PROMOTION

A company's total marketing communications mix - called its promotion mix consists of the
specific blend of advertising, personal selling, sales promotion and public relations tools that the
company uses to pursue its advertising and marketing objectives.
Let us define the four main promotion tools:

 Advertising- Any paid form of non-personal presentation and promotion of ideas, goods
or services by an identified sponsor.
 Personal selling- Oral presentation in a conversation with one or more prospective
purchasers for the purpose of making sales and building customer relationships.
 Sales promotion- Short-term incentives to encourage the purchase or sale of a product or
service.
 Public relations- Building good relations with the company's various publics by
obtaining favorable publicity, building up a good 'corporate image, and handling or
heading off unfavorable rumors, stories and events.

Definition - Promotion mix

The specific mix of advertising, personal setting, sales promotion and public relations that a
company uses to pursue its advertising and marketing objectives.

What Is Integrated Marketing Communications?

 Integrated marketing communications (IMC) refers to the coordination of promotional

efforts to ensure maximum informational and persuasive impact on customers.
 Coordinating multiple marketing tools to produce this synergistic effect requires a
marketer to employ a broad perspective. A major goal of integrated marketing
communications is to send a consistent message to customers.

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  Communication is essentially the transmission of information.
 For communication to take place, both the sender and the receiver of information must
share some common ground. They must have a common understanding of the symbols,
words, and pictures used to transmit information.
 Thus we define communication as a sharing of meaning.
 Implicit in this definition is the notion of transmission of information because sharing
necessitates transmission.
 As Figure shows, communication begins with a source.

Source
 A source is a person, group, or organization with a meaning it attempts to share with an
audience.
 A source could be a salesperson wishing to communicate a sales message or an
organization wanting to send a message to thousands of customers through an
advertisement.

Receiver
 A receiver is the individual, group, or organization that decodes a coded message, and an
audience is two or more receivers.
 The intended receivers, or audience, of an advertisement for Safola Oil, for example,
might be consumers who are concerned about reducing their cholesterol and blood
pressure. Safola could use this information to target receivers with integrated marketing
communications about its products.

Coding Process
 To share meaning, a source must convert the meaning into a series of signs or symbols
representing ideas or concepts. This is called the coding process, or encoding.

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  When coding meaning into a message, the source must consider certain characteristics of
the receiver or audience. To share meaning, the source should use signs or symbols
familiar to the receiver or audience.

Communication Channel
 To share a coded meaning with the receiver or audience, a source selects and uses a
medium of transmission.
 A communications channel, the medium of transmission, carries the coded message
from the source to the receiver or audience.

Decoding Process
 In the decoding process, signs or symbols are converted into concepts and ideas. When a
receiver finds that a message runs counter to his or her own attitudes, the source may
influence the decoding process.
 Seldom does a receiver decode exactly the same meaning that the source coded. When
the result of decoding differs from what was coded, noise exists.

Noise
 Noise is anything that reduces the clarity and accuracy of the communication; it has many
sources and may affect any or all parts of the communication process.
 Noise sometimes arises within the communications channel itself. Radio static, poor or
slow Internet connections and laryngitis are sources of noise.
 Noise also occurs when a source uses signs or symbols that are unfamiliar to the receiver
or have a different meaning from the one intended. Noise also may originate in the
receiver; a receiver may be unaware of a coded message when perceptual processes block
it out.

Feedback
 The receiver‘s response to a message is feedback to the source. The source usually
expects and normally receives feedback, although perhaps not immediately.
 During feedback, the receiver or audience is the source of a message directed toward the
original source, which then becomes a receiver.
 Feedback is coded, sent through a communications channel, and decoded by the receiver,
the source of the original communication. Thus communication is a circular process, as
indicated in Figure.

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ROLE OF PROMOTION MIX
1. Create Awareness
 A considerable amount of promotion focuses on creating awareness. For an organization
introducing a new product or a line extension, making customers aware of the product is
crucial to initiating the product adoption process.
 A marketer that has invested heavily in product development strives to create product
awareness quickly to generate revenues to offset the high costs of product development
and introduction. To create awareness of its new Spicy Premium Chicken sandwich, for
example, McDonald‘s passed out samples of the sandwich, coupons, T-shirts, and iPod
covers in 14 cities.

