The term ‘promotional mix’ is used to refer to the combination of different kinds of promotional tools used by a firm to advertise and sell its products.
The main promotional tools or activities which make up promotion mix are personal selling, advertising, publicity and sales promotion. These are also known as elements of promotion mix.
Philip Kotler opines, “A company’s total marketing communication mix also called promotion mix consists of specific blends of advertising, personal selling, sales promotion, public relations and direct marketing tools that the company use to pursue its advertising and marketing objectives.”
The concept of promotional mix assumes that there is a variety of means for communicating with consumers. Promotional mix refers to the combination of various types and amounts of various forms of promotion used by a marketer.
The final selection of them depends upon the jobs assigned to promotion and the environment in which they are performed.
1. Introduction to Promotional Mix 2. Meaning of Promotion Mix 3. Definition 4. Scope 5. Concept 6. Objectives 7. Components 8.Significance 9. Factors 10. Strength and Weakness.
Promotion Mix: Meaning, Definition, Concept, Scope, Objectives, Components, Factors, Strength and Weakness
Promotion Mix – Introduction
Communication is a must in marketing process. The manufacturer (communicator or source) transmits the message to the target consumer through mass communication methods —advertising, personal selling, sales promotion and publicity—in order to create the demand for the product. This is invariably called promotion.
Promotion influences demand by communicating pro-product and pro-company messages to the market. A promotion strategy involves the coordination of ail communication efforts aimed at specific audiences—consumers, dealers, the government shareholders and so on. The most critical promotional question facing the marketing manager concerns the proper mix of communication methods—advertising, personal selling, sales promotion and publicity.
The promotion mix is usually coordinated on a campaign basis, making the campaign, the relevant unit of the promotion strategy campaign may last for a short fixed period, i.e., a few week, months or a year or if successful, it may run over a pretty long period, several years. The most desirable marketing effort includes a total campaign with one unified theme. It is a coordinated effort of unifying various promotional strategies.
The four promotion mix currents—advertising, personal setting, publicity and sales—promotion are more or less used at every stage in the selling process, but their intensity differs at different stages and at different periods. Publicity is generally effective at the awareness stage. Advertising becomes less and less effective over a period of time. Personal selling is more effective as consumer needs dictate a more personal relationship. Sales promotion may be effective in providing added incentives for buyer’s action.
To a marketing manager, it is difficult to arrive at the best kind of promotion mix because results of communication efforts are hard to measure and it is very difficult to understand what a particular medium will do at a particular time for one product as opposed to another. Most marketing managers select more than one channel to promote a product. Their choices are affected by a number of factors.
Promotional Mix – Meaning
Promotion is an important part of the marketing mix of a business enterprise. It is the spark plug of the marketing mix. It is a process of communication involving information, persuasion, and influence. It includes all types of personal or impersonal communication with customers as well as middlemen in distribution.
The purpose of promotion is to inform, persuade and influence the prospective customers. Personal selling, advertising publicity and sales promotion are widely used to inform the people about the availability of products and create among them the desire to buy the products.
Non business enterprise can market its products unless it undertakes promotional activities effectively. The prospective customers have to be informed about the product its features, utility and availability. The need for promotional activities has increased because of stiff competition, widening of market and rapid changes in technology and tastes of the customers.
The term ‘promotional mix’ is used to refer to the combination of different kinds of promotional tools used by a firm to advertise and sell its products. The main promotional tools or activities which make up promotion mix are personal selling, advertising, publicity and sales promotion. These are also known as elements of promotion mix.
In the modern business world, big business firms cannot depend upon a single promotional tool. They have to make use of all the promotional tools in different degrees depending upon the nature of produce, nature of competition and kinds of customers.
The marketing manager is supposed to decide about the use of various promotional activities and allocate budget for them, while taking a decision about promotion mix, two factors need adequate consideration. Firstly, a combination of promotional activities is to be used because any promotional tool, used alone, may not prove fully effective.
Secondly, all promotional tools are not of equal importance and their importance m iv change with the change in business environment.
There is no tailor-promotional mix for a firm. Every firm has to design its own promotional mix, i.e., to determine, the various promotional tools to be used for promoting the sale of its products. The most striking feature of the promotional tools is their cross-substitutability. They represent alternative ways to influence buyers. This substitutability calls for treating various promotional tool in a joint decision framework.
Promotional strategy is determined by the product market strategy and over-all marketing strategy. Various combinations, types and degrees of personal selling, advertising and other promotional tools are brought together into a promotional mix to develop the promotional strategy. For each component of the promotional mix, management has to set objectives, determine policies and formulate strategies.
