46259969 brand-promotion

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46259969 brand-promotion

  1. 1. Summer Internships 2013 PGDM 2012  Summer Internship Project Report  On “Brand Promotion” Undertaken at Prepared By: Ajay Jayaswal 12GM003 Company Guide Faculty Guide Mr. Tushar Sardana Bakshi Mrs. Priyadarshini (Regional marketing manager) 1
  2. 2. Declaration I Ajay jayaswal student of PGDM in the Academic year 2012-14 at IILM-AHL, Jaipur (Rajasthan) hereby declare that I have completed project titled “ Brand Promotion” of videocon In selected Areas of Jaipur as a part of the course requirement of PGDM of IILM-AHL, Jaipur. I further declare that the information presented in this project is true and original to the best of my knowledge. 2
  3. 3. ACKNOWLEDGEMENT I am grateful to “Mr. Tushar Sardana” whose encouragement, guidance and support from the initial to the final level enabled me to develop an understanding of the subject. I am highly thankful to my Faculty guide for giving me the encouragement and freedom to conduct my project. Lastly, I offer my regards to all of those who supported me in any respect during the completion of the project. Regards, Ajay Jayaswal 3
  4. 4. Preface This project report has been prepared as per the requirement of the syllabus of PGDM course structure under which the students are the required to undertake project. My job during the project was the “ Brand Promotion’’ of Videocon in selected Areas of Rajasthan”. It was a first experience for me as that I was exposed to the professional set-up and was facing the market, which was really a great experience. During project period, when business is involved, experiences counts a lot, as we know, experience are an instrument, which leads towards success. As we all know that working in market on the grass route level has always been a pleasure. Now I take this opportunity to present the project report and sincerely hope that it will be as much knowledge enhancing to the readers as it was to use during the fieldwork and the completion of the report. 4
  5. 5. TABLE OF CONTENT SNO 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. CONTENT OBJECTATIVE OF REPORT RESEARCH METHODOLOGY WHAT IS “BRAND”? A. CONCEPT B. HISTORY OF BRANDING C. TYPES OF BRANDIND D. PRODUCT VS BRAND E. SELECTION OF BRANDS BRAND STRATEGIES BRAND PROMOTION GUIDE WHAT IS “PROMOTION”? ADERTISING A. TYPES OF ADVERTISING B. ADV & CONSTITUTITIONAL RIGHT C. OPPOSITIONS D. FUTURE FINDINGS CONCLUSION 1. OBJECTIVE OF REPORT Objective of this report is to below:1- The cause & effect of branding. 5 PAGE NO 4 5 6 6 8 9 12 19 20 28 35 70 71 76 88 91 93 94
  6. 6. 2- Its impact on Consumer psyches 3- Impact on Brand Building 4- Steps taken by the all new company and brand. 5- Present method and strategy. 6- Time and case of brand promotion. 2. RESEARCH METHODOLOGY Hence we have evaluated Videocon & other companies. First we had gone through questionnaire which we supposed to ask to targeted respondents. 6
  7. 7. Then we had discussion over pros and cons of each segment of questionnaire so that no one should face problem while dealing with odd or unexpected response from respondent. We divided the target respondents by quota sampling technique. We gathered required data and scrutinised it well for its correctness and validity. Then we analysed the particular segments of questionnaire which were probing more towards decision of investment in to the Videocon. To add on to the client’s requirements we have also highlighted the areas where improvement is required in ITM and the vital areas which require more flow of financial resources towards them. . 3. WHAT IS BRAND BRAND:- A brand is a collection of experiences and associations connected with a service, a person or any other entity. Brands have become increasingly important components of culture and the economy, now being described as "cultural accessories and personal philosophies". surpassed. 7
  8. 8. "A company's brand is the primary source of its competitive advantage and a valuable strategic asset." "A company's brand is the primary source of its competitive advantage and a valuable strategic asset." differentiates from the rest.” A.CONCEPT Some people distinguish the psychological aspect of a brand from the experiential aspect. The experiential aspect consists of the sum of all points of contact with the brand and is known as the brand experience. The psychological aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of people and consists of all the information and expectations associated with a product or service. People engaged in branding seek to develop or align the expectations behind the brand experience (see also brand promise), creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. A brand is therefore one of the most valuable elements in an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace. The art of creating and maintaining a brand is called brand management. Careful brand management, supported by a cleverly crafted advertising campaign, can be highly successful in convincing consumers to pay remarkably high prices for products which are inherently extremely cheap to make. This concept, known as creating value, essentially consists of manipulating the projected image of the product so that that the consumer sees the product as being worth the amount that the advertiser wants him/her to see, rather than a more logical valuation that comprises an aggregate of the cost of raw materials, plus the cost of manufacture, plus the cost of distribution. Modern value-creation branding-and-advertising campaigns are highly successful at inducing consumers to pay, for example, 50 dollars for a T-shirt that cost a mere 50 cents to make, or 5 dollars for a box of breakfast cereal that contains a few cents' worth of wheat. A brand which is widely known in the marketplace acquires brand recognition. When brand recognition builds up to a point where a brand enjoys a critical mass of positive sentiment in the marketplace, it is said to have achieved brand franchise. One goal in brand recognition is the identification of a brand without the name of the company present. For example, Disney has been successful at 8
  9. 9. branding with their particular script font (originally created for Walt Disney's "signature" logo), which it used in the logo for go.com. Consumers may look on branding as an important value added aspect of products or services, as it often serves to denote a certain attractive quality or characteristic (see also brand promise). From the perspective of brand owners, branded products or services also command higher prices. Where two products resemble each other, but one of the products has no associated branding (such as a generic, storebranded product), people may often select the more expensive branded product on the basis of the quality of the brand or the reputation of the brand owner. Brand name:The brand name is often used interchangeably within "brand", although it is more correctly used to specifically denote written or spoken linguistic elements of any product. In this context a "brand name" constitutes a type of trademark, if the brand name exclusively identifies the brand owner as the commercial source of products or services. A brand owner may seek to protect proprietary rights in relation to a brand name through trademark registration. Advertising spokespersons have also become part of some brands, for example: Mr. Whipple of Charmin toilet tissue and Tony the Tiger of Kellogg's. Brand identity:How the brand owner wants the consumer to perceive the brand - and by extension the branded company, organization, product or service. The brand owner will seek to bridge the gap between the brand image and the brand identity. [2] Brand identity is fundamental to consumer recognition and symbolizes the brand's differentiation from competitors. Branding approaches/Company name:Often, especially in the industrial sector, it is just the company's name which is promoted (leading to one of the most powerful statements of "branding"; the saying, before the company's downgrading, "No one ever got fired for buying IBM"). In this case a very strong brand name (or company name) is made the vehicle for a range of products (for example, Mercedes-Benz or Black & Decker) or even a range of subsidiary brands (such as Cadbury Dairy Milk, Cadbury Flake or Cadbury Fingers in the United States). B.HISTORY OF BRANDING 9
  10. 10. Although connected with the history of trademarks and including earlier examples which could be deemed "protobrands" (such as the marketing puns of the "Vesuvinum" wine jars found at Pompeii), brands in the field of massmarketing originated in the 19th century with the advent of packaged goods. Industrialization moved the production of many household items, such as soap, from local communities to centralized factories. When shipping their items, the factories would literally brand their logo or insignia on the barrels used, extending the meaning of "brand" to that of trademark. Bass & Company, the British brewery, claims their red triangle brand was the world's first trademark. Lyle’s Golden Syrup makes a similar claim, having been named as Britain’s oldest brand, with its green and gold packaging having remained almost unchanged since 1885. Cattle were branded long before this; the term "maverick", originally meaning an unbranded calf, comes from Texas rancher Samuel Augustus Maverick who, following the American Civil War, decided that since all other cattle were branded, his would be identified by having no markings at all. Factories established during the Industrial Revolution, generating mass-produced goods and needed to sell their products to a wider market, to a customer base familiar only with local goods. It quickly became apparent that a generic package of soap had difficulty competing with familiar, local products. The packaged goods manufacturers needed to convince the market that the public could place just as much trust in the non-local product. Campbell soup, Coca-Cola, Juicy Fruit gum, Aunt Jemima, and Quaker Oats were among the first products to be 'branded', in an effort to increase the consumer's familiarity with their products. Many brands of that era, such as Uncle Ben's rice and Kellogg's breakfast cereal furnish illustrations of the problem. Around 1900, James Walter Thompson published a house ad explaining trademark advertising. This was an early commercial explanation of what we now know as branding. Companies soon adopted slogans, mascots, and jingles which began to appear on radio and early television. By the 1940s, manufacturers began to recognize the way in which consumers were developing relationships with their brands in a social/psychological/anthropological sense. From there, manufacturers quickly learned to build their brand's identity and personality (see brand identity and brand personality), such as youthfulness, fun or luxury. This began the practice we now know as "branding" today, where the consumers buy "the brand" instead of the product. This trend continued to the 1980s, and is now quantified in concepts such as brand value and brand equity. Naomi Klein has described this development as "brand equity mania". In 1988, 10