2. Stimulate Demand
 When an organization is the first to introduce an innovative product, it tries to stimulate
primary demand—demand for a product category rather than for a specific brand of
product—through pioneer promotion.
 Pioneer promotion informs potential customers about the product: what it is, what it
does, how it can be used, and where it can be purchased.
 Because pioneer promotion is used in the introductory stage of the product life cycle,
which means there are no competing brands, it neither emphasizes brand names nor
compares brands. The first company to introduce the digital video recorder, for instance,
initially attempted to stimulate primary demand by emphasizing the benefits of digital
video recorders in general rather than the benefit of its specific brand.

3. Encourage Product Trial

 When attempting to move customers through the product adoption process, a marketer
may successfully create awareness and interest, but customers may stall during the
evaluation stage.
 In this case, certain types of promotion, such as free samples, coupons, test drives or
limited free-use offers, contests, and games, are employed to encourage product trial.
 For Example, Bru usually gives free trials of their coffee mix in various cities.

4. Identify Prospects
 Certain types of promotional efforts are directed at identifying customers who are
interested in the firm‘s product and are most likely to buy it.
 A marketer may use a magazine advertisement with a direct-response information form,
requesting the reader to complete and mail the form to receive additional information.
 Some advertisements have toll-free numbers to facilitate direct customer response.
Customers who fill out information blanks or call the organization usually have higher
interest in the product, which makes them likely sales prospects. The organization
personal contact by salespeople.

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5. Retain Loyal Customers
 Clearly, maintaining long-term customer relationships is a major goal of most
marketers. Such relationships are quite valuable. P
 romotional efforts directed at customer retention can help an organization control its
costs because the costs of retaining customers are usually considerably lower than those
of acquiring new ones.
 Frequent-user programs, such as those sponsored by airlines, car rental agencies, and
hotels, seek to reward loyal customers and encourage them to remain loyal.

6. Facilitate Reseller Support

 Reseller support is a two-way street. Producers generally want to provide support to
resellers to maintain sound working relationships, and in turn, they expect resellers to
support their products.
 When a manufacturer advertises a product to consumers, resellers should view this
promotion as a form of strong manufacturer support.
 In some instances, a producer agrees to pay a certain proportion of retailers‘
advertising expenses for promoting its products.
 When a manufacturer is introducing a new consumer brand in a highly competitive
product category, it may be difficult to persuade supermarket managers to carry this
brand.
 However, if the manufacturer promotes the new brand with free samples and coupon
distribution in the retailer‘s area, a supermarket manager views these actions as strong
support and is much more likely to handle the product.
 To encourage wholesalers and retailers to market its products more aggressively, a
manufacturer may provide them with special offers, buying allowances, and contests.

7. Combat Competitive Promotional Efforts

 At times, a marketer‘s objective in using promotion is to offset or lessen the effect of
a competitor‘s promotional program.
 This type of promotional activity does not necessarily increase the organization‘s
sales or market share, but it may prevent a sales or market share loss.
 A combative promotional objective is used most often by firms in extremely
competitive consumer markets, such as the fast-food and automobile industries.

8. Reduce Sales Fluctuations

 Demand for many products varies from one month to another because of factors such
as climate, holidays, and seasons.

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  A business, however, cannot operate at peak efficiency when sales fluctuate rapidly.
Changes in sales volume translate into changes in production, inventory levels, personnel
needs, and financial resources.
 When promotional techniques reduce fluctuations by generating sales during slow
periods, a firm can use its resources more efficiently.
 Promotional techniques are often designed to stimulate sales during sales slumps.

Push and Pull Channel Policies

Another element marketers consider when planning a promotion mix is whether to use a push
policy or a pull policy.

