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ADVERTISING AND SALES PROMOTION

Ans)

Promotion is the marketing function concerned with persuasive communication


of the components of marketing programme to target audiences with the intent
to facilitate exchange between the marketer and the customer, which may
satisfy the objectives of both the customers and the organisation. There are three
distinctive characteristics in the above definition. Promotion is concerned with
persuasive communication. Promotion seeks to persuade the audience in the
target market to develop a new attitude or change the existing one and engage in
a new behaviour. Promotion is directed at the target audiences. For instance,
the target market for refined cooking oils consists of all health conscious
customers. But refined cooking oil marketers also target the promotions to
audiences (who hear or see promotion messages, but have a preference for asli
ghee, (which is natural fat derived from milk), both within and outside the target
market. Target audience for refined cooking oil may be those who are prone to
developing high cholesterol related diseases, however, audiences outside the
target market might favourably influence the consumption of refined cooking
oil, such as doctors and other health workers. Promotion is also goal oriented
and the objectives may be to create brand awareness, to educate the consumers,
to create a positive image, to build preference and the ultimate goal is to sell the
product or service to consumers who have a need for it.

COMPONENTS OF PROMOTION MIX

Typically, organisations choose one or more of the following methods to


promote their products, services, or ideas. These methods of promotion are
referred to as marketing communications-mix, or promotion-mix

1. Advertising

2. Personal selling
3. Sales promotion

4. Publicity, and

5. Direct marketing.

Advertising :

This is perhaps the most glamorous element of the promotion-mix. We easily


take note of advertising which delivers numerous messages through mass
media. According to Ulanoff Advertising is a tool of marketing for
communication of ideas and information about goods or services to a group; it
employs paid space or time in the media or uses another communication vehicle
to carry its message; and it openly identifies the advertiser and his relationship
to the sales efforts.

Personal Selling :

Advertising is non-personal and directs its communications to the mass market.


Personal selling is the face-to-face presentation of a product, service, or an idea
to a potential customer or customers by a representative of the company or
organisation. This is the most effective way of persuading the customers.
However, it is also the most expensive and impractical to accomplish mass
selling. Wherever used, it is usually employed as a follow-up to mass
communication to clinch the sale or develop a long-term relationship with
customers that will bring in sales. Personal selling is present at each marketing
level, is costlier than advertising, sales promotion, direct marketing and
commands the maximum share of promotion money.

Publicity :

This promotion element is an important element of public relations and plays a


significant role in marketing and promotion-mix. By definition, publicity is
placing of news stories in the media without a charged media fee. Therefore,
publicity has the advantage of being presented as news and audiences often
consider it as more credible than advertising.

Direct Marketing

According to the Dictionary of Marketing Terms, AMA1995, direct marketing


makes 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. To understand marketing communications, we have to
look through the customers eyes. In a study, consumers identified 102 different
media as advertising, which included everything from television to shopping
bags to sponsored community events. Customers also develop perceptions of a
brand or company through a number of other sources such as news reports,
word-of-mouth, experts opinion, plain gossip, or even the personality of the
CEO. All these communications, whether sponsored or not, create an integrated
product in the customers mind. In other words, customers automatically
integrate all the brand-related information that comes from any source. This
determines their perceptions of the company or its brands. For these reasons, in
recent years, companies have started using integrated marketing
communications (IMC), which includes all the promotional elements mentioned
above, plus public relations, distribution, packaging, colours, logos, symbols
and so on, that have something to do with the company or its brands. Integrated
marketing communications sees customers as partners in an ongoing
relationship, recognises the references they use, acknowledges the importance
of whole communications system, and accepts all the ways that bring customers
in contact with the company or its brands. Nearly thirty years ago, sales
promotion was looked upon as everything that was left after providing for
advertising, personal selling and publicity. An early definition given to sales
promotion says Sales promotion includes those activities, which enhance and
support mass selling and personal selling and which help compete and/or
coordinate the entire promotional mix and make the marketing mix more
effective. John F Luick and William L Zeigler, Sales Promotion and Modern
Merchandising, McGraw-Hill, 1968 Implicit in this early definition is the idea
that sales promotion is a subordinate element of the promotional strategy,
having lesser importance than advertising and personal selling. This view is no
longer valid. Sales promotion is one of the most powerful and an important
element of the promotion-mix. It requires the same careful planning and
strategy development as other areas of marketing. Sales promotions are
everywhere, everyday, as observed by almost all of us. When we open a
newspaper, a magazine, or switch on the television sets, look at roadside
hoarding, or go for shopping, sales promotions greet us almost everywhere.
Figures on sales promotion expenditures are not available, however, it is
estimated that around 60%-70% of promotion budget is allocated for sales
promotions in case of packaged and consumer goods and the remaining goes for
advertising. Sales promotions are becoming increasingly popular not only in
consumer goods and are also packaged goods but also in other product
categories such as services, industrial goods and are also used by non-profit
organisations. Companies spend huge sums of money each year on sales
promotion to industrial customers to generate business leads, stimulate
purchases, reward customers and motivate sales people. Some examples of such
business or industrial promotions are conventions, trade fairs and industrial
exhibitions. The present trends indicate that as more and more brands enter the
market without significant and persuasive differentiation, which are really
important from the consumers point of view, sales promotions will increase at
a rapid pace in almost all product categories.

Ans)

Advertising is one of the most visible activities of business and it does not
operate in a vacuum. By informing, persuading and reminding consumers to use
their products or services, companies risk public criticism and attack if their
advertising is offensive to the audience or if the advertised products or services
-do not perform as promised. The opinion of people about advertising is
dividedsome praise advertising while others criticise its role not only in
selling the products but also in the influence that it exerts on the economy and
society. John OToole, the late president of the American Association of
Advertising Agencies, pointed out that many people are critical of advertising
just because it isnt something else. We should appreciate the fact that
advertising is not education, journalism, or entertainment, though it often seems
to be performing the tasks of all the three. Being a tool of mass communication,
it shares some of the traits of all three but these standards should not be used in
judging advertising. Business houses, non-profit organisations and others use
advertising in the fond hope that it will help them sell products, services, ideas,
or images. There is no doubt that advertising affects all of us in numerous ways
and, due to this reason, the entire field of advertising has attracted many
controversies concerning its impact on the economy, society and ethics. Most of
these controversies relate to the following questions: How does advertising
affect the value of products? Does it cause higher or lower prices? Does
advertising promote competition or discourage it? How does advertising affect
overall consumer demand? What is the effect of advertising on consumer
choice? Does advertising make people more materialistic? Does it force people
to buy things they dont really need? Does advertising affect consumers in
subliminal ways they cant control? What is the impact of advertising on art
and culture of a society? Does advertising violate moral and ethical codes?
How much freedom should advertisers have in the kinds of products they
promote and how they advertise them? What should be the proper role of the
government concerning advertising? All these are important questions for which
there are no simple answers. The underlying principle on which all free
economies, around the world, operate is empowering people to make their own
decisions as free citizens. The study of economics tells us that there is no such
thing as perfect competition. The four basic assumptions on which free
market driven societies are based or which they strive to achieve are: 1. Self-
interest: It is assumed that individuals and organisations tend to act in ways that
can serve their own self-interest. By nature, human beings are acquisitive and
want more for less. Companies compete and advertise to attract self-interested
consumers. This leads to greater product availability, at more competitive
prices. 2. Perfect information: Buyers and sellers possess, or can have access to,
all information concerning products, their quality, prices, etc., at all times, and
this leads to greater competition and lower prices. 3. Many buyers and sellers: It
is advantageous to have a wide range of options and let the competitive forces
control the demand and supply in the market-place rather than a single, self-
interested monopoly. 4. Absence of externalities (social costs): Sometimes the
sale or consumption of products may harm those who are not involved in the
transaction, such as with pollution. The government may use regulations to
compensate for or eliminate the externalities, such as banning tobacco
advertising. Free enterprise is basically a utilitarian framework. It helps promote
behaviours that enhance the greatest good for the most people. No other
economic system has achieved this goal better than free enterprise and because
of this, more societies around the world are adopting this economic system.
Effect on the Value of Products or Services :Advertising sets off a chain
reaction of economic events. Why do consumers prefer advertised brands as
compared to unadvertised brands in the same product category? Not necessarily
because advertised brands are superior but because advertising can add value to
a brand in the consumers mind. The famous psychologist, Ernest Dichter,
known as the father of motivational research, has stressed that a products
image, created in part by advertising and promotion, is an inherent feature of the
product itself. Other studies have shown that while an ad may not speak directly
about a products quality, the image created by advertising may imply quality
and make the product more desirable by adding value to it. Advertising also
adds value by educating consumers about new uses for a product. For example,
Milkmaid was initially advertised as a tea or coffee whitener. Later
advertisements repositioned Milkmaid in consumers minds by informing them
that it could be used for preparing desserts and sweets. In a free-market system,
consumers have the option of choosing the desired value in the products or
services they buy. If price is more important to consumers, they have options of
buying less expensive alternatives. Others looking for luxury and status may
choose more fancy and expensive alternatives. Many of our wants are
emotional, social, or psychological in nature rather than purely functional.
Advertising also offers consumers the opportunity to satisfy the psychic or
symbolic needs and wants through products or services that they use.
Advertising contributes to the self-interest of both consumers and advertisers by
adding value to products and services in a free-market system. Further, it
encourages competition which adds to serve the consumers self-interest.

