Promotion of one of the
basic elements of marketing mix. When a product is launch into the market,
aggressive promotional efforts have to be embarked upon to create the awareness
in potential customers.
WHAT IS PROMOTION IN
MARKETING?
When a company develops
a new product, changes an old one or simply wants to increase sales of an
existing products or services, it must transmit its message to potential
customers.
Communication is the
basic element of promotion. It is defined as the passing of information from
one person (sender) to another (receiver), or an exchange of information or
ideas between two people.
Two categories of
communication
a.
Explicit: the use of language to
establish common understanding among the people
b.
Implicit: involves ‘intuitive
interpretation’ of the relatively unconscious symbols of gesture and the
unconscious assimilation of the ideas and behaviours of one’s own culture
OBJECTIVES OF PROMOTION
i.
Behavior Modification
Promotion tends to
change the idea already created about a product either positively or
negatively. Promotion tries to convince the customers (Current and Potential)
of the quality of the product and even the need to take such product. For
instance, a promotion scheme aims at convincing consumers that Bournvita is
better than Milo.
ii.
Informing
Promotions are designed
to inform, persuade, or remind the targets market about the firm’s offerings. Often
a company will attempt to accomplish these simultaneously. It is necessary
ingredient increasing primary demand. This is because people won’t typically purchase
a good or service until they know it will do and how it will benefit them.
iii.
Persuasive
Most promotions tend to
persuade. Persuasive promotions are designed to stimulate purchase. Where the
demand for a product is facing some threat, persuasive promotion could create a
positive image in order to influence long-term buyer behaviour.
iv.
Reminder Promotion
Reminder promotion is
used to keep the products brand name in the public mind and is prevalent during
the maturity stage of the life cycle. This form of promotion tactically assumes
that the target audience has already been persuaded of the merits of the good
or service.
PROMOTIONAL MIX
Rarely will a single
communication resource be the most effective means of accomplishing the firm’s
promotional objectives. Instead a blend of various factors must be used to
reach the target market, this is called “Promotional Mix”. The four major tools
that makes the promotional mix are:
1.
Advertising
2.
Personal Selling
3.
Sales promotion
4.
Publicity
These varies
significantly from one product and industry to the other. Normally, advertising
and personal selling are the primary products and service promotional tools and
are in turn supported by sales promotion. Publicity aids in developing a
positive image for the organization and the product line.
CHOOSING A PROMOTIONAL
MIX
i.
The Nature of the Product
Personal selling has
been identified to be the most important in industrial goods and least
important in consumer non-durables.
ii.
Market Characteristics
Widely scattered
potential customers, highly informed buyers and a large number of brand-loyal repeat
purchasers generally require a blend of more advertising and sales promotion
and less personal selling.
Often firms sell goods
and services in markets where potential customers are difficult to locate.
Advertising is used to locate potential customers by inviting the reader to
“call collect” for more information or “fill out the coupon” for a detailed
brochure. Sales persons are sent to the potential customers as the calls on the
coupons are received.
iii.
Available Funds
Money or lack of it may
easily be the most important factor in determining the promotional blend. A
small undercapitalized manufacturer may rely heavily on free publicity it its
products is of a unique nature.
iv.
Stags of the product life cycle
The first stage of the
product’s life cycle can be an important determinant of a product’s promotional
blend.If the product reaches the growth stage of the life cycle and obtains
adequate distribution, the promotional blend may shift. Often a change is
necessary because different types of individuals enter the target market. The
promotional blend in the later stage of the life cycle might shift towards
personal selling to maintain adequate distribution.
THE PROMOTIONAL PLAN
For promotion to be
effective and result-oriented, it must be properly planned and carefully
implemented. The following distinctive steps are involved:
Step 1: Selling Objective
Before embarking on a
particular promotional exercise, it is essential to establish the objectives
the promotion is aimed at achieving. The objective could be one of creating
awareness, increasing levels of sales, reminding purchases of the brand name,
or developing new customers.
Step 2: Identifying the target market
The market segment that
the firmwants to reach in a given promotional campaign should be explicitly
defined both demographically and perhaps, psychographically through market
research. Normally the target market should consist primarily of the
individuals who most likely to purchase the product within a relevant period.
