuade, or remind. Second, they must establish a budget that takes into account the stages in the product lifecycle, market share, and consumer base, competition and differ, advertising frequency, etc. Third, they must choose the advertising messages. Finally, marketers must take steps to evaluate the communication and sales effects of advertising.

Sales promotion consists of a diverse collection of incentives tools, mostly short term, designed to stimulate quicker and/or greater purchase of particular products by consumers of the trade. Sales promotion includes tools for consumer promotion (samples, coupons, Rebates etc.) 

Trade promotion (price off, advertising and display allowances etc) and business and sales force promotion (trade shows, contests specially advertising etc).

Personal selling/salesmanship is a fact-to-face communication of the company's offer to ultimate or potential customers.

Sales personnel classified based upon the nature of their activities in effecting sales. Accordingly, personal selling classified as: inside order taker, outside order taker, driver salesman, sales engineer, missionary salesman, and creative salesman. The changing patterns is personal selling includes: team selling (selling center), system selling, telemarketing and relationship marketing.

A public is any group that has an actual or potential interest is or impact on a company's ability to achieve its objectives. Public relation involves a variety of programs designed to promote and /or protect a company's image or its individual products. Many companies today use marketing public relations to support their marketing departments in corporate product promotion and image making. It can potentially impact public awareness at a fraction of the cost of advertising, and is often much more credible. The main tools of public relations are publications, events, news, speeches, and public service activities.