Effect on Prices It seems logical to think that if advertising adds value to


products or services, it also adds cost and affects prices. This means that if
companies stop this expensive advertising, products would cost less and be
available at lower prices. This is a major area of continuing debate among
economists, advertisers, consumer advocates and policy makers. However, this
view is not totally correct. While some advertised products do cost more than
the unadvertised products, and the costs are at least partly borne by consumers,
the opposite is also true. Advertising may actually help lower the overall cost of
a product and keep down the prices because of economies of scale in production
and by encouraging competition. Consumers do not always buy products or
services for rational, functional reasons. To many of them, the social,
psychological and emotional benefits from buying a brand are quite important.
According to Paul W Farris and Mark Albion Unfortunately there seems to be
no single way to measure product differentiation, let alone determine how much
is excessive or attributable to the effects of advertising . Both price sensitivity
and brand loyalty could be created by a number of factors such as higher
product quality, better packaging, favourable use experience and market
position. They are probably related to each other but need not be the result of
advertising.

Some important points in this respect are worth noting:

There are several costs involved in doing business and advertising is one of
them. What marketers spend on advertising, for majority of the product
categories, is very small as compared to the total cost of the product. In a mass-
distribution system, advertising is an important element. It helps many
manufacturers to mass-produce products and this brings down the unit cost of
products. Lower unit cost encourages marketers to bring down the product
prices and ultimately it is the consumer who benefits. Most retail advertising
prominently focuses on price and this tends to hold prices down. Manufacturer
advertising usually focuses more on product features, benefits or images in an
attempt to convince consumers that the product is better and, in these instances,
advertising tends to support higher prices.

4.2.3 Effect on Consumer Demand and Consumer Choice

It is generally agreed that the effect of advertising and other promotions is an


increase in aggregate consumption but to what extent it effects consumption, is
a highly debatable issue. Besides advertising, there are other important forces
such as technological advances, level of education, increases in population,
level of income, changing lifestyles, etc., that exert a powerful influence on
aggregate consumption.
SOCIAL EFFECTS

The source of controversy over advertising stems from the way it is used by
advertisers. In accomplishing the sales or communication objectives of
marketers, advertising influences social values, lifestyles and societys tastes. It
is criticised for being untruthful or deceptive, offensive or in bad taste and
exploits vulnerable groups. Roland Berman has expressed the following views
in his book: The institutions of family, religion and education have grown
noticeably weaker over each of the past three generations. The world itself
seems to have grown more complex. In the absence of traditional authority,
advertising has become a kind of social guide. It depicts us in all the myriad
situations possible to a life of free choice. It provides ideas about style,
morality, behaviour. (Roland Berman, Advertising and Social Change, Beverly
Hills, Sage, 1981) It is generally agreed that advertising exerts a powerful social
influence and is criticised for encouraging materialism in society. Advertising is
blamed for manipulating consumers to buy things for which they have no real
need, depicting stereotypes and controlling the media.

Materialism is the tendency to accord undue importance to material interests


and this tendency, perhaps, lessens the importance of freedom, love and
intellectual pursuits of society, which are non-material. People from many
countries and cultures believe that materialism tends to be negatively related to
happiness and hence is considered undesirable. Many people wonder whether
advertising encourages materialism or it merely reflects values and attitudes that
develop as a consequence of more important sociological forces. Critics of
advertising say that it should be used only to provide useful purchase related
information to consumers such as price, product features, performance, etc. It
should not attempt to persuade consumers by playing on their emotions,
anxieties and psychological needs, such as self-esteem, status, being attractive,
etc., thus fostering discontent and exploiting them to purchase products and
services that they do not need.

There is no doubt that advertising and the advertised products are a part of our
culture and influence it in some way, however, advertising cannot be said to
have the power to dominate the forces of religion, family, literature, etc., that
contribute to the values of society. There seems to be little support for the view
that advertising is a pervasive force in altering consumer spending. Level of
income seems to determine the pattern of consumption which, in turn,
influences the intensity of advertising. In most societies, material possessions
are considered as an evidence of success and many argue that an emphasis on
material possessions does not mean disinterest in intellectual, spiritual, or
cultural values. Consumers, whose basic needs have been fulfilled, can be
interested in fulfilling higher-order needs. For instance, a consumer may buy an

expensive music system to really enjoy music rather than simply acquire a
material possession to impress someone. Proponents of advertising argue that
advertising merely reflects the tastes and values of society and doesnt shape
them. Advertising keeps pace with the dynamic market conditions and what is
seen as materialism is a matter of improved standards of living. Money has no
value by itself. Its value exists in the purchasing power that it puts at the
command of consumers. Who really wants to go back to medieval times and
leave the modern colourful way of life? The following points sum up the
rebuttal by the defenders of advertising: A significant amount of advertising is
essentially informational advertising. It is very difficult to separate
informational advertising from persuasive advertising. It is interesting to note
that advertising characterised as highly informational is often extremely
persuasive as well. In most developed and developing economies it is natural
for a large number of people to have higher order needs. Consumers are free to
choose the degree to which they attempt to satisfy their needs. Consumers have
the freedom of choice when faced with persuasive advertising. It is really very
difficult to force consumers to buy anything for which they do not see any
personal benefit. If advertising were really as powerful as claimed by critics,
many products with substantial advertising expenditures would not have failed
in the market-place. It is a hard reality that consumers do have a choice and
advertising cannot persuade them to buy products or services that fail to address
their needs.

4.3.1 Stereotyping in Advertising Stereotyping ignores differences among


individuals and presents a group in an unvarying pattern. Critics often point out
that advertising perpetuates stereotyping of women. The charge is that
advertising has failed to portray the changing role of women in society. Visuals
and copies of ads present stereotypical images of Indian women in settings such
as family illness, children, cooking, neighbours, approval by mother-in-law and
worries about daughters marriage, etc., or they are shown as dependent on men,
subservient, less intelligent, and hardly, if ever, in authoritative roles. They are
also shown as decorative objects or sexually provocative figures. Compared to
their male counterparts in ads, they are shown more scantily dressed. There is a
perceptible improvement in this regard as advertisers have started to recognise
the role of working women in family affairs and decision making. Women are
often depicted in diverse roles that reflect their changing role in society as they
are increasingly entering into political, professional, managerial, technical,
sales, or administrative careers. Advertisers want to effectively reach, not
offend, this increasing market of upwardly mobile group of consumers.

4.3.2 Ethical Issues Ethics are moral principles and values that govern the
actions and decisions of an individual or group (Eric N Berkowitz et al.,
Marketing, 2nd ed. Richard D Irwin, 1992). Many laws and regulations are put
into force that determine what is permissible in advertising. However, not every
issue is controlled by rules. Marketers are often faced with decisions regarding
the appropriateness of their actions which are based on an ethical consideration
rather than what is within the law or industry guidelines. There is considerable
overlap between what many consider to be ethical issues in advertising and the
issues of manipulation, taste and the effects of advertising on values and
lifestyles. Certain actions may be within the law but still unethical. Cigarette
smoking, for example, has been shown to be associated with high levels of lung
cancer and other respiratory tract diseases and many people would consider
cigarette advertising as unethical. Advertising is a highly visible business
activity and any lapse in ethical standards can often be risky for the company.
Consumer protection groups question the sponsorship or support of sports
events by companies selling alcoholic beverages or tobacco products.
Advertisers, such as Kelvin Klein, LOreal, etc., have been criticised for using
overt sex appeals showing women as sex object in their ads. A few years ago,
Calvin Klein was even boycotted for featuring objectionable snapshots of
teenagers in various states of undress. Sex appeal and/or nudity used simply to
gain consumers attention and not even appropriate to the product or service
being advertised is in poor taste. Even when such appeal is used in case of
related products, such as condoms, people may be offended by it. Many people
consider nudity or suggestive sex in advertising as objectionable
Advertising is a very powerful and highly visible business activity. It has a
profound effect on consumer behaviour and, thereby, on society.
Companies risk public criticism if their advertising is offensive or
deceptive. Advertising is criticised for its impact on economic, social and
ethical aspects. The criticism is related to the specific approaches used in
advertising and their impact on societys values, tastes, lifestyles and
behaviour. Critics of advertising point out that advertising is often
deceptive or untruthful; sometimes it is offensive, irritating, in poor taste,
and at times it exploits vulnerable groups, such as children, uses sexually
suggestive ads and nudity, shows women as sex objects and also in
stereotyped roles. It is the belief of many people that advertising should
only be informative and not use subjective claims, puffery, and persuasive
techniques. The primary role of advertising is to make available to
consumers information that helps them make purchase and consumption
decisions. In doing so, it adversely affects competition, increases product
costs and prices to consumers. Advertisers rebut criticism by saying that
advertising only reflects contemporary values and lifestyles. Critics say the
presence of advertising in all imaginable media plays a major role in
influencing and communicating social values. Critics blame advertising for
encouraging materialism and persuading consumers to buy products and
services they dont really need. Advertising Standards Council of India has
prescribed certain norms for advertisers and also encourages consumers to
forward their complaints to ASCI to recommend appropriate action.

