51277606 promotion mix advertising

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A PROJECT ON

PROMOTIONALMIX &

ADVERTISEMENTSubmitted by :-Riaz Ahemad

MBA


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PROMOTIONAL MIX

The purpose of advertising is to promote a product or service in order to increase sales and create a

branding of the product so that a customer loyalty base will be established. Without effective and

targeted advertising, a business cannot succeed. There are many types of advertising a business can

utilize in effort to increase their sales.

The following lists a number of types of advertising available to businesses:

Television and Radio

Since television was first introduced, businesses have had tremendous success using it as an

advertising medium. This is due to the increase in consumers watching television. The cost of

television depends on the time of day or night one advertises, the popularity of the television show(how many viewers,) and the length of the advertisement. Television advertising can reach

millions of people. Radio advertising is a traditional advertising format that uses voice and jingles.

Print

This includes newspapers, magazines, fliers, brochures..etc. Placing advertisements in magazines

and newspapers is an age old method of advertising. Newspapers and the magazines sell the

advertising space. Prices depend on location, size, graphics, and color. Advertising success often

depends on the number of subscribers. Print advertising allows a business to target a specific

demographic. Fliers and brochures are a great way to advertise sales and launch special product

promotion programs.

Internet Advertising

Online advertising consists of small ads, banner ads, text ads, video ads, pay-per-click advertising,

and reciprocal linking to other websites. The effectiveness of online advertising depends on

exposure and how many people actually view the advertisement. Internet advertising allows the

advertiser to track the number of impressions an ad gets (how many people see it), and how many

visits their business website receives from particular ads, making it simple to find out what kind of

conversion rates the advertisers are obtaining. Online advertising does not have any time restraints

and can be viewed day and night throughout the world. Businesses also have their own websites as

an advertising tool. A well-designed and well-promoted website can provide a world of customers.

Out-of-Home Advertising

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This can include digital signage, billboards, kiosks, tradeshows, and out-of-home advertising. This

is advertising that takes place outside of a customer's home. This form of advertising has become

very popular because it provides a new way to reach targeted customers. Billboards, kiosks, and

tradeshows have been extremely successful advertising tools because you can take your product or

service directly to the consumer. Digital signage is a newer method of advertising that is growing

in popularity. Digital signage is where monitors/plasma TVs are placed in strategic locations and

display advertisements directed at their targeted customer. Digital signage can deliver messages in

the form of text and digital video. Advertisers have the ability to up date content from a remote

location. You can find digital signage in such places as sports arenas, retail stores, department

stores, malls, schools...etc.

Regardless of the state of the economy, businesses have to keep advertising to stay successful.

Because of the broad range of advertising methods now available, businesses now have the ability

to reach their targeted customers at very affordable costs.

Promotion is one out of four basic instruments of marketing that has the purpose to inform about otherinstruments of marketing mix and to contribute to sales increase on the long term. The promotion is

always serving to specific goal. These goals can be public informing, demand increasing, product

differentiation, and product value increasing or sales stabilizing. Usually the promotion is targeting more

than one goal.

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It is not enough for a business to have good products sold at attractive prices. To generate sales and

profits, the benefits of products have to be communicated to customers. In marketing, this is

commonly known as "promotion".

Promotion is all about companies communicating with customers.

A business' total marketing communications programme is called the "promotional mix" and

consists of a blend of advertising, personal selling, sales promotion and public relations tools. In

this revision note, we describe the four key elements of the promotional mix in more detail.

It is helpful to define the four main elements of the promotional mix before considering their

strengths and limitations.

(1) Advertising

Any paid form of non-personal communication of ideas or products in the "prime media": i.e.

television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to

persuade and to inform. The two basic aspects of advertising are the message (what you want your

communication to say) and the medium (how you get your message across)

(2) Personal Selling

Oral communication with potential buyers of a product with the intention of making a sale. The

personal selling may focus initially on developing a relationship with the potential buyer, but will

always ultimately end with an attempt to "close the sale".

(3) Sales Promotion

Providing incentives to customers or to the distribution channel to stimulate demand for a product.

(4) Publicity

The communication of a product, brand or business by placing information about it in the media

without paying for the time or media space directly. otherwise known as "public relations" or PR.