Push Policy
 With a push policy, the producer promotes the product only to the next institution down
the marketing channel.
 In a marketing channel with wholesalers and retailers, the producer promotes to the
wholesaler because in this case the wholesaler is the channel member just below the
producer (see Figure). Each channel member, in turn, promotes to the next channel
member.
 A push policy normally stresses personal selling. Sometimes sales promotion and
advertising are used in conjunction with personal selling to push the products down
through the channel.

Pull Policy
 As Figure shows, a firm using a pull policy promotes directly to consumers to develop
strong consumer demand for its products.
 It does so primarily through advertising and sales promotion. Because consumers are
persuaded to seek the products in retail stores, retailers, in turn, go to wholesalers or the
producers to buy the products.

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  This policy is intended to pull the goods down through the channel by creating demand at
the consumer level.
 Consumers are told that if the stores don‘t have it, ask them to get it. Push and pull
policies are not mutually exclusive. At times, an organization uses both simultaneously.
CASE - Promoting “The Ultimate Driving Machine”
Careful targeting, consistent positioning, and a good match between message and media have all
helped Bayerische Motoren Werke (better known as BMW) to accelerate sales revenue on a
relatively small advertising budget. The company, based in Munich, Germany, markets such
well-known global brands as BMW, Mini Cooper, and Rolls-Royce, as well as BMW
Motorcycles.
Although other multibrand automobile manufacturers offer a range of vehicles for mass market
and upscale segments, BMW has followed a different route to profitability. The automaker
focuses exclusively on highend vehicles, targeting drivers who are affluent, successful,
demanding of themselves and their cars, and interested in the time-saving convenience of
automotive technology.
BMW uses television and magazine advertising to reinforce its brand image and to give the
target audience a feeling for what the company calls ―The Ultimate Driving Machine.‖ Because
its advertising budget is not as large as those of its competitors, BMW looks for ways to stand
out in the crowd. For example, it likes to air television commercials supported by bursts of
newspaper advertising; more than once it has signed on as the lone sponsor of television
programs favored by its target audience. ―TV advertising plays a vital role for us in building
brand awareness, image, and desirability among members of the general public,‖ notes a BMW
marketing executive. ―Without that type of broad appeal, a brand such as BMW would have
less desirability within its target consumer groups.‖
The aim of every commercial is to help viewers picture themselves on the open road behind the
wheel of a BMW; the car, not the driver or the scenery, is the star of the advertisement. The
camera lingers on the vehicle‘s sleek lines, comfortable interior, high-tech features, and the
familiar blue-and-white brand symbol. While the vehicle and the scenery may change from
commercial to commercial, the ultimate objective is to motivate consumers to test-drive a BMW.
Movies have played a key role in BMW‘s promotions.
The company has garnered huge waves of publicity from having the Mini Cooper featured in
The Italian Job and for arranging for James Bond to drive new BMWs. To reach Internet-savvy
car buyers, BMW also hired top directors to make short films especially for Web viewing.
Although the films ran online for only four years, they were viewed more than 100 million times,
won numerous awards, and were later issued on DVD for free distribution to prospective buyers.
BMW‘s sales promotion efforts also include samples— in the form of extended test drives—as
well as participation in major automotive trade shows. Eye-catching point-of-purchase displays
in dealer showrooms support the overall integrated marketing communications effort by echoing
selected images from the company‘s advertising.

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Price promotions are rare, although the company held its first end-of-year clearance sale on
select U.S. models not long ago. The company also has offered special leasing deals to spark
sales of its X3 model.
After a long stretch as head of marketing for BMW of North America, Jim McDowell switched
jobs with Jack Pitney, who directed marketing for the company‘s Mini brand. Pitney has begun
infusing BMW‘s marketing with some of the Mini‘s most successful promotional ideas. He plans
to retain ―The Ultimate Driving
Machine‖ slogan for BMW‘s marketing communications because it resonates with the target
audience and differentiates the brand from other premium competitors.
BMW‘s worldwide positioning will not change, but with the launch of new models every year,
the company will continue refining the promotion mix to attract new buyers, maintain brand
image, and keep profits high.

Questions for Discussion

1. Evaluate BMW‘s use of movies in its integrated marketing communications program.
2. What types of objectives is BMW attempting to change through its television
commercials?
3. How does BMW‘s extended sampling facilitate the personal selling efforts when
customers visit a BMW dealership?

