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Advertising definitions:

Paid form of non personal communication about an organization or its products that is
transmitted to a target audience through a mass/broadcast medium.
A. "Advertising" is the expression of an idea created and produced for reproduction and
distribution through means such as television, radio, newspapers, newsletters, periodicals, trade
journals, publications, books, magazines, standardized outdoor billboards, direct mail, point-ofsale displays, leaflets, brochures, fliers, and package design, and which is designed to promote
sales of a particular product or service or to enhance the general image of the advertiser.
Advertising includes public service messages that are designed to affect the behavior of the
public, and messages that are political in nature.
B. "Advertising agency" is any person that is directly responsible to an advertiser for, and
whose functions as a business include the creation of advertising. Creation of advertising means
developing concepts or ideas to express the advertising message.
C. "Advertiser" is a person who contracts to purchase, or have delivered to a third party
on its behalf, advertising.
Importance of Advertising:
Advertisements are important for:

standardized products

products aimed at large markets

products that have easily communicated features

products low in price

Products sold through independent channel members and/or are new.


Broadcast Ad spending is at an all time high due to heavy competition in the:

Computer industry

Telecommunications Industry

Auto Industry

Whenever severe competition between marketers, introducing new products etc. and even
with the evolution of direct marketing, and interactive media the importance of advertising has
been increased in the marketing communication process.
Nature of Advertising: Used by many types of organizations including Churches, Universities,
Civic groups and charities, politicians. Need to consider the following issues:

Does the product possess unique, important features to focus on Unique Selling Point
(USP)
Are the hidden qualities important to the buyers
Is the general demand trend for the product adequate
Is the market potential for the product adequate
Is the competitive environment favorable
Is the organization able and willing to spend the required money to launch an advertising
campaign
As far as India is concerned advertising is a growing business today and gaining
importance day by day. The host of new products marketed, the expenses and the risks
involved in launching them and the cost of personal selling and some challenges which
have placed a heavy responsibility on the advertising, with its growing productive
capacity and out right there is a need for finding customer for this growing output and the
advertising plays an important role in moving the goods from producers to consumers by
advising the people to purchase the best out of the variety of products offered for
selection under the emerging global market tendency.

Scope of advertising: The scope of advertising includes the discussion of both the activities
included in advertising and the activities excluded from advertising. The activities included in
the advertising are:
1. Selection of media with a view to stimulate sales amongst present and prospective
consumers;
2. Communication with consumers of the product and of the manufacturer;
3. Maintenance of brand loyalty amongst the customers;
4. Increasing support to dealers, distributors, wholesalers and retailers and the sales force
are the main functions of advertising;
5. It projects an image in the mind of the people who are customers of the companys
products or who are closely related with the company such as shareholders, government,
creditors and the general public;

6. Demarketing of the existing products while they continuously loose the market image
The activities excluded from advertising are:
1. Advertisements which are designed to deceive the consumers cannot be said to be
an advertising;
2. Advertising is not a game or a toy which the advertiser can play in any way by the
advertisers;
3. The advertising does not include the offering of premiums to stimulate sale of
products; the use of exhibitions and demonstrations at fairs, shows and
conventions; the use of samples and so called public activities involving news
release and activities of personal selling forces.
Thus the scope of advertising is very wide. Each and every type of activity which
stimulates sales by communication through a mass media is included in it and all other activities
which do not perform the communication function through mass media cannot be regarded as
advertising.

Role of Advertising in Marketing Mix


Marketing Mix

PRODUCT MIX

PERSONAL SELLING

PRICE MIX

PROMOTION MIX

SALES PROMOTION

PLACE MIX

PUBLICITY
ADVERTISING

DIRECT MARKETING

Marketing mix consist of four important variables of marketing, i.e. 4Ps-Product, Price,
Promotion and Place. Apart from the traditional 4Ps, there are also other variables, i.e.
Packaging, Posting, and Pace.Advertising is an element of promotion. However, it not only
assists in promoting the product, but also affects the other variables of marketing mix. This can
be explained as follows:

1. Advertising and Product: A product is normally a set of physical elements, such as quality,
shape, size, colour and other features. The product may be of very high quality .At times, the
product is so designed that it requires careful handling and operations. Buyers must be informed
and educated on the various aspects of the product. This can be effectively done through
advertising. Thus, advertising plays the role of information and education.
2. Advertising and Price: The price is the exchange value of the product. A marketer may bring
out a very high quality product with additional features as compared to competitors. In such a
case, price would be definitely high. But buyers may not be willing to pay a high price would be
definitely high. But buyers may not be willing to pay a high price. Here comes advertising.
Advertising can convince buyers regarding the superiority of the brand and thus its value for
money. This can be done by associating the product with prestigious people, situations, or
events. Alternatively when a firm offers a low price products the job of advertising needs to
stress the price advantage by using hard hitting copy. It is not just enough to convince, but it is
desirable to persuade the buyer. Thus advertising plays the role of conviction and persuasion.
3. Advertising and Place: Place refers to physical distribution and the stores where the goods
are available Marketer should see to it that the goods are available at the convenient place and
that too at the right time when the buyers need it. To facilitate effective distribution and
expansion of market, advertising is of great significance. Thus advertising do help in effective
distribution and market expansion.
4. Advertising and Promotion: Promotion consists of advertising, publicity, personal selling
and sales promotion technique. Businessmen today have to face a lot of competition. Every seller
needs effective promotion to survive and succeed in this competitive business world.
Advertising can play a significant role to put forward the claim of seller, and to counter the
claims of competitor. Through effective advertising, sellers can face competition and also help to
develop brand image and brand loyalty.
5. Advertising and Pace: Pace refers to the speed in marketing decisions and actions. It involves
among other things the launch of new products or brand variations at greater speed than before.

As and when new brands are launched, advertising plays an important role of informing,
educating and persuading the customers to buy the product.
6. Advertising and Packaging: The main purpose of packaging is protection of the product
during transit, and preservation of quality and quantity. Now a days, marketers take lot of
efforts to develop and design attractive packages as they carry advertising value. A creatively
design package attract the attention of the customers. It also carries an assurance of quality and
creates confidence in the minds of customers to buy the product.
7. Advertising and Positioning: Product positioning aims at creating and maintaining a distinct
image of the brands in the minds of the customers. Through advertising the marketer can convey
the positioning of the brand and accordingly can influence the buying decision of the target
audience.
Various forms of advertising: Advertising can take a number of forms, including advocacy,
comparative, cooperative, direct mail, informational, institutional, outdoor, persuasive, product,
reminder, point-of-purchase, and specialty advertising.
Advocacy Advertising: Advocacy advertising is normally thought of as any advertisement,
message, or public communication regarding economic, political, or social issues. The
advertising campaign is designed to persuade public opinion regarding a specific issue important
in the public arena. The ultimate goal of advocacy advertising usually relates to the passage of
pending state or federal legislation. Almost all nonprofit groups use some form of advocacy
advertising to influence the publics attitude toward a particular issue.
Comparative Advertising: Comparative advertising compares one brand directly or indirectly
with one or more competing brands. This advertising technique is very common and is used by
nearly every major industry, including airlines and automobile manufacturers. One drawback of
comparative advertising is that customers have become more skeptical about claims made by a
company about its competitors because accurate information has not always been provided, thus
making the effectiveness of comparison advertising questionable. In addition, companies that
engage in comparative advertising must be careful not to misinform the public about a
competitors product. Incorrect or misleading information may trigger a lawsuit by the aggrieved

company or regulatory action by a governmental agency such as the Federal Trade Commission
(FTC).
Cooperative Advertising: Cooperative advertising is a system that allows two parties to share
advertising costs. Manufacturers and distributors, because of their shared interest in selling the
product, usually use this cooperative advertising technique. An example might be when a soft
drink manufacturer and a local grocery store split the cost of advertising the manufacturers soft
drinks; both the manufacturer and the store benefit from increased store traffic and its associated
sales. Cooperative advertising is especially appealing to small storeowners who, on their own,
could not afford to advertise the product adequately.
Direct-Mail Advertising Catalogues, flyers, letters, and postcards are just a few of the directmail advertising options. Direct-mail advertising has several advantages, including detail of
information, personalization, selectivity, and speed. But while direct mail has advantages, it
carries an expensive per-head price, is dependent on the appropriateness of the mailing list, and
is resented by some customers, who consider it junk mail.
Informational Advertising: In informational advertising, which is used when a new product is
first being introduced, the emphasis is on promoting the product name, benefits, and possible
uses. Car manufacturers used this strategy when sport utility vehicles (SUVs) were first
introduced.
Institutional Advertising: Institutional advertising takes a much broader approach,
concentrating on the benefits, concept, idea, or philosophy of a particular industry. Companies
often use it to promote image-building activities, such an environmentally friendly business
practices or new community-based programs that it sponsors. Institutional advertising is closely
related to public relations, since both are interested in promoting a positive image of the
company to the public. As an example, a large lumber company may develop an advertising
theme around its practice of planting trees in areas where they have just been harvested. A theme
of this nature keeps the companys name in a positive light with the general public because the
replanting of trees is viewed positively by most people.

Outdoor Advertising: Billboards and messages painted on the side of buildings are common
forms of outdoor advertising, which is often used when quick, simple ideas are being promoted.
Since repetition is the key to successful promotion, outdoor advertising is most effective when
located along heavily travelled city streets and when the product being promoted can be
purchased locally. Only about 1 percent of advertising is conducted in this manner.
Persuasive Advertising: Persuasive advertising is used after a product has been introduced to
customers. The primary goal is for a company to build selective demand for its product. For
example, automobile manufacturers often produce special advertisements promoting the safety
features of their vehicles. This type of advertisement could allow automobile manufactures to
charge more for their products because of the perceived higher quality the safety features afford.
Product Advertising Product advertising pertains to no personal selling of a specific product.
An example is a regular television commercial promoting a soft drink. The primary purpose of
the advertisement is to promote the specific soft drink, not the entire soft-drink line of a
company.
Reminder Advertising: Reminder advertising is used for products that have entered the mature
stage of the product life cycle. The advertisements are simply designed to remind customers
about the product and to maintain awareness. For example, detergent producers spend a
considerable amount of money each year promoting their products to remind customers that their
products are still available and for sale.
Point-of-Purchase Advertising: Point-of-purchase advertising uses displays or other
promotional items near the product that is being sold. The primary motivation is to attract
customers to the display so that they will purchase the product. Stores are more likely to use
point-of-purchase displays if they have help from the manufacturer in setting them up or if the
manufacturer provides easy instructions on how to use the displays. Thus, promotional items
from manufacturers who provide the best instructions or help are more likely to be used by the
retail stores.
Specialty Advertising: Specialty advertising is a form of sales promotion designed to increase
public recognition of a companys name. A company can have its name put on a variety of items,

such as caps, glassware, gym bags, jackets, key chains, and pens. The value of specialty
advertising varies depending on how long the items used in the effort last. Most companies are
successful in achieving their goals for increasing public recognition and sales through these
efforts.
Different means of advertising
Advertising is the promotion of a companys products and services carried out primarily
to drive sales of the products and services but also to build a brand identity and communicate
changes or new product /services to the customers. Advertising has become an essential element
of the corporate world and hence the companies allot a considerable amount of revenues as their
advertising budget. There are several reasons for advertising some of which are as follows:

Increasing the sales of the product/service

Creating and maintaining a brand identity or brand image.