Advantages and Disadvantages of Each Element of the Promotional Mix

Mix Element Advantages Disadvantages

Advertising Good for building awareness

Effective at reaching a wide audience

Repetition of main brand and product

positioning helps build customer trust

Impersonal - cannot answer all a

customer's questions

Not good at getting customers to make

a final purchasing decision

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Personal Selling Highly interactive - lots of

communication between the buyer and

seller

Excellent for communicating complex /

detailed product information and features

Relationships can be built up - important

if closing the sale make take a long time

Costly - employing a sales force has

many hidden costs in addition to

wages

Not suitable if there are thousands of

important buyers

Sales Promotion Can stimulate quick increases in sales by

targeting promotional incentives on

particular products

Good short term tactical tool

If used over the long-term, customers

may get used to the effect

Too much promotion may damage the

brand image

Public Relations Often seen as more "credible" - since the

message seems to be coming from a

third party (e.g. magazine, newspaper)

Cheap way of reaching many customers

- if the publicity is achieved through the

right media

Risk of losing control - cannot always

control what other people write or say

about your product

Advertising Advertising is the promotion of a companys products and services carried out primarily to

drive sales of the products and services but also to build a brand identity and communicate

changes or new product /services to the customers. Advertising has become an essential

element of the corporate world and hence the companies allot a considerable amount of

revenues as their advertising budget. There are several reasons for advertising some of

which are as follows:

Increasing the sales of the product/service

Creating and maintaining a brand identity or brand image.

Communicating a change in the existing product line.

Introduction of a new product or service.

Increasing the buzz-value of the brand or the company.

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Thus, several reasons for advertising and similarly there exist various media which can be

effectively used for advertising. Based on these criteria there can be several branches of

advertising. Mentioned below are the various categories or types of advertising:

Print Advertising Newspapers, Magazines, Brochures, Fliers

The print media have always been a popular advertising medium. Advertising products via

newspapers or magazines is a common practice. In addition to this, the print media also offers

options like promotional brochures and fliers for advertising purposes. Often the newspapers and

the magazines sell the advertising space according to the area occupied by the advertisement, the

position of the advertisement (front page/middle page), as well as the readership of the

publications. For instance an advertisement in a relatively new and less popular newspaper would

cost far less than placing an advertisement in a popular newspaper with a high readership. The

price of print ads also depend on the supplement in which they appear, for example an

advertisement in the glossy supplement costs way higher than that in the newspaper supplement

which uses a mediocre quality paper

Outdoor Advertising Billboards, Kiosks, Tradeshows and Events

Outdoor advertising is also a very popular form of advertising, which makes use of several tools

and techniques to attract the customers outdoors. The most common examples of outdoor

advertising are billboards, kiosks, and also several events and tradeshows organized by the

company. The billboard advertising is very popular however has to be really terse and catchy in

order to grab the attention of the passers by. The kiosks not only provide an easy outlet for the

company products but also make for an effective advertising tool to promote the companys

products. Organizing several events or sponsoring them makes for an excellent advertising

opportunity. The company can organize trade fairs, or even exhibitions for advertising their

products. If not this, the company can organize several events that are closely associated with their

field. For instance a company that manufactures sports utilities can sponsor a sports tournament to

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advertise its products.

Broadcast advertising Television, Radio and the Internet

Broadcast advertising is a very popular advertising medium that constitutes of several branches

like television, radio or the Internet. Television advertisements have been very popular ever since

they have been introduced. The cost of television advertising often depends on the duration of the

advertisement, the time of broadcast (prime time/peak time), and of course the popularity of the

television channel on which the advertisement is going to be broadcasted. The radio might have

lost its charm owing to the new age media however the radio remains to be the choice of small-

scale advertisers. The radio jingles have been very popular advertising media and have a large

impact on the audience, which is evident in the fact that many people still remember and enjoy the

popular radio jingles.

Covert Advertising Advertising in Movies

Covert advertising is a unique kind of advertising in which a product or a particular brand is

incorporated in some entertainment and media channels like movies, television shows or even

sports. There is no commercial in the entertainment but the brand or the product is subtly( or

sometimes evidently) showcased in the entertainment show. Some of the famous examples for this

sort of advertising have to be the appearance of brandNokia which is displayed on Tom Cruises

phone in the movieMinority Report, or the use ofCadillac cars in the movie Matrix Reloaded.

Surrogate Advertising Advertising Indirectly

Surrogate advertising is prominently seen in cases where advertising a particular product is banned

by law. Advertisement for products like cigarettes or alcohol which are injurious to heath are

prohibited by law in several countries and hence these companies have to come up with several

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other products that might have the same brand name and indirectly remind people of the cigarettes

or beer bottles of the same brand. Common examples include Fosters and Kingfisher beer brands,

which are often seen to promote their brand with the help of surrogate advertising.

Public Service Advertising Advertising for Social Causes

Public service advertising is a technique that makes use of advertising as an effective

communication medium to convey socially relevant messaged about important matters and social

welfare causes like AIDS, energy conservation, political integrity, deforestation, illiteracy, poverty

and so on. David Oglivy who is considered to be one of the pioneers of advertising and marketing

concepts had reportedly encouraged the use of advertising field for a social cause. Oglivy once

said, "Advertising justifies its existence when used in the public interest - it is much too powerful a

tool to use solely for commercial purposes.". Today public service advertising has

been increasingly used in a non-commercial fashion in several countries across the world in order

to promote various social causes. In USA, the radio and television stations are granted on the basis

of a fixed amount of Public service advertisements aired by the channel.

