Everything you need to know about the elements and components of promotion mix! Promotion mix refers to combination of promotional tools used by an organization to achieve its communication objectives. It is an important element of marketing mix. It is concerned with the activities that are undertaken to communicate with customers and distribution channels in order to enhance the sales of the firm. Promotion mix is the combination, types and amounts of different forms of promotion used by a market. These include personal selling, advertisement, sales promotion and publicity. The promotional tools are used in such a way that they complement and support each other.
Some of the elements of promotion mix are:- 1. Advertising 2. Personal Selling 3. Sales Promotion 4. Public Relations 5. Direct Marketing 6. Sponsorship 7. Publicity 8. Marketing Communication Process 9. After Sales Service.
Elements and Components of Promotion Mix
Elements of Promotion Mix – With Advantages and Disadvantages
Promotion is the method you use to spread the word about your product or service to customers, stakeholders and the broader public. Once the firm identifies the target market it will have a good idea of the best way to reach them. Firms use a mix of advertising, personal selling, sales promotion and public relations to promote their products or services.
Let us study each of this promotion mix in detail:
1. Advertising:
Advertising is a form of communication designed to persuade potential customers to choose the product or service over that of a competitor. It is a form of non-personal promotion. It is when companies pay to promote ideas, goods or service in a variety of media outlets.
Successful advertising involves making your products or services positively known by that section of the public most likely to purchase them. The advertisement should be planned, consistent activity that keeps the name of the business and the benefits of the products or services upper most in the mind of the consumer.
The advantages of advertising are:
i. It increases profit by increasing sales,
ii. Advertising aims to make business and product name familiar to the public.
iii. It creates goodwill and builds a favourable image.
iv. It educates and informs the public
v. It offers specific products or services.
vi. It attracts customers to find out more about product or service.
These are four rules to consider when planning any advertising activity- i.e. before preparing and booking any form of advertising.
i. Aim- The aim of advertisement is to inform, sell or improve the image of business.
ii. Target- From which sector of the public for Ex: male, female, adult, child.
iii. Media- Bearing aim and target in mind which media is most suitable TV, press or internet.
iv. Competitors- What are competitors doing? Which media channel they use? Are they successful and now to beat them in competition?
Developing Effective Advertising:
Good advertising generally elicits the following four responses:
1. Attention:
It should catch the eye feelings, ear and stands out amid the clutter of competing advertisements.
2. Interest:
It must arouses interest and delivers sufficient impact in the message or offering.
3. Desire:
It should create a desire to learn more or crave for ownership.
4. Action:
It should spurs an action which leads to achievement of the ads original objective – i.e., it should prompts potential customers to purchase or use the product or service.
Types of Media:
There are many media options open to advertisers. They select the media depending on their budget. Often a combination of media can be used to good effect.
Some of the media are explained below:
1. Press Advertising:
This is commonly used form of general advertising which includes advertising in all press such as newspapers, magazines and journals, Press advertising is suitable for image building, information, and sales campaigns. It is also a very affordable option for small businesses.
2. Radio:
Radio is considered by many advertisers as an ideal medium due to its ability to reach specific target groups, e.g. – teenagers, grocery buyers. Radio takes message throughout the country in local as well as Hindi language. Most radio stations offer packages which include production and extension of your radio campaign through their websites.
3. Television:
Television is a powerful advertising medium because it creates impact through sight, sound and movement however the cost of producing the advertisement and procuring sufficient air time to allow the campaign to work often makes it prohibitive for small business. Television now reaches 90% of the population in India.
4. Direct Mail:
This is a broad category covering direct communication with the consumer through e- mail, post or fax. It can include newsletter, catalogues and letters.
5. Outdoor:
This is any type of advertising which is done outdoors, including static advertising such as bill boards, backs of street benches and bus shelters or mobile advertising displayed on buses, trains or taxis.
6. Cinema:
You can purchase cinema advertising by individual cinemas or screens for a set amount of screenings, Most providers offer packages which include production and screening of your advertisement.
7. Point of Scale:
Advertising at the point where the consumer makes a purchase decision. Ex- floor stickers in store digital advertising, shelf or counter posters or playing interviews about the product in store.
8. Online:
The options for online advertising continue to grow rapidly. They include advertising on the website, creating links to the websites from other websites, publishing blogs offering Online product games, social networks and forums.
9. Directory Listings:
Many consumers use business directories to find a supplier. Directories include the Yellow or White Pages, Trade Directories, Union Directories or Local Business Directories.
Disadvantages of Advertising:
The limitations are as follows:
1. It has Little Capacity to Reach the Select Audience:
The individual requirements of consumers are not alike, therefore a single advertisement fails to meet the requirements of all. For example- an advertisement for a saree will not be appealing to males, and an advertisement for shaving cream is of no use to females.
2. Advertisements are Rigid:
Business firms continue with the same advertisement for a long time. People need change always and they prefer to see the same matter presented in a different setting and style. For example- Pepsi and Coke always change their method of presentation.
3. Advertisement are Unbelievable:
People do not believe the advertising message completely. Some advertisements are meant to influence people. No advertiser speaks of the weaknesses of his product or service. He tries to show his product or service as superior when compared to others. For example- former cricketer Manoj Prabhakar has been indicted for giving false advertisements about the financial company promoted by him, offering high rates of returns, but which later cheated investors with false deposits and returns.
4. Loading the Price:
Advertising is expected to reduce the total cost, through mass production and distribution and ultimately enable customers to buy at lower prices. But in reality, it increases the prices of goods. Big firms demand heavy expenditure on advertisements and the costs are passed on to consumers.
5. Monopoly:
A few large firms in the industry utilise advertisements to prevent the entry of small firms in the market and thus create a monopoly in the market. Only big manufacturers can afford to spend lavishly on extensive and intensive advertisements, to retain and enlarge their market share.
2. Personal Selling:
Basically personal selling is one to one communication between seller and prospective purchaser. It general direct contact with customers. It is one of the most expensive forms of promotion. No other tool of promotion is as strong as personal selling when it comes to convincing the customer securing the feedback and profitability using it to close a sale and personal the title from seller to the buyer.
Ex- Personal Meeting, Telemarketing, e-mail and correspondence.
In the language of sales and marketing “personal selling” singles out those situations in which a real human being is trying to sell to another face to face. Many small businesses are able to use Personal Selling to maximum effect as they have the time to build relationships with their individual customers and get a thorough understanding of their individual needs.
Personal selling requires some out of personal contact between the buyers and the seller. However, this contact does not necessarily have occur face to face, personal selling can occur on the telephone, via video conferencing or even by utilizing internet chat and messaging. The key is that the buyer and seller need to be able to communicate clearly and effectively with each other.