Ans) you will get answer from above question


Ans)

An advertising campaign includes seven essential steps:

Appraisal of advertising opportunity

Market analysis

Setting advertising objectives

Setting budget and necessary control systems

Determining media and creative strategy

Create adds, pre-test, and release adds

Evaluate final results (post-testing)


Appraisal of Advertising Opportunity:

Just because advertising is a powerful promotional tool is no reason for every


marketer to advertise. The marketer must determine whether advertising is
suitable in a particular marketing situation. According to Neil H Borden (The
Economic Effects of Advertising, Richard D Irwin, 1942), five conditions
govern the advertising opportunity. If these conditions are present, effective
advertising may help in achieving the marketing objectives of the company.
However, if the conditions are weak or absent, advertising is unlikely to make
any positive contribution

Presence of Positive Primary Demand: When there is enough consumer demand


for the product category, as happens during the growth stage of a product's life
cycle, the advertiser of the brand in this product category is more likely to be
successful. When a product has reached declining maturity in its life cycle, or
has entered the decline stage, advertising is very unlikely to succeed. It is nearly
impossible for advertising to reverse adverse trend of primary demand. For
instance, in most countries now, including India, it seems nearly impossible to
increase the demand of big cars as the trend is for compacts. Similarly,
advertising is unlikely to help reverse the demand for radios, or cigars.

Good Chances of Product Differentiation: Many products, which are viewed by


consumers as commodities or similar in all respects, do not lend themselves to
advertising. Meaningful and persuasive product differentiation is the key to
create a strong positioning and influence consumers to prefer a particular brand
by showing its unique attributes or benefits. For example, it is difficult to
differentiate sugar, or salt because consumers are most unlikely to have any
involvement in such purchases. On the other hand, there are personal care
products, or automobiles, which can be successfully differentiated.

Products have Hidden or not Readily Noticeable Qualities: If the product


qualities are easily noticeable and considered not really important, probably
there isn't much to advertise successfully. However, if the product's virtues are
hidden, or complex to understand, advertising can successfully create strong
mental associations about the product's economy, reliability, ruggedness etc. It
is difficult or almost impossible to ascertain the quality of a computer, TV set,
microwave oven, or washing machine by just looking at it in a showroom,
though it might be a strong factor influencing the consumer's purchase decision.
Advertising can be very successful in communicating these hidden qualities to
consumers in a manner that can favourably influence their buying decision.

Presence of Powerful Emotional Buying Motives: Appeals that successfully


address emotional motives can prove to be very powerful in case of ego
intensive or "feel" category products. Cosmetics, perfumes, ready to wear
garments, wristwatches, beauty clinics, alcoholic beverages soft drinks etc., are
good examples where powerful emotional motives are involved in product or
service purchase and advertising can be very successful. Availability of

Sufficient Funds: The first condition relates to the nature of market and the
remaining three conditions relate to the product or service and the consumers'
perceptions about such offers. Even if all the above mentioned four aspects are
favourable, much depends on the availability of sufficient funds required for
advertising. People in the advertising business believe that "the greatest waste in
advertising is to advertise too little." If the firm lacks enough funds to commit to
advertising at some minimal level to create noticeable impact, it does not make
sense to advertise. It is hard to imagine that in a highly competitive market
environment one or two ads would even be noticed with so much of advertising
clutter. What Apple computer could achieve with just one ad by paying half a
million dollars for a 60 second commercial is not likely to happen with most
advertising. Successful advertising needs the support of adequate funds. The
prospective advertiser should make a deliberate and careful assessment of the
above mentioned conditions. It is likely that advertising may not be a suitable
option for the company for any of the reasons discussed. The advantage might
lie in allocating a larger portion of the promotion money for sales promotion,
for example, a sample drop in selected market areas. The role of advertising
may appear to be only marginal in a company's marketing programme.

6.2.2 Analyse and Define Target Market: Market analysis in case of an


established brand will involve a retrospective look at what has been done in the
past. In case of new product situation, more in depth analysis of various aspects
of the market would be needed and involve research of some kind. Good
advertising starts with a clear understanding of marketing goals based on
thorough market analysis and the aim is to explore the answers to the two basic
questions: where are we today? And, how did we get here? Marketing plan
provides the details pertaining to brand share, anticipated market conditions,
competitors' share and past moves and any legal constraints concerning the
product category. A critical decision is to define the target market for the
product or service. This would involve finding and precisely defining those
variables that indicate who and where the best prospects are in respect to
demographic characteristics, geographic location, psychographic variables and
behavioural patterns. It will also be necessary to find out the accessibility of the
target audiences. Obviously, how the target markets are defined would influence
the message and media strategies. Consumer research may be needed to find out
Who buys the product? What do they really buy? When do they buy? How do
they use the product? Knowing the target audiences' lifestyle, motivations and
behavioural patterns, etc., helps in deciding whom the advertiser wants to reach
and also helps creative people to write messages to real audiences and
communicate more effectively.

6.2.3 Set Advertising Objectives Promotion or brand manager should set


objectives for an advertising campaign and also for each ad in each medium
used. In setting the campaign objectives, most managers use hierarchy-of-
effects model so that the components of a campaign support each other and
thereby stand a better chance of creating positive synergy in influencing the
consumer choice. The path leads from communication objectives to sales
objectives and advertisers often refer to this sequence awareness advertising as
direct-action advertising. A good ad campaign was that of "Maggie Hot and
Sweet Tomato Chili Sauce." The product category was not new - a number of
tomato ketchup brands were already available. The campaign objective was to
establish the brand as different than other brands in the product category and
create consumer preference for it. Throughout the campaign period, individual
commercials showed a different humorous setting but the campaign theme "it is
different" was communicated very powerfully. There may be many ads within
an advertising campaign, each with its own objectives, and setting objectives
may be fairly complex. There is no rule with a specific set of guidelines that all
advertising must follow to achieve certain objectives. Sometimes an individual
ad may be repeated after some other ads have been used at an interval of one
year with very different objectives because of the changes in consumer needs or
wants, the extent of product or brand reputation, or changes in economic
scenario. The advertiser must closely monitor changes that take place in the
marketing environment, which may warrant a change in objectives and
advertising.
6.2.4 Determine Advertising Budget The objectives determine what is
expected of advertising to accomplish in a defined period of time. The budget
controls all proposed expenditures by fixing a limit. There are various
approaches to determining the budget, however, there is much disagreement on
this issue and different companies use different approaches to determine the
proper allocation. This is a critical decision as it often involves large sums of
money and, in most marketing situations, it is difficult to measure what
advertising does to profits or sales volume. In an increasing number of
companies, top management has been showing an increasing concern in
accountability for these funds. Top management is usually involved in budget
decisions and brand or promotion managers may not be in a position to
influence the decision. This "top down" practice often stops campaigns with
excellent potential. However, brand managers must provide all the possible
input in budgeting decisions.

The advertising budget is basically a plan to allocate financial resources to


advertising for future operations and should be reviewed constantly keeping in
view the changing market conditions. For example, it may become necessary to
match the advertising effort of a close competitor to maintain the present market
position. It often happens that if two brands are equally preferred, the one that
advertises more gets the edge. In case Coca Cola increases its advertising blitz,
then Pepsi cannot simply sit and watch.

6.2.5 Decide Media and Creative Strategy Advertising strategy involves


decisions about media and creation of advertisements. Media plan is developed
simultaneously with creative plan. Often the promotion manager first makes up
her/his mind to use a particular medium and the ad is designed accordingly.
Media planning is quite complex because of the nature of different kind of
media. Media plan determines the best way to reach the audience with the
advertiser's message. The goal is to find a particular combination of media that
enables the advertiser to communicate the message most effectively to the
largest number of target audience at the lowest cost. Initially, the general
approach and role of media in finished campaign is determined. Media planning
focuses on clearly defining the targeted audience's media habits and what
specific media is most suitable for them in terms of reach and frequency. The
major portion of ad budget is spent on media buying and a critical decision
concerns how much media money to spend on an advertising campaign. The
tactics relate to decisions about which media vehicles to use, such as India
Today, Femina, Star Movie channel, or Vividh Bharti. Except for direct mail,
all other media operate on their own schedule and are not under the control of
the advertisers. The advertiser must consider the timing, media closing dates,
campaign length and the number of exposures desired. It becomes necessary
that media and creative teams accommodate each other and allow the maximum
creative execution and effective efficiency in reaching the targeted audience. An
excellent advertising message is estimated to be ten times or more effective than
an average message in influencing consumer attitudes, preferences and purchase
decision for the product. Creative strategy is concerned with what message to
deliver to the audience for accomplishing the objectives. Determining the
central theme, idea, image, or position is a critical part of the creative process
and becomes the cornerstone of all individual ads that constitute the campaign.
"Marlboro country" campaign, Nike's "Just do it," and Hallmark cards campaign
"When you care enough to send the very best" are examples of some successful
campaign themes. "Intel Inside" campaign is a more recent example, and
readers can assess how successfully the company has been using it. "Yeh dil
mange more" by Pepsi, and "Coca Cola enjoy" are the current themes of two
soft drink giants in India. A critical look would reveal that both these campaign
themes are a point of view of those who want to achieve more, those who look
for a fuller life with excitement and joy, no matter what the age. Typically these
themes symbolise a zest for living. Great words and great strategy make up
great campaigns. A creative blueprint or a storyboard is derived from answers to
questions such as: 1. What objectives do we want to accomplish? 2. Who are
our customers now? Who should we sell to? 3. How do our customers now
think, feel and believe about the brand, the company and the competition? 4.
What do we want them to think, feel, and believe? 5. What key idea can we put
in their minds to accomplish?