  11. 11. for example, Philip Morris purchased Kraft for six times what the company was worth on paper; it was felt that what they really purchased was its brand name. Marlboro Friday: April 2, 1993 - marked by some as the death of the brand [1] - the day Philip Morris declared that they were to cut the price of Marlboro cigarettes by 20%, in order to compete with bargain cigarettes. Marlboro cigarettes were notorious at the time for their heavy advertising campaigns, and well-nuanced brand image. In response to the announcement Wall street stocks nose-dived for a large number of 'branded' companies: Heinz, Coca Cola, Quaker Oats, PepsiCo. Many thought the event signalled the beginning of a trend towards "brand blindness" (Klein 13), questioning the power of "brand value". C.TYPES OF BRANDING Individual branding:Main article: Individual branding Each brand has a separate name (such as Seven-Up or Nivea Sun (Beiersdorf)), which may even compete against other brands from the same company (for example, Persil, Omo, Surf and Lynx are all owned by Unilever). Attitude branding:Attitude branding is the choice to represent a larger feeling, which is not necessarily connected with the product or consumption of the product at all. Marketing labeled as attitude branding include that of Nike, Starbucks, The Body Shop, Safeway, and Apple Computer.[1] In the 2000 book, No Logo, attitude branding is described by Naomi Klein as a "fetish strategy". "A great brand raises the bar -- it adds a greater sense of purpose to the experience, whether it's the challenge to do your best in sports and fitness, or the affirmation that the cup of coffee you're drinking really matters." - Howard Schultz (president, ceo and chairman of Starbucks). "No-brand" branding:Recently a number of companies have successfully pursued "No-Brand" strategies, examples include the Japanese company Muji, which means "No label" in English (from 無印良品 --- "Mujirushi Ryohin" --- literally, "No brand quality goods") . Although there is a distinct Muji brand, Muji products are not branded. This no-brand strategy means that little is spent on advertisement or classical marketing and Muji's success is attributed to the word-of-mouth, a simple shopping experience and the anti-brand movement. Another brand which is 11
  12. 12. thought to follow a no-brand strategy is American Apparel, which like Muji, does not brand its products. Derived brands:In this case the supplier of a key component, used by a number of suppliers of the end-product, may wish to guarantee its own position by promoting that component as a brand in its own right. The most frequently quoted example is Intel, which secures its position in the PC market with the slogan "Intel Inside". Brand extension:The existing strong brand name can be used as a vehicle for new or modified products; for example, many fashion and designer companies extended brands into fragrances, shoes and accessories, home textile, home decor, luggage, (sun-) glasses, furniture, hotels, etc. Mars extended its brand to ice cream, Caterpillar to shoes and watches, Michelin to a restaurant guide, Adidas and Puma to personal hygiene. Dunlop extended its brand from tires to other rubber products such as shoes, golf balls, tennis racquets and adhesives. There is a difference between brand extension and line extension. When CocaCola launched "Diet Coke" and "Cherry Coke" they stayed within the originating product category: non-alcoholic carbonated beverages. Procter & Gamble (P&G) did likewise extending its strong lines (such as Fairy Soap) into neighboring products (Fairy Liquid and Fairy Automatic) within the same category, dish washing detergents. Multi-brands:Alternatively, in a market that is fragmented amongst a number of brands a supplier can choose deliberately to launch totally new brands in apparent competition with its own existing strong brand (and often with identical product characteristics); simply to soak up some of the share of the market which will in any case go to minor brands. The rationale is that having 3 out of 12 brands in such a market will give a greater overall share than having 1 out of 10 (even if much of the share of these new brands is taken from the existing one). In its most extreme manifestation, a supplier pioneering a new market which it believes will be particularly attractive may choose immediately to launch a second brand in competition with its first, in order to pre-empt others entering the market. Individual brand names naturally allow greater flexibility by permitting a variety of different products, of differing quality, to be sold without confusing the 12
  13. 13. consumer's perception of what business the company is in or diluting higher quality products. Once again, Procter & Gamble is a leading exponent of this philosophy, running as many as ten detergent brands in the US market. This also increases the total number of "facings" it receives on supermarket shelves. Sara Lee, on the other hand, uses it to keep the very different parts of the business separate — from Sara Lee cakes through Kiwi polishes to L’eggs pantyhose. In the hotel business, Marriott uses the name Fairfield Inns for its budget chain (and Ramada uses Roadway for its own cheaper hotels). Cannibalization is a particular problem of a "multiband" approach, in which the new brand takes business away from an established one which the organization also owns. This may be acceptable (indeed to be expected) if there is a net gain overall. Alternatively, it may be the price the organization is willing to pay for shifting its position in the market; the new product being one stage in this process. D. Product vs Brand • A product is made in a factory… A Brand is bought by the customer. • A Product can be copied… A brand is unique. A product is quickly outdated…Abrand is timeless Brands differentiate Products • Fairness Creams: Fair & Lovely vs Ponds Dream Fairness • Coconut Hair Oil: Parachute vs Dabur Vatika • Cola: Coca Cola vs Pepsi • ATM : HDFC vs HDFC 13
  14. 14. 14
  15. 15. 4. BRAND STRATEGIES To Fuel the Brand Engine • Strategy 1:- Extension- Giving birth to new product brands • Strategy 2 :- Revitalization- Injecting life to the existing brand Brand Revitalization Strategy:Injecting life to same brand, energizing a mature brand Need to inject life into the Mature Brand “Facelift” … Recharging the Brand Batteries Brand Decisions: Leveraging Brand Identity • Brand Extension Strategy • Brand Revitalization / “Restage” • Brand Identity: What does a Brand mean / stand for • Brand Extension: What would you like (enjoy, love, admire) the brand to do for you. • Brand Revitalization: How would you like to see the Brand tomorrow (Future Expectations). • Brand System / Architecture: What are the important Relations that the Brand has 15
  16. 16. Brand Extension Strategy:Brand Growth – Mature brand : provide fillip to stagnating sales – Threat of new entrants: Protect Market Share – Strengthen franchise • Enhance Brand Image – Strengthen Brand Identity – Revive core values Ways in which a Brand can be Extended 1. Line Extension 2. Brand Extension 3. Multiple Brands 4. New Brands 1.Line Extension Strategy • Extend existing brand name to existing product category: Identify & occupy different segments of the market – “market fragmentation” – Pack variants: shampoos: sachets to economy packs…tubes to jars, bottles to cans : differentiate uses – Price variants: Rin Shakti to Rin Supreme. Taj Luxury to Taj Executive: differentiate user groups… Parachute Uttam (differentiate Line Extension Strategy). 2. Brand Extension Strategy • Flavours / Variants: Diet Coke, Sunsilk Black, Parachute Lite…. Hair type, skin type, user groups: Differentiate user needs … Colgate Gel, MaggiChinese Noodles • Ingredient Lead: Lux Sunscreen, Pond’s Talc with SAM : upgrade user needs Brand Extension Strategy • Extend the brand name to a new Product Category: Brand fit in a new business area – Supplementary Categories: BPL TV to Washing machines, Maggi soups & sauces, Lakme lipsticks to perfumes – Complementary Categories: Colgate toothbrush & toothpaste – Image Accessories: Bennetton T-shirts to sun-glasses, Nike sports shoes to Tshirts – Diverse Categories: Similar core values: Britannia biscuits to dairy products 3.Multiple Extension Strategy 16
  17. 17. • New Brand names in the same product category “market saturation” • Expensive strategy: Leading corporates… often through acquisitions… economies of scale – HLL soaps- Lux, Breeze, Kai, Hamam,Lifebuoy, Dove, Pears – P&G Detergents: Ariel, Tide – Coca Cola: Coca Cola, Thums Up… – Lakme: Elle 18, Orchids 4.New Brand Strategy • New Brand Name for a product category: poor brand fit but business potential – Kotex to Kleenex – Huggies to Depend – Thums Up to Gold Spot, Pepsi to Mirinda – Lakme to Elle 18 Stretching the Brand Vertically Understanding the terms: • Vertical stretch: Technically a Line extension since it is the introduction of Price Variants of an existing Brand in the existing Product Class • Stretching Up: Extending the Brand to a Higher Priced Segment Eg: From Surf detergent 500g at Rs 43 to Surf Excel detergent 500g at Rs 60 • Stretching Down: Extending the brand to a Lower Priced Segment Eg: From Ariel Washing Powder to Ariel Gain Washing Powde 6. BRAND PROMOTION GUIDE Building a strong business using the Internet is a challenge. E-commerce can yield tremendous returns, and may prove more cost-effective than traditional ways of doing business. The number of people using the Internet continues to grow, providing an attractive growth opportunity for e-commerce. This means that the Internet will be important for businesses in the foreseeable future. However, there is a growing list of companies which have learned the hard way that they have to build their ebusiness on a sound platform. Traditional marketing techniques remain valid. Developing and maintaining the e-business solutions to communicate with people online, whether via a PC, mobile phone or even a fridge, is an expensive investment in technology and marketing. It has to create a return. A business web site has to work effectively. The right people need to see it. It has to sell. And it has to give reasons for users to come back. This simple 10 Steps guide is designed to help you in planning and marketing your web site to achieve your e-business objectives. 17
  18. 18. Step 1. What are your objectives for the site? What is its purpose? 'To be seen to be there' or 'because my competitor is there' are really no longer viable justifications for being on the 'Net! There are four clear stages of web development that can be identified: - promotional tool - an interactive, online brochure - sales tool - customers can place orders via the site - process improvement - integration with other parts of the business - new business model - integrate customer care, relationship management, distributor management You need to consider where you are in terms of development and therefore which of the following purposes are in your short and medium term plans: - providing information - giving a preview of products or services - selling products or services online - delivering sales online (e.g. software, data etc.) - reaching new markets (e.g. by segment, geographically) - reducing customer servicing and distribution costs - managing customer relationships - building customer lifetime value - generating revenue though advertising (e.g. portals) and to add your specific objectives. Step 2. Assess your online marketing mix Can you put together the right 'marketing mix' or commercial package to meet the needs of your target audience and your own objectives? Products Be sure that your products or services are suitable for selling online. How complicated is the purchase decision? What does the buyer need to know? As ecommerce grows, it is becoming increasingly common to buy books, travel, CDs, and groceries online - even to manage all one's personal finances. But ever more unusual consumer products are starting to be sold successfully via the 'Net, as well as quite complex business products and services. As penetration of the Internet increases and users become more sophisticated, what are their expectations likely to be for you to sell online? Should you sell your core product range or a different level of service and a different type of product? Pricing 18