Advantages and Personal Selling (PS):
There are several advantages of personal selling:
(1) We can convey more information with Personal selling when compared to any other types of promotion such as advertising. Most enterprises use notebook presentations, exhibitions and extremely comprehensive product information when promoting goods like medical equipment, computers and Industrial goods.
(2) Personal Selling has a superior impact on consumers than direct mail or other forms of advertising. The buyers don’t require to wait long to get his queries responded. The retailer will also obtain enhanced experience for what the consumers demand.
(3) Reduced costs compared to other marketing tools such as advertising.
(4) Pricing and benefits can be negotiated and discussed in case of small businesses.
(5) Ongoing buyer/seller relationship can be established.
Disadvantages of Personal Selling:
(1) One disadvantage is that the customer reach is limited through personal selling.
(2) It will require extended time period to create product awareness, particularly if the firm don’t use other forms of advertising.
(3) Sales representatives have to cover up one region or place at a time and they can put together 3-5 presentation to twenty five potential buyers per day therefore contact can be partial in rural areas where fever potential buyers are situated.
(4) Personal selling is in addition costly particularly when bearing in mind the sales representative’s salary, bonus, commission as well as travel time.
(5) It requires plenty of money to prepare the sales representatives, educate them on a range of goods and sales techniques.
3. Sales Promotion:
Sales promotion basically represents all marketing activities other than personal selling, advertising and public relations. Sales promotions are used to stimulate purchasing and sales and the objectives are to increase sales, inform potential customers about new products and create a positive business or corporate image.
Sales promotion offers a group of incentive tools, usually for a short duration to stimulate greater and speedier purchase of a certain brand or service by consumers or dealers. Sales promotion is needed to attract new customers, to hold present customers, to counteract competition and to take advantage of opportunities that are revealed by market research.
Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers retailers or other organizational customers to stimulate immediate sales.
Examples of devices used in sales promotion include coupons, samples, premium, point of purchase (POP) displays, contests, rebates and sweepstakes.
Sales promotion relates to short term incentives or activities that encourage the purchase or sale of a product or service. Sales promotion activities can be targeted towards consumer promotions. Trade promotions, Retail Mechanics, business promotions and sales force promotions.
Here are some typical sales promotion activities:
1. Consumer Sales Promotion Techniques:
i. Price Deal:
A temporary reduction in the price such as 50% off.
ii. Coupons:
A coupon is a certificate that reduces price for ex- Regular price is Rs 25 with a coupon it is Rs. 23 Coupons (same as money) are accepted as cash by retailers.
iii. Price-Pack Deal:
The packaging offers a consumer a certain percentage more of the product for the same price (For ex- 25 percent extra)
iv. Rebates:
Consumers are offered money back if the receipt and barcode e-mailed to the producer.
v. Point of Sale Displays:
Point of Sale Displays has become a mechanism for sales promotion.
Example for this are:
a. Lipstick Board:
A board on which messages are written in crayon.
b. Necker:
A coupon placed on the neck of a bottle.
c. Dumping:
A bin full of products dumped inside.
d. Dangler:
A sign that sways when a consumer walks by it.
2. Trade Sales Promotion Techniques:
i. Trade Allowances:
Short term incentive offered to induce a retailer to stock up on a product.
ii. Dealer Loader:
An incentive given to induce a retailer to purchase and display a product.
iii. Trade Contest:
A contest to reward retailers that sell the most product.
iv. Push Money:
Also known as spiffs. An extra commission paid to retail employees to push products.
v. Training Program:
Dealer employees are trained in selling the product. Trade discount also called as functional discounts which are payments to distribution channel members for performing some function.
3. Business Promotions:
i. Seminars and workshops
ii. Conference presentations.
iii. Trade show displays
iv. Telemarketing and direct mail campaigns
v. Newsletters, and
vi. Event sponsorship.
4. Retail Mechanics:
Retailers have a stock number of retail mechanics that they regularly roll out or rotate for new marketing initiatives.
i. Buy x get y free i.e., Buy one get one free.
ii. Seller gives free goods. Ex- One, free with two or three for two are common free deals.
iii. Get x% of discount on weekdays. (Ex. Wednesday Bazaar at Big Bazaar)
iv. Free Gift with purchase.
5. Sales Force Promotion:
Each form of sales promotion is used to encourage quick movements of products along the channel of distribution.
It also events extra incentives or gives extra value to the distribution channel in the form of:
i. Commission
ii. Sales competition with prizes or awards.
Advantages and Disadvantages of Sales Promotion:
Advantages of Sales Promotion:
i. Price Discrimination:
Producers can introduce price discrimination through the use of sales promotion. They can charge different prices to different consumers and trade segments depending on how sensitive each segment is to particular prices, Coupons, Special events, Clearance sales and discounts are the examples for price discrimination. For example- KMF offers a different price for the people of Karnataka and other states Rs. 1 or Rs. 2 more.
ii. Effect on Consumer Behaviour:
As sales promotions are mostly announced for a short period, customer may feel a sense of urgency and stop comparing the alternatives. They are persuading to act now rather than later. Ex- With every 500g pack of Tang, you get a free Tang glass offer valid only till stocks last.
iii. Effect on Trade Behaviour:
Short term promotions present an opportunity and encourage dealers to forward buy. This forward buying ensures that retailer’s wants go out of stocks. As dealers have more than the normal stocks, they think it is advisable to advertise in local media, arrange displays and offer attractive promotion deals to consumers. These actions help in increasing the store traffic. Ex- Buy 2 dozens shampoo sachets and get 2 sachets free.
iv. Regional Differences:
The south consumer is generally characterized by greater degree of going out and people tend to drink outside the house. The Tamilian consumer in particular is value oriented, rational and looks up to film stars, while the Keralite is more international in his outlook.
The Bangalorean is as cosmopolitan as his Mumbai or Delhi counterpart. Such factors have to be taken into consideration while providing incentives to the customers. Ex- For the buyers of Tamil Nadu. If Superstar Rajnikant is the brand ambassador for a product then sales promotion will become major successful.
Disadvantages of Sales Promotion:
i. Increase Price Sensitivity:
Consumers wait for promotion deals to be announced and then purchase the product. This is true even for brands where brand loyalty exists. Customers wait for promotional offers on their preferred brands. Thus, the routine sales at the market price are lost and the profit margin is reduced because of the discounts to be offered during sale season. Ex- ‘The Diwali Bonanza offers’ on electronics goods.
ii. Quality Image may become Tarnished:
If the promotions in a product category have been rare, the promotion could have a negative effect about its quality image. Consumers may start suspecting that the product has not been selling well, the quality of the product is true compared to the price or the product is likely to be discontinued because it has become obsolete or outdated.