6.2.6 Create Adds, Pre-test, and Release Adds Advertising companies cannot
afford to neglect pre-testing of the ad campaign. Rising costs of media,
thousands of advertising messages competing to get noticed and audience
apathy and often dislike of adds make it essential for companies to be
reasonably sure that the campaign message is attended to and comprehended.
Most authorities agree that advertising should be pre-tested before actual
execution to avoid any costly mistakes and increase its efficiency. For pre-
testing advertising strategy and execution, various techniques such as market
tests, focus groups, surveys, and computer simulation tests etc., are used before
the ads are placed in media.

6.2.7 Evaluate Final Results (Post-testing) Post-testing is done to evaluate the


final results of the campaign. These results are concerned with measuring the
effectiveness of the ad. Post-testing is done at the end of the campaign to
determine to what extent the advertising campaign objectives have been
accomplished and then to make any appropriate changes. It provides feedback
to promotion managers and helps future planning.

TELEVISION

Television is believed to be the most authoritative, influential and exciting of all


mediums. It is often said that television is the ideal medium for advertising
because of its ability to combine visual images, sound, motion and colour.
These characteristics allow the advertiser maximum opportunity to develop the
most creative and imaginative ad messages as compared to any other medium.
However, in spite of several advantages over other media, television does have
certain problems that limit, or even prevent, its use in specific situations.

8.2.1 Advantages

Creativity and Impact The greatest advantage of TV is its ability to present the
advertising message in the most unique way. The integration of sight, sound,
motion and colour offers extraordinary flexibility to make dramatic and lifelike
portrayals of products and services. The commercials can effectively
communicate an image, or mood, associated with the brand. The commercial
can also help build an emotional association, or create entertaining messages
that might make an otherwise unexciting and common product seem to be
interesting. Television is quite adept at communicating humorous, serious,
realistic, or tongue-in-cheek commercials. If the nature of the product is such
that a demonstration would convey the ad message more effectively, TV is the
most suitable ad medium. The print ads of products such as autos, TVs, and
microwave ovens, etc., can show the product and provide information about
their features and benefits but a TV commercial can put the audience in a
position where he/she can actually sense driving or operating the gadget. This
can definitely make an impact not possible by any other advertising media.
People generally rate television as the most credible source of information.
Advertisers gain a qualitative edge because television enjoys the most positive
image of all media. Coverage and Cost Effectiveness Advertising on television
makes it possible to reach a large number of audiences. Doordarshan claims to
have its terrestrial reach to 70 million households in India, including rural areas.
It is estimated that over 191million television audiences are urban and 171
million viewers are located in rural areas. In villages, with a population between
1000 and 5000, average time spent in viewing TV ranges between 24.6 to 32.0
minutes per working day. The same in metros and cities ranges between 32.1 to
36.8 minutes per working day. Cable and satellite channels (C & S) reach 20
million homes, mostly urban. BBC Worldwide reaches a claimed 261 million
homes around the world. Television is a home and family entertainment
medium. Regardless of location, income, age, sex, or educational level, most
people watch at least some TV. A significant number of audiences watch TV
programmes on a regular basis. Television is credited as being the single biggest
factor in opening up the huge rural market to a variety of consumer products.
The simple rural people of India realised that there is a world outside, very
different in many ways. Television has been instrumental in raising the level of
aspirations of the Indian middle class.

Advertisers who are selling products and services that appeal to broad target
audiences find that by using television they can reach mass markets in a cost-
effective manner. This is a major reason that television has become a
particularly popular medium among advertisers of mass consumption products.
Companies having intensive distribution arrangements for their products such as
HLL, Procter & Gamble, Coca-Cola, Pepsi Co, Nirma, OTC (Over the Counter)
remedies, etc., use TV advertising to reach large audiences at a relatively very
low cost per thousand

Attention Television commercials are intrusive in nature as they are imposed


on viewers while they are watching their favourite programmes and, except for
those viewers who make deliberate effort to avoid them, they are exposed to
thousands of commercials each year. Those who dont avoid are exposed to
many advertising messages and are likely to pay some attention. We have
already discussed the nature of low-involvement learning and response process,
which may mean that simply the repetition of ad slogans and jingles on
television with moderate to heavy frequency may produce an impact on
consumers. Readers can easily recall the high frequency of some TV
commercials, such as those of soft drinks, deodorants, shampoos, face creams,
toothpaste, soaps, OTC remedies, many detergents, etc.

Selectivity and Flexibility A frequent criticism of television as an advertising


medium is that it lacks selectivity because it cannot reach a specific target
audience. This criticism has only limited value. Television offers some
selectivity through regional coverage, broadcast time and programme content.
Doordarshans satellite based regional services cater to eight states in the
language of the state. Programmes such as Disney Hour, Sunday Disney (Zee
TV), Top Gear, Wheels (BBC), Job Shop, Style Police (Channel V), etc., cater
to different classes of audience. ESPN, Star Sports and DD Sports are
particularly popular among the young male population and sports enthusiasts.
Doordarshan and Bhaskar TV show educational programmes specially meant
for students. IFB Star Sunday Lunch (Star Plus) appeals heavily to
homemakers. Advertisers are refining their audience coverage by appealing to
groups with specific interests, such as news, sports, music, etc. Animal Planet
(Discovery channel) focuses solely on animal and nature lovers. Commercials
can be scheduled to take advantage of festive seasons and special occasions
such as Diwali, Christmas, World Cups, Tennis Grand Slams and many other
occasions. Men constitute the primary market for Gillette products and for this
reason Gillette sponsors the World Series of baseball and advertises heavily.
Likewise, marketers of famous brands of sports gear sponsor many sports
events