Communicating a change in the existing product line.

Introduction of a new product or service.

Increasing the buzz-value of the brand or the company.

Thus, several reasons for advertising and similarly there exist various media which can be
effectively used for advertising. Based on these criteria there can be several branches of
advertising. Mentioned below are the various categories or types of advertising:
Print Advertising Newspapers, Magazines, Brochures, Fliers
The print media have always been a popular advertising medium. Advertising products
via newspapers or magazines is a common practice. In addition to this, the print media also
offers options like promotional brochures and fliers for advertising purposes. Often the
newspapers and the magazines sell the advertising space according to the area occupied by the
advertisement, the position of the advertisement (front page/middle page), as well as the
readership of the publications. For instance an advertisement in a relatively new and less popular
newspaper would cost far less than placing an advertisement in a popular newspaper with a high
readership. The price of print ads also depend on the supplement in which they appear, for
example an advertisement in the glossy supplement costs way higher than that in the newspaper

supplement which uses a mediocre quality paper.


Outdoor Advertising Billboards, Kiosks, Tradeshows and Events
Outdoor advertising is also a very popular form of advertising, which makes use of
several tools and techniques to attract the customers outdoors. The most common examples of
outdoor advertising are billboards, kiosks, and also several events and tradeshows organized by
the company. The billboard advertising is very popular however has to be really terse and catchy
in order to grab the attention of the passersby. The kiosks not only provide an easy outlet for the
company products but also make for an effective advertising tool to promote the companys
products. Organizing several events or sponsoring them makes for an excellent advertising
opportunity. The company can organize trade fairs, or even exhibitions for advertising their
products. If not this, the company can organize several events that are closely associated with
their field. For instance a company that manufactures sports utilities can sponsor a sports
tournament to advertise its products.
Broadcast advertising Television, Radio and the Internet
Broadcast advertising is a very popular advertising medium that constitutes of several
branches like television, radio or the Internet. Television advertisements have been very popular
ever since they have been introduced. The cost of television advertising often depends on the
duration of the advertisement, the time of broadcast (prime time/peak time), and of course the
popularity of the television channel on which the advertisement is going to be broadcasted. The
radio might have lost its charm owing to the new age media however the radio remains to be the
choice of small-scale advertisers. The radio jingles have been very popular advertising media and
have a large impact on the audience, which is evident in the fact that many people still remember
and enjoy the popular radio jingles.
Covert Advertising Advertising in Movies
Covert advertising is a unique kind of advertising in which a product or a particular brand
is incorporated in some entertainment and media channels like movies, television shows or even
sports. There is no commercial in the entertainment but the brand or the product is subtly( or
sometimes evidently) showcased in the entertainment show. Some of the famous examples for
this sort of advertising have to be the appearance of brand Nokia which is displayed on Tom
Cruises phone in the movie Minority Report, or the use of Cadillac cars in the movie Matrix
Reloaded.

Surrogate Advertising Advertising Indirectly


Surrogate advertising is prominently seen in cases where advertising a particular product
is banned by law. Advertisement for products like cigarettes or alcohol which are injurious to
heath are prohibited by law in several countries and hence these companies have to come up with
several other products that might have the same brand name and indirectly remind people of the
cigarettes or beer bottles of the same brand. Common examples include Fosters and Kingfisher
beer brands, which are often seen to promote their brand with the help of surrogate advertising.
Public Service Advertising Advertising for Social Causes
Public service advertising is a technique that makes use of advertising as an effective
communication medium to convey socially relevant messaged about important matters and social
welfare causes like AIDS, energy conservation, political integrity, deforestation, illiteracy,
poverty and so on. David Oglivy who is considered to be one of the pioneers of advertising and
marketing concepts had reportedly encouraged the use of advertising field for a social cause.
Oglivy once said, "Advertising justifies its existence when used in the public interest - it is much
too powerful a tool to use solely for commercial purposes.". Today public service advertising has
been increasingly used in a non-commercial fashion in several countries across the world in
order to promote various social causes. In USA, the radio and television stations are granted on
the basis of a fixed amount of Public service advertisements aired by the channel.
Celebrity Advertising
Although the audience is getting smarter and smarter and the modern day consumer
getting immune to the exaggerated claims made in a majority of advertisements, there exist a
section of advertisers that still bank upon celebrities and their popularity for advertising their
products. Using celebrities for advertising involves signing up celebrities for advertising
campaigns, which consist of all sorts of advertising including, television ads or even print
advertisements.
Advertising Objectives
Meaning and Importance
Advertising objectives are the communication tasks to be accomplished with specific
customers that a company is trying to reach during a particular time frame. A company that
advertises usually strives to achieve one of four advertising objectives: trial, continuity, brand

switching, and switchback. Which of the four advertising objectives is selected usually depends
on where the product is in its life cycle.
Trial: The purpose of the trial objective is to encourage customers to make an initial purchase of
a new product. Companies will typically employ creative advertising strategies in order to cut
through other competing advertisements. The reason is simple: Without that first trial of a
product by customers, there will not be any repeat purchases.
Continuity: Continuity advertising is a strategy to keep current customers using a particular
product. Existing customers are targeted and are usually provided new and different information
about a product that is designed to build consumer loyalty.
Brand Switching: Companies adopt brand switching as an objective when they want customers
to switch from competitors brands to their brands. A common strategy is for a company to
compare product price or quality in order to convince customers to switch to its product brand.
Switchback: Companies subscribe to this advertising objective when they want to get back
former users of their product brand. A company might highlight new product features, price
reductions, or other important
The long-term objective of advertising, as of every other business activity, is to increase
the firm's net profits over what they would be without it. In some cases, increased profits are also
immediate objectives; but in others, they are not. Perhaps the most important short-term
objective of advertising is to provide support for personal selling and other methods of
promotion. Advertising is almost never used alone; generally it is cast in a supporting role to
other means of promotion.
However, advertising is an extremely versatile communications tool. Depending upon the
marketing situation, companies use advertising to achieve various marketing objectives:
1. To do the entire selling job (as in mail-order marketing)
2. To introduce a new product (by building brand awareness among potential buyers)
3. To force middlemen to handle the product (pull strategy)
4. To build brand preference (by making it more difficult for middlemen to sell substitutes)
5. To remind users to buy the product (retentive strategy)

6. To publicize some change in marketing strategy (e.g., a price change, a new model, or an
improvement in the product)
7. To provide rationalizations for buying (i.e., socially acceptable" excuses)
8. To combat or neutralize competitors; advertising efforts
9. To improve the morale of dealers and/or salesmen
10. To acquaint buyers and prospective buyers with new uses of the product.
The above list is not all-inclusive but only illustrative of the broad range of objectives
advertising may be directed toward accomplishing. One danger in presenting such a list is that
the reader may get the idea that advertising is only something that the advertiser does to someone
else. However, for companies operating under the marketing concept, it is important to bear in
mind that advertising should also serve as an effective and efficient source of information for
members of the audience. Following the logic of the marketing concept, an information source
can only maximally serve the advertiser's purposes when it serves the target audience's
purposes. Advertising objectives, in other words, although they may be phrased in terms of
what the marketer would like to accomplish, should be appraised from the standpoint of their
effectiveness in providing needed and relevant information to members of the intended audience.
Difference between objective, goals and strategy
The strategies and tactics of a marketing plan are the direct plans and actions taken to
achieve marketing objectives and goals. A marketing strategy is defined as your game plan to
achieve your objectives. Strategies can be simply aligned to broader categories in a marketing
plan, or they can be more formally aligned with the 4 Ps of marketing in an overall marketing
plan.
The 4 Ps of marketing include:

Product your product(s) or services

Price what you will charge for products or services and how you will charge

Promotion how you will promote your products and services to customers

Place (or distribution) how you will make your products or services available to
customers.

Each of the 4 Ps of marketing includes a strategy. Examples of marketing strategies


include:

Launch a product that solves customers XYZ problem

Promote product through local online advertising

Pricing discounts for long-term customers or subscriber programs

Make products available through well-branded affiliate programs


Tactics are defined as specific actions that will be taken in support of the marketing

strategies. Tactics are closed related to implementation steps and should include details on timing
and budget allocation.

Examples of tactics for business marketing plans include:

Run banner ads monthly on XYZ website ;

Send 10,000 direct mail pieces to existing customers in March ;

Create a monthly email newsletter to promote new products to customers ;

Set up a LinkedIn group as a social media public relations channel ;

Launch a telemarketing campaign in September to acquire 1,000 new customers.


Establishing a marketing plan that starts with well defined marketing objectives, goals,

strategies and tactics will keep a business focused on achieving results within a desired
framework.
DAGMAR Model
Introduction
DAGMAR is Defining Advertising Goals for Measured Advertising Results. It is
basically an approach to advertising planning and a precise method for selecting and quantifying
goals and for using those goals to measure performance. An advertising objective involves a
communication task, intended to create awareness, impart information, develop attitudes or
induce action. In the DAGMAR approach, the communication task is based on a specific model
of the communication process, as shown below.

Communication Process in DAGMAR Approach


The model suggests that before the acceptance of a product by an individual, there is a
series of mental steps which the individual goes through. At some point of time, the individual
will be unaware of the product or offer in the market. The initial communication task of the
advertising activity is to increase consumer awareness of the product or offer.

The

second

step of the communication process is comprehension of the product or offer and involves the
target audience learning something about the product or offer. What are its specific
characteristics and appeals, including associated imagery and feelings? In what way does it differ
from its competitors? Whom is it supposed to benefit?
The third step is the attitude (or conviction) step and intervenes between comprehension
and final action. The action phase involves some overt move on the part of the buyer such as
trying a brand for the first time, visiting a showroom, or requesting information. The whole
communication process is a bit more complex. And under different circumstances, it may differ
slightly, but the basic concept revolves around what is mentioned in the paragraphs above. The
DAGMAR approach emphasizes the communication task of advertising. The second important
concept of the approach is that the advertising goal be specific. It should be a written, measurable
task involving a starting point, a defined audience, and a fixed time period.
Awareness

Awareness of the existence of a product or organization is necessary before the purchase


behavior can be expected. Once the awareness has been created in the target audience, it should
not be neglected. If there is neglect, the audience may become distracted by competing messages
and the level of awareness of focus product or organization will decline. Awareness needs to be
created, developed, refined or sustained, according to the characteristics of the market and the
particular situation facing an organization at any one point of time.
Awareness grid
Involvement
High

Sustain current levels


HIGH

of awareness

Low

Refine awareness

Awareness

Create association of
LOW

Build awareness

awareness of product

quickly.

with product class


need

In situations where:
Buyer experiences high involvement: Is fully aware of a products existence, attention and
awareness levels need only be sustained and efforts need to be applied to other communication
tasks. Sales promotion and personal selling are more effective at informing, persuading and

provoking consumption of a new car once advertising has created the necessary levels of
awareness. The LG golden eye ads that are repeatedly shown inspite of high awareness to ensure
top of mind awareness and retain the existing awareness levels. Where low levels of awareness
are found, getting attention needs to be the prime objective in order that awareness can be
developed among the target audience.
Sahara Homes ad that features Amitabh Bachhan saying jaha base Bharat. Awareness
level is low, however it is a high involvement decision. Thus adequate attention is required and
awareness levels are raised with use of well-known and trusted celebrities.
Buyer experiences low involvement:
If buyers have sufficient level of awareness, they will be quickly prompted into purchase
with little assistance of the other elements of the mix. Recognition and brand image may be felt
by some to be sufficient triggers to stimulate a response. The requirement in such a situation
would be to refine and strengthen the level of awareness so that it provokes interest and
stimulates greater involvement during recall or recognition.
Parle G ad that talks about it being the largest seller Duniya ka sabse Zyada bikne
waala biscuit. Parle G as a brand already enjoys high levels of awareness and requires low
involvement decision, thus communication is mainly intended to refine awareness.
If buyers have low level of awareness, the prime objective has to be to create awareness
of the focus product in association with the product class.
When coils were popular in use and then the different repellants entered the market,
awareness had to be created about their benefits and use.
Comprehension
Awareness on its own may not be sufficient to stimulate a purchase. Knowledge about
the product or the organization is necessary. This can be achieved by providing specific
information about key brand attributes.