Ex- XYZ powder offer Buy 1 and get 2 free went on and on. Ultimately people stopped asking for the product as the on-going sales promotion strategy made the customers perceive it to be a cheap and an inferior product.
iii. Merchandising Support from Dealers is Doubtful:
In many cases, the dealers do not co-operate in providing the merchandising support nor do they pass on any benefit to consumers. The retailer may not give support because he does not have the place, or the product does not sell much in his shop or maybe he thinks the efforts required is more than the commission or benefit derived.
iv. Short Term Orientation:
Sales promotion is generally for a short duration. This gives a boost to sales for a short period. This short term orientation may sometimes have negative effects on long term future of the organization promotions mostly build short term sales volume which is difficult to maintain. Heavy use of sales promotion, in certain product categories may be responsible for causing brand quality image dilution.
v. Spoil Product Image:
If product does not give benefit according to explanation. It reflects crisis the supply does not fulfills the demand.
4. Public Relations:
Public relations activities enable an organization to influence a target audience. Most of the time, public relation campaigns try to create a favourable image for a company, its product or its policies. Companies give news release to announce news worthy developments about a company’s products or services, distribution channels, facilities, operations, partners, revenues and earnings, employees, and events.
Publicity is one tactic that public relations professionals use. This means bringing newsworthy information to the public. Publicity is non-personal form of communication and it is non-paid. It is specially done by the media.
Example:
Newspaper, a campaign to encourage business to donate computers to schools, donating to hospitals, donating to a cause etc.
There are certain typical public relations tools like news creation and distribution, special events such as conference, grand openings and product launches, speeches and presentations, educational programs community activities and sponsorships.
The key steps in implementing public relations.
There are three major steps in implementing effective public relation activities which require careful planning.
1. Setting the Objectives:
What the firm want to achieve and whom they want to reach? It is to create awareness of a new product or service to the existing clients, to overcome community misconceptions about the business or to create a positive impression with the firms bank manager.
2. Deciding on the Message and the Vehicle:
What is the major thing the firm wants to communicate and what public relations tools will they use to get the message to its target.
3. Evaluating the Results:
Did the firm achieve the desired result and did it lead to a positive outcome?
Many firms (small business) do not devote enough attention to public relations in their promotional mix but it done properly, it can be powerful and cost effective business development and marketing tool.
Elements of Promotion Mix – Personal Selling, Sales Promotion, Public Relations, Direct Marketing, Sponsorship and Publicity
Advertising – Any paid presentation and promotion of ideas, goods, or services by an identified sponsor.
Examples- Print ads, radio, television, billboard, direct mail, brochures and catalogs, signs, in-store displays, posters, motion pictures, Web pages, banner ads, and e-mails.
Element # 1. Personal Selling:
Personal selling involves selling a product or service on a one to one basis. This can either be done face to face or over the phone. It is a process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation. Examples: – Sales presentations, sales meetings, sales training and incentive programs for intermediary salespeople, samples, and telemarketing.
Element # 2. Sales Promotion:
Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples- Coupons, sweepstakes, contests, product samples, rebates, premiums, trade shows, trade-ins, and exhibitions. The aim of sales promotion is to increase short-term sales.
Element # 3. Public Relations:
Public relation is a paid intimate stimulation of supply for a product, service, or business unit by planting significant news about it or a favourable presentation of it in the media. Managing public relations is very important for the organization. It helps in image building, having a good image helps the organization develop a trust and a bond between themselves and their customers, this good will is invaluable. Public relations activities include press releases, company literature, videos, websites, TVs and radio presentations, charitable contributions, speeches, issue advertising, and seminars.
Element # 4. Direct Marketing:
The aim of direct marketing is to create one to one relationships with the organizations or individuals. Direct marketing can come in the form of post, e-mail, telephone calls and mail order. The company usually contacts a named person at the address.
Element # 5. Sponsorship:
Sponsorship is about providing money to an event, in turn the product or company is acknowledged for doing so. For example, the Beijing Olympics in 2008 will partly be sponsored by Panasonic and Indian cricket team by Sahara India. Sponsorship helps the company improve its image and public relations within the market and usually the company attempts to sponsor a person or event that mirrors the image they are trying to aim for.
Element # 6. Publicity:
It 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.
Elements of Promotion Mix – A brief introduction of these elements is given below
Promotion deals with informing and persuading the customers about the firm’s product. Promotion mix involves blending of advertising, sale promotion, personal selling, public relations and direct marketing. These are also known as elements of marketing mix.
A brief introduction of these elements is given below:
(i) Advertising:
Advertising is an important form of promotion. It involves transmitting standard message to a large number of intended receivers. Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services of an identified sponsor. The message which is disseminated is known as advertisement. Advertisement is a paid form of communication which is resorted by an identified sponsor.
(ii) Sales Promotion:
Sales promotion includes all those activities that stimulate consumer purchasing and dealer effectiveness. The examples of sales promotion are distribution of samples, coupons, premium on sale, trading stamps, displays, shows and exhibitions, holding contests, increasing public relations, etc. Sales promotion techniques are designed to supplement and coordinate personal selling and advertising efforts.
(iii) Personal Selling:
Personal selling is the process of assisting and persuading a prospective buyer to buy a commodity in a face to face situation. It involves direct and personal contact between the seller or his representative with the prospective buyer. Personal selling is by far the major promotional tool used to increase profitable sales by offering want satisfying products to the people.
(iv) Public Relations:
It includes all the non-sales communication the business firms have with their various audiences. It consists of both communication with the general public and press relations. Its main task is image building. Publicity is the foundation of good public relations.
Publicity is any non-paid mention of an organisation of its products in the news media. It is non-personal stimulation of demand for a product by planting commercially significant news about it in a published medium or obtaining favourable presentation of it upon radio, television or stage that is non paid for by the sponsor.
(v) Direct Marketing:
It involves direct connections with targeted customers or prospective customers to obtain immediate response and also cultivate lasting customer relationships. Direct marketing may be carried out through direct mail telephone, mobile phone, e-mail, internet, direct response television, etc.
Elements of Promotion Mix – With Characteristics
Promotion mix is the combination, types and amounts of different forms of promotion used by a market. These include personal selling, advertisement, sales promotion and publicity. The promotional tools are used in such a way that they complement and support each other. Advertising efforts are supported by personal selling and display.
Similarly personal selling would be more effective if combined with sales promotion and advertisement. The management, after careful analysis of the company objectives determines the promotional policies and formulates the best combination of promotion mix.
1. Advertising:
According to G.E. Belch and M.A. Belch, “Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.” It is a method of communicating messages regarding products or services from an identified source to a particular segment of the consumers market or prospective buyers.
The means of communication used for advertising can be print media (newspapers, magazines), electronic media (radio, television), outdoor media (bill boards, posters, and wall paintings), new media (internet), or a variety of other means like direct mail, cinema, and transit advertising as well. Advertising creates product awareness and acceptance which makes the final selling job easier.