For learning this understand above other media

Radio

Newspaper

Magazines

Outdoor media

Cinema and video


Television is viewed as the most influential and ideal medium for advertising
because of its ability to combine visual images, movement, sound and colour. It
is a home and family entertainment medium and reaches a very large number of
audiences regardless of age, sex, or educational level. Even in villages with a
population between 1000 and 5000, average time spent in viewing TV has been
reported to be between 24.6 to 32 minutes per working day. TV has been
instrumental in raising the aspirations of the Indian middle class, which is the
largest consuming class. The nature of TV commercials is intrusive and a very
large number of individuals are exposed to commercials and mere repeated
exposure can help in building brand preference. Advertisers can choose a wide
variety of programmes to reach their target audiences and the cost per
individual exposed is low. The limitations of TV include short-lived message,
clutter, limited attention of viewers and the cost of commercial time. Small
budget advertisers are at a disadvantage in using this medium. Radio can
deliver messages to a very large number of audiences across the country.
Akashvani is reported to reach 97.3 per cent of Indian population. Radio time is
far more economical than TV and is believed to be the most personal medium. It
also offers a high degree of selectivity through geographic coverage by a large
number of radio stations and various programme formats. Radio is probably the
most flexible medium as it has a short closing time and also the commercials
are inexpensive to produce. The limitations include lack of visual element,
audience fragmentation, limited listener attention and clutter. Newspapers are a
major sub-class of print media and the largest of all advertising media.
Newspapers are important to national as well as local advertisers and are
published in all major Indian languages. Newspapers carry classified ads,
display ads and special inserts. Newspapers offer a very high degree of
coverage in different languages and geographic areas. The level of readership
is very high among households with relatively better incomeand education
levels. They are also the ones who generally read a national and a local
newspaper. By using daily newspapers, media planners can achieve high level
of frequency in media schedule. Newspapers offer considerable flexibility and
allow advertisers to use creative options as the ads can be produced and run in
BW or colour in very large to small sizes, shapes and formats. Reproduction
quality is a major limitation of newspaper as a medium. Newspapers are not a
leisure and pleasure medium and readers do not generally devote much time in
reading them. The life span of newspapers is short as people generally dump or
throw them away after reading. Hardly anyone reads a two or three-day old
newspaper and hence any ad is unlikely to have any impact beyond the day it is
published. Like most other media, newspapers also suffer from advertising
clutter. Magazines are considered as the most specialised of all the advertising
media. A wide variety of magazines are available for general interest and
special interest readers. Magazine advertising is equally popular among large
and small companies as they allow the detailed presentation of ad messages
along with beautiful reproduction of visuals, graphics and colours. They are
also a high-involvement medium as they are read in a leisurely manner and are
not dumped or thrown away. More number of readers is exposed to a single
magazine issue because of pass along readership. Magazines offer high
selectivity based on geographic selectivity, demography, interest and life-style
in reaching a specific target audience. Reproduction quality is superb both in
BW and colour. Magazines also offer creative flexibility, prestige, reader
involvement and permanence. The limitations include high cost, limited reach
and frequency, long lead-time, competition and clutter. Outdoor is the oldest
advertising medium. Outdoor advertising is one of the more permeating means
of communications and almost everyone living in a civilised society has been
exposed to it. Most national advertisers use outdoor medium for supportive
advertising in the form of billboards, hoardings, posters, wall paintings transit
advertising, etc. This type of advertising can generate very high levels of reach
and frequency at very low costs compared to mainstream media. It can generate
immediate brand name recognition and remind customers already in the
market-place about established and recognised brands. In fact, it offers the last
opportunity to remind and influence customers in the market just before the
actual purchase. The audience of the outdoor advertising dont have to spend
the money or effort to see the ad. The sheer size of outdoor ad makes it
noticeable from a distance to almost every passerby. The advantages of outdoor
include high reach, frequency, convenient visibility and geographic flexibility
because such boards can be placed almost anywhere the law permits. It also
provides 24-hour coverage unlike any other media and is not dependent on
audience habits. By creating a combination of colour, art and short copy,
outdoor advertising can quickly generate an association with a particular brand
as the audiences are exposed to it repeatedly. Limitations include limited
message capability and lengthy messages cannot be used as the exposure time is
very short. There is considerable waste coverage and many uncontrollable
factors such as trees, traffic signals and weather conditions can distract
audience attention. Advertisers also use cinema halls and videotapes to
communicate with customers. National advertisers generally use 35 mm ad
films based on a script and produced by professionals. Local business houses
and retailers use prepared slides for projection. Many local advertisers use
video rentals to advertise their products. Cinema is quite popular both in urban
and rural areas. Increasing numbers of households use VCPs and VCRs and a
large number of films remain in circulation every day and carry a variety of ad
messages to captive audiences.

Ans)

Sales promotion is the only method, among all the available promotional
methods, that can make use of a combination of pull-push strategy to
motivate consumers, trades people and the sales force simultaneously in
transacting sales. The two major target groups towards whom the sales
promotions are directed are consumers and traders. Temporary incentives, to
motivate the sales force, are also considered as sales promotions directed at the
sales force and are often referred to as sales force sales promotion. These
incentives are part of the motivational programmes to build enthusiasm in sales
force for the task at hand. Often sales force sales promotions are aimed as much
at raising the morale of the sales force as at creating a sale.

The company can use sales promotion to achieve many objectives, however,
every offer must start by being specific as to which objectives are to be
achieved. According to Schultz and Robinson (Sales Promotion Management,
Chicago: Crain Books, p 149, 1982), the objectives should be:

1. Specific

2. Measurable

3. Clear and concise

4. Practical and realistic

5. Affordable and

6. Attainable

IMPORTANT OBJECTIVES OF SALES PROMOTION

Some of the important objectives are mentioned below, and the more important
ones have been discussed briefly:

Increase sales volume


Speed up the sales of slow moving products
To check the fluctuations in sales
Attract new customers
Launch new product and increase trial
Encourage repeat purchase
Clearance of excessive inventories
Motivate dealers to stock and sell more
Encourage dealers to participate in display and sales contests
To gain advantageous shelf-space
To increase store traffic
Improve relationship with dealers
To block competitors moves
Motivate sales force
To supplement advertising and personal selling efforts
Deflect customers attention from price.
Increase in Sales Volume: The sales volume of any product depends on many
basic factors of marketing such as product quality, its price, distribution,
effectiveness of marketing communications and macro-environmental factors
(demographic, economic, technological, political/legal, and competitive, etc.).
Definitely, sales promotion cannot be a substitute for weaknesses in the
marketing strategy. There could be a number of reasons for companies to go for
short-term increase in sales volume: a. To reduce inventories before the close of
financial year. b. To increase the stock-holding of retailers, or even consumers,
before the introduction of a competing brand, or c. To push stocks of the old
brand before the introduction of new model. Generally, the brand switchers or
marginal buyers, who buy when a product is on promotional deal, contribute
more towards increasing sales volume. One possibility, though, cannot be
ignored that these brand switchers sometimes get exposed to better products and
some of them may become repeat purchasers. Almost every sales promotion
that offers immediate value at the time of purchase may contribute to increasing
sales-volume. These immediate value promotions can be directed towards those
who like trying new products and those who are regular users of the product.
Such promotions can be particularly useful in new markets and can also be used
to introduce a sense of urgency in consumers or the trade to buy the product
now.

Launch New Products and Increase Trial Small budget companies, who
cannot afford sustained advertising expenditures to introduce new products, or
match the competitive advertising blitz, find sales promotions to be more cost-
effective and helpful in generating sales volume. Companies, who have a small
market share, cannot match the substantial advertising budgets of market
leaders in the same industry. It is also difficult for them to get proper shelf-
space in retail shops without offering incentives to re-sellers, or encourage trial
by consumers without offering some immediate or extra benefit. A free sample,
along with a coupon of attractive value, may prove to be more effective in
inducing trial of a new product by consumers and may also lead to purchase of
the regular pack from the market. A free sample is generally welcome to almost
all consumers and increases the probability of trial and, in some cases, purchase
as well. A number of personal care products, such as shampoos, cosmetics,
toilet soaps or laundry products, such as detergent powders and cakes, etc., have
been introduced successfully in the last few years. Colgate Palmolive launched
Palmolive toilet soap in 1989. Its sales in Chennai, which is one of the largest
markets for toilet soaps, were below all India levels. Market research studies
revealed that the cause of below-level acceptance was inherent conservatism of
the consumers in this market. They do not change brands easily and, despite
heavy advertising, consumer awareness and trial were low. The trial-retention-
ratio suggested that once consumers tried Palmolive soap, they liked the
quality and stayed with the brand. During a four-month period (February-May
1990), promoters called on about half a million households in this city. To
encourage consumers to buy from promoters, a stainless steel teaspoon was
given free with only one cake of Palmolive soap, and subsequent cakes were
sold on a marginal discount. The focus was on an incentive which would ensure
trial of even one cake. For this period dealer shelves were hired to place
attractive displays to make Palmolive soap a highly visible brand in the
windows of retail stores. Sales increased substantially in March and informed
people say, it almost doubled by the end of April 1990. Product adoption
increased just by stimulating trial rate by consumers and lead to growth in sales,
which was maintained subsequently. Consumers often use samples that are
distributed free, with or without a coupon, to introduce a new product or induce
trial of even an existing product. Small budget firms have to exercise extreme
caution and use such promotion judiciously because this may prove to be quite
an expensive proposition. It would be more appropriate to choose selected
markets with high potential.

Encourage Repeat Purchase Repeat purchase by customers leads to increased


sales volume. Such sales promotions are communicated to encourage existing
consumers to forward-buy. Promotions, such as discount coupons, not only
encourage existing consumers but may also stimulate purchase by infrequent
buyers, or even new triers. To encourage repeat purchase, extra benefit offers
are particularly effective. Delayedvalue promotions that may require multiple
purchases are also quite effective. There could be specific incentives, such as
get one free on purchase of four. Frequent-flier offers by some airlines is one
such scheme, where the customer is allotted certain number of points and on
collecting specified points, gets a free offer of value. Some promotions offer
free merchandise or cash refund offer by collecting tokens on purchases of a
specified value.
In the month of January 1983, Nescafe announced a consumer contest.
Contestants were required to suggest one word as a prefix or suffix to describe
Nescafe. There was no limit on the number of entries one could send. The
only condition was that with each entry the contestant must enclose an empty
pouch of 50gm Nescafe as a proof of purchase. There were 1565 prizes to be
won. An independent panel of judges was to select the most appropriate entries
for different categories of awards. The first prize was Rs 200,000. Regular users
of coffee, or even occasional users, responded with enthusiasm because not only
was the contest exciting, the prize money too, was quite substantial.