In attempting to persuade people to try a different brand of water, it may be necessary to


compare the product with other mineral water products and provide an additional usage benefit,
such as environmental claims. The ad of Ganga mineral water, featuring Govinda, which banked
on the purity aspect. They related the purity of the water with that of river Ganga.
Conviction
The next step is to establish a sense of conviction. By creating interest and preference,
buyers are moved to a position where they are convinced that a particular product in the class
should be tried at the next opportunity. To do this, audiences beliefs about the product have to
be moulded and this is often done through messages that demonstrate the products superiority
over a rival or by talking about the rewards as a result of using the product.
Many ads like Thumbs Up featured the reward of social acceptance as grown up. It
almost hinted that those who preferred other drinks were kids.
Action
Communication must finally encourage buyers to engage in purchase activity.
Advertising can be directive and guide the buyers into certain behavioural outcomes,
Use of toll free numbers, direct mail activities and reply cards and coupons.
Tupperware, Aqua Guard, are famous in Indian cities as a result of its personal selling
efforts.
For high involvement decisions, the most effective tool in the communication mix at this
stage in the hierarchy is personal selling. Through the use of interpersonal skills, buyers are more
likely to want to buy a product than if personal prompting is absent.
Characteristics of Objectives
A major contribution of DAGMAR was Colleys specification of what constitutes a good
objective. Four requirements or characteristics of good objectives were noted

Concrete and measurablethe communications task or objective should be a precise statement


of what appeal or message the advertiser wants to communicate to the target audience.
Furthermore the specification should include a description of the measurement procedure
Target audience a key tenet to DAGMAR is that the target audience be well defined. For
example if the goal was to increase awareness, it is essential to know the target audience
precisely. The benchmark measure cannot be developed without a specification of the target
segment
Benchmark and degree of change soughtanother important part of setting objectives is
having benchmark measures to determine where the target audience stands at the beginning of
the campaign with respect to various communication response variables such as awareness,
knowledge, attitudes, image, etc. The objectives should also specify how much change or
movement is being sought such as increase in awareness levels, creation of favorable attitudes or
number of consumers intending to purchase the brand, etc. a benchmark is also a prerequisite to
the ultimate measurement of results, an essential part of any planning program and DAGMAR in
particular.
Specified time perioda final characteristic of good objectives is the specification of the time
period during which the objective is to be accomplished, e.g. 6months, 1 year etc. With a time
period specified a survey to generate a set if measures can be planned and anticipated.
Written Goal - finally goals should be committed to paper. When the goals are clearly written,
basic shortcomings and misunderstandings become exposed and it becomes easy to determine
whether the goal contains the crucial aspects of the DAGMAR approach.
***
UNIT II
ADVERTISING BUDGET
Objective:
After studying this chapter you should be able to understand :
Definition of advertising budget
Budgeting methods
Media scheduling and selection

Advertising Negotiations and Discounts


Relationship of Advertising to Other Promotional Tools
Factors to be considered for deciding advertising budget
Methods of determining advertising budget
Media planning and evaluation
Types of media
Current advertising media scenario in India

An estimation of a company's promotional expenditures over a period of time. An


advertising budget is the money a company is willing to set aside to accomplish its marketing
objectives. When creating the advertising budget, a company must weigh the trade-offs between
spending one additional advertising dollar with the amount of revenue that dollar will bring in as
revenue.
The advertising budget of a business typically grows out of the marketing goals and
objectives of the company, although fiscal realities can play a large part as well, especially for
new and/or small business enterprises. As William Cohen stated in The Entrepreneur and Small
Business Problem Solver, "In some cases your budget will be established before goals and
objectives due to your limited resources. It will be a given, and you may have to modify your
goals and objectives. If money is available, you can work the other way around and see how
much money it will take to reach the goals and objectives you have established." Along with
marketing objectives and financial resources, the small business owner also needs to consider the
nature of the market, the size and demographics of the target audience, and the position of the
advertiser's product or service within it when putting together an advertising budget.
In order to keep the advertising budget in line with promotional and marketing goals, an
advertiser should answer several important budget questions:
1. Who is the target consumer? Who is interested in purchasing the advertiser's product or
service, and what are the specific demographics of this consumer (age, employment, sex,
attitudes, etc.)? Often it is useful to compose a consumer profile to give the abstract idea
of a "target consumer" a face and a personality that can then be used to shape the
advertising message.
2. Is the media the advertiser is considering able to reach the target consumer?

3. What is required to get the target consumer to purchase the product? Does the
product lend itself to rational or emotional appeals? Which appeals are most likely to
persuade the target consumer?
4. What is the relationship between advertising expenditures and the impact of advertising
campaigns on product or service purchases? In other words, how much profit is earned
for each dollar spent on advertising?
Answering these questions will provide the advertiser with an idea of the market
conditions, and, thus, how best to advertise within these conditions. Once this analysis of the
market situation is complete, an advertiser has to decide how the money dedicated to advertising
is to be allocated.
Budgeting Methods
There are several allocation methods used in developing a budget. The most common are listed
below:

Percentage of Sales method

Objective and Task method

Competitive Parity method

Market Share method

Unit Sales method

All Available Funds method

Affordable method
It is important to notice that most of these methods are often combined in any number of

ways, depending on the situation. Because of this, these methods should not be seen as rigid, but
rather as building blocks that can be combined, modified, or discarded as necessary. Remember,
a business must be flexibleready to change course, goals, and philosophy when the market and
the consumer demand such a change.
PERCENTAGE OF SALES METHOD. Due to its simplicity, the percentage of sales method
is the most commonly used by small businesses. When using this method an advertiser takes a

percentage of either past or anticipated sales and allocates that percentage of the overall budget
to advertising. Critics of this method, though, charge that using past sales for figuring the
advertising budget is too conservative and that it can stunt growth. However, it might be safer for
a small business to use this method if the ownership feels that future returns cannot be safely
anticipated. On the other hand, an established business, with well-established profit trends, will
tend to use anticipated sales when figuring advertising expenditures. This method can be
especially effective if the business compares its sales with those of the competition (if available)
when figuring its budget.
OBJECTIVE AND TASK METHOD. Because of the importance of objectives in business, the
task and objective method is considered by many to make the most sense, and is therefore used
by most large businesses. The benefit of this method is that it allows the advertiser to correlate
advertising expenditures to overall marketing objectives. This correlation is important because it
keeps spending focused on primary business goals.
With this method, a business needs to first establish concrete marketing objectives, which are
often articulated in the "selling proposal," and then develop complimentary advertising
objectives, which are articulated in the "positioning statement." After these objectives have been
established, the advertiser determines how much it will cost to meet them. Of course, fiscal
realities need to be figured into this methodology as well. Some objectives (expansion of area
market share by 15 percent within a year, for instance) may only be reachable through
advertising expenditures that are beyond the capacity of a small business. In such cases, small
business owners must scale down their objectives so that they reflect the financial situation under
which they are operating.
COMPETITIVE PARITY METHOD. While keeping one's own objectives in mind, it is often
useful for a business to compare its advertising spending with that of its competitors. The theory
here is that if a business is aware of how much its competitors are spending to inform, persuade,
and remind (the three general aims of advertising) the consumer of their products and services,
then that business can, in order to remain competitive, either spend more, the same, or less on its
own advertising. However, as Alexander Hiam and Charles D. Schewe suggested in The
Portable MBA in Marketing, a business should not assume that its competitors have similar or

even comparable objectives. While it is important for small businesses to maintain an awareness
of the competition's health and guiding philosophies, it is not always advisable to follow a
competitor's course.
MARKET SHARE METHOD. Similar to competitive parity, the market share method bases its
budgeting strategy on external market trends. With this method a business equates its market
share with its advertising expenditures. Critics of this method contend that companies that use
market share numbers to arrive at an advertising budget are ultimately predicating their
advertising on an arbitrary guideline that does not adequately reflect future goals.
UNIT SALES METHOD. This method takes the cost of advertising an individual item
and multiplies it by the number of units the advertiser wishes to sell.
ALL AVAILABLE FUNDS METHOD. This aggressive method involves the allocation of all
available profits to advertising purposes. This can be risky for a business of any size, for it means
that no money is being used to help the business grow in other ways (purchasing new
technologies, expanding the work force, etc.). Yet this aggressive approach is sometimes useful
when a start-up business is trying to increase consumer awareness of its products or services.
However, a business using this approach needs to make sure that its advertising strategy is an
effective one, and that funds which could help the business expand are not being wasted.
AFFORDABLE METHOD. With this method, advertisers base their budgets on what they can
afford. Of course, arriving at a conclusion about what a small business can afford in the realm of
advertising is often a difficult task, one that needs to incorporate overall objectives and goals,
competition, presence in the market, unit sales, sales trends, operating costs, and other factors.
MEDIA SCHEDULING
Once a business decides how much money it can allocate for advertising, it must then
decide where it should spend that money. Certainly the options are many, including print media
(newspapers, magazines, direct mail), radio, television (ranging from 30-second ads to 30-minute
infomercials), and the Internet. The mix of media that is eventually chosen to carry the business's
message is really the heart of the advertising strategy.

SELECTING MEDIA. The target consumer, the product or service being advertised, and cost
are the three main factors that dictate what media vehicles are selected. Additional factors may
include overall business objectives, desired geographic coverage, and availability of media
options.
SCHEDULING CRITERIA. As discussed by Hiam and Schewe, there are three general
methods advertisers use to schedule advertising: the Continuity, Flighting, and Massed methods

ContinuityThis type of scheduling spreads advertising at a steady level over the entire
planning period (often month or year, rarely week), and is most often used when demand
for a product is relatively even.

