Imc

KARISHMA SIROHI Page 1
UNIT 1
COMMUNICATION:
Communication has been variously defined as the passing of information, the exchange of ideas,
or the process of establishing a commonness or oneness of thought between a sender and a
receiver.
Model of communication process:
1. Source: The sender, or source, of a communication is the person or
organization that has information to share with another person or group of
people. The communication process begins when the source selects words,
symbols, pictures, and the like, to represent the message that will be delivered
to the receiver(s). This process, known as encoding, involves putting thoughts,
ideas, or information into a symbolic form. The sender’s goal is to encode the
message in such a way that it will be understood by the receiver. This means
using words, signs, or symbols that are familiar to the target audience.
2. Messages: The encoding process leads to development of a message that
contains the information or meaning the source hopes to convey. The message
may be verbal or nonverbal, oral or written, or symbolic. Messages must be put
into a transmittable form that is appropriate for the channel of communication
being used. In advertising, this may range from simply writing some words or

copy that will be read as a radio message to producing an expensive television
commercial.
3. Channel: The channel is the method by which the communication travels from
the source or sender to the receiver. At the broadest level, channels of
communication are of two types, personal and nonpersonal. Personal channels
of communication are direct interpersonal (face-to-face) contact with target
individuals or groups. Nonpersonal channels of communication are those that
carry a message without interpersonal contact between sender and receiver.
Nonpersonal channels are generally referred to as the mass media or mass
communications, since the message is sent to many individuals at one time.
4. Receiving/decoding: The receiver is the person(s) with whom the sender shares
thoughts or information. Generally, receivers are the consumers in the target
market or audience who read, hear, and/or see the marketer’s message and
decode it. Decoding is the process of transforming the sender’s message back
into thought. This process is heavily influenced by the receiver’s frame of
reference or field of experience, which refers to the experiences, perceptions,
attitudes, and values he or she brings to the communication situation.
5. Noise: Throughout the communication process, the message is subject to
extraneous factors that can distort or interfere with its reception. This unplanned
distortion or interference is known as noise. Errors or problems that occur in the
encoding of the message, distortion in a radio or television signal, or
distractions at the point of reception are examples of noise.
6. Response/feedback: The receiver’s set of reactions after seeing, hearing, or
reading the message is known as a response. Receivers’ responses can range
from nonobservable actions such as storing information in memory to
immediate action such as dialing a toll-free number to order a product
advertised on television. Marketers are very interested in feedback, that part of
the receiver’s response that is communicated back to the sender.
Integrated marketing communication;
integrated marketing communications (IMC), involves coordinating the various
promotional elements and other marketing activities that communicate with a
firm’s customers.
A task force from the American Association of Advertising Agencies (the “4As”)
developed one of the first definitions of integrated marketing communications:
a concept of marketing communications planning that recognizes the added value

of a comprehensive plan that evaluates the strategic roles of a variety of
communication disciplines— for example, general advertising, direct response,
sales promotion, and public relations—and combines these disciplines to provide
clarity, consistency, and maximum communications impact.
Consumer behavior:
Consumer behavior can be defined as the process and activities people engage in
when searching for, selecting, purchasing, using, evaluating, and disposing of
products and services so as to satisfy their needs and desires.

UNIT 2
ADVERTISING
Advertising is defined as any paid form of nonpersonal communication about an organization,
product, service, or idea by an identified sponsor. The paid aspect of this definition reflects the
fact that the space or time for an advertising message generally must be bought. The nonpersonal
component means that advertising involves mass media (e.g., TV, radio, magazines, newspapers)
that can transmit a message to large groups of individuals, often at the same time. The
nonpersonal nature of advertising means that there is generally no opportunity for immediate
feedback from the message recipient (except in direct-response advertising). Therefore, before
the message is sent, the advertiser must consider how the audience will interpret and respond to
it. Advertising can be used to create brand images and symbolic appeals for a company or brand,
a very important capability for companies selling products and services that are difficult to
differentiate on functional attributes.
Another advantage of advertising is its ability to strike a responsive chord with consumers when
differentiation across other elements of the marketing mix is difficult to achieve. Popular
advertising campaigns attract consumers’ attention and can help generate sales. These popular
campaigns can also sometimes be leveraged into successful integrated marketing
communications programs.
Definition:
 According to Wood, “Advertising is causing to know to remember, to do.”
 According to Wheeler, “Advertising is any form of paid non-personal presentation of
ideas, goods or services for the purpose of inducting people to buy.”
 According to Richard Buskirk, “Advertising is a paid form of non-personal presentation
of ideas, goods or services by an identified sponsor.”
 According to William J. Stanton, “Advertising consists of all the activities involves in
presenting to a group, a non-personal, oral or visual, openly sponsored message regarding
disseminated through one or more media and is paid for by an identified sponsor.”

Features of Advertising:
Advertising has certain basic features. The important ones are:
i. Paid form: Advertising is always a paid form of communication and hence commercial in
nature. Thus, advertising can clarify be distinguished from publicity which is not paid for by the
sponsor.
ii. Non-personal presentation: Advertising is a non-personal presentation. Whatever the form
of presentation, advertising is always directed to a mass audience rather than to any individual.
At time:, e advertising message may give the impression of a personal appeal. However, all the
sensations are non-personal in nature.
iii. Sell or promote ideas, goods and services: Advertising is aimed at promoting and selling
not only tangible and physical goods, but also ideas and services. Most often services like
banking and insurance are sold through advertising. For example, Posts and Telegraph
Department advertises to promote the use of PIN CODE for fast delivery of letters. The scope of
advertising is wide and designed to sell not only goods but services and ideas also.
iv. Identified sponsor: Advertising always has an identified sponsor. In other words,
advertising discloses or identifies the source of the opinions and ideas it presents. On the other
hand, the sponsor for publicity or propaganda can remain anonymous.
v. Inform and persuade: Advertising usually informs the potential consumer about products
and services, their benefits and utilities. It also persuades the consumers to purchase such
products and services.
In short, advertising is the art of influencing human action and awakening of a desire to possess
products and services. It is a mass persuasion activity duly sponsored by the manufacturer,
retailer, or dealer for whom the advertising is done.
The main features of advertise are as under:
 It is directed towards increasing the sales of business.
 Advertising is a paid form of publicity

 It is non-personal. They are directed at a mass audience and nor at the individual as is in
the case of personal selling.
 Advertisement are identifiable with their sponsor of originator which is not always the
case with publicity or propaganda.
Functions / Objectives of Advertising:
The purpose of advertising is nothing but to sell something -a product, a service or an idea. The
real objective of advertising is effective communication between producers and consumers. The
following are the main objectives of advertising:
1. Preparing Ground for New Product: New product needs introduction because potential
customers have never used such product earlier and the advertisement prepare a ground
for that new product.
2. Creation of Demand: The main objective of the advertisement is to create a favorable
climate for maintaining of improving sales. Customers are to be reminded about the
product and the brand. It may induce new customers to buy the product by informing
them its qualities since it is possible that some of the customers may change their brands.
3. Facing the Competition: Another important objective of the advertisement is to face to
competition. Under competitive conditions, advertisement helps to build up brand image
and brand loyalty and when customers have developed brand loyalty, becomes difficult
for the middlemen to change it.
4. Creating or Enhancing Goodwill: Large scale advertising is often undertaken with the
objective of creating or enhancing the goodwill of the advertising company. This, in turn,
increases the market receptiveness of the company’s product and helps the salesmen to
win customers easily.
5. Informing the Changes to the Customers: Whenever changes are made in the prices,
channels of distribution or in the product by way of any improvement in quality, size,
weight, brand, packing, etc., they must be informed to the public by the producer through
advertisement.
6. Neutralizing Competitor’s Advertising: Advertising is unavoidable to complete with or
neutralize competitor’s advertising. When competitors are adopting intensive advertising

as their promotional strategy, it is reasonable to follow similar practices to neutralize their
effects. In such cases, it is essential for the manufacturer to create a different image of his
product.
7. Barring New Entrants: From the advertiser’s point of view, a strongly built image
through long advertising helps to keep new entrants away. The advertisement builds up a
certain monopoly are for the product in which new entrants find it difficult to enter.
In short, advertising aims at benefiting the producer, educating the consumer and supplementing
the salesmen. Above all it is a link between the producer and the consumer.
Benefits or Importance of Advertisement
Advertising broadens the knowledge of the consumers. With the aid of advertising, consumers
find and buy necessary products without much waste of time. This speeds up the sales of
commodities, increases the efficiency of labor in distribution, and diminishes the costs of selling.
It is an accepted fact that without market stimulus of heavy advertising, consumers might have
waited another sixty years for the product evaluation that took place in less than ten years – it
took after all over sixty years from the invention of the safety razor before the first acceptable
stainless steel blades appeared in the market. These words are more than enough to testify the
potentialities of advertising in the field of modern marketing system. The main benefits of
advertising may be narrated as follows:
Benefits to Manufacturers
 It increases sales volume by creating attraction towards the product.
 It helps easy introduction of new products into the markets by the same manufacturer.
 It helps to create an image and reputation not only of the products but also of the
producer or advertiser. In this way, it creates goodwill for the manufacturer.
 Retail price, maintenance is also possible by advertising where price appeal is the
promotional strategy.
 It helps to establish a direct contact between manufacturers and consumers.