To Block Competitors Moves In business warfare, it is not uncommon that


sometimes challengers resort to offering discounts. Aggressive advertising and
sales promotion campaigns back up new product launches by competing
companies. A firm that feels threatened would like to protect its loyal customers
from switching to the new competing brand. Such a threatened firm would plan
to load consumers so that they are in no need to go shopping for that product
category. The firm may also announce some attractive trade-deals so that the
shelf space in retail shops is blocked. To accomplish the objective, normally a
combination of push-pull strategy is used. To pre-empt competition, presence
of certain favourable conditions is necessary. Inter-purchase interval, that is, the
interval between two successive purchases should be long for the consumers.
The product should not be bulky so that it can be stocked without occupying
much space. There should be reliable information about the competitive moves,
and the inventory holding costs should not be high. Detergent powders and
cakes, toilet-soaps, shampoos, oral hygiene products, and many other
nondurable products, which are consumed everyday, may respond well to such
promotions. This objective may also be accomplished for certain consumer
durable goods in case of trade segment.

Encourage Dealers to Participate in Display and Sales Contests An


important objective of sales promotion is to encourage re-seller participation in
displays and contests. Display is a powerful tool to enhance sales as it attracts
the attention of consumers who are passersby or window-shoppers. Displays
serve them as reminders, encourage unplanned purchases and increase store
traffic. The space available for displays in retail stores and in showrooms is
limited and expensive. Depending on the size of the store and display material,
number of displays is limited. In an average store, there may not be more than
ten or fifteen items that get major display space at any given time. Generally
these displayed items generate a higher sales volume. Contests are used to
motivate dealers. A certain sales quota is fixed for dealers and those who exceed
the quota by a specified margin, or by the largest margin, are awarded cash or
merchandise, and often a certificate too. Everything about a contest, whether
display or sales, should convey the idea that it is something special. Such
contests should be held infrequently and not become a routine feature which
would reduce their importance and lead to decline in interest. Contests can help
in attaining short-term objectives and improve the company-re-seller
relationship.

12.3.6 Deflect Customers Attention from Price Price increase can often have a
negative effect on sales. Marketers can develop appropriate sales promotion to
accomplish the objective of reducing the negative impact on sales. If the price
of the product was Rs 50 before the price rise, and the new price is Rs 60, then a
coupon with a face value of Rs 5 is provided that places the products price
between Rs 50 and Rs 60, making the effective price only Rs 55. When the
coupon would not be available, the new price does not appear to be so high
relative to the new price of the product. Consumers develop a new reference
price for the product and the increase does not appear to be as high as it was
perceived earlier. Of course the coupon should be of immediate value, instantly
redeemable on-package, or the discount should be given at the time of
purchase.

To Supplement Advertising and Personal Selling Efforts A companys


objectives can be to enhance the attention getting power of advertising and put
power in personal selling efforts of the sales force. A coupon or a premium
offer in a print advertisement increases the attention getting ability of the ad.
When consumers see in bold print FREE, their attention is focused on the
advertisement. They may read not only the headline but also the copy and may
get exposed to the advantages and benefits associated with the brand. Bowman
(1980) cited evidence indicating that print advertisements containing coupon are
more likely to be noticed and recalled than are the same advertisements not
containing coupons. With sales promotion offers, the sales persons calls may
become more productive. The customer sees the advantage of buying the
product now, either at a discount, by getting added value, or on interest free
instalments. With the purchase there might be an element of excitement if some
kind of lucky draw is included. If a sales person who is selling some consumer
durable product, for example a computer to some individual customer or an
organisation, also offers useful value enhancing computer related items, or
extended warranty, etc., it may become more attractive to the customer and lead
to a purchase order. There are plenty of examples everyday offering attractive
deals on computers, printers, TVs, refrigerators, washing machines, microwave
ovens, and many other appliances that make the job of sales personnel more
effective.

: Some common Pull and Push strategies used in advertising and sales
promotion

. Some aspects that are important to consider in making sales promotions


successful are as follows:

Maximum effect at minimum cost: When the nature of promotion objective is


such that it can best be achieved by sales promotion, rather than advertising

alone, and the objective is achieved at minimum cost.


Motivates consumers to buy now: Successful sales promotions induce a sense
of urgency to buy now and avoid postponing purchase. The consumer is moved
to take immediate action and gets involved in the transaction.

Offers what the consumers want: Sales promotion must not attempt to push
any offer that is not regarded as desirable by target consumers. They cannot
attract consumers towards offers that are not perceived as interesting, exciting
and valuable to them.

The promotion should be clear and uncomplicated: It offers a single but


powerful incentive to engage in transaction. Any subsidiary offer stems from or
is closely related to the main offer. In a simple and clear language, it
communicates how consumers can take advantage of the promotional offer. Too
many hurdles discourage consumers to participate.

Promotion should be highly visible: The offer must draw attention of target
consumers. The media selection is important. Effective promotion draws
attention from high visibility and from creative qualities.

Promotion should benefit all concerned: Usually promotions involve


cooperation of sales force and channel members. They need to be motivated to
make the efforts successful.

Promotion must be believable and honest: It makes reasonable and


believable claims, tells the truth, there are no exaggerations, and it respects
publics intelligence.

Promotion must be legal: The marketers must check the legality of promotion
before announcing it.

Promotion must be implemented efficiently: In some types of promotions,


handling houses and premium suppliers are involved. Proper arrangements must
be made with these outside parties to avoid any complication.
Ans)

Sales promotions originate either from manufacturers or retailers. Promotions


originating from manufacturers are called manufacturer promotions and those
originating from retailers are referred to as retailer promotions. Manufacturer
promotions may target end users, re-sellers, or the sales force. Retailer
promotions address customers or end users and the objectives may be to
increase store traffic or increase sales.

There are different groups who might be the target of sales promotion:
consumers, trade and the sales force. Sales promotions originating from
manufacturers may be directed at consumers, resellers, or both. Simultaneously,
the manufacturer may also have a promotion programme for its own sales force.
Sales promotions may also originate from retailers and aimed at consumers,
though their objectives are different from those of the manufacturers. Their
purpose generally is to increase store traffic rather than sell a particular brand,
as may be the case with a manufacturer-initiated promotion. Sales promotions
directed at the end-user, whether by the manufacturer or the retailer, are called
consumer sales promotions. Manufacturer announced promotions to consumers
are based on pull-strategy of the manufacturer. However, retailer announced
promotions to consumers constitute the push-strategy of the retailer. The
objective of most consumer sales promotions is to stimulate consumers to buy a
brand. In certain situations, the objectives for both new and established brands
can also be to encourage consumers to try a product, load the consumers and
increase consumption of an established brand, retain the consumers, build brand
equity, targeting a specific market segment, or enhancing advertising and
marketing efforts, etc. In general, consumer promotions can be same for less
or more for the same which may get translated into a straight price-cut or
added value. Another approach to consumer promotion can be to offer an
interest promotion, which may or may not require purchase of anything, such
as contests and sweepstakes, mail-in premiums, free-premiums and free
samples, etc. Such interest promotions are intended to stimulate consumer
interest, other than price, in products, services, activities, or special events.
Some consumer promotions are considered as consumer-franchise building. In
such promotions, the communication portion included with the premium, free
sample, or the coupon, contains some selling message that reinforces the
consumers understanding about the brand, or the premium offered is related to
the promoted product. Consumer sales promotions cannot make consumers
loyal to a brand that is of little value or does not provide them with a specific
benefit. However, promotions can make consumers aware of a brand and by
communicating its specific features and benefits, contribute to the formation of
a positive and favourable brand image. Franchise building consumer promotions
are designed to create long-term brand preference and ultimately lead to the
goal of full-price purchases. Originally, advertising was viewed as the exclusive
means of image building and sales promotion was used for short-term
immediate sales. Marketers are now recognising the franchise building potential
of sales promotion. According to Betsy Spethmann (Money and Power,
Brandweek, March 15, 1993), a survey of senior marketing executives found
that 88 per cent believe that consumer sales promotions can help build a brands
equity and 58 per cent think that trade sales promotions can contribute.

romotions that do not focus on franchise-building aim to accelerate the purchase


decision process and generate an immediate increase in sales. Such promotions
do not communicate information about a brands advantageous attributes or
benefits and include straight price-cuts, price-off packs, premium not related to
the promoted product, sweepstakes, contests and games, etc. They do not
contribute to the building of brand identity and image. Consumer sales
promotions offered by retailers are non-franchise building as far as the products
go and focus more on lower prices or special deals and consumers buy them on
the basis of price rather than brand equity. The purpose of retailers is to
encourage store patronage and not the brand loyalty of any specific
manufacturers, brand. Consumer promotions can be for non-durable or durable
products as well as services. The items could range from products or services of
daily use to expensive items such as two and four- wheeler autos, music
systems, computers, televisions, air-travel services, hospitality services, Internet
time, etc. Sales promotions to consumers are generally more effective when
combined with advertising and point-of-purchase display.

Some important consumer promotions are:

Price discounts (also called cents-off deals)


Price pack deals (bonus pack)
Rebates (also called refunds)
Continuity programmes
Coupons
Samples
Contests and sweepstakes
Premiums
POP displays
Free trials
Free service camps
Product warranties
Exchange offers
Low interest financing

Model Question Paper

1)What is the significance of internal and external flows in marketing


communications?