Promotion Mix – Definition
Gary Armstrong defines promotion mix as, “A company’s promotional mix includes advertising, personal selling, sales promotion, public relations, direct marketing. It also includes product design, shape, package, colour, label etc., as all these communicate something to buyer.”
Philip Kotler opines, “A company’s total marketing communication mix also called promotion mix consists of specific blends of advertising, personal selling, sales promotion, public relations and direct marketing tools that the company use to pursue its advertising and marketing objectives.”
Promotion is a process of communication involving information, persuasion, and influence. It includes all types of personal or impersonal communication by a producer with prospective customers as well as middlemen in the distribution network.
The purpose of promotion is to inform, persuade and influence the prospective customers. Personal selling, advertising, public relations, sales promotion and direct marketing are widely used to inform the people about the availability of products and create among them the desire to buy the products.
Promotion is a form of corporate communication that uses various methods to reach a targeted audience with a certain message in order to achieve specific organisational objectives. Nearly all organisations, whether for-profit or not-for-profit, in all types of industries, must engage in some form of promotion.
Such efforts may range from multinational firms spending large sums on securing high-profile celebrities to serve as corporate spokespersons to the owner of a one-person enterprise passing out business cards at a meeting of local business persons.
Promotion is communication from a marketers to the prospective buyers in the market. It tries to instil into buyer’s minds images (through advertising, personal selling, sales promotion and publicity) that make them buy the product.
Promotion Mix – Scope of Promotion Mix in Different Areas
Promotion basically deals with outer world and therefore comprise of more and more communication strategies and tools for attracting customers.
Scope of promotion mix can be stressed with the help of following key points:
Advertising involves turning attention of third parties towards product for the sole purpose of sale.
Hence it can be stated that anything and everything that turns the attention to an article or service or an idea might be called as an advertisement.
American marketing association defines advertising as, “any paid form of non-personal presentation of ideas, goods or services by an identified sponsor. Advertising is a prime part of promotion mix.
2. Personal Selling:
Art of personal selling is defined by D.D.Couch as, “science of creating in the mind of your prospect a desire that only possession of your product will satisfy”.
It is evident that salesmanship is both science and art. As a part of art requires patience, practice and use of correct methods, devices and skills.
As a scientific process it requires mastery over certain fundamentals that pre requisites for success in selling.
3. Sales Promotion:
American marketing association defines sales promotion as, “Those marketing activities other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness such as display shows and exhibitions, demonstrations and various non-recurrent selling efforts not in the ordinary routine.”
4. Public Relations and Publicity:
“Public relations is a deliberate and continuous effort to establish and maintain favorable relations between the organization and its public .Customers, employees, stockholders, government and society.” Public relations must be healthy for future prospect of any organization. Costs involved in publications and media management is comparatively lower than advertisement and other promotional elements.
5. Other Selling Tools:
Other selling tools includes any other selling and promotions activity other than advertising, personal salesmanship, sales promotion. It mainly includes mouth publicity etc. Many corporate giants have taken keen interest in viral marketing via internet which is similar to Mouth Publicity. Thus word of mouth has been facilitated by the internet. One more form not directly connected to any other form is sponsorship to events, other brands, organized activities, sporting tournaments etc.
Indian Premier League was officially sponsored by DLF. Individual teams participating in IPL were sponsored or co-sponsored by different companies by participating in the Bidding process.
Every event now is either sponsored or co-sponsored and properly advertised for popularity of that sponsoring company.
Promotion Mix – Concept
The concept of promotional mix assumes that there is a variety of means for communicating with consumers. The term promotional mix refers to the combination of various types and amounts of various forms of promotion used by a marketer. The final selection of them depends upon the jobs assigned to promotion and the environment in which they are performed.
The concept further assumes that there are different types of promotion and each are has its advantages and disadvantages over other forms. All types of promotions are not suited to all types of business. Certain promotion types are better suited for some tasks than others. All promotional types are compatible and interchangeable.
The determination of the various elements in the promotional mix depends upon a number of factors that influence the manager decisions.
These factors can be summed up as:
(1) The amount of money available for promotion purpose;
(2) The nature of market i.e., whether local, regional, national or international;
(3) The nature of the product viz., consumer or industrial, durable or non-durable or perishable;
(4) The stage in the product life cycle i.e. introduction, growth, maturity or decline.
Advertising, personal selling and sales promotion are generally employed on the basis of the promotional strategies and the nature of the market. Generally, speaking a promotion manager employees a combination of different forms of promotion because anyone cannot satisfy the need of the company. A good combination of advertising, personal selling and other promotion methods may increase the sales enormously at a most reasonable low price. Dependence on anyone form of promotion element is seldom effective.