  19. 19. There are increasing customer expectations that online goods will be cheaper. What impact will reducing prices have on your business? Do you actually want to cannibalise offline sales? What will be the overall impact on your margins of selling online? Will it cut your costs? What impact on distribution costs? Distribution Fulfillment is key here. An online sale is effectively a direct sale, and you need to be sure that you have all the systems and capabilities in place to process the order, deliver efficiently and deal directly with customers. Promotion The e-business needs customer-pull to generate sales, as there is no intermediary to do it for you. Can you afford to rely on search engines and telling your customers you have a site? Do you have the budget to build an appropriate campaign to drive people to your site in the competitive world of the Internet? More of this in step nine. Service Unfortunately not all sales go through smoothly. There are sometimes problems. Buyers often need more information or reassurance before they buy. Some products, like investments, can't even be fully transacted over the Web yet. What customer service issues might you face? And what media will you set up to handle customers? As the Internet is still less favoured by consumers for obtaining information than the use of telephone, post or face to face, will you need desk staff, and or a call centre? Step 3. Define your online customers Consider who you want to talk to through your web site. Your online audience may differ from that addressed by your current business. Will you use your web site to target new customer groups - e.g. in other countries not served by your existing business? How can you use the web to grow business with your existing customers through relationship management? Talking to them more directly than before, can you find ways to offer further opportunities for them to buy and build their lifetime value with 19
  20. 20. you? What information can you collect to ensure that these opportunities are really well targeted? Step 4. Plan the project implementation Like most projects, the time invested in planning a web site - from the start or when redeveloping - will pay dividends. You need to plan each phase of the process, and note that it may take longer than you think! Do you know what you want to achieve at each stage of the project? Do you know exactly what you need to communicate through the site? What back end systems and integration will you need to be able to deliver all that is promised on the site? You'll need to brief this clearly to your suppliers (internal or external) to ensure they create a workable solution for you. They can then develop a site map, design concepts and functional specifications. Copy can then be written, as the last activity. Step 5. Select the team Internally, your e-commerce team would ideally have a range of skills, including marketing, and IT. The project manager needs to be a hybrid, with ideally some marketing knowledge, a feel for design and an understanding of IT speak – such people are in high demand! Most businesses then look outside for specialist suppliers. Use experienced consultancies for the planning, design, development, programming and ongoing management of your site. The newness and excitement of the Internet has drawn in many different types of company who all offer web site design services. Graphic designers will focus on the design of web pages; IT companies on database integration and linking your computer systems. Marketing expertise in the Internet world is less easy to find, with a few companies such as Zed-Axis available to provide it. Which of these skills are you likely to need to give you the best chance of success on the Web? Step 6. Scope and design the site When designing the site the user interface is key - if this doesn't work well don't think that you will sell much or keep people on the site. It is essential to think about: ?? Branding - is it consistent with offline/printed materials? Is it prominent through the site? ?? Flexibility - does the design lend itself effectively to all requirements, e.g. product/service sampling, enquiries, purchasing? ?? Navigation - is the navigation bar really clear? Is it consistent? Is everything accessible within three mouse clicks? 20
  21. 21. ?? Images - are there colorful, relevant graphics and images? Can these be used in a way that doesn't negatively impact download times? ?? Animation - is it appropriate? Can it be done in a way that does not drastically slow download? ?? Interactivity - can you involve the visitor in the site? Can you gather useful information without deterring the customer? Can you provide reasons to return to the site? Step 7. Bring in the back end If you are using your site to sell online, then just as with a retail outlet, you may well have goods that need to be stored, processed, packaged, and delivered. If your goods are 'soft', you'll need online fulfillment facilities. Have you got the right systems in at the back end? Including secure payment facilities and customer databases? Step 8. Integrate the IT systems Your web site needs to run, or be 'hosted', on a dedicated server to deliver pages to web browsers. You may choose to invest in this technology in-house and run the site yourself, or outsource to a specialist supplier. Do you need to transfer information from your site into other systems? In most cases the answer is likely to be yes. Although the smallest business may be able to do this manually, it is best achieved through electronic links. Have you planned this? Are links to legacy systems going to cause you any problems? Step 9. Promote, promote, promote! A site with no promotion is like a poster in a rural shop window - only the locals see it. But you don't always have to spend millions. A well-constructed, well targeted plan will start to drive people to your site. You'll need a well-rounded plan. It's no longer enough to rely on trying to get listed on a few search engines - it's a very busy world out there. So, you'll need a well balanced mix of promotions to get ahead of the competition, including: Offline ?? Public relations - media, sponsorship, events ?? Advertising - press, poster, radio, TV ?? Direct marketing - direct mail, door to door, direct response TV Online 21
  22. 22. ?? Banner advertising ?? Email marketing ?? Affiliate links to other sites ?? Directories and portals ?? Search engines Step 10. Monitor and evaluate Make sure that you have software linked to your site to monitor its performance. The ever-changing world of the 'Net means you can't be complacent. Make sure you can identify monthly and weekly trends in: ?? 'hits' on the site and on specific pages, from individual users. ?? time spent on the site (to measure its 'stickiness') ?? click-throughs to ads and links · where traffic is coming from. Also, do you have 'contact us' and feedback options on the site? What other measures are important to you and anyone advertising on your site? To stay ahead on the 'Net you need to constantly evaluate and update your site and proposition - don't get complacent as there is always someone else out there who will happily supply your customers. Other issues International matters When planning a site that you want to work internationally, some of the issues to consider include: Design If your operations in different countries wish to promote their own local business individually, ensure you have design guidelines to ensure consistent branding and design to promote the business in a coordinated way. Languages Consider making the site available in local languages as well as the 'international language' of English. Regulations Be aware of regulations in each country in which you wish to actively sell your services. Areas to consider include data protection, advertising and promotion. Pricing If you are quoting local prices, be aware that visitors will look for consistency across your individual country sites. Domain names The regulations for setting up a web site vary. In some countries you have to prove that you have a bona fide business before you can register a domain name. In other countries, you do not have to offer any proof of identity. Find out the local situation early. 22
  23. 23. Budgets The cost of web site development varies, depending on the size of the site, its complexity, and the software used. It is advisable to get several competitive quotes before commencing the implementation. Prior to launch, you will need to budget for consultancy, design, copywriting, programming, and domain name registration. Other costs may include online promotion and payment services. Although many services appear to be free, you will probably find that these are just taster services. You need to pay in order to get what you want for your online business. There are ongoing costs of hosting and managing your site. You must also budget for continual maintenance and updating of the site. Your target audience will expect that your content is reviewed and updated frequently. Glossary Bandwidth - the capacity of a telecommunications link. Correctly speaking, it measures the range of frequencies which can be conveyed on a channel and is measured in Megahertz or Kilohertz (MHz or KHz). The term is often used interchangeably with the speed of the link, which is measured in Kilobits per second (Kbits/s) or Megabits per second (Mbits/s). Banner advertisement - a form of advertising using a strip across the top of a web page. Usually, the banner is linked to the advertiser's site. Cache - the part of a computer's memory that temporarily stores web pages that you have downloaded. Having the pages in the cache means you can read them again without re-connecting. Clickthrough - an expression for measuring the success of a banner advertisement.When a visitor to a web page clicks on a banner, and goes through to the advertiser's site, it is termed a 'clickthrough'. Cookie - a piece of computer code that is placed onto your computer when you visit a website. It helps the site owner track if you return to the site. Extranet - a privately-owned Internet-type network that is used by a company to communicate with its suppliers or customers. Gateway page - a technical device used to direct search engine traffic to a web site. GIF - a graphics file format, used for digital images. Hit - a popular expression for a user visiting a web page. However, the expression is problematic for recording web user activity. When a user visits a web page, any file which is opened on that page will be recorded as a 'hit'. This means that if a page has lots of image files, it will be recorded as several 'hits'. 23
  24. 24. HTML - hypertext mark-up language. A computer language developed specially to facilitate the display of graphics and text pages on the Internet. Before HTML, all you could do was read basic text. Http: - hypertext transfer protocol. A system used by computers on the Internet to transfer the web pages. Internet - a public network of computers, based on the Internet protocol. Originally developed by the US military in the late 1970s. The most used functions today are the World Wide Web and email and newsgroups. Internet Protocol (IP) - an agreed industry standard set of rules for carrying data over computer networks. IP address - a unique numeric code which is allocated to every server attached to the Internet, for the purposes of identifying that server. ISP - Internet Service Provider. A company that provides you access to the Internet. Intranet - a privately-owned Internet-type network which is used exclusively by the employees of a company for internal communications. Java - a programming language developed by Sun Microsystems. It provides web programmers with more flexibility than HTML, especially to create more interactive features on the site. Keyword - a word used by search engines to index web pages. Metatag- a piece of HTML software code on a web page that contains information readable only to computers and not viewed by visitors to the page. Page impression - an expression used to measure activity on a web site. Each time a visitor clicks on a page, it is recorded as one 'impression'. Unlike 'hits', it doesn'tmatter if the page is made up of multiple files. Search engine - a computer program that literally crawls through the World Wide Web to find new pages. It indexes the pages under keywords so that people can easily retrieve them. World Wide Web - a collection of information on the Internet, which is written in HTML and is easily accessible to the public. 24