Characteristics of Advertising:
(i) Non-personal- Advertising is a non-personal tool of marketing. It is directed towards the target market as a whole and there are no person to person contacts.
(ii) Mass communication- Advertising is not directed towards an individual or a small group. It is a mean of mass communication. Advertisements reach large audience across the country, it is meant for communicating to the masses.
(iii) Persuasive- Advertisement persuades people to buy the products. The aim of advertising is to explain the qualities of the product to the target audience and influence them to make a purchase.
(iv) Paid form of communication- Advertising is always a paid form of communication which is done through an identified sponsor.
(v) Use of mass media- A variety of mass media channels like television, radio, cinema, newspapers, magazines, posters, billboards, etc. are used in advertising. The aim of advertising is to spread the marketing message far and wide.
(vi) Printed salesmanship- Advertising is called printed salesmanship, because information is spread by means of the printed word, symbols and pictures so that people may be induced to act upon it.
2. Personal Selling:
The American Marketing Association defines personal selling as oral presentation in a conversation with one or more prospective customers for the purpose of making sales. Its hallmark is interaction between marketer and customer.
It involves explaining the benefits and advantages of the products or services to the potential customer and persuading him to buy the product. Its purpose is to pair the right products with the right customers.
Personal selling can range from basic order taking to creative selling. Its effect is to push the product through the distribution channel. Since it involves personal interaction between the seller and the buyer, sales persons can tailor their messages according to the unique characteristics of each product. Feedback is also immediate in case of personal selling.
Characteristics of Personal Selling:
(i) High pressure tactics- Buyers are pressurized and persuaded to buy the product by the salesman. Aggressive salesmanship and persuasive advertising is used to influence the customer’s purchase decision.
(ii) Persuasion- Personal selling depends a lot upon the persuasion skills of the salesman. The customer who is not willing to buy is persuaded to make purchases.
(iii) Winning the buyer’s confidence- Unless a salesman is able to gain the trust and confidence of a potential customer, he would not be able to sell to them.
(iv) Informative- Personal selling is informative in nature. It informs the customer about the qualities, features, benefits and usage of the product.
(v) Creation of demand- The purpose of any marketing activity is to create demand for the product. The salesman has to explain the utility of his products and relate them to the customer’s needs to create demand for the goods.
Advantages of Personal Selling:
(i) Personal interaction between a customer and a salesperson means a high degree of personal attention.
(ii) Allows demonstration of products.
(iii) Immediate feedback and clarification of doubts.
(iv) An intensive and in-depth means of promotion.
(v) It is easy to explain technical details about the product.
(vi) Sales message can be customized according to nature of customer.
(vii) Good way of building long-term relations.
Disadvantages of Personal Selling:
(i) Very expensive method of promotion.
(ii) It can be very irritating or annoying at times.
3. Sales Promotion:
The term sales promotion has been defined by American Marketing Association as “those marketing activities, other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and demonstrations, expositions, and various non- current selling efforts, not in ordinary routine.”
Sales promotion is the process of persuading a potential customer to buy the product. Such activities are impersonal and usually non-recurring. They serve as a bridge between advertising and personal selling; they supplement and coordinate efforts in these two areas.
The importance of sales promotion has increased tremendously in modern times; millions of rupees are spent on determining the most effective techniques and appeals for attracting the attention of the prospects towards the dealer’s area of business.
Objectives of Sales Promotion:
(i) Communication:
Sales promotion attracts new customers and communicates to them information about the products. New customers may be attracted by distribution issue of free samples, premiums, contests and similar devices.
(ii) To Introduce New Products:
To induce buyers to purchase a new product, free samples may be distributed, or money and merchandise allowance may be offered to retailers to stock and sell the product.
(iii) Incentives to Buy More:
The concessions, samples and contests are actually incentives to make the existing customers buy more and induce non-buyers to try the product.
(iv) Invitation:
Sales promotion tools are an invitation to the customer to purchase the product before the offer expires. For example- “Offer valid till stocks last”, “Avail discount of 25 per cent before 31st August”, etc.
a. Sampling:
Free samples may be distributed among the prospective customers for arousing their interest in the product. It is an effective sales promotion device when the product is frequently purchased convenience goods such as detergents, soap, tea or coffee, shampoos, etc. It is useful for promoting new products.
b. Contests:
These may be conducted to attract new customers or to introduce new product by asking the prospects to state in a few words why they prefer a particular product.
c. Demonstrations:
These are made to inform the target market about the utilities and attributes of the product. By way of demonstration, the method of using a particular product can be clearly explained to the customers.
d. Couponing:
Coupons generally supplied along with the product, entitle the holder to either a specified savings on a product or a cash refund. Most coupons are designed to introduce a new product, increase sales of an established product, or sell new and larger sizes of a product. Coupons may also induce customers to switch brands and encourage repeat sales.
e. Prices Off:
The company may slash prices of a product for a certain fixed period of time. Since the customer has to pay lesser than usual, he would be induced to buy it.
f. Price Pack Deals:
This includes bonus packs and banded packs. In a bonus pack, additional quantity of the same product is given free on purchase of a standard pack at regular price. For instance, “Get 33 per cent for the same price.” In banded packs, special packs of the product containing more quantity are offered at a proportionately lower price. For example, “Buy one, get one free” schemes.
Advantages of Sales Promotion:
(i) Quick boost in sales.
(ii) Encourages non-users of a product to try it.
(iii) Creates urgency among the customers since they have to buy before offer expires.
Disadvantages of Sales Promotion:
(i) It has only short-term effect.
(ii) Frequent sales promotion can lead to loss of goodwill and damage image.
(iii) Customers may become habituated to price slashes.
4. Public Relations:
Public relations is that element of promotion mix concerned with maintaining favourable public image by the organization. Celebrities and non-profit organizations also use public relations to build up their goodwill. It refers to the management of communication between the organization and its various publics.
Publics are the stakeholders in the company like customers, employees, shareholders, suppliers, etc. Any organization has to function within the framework of the social set up and community it is operating in.
The business can be run successfully only if the public accepts the company and avails of its products and services. Therefore it is essential for the business to interact with the public and maintain good relations with them.
Characteristics of Public Relations:
(i) Comprehensive:
Public relations is a comprehensive process. It integrates various forms of communication to convey a consistent and positive image about the organization to the various publics—customers, government, suppliers, employees, shareholders, etc.
(ii) Value Based:
Public relations should be based on values like integrity, honesty and truth. Companies should not indulge in unethical practices and depict an untrue picture just to impress the public. In order to maintain a positive image in the long-term, it is necessary to win the trust of the public.
(iii) Interactive:
Two-way communication with the different types of public helps to maintain clear communication. Public relation is not only about conveying the messages of the organization to the audience, but it also includes taking feedback, suggestions and criticisms from them so that the company can act on these and improve itself in the future.
