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TERM PAPER
OF
PROMOTIONS MANAGEMENT
(MGT401)
TOPIC:- VIP luggage
SUBMITTED BY:- ANUJ KUMAR
ROLL NO.:- R1814A13
REG NO.:- 10800700
SEC:- R1814
COURSE:- BBA-MBA(5TH SEM)
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SALES PROMOTION
Sales promotion can be gimmicky come-ons or solid marketing strategies. They can attract new
customers to your business or keep loyal customers from being wooed by the competition. This
project defines sales promotions and discusses the way by which sales promotions help in
rewarding the loyal customers.
Sales Promotion consists of a diverse collection of incentive tools, mostly
short term, designed to stimulate quicker and/or greater purchase of particular
products/services by consumers or the trade.
Most sales promotions have a specific duration. They produce result quickly,
but once the promotional period is over, those incentive-induced sales tend to
taper off. A properly designed sequence of sales promotions can accomplish
several marketing objectives:
Encourage an initial purchase.
Foster increased purchases.
Reward repeated purchases and thus encourage even more shopping
activity.
In some professions, sales promotions are rare you hardly ever see a lawyer
offer a two for-one price on divorce, even in services professions. Most service
business rely on long term customer relationship.
Whereas advertising offers a reason to buy, sales promotion offers an incentive
to buy. Sales promotion include tools for consumer promotion (samples,
coupons, cash refund offers, prices off, premiums, prizes, free trials, crosspromotion, point-of purchase displays, and demonstrations); trade promotion
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(price off, advertising and displays allowances and free goods); and business
and sales-force promotion (trade shows and conventions, contests for sales
representatives, and specialty advertising). These tools are used by most
organizations, including nonprofit organizations.
Over the past two decade, the popularity of sales promotion has
been increasing. Two reasons for this increased popularity are
doubtedly the increased increase pressure on management for
Short-term result and the emergence of new purchase tracking
Technology. For example, many supermarket cash register are
now equipped with a device that dispenses coupons to a
Customer at the point of purchase. The some objectives of
Sales promotion type, and cash amount of the coupon will
Very from customer to customer based on their purchases.
In essence, it is now possible for the Coca-Cola company to dispense coupons
will vary from customer who purchase Pepsi Cola, thus avoiding spendingpromotional dollars on already-loyal Coke drinkers.
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SOME OF THE TARGETS OF SALES PROMOTION ARE:
The objective of the sales promotions are different for different targets. The
objectives for the consumers, sales people and resellers are as follow:
When directed at consumers:
1. To obtain the trial of a product.
2. To introduce a new of improved product.
3. To encourage repeat or greater usage by current users.
4. To bring more customers into retail stores.
When directed at sales people:
1. To motivate the sales force.2. To educate the sales force about product improvements.
3. To stabilize a fluctuating sales pattern.
When directed at resellers:
1. To increase reseller inventories.
2. To obtain display and other support for products.
3. To improve product distribution.
4. To obtain more and better shelf space.
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TOOLS FOR SALES PROMOTION:
Aimed at final consumers or users:
Contests
Coupons
Aisle display
Samples
Trade shows
Point-of-purchase materials
Banners and streamers
Sponsors
Aimed at middlemen:
Price deals
Promotion allowances
Sales contests
Gifts
Trade shows
Meetings
Catalogs
Merchandising aids
Aimed at companys own sales force:
Contests
Meetings
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Portfolios
Displays
Sales aids
Training materials
PROMOTION STRATEGIES:
Sales promotion encourages consumers to seek more promotion rather than
more products. For instance, several TV manufacturers gave a 14-inch TV free
when a bigger TV was bought. Schemes like this prod the consumers to look at
the gift rather than the product. Sometimes companies are taken to court by
competitors for giving gifts costlier than the product itself. At others, companies
fall into what might be called Festival Promotion Trap. The customers know
that the company gives a hefty discount on festival sales.
So, he/she waits till Diwali and buys the product. Unwittingly, the company
trades down its own product.
CONCLUSION-
Promotion schemes have to be carefully configured. They should be relevant.