Promotion Mix – 5 Possible Objectives
Promotion can be used for number of reasons for ex: Promotional activity can increase sales, raise awareness or concerns about particular issues develop a brand image or alter public opinion.
The possible objectives for promotion mix may include the following:
Objective # 1. Build Awareness:
New products and new companies are often unknown to a market, which means initial promotional efforts must focus on establishing an identity. In this situation the marketer must focus promotion to effectively reach customer and tell the market who they are and what they have to offer.
Objective # 2. Create Interest:
Moving a customer from awareness of a product to making a purchase can present a significant challenge. Consumer buying behaviour depends on the type of customer so the customer must first recognize they have a need before they actively start to consider a purchase.
The focus on creating messages that convince customers that a need exists has been the hallmark of marketing for a long time with promotional appeals targeted at basic human characteristics such as emotions, fears, humor, sex etc.
Objective # 3. Provide Information:
Some promotions are designed to assist customers in the search stage of the purchasing process. In some cases, such as when a product is so novel it creates a new category of product and has few competitors the information is simply intended to explain what the product is and may not mention any competitors.
In other situations where the product competes in an existing market, informational promotion may be used to help with a product positing strategy.
Objective # 4. Stimulate Demand:
The right promotion can drive customers to make a purchase. In the case of products that a customer has not previously purchased or has not purchased in a long time, the promotional efforts may be directed at getting the customer to try the product.
This is often seen on the internet where software companies allow for free demonstrations or even free downloadable trials of their products. For customer base products, promotion can encourage customers to increase their purchasing by providing a reason to purchase products sooner or purchase in greater quantities than they normally do.
Objective # 5. Reinforce the Brand:
Once a purchase is made a marketer can use promotion to build a strong relationship that can lead to the purchaser becoming a loyal customer. For instance, many retail stores now ask for a customer’s email address so that follow-up emails containing additional product information or even an incentive to purchase other products from the retailer can be sent in order to strengthen the customer marketer relationship.
Promotion Mix – Top 5 Components (With Some Other Tools)
Promotion strategies are concerned with the planning, implementation, and control of persuasive communication with customers. These strategies may be designed around advertising, personal selling, sales promotion, or any combination of functions of these. One of the major strategic issues associated with the development of effective promotion strategy is the availability of financial resources for a specific product/market.
The distribution of the budget among advertising, personal selling, and sales promotion is another strategic matter. The formulation of strategies dealing with these determines the role that each type of promotion plays in a particular situation. Promotion strategy consists of planning, implementing and controlling communications from an organization to its customers and other target audiences.
The function of promotion in the marketing program is to achieve various communications objectives in the market segment. An important marketing responsibility is to plan and coordinate an integrated promotion strategy and to select the specific strategies for the promotion components.
It is important to recognize that word-of-mouth communications among buyers and the communications of other organizations may also influence the target audience of the company.
The promotion-mix has the following components:
2. Personal Selling.
3. Sales Promotion.
4. Direct Marketing.
Component # 1. Advertising:
Advertising may be defined as the strategy of communicating a sales message to potential customers. Advertising is one segment of a well-organized, continuous marketing plan. Effective advertising is a cumulative process that maintains current customers, attracts new customers and establishes a favorable position for the business with competitors. Advertising will neither cure slow business growth or low profits, nor will create a better business person or a well-organized business.
Advertising offers specified benefits to a specific or target audience. As part of a sound marketing plan, advertising becomes an investment in the future of the business, instead of one more expense. An effective advertisement is based on a careful analysis of the situation before money is spent. “Advertising and promotions” is bringing a service to the attention of potential and current customers.
Many products or services have failed in the market, not because of their quality, packaging or pricing, but because the potential customers didn’t know they were there, and if they did, they didn’t know what those were or how to use them. In order to sell your product or service you must promote it. One effective method of promotion is advertising.
The goals of the plan should very much depend on the overall goals and strategies of the organization, and the results of the marketing analysis, including the positioning statement. The plan usually includes what target markets you want to reach, what features and benefits you want to convey to them, how you will convey it to them (this is often called advertising campaign), who is responsible to carry the various activities in the plan and how much money is budgeted for this effort.
Successful advertising depends on knowing the preferred methods and styles of communications of the target markets that you want to reach with your ads. A media plan and calendar can be very useful, which specify what advertising methods are to be used and when.
The fashion advertisements (FAds) and strategies building for optimum sales realization are prominent among them. The FAds have a greater impact on the elite clientele group as compared to other measures used for raising the sales. The product branding and packaging technology is the core input for FAds. Attractive packaging and popular branding have a significant role in the market expansion and product promotion.