(iv) Incorporative:
The public relations executive uses a wide range of communication technology and channels to engage with the stakeholders. The elements of information and communication technology, human resource management and marketing management are merged into the field of public relations.
(v) Interpretive:
Public relations department observes the trends in the business environment continuously. Any changes in the attitudes, beliefs and behaviour of the stakeholders is analysed and translated into advice for the company on how to deal with the dynamic situation.
Public Relations Tools:
There are a variety of tools available to the marketer to carry out public relations functions. The choice of the appropriate tools will depend upon the target market to be identified and the messages that are to be conveyed.
Different tools would be suitable for targeting different types of publics effectively. There should be a proper match between the purpose of the message, its contents and the audience it is meant for.
The Tools of Public Relations are as Follows:
I. Media Relations:
These include all the efforts to publicise the company or its products through the mass media like television, radio, newspapers, magazines, internet, etc. Interesting and relevant stories about the products and company are developed and broadcast/published by the media. Press releases, audio and video news releases and website press room are some of the tools used by media relations.
II. Media Tours:
On a media tour, the spokesperson of a company travels to key cities to introduce a new product. This is covered in a talk show or interview by television or radio channels. This method is often used by the lead actors of Bollywood movies who travel to various cities to promote their films. Media tours may also include public appearances or autograph singing opportunities.
III. Newsletters:
Newsletters are periodic publications containing information about the company, its products, profits, etc. Newsletters can be sent to customers, potential customers, trade customers and employees. They can be sent through regular mail or email.
Newsletters contain information that is interesting to the customers. They contain information about new product launches, product reviews, testimonials, etc. which are well received by the target audiences.
IV. Special Events:
Companies organize special events to capture the attention of the target audience as well as the media. Special events include educational workshops for poor children, sporting events and summer camps.
It also includes stunts which are planned events for attracting the public’s attention towards the company, for example, creating the world’s biggest cake, organizing a marathon, etc. Such events not only draw the public’s attention, they also capture the attention of the media.
V. Speaking Engagements:
Industry experts often speak before conventions, trade association meetings and other groups to demonstrate their expertise to potential customers. Even though such opportunities cannot be used for direct promotion of products, still they provide a good chance to gain visibility in the eyes of a target audience. It could help in networking and generating new customer leads.
VI. Sponsorships:
Companies can avail of numerous sponsorship opportunities at the local, regional or national levels. They can sponsor events, fund raising activities, programmes of a local cultural center, etc. Sponsoring helps the organization to build goodwill and shape consumer attitudes.
VII. Employee Communications:
The company has to engage in constant communication with its valuable internal public, i.e., employees. The have to be informed about corporate programmes, personnel issues, new products and future strategies. Intranet and newsletters are most commonly used to interact with the employees.
VIII. Corporate Social Responsibility (CSR) Programmes:
Companies engage in activities that improves the quality of life for the various members of the community. Organizations have a responsibility towards the society and thus they organize programmes for children’s education, vocational training for women, development of drinking water facilities, fund raising, blood donation camps, etc.
Advantages of Public Relations:
(i) Cost of public relation is very low when compared to its benefits.
(ii) Helps to establish credibility for a company and its products.
(iii) Stimulates awareness about the company.
(iv) Companies which engage in public relations have an advantage over the competitors who do not.
(v) It has long lasting effects.
(vi) Helps to create and build a favourable image of the company.
Disadvantages of Public Relations:
(i) Problems can occur if there is lack of coordination between the marketing and the public relations department.
(ii) The audience may not be able to connect the public relation programme with the company’s products.
(iii) The media may distort the message provided by the company through press release or news release.
5. Marketing Communication Process:
Marketing communication refers to the messages and processes a company uses to communicate with its markets. Communication is concerned with who says what to whom, through which channel and with what effect. The communication process is part of any advertising or marketing programme.
It originates at the source which encodes a message that is transmitted to the receiver through a medium. The process gets completed when the receiver decodes the message and understands it in the same way as intended by the sender.
Its accuracy depends on the integrity with which a message is transmitted and the correspondences between the meanings assigned to the symbols/language used by the source and by the receiver. Anything that distorts the quality of transmission reduces the effectiveness of a message.
Steps in the Marketing Communication Process:
I. Source:
The source of the marketing communication is the party intending to convey information to another party. The party could be an individual salesman or an organization wishing to inform its target audience about its offerings.
II. Encoding:
The idea should be encoded into a meaningful message that can be conveyed through a communication medium. The process of using words, symbols, images, sounds, animation, etc. to transform an intangible idea to a communicable message is known as encoding.
III. Message:
The message is the combination of sounds, images, words, symbols, etc. that the sender transmits to the receiver. It is in form of advertisements, catalogues, promotional messages, etc.
IV. Media:
These are the communication channels through which the message is transmitted. In marketing communication, a variety of media are available like television, radio, cinema, internet, newspapers, magazines, etc.
V. Receiver:
This is the party receiving the message. It is the target audience which is the receiver of marketing messages.
VI. Decoding:
The receiver has to decode the message to understand it. The communication would be effective only if the receiver decodes the messages in the way it was intended by the sender. The receiver’s awareness, experience, perception, motivation and expectations will govern how he interprets the message.
VII. Response and Feedback:
Feedback is that message which the receiver transmits back to the sender after decoding the message and response is the actions he would take after getting the message. The receiver would probably react in one way or the other after getting the message.
He could try to get more information about the product, or maybe he would buy the product after being exposed to the message. Or in some cases he may not react at all.
Elements of Promotion Mix – Advertising, Sales Promotion and Public Relations
Every company works for their growth and development. They work for the expansion of their business activities which is directly related with the sales volume. To achieve the desired level of sales volume a company has to indulge in activities or functions which can persuade the customers to buy the product or service.
1. Advertising:
Advertising is any paid form of non-personal presentation and promotion of ideas goods or services by an identified sponsor.
Major Decisions in Advertising:
A. Objective Setting:
Advertising objectives – A specific communication task to be accomplished with a target audience during a specific period of time.
(i) Informative advertising – Used to inform the consumers about a new product or features and to build primary demand.
(ii) Persuasive advertising – Advertising used to build selective demand for a brand by persuading consumers that it offers the best value for their money.
(iii) Comparison advertising – Advertisement that compares one brand directly or indirectly to one or more other brands.
(iv) Reminder advertising – Advertisement used to keep consumer thinking about a product.
B. Setting the Advertising Budget:
Budget will depend on:
(i) Stage in product life cycle – New product needs greater advertisement budget.
(ii) Market share – High market share brand needs more advertising spending.
(iii) Competition and clutter – More competition means increased budget.
(iv) Advertising frequency – More repetition increases the budget.