  25. 25. 6. WHAT IS “PROMOTION” Promotion is tool with which public will be informed about the availability of a particular product or service and the uses of such product. Production decides the increase in demand for a product; promotion will make the prospective buyers to know about the want, satisfying characteristics of the product, its price and place of availability. This term includes advertisement, personal selling sales promotion and other selling tools which are increasing the sales volume. DEFINITION OF PROMOTION The nature and role promotions and their function in the marketing of packaged goods are defined below. These definitions apply universally in the marketing sense irrespective of accounting practice of marketing technology within particular companies. They define promotions in the broadest possible sense. IN SUMMARY AN IMPORTANT MARKETING FORCE AN EXTRA INCENTIVE PROMOTION IS AN IMPORTANT MARKETING FORCE THE PROVIDES AN EXTRA INCENTIVE (USUALLY SHORT TERM IN NATURE) FOR CONSUMERS, THE TRADE. THE SALES FORCE AND OTHER INFLUENTIAL GROUPS PROMOTION IS ONE OF THREE MAJOR ACTIVITIES IN THE MARKETING OF PACKAGED GOODS Promotion ranks with advertising and field selling effort as one of the major activities that can be utilized in the marketing of packaged goods. PROMOTION IS A SPECIAL INCENTIVE Promotion is an extra incentive over and above (1) the product’s inherent qualities, (2) its established price, (3) 25
  26. 26. BROAD OR SPECIALIZED IMPACT IMMEDIATE OR LONG-RANGE CHARACTER its advertising and (4) its field selling efforts. PROMOTION IS DIRECTED NOT ONLY TO CONSUMERS OR THE TRADE, BUT ALSO ON OCCASION TO THE SALES FORCE AND OTHER INFLUENTIAL GROUPS Promotion, in its broadest sense, provides extra incentives for any group that is an important factor in the marketing of a brand. Although it is most often directed to the consumer or to the trade, it may also be directed to the sales force, or to other influential groups (such as doctors, home economists or appliance manufacturers) … or to all of them at one. Promotion covers a wide field. PROMOTION IS BOTH A SHORT-RANGE AND A LONG-RANGE ACTIVITY Usually promotion is short-term in nature. On occasion, however, it can be a long-term activity (as in the case of a continuing in-pack premium operations). FET BASIC TYPES PROMOTION IS LIMITED TO RELATIVELY FET BASIC ENTRES Although promotion covers a wide field and seems to offer endless variety, almost all promotional activity is a variation on one or more of a few basic types. An understanding of what promotion is and what it does starts with a knowledge of these basic types. A check list of basic promotion types is provided in Appendix 1. II. THE ROLE AND MECHANICS OF PROMOTION Promotions are an extremely valuable tool for the marketing of packaged goods brands. Like all other tools, promotions can make a valuable contribution to marketing when they are properly used. Of course, they are capable of misuse as well by unskilled and inexperienced hands. The doubts about promotions and their misuse can be guarded against by clear understanding of its proper function and mechanics in the context of the full range of marketing activities and situations. 26
  27. 27. PROMOTIONS THE FUNCTION OF PROMOTION IS TO FUNCTION ACCELERATE ACTION STATED BY OTHER MARKETING ACTIVITIES Promotion acts as a catalyst to accelerate action, primarily on the part of the consumer, the trade or the sales force. It supplements, but is not a substitute for, advertising and selling efforts. BOTH PROMOTION WORKS Its function is to speed up or trigger the action that: (1) advertising has persuaded the consumer she should take … )2) the salesman has persuaded the retailer he should take … or (3) the sales manager has exhorted the salesman to take. Promotion’s function is to act as a catalyst that triggers action on the part of those who are favourably predisposed – largely because of previous advertising and selling efforts – to act. PROMOTION ACCELERATES ACTION BY CHANGING THE PRICE – VALUE RELATIONSHIP OF THE BRAND Every product has an established value in the minds of the consumer, the trade or the sales force. This is what the consumer or the retailer or the salesmen is normally willing to expend (in money or effort) for what he gets, or thinks be gets, when he buys (or sells) the product. Promotion changes this price-value relationship to the point where the individual is stimulated to take a desired action. It does this in most cases either by lowering the price or by increasing the value of the product, or both. BOTH PROMOTION Where the product or its advertising or its selling efforts have failed to establish any worthwhile value, promotion is unlikely to be successful because promotion seldom if ever, provides basic lasting values by itself. PROMOTION IS A VERY GOOD METHOD – BUT NOT THE ONLY METHOD – OF CHANGING THE 27
  28. 28. COMPARES WITH OTHER MARKETING ACTIVITIES PRICE-VALUE RELATIONSHIP A product improvement can increase the real or imagined value of a brand – at least until competition duplicates the improvement. An attractive, convenient, image-reinforcing package can increase a brand’s value to the consumer or trade. A price reduction can change the price-value relationship – but in a way that can quickly be matched by competition. Effective selling efforts (effective distribution, pricing, display, etc.) can improve the price-value relationship – not only to the trade, but to the consumer as well. Yet the number of salesmen is limited end they call infrequently on most stores. Improved advertising is one of the best ways to increase the value of a brand. A better advertising copy story – or possibly better media coverage and frequency – can give a brand an advantage that competitive brands cannot easily duplicate. For advertising persuades by implanting ideas in the mind – and what is put into the consumer’s mind is the key to her action in the market place. And the consumer’s action in the market place is, in turn, the key to the value the trade puts on the brand. No other marketing endeavor works so effectively o the consumer’s mind - and thus indirectly on the retailer’s mind - as advertising. Promotion – provided it supplements all these other marketing activities – can quickly accelerate action by providing meaningful, readily visible (but temporary) change in the price-value relationship. Without a backleg of other value-building marketing support, however, promotion is not likely to be effective long term. 28
  29. 29. Used properly, promotion can be an effective method of temporarily changing the price-value relationship and thus accelerating desired action by consumers, the trade, the sales force, and other influential groups. WHEN TO USE THE NEED FOR PROMOTION VARIES. IT IS PROMOTION GREATEST THEN: 1. A BRAND’S QUALITY IS INFERIOR TO COMPETITION; OR 2. A BRAND’S ADVERTISING IS NOT AS PRESUASIVE AS COMPETITIVE COPY; OR 3. A NEW BRAND IS BEING INTRODUCED There is no known formula for determining what percentage of a brand’s marketing expenditures should be devoted to promotion. It depends on the situation. But there are some guide lines. Generally, promotion is most needed when a significant number of consumers (or retailers) are not convinced that a brand’s value in relation to competition is high enough to warrant its price. This usually occurs (1) when an established brand is inferior to competitive brands in quality, appearance or results, or 92) when the brand’s advertising copy – completely apart from the media expenditures behind it – is not as effective as competitive copy in persuading the consumer to buy the brand, or (3) when a new brand is in the process of establishing its basic value through its initial advertising and through increasing consumer trial or the product – trial which promotion can accelerate. Obviously there are many degrees of need for promotion, and in actual practice even a healthy brand needs a certain amount of promotion in its marketing mix. But, long term, the more the product’s quality and its advertising persuasiveness fail to meet competition, the greater is the 29
  30. 30. need for promotion to improve the brand’s price-value relationship. Therefore, (except short term in new-product introductions) a high ratio of promotion to advertising generally indicates that work needs to be done to improve the brand’s quality and/or its advertising copy. PROMOTION’S AT EACH STAGE IN A BRAND’S LIFE CYCLE A ROLE IN THE DIFFERENT DEGREE OF PROMOTINAL EMPHASIS LIFE CYCLE OF IS REQUIRED. A BRAND In a competitive market a brand generally follows a well defined life cycle, each stage of which requires different promotional treatment. New Product A new product can usually profit from substantial promotion support – if the product, the advertising, distribution and price are right … i.e. equal to competition in most respects and superior in some respects. Here is where promotion can truly perform its function of accelerating trial and purchase of a brand whose value has not yet been fully established in the minds of all consumers. Although good advertising on a new brand will persuade many consumers to try the brand, it is not likely to persuade every logical prospect to take immediate action. Those that advertising does not quickly move to action require an extra incentive, such as a free sample or coupon or some other devide that increases the value of the brand, or lowers its price, to the point where the prospect decides to buy it. If the product is of good quality, promotion thus helps to establish its value ore quickly in the minds of more people. There are indications, incidentally, that many new brands (but not all) reach their share-of-market peak within six months to a year after the completion of their introduction. This leads to the conclusion that a brand of proven product 30
  31. 31. and advertising copy superiority would be well advised to meet maximum trial during the introductory period by spending heavily in the advertising media and on the promotional devices that are most effective in reaching the brand’s best longterm prospective consumers. Investment at the highest practicable level in offective advertising and promotion during the introductory stage, therefore – by quickly achieving a high franchise level – can establish a business that is less vulnerable to competition and that returns higher level of profit in the following years. Growing Brand An established, growing brand generally requires minimal promotion support, usually of a selective nature. The product and its advertising are still equal to or better than competition. A high proportion of potential customers have tried the brand and many have become more or less regular users. Stable Brand In such a healthy situation, the job that promotion has to do usually is much narrower and more specialized. It can be sued for sch specific purposes as improving distribution on large sizes, attracting new users from fringe groups or areas where usage levels are below potential, or increasing the consumption among present users. Total promotion expenditures, however, can be cut back to levels that generate optimum profits – so long as the brand continues to represent superior value for the price. A mature, stable brand may need increased promotional support as competition begins to match it in product quality and in the persuasiveness of its advertising copy, or as the brand reaches its natural franchise level. When this happens, growth ceases, sales and share level off. Although the market appears to be in a state of equilibrium, there is seething turmoil under the surface. Consumers are switching to competitive brands – but are balanced by those switching away from competitors. In this dynamic market increased promotional effort can 31