Ans)

EXTERNAL AND INTERNAL FLOW OF COMMUNICATION


Marketing communication supports the marketing plan and helps the targeted
audience to understand and believe in the advantage of the marketers offer over
competition. This is possible only through the designing and implementing of
persuasive communications. Marketing communication has an external flow
and an internal flow.

1.2.1 External Flow The external flow of marketing communication is directed


at the past, current, and potential customers; at the channel members; at
competing and non-competing companies; and at various other audiences who
may influence the companys operations such as government agencies, private
agencies and experts in the field. The communication may include advertising,
personal selling, direct mail, point-of-purchase display, warranties, product
updates, publicity, etc. Such communications help in developing and
maintaining healthy relationships with different audiences outside the company.

1.2.2 Internal Flow This aspect of marketing communication flow involves


various departments in the company, all the company employees and
stockholders. When the company is introducing new products or dropping some
existing products or product prices are revised or the company enters new
markets or new distribution outlets, company employees often need to know
what the marketing department is doing. Convincing and persuasive marketing
communication can help in influencing employee perceptions and shape their
morale and performance. If the employees feel that their company is producing
highly regarded advertisements, they are motivated to work harder, their
turnover decreases and they become a source of effective public relations.
Different departments such as research, engineering, production, and marketing
need to share product information among each other. Stockholders also need to
be informed about marketing activities, as they must be comfortable with the
information that marketing decisions are in their best interests and buying
company stocks would be a positive investment. Irrespective of the fact whether
the flow is external or internal, effective communication requires reaching the
right people with the appropriate information through the right sources at the
right time. The integrated strategy should be

To make an assessment of the relative importance that members of the


audience place on certain categories of information, such as, is it objective
information with facts and figures that they want? Or emotional appeals are
desirable to induce action?

To select the most appropriate communication vehicles to deliver the


information to the audience. This would require finding out which media
vehicles are used by the audience regularly, which ones are trusted most, and do
the audience turn to different vehicles for high involvement product categories.

To assess what the marketers position in relation to competing sources is? For
example, the members of the audience may heavily rely on information from
friends or from published reports, or may also be open to some new sources of
information.

To determine guidelines about the mix of communication techniques and


allocate resources. This would depend on the communication objectives, and the
resources available. Strategy implementation requires a clear understanding of
the needs and wants of target audiences and a great deal of data concerning
competitors, news media, government and available communication techniques,
before implementing communication strategy. Communication is the soul of
promotion activity and understanding communication is essential to the better
management of a marketing communication programme.

2. Discuss different types of consumer advertising. What are the objectives of a


national advertiser and a retailer?

Ans)

Consumer Advertising Most non-classified advertising is display advertising


and is found in newspaper and magazine pages. It generally uses headlines,
illustrations, white space, coupons and other visual devices besides the copy
text. Display ads appear in all sections of the newspaper except the editorial
page, obituary page and the classifieds section. Most newspapers get
approximately 70 per cent of their advertising revenues from display advertising
Display advertising in newspapers is of two types: national and local.

National Advertising The term national advertising has a special connotation


in that it is not confined to any geographic area within the nation. This type of
advertising is mostly undertaken by the marketer of a branded product or
service which is sold through different outlets in the distribution channel,
wherever they may be located. Apparently the term national advertising
conveys mass marketing effort. In reality, this does not necessarily mean that
the product is sold nationwide. The objective is to inform or remind consumers
about a company or a brand. The ad may intend to communicate brand features,
benefits, advantages or uses and to create or reinforce its image so that the
consumers will be predisposed to buying it. This type of advertising is
undertaken by a manufacturer and is in contrast with that undertaken by a
retailer whose objectives are totally different.

National advertising often identifies a specific target audience and attempts to


create an image for the product. For example, the ad for Mercedes-E class is
targeted at a specific segment in the Indian market. When a new manufacturer
with lesser money muscle, limited production capacity and limited distribution
know-how, etc., appears on the business scene, he does not usually go in for
national distribution. He first tries to sell his output in limited markets and then
with improved conditions gradually spreads his product in the remaining
markets. Even well established companies introduce new products in selected
markets only. National advertisers realise that under some conditions it is better
to advertise in regional or local media rather than mass media. As more and
more national advertisers are able to identify and reach narrowly defined market
segments, there would appear more regional or local advertising. For example,
they may select regional/local newspapers, television stations, radio, or outdoor
media to tap differences in the regional language. The advertiser would still be
classified as national advertiser as the purpose of the ads is to encourage
purchase of the advertised product at any outlet that is carrying the item. In the
short-term, however, national advertising will continue to introduce new brands
and re-emphasise brand loyalty in case of already established ones. In effect, the
message of national advertising is, buy our brand.

Retail (Local) Advertising The manufacturer has little concern where his
product is purchased. To that extent, the goal of the retail advertiser differs from
that of the national advertiser who is the manufacturer. The retailer advertises to
encourage patronage by consumers and build store loyalty among them. He is
not particularly concerned with any specific brand. In case the retailer shows
some concern (say he wants to clear stocks of a particular brand), then the
message in effect is buy brand B at our store. The general idea behind retail
advertising is buy at our store. The sale of any specific brand is not the
concern of the retailer unlike the national advertiser.

The retailer must compete in one of the most competitive arenas of business and
move large volumes of products. Besides, the advertising must convey the
image of the store to particularly attract certain types of consumers. To achieve
these objectives, retailers often communicate price information, service and
return policies and the range of merchandise available through these ads. Some
retailer ads are specifically aimed at building store traffic. Generally, the retailer
works in a narrowly limited geographic market. This allows him to focus his
advertising messages to the likes, preferences and buying habits of the targeted
audience. The retailer advertises to precipitate a relatively quicker response to
most of this local advertising, while the national advertisers prime interest is in
establishing longrun favourable attitudes and building brand equity. Besides the
broad classification of display advertising into national and local, some other
forms of display advertising are discussed below. Cooperative Advertising:
Manufacturers of consumer durable goods or specialty products often show
special interest in their dealers advertising. To help identify the dealers in
different geographic markets, dealers put out ads in the local media under their
names. The manufacturer often provides the dealer with the material and
guidelines to develop ads for print, television, or radio commercials. This
ensures that the message is in line with what the manufacturer wants to
communicate. The manufacturer and the dealer usually share the media costs
and hence the name cooperative advertising. End-product Advertising: There
are many products that are rarely purchased direct by consumers. They are
usually bought as a part or ingredient in other products. For example, branded
products such as Teflon (DuPont), Pentium (Intel), Athelon (Advanced Micro
Devices), and many others are used in the manufacture of other end-products.
Advertising of such products is called end-product advertising (also called
branded-ingredient advertising). Manufacturers whose branded parts or
ingredients are used in producing usually other branded or unbranded consumer
products often undertake this type of advertising. Successful end-product
advertising helps create demand for the ingredient that helps in the sale of
another product. For example, Intel promotes its Pentium processors. The
sustained existence of consumer demand for such ingredients encourages
companies to use them in their consumer products. It is not easy to build end-
product demand. The manufacturer must have an ingredient that is widely
recognised by manufacturers and consumers and is believed as having
advantages that will improve the usefulness of the finished product. Extensive
advertising is required to communicate the advantages of such products to
consumers because the ingredients are often not obvious in the product. End-
product advertising may take national or international dimensions and can be
very advantageous to companies who can successfully do it. For example, in the
present scenario of computer market, different segments of consumers are
interested in knowing whether the computer has Intels Pentium processor
(Celeron, Pentium4) or Advanced Micro Devices (AMD), or something else. It
is no secret that Pentium is not only well-known among consumers but also has
the maximum market share in the world.

Direct-response Advertising: This type of advertising encourages the consumer


to respond either by providing feedback to the advertiser or placing the order
with the advertiser by direct mail, catalogues, direct-response print advertising,
directresponse broadcast advertising, telephone and Internet. Some of these
methods, to reach the consumer, are viewed as part of sales promotional
techniques.

Classified ads: are a substantial source of revenue for newspapers. The ads are
arranged under subheads that describe the class of goods or the needs that the
ads seek to satisfy. Such ads provide a community market-place for goods,
services and opportunities of every typereal estate, autos, matrimonial,
domestic help, coaching, employment, business opportunities, etc. Most
classified ads are just text set in small type. Some newspapers also accept
classified display ads. These ads run in the classified section of the newspaper
but use illustrations, larger type sizes, white space, borders, colour and photos.
For example, Ascent section of Times of India is devoted to employment ads
and in some ads colour and photos are used.
3. Some critics say that advertising creates materialism in society. What is your
opinion of this view? Discuss.

Refer to answer 2 in same subject

4. Why is client-agency relationship important? Suggest ways to improve the


clientagency relationship.

5.Media planning involves a trade-off between reach and frequency. Discuss


the statement and mention suitable examples when one or the other should get
more emphasis.