In a competitive market economy, the brands are hired by the manufactures for product marketing. In this system, new product managers have to face an uphill task. In marketing new products, it is essential to take potential as well as existing customers into confidence through an effective communication management. In the absence of building up such awareness, the new product manager gets fringe benefits while the brand owner gets a higher share in the consumer rupee.
As such, these companies may not be in a position to establish their own brand due to many weaknesses pertaining to capital, technical know-how and market guidance. The future threat in this regard can be visualized in the light of selling their product. In the long run their identity will be only as a manufacturing unit, but not as a product seller.
Packaging in the competitive product market is an important determinant as far as the buyer’s behavior is concerned. The more attractive and durable the packaging of any product, greater would be the product resistance and market demand. ‘The New packs’ may be the hard core of some FAds which could be more appealing to the target customers. It requires enough capital to invest in the packaging technology.
Advertising, direct marketing and public relations are the important tools for promoting international marketing. The process of advertising in an international business begins with a market situation analysis conducted to assess marketing opportunities for the product in the existing market. On identifying, the marketing strategies are formulated and supported by communication linkages.
Advertising strategies are developed in accordance with the marketing plan and advertisements are released according to the media plan. Hence, commercials (Ads) seen by the consumer are like the tip of an iceberg emerging from a situation analysis, trade goals and strategies that have been evolved by the marketing and advertising managers. However, it is difficult to establish whether advertising is the first or the last component in the entire process of marketing. Despite numerous research efforts on the function of advertising, a unified theory has not yet emerged.
Component # 2. Personal Selling:
Personal selling consists of verbal communication between a salesperson or selling team and one or more prospective purchasers with the objective of making or influencing a sale. Many companies feel that the personal selling is better strategy to manage the interface of buyer and seller and so annual expenditures on personal selling are larger than advertising.
However, advertising and personal selling strategies share some common features, including creating awareness of the product, transmitting information, and persuading people to buy. The personal selling is an expensive way of persuading the buyers as compared to various ways of advertising.
Salespeople can interact with buyers to answer questions and overcome objections, they can target buyers, and they have the capacity to accumulate market knowledge and provide feedback. Sales promotion consists of various promotional activities, including trade shows, contests, samples, point-of- purchase displays, trade incentives, and coupons.
Sales promotion expenditures are substantially greater than the amount spent on advertising. Direct marketing includes the various communication channels that enable companies to make direct contact with individual buyers. The common direct marketing techniques are catalogues, direct mail, telemarketing, television commercials, radio, magazine, newspaper, electronic shopping and kiosk shopping, etc. The distinguishing feature of direct marketing is the opportunity for the marketer to gain direct access to the buyer.
Direct marketing expenditures account for a large portion of promotion expenditures. Electronic shopping is one of the newer forms of direct marketing. Publicity or public relations for a company’s product, service, or idea involves communications placed commercially in the media. The objective of public relations is to encourage the media to include company- released information in media communication.
Development of an optimum promotion mix is by no means easy. Many companies often undermine the roles of advertising, personal selling, and sales promotion in a given product or market situation. Decisions about the promotional mix are often diffused among the decision-makers, impeding the formation of a unified promotion strategy. The personal selling plans are sometimes deviated from the planning of advertising and promotion.
Component # 3. Sales Promotion:
Selling is an art largely associated with the behavioral skills of the sale personnel of a sales organization. Today, selling is performed using scientific methods of product presentation, advertising and various approaches drawn to take the customer into confidence.
The efficiency of sales depends upon the type of sales person and the techniques used in selling goods or services. The consumers are the decision-makers in buying the goods and services proposed for sales and hence play key role in the sales process. There are four categories of sales that include every type of sales position.
These types of selling are:
1. Consultative sales,
2. Technical sales,
3. Commercial sales, and
4. Direct sales.
These selling categories require a specific management approach to deal with the market
Component # 4. Direct Marketing:
In direct marketing, organisations communicate directly with target customers to generate a response and/or a transaction. Direct marketing traditionally has not been considered an element of the promotional mix. It has become such an integral part of the IMC program of many organisations and often involves separate objectives, budgets, and strategies, marketer view direct marketing as a component of the promotional mix.
Component # 5. Publicity:
When the marketer makes use of a commercially significant news or editorial comment in the print media or a favourable presentation upon radio, television or stage, it is called publicity. Though publicity is a non-personal form of communication, it is not a paid form of communicating marketing message.