FlightingThis type of scheduling is used when there are peaks and valleys in product
demand. To match this uneven demand a stop-and-go advertising pace is used. Notice
that, unlike "massed" scheduling, "flighting" continues to advertise over the entire
planning period, but at different levels. Another kind of flighting is the pulse method,
which is essentially tied to the pulse or quick spurts experienced in otherwise consistent
purchasing trends.

MassedThis type of scheduling places advertising only during specific periods, and is
most often used when demand is seasonal, such as at Christmas or Halloween.

Advertising Negotiations and Discounts


No matter what allocation method, media, and campaign strategy that advertisers choose, there
are still ways small businesses can make their advertising as cost effective as possible. Writing
in The Entrepreneur and Small Business Problem Solver, author William Cohen put together a
list of "special negotiation possibilities and discounts" that can be helpful to small businesses in
maximizing their advertising dollar:

Mail order discountsMany magazines will offer significant discounts to businesses that
use mail order advertising.

Per Inquiry dealsTelevision, radio, and magazines sometimes only charge advertisers
for advertisements that actually lead to a response or sale.

Frequency discountsSome media may offer lower rates to businesses that commit to a
certain amount of advertising with them.

Stand-by ratesSome businesses will buy the right to wait for an opening in a vehicle's
broadcasting schedule; this is an option that carries considerable uncertainty, for one
never knows when a cancellation or other event will provide them with an opening, but
this option often allows advertisers to save between 40 and 50 percent on usual rates.

Help if necessaryUnder this agreement, a mail order outfit will run an advertiser's ad
until that advertiser breaks even.

Remnants and regional editionsRegional advertising space in magazines is


often unsold and can, therefore, be purchased at a reduced rate.

BarterSome businesses may be able to offer products and services in return for reduced
advertising rates.

Seasonal discountsMany media reduce the cost of advertising with them during certain
parts of the year.

Spread discountsSome magazines or newspapers may be willing to offer lower rates to


advertisers who regularly purchase space for large (two to three page) advertisements.

An in-house agencyIf a business has the expertise, it can develop its own advertising
agency and enjoy the discounts that other agencies receive.

Cost discountsSome media, especially smaller outfits, are willing to offer discounts to
those businesses that pay for their advertising in cash.
Of course, small business owners must resist the temptation to choose an advertising

medium only because it is cost effective. In addition to providing a good value, the medium must
be able to deliver the advertiser's message to present and potential customers.
Relationship of Advertising to Other Promotional Tools
Advertising is only part of a larger promotional mix that also includes publicity, sales
promotion, and personal selling. When developing an advertising budget, the amount spent on
these other tools needs to be considered. A promotional mix, like a media mix, is necessary to
reach as much of the target audience as possible. As Gerald E. Hills stated in "Market
Opportunities and Marketing" in The Portable MBA in Entrepreneurship, "When business

owners think about the four promotion tools, it becomes obvious why promotion managers must
use a mix. There are clear trade-offs to be made between the tools."
The choice of promotional tools depends on what the business owner is attempting to
communicate to the target audience. Public relations-oriented promotions, for instance, may be
more effective at building credibility within a community or market than advertising, which
many people see as inherently deceptive. Sales promotion allows the business owner to target
both the consumer as well as the retailer, which is often necessary for the business to get its
products stocked. Personal selling allows the business owner to get immediate feedback
regarding the reception of the business' product. And as Hills pointed out, personal selling allows
the business owner "to collect information on competitive products, prices, and service and
delivery problems."
All the companies or individuals provide for advertising budgets to create brand
awareness and proportionately increase the sales of the product or service offered to their
customers. However it is highly important to know the method of spending advertising budgets
fruitfully for the desired results. There should be no quarter for indiscriminate spending of the ad
budget without producing any tangible benefits to you.
The following factors must be kept in mind while spending advertising budgets for
effective results.
Factor # 1:
Prepare a marketing plan consistent with the objectives of your organization. The
advertising plan must only supplement the marketing plan by providing that little bit of
assistance in creating an awareness and brand image in the market.
Factor # 2:
You must clearly define and identify your real customers who must be targeted with your
advertising campaign. This makes the task of targeting them effortlessly and also does provide
the clues to reach them purposefully.

Factor # 3:
You must clearly chart out the unique selling point of your product or service that can be
highlighted in your ad campaign. Your strengths and features must be spelt out succinctly in the
ad copy for achieving better results. The focus on your core idea helps to penetrate the market
and generate interest from the customers.
Factor # 4:
You can select an appropriate media that provides the maximum reach and contact with
your customers. The budget to be allocated to each media can be decided based on the forecasted
results anticipated from each source and can be changed depending on the results achieved by
you.
Factor # 5:
You must time your advertising schedules so that they are visible and seen by your
targeted customers. This enables to keep track of your expenditures and the resulting sales that
emanate from your advertising scheduling.
Factor #6:
You should always track the response to the advertising campaign for fine tuning it if
necessary to get the optimal results. All these factors help to spend your advertising budget
prudently and derive the benefits that accompany the program.
Experiential Marketing Impetus is a steadfast team of highly experienced individuals
who together are able to design and deliver specialized event sampling, road shows, and
promotional campaigns.
5 Ms of Advertising:
MISSION: What are the Advertising objectives?
MONEY: How much can be spent? (Advertising budget)
MESSAGE: What message should be sent?
MEDIA: What media should be used?
MEASUREMENT: How should the results be evaluated?

After the Target Market, market positioning and marketing mix decisions have been
taken the First step n developing an Advertising Program is:
1. MISSION OR SETTING THE ADVERTISING OBJECTIVES
Advertising Objectives can be classified as to whether their aim is:
To inform: This aim of Advertising is generally true during the pioneering stage of a product
category, where the objective is building a primary demand. This may include:

Telling the market about a new product

Suggesting new uses for a product

Informing the market of a price change

Informing how the product works

Describing available services

Correcting false impressions

Reducing buyers fears

Building a company image

Fig: 5 Ms of advertising
To persuade: Most advertisements are made with the aim of persuasion. Such advertisements
aim at building selective brand.
To remind: Such advertisements are highly effective in the maturity stage of the product. The
aim is to keep the consumer thinking about the product.
2. MONEY
This M deals with deciding on the Advertising Budget
The advertising budget can be allocated based on:

Departments or product groups

The calendar

Media used

Specific geographic market areas


There are five specific factors to be considered when setting the Advertising budget.

Stage in PLC: New products typically receive large advertising budgets to build
awareness and to gain consumer trial. Established brands are usually supported with
lower advertising budgets as a ratio to sales.

Market Share and Consumer base: high-market-share brands usually require less
advertising expenditure as a percentage of sales to maintain their share. To build share
by increasing market size requires larger advertising expenditures. Additionally, on a
cost-per-impressions basis, it is less expensive to reach consumers of a widely used brand
them to reach consumers of low-share brands.

Competition and clutter: In a market with a large number of competitors and high
advertising spending, a brand must advertise more heavily to be heard above the noise in
the market. Even simple clutter from advertisements not directly competitive to the
brand creates the need for heavier advertising.

Advertising frequency: the number of repetitions needed to put across the brands
message to consumers has an important impact on the advertising budget.

Product substitutability: brands in the commodity class (example cigarettes, beer, soft
drinks) require heavy advertising to establish a different image. Advertising is also
important when a brand can offer unique physical benefits or features.

3. MESSAGE GENERATION
Message generation can be done in the following ways:
Inductive: By talking to consumers, dealers, experts and competitors. Consumers are the major
source of good ideas. Their feeling about the product, its strengths, and weaknesses gives enough
information that could aid the Message generation process.
Deductive: John C. Meloney proposed a framework for generating Advertising Messages.
According to him, a buyer expects four types of rewards from a product:

1. Rational
2. Sensory
3. Social
4. Ego Satisfaction.
Buyers might visualize these rewards from:
1. Results-of-use Experience
2. Product-in-use Experience
3. Incidental-to-use Experience
Message evaluation and selection
The advertiser needs to evaluate the alternative messages. A good ad normally focuses on one
core selling proposition. Messages can be rated on desirability, exclusiveness and believability.
The message must first say something desirable or interesting about the product. The message
must also say something exclusive or distinct that does not apply to every brand in the product
category. Above all, the message must be believable or provable.
Message execution.
The message impact depends not only upon what is said but also on how it is said. Some ads aim
for rational positioning and others for emotional positioning. While executing a message the
style, tone, words, and format for executing the message should be kept in mind.
Style. Any message can be presented in any of the following different execution styles, or a
combination of them:

Slice of life: Shows one or more persons using the product in a normal setting.
Example: Coke 1litre ad, showed a family enjoying Coke, with a game of antakshari
when there is a power failure.

Lifestyle: Emphasizes how a product fits in with a lifestyle.

Fantasy: Creates a fantasy around the product or its use.

Example: VIP Frenchie ads, showing a woman thinking of the Frenchie man saving her from a
villain.

Mood or image: Evokes a mood or image around the product, such as beauty, love, or
serenity. No claim is made about the product except through suggestion.

Example: Kingfisher Beer ads, saying the King of Good Times.

Musical: Uses background music or shows one or more persons or cartoon characters
singing a song involving the product.

Example: Ads of Old Spice After Shave Lotion

Personality symbol: Creates a character that personifies the product. The character might
be animated

Example: Ronald McDonald for McDonalds

Technical expertise: Shows the company expertise, experience, and pride in making the
product.

Example: GE and Skoda ads

Scientific evidence: Presents survey or scientific evidence that the brand is preferred over
or outperforms other brands. This style is common in the over-the-counter drug category.

Example: Duracell Ads, claiming the battery lasts 6 times longer than ordinary batteries

Testimonial evidence: This features a highly credible, likable, or expert source endorsing
the product. It could be a celebrity or ordinary people saying how much they like the
product.

Example: In ads for Sunsilk, they had hair expert Coleen, endorsing the product.

Tone: The communicator must also choose an appropriate tone for the ad. Example: Procter &
Gamble is consistently positive in its tone. Its ads say something superlatively positive about the
product, and humor is almost always avoided so as not to take mention away from the message.
Other companies use emotions to set the toneparticularly film, telephone, and insurance
companies, which stress human connections and milestones.
Words: Memorable and attention-getting words must be found. The following themes listed on
the left would have had much less impact without the creative phrasing on the right:
FORMAT: Format elements such as ad size, color, and illustration will make a difference in an
ads impact as well as its cost. A minor rearrangement of mechanical elements within the ad
can improve its attention-getting power. Larger-size ads gain more attention, though not
necessarily by as much as their difference in cost. Four-colour illustrations instead of black and
white increase ad effectiveness and ad cost. By planning the relative dominance of different
elements of the ad, optimal delivery can be achieved.
4. MEDIA
The next element to be considered while making an Advertisement Program is the Media
through which to communicate the Message generated during the previous stage. The steps to be
considered are:

5. MEASUREMENT
Evaluating the effectiveness of the Advertisement Program is very important as it helps
prevent further wastage of money and helps make corrections that are important for further
advertisement campaigns. Researching the effectiveness of the advertisement is the most used

method of evaluating the effectiveness of the Advertisement Program. Research can be in the
form of:

Communication-Effect Research

Sales-Effect Research

There are two ways of measuring advertising effectives. They are:


Pre-testing : It is the assessment of an advertisement for its effectiveness before it is actually
used. It is done through

Concept testing- how well the concept of the advertisement is. This is be done by taking
expert opinion on the concept of the ad.