Ans)

Media planning has become fairly complex and risky with the increase in cost
of various media and the proliferation of media choices. The planners have to
critically analyse the choice of media class, subclass and media vehicles.
Besides new and emerging media, the process of making a choice among
alternatives within the same medium becomes complicated because of a wide
range of alternatives. Media planning refers to a series of decisions concerning
media objectives and media strategies to accomplish the advertising objectives.
Media class refers to the general category of delivery system to carry ad
messages to the target audience, such as print media. Newspaper represents a
subclass in print media. Media vehicle is the specific message carrier within a
medium, for example, Times of India is a media vehicle in print media subclass.

Within the last decade, the media planning function has acquired a lot of
significance in developing advertising campaigns. The proliferation of media
choices and their increased costs have made the task of media planners more
difficult and risky. Mass media options include television, radio, newspapers,
magazines, out-of-home media and others. The choice may seem to be
straightforward, but it is not. The selection of media has become quite intricate
because of the nature of media themselves. The characteristics of each
alternative must be considered carefully. For example, TV can show action,
combining both sight and sound, and can produce an impact that simply is not
possible through other media. Newspapers can carry ads containing much
detailed information as compared to TV or radio. Magazines can convey
detailed information, which remains available to a potential buyer for a longer
time. The process of choosing between alternatives becomes even more
complicated considering the wide range of alternatives within the same
medium. For example, Femina, Vogue, Readers Digest, Filmfare, Stardust,
etc., are well-known fortnightly or monthly magazines. New and evolving
media have further contributed to the difficulty of planning when, where, and
how the ad message will be delivered.

. Media planning refers to a series of decisions that need to taken in delivering


the ad message to the largest number of the target audience in the most effective
manner at the lowest cost. The plan specifies media objectives and media
strategies to accomplish the objectives. Reach is a measure of the number of
different audience members exposed at least once to a media vehicle in a given
period of time. Coverage refers to the potential audience that might get
exposed to the ad message through a media vehicle. Reach refers to actual
audience exposed to the message and coverage relates to the potential audience
likely to be exposed to the message. Frequency refers to the number of times
the audience is exposed to a media vehicle in a given period of time (usually
figured on a weekly basis for ease in schedule planning). The basic goal of a
media plan is to formulate a particular combination of media that would enable
the advertiser to communicate the message successfully and effectively to the
maximum number of potential and existing customers in the target market at the
lowest cost. Any mistakes in this function may result in wastage of substantial
amounts of money.
MEDIA REACH AND FREQUENCY

Media planners face the essential task of ensuring optimal use of media budget
while deciding about the reach, frequency, and the number of advertising cycles
affordable for the year. We have seen in the hierarchy models that the first stage
requires awareness of the product or brand. Obviously, if more people are
aware, there is more likelihood that more of them will move to each subsequent
stage and finally to purchase action. Creating awareness among audience
requires reach which is exposing potential customers to the advertising
message. In case of a new product or brand, quite a high level of reach is needed
to make almost all the potential customers aware of the new introduction.
So far, there is no known way of determining how much reach is required to
achieve desired levels of awareness, attitude change, or purchase intentions.
Also, there is no certainty that an ad placed in a particular media vehicle will
actually reach the target audience. For example, if an advertiser buys 30 or 60
seconds of TV time during a certain programme, everyone who is tuned to this
programme will not necessarily see the commercial for a number of reasons. In
advertising terminology, frequency refers to the average number of times
audience individuals or households are exposed to a medium in an advertising
cycle, not necessarily to the advertisement itself. Most advertisers agree that 1:1
advertising ratio does not exist. An ad may be placed in a media vehicle and the
fact that an individual has been exposed to it does not mean that the ad has been
seen. For this reason, media buyers refer to the reach of media vehicle as
opportunity to see (OTS) an ad rather than actual exposure to it. Since there is
no certainty that an exposure to a vehicle actually results in an exposure to the
ad, it is accepted that one exposure to the media vehicle constitutes reach,
provided that this exposure must occur for the audience member to offer an
opportunity to see the ad. This approach, though, does not help in determining
what frequency level is needed to create the desired impact. Decisions in this
regard are not always based on any hard data. According to Joseph W Ostrow of
Young and Rubicam agency, Establishing frequency goals for an advertising
campaign is a mix of art and science but with a definite bias towards art.

Frequency =

Total Exposures Reach An example will illustrate the concepts of reach and
frequency:

Survey sample size = 10 households with a TV

Survey period = 4 weeks


TV programme = S

Total exposures = 20 Households that watched TV programme

S (Reach) = 8

Frequency =

Total Exposures Reach (OTS)= 2.5

Media planners make compromises and strike a balance between reach,


frequency and the number of advertising cycles in the planning period. In most
cases, the media budget is fixed and the planner cannot spend more on, say,
increasing frequency without decreasing the expenditures on reach or the
number of advertising cycles. If the budgeting approach used is objective and
task method, then all three can be increased up to a more optimistic level. In
reality, there would always be a ceiling either because of the budgeting method
used or by some higher-level corporate decision. The trade-offs are governed by
the principle that it is better to sell some people completely than many people
not at all. With budgetary limits, the strategy options concerning reach and
frequency could be to reach either a lot of people a few times, or a few people
lot of times. For example, to increase the level of reach, the ad may be released
in different media (broadcast, print, or others, and many media vehicles within
each medium). A large number of different people will be exposed to the ad
campaign. The other alternative is to spend the same amount in only one media
type, such as magazines, and just two of the media vehicles, Readers Digest
and Femina only. A smaller number of persons will be exposed to the
advertising but more frequently. The trade off between reach and frequency is
most common. If it is advantageous to maintain advertising continuity, or plan
more advertising cycles, as with a frequently purchased product and service,
then reach should be sacrificed. For infrequently purchased products, such as
consumer durable goods, it is advisable to increase reach and advertise only
occasionally in a cyclic pattern. This may suffice to maintain audience interest
without having to reach them more frequently. If reach is kept constant, the
options are either to advertise at lesser frequency and increase the number of
cycles, or to increase frequency and reduce the number of advertising cycles.
The decision may be based on purchase cycle of the product, such as every four
weeks for toothpaste, or three weeks for instant coffee. In such situations
flighting pattern of media scheduling is appropriate, increasing frequency in
selected cycles. No advertiser can hope to win them all, and it is better to win
some than none.

The best trade-offs depend on the media strategy for the target audience and the
nature of the product/brand. It is possible that audience members are exposed to
more than one media vehicle carrying the same ad, resulting in repetition. If the
ad of a face cream is placed in two magazines, Savvy and Femina, a number of
target audience members will be exposed to both vehicles, resulting in
duplicated reach. If the ad is placed in one magazine only, the total number of
audience exposed only once is unduplicated reach. Figures of both duplicated
and unduplicated reach are important. Unduplicated reach represents potential
new exposures and duplicated reach provides an estimate of frequency.
6 Discuss the advantages and disadvantages of TV advertising. How is TV time
bought?

7.Promotions make consumers price sensitive, encourage only brand switching


and discourage brand loyalty. Discuss with examples.

Refer the question related to promotions in the same paper

8. What is inventory risk? How can promotion planners reduce this risk for re-
sellers?

Ans)

Re-sellers are concerned about the inventory risk associated with stocking or
not stocking the product on promotion. If they are out-of-stocks, then there is an
opportunity cost, and if residual stocks are left that cannot be sold on list price
to consumers, then the traders are concerned with lost margins. Inventory risk is
higher for many reasons such as: When consumer demand for the product is
unpredictable When inventory holding costs are high When additional stocks
of the product cannot be obtained quickly for any reason When prices are
unstable When the product is seasonal When the product is likely to go out of
fashion quickly, and When the producer does not agree to accept unsold stocks.
Manufacturers of high inventory risk items generally promote the more popular
items during the peak period of consumer demand.

Inventory risk is less severe or milder if the manufacturer has more control on
the distribution channel, as in the case of exclusive distribution, or the delivery
is direct to the store. This gives the marketer access to more control and the
inventory can be managed more accurately to minimise risks with over or under
stocks. Some brands enjoy high awareness and loyalty. These brands may have
a dominant share in the product category and their sales may be growing. These
factors are important to the trade because they contribute to high sales turnover,
profits and the image of the store, more so if the intensity of competition is low.
Traders view such brands as good traffic builders and they do not hesitate in
allocating advantageous shelf placing to such brands. In promoting such strong
brands, it is preferable to offer price discount to traders as they are more likely
to pass through part of the benefit to consumers. If price cuts are offered in the
form of coupons to consumers, it is advantageous to mail coupons to nonusers
rather than existing users. Brands, which are weak, do not have many options.
Promotions requiring trade push are generally not available for such brands. A
higher percentage of promotion budget goes to price-deals for consumers to
reward them immediately at the time of purchase to create any impact. It is a
good idea to go for tie-in promotion with a strong brand that can attract greater
consumer and trade attention. Sales force is also unlikely to pay much attention
to weak brands unless they are offered some incentive (sales force promotion).

Higher inventory risk would require that promotions be developed for separate
markets. Excess product stocks from one market can be shifted to another
market where the sales potential is more.