Unit 5 promotion decision

Marketing
Management
Thursday, October 1, 2020 1
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Marketing Management
Unit 1 – Marketing Concepts
Unit 4 – Physical Distribution Decision
Unit 2 – Product Decision
Unit 3 – Price Decision
Unit 5 – Promotion Decision
Unit 6 – Consumer Behavior

Meaning & Definition
Nature & Scope of Marketing
Importance of Marketing Management
Marketing orientation / Concepts
Functions of Marketing
 Marketing Mix – 7 P’s
Unit 1 – Marketing Concepts

Unit 2 – Product Decision
 Why New product fails
 Branding Functions
 Types of Branding labeling

Unit 3 – Pricing Decision
 Concepts of Price
 Factors affecting Price determination
 Pricing Policies
 Types of Price

Unit 4 – Physical Distribution Decision
 Meaning
 Functions & Types of Channels of
Distribution
 Channel Intermediaries
 Channel Management Decisions
 Retailing & Wholesaling

Unit 5 – Promotion Decision
 Concepts of Promotion
 Promotion Mix
1. Advertising
2. Types of Advertising
3. Personal Selling
4. Sales Promotion & its types
5. Publicity
6. Public relations

Promotion
Refer to the entire set of activities, which
communicate the product, brand or service
to the user.
The idea is to make people Aware, Attract
& Induce to buy the product, in preference
over others

What is Promotion
Refers to the use of
communication with the
twin objectives of
Informing potential
customers about the
product. & Persuading
them to buy it

What is Promotion
Philip Kotler,
“Promotion includes all the activities the company
undertakes to Communicate & Promote its
Products to the Target Market.”

Elements of Promotion
1. Advertising
2. Personal selling
3. Sales promotion
4. Publicity
5. Public relation
1. Advertising

Advertising
Any Paid Form of non-
personal presentation &
promotion of ideas, goods, &
services by an identified
sponsor.
Various advertising media –
Television, Radio,
Newspapers, Magazines,
Outdoor

Advertising
Merits:
1. Can reach many consumers simultaneously
2. Relatively low cost per exposure.
3. Excellent for creating brand images.
Demerits:
1. Many consumers reached are not potential buyers (waste of
promotion money)
2. High visibility makes advertising a major target of marketing critics.
3. Advertisements are often quickly & easily screened out by
consumers.

Personal selling
Face-to-face
communication between
Buyer & Seller
Face-to-Face personal
communication & presentation with
potential customers for the
purpose of selling the products

Personal selling
Merits:
1. Can be the most convincing promotion tool; sales
people can directly influence purchase behaviors.
2. Allows two way communication.
3. Often necessary for technically complex products.
Demerits:
1. High cost per contact.
2. Sales training and motivation can be expensive &
difficult.
3. Poorly done sales presentations can hurt sales’ as well
as company, product & brand images.

Objectives of Personal Selling
1.Creation of Demand
2.Handling Objectives
3.Exploring Hidden experience
4.Educating Customers
5.Building Relationships

PERSONAL SELLING
OBJECTIVES
QUALITATIVE QUANTITATIVE

Qualitative objectives
1) To “serve” existing account
2) To search out and obtain new customers.
3) To keep customers informed of changes in the
product line
4) To provide Technical Advice & Assistance to
customers
5) To provide advice & assistance to middlemen on
various management problems.
6) To collect & report market information to company
management.

Quantitative objective
1)To Obtain Sales Volume in ways that contribute to
profit objectives.
2)To keep Personal-selling Expenses within certain limits.
3)To Secure & Retain a certain share of the market.
4)To obtain some number of new accounts on regular
basis

Types of Personal Selling
Industrial Selling
Retail Selling
Services Selling

Industrial Selling
Is basically termed as Business- to Business Selling ( B2B)
Who buys finished goods & resell them to
the end users
Output of one producer enters into the
production process of another producers
These institutional customers use the
products in their daily operations.
Selling only to the government concern
1. Selling to Resellers:
2. Selling to Business Users:
3. Institutional Selling:
4. Selling to Govt.:
Grouped into 4 categories 4

Retail Selling
All the activities directly related to the sale
of Goods & Services to the ultimate
consumers for personal or Non-business
Use

Services Selling
Intangible,
Inseparable,
Variability & Perishability
Products
Vs
Services

Prospecting Involves identifying
potential customers.
A Prospect is a MAD buyer
Money – Money to spend
Authority – Authority to buy
Desire – Desire to Buy it
The sales person must – determine that the person has the Money,
Authority & Desire to purchase, which happens later
1. Prospecting & Qualifying:
A prospect means a probable buyer.