Step 3: Developing a Budget
After the marketing
manager has specified the promotional goals and identified the relevant market
segments, a concrete promotional budget can be developed. At this level, top
level management decision making is required.
Step 4: Choosing a Message
After promotional
objectives has been created, target markets identified, and promotional budgets
established, management can begin preparing the right message to reach the
target. The nature of the message will vary, depending on the goals of the
promotion.
Step 5: Determining the Promotional Mix
Public relations may be
charged with creating a positive corporate image among target customers.
Advertising will focus on developing corporate and product awareness to
complement personal selling. The
function of personal selling will be to interact with customers by amplifying
and explaining the advertising messages and designing the right product or
services to meet the specific needs of customers.
Step 6: Selecting the Media Mix
The advertising media
mix to be used in conjunction with the other three promotional tools will be
discussed later. Different types of media tend to appeal to different
audiences. The choice will depend of target audience.
Step 7: Measuring Effectiveness
This is to access the
success or otherwise of a chosen promotional tool. Where a tool fails to
achieve the set goal, a modification could be made.
DESIGNINING THE
PROMOTIONAL MESSAGE
A marketer must design
a realistic message to make the promotion meaningful and effectively
convincing. Ideally, the message should get attention, hold interest; arouse
desire and elicit action (i.e. AIDA Model). In formulating the message, the
marketer must consider solving four problems:
i.
What to say (Message Content)
ii.
How to say it logically (Message
Structure)
iii.
How to express it symbolically (Format)
iv.
Who should say it (Message source)
MESSAGE CONTENT
The communicator must
figure out what to say to the target audience to produce the desired response. Formulating
some kind of benefit, motivation, identification, or reason why the audience
should think about or investigate the product. Three types of appeals can be
distinguished;
i.
Rational appeal which shows that the
product will produce the claimed functional benefit
ii.
Emotional appeal which attempts to stair
up some negative or positive emotion that will motivate purchase
iii.
Moral appeals which is directed to the
audiences’ sense of what is right and proper.
They often used to
exhort people to support social cause such as cleaner environment.
MESSAGE STRUCTURE
Effectiveness. Message
can be communicated in a way that leads to a logical conclusion about the
benefits of the product. For instance, a T.V advert comparing the use of one
product to another e.g. using a Duracell battery over other battery brands
MESSAGE FORMAT
The communicator must
develop a strong format for the message. In print advert, the communicator has
to decide on the headline copy, illustration, and colour. To attract attention,
the advertisers use such devices as key visuals, a pay-off, image,
demonstration, testimonials, emotion, and music. Every medium requires every
details to be properly presented.
MESSAGE SOURCE
Message delivered by
attractive sources achieve higher attention and recall. Advertisers often celebrities
as spokespeople, for example, Mohammed Ali for Ribena drink. The sources of a
message should attractive, likable and trustworthy
ADVERTISING
THE NATURE OF
ADVERTISING
This is part of the
marketing mix, but can only be used by an individual such as an entrepreneur or
by a non-commercial organization not engaged in marketing such as hospitals
advertising for staff. Advertising aims at persuading people to buy.
Advertising consists of
non-personal or one-way form of communication conducted through paid media
under clear sponsorship. Advertising is designed in line with what it is promoting.
THE ROLE OF ADVERTISING
The greatest of the
role is to carry the sales message to a very large people, usually the
advertiser does not know or cannot meet and who may be scattered throughout a
town, a state, country or may be the world.
Advertising can
influence product and brand selection when a neutral or favourite frame of
reference already exists.
Advertising influences
consumer preference. Since advertising dose influence consumers’ preference.
Advertising leads to increased sales return. It influences not only the
advertised brand but also sales of other brands.
TYPES OF ADVERTISING
There are seven main categories of advertising
i.
Consumer Advertising
There are two kinds of
goods bought by the general public; consumer goods and consumer durables, which
together with consumer services through media addressed to the appropriate
social grades. Consumer durables ae goods that are not found in shops, etc.
they are usually more expensive, less essential, less frequently bought and of
a more permanent nature.
ii.
Industrial Advertising
Industrial advertising
is aimed at promoting sales of equipment and services used by industry. Also
promoting the sales of raw materials, components and other items used in
industrial production.
iii.