The major tools of promotion mix are as follows:
i. Online Marketing:
The Internet has a great effect on marketing communication programs and as well change the ways companies design and implementing their entire business and marketing strategies. Unlike traditional forms of marketing communications such as advertising, which are one-way in nature, the new media allow users to perform a variety of functions such as receive and alter information and images, make inquiries, respond to questions, and, of course, make purchases.
Additionally with the Internet, other forms of interactive media include CD-ROMs, kiosks, and interactive television. However, the interactive medium that is having the greatest impact on marketing is the Internet, especially through the component known as the World Wide Web.
Thousands of companies, ranging from large multinational corporations to small local firms, have developed websites to promote their products and services, by providing current and potential customers with information, as well as to entertain and interact with consumers.
The passing of information from person-to-person is referred to as word of mouth. It comprises of human communication, such as face-to-face, telephone, email, and text messaging. An organisation’s image can be projected through channels other than the formal communication process.
Of course, positive word-of-mouth recommendation is generally dependent on customers having good experiences with an organisation, and studies have shown how unexpectedly high standards of service from a company can promote recommendation.
iii. Public Relations:
It is a planned effort by an organisation to influence the attitudes and opinions of a specific group by developing a long-term relationship. Therefore, firms are concerned with customers, suppliers and dealers along with the effect of their actions on people outside their target markets. Their target are inclusive of a large number of interested public (customers, stock holders, government agencies, special interest groups).
Promotion Mix – Significance of Promotion Mix in Marketing
Promotion plays an important part in marketing. This function of marketing is dedicated towards persuading the existing and potential customers to make a purchase of a given product or service.
Promotion is termed as Marketing Communication Mix by famous author and Marketing Guru Philip Kotler.
He stated following functions of Marketing Communication Mix – 1) Advertising, 2) Sales promotion, 3) Public relations and 4) Salesmanship.
Final aim of any organization is making an increase in profits through healthy competition and for helping this aim, promotion comes in picture.
It is a strongest tool for increasing sales and profits any organization can have. It’s an action oriented program with an intention of persuasion.
Significance of marketing promotion mix is highlighted with the help of following points:
1. Profit Maximization and Increase in Sales Volume:
This is the ultimate aim of any organization. Every organization strives for the achievement of this goal.
Without this, the sole purpose of establishing a company will lose its significance.
Hence every company makes it a primary objective and directs every department to achieve it.
All the other objectives are secondary and only helps in achieving this primary aim.
Every part of the world now is full with promotional and saleable material, both in audio and visually accessible format looking for maximum reach of audience.
Millions of dollars, Euros, Rupees are getting disbursed for the purpose of maximum promotional activities. Moreover many production houses of Movies are spending crores of rupees for a promotion of a single movie. Such is the vital role of promotional activities in modern highly dynamic scenario of globalization and technology advancement.
Corporate managements are ready to spend huge amounts for promotional activities and people are also ready to buy such products whose promotional activities are attractive.
Social activities are rising like a jungle fire for promotion and sale purpose.
It is estimated that after five years, half of consumer product sale will effect from social networking and e-commerce web sites and portals. People are buying high value items like LED TV, other consumer durables like Refrigerators on a single click. Therefore marketing team must consider this growing demand for sales promotion and should accordingly make arrangements so that they remain in competition which is growing like a virus.
According to a survey conducted in India regarding importance of internet it was seen that usage of internet for product promotion as well as online purchase has increased tremendously.
2. Customer Base Widening:
Promotion is important for widening, maintaining and saving customer base which is a tangible form of profit figures. This activity becomes important because of the widening of market. All products are now sold all over the world with very advance logistics and transportation facilities.
Promotion is now done for not only profit maximization but for capturing major share in the market. For attracting more and more markets, for satisfying and creating demands for products.
Promotion has gained importance because number of prospective buyers have increased marginally and so this class of customers will be attracted towards those who have better promotional tactics.
Apple is one of the most popular brand in the world which only with the promotion created miracle.
Today, Product launching event of Apple is one of the most popular video and viewed on the YouTube by millions of people. Apple is the most trusted brand in world and it has become a leader in promotional techniques and persuasion and attracting customers without negotiation on prices.
Apple never offers discount on any product and in spite of that people are ready to buy apple product without asking for discounts and youth today is crazy about apple products and feel proud to own apple i- pod or i-phone. This is the effect of promotional and persuasion techniques.
3. Penetrating Cut Throat Competition:
Cut throat competition is an ill effect of modernization of business and globalization. It is an outcome of thirst for more and more profit and market share.
There is an excessive competition in every sector from agriculture to industrial with more or less degree.
With the introduction of new products every day in a market full of thousands of producers already selling same product.