Methods of Prospecting
1. Cold canvassing - Face to face meeting
2. Endless chain customer referral- Referred peoples
3. Prospect pool - Names from telephone directory
4. Non competing sales force - Salespeople of non-
competing
5. Friends
6. Direct mail
7. Telemarketing
8. Trade shows & Demonstrations

2. Pre-approaching :
Before the salesperson approaches the customers for a sale, it is
necessary to develop a sales strategy by collecting
customer data & combine with product attributes to
match their desires.
During this stage, the salesperson tries to understand about
the prospective buyers Needs, Problems, Buying Motives,
Preferences, Personal Character etc.
this Pre-approach is effective for making a
ground for approach.

3. Approaching :
During this stage, the salesperson came in contact with
the potential customers & make an effort to influence them
for a favorable decision.
The appointment can be taken over
 Phone, Mail,
 Personal Visit &
Third Party Reference

Methods of Approach
1. The Introductory approach
- Focusing on the selling
company
2. The Benefit approach
- Focusing on consumer
benefits
3. The Referral approach
- Focusing on 3rd party’s
recommendation

4. Presentation & Demonstration :-
The Prospect may be made to
• Understand the Special features, Benefits of the
product.
•Show the survey Reports, Relevant Data, Free
Gifts, referring to specific problems in other
products, Telling examples etc.
Here the salesperson presents his Products & Services before the
prospect & make an effort to create & modify their interest
towards it.

5. Handling objections :
.
Customers make objections after or during the
presentation. These objections are many times
excuses for not buying.
Objections normally pause the sales process
because the customer either
- Not understood the product & its benefits, or
- Is not fully in agreement with the salesperson.

5. Handling objections :
If the customer has doubts about the quality,
price & the usage of the product, it is the duty of
salesperson to clarify before close of the sale.
The salesman must face the buyer by giving
satisfactory answers, sincerely & without hurry.

6. Closing the sales :
The salesman also asks question as to the
product-choice of color, Quantity, Terms etc.
At the climax stage, the prospects place orders with the
salesman.
Closing the sale is the goal in any selling process for a
salesperson, which comes after the objections are
effectively handled & the customer is satisfied
with the presentation & is ready to place an order.

7. Follow up :-
This stage is important because it helps the
salesperson to know the satisfaction level / problems if
any , generate additional leads & also to maintain
goodwill and take corrective actions.
After sale service should be followed strictly i.e.,
punctuality, personal attention etc.

Six Things Which Makes A
Salesman Successful
1.Know the product
2.Know the company
3.Know the competition
4.Know the customer
5.Know the process of selling
6.Know own self

Sales promotion
Sales promotion mainly involves Short-term &
Non-routine incentives, offered to dealers
as well consumers.
The popular methods are
Demonstration, Trade Show,
Exhibition, Exchange offer,
Seasonal discount,
Free service, Gifts,
Contests, etc.

Sales Promotion
Merits:
1. It stimulates in the consumers an attitude
towards the product.
2. It creates a better incentive in the consumers
to make a purchase. It is a demand creator.
Demerits:
1. It involves additional expenditure on the part of the
business. Apart from the heavy expenditure to be
incurred on Advertisement & Personal selling.
This leads to an overall increase in
promotional costs.

Publicity
It is not a paid form of mass
communication that involves getting
favorable response of customers by
placing commercially significant
news in mass media.

Publicity
William J. Stanton :
“ Publicity is any promotional
communication regarding an
organization & / or its products
where the message is not paid for by
the organization benefiting from it.”

Publicity
“The notice or attention given to someone or
something by the media.” The media can take
notice of a company, organization or individual. It
usually takes the form of news coverage, feature
stories, executive interviews. Publicity can be
great for brands, building awareness & gaining
broad exposure.

Publicity

Publicity
Merits:
1. It makes advertising and its message more credible.
2. Cost efficiency & effectiveness
Demerits:
1. Lack of control over media.
2.

Public relation
These activities
Promote a Positive Image, generate
publicity & encourage goodwill with the
objective of increasing sales.

Public relation
Public relations can take many forms,
including
Generating Favorable Media Coverage,
Hosting Special Events & sponsoring charitable
campaigns are examples of public relations.

45
Strategies to Motivate Your Sales force

47
Rebate:
The rebate is the amount of the purchase
price refunded by the seller to the buyer,
when the quantity purchased reaches the
specified limit.
Rebates require the person to pay the full
amount in the store, following which they
will be require to fill & send directly to the
manufacturer, who will pass on the
discount to the customer later

48
Discount:
If there is a 10% discount on the product for
the consumer, then it is known as
Consumer Discount.
However, if there is a 10% discount to the
dealer when he is purchasing from the
company, it is known as Trade Discount.
Discounts are reduction in price that is
offered on the spot to the consumer

49
If a customer has been over-invoiced, the
excess amount will be refunded to him.
Refund:
Money which is returned to the customer in
the form of cash. Cash refund can occur due
to a variety of reasons
If a product is defective, the company may refund the cash
back to the customer for returning the product.