(v) Product differentiation – A brand that closely resembles other brands in its product class requires heavy advertising to set it apart.
(i) Creating advertisement message –
a. What
b. How
c. Tone (positive or negative)
(ii) Selecting advertisement medium.
To study and analyse the effect of advertising on sales and market share.
2. Sales Promotion:
Short terms incentives to encourage purchases or sales of a product or service. Whereas advertising offers reasons to buy a product or service, sales promotion offers reasons to buy it now [discounts, free coupons, gifts].
Setting Sales Promotion Objectives:
A. For Consumer Promotion:
(i) To increase short term sales
(ii) To build long term relationships.
(iii) To inspire customers to buy new products
(iv) To take consumers away from competitors.
B. For Trade Promotion:
(i) Getting retailers to carry new items and more inventories
(ii) Getting them to advertise the product and giving more shelf space
C. For Sales Force:
(i) Getting more sales force support for products
(ii) Personal selling
Selecting Sales Promotion Tools:
(a) Samples – Offers to consumer of a small amount of a product for trial
(b) Coupon – Certificate that gives buyers a saving when they purchase a specific product.
(c) Cash refund offer – Offer to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer.
(d) Price pack – Reduced price that is marked by the producer directly on the label.
(e) Premium – Goods offered either free or at low cost as an incentive to buy a product.
(f) Advertising specialities – Useful articles [e.g. pens, T-shirts etc.] imprinted with an advertisers names given as gift to consumers.
(g) Patronage reward – Cash or other award for the regular use of a certain company’s, product or services [e.g. frequent flyer award].
(h) Point of purchase (POP) promotion – Display and demonstration that takes place at the point of purchase or sale.
(i) Contests, lotteries, games.
(a) Discount
(b) Allowance – promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer’s products in some way.
(III) Business Promotion Tools:
(a) Conventions and Trade shows
(b) Sales contest.
3. Public Relations:
Building good relations with the company’s various publics by obtaining favourable publicity, building up a good corporate image and handling or heading off unfavourable rumors, stories and events.
Functions of Public Relations Department:
(i) Press relations or press a gentry.
(ii) Product publicity
(iii) Public affairs – Building and maintaining community relations.
(iv) Lobbying – Building and maintaining relations with legislators and Government.
(v) Investor relations – Maintaining relations with shareholders.
(i) News
(ii) Speeches
(iii) Special events
(iv) Written material – e.g. Annual Report, brochures, articles etc.
(v) Audiovisual matter – e.g. films, slides etc.
(vi) Corporate identity material e.g. logo, stationary, business cards.
(vii) Public service activity e.g. investing time and money for community service.
Major Public Relations Decisions:
(i) Setting objectives.
(ii) Choosing message and vehicles.
(iii) Implementing the plan.
(iv) Evaluating results.
Elements of Promotion Mix – Sales Promotion, Advertising, After Sales Service and Personal Selling
1. Sales Promotion:
Sales promotion is essentially a direct and immediate inducement that adds an extra value to the product, so that it prompts the dealers, distributors or ultimate consumers to buy the product.
American Marketing Association defines it as “In a specific sense, sales promotion includes those sales activities that supplement both personal selling and advertising and coordinate them and help to make them effective, such as displays, shows and expositions, demonstrations and other non-recurrent selling efforts not in the ordinary routine.”
Advertising offers reasons to buy a product or service where as sales promotion offers reasons to buy it now.
1. For introducing new products
2. For overcoming a unique competitive situation
3. For unloading accumulated inventory
4. For overcoming seasonal slumps
5. For getting new accounts (new customers)
6. For retrieving lost accounts
7. As a support and supplement to advertising efforts
8. As a support and supplement to salesman’s efforts
9. For persuading salesmen to sell the full range of products
10. For persuading dealers to buy the company’s product by increasing their size of orders.
11. For giving shelf space by distributor.
Organising Sales Promotion Programmes:
Steps in organising sales promotion programs are:
(i) Identifying the basic requirements i.e. basic needs –
a. Is it to enhance the dealer’s off take of the product?
b. Is it to bring in extra sale immediately?
c. Is it to off load accumulated stocks?
d. Is it to regain lost consumer interest in the product?
e. Is it to enlist some support for the advertising effort that is already on?
(ii) Identifying the right promotional programme.
(iii) Enlisting the support and involvement of salesman.
This can be ensured by asking the following questions:
a. Are they briefed on the content and context of the programme?
b. Are they informed of their roles in the conduct of the programme?
c. Is detailed information / working guides, explaining what they are expected to do at different stages of the campaign, available to them?
(iv) Enlisting the support of dealers (like point of purchase displays).
(v) Enlisting the Agency’s supports (Advertising agency).
(vi) Launching and follow up of campaigns.
(vii)Timing of the campaign.
(viii) Coordination with other elements of promotion.
Critical Analysis of Sales Promotion:
i. Sales promotion is normally used for short term sales achievements.
ii. Sales promotion does not attempt to achieve goals that advertising or personal selling can achieve better.
iii. Sales promotion offers an extra value to the product over and above its present value. But this present value can be given through other means as well – through advertising, through more effective personal selling or through better publicity or combination of these efforts.
iv. Sales promotion is only expediting and accelerating the marketing tasks already initiated by all other elements of the communication mix.
v. If the sales promotion devices of price offs and premiums are frequently resorted to, the image of the brand may suffer in the long run. Consumers may hesitate to buy the brand without these attractions.
vi. When a favorable image for the product has already been created, sales promotion works faster and better.
vii. When sales promotion is used for new products, image creation through media advertising and other means should take place concurrently.
viii. The sales promotional support required by a product varies at different stages of its life cycle.
2. Advertising:
Advertising can be defined as any paid form of non-personal presentation and promotion of ideas, goods, and services by an identified sponsor.
Advertising is telling and selling
This word originated from a Latin word ‘Adverto’, which means to turn around.
1. It is a paid form of communication
2. It is a non – personal communication
3. It is done by an identified sponsor
4. It is different from publicity
5. Its purpose is to make the customer aware of the product or services
6. Objective is to sell the product.
A. Benefits to Manufacturers:
1. Creates demand
2. Provides economies of scale
3. Develops goodwill
4. Supports sales
5. Helps introducing new products.
B. Benefit to Consumers:
1. Educates consumers
2. Makes shopping easy
C. Benefits to Society:
1. Creates employment
2. Sustains the press.
1. Advertorials – Like – editorials are hard to distinguish from newspaper content.
2. Infomercials – TV commercials that appear to be 30 minute TV show demonstrating or discussing a product.
3. Web Banners – These companies can be reached by clicking on these banners.
(1) Mission:
a. Sales goals
b. Advertising objectives
(2) Money:
Factors to consider:
a. Stage in product life cycle
b. Market share and consumer base
c. Competition and clutter
d. Advertisement frequency
e. Product substitutability
(3) Message:
a. Message generation
b. Message evaluation and selection
c. Message execution
d. Social response review
(4) Media:
a. Reach, frequency and impact
b. Major media type
c. Specific media vehicles
d. Media timing
e. Geographical media allocation
(5) Measurement:
a. Communication impact
b. Sales impact
A. Setting the Advertising Objectives:
The advertisement objective flows from prior decisions on target market, market positioning and marketing mix.