 It leads to smoothen the demand of the product. It saves the product from seasonal
fluctuations by discovering new and new usage of the product.
 It creates a highly responsive market and thereby quickens the turnover that results in
lower inventory.
 Selling cost per unit is reduced because of increased sale volume. Consequently, product
overheads are also reduced due to mass production and sale.
 Advertising gives the employees a feeling of pride in their jobs and to be in the service of
such a concern of repute. It, thus inspires the executives and worker to improve their
efficiency.
 Advertising is necessary to meet the competition in the market and to survive.
Benefits to Wholesalers and Retailers
 Easy sale of the products is possible since consumers are aware of the product and its
quality.
 It increases the rate of the turn-over of the stock because demand is already created by
advertisement.
 It supplements the selling activities.
 The reputation created is shared by the wholesalers and retailers alike because they need
not spend anything for the advertising of already a well advertised product.
 It ensures more economical selling because selling overheads are reduced.
 It enables them to have product information.
Benefits to Consumers
 Advertising stresses quality and very often prices. This forms an indirect guarantee to the
consumers of the quality and price. Further large scale production assumed by advertising
enables the seller to seller product at a lower cost.

 Advertising helps in eliminating the middlemen by establishing direct contacts between
producers and consumers. It results in cheaper goods.
 It helps them to know where and when the products are available. This reduces their
shopping time.
 It provides an opportunity to the customers to compare the merits and demerits of various
substitute products.
 This is perhaps the only medium through which consumers could know the varied and
new uses of the product.
 Modern advertisements are highly informative.
Benefits to Salesmen
Salesmanship is incomplete without advertising. Advertising serves as the forerunner of a
salesman in the distribution of goods. Sales is benefited the advertisement in following ways:
 Introducing the product becomes quite easy and convenient because manufacturer has
already advertised the goods informing the consumers about the product and its quality.
 Advertising prepares necessary ground for a salesman to begin his work effectively.
Hence sales efforts are reduced.
 The contact established with the customer by a salesman is made permanent through
effective advertising because a customer is assumed of the quality and price of the
product.
 The salesman can weigh the effectiveness of advertising when he makes direct contact
with the consumers.
Benefits to Community or Society
 Advertising, in general, is educative in nature. In the words of the late President
Roosevelt of the U.S.A., “Advertising brings to the greatest number of people actual

knowledge concerning useful things: it is essentially a form of education and the progress
of civilization depends on education.”
 Advertising leads to a large-scale production creating more employment opportunities to
the public in various jobs directly or indirectly.
 It initiates a process of creating more wants and their satisfaction higher standard of
living. For example, advertising has made more popular and universal the uses of such
inventions as the automobiles, radios, and various household appliances.
 Newspapers would not have become so popular and so cheap if there had been no
advertisements. The cheap production of newspapers is possible only through the
publication of advertisements in them. It sustains the press.
 It assures employment opportunities for the professional men and artist.
 Advertising does provide a glimpse of a country’s way of life. It is, in fact, a running
commentary on the way of living and the behavior of the people and is also an indicator
of some of the future in this regard.
Types of Advertising:
•Brand Ad.
•Retail orLocal Ad.
•Political Ad
•Directory Ad.
•Direct Response Ad.
•B2B Ad.
•InstitutionalAds
•PublicService Ad.
•InteractiveAd
Advertising

Advertising Environment:
Social Aspect of advertising:
Advertising, a high profile industry, plays a strong role in society. There are some positive and
some negative aspects of advertising on the social ground. They are as follows.
 Deception in Advertising: The relation between the buyers and sellers is maintained if
the buyers are satisfied with what they saw in advertise and what they got after buying
that product. If seller shows a false or deceptive image and an exaggerated image of the
product in the advertisement, then the relation between the seller and buyers can’t be
healthy. These problems can be overcome if the seller keep their ads clean and displays
right image of the product.
 The Subliminal Advertising: Capturing the Minds of the consumers is the main
intention of these ads. The ads are made in such a way that the consumers don’t even
realizes that the ad has made an impact on their minds and this results in buying the
product which they don’t even need. But “All ads don’t impress all consumers at all
times”, because majority of consumers buy products on basis of the price and needs.
 Effect on Our Value System: The advertisers use puffing tactics, endorsements from
celebrities, and play emotionally, which makes ads so powerful that the consumers like
helpless preys buy those products. These ads make poor people buy products which they
can’t afford, people picking up bad habits like smoking and drinking, and buy products
just because their favorite actor endorsed that product. This affects in increased the cost
of whole society and loss of values of our own selves.
 Offensiveness: Some ads are so offensive that they are not acceptable by the buyers. For
example, the ads of denim jeans showed girls wearing very less clothes and making a sex
appeal. These kinds of ads are irrelevant to the actual product. Btu then there is some ads
which are educative also and now accepted by people. Earlier ads giving information
about birth control pills was considered offensive but now the same ads are considered
educative and important.

But at the last, there are some great positive aspects which help
 Development of society and growth of technologies
 Employment
 Gives choices to buyers with self interest
 Welcomes healthy competition
 Improving standard of living.
 Give information on social, economical and health issues.
Ethical aspect of Advertising:
Ethical questions about advertising revolve around three criteria:
 Advocacy: advertising by its nature, tries to persuade its audience to do something. As a
result, it is not objective or neutral, which disturbs critics who think it should be. Most
people, however, are aware that advertising tries to sell something, whether it is a
product, a service, or an idea. Think about presidential elections. Whoever runs for
president, you can be sure that the campaign ads will portray the candidate positively.
 Accuracy: the second ethical issue is accuracy. Beyond the easily verifiable claims in an
advertising message are matters of perception. Will buying the automobile make me the
envy of my neighbors? Will it make me more attractive to the opposite sex? Such
messages may be implied by the ads.
 Acquisitiveness: the third ethical issue is acquisitiveness. Some critics maintain that
advertising is a symbol of our society’s preoccupation with accumulating material
objects. Because we are continually exposed to an array of changing, newer, and better
products, critics claim we become convinced that we must have these products.
Economic aspect of advertising:
 Value of Products: The advertised products are not always the best products in the
market. There are some unadvertised products also present which are good enough. But
advertising helps increase value for the products by showing the positive image of the
product which in turn helps convincing customers to buy it. Advertising educates
consumers about the uses of the products hence increasing its value in minds of the
consumers. For e.g. mobile phones were first considered as necessity but nowadays the

cell phones come with number of features which makes them mode of convenience for
consumers.
 Effect on Prices: Some advertised products do cost more than unadvertised products but
the vice versa is also true. But if there is more competition in the market for those
products, the prices have to come down, for e.g., canned juices from various brands. Thus
some professional like chartered accountants and doctors are not allowed to advertise.
But some products do not advertise much, and they don’t need much of it and even their
prices are high but they are still the leaders in market as they have their brand name. e.g.,
Porsche cars
 Effect on consumer demand and choices: Even if the product is heavily advertised, it
does not mean that the demand or say consumption rates will also increase. The product
has to be different with better quality, and more variety than others. For E.g., Kellogg’s
cornflakes have variety of flavors with different ranges to offer for different age groups
and now also for people who want to loose weight thus giving consumers different
choices to select from.
 Effect on business cycle: Advertising no doubt helps in employing more number of
people. It increases the pay rolls of people working in this field. It helps collecting more
revenues for sellers which they use for betterment of product and services. But there are
some bad effects of advertisements on business cycle also. Sometimes, consumer may
find the foreign product better than going for the national brand. This will definitely
effect the production which may in turn affect the GDP of the country.
The economic aspects are supported by the Abundance Principle which says producing
more products and services than the consumption rate which helps firstly keeping
consumers informed about the options they have and secondly helps sellers for playing in
healthy and competitive atmosphere with their self interest.
Legal aspect of advertising:
ome legal issues to consider before advertising online are:
 Click fraud: In search engine advertising's simplest form, known as pay per click, you
offer to pay a certain amount to a search engine each time someone searches a keyword
and clicks on a link to your website. Click fraud occurs when someone who wishes you

ill (such as a competitor) clicks repeatedly on your ad listings without actually intending
to buy anything, just to run up your bill. Before buying clicks on any search engine, find
out about the search engine's click protection system and what they will and won't do to
remove fraudulent clicks from your account. Also consider registering your website with
a pay-per-click auditing service--such as www.whosclickingwho.com --that tracks your
search engine listings and identifies potential fraudsters for a fee.
 Keyword spamming: If you have a registered trademark, you want to use it as a
keyword so people searching for that trademark see your website first. A keyword
spammer is someone who uses your trademark (for example, by outbidding you for your
trademark or including it in the invisible metatags search engines use to find your
website) to siphon customers away from you. Most search engines will remove a
keyword spammer's listings if you complain, but in many cases you have to pursue legal
action directly against the spammer to get him or her to stop.
 False advertising: Any claim or statement you make about your products and services
on your website is a legal warranty consumers can rely on, and must be true, correct and
complete in all respects. If you make false claims, you may be sued for false advertising.
Avoid hyped-up claims unless you can back them up with hard data, and have an attorney
review your product descriptions before posting them on your site, especially if you
disparage or make fun of your competition.
Advertising agency Vs Advertising Department:
Advertising agency: advertiser hire independent agencies to plan and implement part or all of
their advertising effort. This working arrangement is known as the agency client partnership. An
advertiser uses an outside agency because it believes the agency will be more efficient in
creating an individual commercial or a complete campaign. Successful agencies typically to
negotiate good deal for clients. Large advertiser, either companies or organizations, participate in
the advertising process either through their advertising departments or through their in house
agencies.