Celebrity Advertising

Although the audience is getting smarter and smarter and the modern day consumer

getting immune to the exaggerated claims made in a majority of advertisements,

there exist a section of advertisers that still bank upon celebrities and their popularity

for advertising their products. Using celebrities for advertising involves signing up

celebrities for advertising campaigns, which consist of all sorts of advertising

including, television ads or even print advertisements.

personal selling

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Introduction

Personal selling can be defined as follows:

Personal selling is oral communication with potential buyers of a product with the intention of

making a sale. The personal selling may focus initially on developing a relationship with the

potential buyer, but will always ultimately end with an attempt to "close the sale"

Personal selling is one of the oldest forms of promotion.

It involves the use of a sales force to support a push strategy (encouraging intermediaries to buy

the product)

or a pull strategy (where the role of the sales force may be limited to supporting retailers and

providing after-sales service).

What are the main roles of the sales force?

Kotler describes six main activities of a sales force:

(1) Prospecting - trying to find new customers

(2) Communicating - with existing and potential customers about the product range

(3) Selling - contact with the customer, answering questions and trying to close the sale

(4) Servicing - providing support and service to the customer in the period up to delivery and also

post-sale

(5) Information gathering - obtaining information about the market to feedback into the

marketing planning process

(6) Allocating - in times of product shortage, the sales force may have the power to decide how

available stocks are allocated

What are the advantages of using personal selling as a means of promotion?

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Personal selling is a face-to-face activity; customers therefore obtain a relatively high degree of

personal attention

The sales message can be customised to meet the needs of the customer

The two-way nature of the sales process allows the sales team to respond directly and promptly to

customer questions and concerns

Personal selling is a good way of getting across large amounts of technical or other complex

product information

The face-to-face sales meeting gives the sales force chance to demonstrate the product

Frequent meetings between sales force and customer provide an opportunity to build good long-

term relationships

Given that there are many advantages to personal selling, why do more businesses not maintain a

direct sales force?

Main disadvantages of using personal selling

The main disadvantage of personal selling is the cost of employing a sales force. Sales people are

expensive. In addition to the basic pay package, a business needs to provide incentives to achieve

sales (typically this is based on commission and/or bonus arrangements) and the equipment to

make sales calls (car, travel and subsistence costs, mobile phone etc).

In addition, a sales person can only call on one customer at a time. This is not a cost-effective way

of reaching a large audience.

sales promotionIntroduction

A good definition of sales promotion would be as follows:

An activity designed to boost the sales of a product or service. It may include an advertising

campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps,

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arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary

price reductions, door-to-door calling, telemarketing, personal letters on other methods.

More than any other element of the promotional mix, sales promotion is about action. It is about

stimulating customers to buy a product. It is not designed to be informative a role which

advertising is much better suited to.

Sales promotion is commonly referred to as Below the Line promotion.

Sales promotion can be directed at:

The ultimate consumer (a pull strategy encouraging purchase)

The distribution channel (a push strategy encouraging the channels to stock the product). This

is usually known as selling into the trade

Methods of sales promotion

There are many consumer sales promotional techniques available, summarised in the table below:

Price promotions

Price promotions are also commonly known as price discounting

These offer either (1) a discount to the normal selling price of a product, or (2) more of the product

at the normal price.

Increased sales gained from price promotions are at the expense of a loss in profit so these

promotions must be used with care.

A producer must also guard against the possible negative effect of discounting on a brands

reputation

Coupons

Coupons are another, very versatile, way of offering a discount. Consider the following examples

of the use of coupons:

- On a pack to encourage repeat purchase

- In coupon books sent out in newspapers allowing customers to redeem the coupon at a retailer

- A cut-out coupon as part of an advert

- On the back of till receipts

The key objective with a coupon promotion is to maximise the redemption rate this is the

proportion of customers actually using the coupon.

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One problem with coupons is that they may simply encourage customers to buy what they would

have bought anyway. Another problem occurs when retailers do not hold sufficient stocks of the

promoted product causing customer disappointment.

Use of coupon promotions is, therefore, often best for new products or perhaps to encourage sales

of existing products that are slowing down.

Gift with purchase

The gift with purchase is a very common promotional technique. It is also known as a premium

promotion in that the customer gets something in addition to the main purchase. This type of

promotion is widely used for:

- Subscription-based products (e.g. magazines)- Consumer luxuries (e.g. perfumes)

Competitions and prizes

Another popular promotion tool with many variants. Most competition and prize promotions are

subject to legal restrictions.