  32. 32. provide the improved price-value relationships needed to hold onto present customer and to attract new users to replace those lost to competition. But here also is the time for efforts to be redoubled to develop an improved product, a better package, a new and more persuasive advertising story, better distribution or a new use or market. Promotion can delay the day of reckoning and give time for such work … but it cannot prevent the inevitable Declining Brand decline that will occur without an improved product and better advertising to re-establish the basic value of the brand. A declining brand may need much heavier promotion support as it becomes old and out-dated by new or improved competitive brands. Efforts to improve the brand’s quality and its advertising copy to equal competition may have been unsuccessful. Increasing the advertising appropriation may not help – and may, in fact, merely reduce profits. Yet the old successful brand has a strong base of loyal users – or potential users – because of past product quality and memorable advertising … a substantial reservoir of good will, an established value in the consumer’s mind. True, the value may be lower that it used to be before competitive brands made inroads, but it is there and it still is substantial. Under these conditions, promotion can temporarily maintain brand sales by building on the established good will. It can increase the value of the brand, or lower its price, to the point where the reservoir of potential consumers is persuaded to buy the brand. Unfortunately, unless improvements are made in the product and the advertising – and unless the advertising is maintained – heavy emphasis on promotion at this stage seems to erode the brand’s basic values, so that ever larger discounts and heavier promotions are required to maintain sales volume. Ultimately, advertising may be discontinued and a decision 32
  33. 33. made to “milk” the brand by relying solely on promotion to brake the decline. The decision to “milk” a brand through promotion, however, must not be taken prematurely. Brands that were once strong can retain remarkable vitality under the survace. They may have a more firmly established value and longer life than is realized. Abandoning efforts to improve the product and the advertising while switching to heavy promotion may serve only to erode more quickly the established values of the brand. This in turn hastens its eventual demise and the loss of profits which the brand has generated. The decision to switch almost completely to promotion is one that should not be taken lightly. In Summary, it appears that there is no magic formula to tell the marketing man what promotion of his funds should be spend on promotion. But there is a general life-cycle that most brands in a competitive market follow. And this life-cycle greatly influences promotion activity, as needs change for improving the price-value relationship … needs that are satisfied in many cases most practically by promotion. III. 11 PRINCIPLES OF EFFECTIVE PROMOTIONS Basic Principles that Are crucial to Successful Promotion Projects (Regardless of Promotion Type, Product, Country or Time It is to be noted that there are general principles that seem to be common to successful packaged-goods promotions. These principles relate to individual promotions and describe inherent qualities of the promotion; they do not cover techniques of planning or administration or execution. (Such points are covered later in the report.) It has been observed that an effective promotion adheres, in the greatest possible degree, to the following 11 basic principles: 1 IT DOES NOT ATTEMPT TO ACCOMPLISH GOALS 33
  34. 34. THAT ADVERTISING OR SALESMANSHIP CAN ACCOMPLISH BETTER 2 3 4 The promotion is directed towards specific objectives that promotion properly can achieve. It is not used to perform functions that are best performed by advertising or a good salesman. It is not offered simply because of whim or habit or desire for a change. It is aimed at specifically-defined goals that promotion realistically can be expected to achieve better than any other marketing endeavour. IT EMPLOYS THE SPECIFIC TYPE OF PROMOTION THAT MOST CLOSELY FITS THE CONDITIONS AND THE GOAL Every basic type of promotion has certain fundamental strengths and limitations. Some are better fitted to one task than another; some cost more than others. Some attract new users at the expense of immediate sales to present users, or vice versa. Successful promotions employ the type of promotion that – on the basis of past record and logical analysis – offers the best chance of achieving the desired goals under existing conditions. IT IS AIMED PRIMARILY AT THE CONSUMER – BUT AT THE SAME TIME IT OFFERS POSITIVE INCENTIVES TO THE TRADE, SALES FORCE OR OTHER INFLUENTIAL GROUPS. The consumer is the key to packaged goods marketing success. Strong consumer demand is one of the best incentives that can be offered to the trade to stock, display or feature a brand. Promotion to the trade or to the sales force without ensuring that consumers will take the goods out of the store is likely to be inefficient and ineffective. This does not mean that trade promotions should be used properly. The most successful promotions have consumer appeal built into them. IT IS CONSISTENT WITH PRESENT – OR POTENTIAL – BEHAVIOR PATTERNS OF THE GROUPS 34
  35. 35. INVOLVED 5 It does not require them to do something that is completely foreign to their practice (unless there is strong evidence to suggest that predisposition to change these practices already exists). Unless conditions are right and unless the incentive to action is adequate, consumers will not buy sizes or quantities they don’t usually use or need … nor will the trade buy merchandise they can’t sell or deals that require involved administrative procedures. Successful promotions build on existing – or latent – behavior patterns. IT USES EMOTIONAL, AS WELL AS RATIONAL, APPEALS TO SELF-INTEREST The successful promotion appeals strongly to the selfinterest of the consumer (or the trade, or other target group). It frequently does this on the emotional, as well as the rational, level. While the rational appeal of a reduced price can be very effective, cut prices or conetary rewards are not the only incentives that move people to buy. Equally effective – or even more effective – is the addition of extra value to a brand. Frequently an added-value promotion not only provides longer-lasting benefits than reducing the price, but also is much more difficult for competition to duplicate. The added value may be extrinsic, or tangible (as in the case of a premium or reusable container) …. Or it may be intrinsic, or intangible – even emotional. Here, especially, is where ideas become so important to the success of a promotion. For ideas evoke actions which can enhance a brand’s prestige and quality, its reputation for service and surety of results – its image and its value. A great opportunity also exists for adding ideas and emotional qualities even to cut price or other so called rational promotions – ideas such as creatively tying in with 35
  36. 36. news of a product improvement or a new package; dramatizing a new advertising claims; supplying spring house-cleaning hints or Christmas dinner service suggestions. Ideas such as linking an intriguing name or a plausible reason with what would otherwise be a prosaic price-off pack. 6 7 Successful promotions employ both emotional and rational approaches in appealing to the self-interest of the groups the brand is trying to move to action. IT SETS ITSELF APART FROM OTHER PROMOTIONS BY UNIQUENESS, VARIETY AND CREATIVE IMAGINATION Promotions may be successful because no other brands in the category are using promotions, or because the promoted brand may be the first or only brand to use a particular type of promotion or an intriguing variety of promotions. But more likely, success is due to creative, imaginative thinking in the conception and execution of the promotion – creativity in the basic idea or the reason for the promotion, in the name given to it, in the prizes or premiums offered, in the little, intriguing differences that excite imagination and arouse enthusiasm at all levels. Creative thinking is just as important in promotion as it is in advertising, field selling and product development. IT HAS ATTENTION-VALUE, URGENCY AND ACTION BUILT INTO IT An effective promotion is arresting and cannot be ignored. It is concentrated within a limited time period and is limited in quantity. It features a sense of urgency, an incentive to action. It is not something that the consumer or the trade or the sales force can put off doing until later. Generally, the more immediate the reward, the greater the effectiveness of the promotion. A successful promotion is an infrequentlyoffered incentive of limited duration and quantity that demands action now. 36
  37. 37. 8 IT HAS SUFFICIENT IMPACT TO ACHIEVE ITS STATED OBJECTIVE, BUT DOES NOT WASTE MONEY A promotion that is too weak to accomplish what it sets out to do is a waste of money. An effective promotion has sufficient impact at every level to achieve its goals. The incentive is adequate to trigger the desired action. Deal quantities realistically meet the trade’s obvious minimum requirements. But, on the other hand, an effective promotion does not give away more than is necessary. The amount of money spent on a promotion, or the size of the incentive that is offered, is not necessarily a measure of its effectiveness. A 20-cent coupon usually does not get twice as many new triers as a 10-cent coupon. Doubling the deal quantity may do nothing more than reduce brand profits. A good on-pack premium may attract more potentially loyal consumers than a priceoff pack costing 50% more. Adding a trade display allowance to a strong consumer promotion may result in only a few more displays than would have been obtained anyway. 9 10 A brand with an established value may need a smaller priceoff concession than a brand of lesser value or poorer image. A good promotion is strong enough to do the job, but does not waste money. IT IS CLEAR, SIMPLE AND EASY TO UNDERSTAND AND EXECUTE The consumer refuses to be confused. If the promotion is complicated, she will ignore it. So will the trade. And so will the sales force. The most successful promotions are simple in concept, clear in presentation, easy to operate. There is little opportunity for things to go wrong. IT IS HONEST, BELIEVABLE AND REPRESENTS GOOD VALUE AND QUALITY 37
  38. 38. 11 It is straight forward and honest in presenting the terms of the promotion offer and in describing the incentive. Prizes and premiums are not misrepresented in terms of value or quality. It avoids trickery or subterfuge or gimmickry that the consumer or trade is quick to spot and which diminishes believability and brand loyalty. IT IS CONSISTENT WITH THE BRAND IMAGE A good promotion can enhance brand image. But many promotions actually conflict with the image that the product, its package, its advertising, its positioning have carefully developed. By appealing to the wrong type of consumers, some promotions not only waste money but actually drive the brand’s best prospects away. Good promotions are consistent with the brand image. IV. 7 ESSENTIAL ELEMENTS IN AN ORGANIZED, DISCIPLINED APPROACH TO AN EFFECTIVE PROMOTIONAL PROGRAM It has been observed that successful promotions don’t “just happen.” They not only incorporate the 11 basic principles previously cutlined, but are also the result of careful planning and organization. Successful promotions require the existence of certain essential conditions and the application of an organized, disciplined approach and follow-up to all promotion activities. The conditions and disciplines that are essential to long-term brand and company success follow: 1 A SIGNIFICANT VALUE MUST HAVE BEEN ESTABLISED FOR THE BRAND BEFORE PROMOTION CAN BE EFFECTIVE A reduced price on an unwanted brand does not make the brand more wanted. A significant value for the brand must exist in the minds of consumers (or others) before promotion can be effective. (In the case of a new product this value 38