The advertising department: most large businesses have advertising departments. Their
primary responsibility is to act as a liaison between the marketing department and the advertising
agency and other vendors. Depending on the business, the involvement of the marketing
department can vary tremendously from company to company; and committees are quite
common. The individual in charge of the advertising department may carry a title such as
director of advertising or advertising manager. As indicated, the task of the advertising manager
and the staff is to facilitate the interaction between the company’s marketing department and the
agencies. Many companies may have hundreds of agencies working for them, although they
normally have an agency of record which does most of their business and may even manage the
other agencies.
A study of 5 M’s of Advertising:
The decision making in advertising is a
five-step process. It is called ‘Five M's of
Advertising.’ It consists of:
1. Mission,
2. Money,
3. Message,
4. Media, and
5. Measurement.
Evaluation and broad decisions need to be
taken in regard to these five areas while
organizing an advertising program or
campaign.
The five M's of Advertising on which an advertiser has to make decisions:

1. Mission:
a. Mission refers to the purpose or objective of advertising.
b. These goals vary in character and mainly include:
i. Sales promotion,
ii. Information and guidance to consumers,
iii. Developing brand loyalty,
iv. Market goodwill,
v. Facing market competition effective,
vi. Making the products popular or successful, and
vii. The introduction of a new product in the market.
c. The decision in regard to mission or objective is a basic one, and all other
decisions get adjusted according to it. For consumer products like chocolate,
toothpaste, soap, etc., the mission or objective includes facing market
competition, sales promotion and to make a product successful in the market.
2. Money:
a. Money refers to the finance provided for advertising purpose. It makes an AD
budget. It means the budget allocation made by the company for running the
entire operation of AD Campaign. Money provided is a limiting factor because
the effectiveness of advertising, media used, coverage of advertising, etc. are all
related to the funds provided for running advertisements. Advertising is a costly
affair, and companies have to spend millions of dollars on it. It should always be
within the limits of funds provided. Naturally, decisions in selecting an
advertising package should be properly adjusted to the allocated AD budget.
b. Consumer products like toothpastes or chocolates are highly competitive with
many substitutes readily available in the market. Naturally, extensive advertising

on TV, newspapers, radio, etc. is required. These media are costly. So, the
manufacturing or marketing company will have to provide huge money for
advertising purpose.
3. Message:
a. The message gets delivered through the text of an advertisement. It is passed
through written words, pictures, slogans, and signs. It is for the information,
guidance and motivation of prospective buyers. Attractive and meaningful
messages give positive results, and the advertising becomes result-oriented. For
this, the services of creative writers, artists, etc., are used to give an appealing
message to the consumers.
b. Here, the advertiser has to decide:
i. How to deliver the message?
ii. Which media to use for communicating the message?
iii. What would be the extent of creativity?
iv. Which specific customer group be targeted with the message, so on.
c. The AD message is related to the decisions taken in regards to the mission, and
money provided for the purpose of advertising.
d. For advertising consumer product like chocolate, the message is important for its
success. Chocolate is favored mainly by children and teenagers. The message
should be such that it is beneficial and appealing to the younger minds. It must
have a promise of a taste pleasure and satisfaction as expected by the younger
generation. The AD message should be simple and easily understandable with the
help of a picture or slogan. It should also be attractive and agreeable to the
younger generation. The pictures or slogans used should be short and impressive.

4. Media:
a. The advertiser has to take a crucial decision about selecting a proper media for an
advertising purpose. Media differ as regards to cost, coverage, effectiveness or
impact, etc. The selection of media depends on the budget provided, products
getting advertised, and features of prospective buyers, so on. A wrong decision on
media may make entire advertising ineffective and money spent on it will be
wasted. Therefore, a media should be properly selected, and decision in this
regard is essential and critical.
b. For advertising popular and extensively used consumer items like chocolate, the
media should be selected properly. Cartoon TV channels, comic books,
newspapers supplement meant for kids, etc., should be preferred.
5. Measurement:
a. Measure relates to the effectiveness of advertising. An advertiser will like to
evaluate advertisement in order to judge its effectiveness. If an advertisement is
not effective, it will be modified or withdrawn. It is necessary for avoiding
expenditure on the advertisement that is not purposeful or is not likely to give any
positive results. An advertiser has to measure the effectiveness of his ad program
or campaign and take suitable decisions. This decision-making as regards
effectiveness of advertisements is equally important and essential. Such testing
facilitates an introduction of appropriate remedial measures if required.
b. For measuring effectiveness of chocolate advertising, the post advertising sale is
one major consideration. Demand creation in new market segments or new age
groups is another factor in the measurement of an ad effectiveness. Even the
success of a sales promotion program is useful for measuring the effectiveness of
an advertisement.
In brief, like other areas of marketing management, decision-making is necessary for advertising.
It relates to Five M's - Mission, Money, Message, Media and Measurement.

UNIT 3
SALES PROMOTION:
Sales promotion has been defined as “a direct inducement that offers an extra value or incentive
for the product to the sales force, distributors, or the ultimate consumer with the primary
objective of creating an immediate sale.” First, sales promotion involves some type of
inducement that provides an extra incentive to buy. This incentive is usually the key element in a
promotional program; it may be a coupon or price reduction, the opportunity to enter a contest or
sweepstakes, a money-back refund or rebate, or an extra amount of a product. The incentive may
also be a free sample of the product, given in hopes of generating a future purchase, or a
premium that serves as a reminder of the brand and reinforces its image. A second point is that
sales promotion is essentially an acceleration tool, designed to speed up the selling process and
maximize sales volume. By providing an extra incentive, sales promotion techniques can
motivate consumers to purchase a larger quantity of a brand or shorten the purchase cycle of the
trade or consumers by encouraging them to take more immediate action. A final point regarding
sales promotion activities is that they can be targeted to different parties in the marketing
channel. Sales promotion can be broken into two major categories: consumer-oriented and trade-
oriented promotions. Activities involved in consumer-oriented sales promotion include
sampling, couponing, premiums, contests and sweepstakes, refunds and rebates, bonus packs,
price-offs, frequency programs, and event marketing. These promotions are directed at
consumers, the end purchasers of goods and services, and are designed to
induce them to purchase the marketer’s brand. Trade-oriented sales promotion includes dealer
contests and incentives, trade allowances, point-of-purchase displays, sales training programs,
trade shows, cooperative advertising, and other programs designed to motivate distributors and
retailers to carry a product and make an extra effort to push it to their customers. Many
marketing programs include both trade- and consumer-oriented promotions, since motivating
both groups maximizes the effectiveness of the promotional program.
Sales promotion refers to ‘those marketing activities that stimulate consumer shows and
expositions.

Purchasing and dealer effectiveness such as displays, demonstration and various non- recurrent
selling efforts not in the ordinary routine.”
According to A.H.R. Delens: “Sales promotion means any steps that are taken for the purpose of
obtaining an increasing sale. Often this term refers specially to selling efforts that are designed to
supplement personal selling and advertising and by co-ordination helps them to become more
effective.”
In the words of Roger A. Strong, “Sales promotion includes all forms of sponsored
communication apart from activities associated with personal selling. It, thus includes trade
shows and exhibits, combining, sampling, premiums, trade, allowances, sales and dealer
incentives, set of packs, consumer education and demonstration activities, rebates, bonus, packs,
point of purchase material and direct mail.”
Objectives of Sales Promotion:
Sales promotion is a vital bridge or a connecting link between personal selling and advertising.
Sales promotion activities are undertaken to achieve the following objectives:
1. To increase sales by publicity through the media which are complementary to press and
poster advertising.
2. To disseminate information through salesmen, dealers etc., so as to ensure the product
getting into satisfactory use by the ultimate consumers.
3. To stimulate customers to make purchases at the point of purchase.
4. To prompt existing customers to buy more.
5. To introduce new products.
6. To attract new customers.
7. To meet competition from others effectively.
8. To check seasonal decline in the volume of sales.