Test commercials test trial of the advertisement to the sample of people

Finished testing

Post-testing: It is the assessment of advertisement effectiveness after it has been used. It is


done in two ways:

Unaided recall a research technique that asks how much of an ad a person remembers
during a specific period of time

Aided recall a research technique that uses clues to prompt answers from people about
ads they might have seen from any of the mass media vehicles.

Methods for determining advertising budget


There are several percentage methods used in developing a budget. The most typical are
listed below:
The advertising budget making process:
Advertising budget is not an exception to the general budget. It is a functional budget
setting the goals and objectives in terms of income and expenditure on advertising during a

specified period which is called as budget period. While preparing any budget the person who is
entrusted with this function must observe two fundamental aspects, viz.,
1. Budget must be constructed with the financial capabilities of the company
otherwise the plans set will remain unexecuted due to short of funds;
2. It must be specifically contain the details on the allocation of funds to specific
operations. Only then, it will be able to perform its single most important purpose
of budgetary control.
Steps in advertising budget making process:
1. Collection of data and preparation of budget;
2. Presentation and approval of the budget;
3. Budget execution; and
4. Control of budget or budgetary control.
Step 1 contains the collection of data pertaining to the marketing mix strategies, target
market, competition, competitors strategies, media and media characteristics, innovative
practices in the market at present and to be in future. These details will enable the budget
preparation authorities to consider the allocation of funds as per the requirements and for
achieving the optimality for spending the funds for the possible achievement of the goals.
Step 2 explains about preparation and approval of the budget. This step is executed
by the advertising head of the company or the firm with the support of the agency
personnel or with the assistance of some specialists and finally the draft will be submitted
to the top level management of the firm. The utmost important aspect to be kept in mind
executing this step is to see that whether the organizational goals are given due
importance on priority basis or not while allocation of the funds are made.
Step 3 describes about the way the advertising budget is executed. It discusses about
the various media mix decisions or media mix strategies finalization. During this stage
the advertising manager has to continuously verify the allocation is done appropriately or
not as per the plan.

Step 4 tells about the control of budget in order to attain better direction and effective
reach of the allocations of the budgeted activities. It also figurate the efforts to initiate
proper benefit to be attained by the remaining promotion mix elements which go hand in
hand with advertisement. The advertising budget relaxes the stress generated on the part
of the other promotion mix elements in marketing communication process.
Media Planning
Media planning

can be defined as The process of establishing the exact media

vehicles to be used for advertising. Choosing which media or type of advertising to use is
sometimes tricky for small firms with limited budgets and know-how. Large-market television
and newspapers are often too expensive for a company that services only a small area (although
local newspapers can be used). Magazines, unless local, usually cover too much territory to be
cost-efficient for a small firm, although some national publications offer regional or city editions.
Metropolitan radio stations present the same problems as TV and metro newspapers; however, in
smaller markets, the local radio station and newspaper may sufficiently cover a small firm's
audience. That's why it's important to put together a media plan for advertising campaign. The
three components of a media plan are as follows:
1. Defining the marketing problem. Where from the business is coming and where the
potential for increased business lies? Which markets offer the greatest opportunity? Reach
everybody or only a select group of consumers? How often is the product used? How much
product loyalty exists?
2. Translating the marketing requirements into attainable media objectives. Want to reach
lots of people in a wide area (to get the most out of your advertising money)? Then mass media,
like newspaper and radio, might work. If the target market is a selected group in a defined
geographic area, then direct mail could be the best option.
3. Defining a media solution by formulating media strategies. Certain schedules work best
with different media. For example, the rule of thumb is that a print ad must run three times
before it gets noticed. Radio advertising is most effective when run at certain times of the day or
around certain programs, depending on what market you're trying to reach.

Advertising media generally include:

Television

Radio

Newspapers

Magazines (consumer and trade)

Outdoor billboards

Public transportation

Yellow Pages

Direct mail

Specialty advertising (on items such as matchbooks, pencils, calendars, telephone pads,
shopping bags and so on)

Other media (catalogs, samples, handouts, brochures, newsletters and so on)

When comparing the cost and effectiveness of various advertising media, consider the
following factors:

Reach. Expressed as a percentage, reach is the number of individuals (or homes) you want to
expose your product to through specific media scheduled over a given period of time.

Frequency. Using specific media, how many times, on average, should the individuals in
your target audience be exposed to your advertising message? It takes an average of three or
more exposures to an advertising message before consumers take action.

Cost per thousand. How much will it cost to reach a thousand of your prospective customers
(a method used in comparing print media)? To determine a publication's cost per thousand,
also known as CPM, divide the cost of the advertising by the publication's circulation in
thousands.

Cost per point. How much will it cost to buy one rating point for your target audience, a
method used in comparing broadcast media. One rating point equals 1 percent of your target
audience. Divide the cost of the schedule being considered by the number of rating points it
delivers.

Impact. Does the medium in question offer full opportunities for appealing to the appropriate
senses, such as sight and hearing, in its graphic design and production quality?

Selectivity. To what degree can the message be restricted to those people who are known to
be the most logical prospects?

Reach and frequency are important aspects of an advertising plan and are used to analyze
alternative advertising schedules to determine which produce the best results relative to the
media plan's objectives. Frequency is important because it takes a while to build up awareness
and break through the consumer's selection process. People are always screening out messages
they're not interested in, picking up only on those things that are important to them. Repetition is
the key word here. For frequency, it's much better to advertise regularly in small spaces than it is
to have a one-time expensive advertising extravaganza.
Fig: Media Planning Process

Media
Planning
Process:
Situation
analysis
*

Strategy &

targets (business/brand/consumer)
* Market situation and competition analysis
* Marketing und media objectives
Objectives
* Definition of communication objectives
* cognitive-oriented objectives (awareness, recall)
* affective-oriented objectives (interest, brand positioning,
brand development, brand management)
* conative-oriented objectives (purchase intentions,
customer loyalty)
Target group analysis
* target group identification: two-step segmentation process
* definition of core target groups based on
- demographic characteristics (age, gender)
- psychographic characteristics (interests, buying habits)
- socioeconomic characteristics (occupation, social status,
income, buying power)

- behavioural characteristics (buying behaviour, decision behaviour)


Strategic media planning
* Campaign strategy (duration, timing, recency/burst strategy)
* Media mix and budgeting
* Advertising impact
* Ad specials
Detail planning/Optimization
* Detail planning for each media channel
* Availability
* Dates of publication
* Selection of time slots
* Positioning within the magazine or commercial break
Purchasing
* Booking (order management, production plans)
* Job handling (artwork, tapes)
* Rescheduling/Optimization
Completion
* Controlling, documentation
* Invoicing
Evaluation/Controlling
* Campaign performance (expost analysis)
* Planning, purchasing efficiency
* Competition reporting
Negotiations/Discounts
* Special conditions, performance optimization
* Client-specific agreements
Evaluation of important media

Print media
1. Newspapers. Newspapers are one of the traditional mediums used by businesses, both big
and small alike, to advertise their businesses.

Advantages

Allows to reach a huge number of people in a given geographic area

Consisting the flexibility in deciding the ad size and placement within the newspaper

The ad can be as large as necessary to communicate as much of a story as we care to tell

Exposure to the ad is not limited; readers can go back to the message again and again if
so desired.

Free help in creating and producing ad copy is usually available

Quick turn-around helps the ad reflect the changing market conditions. The ad decided to
run on any day can be in the customers hands in one to two days.

Disadvantages

Ad space can be expensive.

The ad has to compete against the clutter of other advertisers, including the giants ads
run by supermarkets and department stores as well as the ads of the competitors

Poor photo reproduction limits creativity

Newspapers are a price-oriented medium; most ads are for sales

Expected that the

ads have a short shelf life, as newspapers are usually read once and

then discarded.

It may be paying to send the message to a lot of people who will probably never be in the
market to buy from.

Newspapers are a highly visible medium, so the competitors can quickly react to the
prices.

With the increasing popularity of the Internet, newspapers face declining readership and
market penetration. A growing number of readers now skip the print version of the
newspaper (and hence the print ads) and instead read the online version of the
publication.

2. Magazines. Magazines are a more focused, albeit more expensive, alternative to newspaper
advertising. This medium allows reaching highly targeted audiences.
Advantages

Allows for better targeting of audience, as one can choose magazine publications that
cater to the specific audience or whose editorial content specializes in topics of interest to
the audience.

High reader involvement means that more attention will be paid to the advertisement

Better quality paper permits better color reproduction and full-color ads.

Disadvantages

Long lead times mean that it has to make plans weeks or months in advance.

The slower lead time heightens the risk of the ad getting overtaken by events.

There is limited flexibility in terms of ad placement and format.

Space and ad layout costs are higher.

3. Yellow Pages. There are several forms of Yellow Pages that we can use to promote and
advertise the business. Aside from the traditional Yellow Pages supplied by phone companies,
we can also check out specialized directories targeted to specific markets (e.g. Hispanic Yellow
Pages, Blacks, etc.); interactive or consumer search databases; Audio text or talking yellow
pages; Internet directories containing national, local and regional listings; and other services
classified as Yellow Pages.
Advantages

Wide availability, as mostly everyone uses the Yellow Pages


Non-intrusive
Action-oriented, as the audience is actually looking for the ads
Ads are reasonably inexpensive
Responses are easily tracked and measured
Frequency

Disadvantages

Pages can look cluttered, and the ad can easily get lost in the clutter

The ad is placed together with all the other competitors

Limited creativity in the ads, given the need to follow a pre-determined format

Ads slow to reflect market changes

4. Radio
Advantages
Radio is a universal medium enjoyed by people at one time or another during the day, at
home, at work, and even in the car.

The vast array of radio program formats offers to efficiently target the advertising
expenses to narrowly defined segments of consumers most likely to respond to the offer.

Gives the business, personality, through the creation of campaigns using sounds and
voices

Free creative help is often available

Rates can generally be negotiated

During the past several years, radio rates have seen less inflation than those for other
media

Disadvantages

Because radio listeners are spread over many stations, it may have to advertise
simultaneously on several stations to reach the target audience

Listeners cannot go back to the ads to go over important points

Ads are an interruption in the entertainment. Because of this, a radio ad may require
multiple exposure to break through the listener's "tune-out" factor and ensure message
retention

Radio is a background medium. Most listeners are doing something else while listening,
which means that the ad has to work hard to get their attention

5. Television
Advantages

Television permits to reach large number of people on a national or regional level in a


short period of time

Independent stations and cable offer new opportunities to pinpoint local audiences

Television being an image-building and visual medium, it offers the ability to convey the
message with sight, sound and motion

Disadvantages

Message is temporary, and may require multiple exposure for the ad to rise above the
clutter

Ads on network affiliates are concentrated in local news broadcasts and station breaks

Preferred ad times are often sold out far in advance

Limited length of exposure, as most ads are only thirty seconds long or less, which limits
the amount of information we can communicate

Relatively expensive in terms of creative, production and airtime costs

6. Direct Mail. Direct mail, often called direct marketing or direct response marketing, is a
marketing technique in which the seller sends marketing messages directly to the buyer. Direct
mail includes catalogs or other product literature with ordering opportunities; sales letters; and
sales letters with brochures.
Advantages

The advertising message is targeted to those most likely to buy the product or service.