Trade Advertising
This addressed to
distributors, chiefly wholesalers, agents, importers/exporters and numerous
kinds of retailers, large and small. Goods are advertised for resale.
Trade press or direct
mail is commonly used here. Trade press is read by traders. The trade press
advertising is to inform merchants and trades about goods available for resale.
iv.
Retail Advertising
Here we have a form of
advertising which lies between trade and consumer advertising. The most obvious
examples are those of departmental stores and supermarkets, but it can include
a petrol station etc.
v.
Financial Advertising
This includes those
banks savings, insurance and investments. In addition to advertising addressed
to customers or clients it can also include company reports, prospectus for new
share issues, records of investment in securities and other financial
announcements.
The object of financial
advertising may be to borrow or lend money, conduct all kinds of insurance,
sell shares or report financial results.
vi.
Recruitment Advertising
This form of
advertising aims to recruit staff and may consist of run-on classified
advertisements or displayed classified, although other medial such as radio and
television are sometimes used. This is
mainly of two kinds, that inserted by employers, whether identified or using
box numbers and that placed by employment or recruitment agencies which has
been commissioned to fill vacancies.
The media of
recruitment advertising include national newspapers, trade and professional
journals.
PERSONAL SELLING
WHAT IS PERSONAL
SELLING?
Promotion is
communicating with potential customers and personal selling is often the best
way to achieve this. While face-to-face with prospective customers, sales
people can get more attention than an advertisement or a display.
Personal selling is a
direct face-to-face communication between sellers and potential customers.
IMPORTANCE OF PERSONAL
SELLING
i.
Helping to buy
Good sales people don’t
just try to sell to the customer. Rather, they try to help the customer to buy
by presenting both the advantages and disadvantages of their products and
showing how they will satisfy needs.
ii.
Sales people represent the whole company
and customers too
Increasingly, the
salesperson is seen as a representative of the whole company – responsible for
explaining its total effort to target customer than just pushing products. This
sales representative is often the only link between the firm and its customers,
especially when customer are away.
iii.
Sales force provides research
information
The sales
representative may be the first in the company to hear about a new competitor,
or a competitors’ new products or strategy. It is important that such
information gets back to the firm.
iv.
Salespeople can be strategy planners too
Some salespeople are
expected to be marketing managers in their own geographic territories. They are
therefore expected to take initiative to develop their own marketing mix or
even their own strategies.
TYPES OF PERSONAL
SELLING
Personal selling can be
classified according to the ales job performed by the sales force.
i.
Account Representative
Also known as sales
representative, calls on a large number of already established customers.
Selling is low-key, orders are taken, and there is little effort to develop new
business. Used in goods, textile, etc.
ii.
Missionary Salesperson
The tasks of this sales
person is primarily to introduce products and to perform promotional activities
rather than to solicit orders. Among pharmaceutical manufacturers the
missionary salesperson is called ‘detail salesperson’, and their job is to call
on doctors, distribute samples, and persuade them to write prescriptions that
specify the brands being pushed. Actual sales are made through the wholesalers.
iii.
Sales Engineer
When technical
knowledge and ability to discuss technical problems is essential to the sale,
the job usually calls for a sales engineer. This sales person can identify,
analyze, and solve customer’s problems to make the sale. They are mostly found
in the chemical, machinery and heavy equipment industries.
iv.
Non-technical industrial – Product
salesperson
Firms that sell
tangible products to industrial and other organizational purchasers, where no
technical knowledge is necessary.
v.
Service Salesperson
As the main
differentiation from all the others, this salesperson sells intangibles. This
include maintenance programmes, computer software systems and insurance.
Intermediaries, of
course, also make use of personal selling in the promotion of their goods and
services. Wholesalers will in most cases, use the account representative type
of salesperson as described above.
SALES
PROMOTION
This
is another important element of the Promotional mix.
WHAT
IS PROMOTIONAL MIX?
This can be defined as
non-recurring promotion activities between producers and intermediaries and
consumers. Rather than competing with either advertising or personal selling,
sales promotion activities are complementary to them.
TYPES OF SALES
PROMOTION
1.
Dealer Promotion
Because they don’t
usually come in contact with the consumer, producers are dependent of retailers
to maximize the effectiveness of their promotional efforts. Dealer sales
promotion include the following
i.