Types of Sales Promotion:
1) Consumer oriented Promotion: the consumer-oriented promotion tools are aimed at
increasing the sales to existing consumers, and to attract new customers to the firms. It is
also called pull strategy. The consumer can take the benefit of promotion tools either
from the manufactures or from the dealer, or from both.
Objectives of consumer oriented sales promotion:
 Obtaining Trial and Repurchase One of the most important uses of sales
promotion techniques is to encourage consumers to try a new product or service.
The success of a new brand depends not only on getting initial trial but also on
inducing a reasonable percentage of people who try the brand to repurchase it and
establish ongoing purchase patterns. Promotional incentives such as coupons or
refund offers are often included with a sample to encourage repeat purchase after
trial.
 Increasing Consumption of an Established Brand: Sales promotion can
generate some new interest in an established brand to help increase sales or
defend market share against competitors.

Marketers attempt to increase sales for an established brand in several ways, and
sales promotion can play an important role in each. One way to increase product
consumption is by identifying new uses for the brand. Sales promotion tools like
recipe books or calendars that show various ways of using the product often can
accomplish this. Another strategy for increasing sales of an established brand is to
use promotions that attract nonusers of the product category or users of a
competing brand. Attracting nonusers of the product category can be very
difficult, as consumers may not see a need for the product. Sales promotions can
appeal to nonusers by providing them with an extra incentive to try the product,
but a more common strategy for increasing sales of an established brand is to
attract consumers who use a competing brand. This can be done by giving them
an incentive to switch, such as a coupon, premium offer, bonus pack, or price
deal. Marketers can also get users of a competitor to try their brand through
sampling or other types of promotional programs.
 Defending Current Customers: With more new brands entering the market
every day and competitors attempting to take away their customers through
aggressive advertising and sales promotion efforts, many companies are turning to
sales promotion programs to hold present customers and defend their market share.
A company can use sales promotion techniques in several ways to retain its current
customer base. One way is to load them with the product, taking them out of the
market for a certain time. Special price promotions, coupons, or bonus packs can
encourage consumers to stock up on the brand. This not only keeps them using the
company’s brand but also reduces the likelihood they will switch brands in
response to a competitor’s promotion.
 Targeting a Specific Market: Segment Most companies focus their marketing
efforts on specific market segments and are always looking for ways to reach
their target audiences. Many marketers are finding that sales promotion tools such
as contests and sweepstakes, events, coupons, and samplings are very effective
ways to reach specific geographic, demographic, psychographic, and ethnic
markets. Sales promotion programs can also be targeted to specific user-status
groups such as nonusers or light versus heavy users. Contests have become a
popular sales promotion tool for targeting specific market segments.
 Enhancing Integrated Marketing Communications and Building Brand
Equity: A final objective for consumer-oriented promotions is to enhance or
support the integrated marketing communications effort for a brand or company.
Building brand equity and image has traditionally been done through advertising.
However, sales promotion techniques such as contests or sweepstakes and
premium offers are often used to draw attention to an ad, increase involvement
with the message and product/service, and help build relationships with
consumers.

Consumer oriented sales promotion tools:
1. Sampling: sampling involves a variety of procedures whereby consumers are given some
quantity of a product for no charge to induce trial. Sampling is generally considered
the most effective way to generate trial, although it is also the most expensive. As a
sales promotion technique, sampling is often used to introduce a new product or
brand to the market.
Manufacturers of packaged-goods products such as food, health care items, cosmetics,
and toiletries are heavy users of sampling since their products meet the three
criteria for an effective sampling program:
 The products are of relatively low unit value, so samples do not cost too much.
 The products are divisible, which means they can be broken into small sample
sizes that are adequate for demonstrating the brand’s features and benefits to the
user.
 The purchase cycle is relatively short, so the consumer will consider an
immediate purchase or will not forget about the brand before the next purchase
occasion.
Benefits and limitation of Sampling:
Benefits
 Samples are an excellent way to
induce trial as they provide consumers
with a risk-free way to try new
products.
 Sampling generates much higher trial
rates than advertising or other
sales promotion techniques.
 Consumers
experience the brand directly, gaining a
greater appreciation for its benefits. his
can be particularly important when a
product’s features and benefits are
difficult to describe through
advertising.
 The samples are even more likely to
lead to purchase when they are
accompanied by a coupon.
 Increase sales volume at the early stage
of the product life cycle and obtain
desirable distribution.
 Stimulate trial of product.
Limitations
 The costs of a sampling program can be
recovered only if it gets a number of
consumers to become regular users of
the brand at full retail price.
 Another possible limitation to sampling
is that the benefits of some products are
difficult to gauge immediately, and the
learning period required to appreciate
the brand may require supplying the
consumer with larger amounts of the
brand than are affordable.
 the brand must have some
unique or superior benefits for a
sampling program to be worthwhile.
Otherwise, the sampled consumers
revert back to other brands and do not
become repeat purchasers.
 Not appropriate for mature products
and slow turnover products.
 Most expensive sales promotion
technique.

Sampling
Door to
Door
Sampling
Through
mail
In store
Sampling
On
package
Sampling
Event
Sampling
Other
methods
Sampling methods:
1. Door to door sampling: in which
the product is delivered directly to
the prospect’s
residence, is used when it is
important to control where the
sample is delivered. This
distribution method is very
expensive because of labor costs, but
it can be cost effective if the
marketer has information that helps
define the target market and/or if
the prospects are located in a well-
defined geographic area. Some
companies have
samples delivered directly to
consumers’ homes by including
them with newspapers.
Sunday papers have become an
increasingly attractive way of mass
distributing samples.
2. Sampling through mail: is common for small, lightweight, nonperishable
products. A major advantage of this method is that the marketer has control over
where and when the product will be distributed and can target the sample to
specific market areas. The main drawbacks to mail sampling are postal
restrictions and increasing postal rates.
3. In store sampling: is increasingly popular, especially for food products.
The marketer hires temporary demonstrators who set up a table or booth,
prepare small samples of the product, and pass them out to shoppers. The
in-store sampling approach can be very effective for food products, since
consumers get to taste the item and the demonstrator can give them more
information about the product while it is being sampled. Demonstrators
may also give consumers a cents-off coupon for the sampled item to
encourage immediate trial purchase. While this sampling method can be
very effective, it can also be expensive and requires a great deal of planning, as
well as the cooperation of retailers.
4. On-package sampling: where a sample of a product is attached to another item,
is another common sampling method (see Exhibit 16-13). This procedure can be
very cost-effective, particularly for multiproduct firms that attach a sample of a
new product to an existing brand’s package. A drawback is that since the sample
is distributed only to consumers who purchase the item to which it is attached, the
sample will not reach nonusers of the carrier brand. Marketers can expand this

sampling method by attaching the sample to multiple carrier brands and including
samples with products not made by their company.
5. Event sampling: has become one of the fastest-growing and most popular ways
of distributing samples. Many marketers are using sampling programs that are
part of integrated marketing programs that feature events, media tie-ins, and other
activities that provide consumers with a total sense of a brand rather than just a
few tastes of a food or beverage or a trial size of a packaged-goods product. Event
sampling can take place in stores as well as at a variety of other venues such as
concerts, sporting events, and other places.
6. Other methods of Sampling: Marketers may insert packets in magazines or
newspapers (particularly Sunday supplements). Some tobacco and cereal
companies send samples to consumers who call toll-free numbers to request them
or mail in sample request forms. Many marketers are finding that sampling meets
the complementary goals of introducing consumers to their products and getting
retailers to support their promotional programs.
2. Couponing: Coupons are certificates with a stated value that consumers can redeem with
retailers or manufacturers when they make appropriate purchases. They are offered
mainly by retailers and manufacturers as sales promotion tools to accomplish specific
sales and marketing goals. Consumers are attracted to coupons because they offer
immediate value and savings.
Advantages and limitations of Couponing:
Advantages
 First, coupons make it possible to
offer a price reduction only to those
consumers who are price-sensitive.
Such consumers generally purchase
because of coupons, while those
who are not as concerned about
price buy the brand at full value.
 Coupons also make it possible to
reduce the retail price of a product
without relying on retailers for
cooperation, which can often be a
problem.
 Since a coupon lowers the price of a
product, it reduces the consumer’s
perceived risk associated with trial
of a new brand.
 Coupons can encourage repurchase
after initial trial. Many new
products include a cents-off coupon
inside the package to encourage
repeat purchase.
 Coupons can also be useful
promotional devices for established
Limitations
 First, it can be difficult to estimate
how many consumers will use a
coupon and when.
 Response to a coupon is
rarely immediate; it typically takes
anywhere from two to six months to
redeem one.
 A problem associated with using
coupons to attract new users to an
established brand is that it is
difficult to prevent the coupons
from being used by consumers who
already use the brand.
 Rather than attracting new users,
coupons can end up reducing the
company’s profit margins among
consumers who would probably
purchase the product anyway.
 Other problems with coupons
include low redemption rates and
high costs. Couponing program
expenses include the face value of
the coupon redeemed plus