In order to meet the competition, every producer has to persuade customer about their specialty of producing that particular product. Promotion is a direct as well as indirect instrument of attractive packaged inducement which strikes when iron is hot and for favorable decision. Customers are clever and know what to purchase, so producer must be clever to satisfy customers demand.
4. Only Tool Left in Times of Depression:
Depression comes with some inherent effects on economy which includes rise in inflation, low demand for luxurious items, high demand for basic necessities, unemployment, etc.
Depression is a best example of showing the importance of promotion in marketing management. In poor economic conditions, organization needs promotional activities in order to sustain low profitable situations. In times of lower sale and profits high promotion can bring stable results which are essential in times of this type of crisis, hence the significance of promotion. Cost involved in promotional activities are huge and are increasing day by day.
It is to be observed here that promotional expenditure must be strictly monitored and controlled because they contribute highest marketing expenses. All major corporate giants are making studies and research for controlling these costs and looking for new avenues which are cost effective and in spite of that, effective in bringing the results. Vodafone introduced animated zoo zoo characters in their advertisements which become massively successful and sale boosted marginally with this promotional technique which was comparatively cost effective and simple.
5. Attribute of the Face of Company:
If product is the heart of the company then the promotion mix is the face of company which displays the purity of the heart with simplicity and lucidity, which in turn creates stability and healthy growth.
Person sees face of other person and not heart hence if face is simple, attractive and persuasive then other person is attracted easily and with little efforts .Hence promotion is very important in marketing a product because it is the major factor in buyers decision. It attracts customers to doorstep of company.
Thus significance of promotion must be understood in this light of good outer relations, and must be applied in forming marketing policies.
Simple sign of ‘√’ is now responsible for millions of gross profit of NIKE Company; similarly one simple Tree of woodland is attracting customers all over the India.
This is important for study because how simple promotional techniques can become so effective in assisting sales and profits.
Promotion Mix – 6 Major Factors that Helps Marketing Manager in Deciding the Promotional Mix
There are various factors which are usually considered by the marketing manager in arriving at the promotional mix:
1. Stage of a Product Life Cycle:
The stage in the life cycle of the product is one of the determinants in deciding the promotional mix. The various stages in the product life cycle are- (i) innovation, (ii) growth, (iii) maturity, (iv) saturation, (v) decline and (vi) obsolescence. Every product passes through these stages. The marketing manager has to adopt different promotional mix in different stages.
At the first stage, all types of promotional efforts— advertising, publicity, sales promotion and public relations are necessary because these efforts are aimed at informing the target consumers of the presence of the product in the market. Substantial expenditures on advertising are vital to inform the public on the other hand, personal selling programme is also undertaken that aids in generating product acceptance among retailers, wholesalers, industrial and institutional buyers.
Sales promotion efforts are made during growth period in order to check the entry of competitors. During the maturity stage, heavy expenditure on advertising and personal selling are required to fight competitive situation and to maintain their share of market. During saturation and declining stages, the promotion expenditures are reduced to a great extent.
Only a minority of organisations attempt to prop up lagging product with high promotional advertising. Some use aggressive personal selling programme to further penetrate the specific market segments where demands or the product exist. In obsolescence stage, all promotional efforts are stopped and it is thought better to withdraw the product from the market or substitute the product with the new product.
(2) Type of Product:
The characteristics of a product may also dictate its natural audience. A non-differentiated product (detergents or soaps) may be promoted with psychological advertising. A product with hidden emotional qualities of suitings, clothing, etc., may be given a careful and subtle mass media promotion. The product is generally classified as consumer product or industrial product. The classification of product or service is an indicator of the most appropriate type of promotion mix that may be required.
(a) Consumer Goods:
Ordinarily, there are three types of consumer goods — convenience, shopping and speciality. Each one requires a separate type promotion. Convenience goods are those goods that are frequently purchased, are low in cost and are bought at most accessible retail outlet as soon as the need for the product is felt. This type of goods calls for emphasis on advertising and sales promotion efforts.
Such items have a large and geographically dispersed market, advertisement is the most suitable form of mass communication for people to react at large at the lowest cost per contact. Such convenience items which are sold on self-service basis, sales promotion techniques are the best promotional devices.
Products purchased after careful consideration of quality, price style and durability are classified as shopping goods. The product, in this case, has a high unit value and are not frequently purchased such as clothing and furniture. The marketer of shopping goods place more emphasis on personal selling because customer in purchasing such items require an advice from the salesmen and a comparison of goods with the other brands of the same product in the same store or in different stores. A good salesmanship will do the needful. However, advertising is also necessary just to inform the public of the existence of the product.