The promotional gifts should hold synergies with brand and the product. It is
better if it has strategic value like SAMSUNG. But, ultimately, no promotion
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scheme can salvage a product. Eventually, the product has to fend for itself. A
support should not be mistaken for a crutch.
SALES PROMOTION-
Consumer-Oriented Promotions:
1. Samples
2. Coupons
3. Premiums
4. Refunds/Rebates
5. Bonus Packs
6. Price-Offs
7. Contests/Sweepstakes
8. Frequency programs
9. Event Marketing
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Sampling:
Sampling involves a variety of procedures, whereby consumers are given some
quantity of 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 salespromotion 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 foe 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 size that are adequate for demonstrating the brands 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.
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Couponing:
The oldest, most widely used, and most effective sales promotion tool is the
prices-off coupons. Coupons make it possible to offer a price reduction only to
those consumers who are price-sensitive. Coupons also make it possible to
reduce the retail price of the product without relying on retailers for
cooperation. Coupons can encourage repurchase after initial trial.
The product category where coupons are used most is disposable diapers,
followed by cereal, detergent, and deodorant. Some of the product categories
where coupons are used the least are carbonated beverages, candy, and gum.
But there are a number of problems with coupons. It can be difficult to estimate
how many consumer will use a coupons and when. Response to a coupon is
rarely immediate; it typically takes anywhere from two to six month to redeem
one. However, coupons remain less effective than sampling for including initial
product trial in a short period.
Another problem with coupon promotions is misredemption or fraud which can
occur in a number of ways, including:
Redemption of coupons by consumers for a product or size not specified
on the coupons.
Redemption of coupons by salesclerks in exchange for cash.
Premiums:
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A premium is an offer of an item of merchandise or services either free or at a
low price that is an extra incentive for purchases. The two basic types of offer
are the free premium and the self-liquidating premium.
Free premium are usually gifts or merchandise included in the product package
or sent to consumers who mail in a request along with a proof of purchase. Free
premium have become very popular in the restaurant industry, particularly
among fast-food chains such as McDonalds and Burger King, which use
premium offers in their kids meal to attract children.
Self-Liquidating Premium require the consumer to pay some or all of the cost
of he premium plus handling and mailing costs. The cost marketers usually
purchases items used as self-liquidating premiums in large quantities and offers
them to the 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 premium offer several advantages to
marketers. Offering values to consumers through he premium products can
create interest in the brand and goodwill that enhance the brands image.
Contests & Sweepstakes:
A contest is a promotion where consumer competes for prizes or money on the
basis of skill or ability. The company determines winners by judging the entries
or ascertaining which entry comes closest to some predetermined criteria.
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Contests usually provide a purchase incentive by requiring a proof of purchase
to enter or an entry form that is available from a dealer or visit a store display to
gather information needed to enter. Marketer must be careful not to make their
contests too difficult to enter, as doing so might discourage participation among
key prospects in the target audiences.
Sweepstakes is a promotion where winners are determined purely by
chance; it cannot require a proof of purchase as a condition for entry. Entrant
needs 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 instant winner is a popular promotional tool. Some
games occur over a longer period and require more involvement by the
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
purchase.
Refunds & Rebates:
Refunds are offers by the manufacturer to return a portion of a new product
purchase price, usually after the consumer supplies some proof of purchase.
Consumers are generally very responsive to rebate offers, particularly as the
size of saving increase. Rebates are used by the makers of all types of products,
ranging from packaged goods to major appliances, cars, and computer software.
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Packaged-goods marketers often refund offers to induce trial of a new product
or encourage users of another brand to switch. Consumers may perceive the
savings offered through a cash refund as an immediate value that lowers the
cost of the item, even through those savings are realized only if the consumers
redeems the consumers redeem the refund or rebate offer.
Rebate have become a widely used form of promotion for consumer
durable s. products such as cameras, sporting goods, appliances, television,
audio and video equipment, computers, and cars frequently use rebate offers to
appeal to price conscious consumers. Rebates are now common not only in the
auto industry and other durable products but for packaged-goods products as
well.