An advertisements goal is a specific communication task and achievement levels to be accomplished with a specific audience in a specific period of time.
(1) Informative advertisement – In the pioneering stage of a product category, Objective is to build primary demand
(2) Persuasive advertising –
a. At competitive stage
b. To build selective demand for a particular brand. .
c. Competitive advertising
(3) Reminder advertising – With mature products e.g. Coca-Cola.
(4) Reinforcement advertisement – Assures customers that they have made the right choice – (automobile).
B. Deciding on Advertising Budget:
Factors to be considered:
(1) Stage in the Product Life Cycle –
a. New product – Large advertisement budget.
b. Established brands – Low advertisement budgets as a ratio to sales.
(2) Market share and consumer base –
a. High market share – Low budget as percent of sales
b. Building market share – Larger budget as percent of sales
On a cost-per-impression basis –
a. Widely used brand – Low cost per customer
b. Low share brand – High cost per customer
(3) Competition and clutter –
a. Many competitors – More advertisement expenses
b. More clutter of advertisement – More advertisement expenses (even if unrelated)
(4) Advertising frequency –
More repetitions needed – High budget.
(5) Product substitutability –
a. Consumer goods need more advertisement to establish a differentiated image.
b. When brand can offer unique physical benefits more advertisement is needed.
C. Choosing the Advertising Message:
Steps to develop a creative strategy:
(1) Message generation –
a. Inductive frame work – talking to the consumers.
b. Deductive framework – Appeal
i. Rational
ii. Emotional
iii. Moral
(2) Message evaluation and selection –
a. Desirability
b. Exclusiveness
c. Believability
(3) Message Execution –
a. Labeling (Labeling consumers as type of consumers)
b. Style
c. Tone
d. Words
e. Format
(4) Social responsibility review.
Media selection involves finding the most cost effective medium to deliver the desired number of exposures to the target audience.
(1) The effect of exposure on audience awareness depends on –
a. Reach – The number of different persons or households exposed to a particular media schedule at least once during a specified time period.
b. Frequency – The number of times within the specified time period that an average person or household is exposed to the message.
c. Impact – The qualities value of an exposure through a given medium.
(2) Choosing among major media types –
The media planner has to know the capacity of the major media types to deliver reach, frequency and impact.
Variables to be considered while Selecting Media Type:
(i) Target-audience media habits –
For example – TV is most effective for teenagers.
(ii) Product – Media types have different potential for demonstration, visualisation, explanation, believability and colour e.g. woman’s dresses are best shown in colour magazines.
(iii) Message – A message announcing a major sale tomorrow will require Ratio, TV or newspaper. A message containing a great deal of technical details will require specialised communication or mailings.
(iv) Cost – TV is very expensive whereas newspaper advertising is relatively inexpensive in the cost-per-exposure.
(3) Selecting specific vehicles –
Media planner must search for the most cost effective media vehicle within each chosen media type.
For example, a TV slot may be during KBC or any other programme or cricket match etc.
Audience size has several possible measures:
(i) Circulation – The number of physical units carrying the advertisement.
(ii) Audience – The number of people exposed to the vehicle.
(iii) Effective Audience – The number of people with target audience characteristics exposed to the vehicle.
(iv) Effective advertisement exposed audience – The number of people with target audience characteristics who actually saw the advertisement.
(4) Deciding on Media timing –
(i) Macro scheduling problem –
a. Season
b. Business cycle
(ii) Micro scheduling problems –
Allocating advertise expenses within a short period to obtain maximum impact.
Timing pattern should Consider Three Factors:
(a) Buyer turnover – Rate at which new buyers enter the market. Higher this rate more continuous the advertisement should be.
(b) Purchase frequency – Number of times during the period that the average buyer buys the product. High purchase frequency requires more continuous advertisement.
(c) Forgetting rate – Rate of forgetting the brand. Higher is the forgetting rate more continuous the advertisement is required.
Choice has to be made Between:
(i) Continuity (Expanding markets)
(ii) Concentration (Seasonal markets)
(iii) Flighting / intermittent. (One phase – second phase) (Limited funds)
(iv) Pulsating
(5) Deciding on Geographical Allocation –
(i) National buys
(ii) Spot buys
(iii) Local buys
Evaluating advertising effectiveness can be done through:
(i) Communication – Effect Research:
To determine if an advertisement is communicating effectively.
Methods of Rating:
(a) Direct Rating Method:
Ask customers to rate alternate advertisements.
It tests:
i. Attention (How well the advertisement catches the reader’s attention)
ii. Read – through (How well the advertisement leads the reader to read further)
iii. Cognitive (How clear the central message or benefit is)
iv. Affective (How effective the appeal is)
v. Behaviour (How well the advertisement suggests follow – through action).
(b) Portfolio Test:
Ask customers to view or listen to a portfolio of advertisements, taking as much time as they need. Then ask them to recall the content.
Recall level indicates an advertisements ability to stand out and have its message understood and remembered
(c) Laboratory Tests:
Uses equipments to measure physiological reactions – heartbeat, blood pressure, pupil dilation, perspiration – to an advertisement.
(ii) Sales Effect Research:
It is done by studying the effect of advertising on sales. An effective advertisement will help in increasing sales, market share and customer loyalty.
A comparison of past sales with the current sales would help in understanding the difference made by advertising.
2. Pervasiveness – (Repetitive or spread all over) –
a. Seller can repeat many times
b. Buyers can compare various messages
c. Size of advertisement says about company’s size, power and success.
3. Amplified expressiveness – Opportunity for dramatising the company and its product.
4. Impersonality – Audience does not feel obliged to pay attention or respond to advertisement.
6. Reach geographically dispersed buyers.
3. After Sales Service:
After the product has been sold, it passes on from the seller to the buyer. The buyer then uses the product or service. It is the buyer who must be satisfied by the product. Satisfaction is measured by comparing the expected performance and the actual performance. The product may not perform as expected because of some mechanical, technical or other defects.
Such defects must be corrected by the firm as early as possible. This ‘correction’ is done to save the image of the firm. If the firm ignores the customers complains then it is bound to diminish its credibility.
Reasons for providing after sales service:
After sales service helps the marketer to increase his sales volume.