Money refunds

Here, a customer receives a money refund after submitting a proof of purchase to the manufacturer.

These schemes are often viewed with some suspicion by customers particularly if the method of

obtaining a refund looks unusual or onerous.

Frequent user / loyalty incentives

Repeat purchases may be stimulated by frequent user incentives. Perhaps the best examples of this

are the many frequent flyer or user schemes used by airlines, train companies, car hire companies

etc.

Point-of-sale displays

Research into customer buying behaviour in retail stores suggests that a significant proportion of

purchases results from promotions that customers see in the store. Attractive, informative and well-

positioned point-of-sale displays are, therefore, very important part of the sales promotional

activity in retail outlets.

push and pull strategies

"Push or Pull"?

Marketing theory distinguishes between two main kinds of promotional strategy - "push" and

"pull".

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Push

A push promotional strategy makes use of a company's sales force and trade promotion activities

to create consumer demand for a product.

The producer promotes the product to wholesalers, the wholesalers promote it toretailers, and the retailers promote it toconsumers.A good example of "push" selling is mobile phones, where the major handset manufacturers such

as Nokia promote their products via retailers such as Carphone Warehouse.

Personal selling and trade promotions are often the most effective promotional tools for companies

such as Nokia - for example offering subsidies on the handsets to encourage retailers to sell higher

volumes.

A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g.selling insurance or holidays directly). With this type of strategy, consumer promotions and

advertising are the most likely promotional tools.

Pull

A pull selling strategy is one that requires high spending on advertising and consumer

promotion to build up consumer demand for a product.

If the strategy is successful, consumers will ask theirretailers for the product, the retailers will

ask thewholesalers, and the wholesalers will ask the producers.A good example of a pull is the heavy advertising and promotion of children's toys mainly on

television. Consider the recent BBC promotional campaign for its new pre-school programme

the Fimbles. Aimed at two to four-year-olds, 130 episodes of Fimbles have been made and are

featured everyday on digital children's channel CBeebies and BBC2.

As part of the promotional campaign, the BBC has agreed a deal with toy maker Fisher-Price to

market products based on the show, which it hopes will emulate the popularity of the Tweenies.

Under the terms of the deal, Fisher-Price will develop, manufacture and distribute a range ofFimbles products including soft, plastic and electronic learning toys for the UK and Ireland.

In 2001, BBC Worldwide (the commercial division of the BBC) achieved sales of 90m from its

children's brands and properties last year. The demand created from broadcasting of the Fimbles

and a major advertising campaign is likely to pull demand from children and encourage retailers

to stock Fimbles toys in the stores for Christmas 2002.

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public relations

Introduction

The Institute of Public Relations defines public relations as follows:

The planned and sustained effort to establish and maintain goodwill and mutual

understanding between an organisation and its publics

What is meant by the term publics in the above definition?

A business may have many publics with which it needs to maintain good relations and build

goodwill. For example, consider the relevant publics for a publicly-quoted business engaged in

medical research:

Employees

Shareholders

Trade unions

Members of the general public

Customers (past and present)

Pressure groups

The medical profession

Charities funding medical research

Professional research bodies and policy-forming organisations

The media

Government and politicians

The role of public relations is to:

Identify the relevant publics

Influence the opinions of those publics by:

o Reinforcing favourable opinions

o Transforming perhaps neutral opinions into positive ones

o Changing or neutralising hostile opinions

Public relations techniques

There are many techniques available to influence public opinion, some of which are more

appropriate in certain circumstances than others:

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Consumer communication

Customer press releases

Trade press releases

Promotional videos

Consumer exhibitions

Competitions and prizes

Product launch events

Celebrity endorsements

Web sites

Business communication

Corporate identity design

Company and product videos

Direct mailings

Web site

Trade exhibitions

Internal / employee communication

In-house newsletters and magazines

Intranet

Notice boards

Employee conferences

Email

External corporate communication

Company literature (brochures, videos etc.)

Community involvement programmes

Trade, local, national and international media relations

Financial communication

Financial media relations

Annual report and accounts

Meetings with stock market analysts, fund managers etc

Shareholder meetings (including the annual general meeting

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Given the wide range of techniques used in public relations, how is it possible to measure the

effectiveness of public relations?

It is actually quite difficult to measure whether the key messages have been communicated to the

target public. In any event, this could be quite costly since it would involve a large amount of

regular research. Instead, the main measures of effectiveness concentrate on the process of public

relations, and include:

Monitoring the amount of media coverage obtained (press cuttings agencies play a role in

keeping businesses informed of this)

Measuring attendance at meetings, conferences

Measuring the number of enquiries or orders received in response to specific public relations

efforts.

marketing planning - setting marketing

objectives

Introduction

Objectives set out what the business is trying to achieve.