Bonus Packs:
Bonus packs offers the consumer an extra amount of product at the regular
price by providing larger containers or extra units. Bonus packs result in a lower
cost per unit for the consumer and provide extra value as well as more products
for the money. There are several advantages to bonus pack promotions. First,
they give marketers a direct way to provide extra value without having to get
involved with complicated coupons and refund offers.
The additional value of a bonus pack is generally obvious to the consumers and
can have a strong impact on the purchase decision at the time of purchase.
Bonus packs can also be an effective defensive maneuver against a competitors
promotion or introduction of a new brand.
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Frequency Program:
One of the fastest-growing areas of sales promotion is the use of frequency
program (also known as continuity or loyalty programs). Many packaged-goods
companies are also developing frequently programs. Pillsbury, Nestle, Kraft,
and others have recently introduced frequency program that offers consumers
the opportunity to accumulate points for continuing to purchase their brands; thepoints can be redeemed for gifts and prizes.
Trade-Oriented Promotion:
10.Contests and dealer Incentive
11.Point-of purchase Display
12.Training Program
13.Trade Allowance
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TYPE OF MESSAGE USED: - The message formats are a template for
determining the advertising strategy that will be told in the form of story. In case
of VIP luggage, I will try to use various types of messages such as factual, teaser
and emotional.
a) Factual:-It will be information rich advertisement telling about the product. It
is usually a devoid of an emotional appeal, special effects or any other thing that
distracts the audience from the main message content.
b)TEASER:-As the teasers are the mystery advertisements in which only a little
bit is told about the product and by this way a curiosity is generated among the
consumers and the consumers purchase the product ,so this thing can also be
used in case of theluggages.
c) EMOTIONAL: Emotions will be used in the ad which will be in the form of
happiness appeal which will generate interest among the buyers
MESSAGE APPEAL:-The message appeal used in the case of VIP luggage will be
emotional appeal. The emotional appeal tends to arouse the positive as well as
negative feeling in a person. Customers usually buy the products based on their
feelings and not on the basis of information the product is providing. The
emotional statements work more than a pure logic. Humorous appeal will be
used in my ads.
Communications Analysis
Marketing Communication strategies for are almost fully concentrated on print
advertising and electronic ad. Depending on how the differentiates and positions itself
the print ads can be found in newspapers and local community magazines or high-end
regional magazines and electronic ad will be shown on entertainment channels like
star plus, Sony, zee etc. Besides these channels the ad will also be shown on movie
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channels and sports channel. Internet will also be used as a medium of
communication.
Competitive AnalysisVIP has direct competition with other luggage companies like
aristocrat,safari,American touristor make and local luggage companies. Thus the
consumers have a lot of choice in the market as far as luggage companies are
considered. Most of the competitor gives their ad on magazines and news paper etc.
Thus the role of IMC becomes very important in establishing a strong brand
presence in the market which can differentiate our brand from the competitors.
ADVERTISING CAMPAIGN
ADVERTISING OBJECTIVE
To develop knowledge and liking for VIP luggage as a best brand and persuasive
advertising.
To attract more people to buy VIP luggage.
Objective 1
Create awareness among 90% of the target audience.
Objective 2
Use simple messages.
Objective 3
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Providing detailed description about various communication modes for reaching the
destination.
Objective 4
Build favourable attitudes
ADVERTISEMENT BUDGET
To advertise we need funds for the same. The preparation of budget i.e. allocation of funds to
various cost centres is very much necessary before proceeding for the designing of the
campaign. It is a very critical aspect of the designing of the advertisement campaign. After
all the reason behind this is the profit motive of the advertising agency.
We have considered some of the underlying factors while setting the advertisement budget:
1. Since our product, VIP luggage, is in its introductory stage in its life cycle so we plan
to put it in an aggressive advertising campaign.
2. In order to achieve an aggressive campaign we have selected an effective media mix
comprising local newspapers, cable, radio and FM stations, internet, billboards and
national dailies.
3. The kind of frequency which we have planned has also played a determining factor in
apportioning the budget.
In this present scenario, our team has followed the Build-Up approach in calculating the
advertisement budget. The Build-Up approach refers to the process of calculating the
advertisement budget by following the said steps:
1. Setting of advertising objective.
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on our
target
audience
)
Radio Rs. 36,000 Rs. 27,000 Rs. 45,000 Rs. 18,000 Rs. 18,000 Rs. 18,000 Rs.