ADVERTISING

Advertising is a paid form of non-personal communication transmitted to a target audience

through mass media, such as television, radio, the Internet, newspapers, magazines, direct mail,
outdoor displays, and signs on mass transit vehicles.

 When asked to name major advertisers, most people immediately mention business
organizations.
 However, many non-business types of organizations, including governments, churches,
universities, and charitable organizations, employ advertising to communicate with
stakeholders.
 Advertising is used to promote goods, services, ideas, images, issues, people, and
anything else that advertisers want to publicize or foster.

Developing an Advertising Campaign

An advertising campaign involves designing a series of advertisements and placing them in

various advertising media to reach a particular target audience.

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1. Identifying and Analyzing the Target Audience
 The target audience is the group of people at whom advertisements are
aimed.
 Advertisements for Barbie cereal are targeted toward young girls who play
with Barbie dolls, whereas those for Special K cereal are directed at health-conscious
adults.
 Identifying and analyzing the target audience are critical actions.
 The information yielded helps to determine other steps in developing the
campaign.
The target audience for a campaign may include everyone in the firm‘s target market or only
a portion of the target market.

2. Defining the Advertising Objectives

 The advertiser‘s next step is to determine what the firm hopes to accomplish
with the campaign.
 Because advertising objectives guide campaign development, advertisers
should define objectives carefully.
 Advertising objectives should be stated clearly, precisely, and in measurable
terms.
 Precision and measurability allow advertisers to evaluate advertising success
at the end of the campaign in terms of whether or not objectives have been met.

3. Creating the Advertising Platform

 Before launching a political campaign, party leaders develop a political
platform stating the major issues that are the basis of the campaign.
 Like a political platform, an advertising platform consists of the basic issues
 or selling points that an advertiser wishes to include in the advertising campaign.
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  An advertising platform should consist of issues important to customers. One
of the best ways to determine those issues is to survey customers about what they
consider most important in the selection and use of the product involved.
 Selling features must not only be important to customers, but they also should
be strongly competitive features of the advertised brand.

4. Determining the Advertising Appropriation

 The advertising appropriation is the total amount of money a marketer
allocates for advertising for a specific time period.
 It is hard to decide how much to spend on advertising for a specific period
because the potential effects of advertising are so difficult to measure precisely.
 Many factors affect a firm‘s decision about how much to appropriate for
advertising. Geographic size of the market and the distribution of buyers within the
market have a great bearing on this decision.
 Of the many techniques used to determine the advertising appropriation, one
of the most logical is the objective-and-task approach. Using this approach,
marketers determine the objectives a campaign is to achieve and then attempt to list
the tasks required to accomplish them. The costs of the tasks are calculated and added
to arrive at the total appropriation. A coffee marketer, for example, may find it
extremely difficult to determine how much of an increase in television advertising is
needed to raise a brand‘s market share from 8 to 10 percent.
 In the more widely used percent-of-sales approach, marketers simply
multiply the firm‘s past sales, plus a factor for planned sales growth or decline, by a
standard percentage based on what the firm traditionally spends on advertising and
perhaps on the industry average. This approach is flawed because it is based on the
incorrect assumption that sales create advertising rather than the reverse. A marketer
using this approach during declining sales will reduce the amount spent on
advertising, but such a reduction may further diminish sales. Though illogical, this
technique has been used widely because it is easy to implement.
 Another way to determine the advertising appropriation is the competition
matching approach. Marketers following this approach try to match their major
competitors‘ appropriations in absolute dollars or to allocate the same percentage of
sales for advertising that their competitors do.

5. Developing the Media Plan

 To derive maximum results from media expenditures, marketers must develop
effective media plans. A media plan sets forth the exact media vehicles to be used
(specific magazines, television stations, newspapers, and so forth) and the dates and
times the advertisements will appear.

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  The plan focuses on how many people in the target audience will be exposed
to a message and the frequency of exposure. To formulate a media plan, the planners
select the media for the campaign and prepare a time schedule for each medium. The
media planner‘s primary goal is to reach the largest number of people in the
advertising target audience that the budget will allow.