Objectives can be set at two levels:

(1) Corporate level

These are objectives that concern the business or organisation as a whole

Examples of corporate objectives might include:

We aim for a return on investment of at least 15%

We aim to achieve an operating profit of over 10 million on sales of at least 100 million

We aim to increase earnings per share by at least 10% every year for the foreseeable future

(2) Functional level

e.g. specific objectives for marketing activities

Examples of functional marketing objectives might include

We aim to build customer database of at least 250,000 households within the next 12 months

We aim to achieve a market share of 10%

We aim to achieve 75% customer awareness of our brand in our target markets

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Both corporate and functional objectives need to conform to the commonly used SMART criteria.

The SMART criteria (an important concept which you should try to remember and apply in exams)

are summarised below:

Specific - the objective should state exactly what is to be achieved.

Measurable - an objective should be capable of measurement so that it is possible to determine

whether (or how far) it has been achieved

Achievable - the objective should be realistic given the circumstances in which it is set and the

resources available to the business.

Relevant - objectives should be relevant to the people responsible for achieving them

Time Bound - objectives should be set with a time-frame in mind. These deadlines also need to be

realistic.

marketing planning - the link with strategic

planning

Introduction

Businesses that succeed do so by creating and keeping customers. They do this by providing better

value for the customer than the competition.

Marketing management constantly have to assess which customers they are trying to reach and

how they can design products and services that provide better value (competitive advantage).

The main problem with this process is that the environment in which businesses operate is

constantly changing. So a business must adapt to reflect changes in the environment and make

decisions about how to change the marketing mix in order to succeed. This process of adapting and

decision-making is known as marketing planning.

Where does marketing planning fit in with the overall strategic planning of a business?

Strategic planning (which you will cover in your studies of strategy is concerned about the

overall direction of the business. It is concerned with marketing, of course. But it also involves

decision-making about production and operations, finance, human resource management and other

business issues.

The objective of a strategic plan is to set the direction of a business and create its shape so that

the products and services it provides meet the overall business objectives.

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Marketing has a key role to play in strategic planning, because it is the job of marketing

management to understand and manage the links between the business and the environment.

Sometimes this is quite a straightforward task. For example, in many small businesses there is only

one geographical market and a limited number of products (perhaps only one product!).

However, consider the challenge faced by marketing management in a multinational business, with

hundreds of business units located around the globe, producing a wide range of products. How can

such management keep control of marketing decision-making in such a complex situation? This

calls for well-organised marketing planning.

What are the key issues that should be addressed in marketing planning?

The following questions lie at the heart of any marketing (or indeed strategic) planning process:

Where are we now?

How did we get there?

Where are we heading?

Where would we like to be?

How do we get there?

Are we on course?

Why is marketing planning essential?

Businesses operate in hostile and increasingly complex environment. The ability of a business to

achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-

connected. It makes sense to try to bring some order to this chaos by understanding the commercial

environment and bringing some strategic sense to the process of marketing products and services.

A marketing plan is useful to many people in a business. It can help to:

Identify sources of competitive advantage

Gain commitment to a strategy

Get resources needed to invest in and build the business

Inform stakeholders in the business

Set objectives and strategies

Measure performance

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direct marketing

Introduction

Direct marketing is concerned with establishing an individual relationship between the business

offering a product or service and the final customer.

Direct marketing has been defined by the Institute of Direct Marketing as:

The planned recording, analysis and tracking of customer behaviour to develop a relational

marketing strategies

The process of direct marketing covers a wide range of promotional activities you may be familiar

with. These include:

Direct-response adverts on television and radio

Mail order catalogues

E-commerce (you bought this marketing companion following tutor2us direct marketing

campaign!)

Magazine inserts

Direct mail (sometimes also referred to as junk mail)

Telemarketing

Direct mail

Of the above direct marketing techniques, the one in most widespread use is direct mail.

Direct mail is widely thought of as the most effective medium to achieve a customer sales

response.

Why?

The advertiser can target a promotional message down to an individual level, and where possible

personalize the message. There are a large number of mailing databases available that allow

businesses to send direct mailing to potential customers based on household income, interests,

occupation and other variables

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Businesses can first test the responsiveness of direct mailing (by sending out a test mailing to a

small, representative sample) before committing to the more significant cost of a larger campaign

Direct mailing campaigns are less visible to competitors it is therefore possible to be more

creative, for longer

However, direct mail has several weaknesses:

A piece of direct mail is less interactive than a television or radio advert, although creative

packaging can still stimulate customer response

Lead times to produce direct mailing campaigns can be quite long

There is increasing customer concern with junk mail the receipt of unsolicited mail which

often suggests that the right to individual privacy has been breached.