products. They can encourage
nonusers to try a brand, encourage
repeat purchase among current
users, and get users to try a new,
improved version of a brand.
 Coupons may also help coax
users of a product to trade up to
more expensive brands.
costs for production, distribution,
and handling of the coupons.
 Another problem with coupon
promotions is misredemption, or the
cashing of a coupon without
purchase of the brand.
Coupon distribution methods
3. Premium: Premiums are a sales promotion device used by many marketers. A premium
is an offer of an item of merchandise or service either free or at a low price that is an
extra incentive for purchasers. Many marketers are eliminating toys and gimmicks in
favor of value-added premiums that reflect the quality of the product and are consistent
with its image and positioning in the market.
Types of premium:
 Free premiums: Free premiums are usually small gifts or merchandise included
in the product package or sent to consumers who mail in a request along with a
proof of purchase. In/on-package free premiums include toys, balls, trading cards,
or other items included in cereal packages, as well as samples of one product
included with another. Surveys have shown that in/on-package premiums are
consumers’ favorite type of promotion.
 Self liquidating premiums: Self-liquidating premiums require the consumer to
pay some or all of the cost of the premium plus handling and mailing costs. The
marketer usually purchases items used as self-liquidating premiums in large
quantities and offers them to consumers at lower-than-retail prices. The goal is
not to make a profit on the premium item but rather just to cover costs and offer a
value to the consumer. In addition to cost savings, self-liquidating premiums offer
several advantages to marketers. Offering values to consumers through the
premium products can create interest in the brand and goodwill that
enhances the brand’s image. These premiums can also encourage trade
support and gain in-store displays for the brand and the premium offer.
Self-liquidating premiums are often tied directly to the advertising campaign, so
Coupon distribution methods
 Freestanding inserts
 Direct mail
 Newspaper and magazines
 Inside/outside the package
 In store couponing

they extend the advertising message and contribute to consumer franchise
building for a brand.
A premium (gift) is a reward given to the consumer for performing a particular act,
generally purchasing a product or service. The premium may be free or available to
the consumer by paying a price well below the regular market price.
There are many varieties of premiums which are sometimes referred to as direct
premiums and mail premiums. Direct premiums are used to reward the customers
immediately at the time of purchase, and mail premiums require the customers
to take some action, such as mailing the proof of multiple purchases to the
marketer. After the receipt of the proof, the marketer sends the premium to the
consumer.
Advantage and disadvantage of premium:
Advantage
 Premiums are widely used to
reward consumers. They serve as
a powerful means of
differentiating the offer at the
point of purchase where all the
products are similar and the
competition is at parity.
 Depending on the preferences,
premiums can be selected to
appeal to the target groups in a
market.
 If the promotion objective is to
increase usage, some product
related premium would be more
useful.
 Near-pack premiums are a strong
motivation for retailers to display
the product with premium at a
prominent place in the store.
Disadvantage
 If the premium selection is poor,
it may hurt product sales.
 The appeal to the consumer is an
important factor and this aspect
must be pre-tested in some way.
This would, of course, add to the
cost of the promotion.
 Even regular consumers may shy
away from the product if the
premium does not measure up to
their likes.
 Too frequent use of premium
with any product is likely to
lessen the importance of the
product in the eyes of the
consumer.
In-pack, On-pack and Container Premiums
 In-pack premium: The premium is enclosed inside the product pack. Such
premiums are generally small and low priced, such as a toy, steel bowl, face towel and
many other items.
 On-pack premium: As the name suggests, on-pack premium is attached to the outside of
the product package or to the product itself if no outer package is used.

 Near-pack premium: Sometimes the premium is bulky in size and hence cannot be
enclosed inside the pack or put on the pack it is kept near the promoted product and the
consumer takes one with the purchased product.
 Container-premium: In this type of premium the product itself is packed inside the
premium, which is a container, and this container can be used for some other purpose
after the product has been consumed.
4. Contests and Sweepstakes: A contest is a promotion where consumers compete for
prizes or money on the basis of skills or ability. The company determines winners by
judging the entries or ascertaining which entry comes closest to some predetermined
criteria. A sweepstakes is a promotion where winners are determined purely by chance; it
cannot require a proof of purchase as a condition for entry. Entrants need only submit
their names for the prize drawing. While there is often an official entry form, handwritten
entries must also be permitted. One form of sweepstakes is a game, which also
has a chance element or odds of winning. Scratch-off cards with instant winners are a
popular promotional tool. Some games occur over a longer period and require more
involvement by consumers. Promotions where consumers must collect game pieces
are popular among retailers and fast-food chains as a way to build store traffic and
repeat purchases. A sweepstake is a random drawing and is sometimes called a chance
contest. This too may or may not involve the purchase of any product or service.
A lottery prize is decided on the basis of chance and requires a “consideration” for entry
that may be proof-of-purchase of ticket or a product.
According to the American Association of Advertising Agencies, “A contest is an
event that invites the customer to apply skill to solve or complete a special problem”. The
same agency says, “A sweepstake does not call for the application of skill on the part of
the consumer. Winners are determined by a drawing from all entry forms. In other
words, prizes are awarded on the basis of chance”. Often, a combination of contest and
sweepstakes is employed in some promotions. Among all the sales promotional devices,
probably the most exciting and highly rewarding are the contests and sweepstakes
Advantages and disadvantages:
Advantages
 Contests and sweepstakes can
create a high level of awareness and
build or reinforce the image of the
product or service.
 Consumers may associate the
impressive prizes with the product
or service.
 The promotions are more
successful in getting the print
advertisement read, or the audio-
visual ad seen.
 Contests and sweepstakes can help
Disadvantages
 Contests and sweepstakes generally
are not effective in generating trial
of a new product.
 Heavy media expenditure is often
required to make these events
successful.
 It is generally not possible to pre-
test a contest or sweepstakes
programme and could prove to
be quite risky.
 The promoter has to check
thoroughly the rules and regulations

gain store displays, generate store
traffic and encourage the trial of a
product if the prizes are sufficiently
attractive.
that may vary from state to state.
 Designing a contest or sweepstakes
requires lengthy lead-time.
5. Refunds and Rebates: The terms ‘refund’ and ‘rebate’ are used as meaning the same
thing. Long ago, the term rebate was made popular by the automobile industry in
developed countries. There is a subtle difference between these two terms. The Random
House Dictionary defines a refund as repayment of money, and a rebate as a return of
part of the original payment for some service or merchandise. This means that a
refund is repayment of total money paid for purchase, while the rebate represents
repayment of only part of the money paid for purchase. However, both these terms are
used interchangeably in the real world of marketing. Refund offers can induce excitement
in consumers at relatively low cost.
Advantages
 Consumers are generally very
responsive to rebate offers,
particularly as the size of the
savings increases.
 Packaged-goods marketers often
use refund offers to induce trial of a
new product
or encourage users of another brand
to switch.
 Refund offers can also encourage
repeat purchase. Many offers
require consumers
to send in multiple proofs of
purchase. The size of the refund
offer may even increase as the
number of purchases gets larger.
 Rebates can help create new users
and encourage brand switching or
repeat purchase behavior, or they
can be a way to offer a temporary
price reduction.
Disadvantages
 When small refunds are being
offered, marketers may find other
promotional incentives such as
coupons or bonus packs more
effective.
 They must be careful not to
overuse rebate offers and confuse
consumers about the real price and
value of a product or service.
 consumers can become dependent
on rebates and delay their purchases
or purchase only brands for which a
rebate is available.
 Many retailers have become
disenchanted with rebates and the
burden and expense of
administering them.
 Nonusers of rebates were
particularly likely to perceive the
redemption process as too
complicated and to suspect
manufacturers’ motives.
6. Bonus packs: Bonus packs offer the consumer an extra amount of a product at the
regular price by providing larger containers or extra units (Exhibit 16-22). Bonus packs
result in a lower cost per unit for the consumer and provide extra value as well as more
product for the money. Price-packs are also called value-packs. These may take any of
the two forms, bonus pack and banded pack. In case of bonus pack offer, an

additional quantity of the same product is offered free when the standard pack size of
the product is purchased at the regular price. This type of deal is often seen in case of
laundry products, food products and personal care products, etc. Banded pack offer,
when two or more units of a product are sold at a reduced price compared to the
regular price. The products are generally banded together physically. Another variation of
this technique is “buy-one-take-one-free”, or some similar offer (it could be “same for
less” or “more for the same”).
Advantage
1. Generally effective in converting
product tries into users.
2. Extra quantity is an incentive and a
reward.
3. Consumers, who buy bonus packs
of consumables, stay out of the
market and are not exposed to
competitors’ offers.
4. They give marketers a direct way to
provide extra value without having
to get involved with complicated
coupons or refund offers.
Disadvantage
1. The cost of the additional product
may be small to the manufacturer
but the cost of the larger new pack
may make the offer expensive.
2. Retailers break the banding and
sell the bonus product at regular
price if the product happens to
enjoy brand strength.
3. In case of consumer durables, such
a deal is quite likely to hurt the
brand image and disrupt price-
quality perceptions of customers.
7. Price off deals: Price deals are probably the most commonly used promotional
techniques. A price deal for customers means a reduction in the price of the promoted
product which means that the customer saves money on purchase. Such a deal is
designed to stimulate customers to try a new product, to encourage new users to try an
existing product, or to encourage customers to continue product patronage, increase
purchase quantity, purchase multiple units, and accelerate usage rate, etc. Such deals are
suitable when brand loyalty is low, product category is considered a commodity and price
is the primary consideration of the customers.
Advantages
1. First, since price-offs are
controlled by the manufacturer, it
can make sure the promotional
discount reaches the consumer
rather than being kept by the trade.
2. price-offs
can be a strong influence at the
point of purchase when price
comparisons are being made.
3. Price-off promotions can also
encourage consumers to purchase
larger quantities, preempting
Disadvantages
1. Price-off promotions may not
be favorably received by
retailers, since they can create
pricing and inventory
problems.
2. like bonus packs, price-off
deals appeal primarily to
regular users instead of
attracting
nonusers.