6. Creating the Advertising Message

 The basic content and form of an advertising message are functions of several
factors.
A product‘s features, uses, and benefits affect the content of the message.
 Characteristics of the people in the target audience—gender, age, education,
race, income, occupation, lifestyle, and other attributes—influence both content and
form.

7. Executing the Campaign

 Execution of an advertising campaign requires extensive planning and
coordination because many tasks must be completed on time and many people and
firms are involved.
 Production companies, research organizations, media firms, printers,
photoengravers, and commercial artists are just a few of the people and firms
contributing to a campaign.

8. Evaluating Advertising Effectiveness

 Advertising can be evaluated before, during, and after the campaign. An
evaluation performed before the campaign begins is called a pretest.
 A pretest usually attempts to evaluate the effectiveness of one or more
elements of the message.
 To pretest advertisements, marketers sometimes use a consumer jury, a panel
of actual or potential buyers of the advertised product. Jurors judge one or several
dimensions of two or more advertisements.
 Such tests are based on the belief that consumers are more likely than
advertising experts to know what influences them.

PUBLIC RELATIONS
 Public relations are a broad set of communication efforts used to create and maintain
favorable relationships between an organization and its stakeholders.
 An organization communicates with various stakeholders, both internal and external,
and public relations efforts can be directed toward any and all of these.
 A firm‘s stakeholders can include customers, suppliers, employees, stockholders, the
media, educators, potential investors, government officials, and society in general.
 Public relations can be used to promote people, places, ideas, activities, and even
countries. It focuses on enhancing the image of the total organization.
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  Assessing public attitudes and creating a favorable image are no less important than
direct promotion of the organization‘s products.
 Because the public‘s attitudes toward a firm are likely to affect the sales of its products, it
is very important for firms to maintain positive public perceptions.

Public Relations Tools

Publicity
 Publicity is part of public relations. Publicity is communication in news-story form about
the organization, its products, or both transmitted through a mass medium at no charge.
 For example, after Apple chairman Steve Jobs announced that the company would
introduce a revolutionary new mobile phone, the iPhone, the story was covered in
newspapers and television news shows throughout the world for months afterward.
 Although public relations has a larger, more comprehensive communication function than
publicity, publicity is a very important aspect of public relations.
 Publicity can be used to provide information about goods or services; to announce
expansions, acquisitions, research, or new product launches; or to enhance a company‘s
image.

News / Press Release

 The most common publicity-based public relations tool is the news release, sometimes
called a press release, which is usually a single page of typewritten copy containing
fewer than 300 words and describing a company event or product.
 A news release gives the firm‘s or agency‘s name, address, phone number, and contact
person. News releases can tackle a multitude of specific issues.

Feature Article
 A feature article is a manuscript of up to 3,000 words prepared for a specific
publication.

Captioned Photograph
 A captioned photograph is a photograph with a brief description explaining the
picture‘s content.
 Captioned photographs are effective for illustrating new or improved products with
highly visible features.

Press Conference
 A press conference is a meeting called to announce major news events.
 Media personnel are invited to a press conference and are usually supplied with written
materials and photographs.

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 Letters to the editor and editorials are sometimes prepared and sent to newspapers and
magazines.
 Videos and audiotapes may be distributed to broadcast stations in the hope that they
will be aired.

PERSONAL SELLING

 Personal selling is paid personal communication that attempts to inform customers

and persuade them to purchase products in an exchange situation.
 For example, a salesperson describing the benefits of a Toyota Innova to a customer
at a dealership is engaging in personal selling. Personal selling goals vary from one firm
to another.
 However, they usually involve finding prospects, persuading prospects to buy, and
keeping customers satisfied.

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 Personal selling gives marketers the greatest freedom to adjust a message so that it
will satisfy customers‘ information needs.
 Compared with other promotion methods, personal selling is the most precise,
enabling marketers to focus on the most promising sales prospects.
 Other promotion-mix elements are aimed at groups of people, some of whom may not
be prospective customers. However, personal selling is generally the most expensive
element in the promotion mix.