The Direct marketing database

Direct mailing is based on the mailing list a critical part in the direct marketing process. The

mailing list is a database which collects together details of past, current and potential customers. A

properly managed mailing database enables a business to:

Focus on the best prospective customers

Cross-sell related products

Launch new products to existing customers

How is the mailing database compiled?

The starting point is the existing information the business keeps on its customers. All forms of

communication between a customer and the business need to be recorded so that a detailed, up-to-

date profile can be maintained.

It is also possible to buy mailing lists from elsewhere. There are numerous mailing list owners

and brokers who sell lists of names. The Internet, directories, associations and other sources are

good sources.

The promotional mix

Promotional mix

It is helpful to define the five main elements of the promotional mix before considering their

strengths and limitations.

Advertising

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Advertising is any paid form of non-personal communication of ideas or products in the "prime

media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is

intended to persuade and to inform.

The two basic aspects of advertising are the message (what you want your communication to say)

and the medium (how you get your message across)

Direct marketing

Direct marketing creates a direct relationship between the customer and the business on an

individual basis.

Personal Selling

Personal selling refers to oral communication with potential buyers of a product with the intention

of making a sale. The personal selling may focus initially on developing a relationship with the

potential buyer, but will always ultimately end with an attempt to "close the sale".

Sales Promotion

Sales promotion refers to the provision of incentives to customers or to the distribution channel to

stimulate demand for a product.

Public Relations

Public relations is the communication of a product, brand or business by placing information about

it in the media without paying for the time or media space directly

Factors that determine the type of promotional tools used

Each of the above components of the promotional mix has strengths and weaknesses. There are

several factors that should be taken into account in deciding which, and how much of each tool to

use in a promotional marketing campaign:

(1) Resource availability and the cost of each promotional tool

Advertising (particularly on television and in the national newspapers can be very expensive). The

overall resource budget for the promotional campaign will often determine which tools the

business can afford to use.

(2) Market size and concentration

If a market size is small and the number of potential buyers is small, then personal selling may be

the most cost-effective promotional tool.

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A good example of this would be businesses selling software systems designed for supermarket

retailers. On the other hand, where markets are geographically disperse or, where there are

substantial numbers of potential customers, advertising is usually the most effective.

(3) Customer information needs

Some potential customers need to be provided with detailed, complex information to help them

evaluate a purchase (e.g. buyers of equipment for nuclear power stations, or health service

managers investing in the latest medical technology). In this situation, personal selling is almost

always required - often using selling teams rather than just one individual.

By contrast, few consumers need much information about products such as baked beans or bread.

Promotional tools such as brand advertising and sales promotion are much more effective in this

case.

Rural Marketing - A Critical Review

Prime Minister Manmohan Singh recently talked about his vision for rural India: "My vision

of rural India is of a modern agrarian, industrial and services economy co-existing side by

side, where people can live in well-equipped villages and commute easily to work, be it on

the farm or in the non-farm economy. There is much that modern science and technology

can do to realize this vision. Rural incomes have to be increased. Rural infrastructure has to

be improved. Rural health and education needs have to be met. Employment opportunities

have to be created in rural areas."

'Go rural' is the slogan of marketing gurus after analyzing the socio-economic changes in

villages. The Rural population is nearly three times the urban, so that Rural consumers have

become the prime target market for consumer durable and non-durable products, food,

construction, electrical, electronics, automobiles, banks, insurance companies and other

sectors besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides

and farm machinery. The Indian rural market today accounts for only about Rs 8 billion of

the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly

there seems to be a long way ahead. Although a lot is spoken about the immense potential

of the unexplored rural market, advertisers and companies find it easier to vie for a share of

the already divided urban pie.

The success of a brand in the Indian rural market is as unpredictable as rain. It has always

been difficult to gauge the rural market. Many brands, which should have been successful,

have failed miserably. More often than not, people attribute rural market success to luck.

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Therefore, marketers need to understand the social dynamics and attitude variations within

each village though nationally it follows a consistent pattern looking at the challenges and

the opportunities which rural markets offer to the marketers it can be said that the future is

very promising for those who can understand the dynamics of rural markets and exploit

them to their best advantage. A radical change in attitudes of marketers towards the vibrant

and burgeoning rural markets is called for, so they can successfully impress on the 230

million rural consumers spread over approximately six hundred thousand villages in rural

India.

What rural market buys?

Rural India buys small packs, as they are perceived as value for money. There is brand

stickiness, where a consumer buys a brand out of habit and not really by choice. Brands

rarely fight for market share; they just have to be visible in the right place. Even expensive

brands, such as Close-Up, Marie biscuits and Clinic shampoo are doing well because of deep

distribution, many brands are doing well without much advertising support Ghadi, a big

detergent brand in North India, is an example.

Why Rural Market?