After sales services are provided by the marketer for the following reasons:
(i) Repairs:
Most products need regular repairs. Many companies now provide repair facilities to its buyers.
(ii) Warranty:
Some products come with a warranty for a specified period during which the seller provides support and guidance to the customer. Any defect in the product or any maintenance requirement during the warranty period will be serviced by the after sales service department of the firm.
(iii) Service Warranty Extension:
The manufacturer may provide service warranty coupons to its customers. Such coupons can be honoured at any of the authorised service stations.
(iv) Consumer Dissonance:
Every firm would want to generate a behaviour of repeat purchase in its customers. Such repeat purchases happen only when there is a relationship of trust, understanding and appreciation of the product and there is an element of satisfaction in the customer.
After the product has been purchased there is a normal behaviour of introspection and doubt about commitment to one alternative. Such a doubt may generate anxiety and leads to post purchase dissonance. Dissonance is a natural behaviour because as a result of commitment to one alternative all other alternatives have been rejected.
Such dissonance can be reduced by the support of after sale service staff.
(v) Benefits to the Firm:
After sale service tends to increase customer loyalty, and generates positive reaction from customers. A good service system reduces both the support cost and liability claim. A faulty system may not only increase operating cost but also damage the firm’s image. All these things combined can provide competitive advantage to the firm specially in an undifferentiated market.
(vi) Customer Satisfaction:
It is a common belief that selling to repeat customer is cheaper than selling to a new customer. After sales service has a very important role in customer satisfaction. A satisfied customer is a very effective mode of promotion. A satisfied customer also tends to be a loyal customer who pays less attention to competition and competitors brand and advertisement leading to reduced price sensitivity.
Methods for Providing after Sales Service:
1. Service staff – The Company may recruit special staff for service department. Such staff would go to a customer and fulfil their service requirements.
2. Dealers or agents – The company may authorise some dealers or agents to provide services to its customers.
3. Independent service providers – If the company cannot recruit service staff or if its dealer network does not permit services by them, independent service providers may be entrusted this task.
4. Personal Selling:
Personal selling consists of direct interpersonal communication with the specific purpose of persuading a prospective customer to buy a product or service.
American Marketing Association defines it as –
“Oral presentation in a conversation with one or more prospective purchasers for the purpose of making sales.”
Personal Selling:
It refers to face to face communication between a seller or his representative and the buyer. Sales person of an enterprise assists and persuades the prospective buyer to buy the product.
Functions Performed by a Salesman:
A sales man of industrial goods surveys and interprets the needs of his prospective customer.
Primary Functions:
(i) Persuades the customer regarding the suitability of his product for his needs.
(ii) Acts as an expediter to get the delivery made to him in time.
(iii) Helps him in installation.
(iv) Solves functional problems of his product.
(v) Renders a variety of after sales services.
(vi) Acts as a consultant to his customer before, during and after the sale.
(vii) He provides feedback regarding market information to his company so as to enable it to perform more effectively its tasks of production, distribution, and marketing planning.
Salesman of Consumer Goods:
(i) Acts as a representative of his company.
(ii) He motivates and persuades the wholesalers and retailers to stock his products in adequate quantities, helps them in planning displays, trains their sales people and ensure that they get regular and timely supplies of his products.
(iii) He acts as the market intelligence person for his company
(iv) He is the marketing manager of his sales territory.
(v) He is the problem definer
(vi) Trouble shooter
(vii) Consultant
(viii) Expediter for his customers
(ix) He is the front office man so far as the customers are concerned.
Types of Selling Jobs:
(i) Selling to Consumers:
Most of the selling to consumers is done by retailers.
In some case the employee sales force directly sells to consumers. For example – Insurance, Car, TV, AC etc.
(ii) Selling to Retailers:
Selling to retailers is an extremely important marketing function.
The retailers should be told about the product, its distinguishing features, expected sales volume, their profit margin etc.
Selling at retailer level is done by the manufacturers as well as wholesalers sales people.
Personal selling at the retailer level is primarily of three types:
(a) Order Taking:
In this case the salesman visits the retailers in his sales territory and books their requirements.
He also introduces new or improved products to retailers, conveys his company’s pricing policies, makes adjustments and handle the complaints.
(b) Missionary Selling:
Missionary or detail salesmen are generally employed by pharmaceutical firms and manufacturers of consumer durables etc.
Their main task is to work with the retailers in order to build their company’s image and goodwill and help them in arranging point of purchase display.
(c) Technical Selling:
The manufacturer’s salesmen work with the retailers to help them in the installation and efficient functioning of the products sold by them to consumers.
Examples for products like A/C, cars etc.
(iii) Selling to Wholesalers:
Personal selling also plays an important role in servicing the wholesaler’s organisation.
Manufacturers salesmen not only arrange regular supplies of their products to these merchant middle men, but also render number of services including training of their sales force, advertising and other aspects of marketing guidance.
(iv) Selling to Manufacturers:
Also called industrial selling, is a highly specialised job.
Manufacturers buy raw material, machine tools, semi-fabricated goods etc. for further processing.
This kind of selling requires thorough knowledge of the technical aspects of the product, assessment of the needs of buyer and matching the product with the buyer’s needs.
It also requires abilities to solve buyer’s technical problems and provide them with after-sale services.
These salesmen are also called consulting engineers or service engineers as they help customers in the designing and functioning of their production operations and trouble shoot their technical problems.
Areas in which Personal Selling Objectives have to be set:
1. Sales volume
2. Preparation of each product in the total sales volume
3. Market share
4. Profits
5. Selling expenses level
6. New accounts and business growths
7. Appointments of new dealers and expansion of channel
8. Achieving prescribed proportion of cash and credit sales
9. Collection of amount due
10. Pre-sale and after sale service
11. Training of dealers and customers
12. Assistance in sales promotional measures
13. Gathering and reporting market intelligence
Determining the Size of the Sales Force:
Size of sales force primarily depends upon:
(a) Level of sales expected and number of salesman needed for generating this sale.
(b) Minimum number of salesman needed for servicing, irrespective of the level of sales.
(c) Minimum number of salesmen needed for finishing the required marketing intelligence.
(d) Cost involved in maintaining the sales force.
Merits of Personal Selling:
1. Helps in locating prospects –
i. Thus avoids wastage of resources in advertisement and sales promotion.
ii. Also helps in converting a potential customer into an actual buyer.
2. Provides operational flexibility –
Salesman can adjust his sales talk and presentation according to the needs, moods and behaviour of his customers.
3. Acts as consultant to customers.
4. Removes objections and doubts
5. Building and strengthening distribution.
6. Demonstrates the product
7. Gets the buying action (by motivating customers to buy).
8. Builds social relations.
9. Provides feedback.
Limitations:
1. High cost.
2. Shortage of high caliber sales people
3. Inaccessibility to busy customers.