1,62,000
Local
channels
Rs. 2,000 x 2
x 50 = Rs.
2,00,000
Rs. 2,000 x
2 x 50 = Rs.
2,00,000
Rs. 2,000 x
2 x 50 = Rs.
2,00,000
Rs. 2,000 x
1 x 50 = Rs.
1,00,000
Rs. 2,000 x
1 x 50 = Rs.
1,00,000
Rs. 2,000 x
1 x 50 = Rs.
1,00,000
Rs.
9,00,000
Local
news
channels
Rs. 3,000 x 2
x 50 = Rs.
3,00,000
Rs. 3,000 x
2 x 50 = Rs.
3,00,000
Rs. 3,000 x
2 x 50 = Rs.
3,00,000
Rs. 3,000 x
1 x 50 = Rs.
1,50,000
Rs. 3,000 x
1x 50 = Rs.
1,50,000
Rs. 3,000 x
1 x 50 = Rs.
1,50,000
Rs.
13,50,000
Billboard
s and
posters
Rs. 5,000
x 50 = Rs.
2,50,000
NOTE: Full Page 52 cm x 33 cm (Size); Half Page - 26 cm x 33 cm (Size)
Unit for newspapers: cost/cm2 is to be Rs. 360. A total of Rs. 25,000 for the half page
advertisement (approximately) is to be charged
Unit for radio: Rs. 300/10 seconds everytime.
Total budget for the advertisement campaign comes out to be Rs. 47,02,000 for the period
October to December. The tender which we have filed is of Rs. 70,00,000. Thus our margin
will be Rs. 18,00,000 after apportioning Rs. 4,00,000 to various miscellaneous expenditures.
MEDIA STRATEGY
Demographics of our target audience, their attitudes, etc. have suggested us to take the media
mix of the following type.
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1. Print Media Newspapers (PUNJAB KESARI & The Times of India)
2. Electronic Media Local cable channels
3. Radio FM stations have tie-ups with the local newspapers so we have selected these
media vehicles which are BIG FM, Radio Dhoom & Radio Mantra.
4. Outdoor media Billboards, posters.
Newspaper has the widest reach among the various media vehicles. The cost for advertising
via this media is relatively less. The reach of this media to our target audience is estimated to
be the largest. One of our objectives is to make 90% of our target audience aware about the
tourist destinations in INDIA and newspapers in the form of local and national dailies can
very well comply with this objective as it has the benefit of mass coverage. It is basically an
awareness based campaign so we are required to provide the details and specifications about
VIP luggage. security concerns, communication aspects, expenses involved and other such
details. For all this we require a large media space and newspapers does a good job in this
regard. The pamphlets which we have designed to promote VIP luggage can be inserted in
the newspapers and thus circulated in the country. It involves lesser cost, more information
and larger reach. So newspapers are our first priority in our media mix. we have planned to
focus three of the premier stations of india through which we can grab the attention of people.
We have selected various cities of the state where billboards and posters can be put up. In
this regard we have chosen locations where the density of our target audience is the
maximum. Our research has shown that the people of the country prefers VIP luggage. Thus
the number of billboards and posters to be put up is decided to be the maximum in the
country.
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Next three months i.e. January to March Our media scheduling will that be of flighting.
This has been decided keeping in mind the various festivals that would take place in the first
three months of our campaign. In the first part we can see that there are lots of vacations like
winter holidays, Christmas and Diwali when people break their daily monotonous routine and
plan to purchase things. Thus our objective would be grabbing the attention of those people
in this favourable time period the most. Hence continuity has been chosen to support the
aggressive campaign in the first half.
In the second half the frequency of ad insertion will be less and will focus on developing the
linking for buyers.
First three months
Newspapers - Mentioning twice a week
Pamphlets Twice in a month in newspapers
Radio Mentioning everyday: 1st month - 4; 2nd month 3 & 3rd month 5
(In December people plan to visit more places of customer attraction so we have decided to
give the maximum mention)
Local channels Twice daily
News Channels Ad to be displayed twice daily at prime time (9 am and 9 pm).