Marketing message can be personalized, thus helping increase positive response.

The message can be as long as is necessary to fully tell the story.

Effectiveness of response to the campaign can be easily measured.

We can have total control over the presentation of the advertising message.

The ad campaign is hidden from competitors until it's too late for them to react

Active involvement - the act of opening the mail and reading it -- can be elicited from the
target market.

Disadvantages

Some people do not like receiving offers in their mail, and throw them immediately
without even opening the mail.

Resources need to be allocated in the maintenance of lists, as the success of this kind of
promotional campaign depends on the quality of the mailing list.

Long lead times are required for creative printing and mailing

Producing direct mail materials entail the expense of using various professionals copywriter, artists, photographers, printers, etc.

Can be expensive, depending on the target market, quality of the list and size of the
campaign.

7. Telemarketing. Telephone sales, or telemarketing, is an effective system for introducing a


company to a prospect and setting up appointments.
Advantages

Provides a venue where it can easily interact with the prospect, answering any questions
or concerns they may have about the product or service.
It's easy to prospect and find the right person to talk to.

It's cost-effective compared to direct sales.

Results are highly measurable.

We can get a lot of information across if the script is properly structured.

If outsourcing, set-up cost is minimal

Increased efficiency since we can reach many more prospects by phone than we can with
in-person sales calls.

Great tool to improve relationship and maintain contact with existing customers, as well
as to introduce new products to them

Makes it easy to expand sales territory as the phone allows to call local, national and even
global prospects.

Disadvantages

An increasing number of people have become averse to telemarketing.


More people are using technology to screen out unwanted callers, particularly
telemarketers

Government is implementing tougher measures to curb unscrupulous telemarketers

Lots of businesses use telemarketing.

May need to hire a professional to prepare a well-crafted and effective script

It can be extremely expensive, particularly if the telemarketing is outsourced to an


outside firm

It is most appropriate for high-ticket retail items or professional services.

8. Specialty Advertising. This kind of advertising entails the use of imprinted, useful, or
decorative products called advertising specialties, such as key chains, computer mouse, mugs,
etc. These articles are distributed for free; recipients need not purchase or make a contribution to
receive these items.
Advantages:

Flexibility of use

High selectivity factor as these items can be distributed only to the target market.

If done well, target audience may decide to keep the items, hence promoting long
retention and constant exposure

Availability of wide range of inexpensive items that can be purchased at a low price.

They can create instant awareness.

They can generate goodwill in receiver

The items can be used to supplement other promotional efforts and media (e.g.
distributed during trade shows).

Disadvantages

Targeting the market is difficult.

This can be an inappropriate medium for some businesses.

It is difficult to find items that are appropriate for certain businesses

Longer lead time in developing the message and promotional product

Possibility of saturation in some items and audiences


Wrong choice of product or poor creative may cheapen the image of advertiser.

COMPUTER MEDIA SELECTION

The search engines have accentuated the use of information technology in


advertisements. Considering the mindset of a common buyer, one can establish that he seeks
information before making a major buying decision. Now, Internet is also put to use through
search engines for seeking information related to product, service, price, specifications,
comparison, etc. The users seeking information regarding buying decision making can also be
influenced with the online advertising tools. This calls for premier Internet advertising agencies.

With Internet advertising opening its door, it is possible for the advertisers to gain
momentum through it. To place banner advertisements online there are lot of factors that have to
be managed strategically. The searches from the users can also be used to bring traffic to your
web presence. It can be efficiently done by working with Internet advertising agencies. It is all
about identifying the growth opportunities online. Consider the growth through following data,

which tells that India has over 46 million Internet users (IAMAI). Both, global and Indian brands
are increasing ad spends to remain at an edge above the competition.
Another important data from IAMAI grabs the attention. It reveals that Rs.236 crores of
annual ad spends were made in 2006 for targeting Indian users. It is considerable money spent
over online advertisements. The strategic promotions have to be synchronous with expert
knowledge of Internet advertising agencies. Online advertising and promotion needs to be done
with a well planned and targeted approach. The online ad agencies prove to be wonderful
resources where graphic experts can give your campaign a dynamic shape. This is all due to their
innovative ad designing skills. The reach to target audience is not confined to conventional
methods alone.
The large base of Internet users has so much to offer in terms of potential customer
responses and leads. In addition, the Internet being spread across the very length and breadth of
the globe, it becomes useful for online advertising. It is essential in building brands, which
generally need striven efforts to become distinguished. In presence of vast audience, consider the
clicks and impressions that can be achieved from the desired corner of the globe. This can be
quite effective to make your brands identified. Even so, Internet advertising works on feasible
cost models. This makes Internet advertising agencies the cost effective partners to reach target
audience.
Marketing is the process by which goods are sold and purchased. The aim of marketing is
to acquire, retain, and satisfy customers. Modern marketing has evolved into a complex and
diverse field. In today's extremely competitive business environment businesses are searching for
ways to improve profitability and to maintain their position in the marketplace. As competition
becomes more intense the formula for success becomes more difficult. One particular thing has
greatly aided companies in their quests to accomplish these goals and that is the computer. Some
of the roles computers play in these changing marketing trends is as follows. One role of
computers in marketing is inventory control. Computers are now used to keep records of
inventory. Inventory keeping allows Inventory control systems maintain information about
activities within firms that ensure the delivery of products to customers. The subsystems that
perform these functions include sales, manufacturing, warehousing, ordering, and receiving.

Softwares like Simple Inventory, Microsoft Access, Mess Less Inventory Management System
and Jump Box facilitate automated inventory management. It makes it easy to retrieve, save and
change stocks, customer details, market niches, and sales. Secondly, computers are used in
product and market analysis. Systematic gathering, recording, and analysis of data about issues
relating to marketing products and services are currently done using computers. The goal of this
is to identify and assess how changing elements of the marketing mix impacts customer behavior
quickly. Computers are able to analyze a greater sample of market niches and make forecasting
more precise than the previous ways of getting the study done.
Current Ad Media scene in India
Communication is experiencing a series of rapid changes. Last few decades have
witnessed the development of new communication system and pieces of equipments that have
great potential in enhancing our communication capabilities. The same series of development has
also reached far beyond the communication field and has numerous implications for both
developed and developing societies. The spread of mass media has been among the most
powerful forces for social changes in developing as well as developed countries. The media have
broadened narrow horizons, accelerated the pace of transformation and created a climate of
readiness for development. Studies revealed that communication could alter the form and shape
of our life style if used to overcome development problems. But impact has not always been
beneficial. The media and communication are still seen as a tool for entertainment or
propaganda, their potential in stimulating directed development remaining largely unrealized in
the majority of countries. It has been calculated that less than 10 percent of broadcasting hours in
third world are devoted to educational and developmental purposes. At the same time most
development project and programme go ahead without a media or communication element.
Planners concentrate on physical and economic factor while the human element is ignored. The
people often lack the information they need to cope with new situations, while the government
do not get the information they need on peoples needs, priorities and possibilities. Thus
development and communication are out of gear. On one hand we have development action
without media or communication support. Yet in an ideal world the two would work hand in
hand. It is curious that there is this neglect of communication in development that so often
communication is a missing link in a development inputs. For communication, has now proved
itself beyond dispute in many successful projects and programmes in the sphere of agriculture,

education, family planning, health and nutrition etc. Properly designed and coordinated with
other development efforts, the communication input can inform people of new idea and
techniques help to change attitudes and stimulate popular participation & self help more rapidly
and effectively than conventional approach.
The recent breakthrough in communication technologies has resulted in emergence of
various basic devices such as television, video, satellite, tele-text, videotext, audio text,
computers, print media and wide range of projection devices. Now more advance devices and
materials are available as a result of modification or combination of these devices, these are
interactive video, teleconferencing system, video conferencing system, close circuit TV,
multimedia packages, high definition TV, high speed video, E-mail, Fax, Computer assisted
instructions, computer managed instructions etc. All these have great potential in
collecting/disseminating-desired information/message more effectively, accurately and
immediately. Both the people and the development agencies can use these technologies for
minimizing communication gap. The media and Information Technology (IT) scenario has
undergone a radical change in the recent past in India as it has happened elsewhere in the world.
The change is both quantitative as well as qualitative. It is also observed that the gap between
invention of new technology in the Western world and its use in India is also reducing day by
day. Earlier technologies took comparatively longer time to develop roots in the country. But
now days, soon after a new technology is developed anywhere in the world, it starts getting used
in India too.
The change in the media or IT scenario is due to several factors:
1. Rapid growth of technology, and increased reach and access
2. Technological developments and combination of different technologies
3. Improved economics of technology
4. Liberalization of rules and regulations about entry and adoption in the country, and
5. Facilitative socio-political regime
Take any technology, whether it is electronic, print or information technologies, the
growth has been very rapid in the last decade and a half. It will be seen in later part of the article
how the individual technologies have grown during this period. The growth also contributes to
expansion of the reach as well as access. It is also found that the growth is not necessarily

restricted only to urban areas as it used to happen in the past. It spreads to smaller towns and
rural areas also in reasonable time. Apart from the rapid growth, the change is also facilitated
largely due to the increased user friendliness of the technology. For example, today's computers
are much more user friendly than they were. The hardware is easily available and manageable in
terms of size and the software is easy to learn.
The qualitative change also comes about due to the combination of different
technologies. For example, there is a unique fusion of the information technology of computer,
television, audio and even print medium as can be seen in the form of the Internet. One can read
the printed newspaper in an electronic form on the net. Television and radio are accessible
through the Internet. The government has been creating a more facilitative regulatory regime.
The emphasis is now on encouraging expansion and reducing the obstacles that come in the way.
Some of the rules and regulations have been changing fast. In the earlier days, the change in the
rules used to be very slow and tedious, but over the years the situation is improving. The sociopolitical atmosphere is more open and this greatly supports both the changes in rules and
regulations as well as efficient implementation of the policies. The whole growth process has
obviously become possible because the technologies have become more affordable and also
because the society has started understanding the importance of new communication
technologies.
The speed and type of changes have varied from technology to technology. For the
purpose of analysis, the article looks at the following main categories:
a. The Broadcast Media: This will include radio, television and related media;
b. The Print Media; and
c. Telecommunications: This will include telephones, pagers, cellars, computers and the
Internet.
It is seen that some of the characteristics traditionally associated with a particular
medium are undergoing changes. The distinctions between different media are getting slowly
blurred. It is no longer possible to say that a medium is strictly a print medium. For example, one
can read the newspapers and magazines from anywhere in the world through the Internet.
Obviously these newspapers and magazines are no longer print media. It also used to be
believed that there is a certain amount of permanency or lack of permanency of the output of a

medium. For example, it was believed that the radio and television programmes are nonpermanent as compared to the print medium - because once they are transmitted, it is not
possible to have a re-look at them. However, the invention and ease of recording has changed the
scenario. It is possible to record any television programme at any time and watch it one's
convenience. Similarly, the print medium considered being more permanent than the ethereal
TV or radio services. However, if the newspaper is only on the Internet, it can no longer have
that characteristic. Of course, it is always possible to download and take a hard copy and this
again make it into a print or permanent medium. The biggest change, however, has come through
the marriage of different technologies. The greatest contribution has come from the personal
computer. Through a huge system of satellite communication, cable communication, fibreoptics,
telephone lines, the broadcast media, the print media, the Internet and the computer combined
together have broken all the traditional boundaries between different media. The day probably is
not far when the medium like television will become obsolete because most of its functions
would have been taken over by the computer technology in the form of the Internet.
OVER VIEW OF INDIAN MEDIA SCENARIO

The media industry can be categorized into the following categories; filmed
entertainment, television, music, radio and print. As implied, many aspire to join this industry
due to the high visibility and glamour associated with many of the top jobs. That said, the
opportunities are many and varied, and not all focused on celebrity status, such as in the areas of
mass communication, content development, animation, production and event management.