  39. 39. sometimes is created almost simultaneously with the offer of the promotion – usually through media advertising, the advertising massage accompanying the sample or coupon, or even through broad consumer awareness of the product class.) The establishment of brand value relies on many things, of which the following two are most important: Good Product Persuasive Advertising The product must be good. The better the product is in relation to competitive brands, the more effective promotion will be in attracting and holding new triers … and at the same time the less will be the need for continuing and heavy use of promotion beyond the introductory period. On the other hand, the more the brand fails to meet competitive product quality, the greater must be the reliance placed on promotion to compensate for diminished value. In order for promotion to be truly effective in accelerating long-term growth and profits, a good product is essential. The advertising must be persuasive. Even a good product will not be successful unless consumers (and everyone else) believe that the brand offers the advantages (i.e. value) provided by no other brand. Implanting this idea in the consumer’s mind is the function of advertising. If advertising does this job well, promotion can effectively provide added incentives to accelerate purchase and trial. If advertising performs this job poorly, promotion must make much more drastic changes in the brand’s price-value relationship. Good advertising copy and the effective use of media, therefore, are prerequisities for effective promotion. Some brands seem at first glance to be exceptions to these conditions. Take, for example the older brand with no product superiority which has abandoned advertising completely in favor of promotion … and which is building its share of market in spite of this. Does not this cast doubt on the validity of these conclusions? The answer is “No”. For it is clear that the brand’s past advertising and product quality 39
  40. 40. 2 have effectively created a scund value concept as the base upon which promotion builds … at least until such time as the brand’s value begins to decrease in the minds of a shrinking group of consumers. Promotion cannot be effective unless a significant value has been established for the brand. PROMOTION MUST BE PART OF AN OVER-ALL PLAN Since promotion has already been found to be an important element of marketing that supplements advertising and filed selling and is interrelated with every from of marketing activity on a brand, it seems clear that consideration of promotion must be included in every overall marketing plan. It cannot be treated as an afterthought, nor can it be ignored. It must be included in every brand’s and every company’s marketing planning, rimarily in the following two ways: Marketing Strategy All promotion planning must stem from and be part of the brand’s marketing strategy. The marketing strategy (which must be a written, working document) defines the brand’s long-range marketing objectives, the brand concept and reason for being, and the basic strategy by which it hopes to achieve these objectives throughout the years. It is based upon an intensive, organized study of the consumer, the market, the product and the competition. The marketing strategy also defines in general terms the role of each marketing element (i.e. advertising, promotion, sales effort, etc.) in achieving the brand’s marketing objectives and provides broad guidelines as to the relative proportion of marketing funds that will be put against each element – particularly the relationship of promotion to advertising effect – under defined conditions or during various stages of marketing development. It is the basic long-range planning document for the brand and (while it must be kept up to date) the basic strategy should be changed infrequently. Annual Marketing Plan Promotion activities must be planned and budgeted on an annual basis. They must be part of the brand’s annual 40
  41. 41. marketing plan. The annual plan is (1) a statement of brand objectives, strategies and tactical plans for all marketing activities during the coming year, and (2) a financial forecast that translates these plans into sales, expenses and profits. Failure to include realistic plans and expenditures for promotions means that when a decision is suddenly made to use promotion, advertising or other marketing activities must be cut to provide promotional funds. This in turn makes it impossible 91) to forecast profits accurately, and (2) to coordinate promotion with other marketing activities. 3 Objectives Annual Program An annual brand marketing plan, therefore, must include objectives, strategy and plans for promotion as well as for advertising, field sales effort, product development, etc. the annual plan must also (1) be consistant with the brand’s longrange marketing strategy, and (2) provide a reasonable degree of flexibility when periodic reviews show that importantlychanged conditions dictate changes in plans. Promotion, like advertising and field selling efforts, must be planned on an annual basis and coordinated with other marketing activities on the brand. EVERY BRAND MUST HAVE A WRITTEN STATEMENT OF PROMOTION OBJECTIVES AND STRATEGY The promotion strategy statement is one of the major elements of the brand’s annual marketing plan. It fundamental purpose is to establish guidelines and principles that are most likely to ensure promotion success for the brand. It does this by translating the eleven principles of effectives promotions ………. Into basic policy decisions applying more specifically to the brand involved. The promotion strategy statement should cover five major points (each to the extent applicable) Broad objectives – What the brand’s promotion program is espected to accomplish. (See Promotion Principle No.1) 41
  42. 42. Program Principles Kinds of promotion that will be used (or not used) – The relative reliance that will be placed on cutting price vs. adding value to the brand in order to achieve these objectives; the approsimate proportion of annual promotion effort that will be directed against the consumer vs. the trade or other groups. The specific types of promotion, therefore, that will generally be used (or not used) by the brand. (See Promotion Principles Nos. 2, 3, 5, and 11). Policies relating to the annual program – The frequency, duration and number of promotions to be offered; the times of year or types of areas in which promotions will be concentrated or in which no promotions will be run; the relative emphasis (in broad terms), if any, that will be placed on promoting specific package sizeds; provision of funds, and Guidelines For broad policies to be followed, to meet specified types of Promotion competitive conditions that may arise. (See Promotion Development Principles Nos. 2, 4, 7 and 8) Supporting Reasons Guidelines relating to individual promotions – Limitations, ranges or standards to assist in establishing pack quantities, price discounts, types and values of premiums, coupon values, etc.; the degree and nature of advertising coordination or support, if any, that is deemed essential for certain type of promotions or conditions; the nature of tie-in promotions that will be used and the standards established for the selection of products and brands as tie-in partners; etc. (See Promotion Principles Nos. 4 through 11) Reasons – Why these strategic decisions a and guidelines are believed to be the ost effective and efficient way to achieve the brand’s promotion – and overall marketing – objectives, based on analysis of results of prior efforts and appraisal of current conditions. The promotion strategy a statement tell what the brand will do in promotion, but not how to do it. It is a long-term statement of principle and policy that provides guidance to all concerned. It is changed only when the product manager and 42
  43. 43. 4 his management agree that new conditions or new knowledge dictate a change in basic strategy. Once the strategy has been agreed upon, all promotional activities on the brand must conform to it. A WRITTEN TACTICAL PLAN MUST BE PREPARED FOR EACH INDIVIDUAL PROMOTION COMPRISING THE YEAR’S PROMOTIONAL PROGRAM – AND MUST DEFINE THE SPECIFIC NUMERICAL OBJECTIVES OF THAT PROMOTION The promotion strategy statement, as just described, establishes general promotion objectives for the brand’s promotion program and tells what the brand will do (in terms or principle and policy) to achieve these objectives. A tactical promotion plan, on the other hand, tells how the brand will execute an individual promotion that is part of the progress, translating the strategy into specific terms for that promotion, and establishing numerical goals against which each promotion’s accomplishment can be measured. Details of Plan and Time The tactical promotion plan also gives full details of the plan, Table the quantities, the cost, the timing, the specific areas covered, the responsibilities of sales, Manufacturing and other groups involved. It must include a time table showing the time required for each preparatory step and establishing realistic target dates. Where possible, the tactical promotion plan should also past experience, research or other facts to support the reasonableness of the stated objectives, anticipated Plans To consumer and trade reaction, and costs. Evaluate Results Finally, the tactical promotion plan should describe the basis for evaluating the promotion afterit has run, and should indicate what special measurements must be set up in advance for this purpose. The tactical promotion plan, in summery, serves (1) as a tool to sharpen planning, (2) as a device to communicate plans, coordinate operations and control the execution and cost of 43
  44. 44. Outline And Summary Included in Annual Plan 5 the promotion, and (3) as the basis for measuring how successful and efficient the promotion, as run, actually was in relation to anticipated goals and costs. A separate tactical plan is prepared for each promotion in the brand’s program. A consolidated outline and summery of the individual promotions planned for the year’s promotion program is included in the brand’s annual marketing plan to show how the strategy will be carried out and to provide a finance breakdown and summery of the total annual promotion budget. This consolidated summary include information on the timing, nature, scope and cost of each promotion planned for the year (or it set up reserves and indicates preliminary plans for these promotions for which final plans have not been established.) the detailed tactical plan sheets for each promotion, however, usually are not included in the annual plan, since the consolidated outline and summary provides the essential information for management purposes. A written tactical plan for each promotion is an essential element in the effective use of promotions. EFFECTIVE COMMUNICATION, COORDINATION AND CONTROL MUST BE ESTABLISHED TO ENSURE THE SUCCESSFUL EXCUTION OF PROMOTION PLANS In almost no other marketing activity do so many different groups of people become involved as in promotion. It requires the assistance of manufacturing, warehousing, transportation, sales, accounting, purchasing and legal groups – in addition to promotion specialization, sales, accounting, purchasing and legal groups – in addition to promotion specialists, creative people, advertising agencies and brand marketing management. Careful and articulate communication of objectives and plans is essential. So is the effective scheduling and coordination of their activities. And so is the establishment of controls to ensure that the promotion works in practices as it was planned in theory. A good plan can be vitiated, for example, by salesmen who 44
  45. 45. don’t understand its purpose, or who authorize payment of trade allowances for services not actually performed as specified; or by failure of the plant to ship deal packs on specified dates. Delays and mistakes cost money – such of it hidden – that may seriously reduce brand and company profits. Every promotion must, of course inform to legal and ethical standards. But the interpretation of law often is unclear … some times even personal and capricious. Lack of understanding and enthusiasm by legal advisors can result in routine legal opinions that deny to a brand a form of promotion that a more aggressive competitor may kind a way to carry out, within legal restrictions, with only minor change. A lawyer who is clearly told the purpose and the concept of a promotion can frequently make constructive legal, conceptual and operational suggestions of great value. 8 The successful execution of sound promotion plans requires persistent attention to detail effective communication, contagious enthusiasm, disciplined coordination and tight control. FACTUAL KNOWLEDGE ABOUT PROMOTION MUST BE DEVELOPED AND ASSEMBLED THOUGH A PROGRAM OF PROMOTION TESTING, ANALYSIS, EVALUATION, RESEARCH AND MEASUREMENT It costs as much to run a bad promotion as a good one, perhaps even more. The best way to eliminate bad promotion is to build each promotion plan on a solid foundation of knowledge. Unfortunately, too little is known about promotion and the way it works. There are few experts or authorities with a broad knowledge of promotion principles and with objective experience in the things that mean better results for less money. And the information that is known is usually not 45