Next three months
Newspapers - Mentioning once in a week
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Radio Mentioning twice a day
Local channels Twice daily
News Channels Ad to be displayed once daily
CREATIVE STRATEGY
Now we come down to the most vital component of the advertisement campaign i.e.
determining the creative strategy.
Message Theme
Our message theme has been a blend of emotional and rational approach. Numbers, letters,
words and concepts have been specified for ascertaining the rational themes. Feelings,
abstract ideas, images have been effectively designed to strike a balance for the message
theme.
We have tried to develop the relevance of VIP luggage for the audience of india in respect of
time and space boundary.
The selling strategy of ours has featured the following:
1. Benefits accrued (In our ads we have tried to focus on the value proposition involved
in choosing thevariety of luggages. For the incumbents it will always be cheaper to
go for the various types of luggages..
2. Attributes which give the distinctive difference to VIP luggage have also find a
mention in the various ads of ours through various media vehicles so we have applied
the concept of product differentiation to adhere to one of our objective of liking. And
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we have the various distinctive differences and we have tried to insert at specific
places keeping the target audience in our mind.
3.The USP of our product i.e. VIP luggage have found a mention in the punch lines of
our ad campaign. The biggest advantage which VIP luggage provides is that our
target audience can avail the benefits of quality and less cost.
4. Our focus will be on providing the distinctive differences, and advantages on the cost
front and touching the emotions of people.
PRE-TEST OF AD CAMPAIGN
As we have seen that a huge investment is involved in designing and launching an ad
campaign therefore pre-testing of an ad campaign is utmost essential and cannot be over
emphasised. Moreover if the error can be detected at an early stage a lot in terms of energy,
time and cost can be saved.
For print media:
We will go for the following
1. Direct questioning: We will go to the mentioned cities and through direct questions
we will try and get feedback about the effectiveness of the ad.
2. Order of merit: Respondents are shown alternative ads and asked to rank them
according to their preference. Respondents will be randomly selected across the
demographics of our target audience.
For Broadcasting:
1. Clutter test: We will try and measure whether our audios and videos are able to break
the clutter of varied advertising.
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POST TESTING
Once the ad is designed, pre-test done and the ad is released to generate an effective feedback
we sincerely advice for effective post testing technique. This will truly measure the
effectiveness of our ad campaign in respect of our objects met. We can follow the below post
test techniques:
1. Recall
2. Tracking studies
BIG IDEA
The campaign will be known as Feel your own soul campaign and should be designed in
such a way that it catches the attention of the target audience so that they have to stop look
and listen.
Undoubtedly its an original idea.
Relevance Festive season will attract more people. Moreover the idea talks about feeling
your own soul as our target audience are the inhabitants of Jharkhand itself.
The punch line which will transfer the selling strategy statement into an exciting attention
getting and memorable message.
There are many things in life that will catch your eye.
But only a few will catch your heart.... pursue those.
So this goes in making the big idea exciting.
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EFFECTIVENESS OF PROMOTIONAL
ACTIVITIES
The main purpose of the study is to know the effectiveness of the promotional
Activities in luggage industry. From the study we Expect to know to what
extent the promotional activity benefited to the industry and what the things are
that customer expects to do from the industry to improve sales.The effectiveness
of promotional activities helps the company to increase the sales and encouragethe repeat purchase. We also try to know the awareness of the sales promotional
activities as advertising plays an important role in sales Promotion.
Recommendations-
This study help us to find out the best and cheapest advertising and sales
promotion methods.
This study save our valuable time and money to choose a best advertising
method
Benefits of products can be demonstrated most effectively by advertising.
Advertisement gets the full attention of the people.
Advertising is done with a positive objective of awareness, persuasion or
reinforcement.
Advertising is the most visible marketing tool which seeks to transmit an
effective message from the marketer to a group of individuals.
Including the consumer to try the product,
rewarding the consumer for brand loyalty,
encouraging the consumer to trade up or purchase larger sizes of a
product,Stimulating the consumer to make repeat purchase of the product
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