competitors’ promotions and
leading to greater trade support.
8. Event marketing: Event marketing is a type of promotion where a
company or brand is linked to an event or where a themed activity is developed for the
purpose of creating experiences for consumers and promoting a product or service.
Marketers often do event marketing by associating their product with some popular
activity such as a sporting event, concert, fair, or festival. However, marketers also
create their own events to use for promotional purposes. An event sponsorship is an
integrated marketing communications activity where a company develops actual
sponsorship relations with a particular event and provides financial support in return for
the right to display a brand name, logo, or advertising message and be identified as a
supporter of the event. Event marketing often takes place as part of a company’s
sponsorship of activities such as concerts, the arts, social causes, and sporting events.
2) Trade oriented sales promotion: Trade oriented sales promotions are inducements
offered by manufacturers to wholesalers and retailers. These include off -invoice
discounts, merchandise allowances, bonus packs and samples. The one example I found
was at Menards where they had in-store demonstration offering coupons if you bought
the product that day. The demonstrations were conducted by a representative from the
manufacturer.
Objective of trade oriented sales promotion:
1. Obtain Distribution for New Products: Trade promotions are often used
to encourage retailers to give shelf space to new products. Manufacturers
recognize that only a limited amount of shelf space is available in supermarkets,
drugstores, and other major retail outlets.
2. Maintain Trade Support for Established Brands Trade promotions are
often designed to maintain distribution and trade support for established brands.
Brands that are in the mature phase of their product life cycle are vulnerable to
losing wholesale and/or retail distribution, particularly if they are not
differentiated or face competition from new products. Trade deals induce
wholesalers and retailers to continue to carry weaker products because the
discounts increase their profit margins. Brands with a smaller market share often
rely heavily on trade promotions, since they lack the funds required to
differentiate themselves from competitors through media advertising.
Even if a brand has a strong market position, trade promotions may be used as
part of an overall marketing strategy.
3. Encourage Retailers to Display Established Brands: Another objective of
trade-oriented promotions is to encourage retailers to display and promote an
established brand. Marketers recognize that many purchase decisions are made in
the store and promotional displays are an excellent way of generating sales. An
important goal is to obtain retail store displays of a product away from its regular
shelf location.

4. Build Retail Inventories: Manufacturers often use trade promotions to build
the inventory levels of retailers or other channel members. There are several
reasons manufacturers want to load retailers with their products. First, wholesalers
and retailers are more likely to push a product when they have high inventory
levels rather than storing it in their warehouses or back rooms. Building channel
members’ inventories also ensures they will not run out of stock and thus miss
sales opportunities.
Types of trade oriented promotion:
1. Contests and Incentives: Manufacturers may develop contests or special
incentive programs to stimulate greater selling effort and support from reseller
management or sales personnel. Contests
or incentive programs can be directed
toward managers who work for a
wholesaler or distributor as well as toward
store or department managers at the retail
level. Manufacturers often sponsor contests
for resellers and use prizes such as trips or
valuable merchandise as rewards for
meeting sales quotas or other goals.
Contests or special incentives are often targeted at the sales personnel of the
wholesalers, distributors/dealers, or retailers. These salespeople are an important
link in the distribution chain because they are likely to be very familiar with the
market, more frequently in touch with the customer (whether it be another reseller
or the ultimate consumer), and more numerous than the manufacturer’s
own sales organization. Manufacturers often devise incentives or contests for
these sales personnel. These programs may involve cash payments made directly
to the retailer’s or wholesaler’s sales staff to encourage them to promote
and sell a manufacturer’s product. These payments are known as push money
(pm) or spiffs.
2. Trade allowances: Probably the most common trade promotion is some form
of trade allowance, a discount or deal offered to retailers or wholesalers to
encourage them to stock, promote, or display the manufacturer’s products. Types
of allowances offered to retailers include buying allowances, promotional or
display allowances, and slotting allowances.
Buying Allowances A buying allowance is a deal or discount offered to resellers
in the form of a price reduction on merchandise ordered during a fixed period.
These discounts are often in the form of an off-invoice allowance, which means a
certain per case amount or percentage is deducted from the invoice. A buying
allowance can also take the form of free goods; the reseller gets extra cases with
the purchase of specific amounts.
Promotional Allowances Manufacturers often give retailers allowances or
discounts for performing certain promotional or merchandising activities in
Types:
1. Contests and incentives
2. Trade allowances
3. Displays and point of
purchase material
4. Sales training programs
5. Trade shows
6. Cooperative advertising

support of their brands. These merchandising allowances can be given for
providing special displays away from the product’s regular shelf position, running
in-store promotional programs, or including the product in an ad. The
manufacturer generally has guidelines or a contract specifying the activity to be
performed to qualify for the promotional allowance. The allowance is usually a
fixed amount per case or a percentage deduction from the list price for
merchandise ordered during the promotional period. Slotting Allowances In
recent years, retailers have been demanding a special allowance for agreeing to
handle a new product. Slotting allowances, also called stocking allowances,
introductory allowances, or street money, are fees retailers charge for providing a
slot or position to accommodate the new product.
3. Displays and Point-of-Purchase Materials Point-of-purchase (POP) displays are
an important promotional tool because they can help a manufacturer obtain more
effective in-store merchandising of products. Point-of-purchase displays are very
important to marketers since many consumers make their purchase decisions in
the store. In fact, some studies estimate that nearly two-thirds of a consumer’s
buying decisions are made in a retail store.
4. Sales Training Programs Manufacturers provide sales training assistance to
retail salespeople in a number of ways. They may conduct classes or training
sessions that retail personnel can attend to increase their knowledge of a product
or a product line. These training sessions present information and ideas on how to
sell the manufacturer’s product and may also include motivational components.
Sales training classes for retail personnel are often sponsored by companies
selling high-ticket items or complex products such as personal computers, cars, or
ski equipment.
5. Trade Shows Another important promotional activity targeted to resellers is the
trade show, a forum where manufacturers can display their products to current as
well as prospective buyers. A number of promotional functions can be performed
at trade shows, including demonstrating products, identifying new prospects,
gathering customer and competitive information, and even writing orders for a
product. Trade shows are particularly valuable for introducing new products,
because resellers are often looking for new merchandise to stock.
6. Cooperative Advertising The final form of trade-oriented promotion we
examine is cooperative advertising, where the cost of advertising is shared by
more than one party. There are three types of cooperative advertising. Although
the first two are not trade-oriented promotion, we should recognize their
objectives and purpose.
Horizontal cooperative advertising is advertising sponsored in common by a
group of retailers or other organizations providing products or services to the
market.
Ingredient-sponsored cooperative advertising is supported by raw materials
manufacturers; its objective is to help establish end products that include the
company’s materials and/or ingredients.

The most common form of cooperative advertising is the trade-oriented form,
vertical cooperative advertising, in which a manufacturer pays for a portion of
the advertising a retailer runs to promote the manufacturer’s product and its
availability in the retailer’s place of business.
Growth of sales promotion:
Strategic issues in designing sales promotion campaign

UNIT 4
PERSONAL SELLING:
Personal selling involves selling through a person-to-person communications process. The
emphasis placed on personal selling varies from firm to firm depending on a variety of factors,
including the nature of the product or service being marketed, size of the organization, and type
of industry. Personal selling often plays the dominant role in industrial firms, while in other
firms, such as makers of low-priced consumer nondurable goods, its role is minimized.
Role of personal selling in IMC:
Manufacturers may promote their products directly to consumers through advertising and
promotions and/or direct-marketing efforts or indirectly through resellers and salespeople.
Determining the Role of Personal Selling
1. What specific information must be exchanged between the firm and potential
customers?
2. What are the alternative ways to carry out these communications objectives?
3. How effective is each alternative in carrying out the needed exchange?
4. How cost effective is each alternative?
Nature of Personal Selling:
1. Provider stage.
Selling activities are limited to accepting orders for the supplier’s available offering and
conveying it to the buyer.
2. Persuader stage.
Selling involves an attempt to persuade market members to buy the supplier’s offerings.
3. Prospector stage.
Activities include seeking out selected buyers who are perceived to have a need for the
offering as well as the resources and authority to buy it.
4. Problem-solver stage.
Selling involves obtaining the participation of buyers to identify their problems, which can
be translated into needs, and then presenting a selection from the supplier’s offerings that
corresponds with those needs and can solve those problems.
5. Procreator stage.
Selling defines the buyer’s problems or needs and their solutions through active buyer-
seller collaboration and then creates a market offering uniquely tailored to the customer.