Growth Potential
The Indian entertainment and media sector is one of the fastest growing sectors in the
economy, and its segments have all witnessed tremendous double digit growth in the last few
years. The past 2 years were tumultuous, especially due to poor liquidity in the system for
financing big projects for the big and small screen. However, with global indicators realigning
themselves once again, the Indian media and advertising industry too looks poised to resume
where it left off pre 1H 2008. According to a 2009 report jointly published by the Federation of
Indian Chambers of Commerce and Industry (FICCI) and KPMG, the media and entertainment
industry in India is likely to grow at ~13 % CAGR over 2009-13, touching US$ 20 billion by
2013. The key reasons favoring the rapid growth of the Indian entertainment and media sector

are the demographic and economic factors buoying Indias development; with a majority of the
population below the age of 35, and increasing disposable income in Indian households, the
average spend on media and entertainment is likely to grow, according to the 2009 edition of
PricewaterhouseCoopers report. In addition, advances in technology, increasing penetration of
communication mediums, policy initiatives of the Indian government to increase FDI and the
increased participation of private media companies have been the other key drivers of the
industry.
As per current estimates the television industry is projected to grow by 22%, filmed
entertainment by 16%, radio by 18% and the Indian advertising industry 61% over the next 3
years. Given the lucrative prospects of this segment, international media giants are all vying for a
stake in the segment. In addition to domestic growth, the growing popularity of Indian content in
the world market and South Asia in particular, has encouraged Indian entertainment industry
players to also venture abroad to tap this booming segment; according to a report by CII-AT
Kearney, the share of international markets in total box office collections is estimated to increase
from 8% in 2006 to 15% in 2010.
Future Prospects
The greatest opportunities naturally lie in those sub-areas that are expected to grow the
fastest over the next few years, namely, in the development of digital distribution platforms for
TV such as DTH, digital music platforms, digital media advertising (internet, mobile and digital
signage) and global cinema content.

***
UNIT III
SALES MANAGEMENT

Introduction
Marketing is the process used by an organization to relate creativity and productivity to the
environment in which it sells its products and services. Effective marketing requires the talent to
speak in a language the market place understands; the insight and skill to find the solutions to
customers problems and the commitment to give value. The word marketing means different
things to different people. A sales man understands marketing as selling activities of oral
presentation with a view to effectuate the exchange of money for the benefits offered by his
product. An advertising-man use it as advertising media selection, and a host of activities related
to the advertising function.
The, American Marketing Association (AMA) defined marketing as: The performance of business activities that direct the flow of goods and services from
producer to consumer or user .

MARKETING MIX AND SALES MANAGEMENT

PRODUCT MIX

Personal Selling /Sale force Management

PRICE MIX

Sales Promotion

+
PROMOTION MIX

Advertising
+

PLACE MIX

Publicity

As shown in Fig I the personal selling occupies a major part in sales force management,
the able support of the remaining elements of the promotion mix i.e., sales promotion,
advertising and publicity are also essential to supplement the success of business in the society.
Hence the role of promotion mix is more important to the commitment of reaching sales targets
along with other marketing mix elements.
As the sales are the life-blood of any business and the profit i.e., the bread-winner for
the organization the function of sales among the other functions of marketing has to be viewed
with special emphasis and with more analytically, such that the corporate objectives are realized
without any difficulties.

Even though for the earning of sales revenue almost the efforts of

entire promotion mix elements are used, but the human element inculcation can never be denied
and it is also an important to use the sales force for better DYADIC approach.
Note: DYAD a Latin word mostly used in Anthropology and Sociology subjects while
referring human interaction and relations.
The corporate objectives viz; increased sales revenue, profit maximization and
continuation of growth are realized through effective sales force management along with the
operation of other promotion-mix elements.

The

salesforce

management

which

can

also

be

called

as

Sales Management can be defined as the management of all marketing activities, including
advertising, sales promotion, marketing research, physical distribution, pricing and product
merchandising.
According to American Marketing Association (AMA) sales management is the
planning, direction, and control of personal selling, including recruiting, selecting, equipping,
assigning, routing, supervising, paying, and motivating as these tasks apply to the personal sales
force.
Thus, sales management is nothing but the management of a firms personal selling
function. It indicates the tasks of sales management as the analysis, planning, organization,
direction and control of the companys sales activities. These tasks can also be denoted as
DIMENSIONS of sales management as shown in fig. II.
-

Analysis includes review of the firms internal sales records and salespeoples
reports, investigation of market trends and other relevant environmental factors;

Planning includes setting of objectives for the firms sales efforts and mapping out
strategies and tactics for achieving these objectives;

Organization includes setting up structures and procedures for effective and smooth
execution of sales programmes and plans.
-

Direction deals with staffing and supervision of the day-to-day implementation of


sales policies, programs and plans.

Control comprises of performance comparison of actual and planned sales results,


examination of the reasons for observed divergances, and evaluation of the need for
plan revision.
Figure II Dimensions of Sales management
Planning

Analysis

Control

organizing

Direction
All the efforts of sales (force) management ultimately targeted to achieve the THREE general
objectives viz; sales volume, contribution to profits, and continuing growth. All these objectives
are delegated by accountability and responsibility to the marketing department by the top
management further it will be delegated to the sales department with sufficient authority to
achieve these objectives.
The sales (force) management is the aspect of promotion that brings the human element into
marketing transactions. The DYADIC approach has been inserted into marketing effort in the
name of sales force approach because of the following expected attributes:-

The human element is critical, which establishes relationship with customers


indirectly by the company/organization which works as most intimate, influential in
decision making by customers for sales.

The customers confidence is enhanced, by building a basis of trust, nurtured


relationships on permanent emphasis.

Customers can act immediately, which creates an opportunity to the sales force for
placing orders, storing and to acquire feedback.
MODERN TRENDS IN SALES MANAGEMENT

ANALYTICAL VIEW OF SALES APPROACHES---- FROM PAST TO PRESENT


Traditional/Past Developments :a) Town Economy , a medieval economic organization in which commercial activities
were concentrated in the population centers.
b) Agricultural middlemen, an early businessperson who purchased staple products from
the countryside and transported them to a local market for sale.
c) Bagman, who was an eighteenth century salesperson, sold goods in sample bags
which were produced through the factory systems..

d) Yankee peddler, an early American seller, traditionally based in New England, who
sold goods to pioneers.
e) Wagan peddlers ,the thirteenth century sales people, who covered their territories in
covered wagons.
f) Credit investigators , are the suppler-employed people who evaluated retailers credit
and developed goodwill.
g) Greeters, are the supplier-employed sales representatives who solicited business from
retailers on buying trips.
h) Drummers, are the nineteenth century sales people who Journeyed to merchants
places of business.
i) Canned sales presentation (by John Patterson), a structured sales script memorized by
the sales-person. At first it is used extensively in door-to-door selling and now being
employed by many marketers. This provides a salesperson with what a company
considers to be the best way to sell.
j) Stimulus-response theory, holds that the prospect will buy upon hearing the right
sales message
Stimulus
[The correct selling
Statement ]

Response
[A successful sale]

k) Selling formula, (Arthur Frederic Sheldons 1902), approach, in which sales people
lead prospects through distinct stages of the buying process in a persuasive manner.

Attention
Interest

AIDR

(This is on the way to a purchase decision)

Desire
Resolve (Response)
l)Systems selling, a team approach to selling that requires salespeople to bring all
relevant components of the firm to bear in solving customers problem. This approach
has been developed in 1970s, to market computers, scientific instruments, machine tools,
and other complex equipment, for which teamwork is essential.

m)creative selling ,involves arousing demand and influencing patronage. Ex:LIC/Insurance Policies selling.
n)Service selling , involves aiding the customer in bringing a sale to a completion.
Ex:- Assistance by retail sellers in selection and purchase by consumers.
0)Selling centre, a group of sales people and support personnel set up to meet a buyers
needs.
p)Buying centre ,people who participate in an industrial purchase decision.
Q)Telemarketing, is one which inculcates telephone channel for sales.
Modern Trends in Sales Management MODERN SALES APPROACHES
1)Partnering , sharing of values between vendors and buyers.
2)Relationship selling , a personal selling based on long-term associations with buyers.
3)Team selling , where sales efforts using multiple personnel - ?
4)Value-added selling , the provision of selling services that exceed the customers
expectations.
5)Consultative selling , where sales people act as problem-solvers for their customers.
The sales approaches if examined from the past to present times, it is clear that drastic
changes took place. The various causes may be changes in products and production,
increasing consumer awareness, market saturation, changes in consumers perception,
attitude, behaviour, tastes and preferences, technological advancement etc.
The choice of basic selling style depends upon the following conceptualizations of the
companies. They are :1) Individualized requirements of the company;
2) To compete with the style of competitors;

3) To accommodate the selling(promotion)budget;


4) To meet market accessiveness.
The various styles are as follows :1)Trade selling, means the trade salesperson develops and maintains long-term relations
with a stable group of customers. This is low-key selling, with little or no pressure, and
the job is dull and routine. This selling style is applied primarily to products that have
well-established markets.
All promotional strategies/forms are more vital to promote this type of selling approach.
One important responsibility of the trade salesperson is to help customers build up their
volume through providing promotional assistance.
2)Missionary selling :- The missionary salespersons main job objective is to increase
the companys sales volume by assisting customers with their selling efforts. The
missionary sales person is concerned only with securing orders incidentally, through
primary public relations and through customers of the customers (i.e., indirect
customers). Direct customers persuade indirect customers and missionary salespersons
persuade direct customers.
3)Technical selling:- The technical salesperson deals primarily with the companys
established accounts, and his main objective is to increase their volume of purchase by
providing technical advice and assistance. The technical salesperson devotes considerable
time to acquaint industrial users with technical product characteristics and applications
and to helping them design installations or processes that incorporate the companys
products. In this selling style, the ability to identify, analyze, and solve customers
problems is important. Technical salespeople often specialize, either by products or
markets.
4)New-business selling :- In this mode of selling the salespersons main job is to find
and obtain new customers, i.e., to convert prospects into customers. The salesperson
should be universally creative and ingenious and possess a high degree of
resourcefulness.