50
Gifts:
Most common ways to promote your store during
festival time or when there is a huge walk in
expected is Gifting. Customers have an anticipation
that they might win a gift from the store.
A customer who purchases a set amount
of products will get the “Assured gift”
from you.

51
Quantity Gifts:
Under this method, some extra quantity of the main
product is passed on as a gift to the customers.
For example, 25% extra toothpaste in a packet of
200 gm tooth paste.

52
Samples:
Under this method, the producer distributes
free samples of his product among the
consumers.
Sales representatives distribute these
samples from door-to-door.

53
Contests:
The blank form is made available to that consumer
who buys the product first.
Consumers taking part in the contest are asked to
answer some Very Simple Questions on a form
& forward the same to the company.

54
Lucky Draw:
Under this method, the customers of a particular
product are offered gifts on a fixed date & the
winners are decided by the draw of lots. While
purchasing the product, the customers are given a
coupon with a specific number printed on it.

55
Instant Draw & Assigned Gift:
Under this method, a customer is asked to scratch a
card on the purchase of a product & the name of
the product is inscribed thereupon which is
immediately offered to the customer as a gift. For
example, on buying a car when the card is scratched
such gifts are offered – TV, Refrigerator, Computer,
etc.

56
Full Finance @ 0%:
Under this method, the product is sold & money
received in installment at 0% rate of interest. The
seller determines the number of installments in
which the price of the product will be recovered
from the customer. No interest is charged on these
installments.

57
Advertising
is an audio or visual form
of marketing communication that employs
an openly sponsored, Non-personal
message to promote or sell a product,
Advertising is one of the most critical
components of marketing.

58
Advertising
Concept of communicating a message about
goods & services to a customer.
Advertising is done using various media like
TV, Print, Radio, Online, Outdoor etc
where advertisements are showcased
showing the value to the customer.

59
Advertising Budget
includes money for doing Advertising Research,
Getting Creatives Made (Consultants),
Printing Material, allocating money to
Advertising Media and ensuring proper
implementation of ad campaigns.
Refers to the amount of money
allocated towards advertising a
Product & Services

Percentage of Sales
Comparable to the competition
Affordability
Objective and task-based
Methods of advertising budget
1
2
3
4

61
Percentage of Sales:
In this method the advertising budget is
calculated as certain Fixed Percentage of
The Sales or estimated sales.
Most businesses set aside between 2% & 5% of
annual revenues for advertising. So if your annual
sales are Rs. 300,000/- then spend Rs. 6,000/- to
Rs.15,000/- on advertising.

62
Comparison with Competitor :
In this method, a manager establish budget
amount by matching the percentage sales
expenditure with that of competitors.
The business may wish to budget a similar
amount on its own advertising by way of staying
competitive.

63
Affordability :
In this method the budget for advertising is
decided based on availability of funds. Mostly for
small companies the funds available varies from
time to time based of business performance.
Hence marketing spend vary throughout the
year based on availability of funds.

64
Objective and task-based :
Advertiser to correlate advertising expenditures with
overall marketing objectives.
first establish concrete marketing objectives, often
articulated in the "Selling Proposal," & then develop
complementary advertising objectives articulated in the
"Positioning Statement."
expansion of area market share by 15 percent within a year, for instance) may
only be reachable through advertising expenditures

65
Factors affecting advertising budget
1.Degree of competitiveness in market:
Monopoly/Duopoly/Perfect
•A monopoly firm does not have to worry about
the promotional spends as it is the only player in
the market.
•For duopoly, where market is dominated by two
dominant players, the promotional budgets would
be high to outperform each other.
•Thus depending upon the competition the
advertising budget is set.

66
2. Market Share: Market leader/Market Follower
The advertising budget for a market follower will
be decided by the tactics of the market leader. To
improve market share one of the investment is to
increase promotional spent. Thus, where a
company stands is a deciding factor in advertising
budget

67
3.Product life-cycle stage:
Introduction/growth/maturity/decline
The advertisement budget would be higher at the
Introduction & Growth Stages as it has to
introduce the product in the market and establish itself
among the competitors so the frequency of
advertisements would be high & so would be
the budget.

68
4. Advertising Frequency:
An ad can be played only once or can be multiple times.
Also, it can be Daily, Weekly, Fortnightly,
Monthly etc. Depending upon the requirement, the
advertising budget is altered.
All these factors are responsible in creating a efficient
advertising budget.

Unit 5 promotion decision

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