The Indian rural market has a huge demand base and offers great opportunities to

marketers. Two-thirds of Indian consumers live in rural areas and almost half of the national

income is generated here. The reasons for heading into the rural areas are fairly clear. The

urban consumer durable market for products like color TVs, washing machines, refrigerators

and air conditioners is growing annually at between 7 per cent and 10 per cent.

The rural market is zooming ahead at around 25 per cent annually. "The rural market is

growing faster than urban India now," says Venugopal Dhoot, chairman of the Rs 989

-crore(Rs billion) Videocon Appliances. "The urban market is a replacement and up

gradation market today," adds Samsung's director, marketing, Ravinder Zutshi.

Reasons for improvement of business in rural area

Socio-economic changes (lifestyle, habits and tastes, economic status)

Literacy level (25% before independence more than 65% in 2001)

Infrastructure facilities (roads, electricity, media)

Increase in income Increase in expectations

MART, the specialist rural marketing and rural development consultancy has found that 53

per cent of FMCG sales lie in the rural areas, as do 59 per cent of consumer durable sales,

said its head Pradeep Kashyap at the seminar. Of two million BSNL mobile connections, 50

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per cent went to small towns and villages, of 20 million Rediffmail subscriptions, 60 per cent

came from small towns, so did half the transactions on Rediff's shopping site.

Special features of rural market

Unlike urban markets, rural markets are difficult to predict and possess special

characteristics. The featured population is predominantly illiterate, have low income,

characterized by irregular income, lack of monthly income and flow of income fluctuating

with the monsoon winds.

Rural markets face the critical issues of Distribution, Understanding the rural consumer,

Communication and Poor infrastructure. The marketer has to strengthen the distribution and

pricing strategies. The rural consumer expects value for money and owing to has unsteady

and meager status of weekly income; increasing the household income and improving

distribution are the viable strategies that have to be adapted to tap the immense potential

of the market.

Media reach is a strong reason for the penetration of goods like cosmetics, mobile phones,

etc., which are only used by the urban people. Increasing awareness and knowledge on

different products and brands accelerate the demand. The rural audience are however

critical of glamorous ads on TV, and depend on the opinion leaders who introduce the

product by using it and recommending it.

Opinion leaders play a key role in popularizing products and influence in rural market.

Nowadays educated youth of rural also influences the rural consumers. Rural consumers are

influenced by the life style they watch on television sets. Their less exposure to outside

world makes them innocent and fascinated to novelties. The reach of mass television media,

especially television has influenced the buying behaviour greatly

Creating brands for rural India

Rural markets are delicately powerful. Certain adaptations are required to cater to the rural

masses; they have unique expectation and warrant changes in all four parameters of

product, price, promotion and distribution.

A lot is already emphasized on adapting the product and price in terms of packaging,

flavouring, etc and in sachets, priced to suit the economic status of the rural India in sizes

like Rs.5 packs and Re.1 packs that are perceived to be of value for money. This is a typicalpenetration strategy, that promises to convert the first time customers to repeated

customers.

The promotion strategies and distribution strategies are of paramount importance. Ad

makers have learnt to leverage the benefits of improved infrastructure and media reach.

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The television airs advertisements to lure rural masses, and they are sure it reaches the

target audience, because majority of rural India possesses and is glued to TV sets!

Distributing small and medium sized packets thro poor roads, over long distances, into deep

pockets of rural India and getting the stockiest to trust the mobility is a Herculean task.

Giving the confidence those advertisements will support. Sales force is being trained to win

the confidence of opinion leaders. Opinion leaders play an important role in popularizing the

brand. They sometimes play the role of entry barriers for new products.

The method of promotion needs to be tailored to suit the expectations of the market.

Techniques that have proved to be successful are Van campaigns, edutainment films,

generating word of mouth publicity through opinion leaders, colourful wall paintings. The

Wide reach of television has exposed the other wise conservative audience to

westernization. Panchayat televisions in Tamilnadu carries message that are well received

and contribute to community development.

Dynamics of rural markets differ from other market types, and similarly rural marketing

strategies are also significantly different from the marketing strategies aimed at an urban or

industrial consumer. This, along with several other related issues, have been subject matter

of intense discussions and debate in countries like India and China and focus of even

international symposia organized in these countries.

Rural markets and rural marketing involve a number of strategies, which include:

* Client and location specific promotion

* Joint or cooperative promotion

* Bundling of inputs

* Partnership for sustainability

Client and Location specific promotion involves a strategy designed to be suitable to the

location and the client. Joint or co-operative promotion strategy involves participation

between the marketing agencies and the client. 'Bundling of inputs' denote a marketing

strategy, in which several related items are sold to the target client, including arrangements

of credit, after-sale service, and so on. Media, both traditional as well as the modern media,

is used as a marketing strategy to attract rural customers.