Point-of- Purchase display which
includes packages, shelf-talkers (Signs hung from shelves), wall signs, posters
and other eye-catching materials.
ii.
Dealer advertising assistance is a form
of cooperative advertising between the producer and the retailer. The producer
may specify acceptable media any insist on the dealer using producer prepared
advertisements.
iii.
Store Traffic Stimulation – producers
will supply dealers with premiums on a cooperative basis, to be given consumers
who come to the store to see a demonstration of the producer’s product.
2.
Consumer Promotion
These are promotions
directly aimed at the consumers. These include sampling, price incentives,
premium and contests.
i.
Sampling: Permitting consumers to sample
it i.e. free trail of a health club’s facilities
ii.
Consumer Price Incentives: for instance,
quantity discount, price discount, etc
iii.
Premiums: actual products or services
offered as an incentive to by other products or services.
iv.
Contests: contest provide excitement for
the product or service being promoted.
PURPOSE OF SALES
PROMOTION
i.
It stimulates consumer trial
ii.
Helps to establish long-term consumers’
loyalty when there is a free management service or after sales services
iii.
Increased repurchase rates as sellers
use incentive – type promotion to attract customers to repeatedly purchase the
product.
iv.
Increases the overall sales volume
v.
Increases market share
PUBLIC RELATIONS
NATURE OF PUBLIC RELATIONS
In any marketing organization, the public relations
department is usually an independent one and of necessity has to be located at
the headquarters. It is about the busiest department that deals with various
publics, i.e. stakeholders, government agencies, community leaders, etc. they
perform the following activities which helps to promote the organization
i.
Press Relations: placing information
worthy of note into the news media in order to attract the attention of the
public to the organization and its products.
ii.
Pubic Publicity of organization’s
products and image
iii.
Corporate communications: helps in ensuring
effective communication internally and externally i.e. between employees and
the organization on the one hand, and the organization and the public on the
other hand.
iv.
Lobbying – government agencies to ensure
compatible government policies and regulations
v.
Counselling – advices management of
public issues and government policies and regulations.
MAJOR TOOLS IN PUBLIC RELATIONS
i.
News
Finding and creating
favourable news about the company and its product. This requires skills in
developing story concept and researching it extensively. The Public Relations
Officer (P.R.O) must understand the needs of the press for stories that are
interesting and timely, and for releases that are well written and attention getting.
ii.
Speeches: Spokespersons or PRO must be
able to makes speeches that are capable of winning the target audience.
iii.
Event:
This includes news conferences, Seminars, outings, exhibitions, etc.
iv.
Public
Service Activities: companies can improve public goodwill by contributing money
and time to good causes. E.g. sponsoring education scholarships, making
donations and representations at community launchings.
v.
Written
material: this is intended to reach an influence target markets. This include
annual reports, brochures, articles and company newsletters and magazines.
vi.
Audio
– Visual Material: such as films, video cassettes is getting more ground. They
have direct impact and have more influence on consumers.
vii.
Telephone
Information Service: the PR department can provide a telephone number through
which prospects and customers can get information and better service from a
company.
THE NEED FOR
PUBLIC RELATIONS DEPARTMENT
Since
communication is the life wire of any market organization, to ensure effective communication,
the PR contributes the following to the organization’s survival and growth
i.
Build
Awareness
ii.
Build
credibility
iii.
Stimulates
the sales force
iv.
Holds
down promotion costs
Cost of sales
promotion can be cut down if the PR effectively disseminates information about
the company and its products.
DISTRIBUTION STRATEGY
Here we will be discussing how the marker can
fulfill its ultimate goal of satisfying the customer which can be accomplished
by effectively getting the products to the target customers – DISTRIBUTION
AIMS OF
DISTRIBUTION
The general step
in the marketing process is to determine what methods and routs will be used to
bring products to the market. This involves establishing strategies including
selecting a channel of distribution and providing for the physical distribution
of the product.Production is not complete until it gets to the final consumer.
Distribution is
concerned with the process of transferring goods from producers to final buyers
and users. It includes physical activities such as transporting and storing
goods, legal and promotional, even financial activities during the transfer of
ownership.
SOME BASIC
CONCEPTS
MIDDLEMAN
A middleman is
an independent business concern standing between producers and ultimate
household consumers or industrial users. He renders services in connection with
the purchase and/or sales of products as they move from producers to consumers.