High unit value and infrequent purchase are also the characteristics of speciality goods, if it is a branded item, which the consumer has become convinced is superior to all competitive brands. Here, the marketer employs a combination of the three primary methods of promotion — advertising, personal selling and sales promotion.
Personal selling technique helps the marketer in maintaining the image of the product. Advertising also serves the same purpose and reminds the people to keep the product in mind. Sales promotion techniques maintain the image of the product and remind consumers, of the product.
(b) Industrial Goods:
Industrial goods are generally classified in five categories — raw materials, fabricating materials and parts, operating supplies, installations and accessory equipment. In general, all types of industrial goods require more emphasis than consumer goods on personal selling because these goods are purchased and sold in bulk and moreover, salesman offer advice and assistance at the time of supplying such goods and in the post- sales period.
A computer supplier, unhesitatingly, allow his salesmen to spend many hours with an account after the sale has been completed just to ensure that the equipment is operating properly and the account is using it in a proper manner.
Advertising and sales promotion are important elements of the promotion mix for some. Advertising is helpful for salesmen in convincing the prospect about the product and the organisation and its product line. Once the prospect has achieved familiarity about the product and product line of the organisation through advertisement, the salesperson finds it easy to get an appointment.
Some industrial seller use advertising to generate prestige. As far as sales promotion devices are concerned, the sellers of industrial goods use these devices not as extensively as the marketers of consumer goods. Some marketers of industrial goods rely heavily on displays in trade fairs, exhibitions and conventions. Some use price deals such as ‘Rupees off or ‘two for one’ or “buy two get five free” or ‘gifts’ offer to generate sales. Still others allow premiums and trading stamps to the buyers.
(3) Target of Promotion:
The use of promotion mix is also affected by the type of person, to which it is directed. Promotion may be directed at four different groups — wholesalers, retailers, industrial consumers and final consumers. The right choice of promotion blend for each group is different.
(a) Promotion to Wholesalers:
As wholesalers are less in number and more conscious to demand and cost, they respond to economic arguments. Any type of promotion which the producer intends to direct at retailers and final consumers will be sufficient promotion for wholesalers but they are more conscious about the personal selling representatives who cements the relationship between producer and wholesalers.
(b) Promotion to Retailers:
If number of retailers are less, the personal selling may be feasible to manufacturers and wholesalers.
In case the number of retailers are numerous the advertisings in trade magazine and newspapers are valuable. Sales promotion activities such as discount on sales or gifts on bulk purchases, etc., also play valuable roles in marketing the goods. If the product is consumer item of high value, the bulk of promotion efforts is to serve the retailers through sales personnel.
Personal selling will also be valuable where the product requires after-sales service or possesses some technical characteristics, because the salesperson may have to answer the retailer’s questions about the technical characteristics the promotion that will be directed towards final consumer, the retailer’s own part in selling the product, and important details concerning price, the marketers and promotional assistance.
In other words, promotion to retailer is mainly informative in nature which he passes on to consumers. The promotion to retailers must also be persuasive so that his interest in selling the product may not be lost. In most cases, personal selling is the main promotion efforts to retailers because marketing mixes may have to be adjusted drastically from one geographic territory to another to meet competitive situations and moreover it creates and maintains good channel relationship.
(c) Promotion to Industrial Consumers:
Industrial customers, being less numerous than final consumers have a justification for a promotion blend emphasising personal selling because the personal sales representatives may be more flexible in adjusting their company’s appeal to suit each customer. They supply the necessary information as desired by the customer. Although personal selling dominate the scene in industrial marketing, advertising is also used widely, mainly for economic reasons.
(d) Promotion to Final Consumers:
The large number of ultimate consumers practically force retailers, wholesalers and manufacturers to use the mass selling techniques in their promotion blends. So, advertising is preferred in most cases because it establishes brand preference to such an extent that little personal selling may be required. Sales promotion techniques are also used extensively. Self-service, discount, gift and novelties attest to this. Advertising may even be the way to supply the necessary information to those who are interested in seeking them.
(4) Size of Budget:
The amount allocated for the promotional efforts is an obvious limitation on the choice of promotional channels. If the budget is small, a firm cannot spend more on promotional activities because it cannot buy enough mass media advertising worth the count. If accounts are limited, the organisation can safely rely on personal selling and publicity, and can manage within its resources. But, on the other hand, if accounts are numerous the organisation will prefer advertising in local or regional newspapers, or it may use local radio or TV.
On the other hand, if size of budget is big enough, the organisation may use national newspapers, or TV and radio. It will be economical per contact but it will require lump sum amount which a small firm cannot afford. Some smaller manufacturers, out of necessity rather than choice, use personal selling as their major promotion method.