  46. 46. Pre-Testing made available to others facing the same problem … or else it is ignored. Analyzing Pre-Testing – Every important unknown element of a given promotion should be pre-tested if the risk of failure is greater than the risk of delay or breach of security. In addition, a general program of testing alternative promotions, or lowercost variations, or premium items or contest prizes must be established to build a backlog of proven devices that can be utilized when conditions do not permit full-scale pre-testing. Evaluating Analysis of past records – Frequently a study of past records on the same or other brands suggests how promotions can be improved or prevents a brand from repeating a bad mistake. But analysis is impossible unless records are kept and unless they are interpreted and conclusions are drawn by a qualified person. Faulty memory, superficial study and minister pretation are dangers that must be eliminated. Evaluation of results – Every promotion should be evaluated after it has been used to determine whether it did, in fact, achieve its objectives within the budgeted cost. If it did, how could it have been improved? If it did not, conclusions should be drawn – with complete objectivity – as to why it failed to perform as planned. The evaluation should be in writing and should be made available to others within the company as a means of increasing their knowledge. Such a program of evaluation depends on two essentials: The objectives of the promotion must be clearly defined and stated in measurable terms (i.e. “to obtain offshelf displays of at least five cases each in 15% of the Class A stores”, or “to build retail inventories from a 3-week supply to a 5-week supply,” or “to raise the usage level from 7% to 10%). Agreement must be reached in advance regarding what will be measured and arrangements must be made before the promotion runs to obtain the necessary measurement and 46
  47. 47. Developing fundamental Knowledge To Replace Unproved Assumptions information needed for the evaluation. After the promotion has ended it is too late to set up research or to ask for special reports or to make personal observations. Developing insights about how promotion works through coordinated methods and special research – Every promotion plan is based on a combination of fact and unproved assumption. Some of these assumptions are of basic importance. If they are incorrect the plan will fail. Hence it is vital to confirm or disprove such assumptions as the following: … “New triers obtained by a price-off valuable to a brand as those obtained by a coupon (or by a sample).” … “New triers usually buy the small size and “trade up” to larger sizes if they are satisfied.” … “Misredemption of a magazine coupon follows the same pattern as for a mail coupon”. … “The real value of a sendaway offer lies in the number who buy the product but forget to send in the box top.” In order to prove or disprove such broad assumptions as these – assumptions which are important to every brand and company – three steps are necessary: All promotion tests and evaluations – on all brands must be designed not only to answer the questions of immediate interest ot the specific brand but also to permit deeper analysis and insights into the fundamental behavior of people and the basic ways in which promotion works standard methods of testing and evaluating brand promotions may be needed to permit brand-to-brand comparisons. Special research may have to be undertaken – probably underwritten by several brands or an entire company – to determine the validity of some of the most important basic 47
  48. 48. assumptions about promotion. It is likely that such validation will not come from normal brand testing and research, but will have to be obtained through planned corporate projects of major importance. Research techniques must be improved and developed which will provide the basic knowledge that each brand needs to define the right marketing and promotion objectives, rather than objectives that are assumed to be right. Establishing the right objective for a brand requires that basic knowledge abuut consumer needs, usage habits and attitudes and about consumer profiles and brand images be available. In summary, something more than ad-ccc testing and evaluation of specific promotions is required. A special effort must be made to develop deeper knowledge of the fundamentals of promotion and marketing – knowledge that can be applied to all brands in all countries, knowledge that can replace the many unproved assumptions on which most objectives and most promotion plans are now based. Assembling And Circulating All Promotion Assembling, analyzing and interesting this knowledge – What Knowledge one brand learns can be of great value to another brand. A piece of information about one type of promotion may provide insights on how another type works. Basic research, while it may have little application to a given brand’s immediate problems, has vital implications for every brand’s long-range marketing program. A way must be provided to assemble all available promotion information and knowledge, t analyze and interpret it, and to develop fundamental insights and uncover basic principles. Then a way must be provided to make this knowledge available to every product manager, to every promotion specialist, to every echelon of management so that it can be applied to current marketing operations. The mounting cost of promotion and the high risk of failure demand that knowledge be developed as rapidly as possible. 48
  49. 49. It also demands that this knowledge be assembled and made available in valid and actionable from to all involved in promotion. 7 SPECIALISED, PROFESSIONAL SKILL AND KNOWLEDGE MUST BE BROUGHT TO EVERY PROMOTION OPERATION The planning, execution and evaluation of promotion is a highly skilled task that require specialized knowledge and professional ability. It is not something to be turned over to the newest trainee. Product Manager Primary Many groups are involved in promotion planning and Responsibility operation, including both sales and advertising departments. It seems clear, however, that primary responsibility for all promotion activity on a brand must lie with the individual responsible for formulating the brand marketing mix and for Professional profit contributions. In most companies this is the product Assistance manager. Required But it is also clear that the product managere requires the same sort of professional help in promotion that the advertising agency (and company staff experts) provide in advertising Just as no product manager is expected to be an expert in copy, media, advertising production and advertising research (although he may well be very capable in some), so no product manager should be expected to be an expert in promotion theory, promotion research and analysis, promotion development, promotion execution and promotion Advertising evaluation. The job is too complex, too specialized – it Agency requires too much knowledge beyond the product manager’s Limitations have the time or the opportunity or the inclination to develop. A Staff Advertising agencies have at times been suggested as a possible source of this professional assistance in promotion. Undoubtedly they can be of great help in the development of promotion ideas. But their help in preparing and executing detailed plans is likely to be limited. It is doubtful, therefore, 49
  50. 50. Promotion Group Is essential that any agency can contribute in the promotional field in the same way that it contributes in advertising. This means that there is a real need for a central staff promotion group within every company where promotion is employed. The form of organisation will very with each situation. A large company may need a complete department staffed with broadly-experienced managers and with specialists in such activities as couponing, contests, premiums, trade promotions, promotion research, evaluation, etc. in a small company the promotion specialist may well be one person who may also have other responsibilities. The point is that there must be a central, iniesnient staff group – responsible to top management – to supply specialized knowledge and reccive annual and ato ….. company-wide and basic projects. This staff promotion group can also pending specialized services such as preparing display material; or setting up managements with mailing beauses; or developing, testing and buying premiums; or assisting in pretests and evaluations. There must be someone within the company to whom both the product manager and management can turn for professional assistance in promotion as they turn to the advertising agency for help in advertising. Successful promotion under today’s conditions requires that specialized, professional skill and knowledge be brought to bear on every phase of promotion planning, execution and evaluation. APPENDIX CHECK LIST OF BASIC PROMOTION TYPES In convenitnece, the most important types of promotions have been typed 50
  51. 51. under broad headings, even though it may be misleading in the cased to do so. For example, a trade allowance that is passed …100% to consumers in the form of a special reduced price might be classified as a consumer promotion. Likewise, a coupon distributed only to present users of a brand might not be used as sampling device”. Inspite of these drawbacks, the following check list of basic promotion types if furnished with the hope that it will illustrate the promotion is: CONSUMER PROMOTION PROMOTIONS IN WHICH THE MAJOR EFFORT IS AIMED INITIALLY AT CONSUMER A Sampling Devices 1. Sampling (distribution of free special or regular size package to consumers) House to house By mail In or on packages of same brand or other brands F…. inserts Other 2.Couponing (distribution of certificates with a stated monetary or merchandize value which the consumer redeems through a retailer towards the purchase of the specified item House to house By mail In or on packages (same brand or different brand) In media advertisements Other 3. Demonstrations ( An illustration or demonstration of how a product is prepared and/or used, frequently involving consumer tasting of food products and usually involving the presence of a home economist or other trained representative. In Store 51
  52. 52. B. Pack Promotions Fairs, exhibits, etc. 1. Reduced-revenue packs (usually at factory, but also may be banded in stores) Price off ½ price sale “Two for…..” sale Bonus packs (larger quantity at same price) 2. Premium packs C. Other Consumer Promotions: In or on-pack premium free or self-liquidating, or partially liquidating ( Premium may be a sample of another brand) May also include separate premiums distributed in stores, but not actually attached to package). 1. Refund offers (Cash, check or coupon given consumer for proof of purchase…usually by mail) 2. contests or competitions (puzzles, games, estimates, or competitions involving skill for prizes or rewards of various types) 3. Sweepstakes-type drawings (No skill or proof of purchase required) 4. Sendaway (or mail-in) premiums Free or liquidating (usually with proof of purchase) Label saving plans 5. Display promotions, Receipe or service or “idea” display promotions (alone or tied in with other items) 6. Other miscellaneous consumer promotions, such as trading stamps, out-of-pack premiums, etc. TRADE 52