Personal Selling Process

1. Prospecting for Customers

 Developing a list of potential customers is called prospecting. Salespeople
seek names of prospects from company sales records, trade shows, commercial
databases, newspaper announcements (of marriages, births, deaths, and so on), public
records, telephone directories, trade association directories, and many other sources.
 Sales personnel also use responses to traditional and online advertisements
that encourage interested persons to send in information request forms.
 Seminars and meetings targeted at particular types of clients, such as attorneys
or accountants, also may produce leads.

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  Most salespeople prefer to use referrals—recommendations from current
customers— to find prospects.
 Obtaining referrals requires that the salesperson have a good relationship with
the current customer and so must have performed well before asking the customer for
help.

2. Evaluating Prospects
 Before contacting acceptable prospects, a salesperson finds and analyzes
information about each prospect‘s specific product needs, current use of brands,
feelings about available brands, and personal characteristics.
 In short, salespeople need to know what potential buyers and decision makers
consider most important and why they need a specific product.
 The most successful salespeople are thorough in their evaluations of
prospects.

3. Approaching the Customer

 The approach, the manner in which a salesperson contacts a potential
customer, is a critical step in the sales process.
 In more than 80 percent of initial sales calls, the purpose is to gather
information about the buyer‘s needs and objectives.
 Creating a favorable impression and building rapport with prospective clients
are important tasks in the approach.
 During the initial contact, the salesperson strives to develop a relationship
rather than just push a product.
 The salesperson may have to call on a prospect several times before the
product is considered.
4. Making the Presentation
 During the sales presentation, the salesperson must attract and hold the prospect‘s
attention, stimulate interest, and spark a desire for the product.
 Research indicates that salespersons who carefully monitor the selling situation and
adapt their presentations to meet the needs of prospects are associated with effective sales
performance.
 Salespeople should match their influencing tactics—such as information exchange,
recommendations, threats, promises, ingratiation, and inspirational appeals—to their
prospects.

5. Overcoming Objections
 An effective salesperson usually seeks out a prospect‘s objections so that he or
she can address them.
 If they are not apparent, the salesperson cannot deal with them, and the
prospect may not buy.

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  One of the best ways to overcome objections is to anticipate and counter them
before the prospect raises them.
 However, this approach can be risky because the salesperson may mention
objections that the prospect would not have raised.
 If possible, the salesperson should handle objections as they arise. They also can
be addressed at the end of the presentation.

6. Closing the Sale

 Closing is the stage of the selling process when the salesperson asks the prospect
to buy the product.
 During the presentation, the salesperson may use a ―trial close‖ by asking
questions that assume that the prospect will buy the product.
 The salesperson might ask the potential customer about financial terms, desired
colors or sizes, or delivery arrangements.
 One questioning approach uses broad questions (what, how, and why) to probe or
gather information and focused questions (who, when, and where) to clarify and close
the sale.

7. Following Up
 After a successful closing, the salesperson must follow up the sale. In the follow-
up stage, the salesperson determines whether the order was delivered on time and
installed properly, if installation was required.
 He or she should contact the customer to learn if any problems or questions
regarding the product have arisen.
 The follow-up stage is also used to determine customers‘ future product needs.

Types of Salespeople

Order Getters
 To obtain orders, a salesperson informs prospects and persuades them to buy the product.
 The role of the order getter is to increase sales by selling to new customers and
increasing sales to current customers.
 This task sometimes is called creative selling. It requires that salespeople recognize
potential buyers‘ needs and give them necessary information.

Order Takers
 Salespeople take orders to perpetuate long-lasting, satisfying customer relationships.
 Order takers seek repeat sales. They generate the bulk of many organizations‘ total
sales.

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  One major objective is to be certain customers that have sufficient product quantities
where and when needed.

Support personnel
 Support personnel facilitate selling but usually are not involved solely with making
sales.
 They are engaged primarily in marketing industrial products, locating prospects,
educating customers, building goodwill, and providing service after the sale.
 There are many kinds of sales support personnel; the three most common are missionary,
trade, and technical salespeople.