The new role of personal selling:
 Surveying—educating themselves more about their customers’ businesses and
regularly assessing these businesses and their customers to achieve a position of
knowledgeable authority.
 Mapmaking—outlining both an account strategy and a solutions strategy (for the
customer). This means laying out a plan, discussing it with the customer, and
revising it as changes require.
 Guiding—bringing incremental value to the customer by identifying problems
and opportunities, offering alternative options and solutions, and providing solutions with
tangible value.
 Fire starting—engaging customers and driving them to commit to a solution.
Relationship marketing: Relationship marketing is defined as “an organization’s effort to
develop a longterm, cost-effective link with individual customers for mutual benefit.”8 Rather
than focusing on a short-term sale, the sales rep tries to establish a long-term bond. And
rather than just selling, the sales department works with marketing to use techniques
like database marketing, message differentiation to different target markets, and tracking of
promotional effects to improve the relationship.

Personal selling responsibilities:
Sales & Marketing Management uses three categories to classify salespeople: order taking,
creative selling, and missionary sales
Personal selling has evolved to include responsibilities beyond these. Job requirements
may include (1) locating prospective customers; (2) determining customers’ needs and wants that
are not being satisfied; (3) recommending a way to satisfy these needs and/or wants; (4)
demonstrating the capabilities of the firm and its products for providing this satisfaction; (5)
closing the sale and taking the order; and (6) following up and servicing the account.

Traits of an effective salesperson:
locating prospective customer
determining the need of
customer
recommending a way to
satisfy these needs
demonstration of products
closing the sale
follow up

Advantages and disadvantages of personal selling:
Advantages:
1. Allowing for two-way interaction. The ability to interact with the receiver allows the sender
to determine the impact of the message. Problems in comprehension or objections can be
resolved and in-depth discussions of certain selling points can be provided immediately. In
mass communications this direct feedback is not available and such information cannot be
obtained immediately (if at all).
2. Tailoring of the message. Because of the direct interaction, messages can be
tailored to the receiver. This more precise message content lets the sender address the
consumer’s specific concerns, problems, and needs. The sales rep can also determine
when to move on to the next selling point, ask for the sale, or close the deal.
3. Lack of distraction. In many personal selling situations, a one-to-one presentation
is conducted. The likelihood of distractions is minimized and the buyer is generally
paying close attention to the sales message. Even when the presentation is made by a
group of salespeople or more than one decision maker is present, the setting is less
distracting than those in which nonpersonal mass media are used.
4. Involvement in the decision process. Through consultative selling and relationship
marketing, the seller becomes more of a partner in the buying decision process, acting
in conjunction with the buyer to solve problems. This leads the buyer to rely more on
the salesperson and his or her products and services. An added benefit may be increasing the
involvement of the organization’s own employees.
5. Source of research information. In a well-integrated marketing/sales department
the sales force can be the “eyes and ears” of the firm. Sales reps can collect information on
competitors’ products and services, promotions, pricing, and so on, firsthand.
In addition, they can learn about the buying needs and wants of customers and potential
customers.
Disadvantages:
1. Inconsistent messages. Earlier we stated that the ability to adapt the message to the
receiver is a distinct advantage of personal selling. But the lack of a standardized message
can become a disadvantage. The message to be communicated is generally
designed by the marketing staff with a particular communications objective in mind.
Once this message has been determined, it is communicated to all receivers. But the
salesperson may alter this message in ways the marketer did not intend. Thus, the
marketing staff is at the mercy of the sales force with respect to what exactly is
communicated.
2. Sales force/management conflict. Unfortunately, there are situations in even the
best companies when one wonders if the sales staff and marketing staff know they
work for the same company and for the same goals. Because of failure to communicate,
corporate politics, and myriad other reasons, the sales force and marketing may
not be working as a team. The marketing staff may not understand the problems faced
by the sales staff, or the salespeople may not understand why marketing people

do things the way they do. The result is that the sales force may not use materials provided
from marketing, marketing may not be responsive to the field’s assessment of
customer needs, and so forth. The bottom line is that the communications process is
not as effective as it could be due to faulty internal communications and/or conflicts.
3. High cost. We discussed earlier the high cost of personal selling. As the cost per
sales call continues to climb, the marketer may find mass communications a more
cost-effective alternative.
4. Poor reach. Personal selling cannot reach as many members of the target audience
as other elements. Even if money were no object (not a very likely scenario!), the
sales force has only so many hours and so many people it can reach in a given time.
Further, the frequency with which these accounts are reached is also low.
5. Potential ethical problems. Because the manager does not have complete control
over the messages the salespeople communicate and because income and advancement
are often directly tied to sales, sometimes sales reps bend the rules. They may say and
do things they know are not entirely ethical or in the best interest of the firm in order to
get a sale. Other, perhaps more serious, problems can also occur.
Evaluating the personal selling efforts:
Criteria for Evaluating Personal Selling A number of criteria may be used to evaluate the
contribution of the personal selling effort to the promotional program. They include the
following.
 Provision of marketing intelligence—the ability of the sales force to feed back
information regarding competitive programs, customer reactions, market trends,
and other factors that may be important in the development of the promotional
program.
 Follow-up activities—the use and dissemination of promotional brochures and
correspondences with new and existing customers, providing feedback on the
effectiveness of various promotional programs.
 Program implementations—the number of promotional programs implemented;
the number of shelf and/or counter displays used, and so forth; the implementation and
assessment of cooperative advertising programs.
 Attainment of communications objectives—the number of accounts to whom
presentations were made (awareness, evaluation), the number of trial offers
accepted, and the like.

UNIT 5
DIRECT MARKETING:
Direct marketing is a system of marketing by which organizations communicate directly with
target customers to generate a response or transaction. This response may take the form of an
inquiry, a purchase, or even a vote.
Direct marketing occurs when a seller and customers deal with each other directly rather than
through an intermediary, such as a wholesaler or retailer.
Direct marketing uses a set of direct-response media, including direct mail, telemarketing,
interactive TV, print, the Internet, and other media. These media are the tools by which direct
marketers implement the communications process.
Direct marketing objectives:
 The direct marketer usually seeks a direct response.
 The objectives of the program are normally behaviors—for example, test drives, votes,
contributions, and/or sales.
 A typical objective is defined through a set response, perhaps a 2 to 3 percent response
rate.
 Many organizations use direct marketing to build an image, maintain customer
satisfaction, and inform and/or educate customers in an attempt to lead to future actions.
Developing a Database:
To segment and target their markets, direct marketers use a database, a listing of customers
and/or potential customers. This database is a tool for database marketing—the use of specific
information about individual customers and/or prospects to implement more effective and
efficient marketing communications. Databases are used to perform the following functions:
1. Improving the selection of market segments. Some consumers are more likely to be
potential purchasers, users, voters, and so on than others. By analyzing the characteristics
of the database, a marketer can target a greater potential audience.
2. Stimulate repeat purchases. Once a purchase has been made, the customer’s name
and other information are entered into the database. These people are proven direct
marketing users who offer high potential for repurchase. Magazines.
3. Cross-sell. Customers who demonstrate a specific interest also constitute strong
potential for other products of the same nature.
4. Customer relationship management. Customer relationship management (CRM),
requires that the marketer develop and maintain a significant amount of information
about its clients. The aim of CRM is to establish a relationship with one’s customers
through affinities, personalized communications, and product/service offerings. For CRM
to work effectively, a database is required. While CRM relies on technology specifically
designed for managing customer relationships, there are overlapping characteristics of
CRM and database marketing.