  53. 53. PROMOTIONS A. Trade Allowances PROMOTIONS IN WHICH THE MAJOR EFFORT IS AIMED INITIALLY AT THE TRADE (DISTRIBUTORS, WHOLESAILERS, RETAILERS OR THEIR SALESMEN) Allowances Payments to the trade usually for a specific purpose and for a specified time. Payment may be in the form of cash or credit. There are several types, including: Count and recount allowance Customer stocks counted at beginning and end of period (plus purchases) to give net movement out of stock; allowance paid on net movement. Advertising and/or display or merchandising Allowance Allowance paid for performance of specified activity, such as featuring in dealer’s advertising, display, reduced price, or offer of extra trading stamps, etc. Introductory allowance Payment during introductory period to obtain distribution Buying allowance B. Trade Reduced Revenue Promotion Payment made without stipulation as to service required in return. Reduced Revenue offers A reduction in the regular price to the trade without requiring that such reductions be passed along to the consumer or that my specified action be performed. The 53
  54. 54. distinction between this promotion and a buying allowance is small. Generally, however, the reduced revenue promotion takes the following forms. C. Other Trade Promotions. One package free with purchase of 11 (assuming cases are packed 12’ s) Baker’s dozen deal (13 for the price of 12) One case of one size free with purchase of specified number cases of another size. 1. Trade Premiums (A gift to the organization or to individuals, frequently upon the purchse of specified quantities or selections. May include permanent display racks, or dual-use display pieces, such as a plastic boat). 2. Redemption of retailer certificates packed in each case of merchandise. 3. Trade contests, competitions or Prizes 4. Trade Sampling Distribution of free product samples to dealers and distributors (usually for personal use). 5. Other miscellaneous trade incentives (Pushmoney for retailer’s salesmen; billing; etc.) Some forms – such as delayed billing dates or opportunities to SALES FORCE buy in advance of an announced price increase – are INCENTIVE frequently classified as other than promotions, but actually PROMOTIONS might be considered as promotional devices. Salesmen’s Inventives PROMOTIONS IN … THE MAJOR EFFORT IS AIMED INITALLY AT THE SALES FORCE 54
  55. 55. 1. Sales contests Prizes for best or target performances by salesmen 2. Salesmen’s premiums Merchandize awards for achievement of established sales or pint-value goals, frequently from premium catalogues. INCENTIVES FOR OTHER SPECIALIZED GROUPS A. Professional Promotions 3. Salesmen’s cash bonus plans These are usually classified as selling expense or compensation, but ma be considered a special form or promotion. PROMOTIONS IN WHICH THE MAJOR EFFORTS IS AIMED INITALLY AT GETTING THE COOPERATION OF OTHER SPECIALIZED GROUPS Offering of samples, premiums, service material, special literature, and other incentives to professional people in order to inform that of product advantages in their fields and so encourage them to use and/or recommend the brand in their contacts with consumers and/or other influential groups. Such professional include: B. Appliance Manuracturer Promotions Doctors Dentists Nurses Teachers Home Economists Hair Dressers Etc. Incentive programs designed to encourage equipment and appliance manufacturers or dealers to recommend the brand in their instruction books and service literature and/or enclose samples, coupons or brand service materials with their equipment and appliances. (Examples: washing 55
  56. 56. machine manufacturers, dishwasher manufacturers, electric mixer or frying pan manufacturers, retail appliances stores, etc.) Promotions may include: Sampling Couponing Free service material Display material Merchandising allowances Advertising cooperation and support Technical assistance 7. ADVERTISING Advertising is a form of communication that typically attempts to persuade potential customers to purchase or to consume more of a particular brand of product or service. “While now central to the contemporary global economy and the reproduction of global production networks, it is only quite recently that advertising has been more than a marginal influence on patterns of sales and production. The formation of modern advertising was intimately bound up with the emergence of new forms of monopoly capitalism around the end of the 19th and beginning of the 20th century as one element in corporate strategies to create, organize and where possible control markets, especially for mass produced consumer goods. Mass production necessitated mass consumption, and this in turn required a certain homogenization of consumer tastes for final products. At its limit, this involved seeking to create ‘world cultural convergence’, to 56
  57. 57. homogenize consumer tastes and engineer a ‘convergence of lifestyle, culture and behaviors among consumer segments across the world’.” Many advertisements are designed to generate increased consumption of those products and services through the creation and reinvention of the "brand image" . For these purposes, advertisements sometimes embed their persuasive message with factual information. Every major medium is used to deliver these messages, including television, radio, cinema, magazines, newspapers, video games, the Internet, carrier bags and billboards. Advertising is often placed by an advertising agency on behalf of a company or other organization.[citation needed] Organizations that frequently spend large sums of money on advertising that sells what is not, strictly speaking, a product or service include political parties, interest groups, religious organizations, and military recruiters. Non-profit organizations are not typical advertising clients, and may rely on free modes of persuasion, such as public service announcements.[citation needed] Money spent on advertising has increased dramatically in recent years. In 2007, spending on advertising has been estimated at over $150 billion in the United States and $385 billion worldwide, and the latter to exceed $450 billion by 2010. While advertising can be seen as necessary for economic growth, it is not without social costs. Unsolicited Commercial Email and other forms of spam have become so prevalent as to have become a major nuisance to users of these services, as well as being a financial burden on internet service providers. Advertising is increasingly invading public spaces, such as schools, which some critics argue is a form of child exploitation. A. Types of advertising:1. Media Commercial advertising media can include wall paintings, billboards, street furniture components, printed flyers and rack cards, radio, cinema and television adverts, web banners, mobile telephone screens, shopping carts, web popups, skywriting, bus stop benches, human billboards, magazines, newspapers, town criers, sides of buses, banners attached to or sides of airplanes ("logojets"), inflight advertisements on seatback tray tables or overhead storage bins, taxicab 57
  58. 58. doors, roof mounts and passenger screens, musical stage shows, subway platforms and trains, elastic bands on disposable diapers, stickers on apples in supermarkets, shopping cart handles (grabertising), the opening section of streaming audio and video, posters, and the backs of event tickets and supermarket receipts. Any place an "identified" sponsor pays to deliver their message through a medium is advertising. One way to measure advertising effectiveness is known as Ad Tracking. This advertising research methodology measures shifts in target market perceptions about the brand and product or service. These shifts in perception are plotted against the consumers’ levels of exposure to the company’s advertisements and promotions. The purpose of Ad Tracking is generally to provide a measure of the combined effect of the media weight or spending level, the effectiveness of the media buy or targeting, and the quality of the advertising executions or creative. 2. Covert advertising Covert advertising is when a product or brand is embedded in entertainment and media. For example, in a film, the main character can use an item or other of a definite brand, as in the movie Minority Report, where Tom Cruise's character John Anderton owns a phone with the Nokia logo clearly written in the top corner, or his watch engraved with the Bulgari logo. Another example of advertising in film is in I, Robot, where main character played by Will Smith mentions his Converse shoes several times, calling them "classics," because the film is set far in the future. I, Robot and Spaceballs also showcase futuristic cars with the Audi and Mercedes-Benz logos clearly displayed on the front of the vehicles. Cadillac chose to advertise in the movie The Matrix Reloaded, which as a result contained many scenes in which Cadillac cars were used. Similarly, product placement for Omega Watches, Ford, VAIO, BMW and Aston Martin cars are featured in recent James Bond films, most notably Casino Royale. Bladerunner includes some of the most obvious product placement; the whole film stops to show a coca cola billboard. 3. Television commercials The TV commercial is generally considered the most effective mass-market advertising format, as is reflected by the high prices TV networks charge for commercial airtime during popular TV events. The annual Super Bowl football 58
  59. 59. game in the United States is known as the most prominent advertising event on television. The average cost of a single thirty-second TV spot during this game has reached $3 million (as of 2009). The majority of television commercials feature a song or jingle that listeners soon relate to the product. Virtual advertisements may be inserted into regular television programming through computer graphics. It is typically inserted into otherwise blank backdrops or used to replace local billboards that are not relevant to the remote broadcast audience. More controversially, virtual billboards may be inserted into the background where none exist in real-life. Virtual product placement is also possible. Trends With the dawn of the Internet came many new advertising opportunities. Popup, Flash, banner, Popunder, advergaming, and email advertisements (the last often being a form of spam) are now commonplace. The ability to record shows on digital video recorders (such as TiVo) allow users to record the programs for later viewing, enabling them to fast forward through commercials. Additionally, as more seasons of pre-recorded box sets are offered for sale of television programs; fewer people watch the shows on TV. However, the fact that these sets are sold, means the company will receive additional profits from the sales of these sets. To counter this effect, many advertisers have opted for product placement on TV shows like Survivor. 59
  60. 60. Particularly since the rise of "entertaining" advertising, some people may like an advertisement enough to wish to watch it later or show a friend. In general, the advertising community has not yet made this easy, although some have used the Internet to widely distribute their ads to anyone willing to see or hear them. Another significant trend regarding future of advertising is the growing importance of the niche market using niche or targeted ads. Also brought about by the Internet and the theory of The Long Tail, advertisers will have an increasing ability to reach specific audiences. In the realm of advertising agencies, continued industry diversification has seen observers note that “big global clients don't need big global agencies any more”. This trend is reflected by the growth of nontraditional agencies in various global markets, such as Canadian business TAXI and SMART in Australia and has been referred to as "a revolution in the ad world". In freelance advertising, companies hold public competitions to create ads for their product, the best one of which is chosen for widespread distribution with a prize given to the winner(s). During the 2007 Super Bowl, PepsiCo held such a contest for the creation of a 30-second television ad for the Doritos brand of chips, offering a cash prize to the winner. Chevrolet held a similar competition for their Tahoe line of SUVs. This type of advertising, however, is still in its infancy. It may ultimately decrease the importance of advertising agencies by creating a niche for independent freelancers 60

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