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Promotion mix & advertising




PROMOTIONAL MIXThe 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 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 other instruments 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. Promotion is the process of communication between the company that sells the product and the potential customer, with the purpose of influencing the attitudes and behavior. There are specific promotional tool that are supporting chosen promotional goal. The promotion mix represents a combination of different promotional tools. The basic elements of promotional mix are Advertising, Public Relationship, Personal Sales and Sales Promotion.

1. Advertising is communication with current and potential customers and consumers,done through paid mass media. The channels of communication can be TV, radio, Internet, billboards, etc.

2. Public Relationship ( PR ) is communication toward public, but is turned more toreputation and image of the company, than to it's products. The PR activity can be a press conference, TV interview with company representative, press article about donation of the company to charity or about latest environmental project.

3. Personal Sales is a way of promotion activity where sales representative is directlycontacting the customer. This person-to-person contact has the goal of direct promotion of the product and conclusion of sales.

4. Sales Promotion represents a set of different promotional activities that has thegoal of animating customers for purchasing. This can be value offer ( discount ), quantity offer ( 2+1 ), prize drawings, merchandising, direct contact by animators in retail outlet, etc. 5. The approach to promotion can be different. The push strategy is transferring the supply pressure downstream through sales channels.

6. The pull strategy is approaching the consumer directly. The consumer'sdemand is then creating request for product through supply channel upstream. Usually these two approaches are interlacing. In the early stage of product life the pull strategy is more dominant.

7. Later, when the market is saturated with own and competitor's products thepush strategy is predominant.


promotion - introduction to the promotional mixIt 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 Advertising Advantages Good for building awareness Effective at reaching a wide audience positioning helps build customer trust Personal Selling Highly seller detailed features Relationships long time Sales Promotion Can stimulate quick increases in sales If used over the long-term, customers by targeting promotional incentives on may get used to the effect particular products Good short term tactical tool Too much promotion may damage the brand image can be built up important if closing the sale make take a product information interactive lots Disadvantages Impersonal - cannot answer all a customer's questions make a final purchasing decision of Costly - employing a sales force has wages and important buyers

Repetition of main brand and product Not good at getting customers to

communication between the buyer and many hidden costs in addition to Excellent for communicating complex / Not suitable if there are thousands of

Public Relations Often seen as more "credible" - since Risk of losing control - cannot always the message seems to be coming from a control what other people write or say third party (e.g. magazine, newspaper) Cheap way of reaching many customers - if the publicity is achieved through the right media about your product


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 become6

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.

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 outdoor7

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 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 for8

this sort of advertising have to be the appearance of brand Nokia which is displayed on Tom Cruises phone in the movie Minority Report, or the use of Cadillac 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 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 AdvertisingAlthough the audience is getting smarter and smarter and the modern day 9

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 sellingIntroduction 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 sale10

(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? 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.11

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, 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 reputation12

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. 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.13

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".

PushA 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 to retailers, and the retailers promote it to consumers. 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.

PullA 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 their retailers for the product, the retailers will ask the wholesalers, 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 14

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 of Fimbles 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.

public relationsIntroduction 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 politicians15

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: 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 Email16

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 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 objectivesIntroduction 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:17

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 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 planningIntroduction 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).18

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. 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 interconnected. It makes sense to try to bring some order to this chaos by understanding the19

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

direct marketingIntroduction 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)20

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 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, upto-date profile can be maintained.21

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 mixPromotional mix It is helpful to define the five main elements of the promotional mix before considering their strengths and limitations. Advertising 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:22

(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. 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 ReviewPrime 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. 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 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 typical penetration 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. 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,












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 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. %20RTI/aHR0cDovL3d3dy5ydGkub3JnLmluL0RvY3VtZW50cy9DYXNlJTIwU3R1ZGllcy 9QcmVzZW50YXRpb25zL1JUSSUyMFBPV0VSLU9jdC0xL01lZGlhJTIwYW5kJTIwUmlnaH QlMjBUbyUyMEluZm9ybWF0aW9uLnBwdAPRICE: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:

Profit oriented goals are including three main variables. Profit maximizing has the goal of extraction of maximal 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 price level that should bring the company to the specific position in the market. Sales maximizing prices is supposed to bring direct increase of profit. Competition variable is very important, therefore the company can adopt several price policies that should 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 that are 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,














Public relationship is one of the elements of company promotion within activities 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 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.