Tools
Catalogs
Broadcast Media
Infomercial
TV advertorial
Print Media
Teleshopping
Electronic Teleshopping
Direct Mail
Telemarketing
Direct-Marketing Strategies and Media
Direct mail, telemarketing, direct-response broadcasting, the Internet, and print. Each medium is
used to perform specific functions, although they all generally follow a one- or two-step
approach.
In the one-step approach, the medium is used directly to obtain an order. You’ve
probably seen TV commercials for products like wrench sets, workout equipment, or
magazine subscriptions in which the viewer is urged to phone a toll-free number to place an
order immediately. Usually these ads accept credit cards or cash on delivery and give an address.
Their goal is to generate an immediate sale when the ad is shown.
The two-step approach may involve the use of more than one medium. The first
effort is designed to screen, or qualify, potential buyers. The second effort generates
the response. For example, many companies use telemarketing to screen on the basis
of interest, and then follow up to interested parties with more information designed to
achieve an order or use personal selling to close the sale.
Media:
1. Direct Mail: Direct mail is often called “junk mail”—
the unsolicited mail you receive. More advertising
dollars continue to be spent in direct mail than in
almost any other advertising medium. Keys to the
success of direct mail are the mailing list, which
constitutes the database from which names are
generated, and the ability to segment markets. Lists
have become more current and more selective,
eliminating waste coverage. Segmentation on the basis
of geography (usually through Zip codes),
demographics, and lifestyles has led to increased
effectiveness. The most commonly used lists are of
individuals who have already purchased direct-mail
products.
Advantage
 Tells a story
 Engages attention
 Personalizes the messages
 Builds in feedback
 Reaches the unreachable
Disadvantage
 Negative perceptions
 Cost
 Mailing list
 Response rate
 vulnerability
2. Catalogs: Major participants in the direct-marketing business include catalog companies.
In addition to the traditional hard copies, catalogs are now available on the Internet for
both consumer and business-to-business customers. In some instances in the consumer

market the catalog merchandise is available in retail stores as well. In others, the catalog
and retail divisions are treated as separate entities.
Catalogs is a multipage direct mail publication that shows a variety of merchandise.
Advantage
 Targeted
 Engages attention
 Complete information
 convenience
Disadvantage
 Negative perceptions
 Cost
 Mailing list
 Response rate
3. Broadcast media: DM can also use Television and radio. Television is a good medium
for direct marketers who are advertising a broadly targeted products and who have the
budget to afford the ever increasing costs of television advertising. Two broadcast media
are available to direct marketers: television and radio. Direct marketing in the broadcast
industry involves both direct-response advertising and support advertising. In direct-
response advertising, the product or service is offered and a sales response is solicited,
through either the one- or two-step approach.
4. Infomercial: The lower cost of commercials on cable and satellite channels has
led advertisers to a new form of advertising. An infomercial is a long commercial that
ranges from 30 to 60 minutes. Many infomercials are produced by the advertisers and are
designed to be viewed as regular TV shows.
5. TV advertorials: Peugeot is the first auto manufacturer to use TV advertorials. The
company developed eight 5-minute films positioning the autos as “The Drive of Your
Life” while providing comprehensive information on test drives, technical specifications,
and demonstrations. In addition, the auto company developed advertorials for its website,
with each advertorial targeted to different target audiences.
6. Teleshopping: The development of toll-free telephone numbers, combined with
the widespread use of credit cards, has led to a dramatic increase in the number of people
who shop via their TV sets.
7. Print media: ads in the mass media are less directly targeted than are direct mail and
catalog but they can still provide the opportunity for a direct response. Ads in newspaper
and magazines can carry a coupon, an order form, an address, or a toll free. The response
may be either to purchase something or to ask for more information, which is the goal for
the magazine ads.
8. Telemarketing: If you have a telephone, you probably do not have to be told
about the rapid increase in the use of telemarketing, or sales by telephone. Both profit
and charitable organizations have employed this medium effectively in both one- and
two-step approaches. As telemarketing continues to expand in scope, a new dimension
referred to as audiotex or telemedia has evolved.
9. Electronic teleshopping: Unlike infomercials and home shopping channels,
which have relied on broadcast or cable TV, electronic teleshopping is an online
shopping and information retrieval service accessed through personal computers.

Direct selling:
An additional element of the direct-marketing program issonal presentation, demonstration, and
sales of products and services to consumers indirect selling, the direct, pertheir homes.
The three forms of direct selling are
 Repetitive person-to-person selling. The salesperson visits the buyer’s home, job
site, or other location to sell frequently purchased products or services (for
example, Amway).
 Nonrepetitive person-to-person selling. The salesperson visits the buyer’s home,
job site, or other location to sell infrequently purchased products or services (for
example, Encyclopaedia Britannica).
 Party plans. The salesperson offers products or services to groups of people
through home or office parties and demonstrations (for example, Tupperware and
PartyLite Gifts).
Evaluating the effectiveness of direct marketing:
Because they generate a direct response, measuring the effectiveness of direct-marketing
programs is not difficult. Using the cost per order (CPO), advertisers can evaluate the relative
effectiveness of an ad in only a few minutes based on the number of calls generated. By running
the same ad on different stations, a direct marketer can determine the relative effectiveness of the
medium itself.
Advantages and disadvantages of direct marketing:
1. Selective reach. Direct marketing lets the advertiser reach a large number of people
and reduces or eliminates waste coverage. Intensive coverage may be obtained
through broadcast advertising or through the mail. While not everyone drives on
highways where there are billboards or pays attention to TV commercials, virtually
everyone receives mail. A good list allows for minimal waste, as only those consumers
with the highest potential are targeted.
2. Segmentation capabilities. Marketers can purchase lists of recent product
purchasers, car buyers, bank-card holders, and so on. These lists may allow segmentation
on the basis of geographic area, occupation, demographics, and job title, to mention a
few.
3. Frequency. Depending on the medium used, it may be possible to build frequency
levels. The program vehicles used for direct-response TV advertising are usually the
most inexpensive available, so the marketer can afford to purchase repeat times.
Frequency may not be so easily accomplished through the mail, since consumers may be
annoyed to receive the same mail repeatedly.
4. Flexibility. Direct marketing can take on a variety of creative forms.
5. Timing. While many media require long-range planning and have long closing
dates, direct-response advertising can be much more timely. Direct mail, for example,
can be put together very quickly and distributed to the target population. TV programs

typically used for direct-response advertising are older, less sought programs that are
likely to appear on the station’s list of available spots. Another common strategy is to
purchase available time at the last possible moment to get the best price.
6. Personalization. No other advertising medium can personalize the message as
well as direct media. Parents with children at different age levels can be approached,
with their child’s name included in the appeal.
7. Costs. While the CPM for direct mail may be very high on an absolute and a relative
basis, its ability to specifically target the audience and eliminate waste coverage
reduces the actual CPM.
8. Measures of effectiveness. No other medium can measure the effectiveness of its
advertising efforts as well as direct response. Feedback is often immediate and always
accurate.
Disadvantage:
1. Image factors. the mail segment of this industry is often referred to as junk mail. Many
people believe unsolicited mail promotes junk products, and others dislike being
solicited. Even some senders of direct mail, including Motorola, GM, and Air Products &
Chemicals, say they throw out most of the junk mail they receive. This problem is
particularly relevant given the increased volume of mail being sent.
2. Accuracy. One of the advantages cited for direct mail and telemarketing was
targeting potential customers specifically. But the effectiveness of these methods
depends on the accuracy of the lists used. People move, change occupations, and so
on, and if the lists are not kept current, selectivity will decrease. Computerization has
greatly improved the currency of lists and reduced the incidence of bad names; however,
the ability to generate lists is becoming a problem.
3. Content support. The ability of magazines to create mood contributes to the overall
effectiveness of the ads they carry. In direct-response advertising, mood creation is
limited to the surrounding program and/or editorial content. Direct mail and online
services are unlikely to create a desirable mood.
4. Rising costs. As postal rates increase, direct-mail profits are immediately and
directly impacted.
PUBLIC RELATION:
Public relations is indeed a management function. The term management should be
used in its broadest sense; it is not limited to business managements but extends to other types of
organizations, including nonprofit institutions.
In this definition, public relations requires a series of stages, including:
1. The determination and evaluation of public attitudes.
2. The identification of policies and procedures of an organization with a public
interest.
3. The development and execution of a communications program designed to bring
about public understanding and acceptance.

Determining
and
evaluating
public
attitudes
Establishing
a PR Plan
Developing
and
executingPR
Plan
Marketing public relation function”
Thomas L. Harris has referred to public relations activities designed to support marketing
objectives as marketing public relations (MPR) functions.7 Marketing objectives that may be
aided by public relations activities include raising awareness, informing and educating, gaining
understanding, building trust, giving consumers a reason to buy, and motivating consumer
acceptance. MPR adds value to the integrated marketing program in a number of ways:
1. Building marketplace excitement before media advertising breaks.
2. Creating advertising news where there is no product news.
3. Introducing a product with little or no advertising.
4. Providing a value-added customer service.
5. Building brand-to-customer bonds.
6. Influencing the influentials
7. Defending products at risk and giving consumers a reason to buy.
There are a number of advantages of using MPR:
 It is a cost-effective way to reach the market.
 It is a highly targeted way to conduct public relations.
 It benefits from the endorsement of independent and objective third parties who
have no association with the product.
 It achieves credibility.
 It supports advertising programs by making messages more credible.
 It breaks through the clutter.
 It circumvents consumer resistance to sales efforts.
There are disadvantages, including the following:
 There is a lack of control over the media.
 It is difficult to tie in slogans and other advertising devices.
 Media time and space are not guaranteed.
 There are no standard effectiveness measures.
The process of Public Relation:

Advantages and Disadvantages:
Advantages Disadvantages
 Credibility
 Cost
 Avoidance of clutter
 Lead generation
 Ability to reach specific groups.
 Image building
 public relations is the potential for not
completing the communications
process.
 While public relations messages can
break through
the clutter of commercials, the receiver
may not make the connection to the
source
 Many firms’ PR efforts are never
associated with their sponsors in the
public mind.
 Public relations may also misfire
through mismanagement and a lack of
coordination with the marketing
department

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