A salesperson may be employed for Rs. 5,000 p.m. or so plus expenses while the sponsoring of a single TV., broadcast may cost a sizeable amount of money. A small firm having small promotion budget may also use sales promotion, public relation and direct mail, over and above personal selling.
The size of promotion budget may have an impact on the composition of the promotion mix. Organisations with small budget may be forced to use promotion methods which are less effective because they are not in a position to afford heavy expenditure on other methods which are more effective such as advertising in national newspaper and national network on TV and radio which can be used only by the organisations that allocate a big amount for their promotional efforts.
Smaller organisations prefer personal selling and publicity. They pay commission to salesmen which is payable only when sales are affected. Sometimes family members invest their time in personal selling. Though personal selling is costly per contract than the advertising, yet it is used because the payment is not made in one lump sum.
Thus, size of budget leads the management to use the methods which would not be employed otherwise even though they are less effective.
(5) Push and Pull Strategy:
In deciding on ideal promotional mix, the key variable is the direction of influence in the distribution marketing channel. In some case, direction of influence is towards the middlemen whereas in some other cases, it is an end-user.
This characteristic of the variable is called push-pull strategies:
(a) Push Strategy:
In push strategy, generally used in industrial product marketing, products have a high unit value and need adjustment for consumer needs. It is aimed at the middlemen with the goal of getting them to aggressively promote the manufacturer’s brand to consumers. This strategy can favourably be used when consumers rely heavily on the advice of dealers for the product use.
Thus, specially stores often emphasise the push strategy with a lesser emphasis on advertising. In this strategy, personal selling is the favoured promotional channel. Dealers promote the product line aggressively for which they are granted high margins and an exclusive distribution territory.
(b) Pull Strategy:
A pull strategy, in its extreme form, emphasises the importance of mass communication. It is aimed at stimulating the end-consumer demand to a sufficient degree so that the consumer may ask retailers for the product and retailers are forced to stock the brand in order to please their customers. The retailer will ask the wholesaler to supply the brand demanded by the consumer and the wholesaler, naturally, will ask the manufacturer to supply. Thus, this strategy stresses on advertising in order to create a heavy demand of goods.
The promotional campaigns of most manufacturers are a blend of the two approaches. Deciding where to place the emphasis is not always easy; the choice of approach depends on the nature of the product and the buying habits of consumers. Push strategy is most effective where units value is high whereas pull strategy is suitable for products having low unit value and are meant for broad public distribution. In most cases, marketers use both strategies; but one is always emphasised.
(6) Organisational Philosophy:
The philosophy of the organisation too, affects the promotion mix. Thus, it is evident from the above discussion, that no promotion blend is suitable for all situations. Each mix should be developed as a pact of marketing mix. A blend of personal selling and advertising may be expected when a firm sells consumer and industrial goods, More emphasis on advertising should be on advertising promoting consumer goods and or personal selling for industrial goods.
Promotion Mix – Strengths and Weaknesses of Promotional Mix
The strengths and weaknesses of major promotional mix are discussed as follows:
1. Publicity/Public Relations – Has high credibility; can create goodwill; is low in cost; reaches many audiences, especially difficult-to-reach audiences.
2. Personal Selling – Flexible, Highly targeted, interactive and bidirectional, message and presentation can be customised and personalised, measurable, offers immediate feedback, takes the consumer closer to sales, effective in building relationships, suitable for certain product types and niche audiences.
3. Online Marketing – Is direct, low in cost, interactive and two-directional, personalised, up-to-date, targeted, less intrusive, and less commercial.
4. Advertising – Informs, persuades, reminds, and reinforces mass audiences about a product; builds brand identify.
5. Direct Marketing – Highly targeted, measurable, customisation and personalisation possible, suitable for certain product types, possibility for two-way communication and building long-term relationships.
6. Sales Promotion – Is relatively less expensive than advertising, leads to immediate results, has a direct impact on sales and is measurable, helps to clear excess inventory, helps to nullify competitive promotions, generates excitement, gets trade and salesforce support.
1. Publicity/Public Relations – Organisation has little control over what gets publicised, often has hidden costs, results are difficult to measure, does not have a direct impact on sales.
2. Personal Selling – Expensive, unsuitable for large audiences.
3. Online Marketing – Smaller audiences, unsuitable for non-savvy audiences, some forms like spam e-mails or pop-ups can be quite intrusive.
4. Advertising – Expensive, within a cluttered media with high noise level.
5. Direct Marketing – Expensive, not suitable for reaching large audiences.
6. Sales Promotion – Is gradually getting cluttered and expensive, has short-term results, makes consumers deal-prone, can erode brand equity and loyalty.