Partnership for sustainability involves laying and building a foundation for continuous and

long lasting relationship.

Innovative media can be used to reach the rural customers. Radio and television are the

conventional media that are reaching the rural audience effectively. But horse cart, bullock

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cart and wall writing are the other media, which can carry the message effectively to the

rural customers.

Rural marketing is an evolving concept, and as a part of any economy has untapped

potential; marketers have realized the opportunity recently. Improvement in infrastructure

and reach, promise a bright future for those intending to go rural. Rural consumers are keen

on branded goods nowadays, so the market size for products and services seems to have

burgeoned. The rural population has shown a trend of wanting to move into a state of

gradual urbanization in terms of exposure, habits, lifestyles and lastly, consumption

patterns of goods and services. There are dangers on concentrating more on the rural

customers. Reducing the product features in order to lower prices is a dangerous game to

play.

http://www.edocfind.com/download/ppt/MEDIA%20AND

%20RTI/aHR0cDovL3d3dy5ydGkub3JnLmluL0RvY3VtZW50cy9DYXNlJTIwU3R1ZGllcy9

QcmVzZW50YXRpb25zL1JUSSUyMFBPV0VSLU9jdC0xL01lZGlhJTIwYW5kJTIwUmlnaHQl

MjBUbyUyMEluZm9ybWF0aW9uLnBwdA

PRICE:-

The Price is the one of components of marketing Mix, along with Promotion,

Product Distribution and Product. The price is usually defined as financially

expressed value of the product or service at the market. Price levels are

forming the public opinion about a specific supplier. For modern shopper the

price is not only the expression of money outflow, but also represent a certain

value, benefit or satisfaction perceived by certain product / service.

The price has specific relationship with other components of marketing mix. Actually the price is the only

component that generates revenue, while other components generate costs. Manufacturing of the

product represent the cost. The distribution of the product also generate the cost. The promotion usually

creates the increase of demand for the product/service, but directly also creates costs. All these costs

needs to be covered through the price.

Still, the goal of the price is not only to cover the basic costs of manufacturing, distribution and

promotion. The function of the price is much more complex and depends on different variables. Goals of

price depends on company's policy against various relationships:

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Profit oriented goals are including three main variables. Profit maximizing has the goal of extraction ofmaximal possible profit. Satisfactory profit goals target the specific profit rate. Return on investment

pricing is primarily focused on direct return of investment to the investor.

Sales oriented goals can have two main targets. Market share approach is targeting a specific pricelevel that should bring the company to the specific position in the market. Sales maximizing prices is

supposed to bring direct increase of profit.

Competit ion variable is very important, therefore the company can adopt several price policies thatshould address the competition in appropriate way. Competition avoiding process have a goal of avoiding

clashes ( price wars ) with competition. Repelling prices policy has the aim of discouraging the

competition from entering the new market or product category. Stabile prices policy is the common price

strategy that brings balance between attractiveness to shoppers and challenge to competition.

Prestige price positioning have relatively high price level. There is a certain segment of customers thatare willing to pay high premium price in order to distinguish themselves from the majority of the market.

These customers are building their lifestyle image by purchasing exclusive and luxury products.

Status Quo is pricing policy when company does not want to make to make disturbances in the market.This is the case with the products that have the specific position in the market, while any bigger

alteration in price policy would not bring much value.

Publ ic relat ionship is one of the elements of company promotion withinactivities of marketing mix. Public relationship represent communication of

company and establishment of relationship with different stakeholder groups:

consumers, employees, shareholder, government and different social groups.

Contemporary market trends require companies to move from occasional communication to continuous

public relationship communication in organized and planned manner. The main goal of public relationship

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is building of prestige and image through formal communication.

The medias for public relationship communication are:

Newspaper & magazine Articles

Press conferences

Sponsored events

Press releases

Animation of Experts for purposes of PR

Publicity is spontaneous manifestation of positive information publishing, not initiated by company.

Publicity is considered as a part of public relationship, since it serve to the common goal. Publicity is

shown through news, stories, newspaper columns, editor's comments, ...

Unfortunately, there is negative publicity too. Negative news, articles or comments can be published

occasionally, as a result of different factors. Negative publicity can result with sales decrease, image

deterioration or even lead to serious business crisis. The goal of public relationship is to alleviate

negative effects of negative publicity by planned PR activity.

The main problem with positive and negative publicity is the fact that there is no real control of media.

The only way of influencing the media and public opinion is choosing a right corporate social

responsibility policy and PR approach that will minimize possibility for negative publicity and maximize

positive public opinion of the company.

BIBLIOGRAPHY:-

http://www.biz-development.com/Marketing/5.7.Marketing-Mix-Promotion.htm

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