Middlemen are
classified on the basis of whether they take little to the products involved.
Merchant middlemen actually take ownership title (i.e. buy in order to sell) to
the goods they are helping to market. Agent middlemen do not take title, but
they do actively assist in the transfer of the title. Brokers and manufacture
agents ere examples of wholesalers and retailers. Retailers are merchant
middlemen.
CHANNELS OF
DISTRIBUTION
A channel of
distribution (Trade Channel) for a product is the rout taken by the title to
the goods as they move from the producer to the ultimate consumer or industrial
user. A channel always includes both the producer and the final consumer of the
products as well as all agent and the merchant middlemen involved in the title
transfer.
Middlemen are
important in the following areas
i.
Serves
as purchasing agent for their customer
ii.
Concentration
and dispersion of variety of goods
iii.
Creation
of time and place utility
DECIDING THE
DISTRIBUTION METHOD
1.
The
nature of the product to be marketed
2.
The
scope of the market it is intended to penetrate
3.
The
distribution pattern which exists currently for this class of product
4.
The
production costs of the product
5.
The
size of the existing sales force
6.
The
amount of the advertising appropriation to be devoted to the product
7.
The
price policy it is intended to adopt
8.
The
company’s transport and storage facilities
9.
The
company’s financial resources
RETAILING AND
WHOLESALING
Retailing consist of activities involved in
selling directly to the ultimate consumer, e.g. house-to-house selling,
supermarkets, shopping centers, etc.
Wholesaling involves selling to buyers other than
ultimate consumers.
TYPES OF
MARKETING CHANNELS
A product can be
distributed through one of the following channels
a.
Manufacturer
to consumer
b.
Manufacturer
through agent middlemen to consumer or user
c.
Manufacturers
to retailer to ultimate consumer
d.
Manufacture
through merchant wholesaler to retailer to ultimate consumers
WHOLESALERS
Classification
of wholesalers
Classification by Range
i.
General
merchandise wholesale
The type of
wholesalers carries a general assortment of products in two or more distinct
and unrelated merchandise lines, etc. such wholesalers may stock and sell dry
goods, hardware, farm implements, etc.
ii.
General
line wholesalers
This type of
wholesaler carries a broad assortment of goods within a single merchandise
line, but may also handle stocks of goods in related lines. For instance, a
general line wholesaler may carry a broad stock of canned fruits and
vegetables, cereals, tea and coffee and in addition carry soaps and detergent,
toothpaste, etc.
iii.
Specialty
Wholesaler
This type of
wholesaler carries only part of a merchandise line but within their restricted
range of offerings, they have complete assortment. They give promotional
support to the manufacturer’s brand they handle.
Classification by Method of Operation
i.
Truck
Wholesaler
They combine
selling, delivery and collection in one operation. They carry only a limited
stock. They call on retailers and restaurants, hotels and other food, service
establishments. They sell mostly perishable goods, they are required to call
frequently on retailers and customers.
ii.
Rack
Jobber
The rack jobber
markets specialized lines of merchandise to retail stores and provides certain
services such as after service.
iii.
Cash
– and – Carry Wholesalers
Whereas service
wholesalers send their sales personnel to retailers to solicit orders or
deliver on credit, cash – and – carry wholesaler require retailers to come to
the warehouse pick their own orders, pay cash and carry away their purchases.
By restricting services and lowering its operation costs the cash – and – carry
wholesaler is able to lower its price more than service wholesaler.
IMPORTANCE OF
WHOLESALERS
i.
Selling
and Promotion: they provide a salesforce enabling manufacturers to reach many
small customers at a relatively low cost.
ii.
Buying
& Assortment Building: they save customers considerable work
iii.
Bulk
– Brooking: they buy in bulk from the manufacturers and sell in smaller lots to
the retailers.
iv.
Warehousing:
they hole inventories thereby reducing inventory cost for manufacturers and
suppliers
v.
Financing:
this is by granting credit and finance manufacturers by paying in advance.
vi.
Risk
– Bearing: they absorb the risk by taking title and bearing the cost of theft,
damage, spoilage and obsolescence
vii.
Market
Information
RETAILER
Retailing
includes all the activities involved in selling goods or services directly to
final customers for their personal non-business use.