Missionary salespeople
 Missionary salespeople, usually employed by manufacturers, assist the producer‘s
customers in selling to their own customers.
 Missionary salespeople may call on retailers to inform and persuade them to buy the
manufacturer‘s products.
 When they succeed, retailers purchase products from wholesalers, who are the producer‘s
customers.
 Manufacturers of medical supplies and pharmaceuticals often use missionary salespeople,
called detail reps, to promote their products to physicians, hospitals, and retail druggists.

Trade salespeople
 Trade salespeople are not strictly support personnel because they usually take orders as
well. However, they direct much effort toward helping customers, especially retail stores,
and promote the product.
 They are likely to restock shelves, obtain more shelf space, set up displays, provide in-
store demonstrations, and distribute samples to store customers.

Technical salespeople
 Technical salespeople give technical assistance to the organization‘s current customers,
advising them on product characteristics and applications, system designs, and
installation procedures.
 Because this job is often highly technical, the salesperson usually has formal training in
one of the physical sciences or in engineering.

SALES PROMOTION

 Sales promotion is an activity or material, or both, that acts as a direct inducement,

offering added value or incentive for the product, to resellers, salespeople, or consumers.

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  It encompasses all promotional activities and materials other than personal selling,
advertising, and public relations.
 Marketers often use sales promotion to facilitate personal selling, advertising, or both.
Companies also employ advertising and personal selling to support sales promotion
activities. For example, marketers frequently use advertising to promote contests, free
samples, and premiums.

A} Consumer Sales Promotion Methods

 Consumer sales promotion methods encourage or stimulate consumers to patronize
specific retail stores or try particular products.
 These methods initiated by retailers often aim to attract customers to specific locations,
whereas those used by manufacturers generally introduce new products or promote
established brands.

1. Coupons and Cents-Off Offers

 Coupons reduce a product‘s price and are used to prompt customers to try new or
established products, increase sales volume quickly, attract repeat purchasers, or
introduce new package sizes or features.
 Savings may be deducted from the purchase price or offered as cash.
 With a cents-off offer, buyers pay a certain amount less than the regular price
shown on the label or package.
 Similar to coupons, this method can serve as a strong incentive for trying new or
unfamiliar products.
 Commonly used in product introductions, cents-off offers can stimulate product
sales, yield short-lived sales increases, and promote products in off-seasons.

2. Refunds and Rebates

 With money refunds, consumers submit proof of purchase and are mailed a
specific amount of money.
 Usually manufacturers demand multiple product purchases before consumers
qualify for refunds.
 Money refunds, used primarily to promote trial use of a product, are relatively
low in cost, but because they sometimes generate a low response rate, they have
limited impact on sales.
 With rebates, the customer is sent a specified amount of money for making a
single purchase.
 Rebates generally are given on more expensive products than money refunds and
are used to encourage customers.

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3. Frequent-User Incentives
 Do you have a ―Reward Card‖ from Border‘s? Many firms develop incentive
programs to reward customers who engage in repeat (frequent) purchases.
 As mentioned earlier, most major airlines offer frequent flier programs that
reward customers who have flown a specified number of miles with free tickets
for additional travel. Frequent-user incentives foster customer loyalty to a specific
company or group of cooperating companies.

4. Point-of-Purchase Materials and Demonstrations

 Point-of-purchase (P-O-P) materials include outdoor signs, window
displays, counter pieces, display racks, and self-service cartons.
 These items, often supplied by producers, attract attention, inform customers,
and encourage retailers to carry particular products.
 Demonstrations are excellent attention getters. Manufacturers offer them
temporarily to encourage trial use and purchase of a product or to show how a
product works.
 Because labor costs can be extremely high, demonstrations are not used
widely.
 They can be highly effective for promoting certain types of products, such as
appliances, cosmetics, and cleaning supplies.