Types of
Retailers
i.
Store
Retailers: department stores, supermarkets, clothing boutiques, etc.
ii.
Non-store
Retailer: direct marketing to the customers. Other forms include automatic
vending through the use of coin – operated machines.
iii.
Retail
Organization: they are classified into corporate chain which is identified as
two or more outlets commonly owned and controlled, selling similar lines of
merchandise and having central buying and merchandising.
iv.
Customer
Cooperative: a form of retail firm owned by consumers. Started by community
residents or employees of an organization who feel the local retailers are not
serving them well.
IMPORTANCE OF
RETAILER
i.
Offers
direct service to customers (Public)
ii.
He
breaks bulks
iii.
He
prepares the goods for resale
iv.
He
provides expert advice for customers such as on the use of a product
v.
He
offers after sales service to customers as packing and carrying the product
vi.
He
provides credit and higher purchase facilities to customers by allowing them to
buy now and pay later
PHYSICAL DISTRIBUTION
NATURE OF
PHYSICAL DISTRIBUTION
Physical distribution involves planning,
implementing and controlling the physical flow of materials and final goods
from points of origin to points of use to meet customer needs at a profit. Some
major activities in physical distribution include
i.
Sales
Forecasting: this include sales projection based on past records of sale
ii.
Production
Plan: the production plan indicates the material that the purchasing department
must order
iii.
Order
Processing: the purchasing order department prepares multi-copy invoices and
dispatches them to various department. Items out of stock are back – ordered.
iv.
Warehousing:
the warehouse sends out goods as soon as possible. More stocking locations mean
that the gods can be delivered to customers more quickly.
TRANSPORTATION
Marketers need
to take an interest in their company transportation decisions. The choice of
transportation carriers will affect the pricing of the products,
on-time-delivery, and the condition of the goods when they arrive. The choice
of transportation depends on, among other things, the nature of the product. The
various types of transportation available to a marketer to a marketer are:
i.
Rail:
this the most cost-effective means of transportation. It is useful for bulky
and sensitive materials such as machines, chemicals, etc.
ii.
Water:
for international movement of goods, this becomes the most effective. This
cannot be used for perishable goods.
iii.
Truck
(Road): Useful when transporting goods internally that is from state to state
or town to town.
iv.
Pipeline:
specially for shipping petroleum and other liquefied products.
v.
Air:
air freight is ideal where speed is essential and distant markets have to be
reached. Perishable goods are better transported by air.
INVENTORY
MANAGEMENT AND CONTROL
Where proper
inventories are not maintained firms can experience marketing problems,
particularly in areas of customer relations and revenue generation. The cost of
inventory increases the level of stock with a view to avoiding a stockout. Thus,
inventory management involves a careful decision about when and how to order.
Inventory
management aims at achieving the following
i.
Inventory
allows geographic specialization of individual units of the firm e.g. between
manufacturing and distribution
ii.
Inventory
allows maximum efficiency of operations in a single location.
iii.
Inventory
serves to balance supply availability with demand requirements, e.g. balancing
seasonal production with year round consumption and year – round production
with consumption.
iv.
Safety
stock concerns short – range variation in demand or the capacity of the
operation to replenish inventories. This is essential for preventing
uncertainty about future sales and this necessitates planning an inventory
position.
Ordinary sales are essential for the planning
period but it does occur that there could be excess sales. Statistical and
mathematical techniques are used for planning safety stocks. One of the
commonest techniques emphasizes a cost trade – off between two fundamental
costs involved in inventory.
Inventory
Holding Cost: this increases with the addition of more inventory
Order Cost:
those involved in placing an order and they decrease as the quantity ordered
decreases.
MATERIAL
HANDLING SYSTEM
All of the
activities associated with moving products within the manufacturers plant
warehouse and transportation company terminal are called materials handling. There
are two systems of material handling that ensure efficiency.
i.
Unitizing:
this involves combining a s many packages as possible into one load, preferably
on a pallet. A pallet is a platform generally made of wood, upon which products
are transported. They are lifted by forklift trucks.
ii.
Containerizing:
this is usually made up of several unitized loads and is typically about 8 feet
wide, 8 feet high and could be 10, 20, 30 or 40 feet in length. It eliminates
costly reloading, packaging and security requirements.
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