5. Free Samples and Premiums

 Marketers use free samples to stimulate trial of a product, increase sales
volume in the early stages of a product‘s life cycle, and obtain desirable
distribution.
 Sampling is the most expensive sales promotion method because production
and distribution—at local events, by mail or door-to-door delivery, online, in
stores, and on packages—entail high costs.
 Premiums are items offered free or at minimal cost as a bonus for purchasing
a product. Like the prize in a Kelloggs Chocos, premiums are used to attract
competitors‘ customers, introduce different sizes of established products, add
variety to other promotional efforts, and stimulate consumer loyalty.
 Creativity is essential when using premiums; to stand out and achieve a
significant number of redemptions, the premium must match both the target
audience and the brand‘s image.

6. Consumer Games, Contests, and Sweepstakes

 In consumer contests, individuals compete for prizes based on analytical or
creative skills.
 This method can be used to generate retail traffic and frequency of exposure
to promotional messages.
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  Contestants are usually more highly involved in consumer contests than in games
or sweepstakes, even though total participation may be lower.
 In consumer games, individuals compete for prizes based primarily on chance—
often by collecting game pieces such as bottle caps or a sticker on the side of
French fries. Because collecting multiple pieces may be necessary to win or
increase an individual‘s chances of winning, the game stimulates repeated
business.
 Entrants in a consumer sweepstakes submit their names for inclusion in a
drawing for prizes.
 Sweepstakes are employed more often than consumer contests and tend to attract
a greater number of participants.

B} Trade Sales Promotion Methods

 To encourage resellers, especially retailers, to carry their products and to promote them
effectively, producers use sales promotion methods.
 Trade sales promotion methods stimulate wholesalers and retailers to carry a
producer‘s products and market those products more aggressively.

1. Trade Allowances
 Many manufacturers offer trade allowances to encourage resellers to carry a
product or stock more of it.
 One such trade allowance is a buying allowance, which is a temporary price
reduction offered to resellers for purchasing specified quantities of a product.
 A soap producer, for example, might give retailers Re.1 for each case of soap
purchased. Such offers provide an incentive for resellers to handle new products,
achieve temporary price reductions, or stimulate purchase of items in larger than
normal quantities.
 A buy-back allowance is a sum of money that a producer gives to a reseller for
each unit the reseller buys after an initial promotional deal is over.
 A merchandise allowance is a manufacturer‘s agreement to pay resellers certain
amounts of money for providing promotional efforts such as advertising or P-O-P
displays.
 This method is best suited to high-volume, high-profit, easily handled products.

2. Cooperative Advertising and Dealer Listings

 Cooperative advertising is an arrangement whereby a manufacturer agrees to
pay a certain amount of a retailer‘s media costs for advertising the manufacturer‘s
products.
 The amount allowed is usually based on the quantities purchased. As with
merchandise allowances, a retailer must show proof that advertisements did

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appear before the manufacturer pays the agreed on portion of the advertising costs.
 Dealer listings are advertisements promoting a product and identifying
participating retailers that sell the product.

3. Free Merchandise and Gifts

 Manufacturers sometimes offer free merchandise to resellers that purchase a
stated quantity of products.
 Occasionally, free merchandise is used as payment for allowances provided
through other sales promotion methods.

4. Premium (Push) Money

 Premium money (or push money) is additional compensation to salespeople
offered by the manufacturer as an incentive to push a line of goods.
 This method is appropriate when personal selling is an important part of the
marketing effort; it is not effective for promoting products sold through self-
service.

5. Sales Contests
 A sales contest is designed to motivate distributors, retailers, and sales personnel
by recognizing outstanding achievements.
 To be effective, this method must be equitable for all persons involved.

CASE- Global International plc

Toby Kelly is the recently appointed Marketing Director of Global International plc. The
company is multinational marketer of sports equipment, selling a range of well-known brands in
virtually every part of the world.

As a company, and somewhat unusually compared to competitors, it has never considered

commercial sponsorship for the company or any of its brands. In fact, several of its branded
products are used by leading sportspersons in a number of sports. For example, Mia Rees
(currently the world‘s number l female tennis player) uses the company‘s ‗Spinner‘ brand of
tennis racket.

Similarly, most of the Australian cricket team use the company‘