Hence lots of changes took place in professional selling since 1990s and the change is
still continuing. This might be because of changing markets, diversified products, R&D,
Economic/Purchasing abilities, communication and transportation developments.
CLASSIFICATION OF SALESPEOPLE:In the light of the changes in professional selling the classification of sales people can be
of two types viz;
1) Creative selling; and 2) Service selling.
-

Creative selling involves arousing demand and influencing patronage.

Service selling aids the customer in bringing the sale of completion.

The extended classification can be of four types basing on sales tasks.


Sales development involves the creation of customers through methods such as
motivating buyers to change vendors.

Missionary salespeople pull the product through the marketing channel by providing
low-key personal selling assistance.

Maintaining salespeople involves in the generation of sales volume from existing


customers;

A supportive, salesperson provides continuing service to the buyer.


Directly by suggesting a replacement item rather than the repair of an older product.
Table I Specific Sales activities and related Tasks

Sales Activities
Selling

Tasks
- -> Prospecting, planning and
Making sales presentations,
Handling objections;

Handling orders

-- > Writing orders, Expediting


Orders, locating lost orders;

Product servicing

-- > Delivering and installing


Products, training customers;

Information handling

-- > Receiving customer feed


back, providing technical
information;

Account servicing

--> Handling inventory control,


Stocking shelves, setting up
Tradeshow exhibits;

Training

--> Training new salespeople,


Traveling with sales trainees;

Entertaining

-- > Taking a customer to dinner,


hosting party, playing games
and sports with customers.

Traveling

-- > Spending a night on the road,


traveling out of town.

Assisting distributors

-- > Establishing relations with


Distributors, collecting past
due accounts.

All the above mentioned tasks are viewed as selling situations. The field of salespersons
job usually involves a blend of them. Many companies try to expand the creative selling
activities of maintenance and support the salespeople.
With various tasks/ activities of a salesperson, the selling became an interpersonal
communication between salesperson and Prospect as depicted in Fig III. As it has already been
mentioned in connection with DYADIC approach, there is a possibility of greater interaction and
more sales.
THEORIES OF SELLING:Selling has been considered by most of the practitioners as an art and by some as a science
which led to produce two contrasting meanings of selling. The first category of theories had been

propounded by professionals basing upon their group of practical, or learned-through-experience and


their ability to apply in sales situations. The second category of theories is based on behavioral
sciences. These theories deal with the buying behavior.
The theories which fall under above two approaches are:I. AIDAS theory of selling
The five letters stands for initials of the five words used to express Attention, Interest,
Desire, Action and Satisfaction. The five letter constitute the skeleton around which many sales
functions are organized. According to this theory, the prospect goes through FIVE mental stages
before taking the decision to purchase or not to purchase. The sellers job is to lead the customer in
such a way that the sale can be made.
Seeking Attention

-----

Gaining Interest

-----

Kindling Desire

-----

Inducing Action

-----

Customer Satisfaction----

Seeking Attention, is the fundamental step on which the rest of the selling process depends.
The sales person must have a sense of direction, knowledge, listening ability and sense of
humor to carry out the task successfully. Once the prospect starts paying attention, the rest of
the task requires less effort.
Gaining Interest, is the conversion of the prospects attention into interest. It can be done
with the help of catalogues, sales portfolios, flipcharts or other visual aids. It depends on the
smartness of the sales person, how he is using the prospects hint regarding the product for
developing the selling appeal that is most likely to be effective. The sales person must take
into account the basic motivation, mood and time of prospect while selecting the appeal to
emphasize.

Kindling Desire, is that goal to kindle the prospects desire to the ready-to-buy point. The
most important issue in this regard is that the salesperson must keep the conversion running.
The prospects may have certain objections which must be anticipated and answered to their
satisfaction. The change of making a sale improves if all the objections are treated
beforehand. The problem can be either logical or psychological and objections are often
unspoken.
Inducing Action, means if everything has been perfect, the prospect is ready to buy. Hence
the salesman should know how to make everything to be perfect and he should know how to
recognize closing signals from the buyer; including physical actions, comments and
questions. He can pose different questions or show body language for the closing of a sale.
Consumer Satisfaction, is the last step, which is necessary to reassure the customer that the
decision was correct. The salesperson then should follow-up the customer after the receipt of
the order. The order is the climax of the selling situation, so the possibility of an anti-climax
should be avoided because customers sometimes unsell themselves.
II Right set of circumstances Theory:
This theory is a seller-oriented theory. The salesperson should give proper stimuli to
secure the attention of the prospect and mould the situation so that sales can result. Thats
why this theory is also called Situation-response theory. It depends upon the skill of the
sales person, that how effectively the situation has been handled/can be handled. A situation
can be divided into two factors internal and external. The internal factors and external
factors are most of the time inter linked and over shadowed each to the other.
III Buying Formula Theory:It is focused on the buyer side of the buyer-seller dyad. The buyer is governed by
needs or problems and the sales persons role is to assist the buyer to arrive at a solution. It
stresses on the thinking process that goes on inside the mind of the buyer that causes the
decision to buy or not to buy.
This theory takes into account the internal factors, and doesnt place all the importance to
external factors.

In an actual selling situation, emphasis should be placed depending upon a variety of


circumstances. The various points as mentioned below act as guidelines:1) If the need is not felt by the prospect, then the need element should be emphasized;
2) If the prospect is having need but he is unable to decide about the product/service that can
cater to need, the product or service should be emphasized;
3) If the prospect is not able to find the trademark while thinking of the product, the trade
name should be emphasized;
4) If need, product and trade mark are well associated then emphasis should be put on
facilitating purchase and how the product can be used to satisfy the need or problem;
5) If competition is there, then the salesperson must emphasizes the adequacy and pleasant
feeling related to the product;
6) While dealing with a new product, all the elements of the equation should be
emphasized;
7) If more sales are to be made to old users, then new uses of the product must be
emphasized.
IV. Behavioral equation Theory: (it is developed by John .A. Howard)
It is a modified form of Right set of circumstances theory. In this theory, there are four
elements drive, cue, response and reinforcement which play an important role in describing
stimulus response model.
R=PxDxKxV
R = Response of the buyers;
P = Predisposition or force of habit;
D = Drive level of the buyer or motivation to buy;
K = Incentive provided by the product;
V = Intensity of all cues.
Drives , are the strong internal stimuli which can be innate like hunger, thirst, pain, sex, etc.,
or can be learned like recognition prestige, approval etc

Cues , are weak stimuli which decide when the buyer will respond. They can trigger/nontrigger decision-making. The Product Cues , are cues received directly from the product. The
information cues , provide information of a symbolic nature about the product.
Response , is what a buyer does.
Reinforcement, is any event that strengthens response (i.e., satisfaction of customer
reinforces)
The above equation is a multiplicative relationship. R is a dependent variable whereas
others are independent variables. Among the independent variables if any one is Zero, then R
will become Zero. P increases if K increases. A salesperson influences P directly,
salespersons affect D to exercise influence.
In the case of an Established Product, we can find a strong sales person Customer
relationship and the same is unfound in the case of a New Product Exactly on the contrary
we can find a weak sales person Customer relationship in the case of a new Product.
This specifies about the required sales person product strategy in establishing the
degree of dyadic character in personal selling practice.
Selling As a Career
A career in sales is one that can be learnt by all provided they have a personal desire and
the will to make a commitment to learn the selling techniques and sales skills required.As a
profession selling has been the essential commercial activity that ensures the wheels of
commerce continue to turn as the world economy survives and prospers on the buying and
selling of goods and services. To the committed individual a sales career is available provided
they understand it will be a lifelong learning process as the nature of the business is very
competitive. In the market place today it is rare to have a product or service that does not have
any competition or if there is it is not long before there will be a competitor chasing the same
business. All business revolves around selling and it is fatal for any organization to cut back or
reduce its sales activity as it will result in a drop of cash flow to the business affect stakeholders
and employees alike. A sales career can offer an employment lifeline during good and not so
good economic times as for the committed individual there is a vast range of learning materials

available dealing with all aspects of the selling profession. One of the main selling skills required
by any salesperson is to be able to sell their product or service by having a sound knowledge of
what they are selling.
Definitions of salesmanship:Salesmanship is the art of persuading persons to buy goods or services which will give
them lasting satisfaction.
Salesmanship is the art of helping prospects and customers achieve their goals in life.
Selling is a buying process wherein the salesman ascertains the customers needs and
indicates convincingly how the needs can honestly be satisfied through the purchase of goods and
services.
Salesmanship is the art of solving the customers problems through the benefits offered by
the products or services being sold by the salesman.
ACQUIRING SKILLS AND DEVELOPING NEW QUALITIES FOR
SALESMEN TO IMPROVE GROWTH CHANCES
PERSONAL QUALITIES OF A SUCCESSFUL SALESMAN

There are a number of traits or qualities that make up the personality of a salesman. They
are
a) Physical Qualities
b) Psychological Qualities
c) Social Qualities
d) Character Qualities.

The traits of a sales man are shown in Table V


Physical Qualities

Psychological Qualities

Social Qualities

Character Qualities

Sound health physique

Amazing alertness

Extrovert

Maturity

Alluring posture

Rich Imagination

Conversational ability

Courage

Good appearance

Confidence

Poise

Sincerity

Cleanliness

Enthusiasm

Courtesy

Determination

Appearance

Initiative ness

Tact

Integrity

Grooming

Keen observation

Cooperation

Loyalty

Good manners

Industry

Clothes
Voice

Table V Personal Qualities of a successful salesman

Tips and suggestions to improve personal ability and skills for salesmen
Persistence

Professionalism

Passion

7 Ps of
Successful
Salesmanship

Pro - activeness

Preparedness
Positiveness
Passion Selling is a joy and sales person is happy with his job

Personableness

Persistence The sales person is Persistence, Perseveres and is constant)


Pro activeness Initiative & enthusiasm
Personableness having personal relationships with customers
Positiveness having positive attitude orientation
Preparedness Prepared with self analyzed, self directed and self motivated
Professionalism Punctual & self disciplined
According to Dr. Patrick Low Kim Cheng of Kazakhstan Institute of Management
as depicted in the above figure, there are 7Ps for a successful Salesmanship. They are:
Passion, the first P states the requirement of Joyful mood in handling the sales job. As they are
committed to sales as a way of life, it is being the passionate towards their products, which
endures success.
Persistence is the second P which states the requirement on the part of the sales person to
persistent and consistent. The great sales performer should not be easily dis heartened by
rejections, objections or mistakes in sales rather they should handle with care and confident the
prospects to lead to sale.
Pro- activeness is the third P which states about the initiative ness and enthusiasm to be present
on the part of a successful salesperson. The salesperson should be energetic and on the mood of
initiative ness with strong urge and always having Challenging nature to face the ups and downs.
Personableness is the fourth P , which states the importance of the fair and relevant personality
of the part

of

the successful salesperson.

It includes the establishment of personable

relationships with the customers and should be having an adorable personality.


Positiveness is the fifth P which states the requirement of the Positive attitude on the part of the
salesperson. It includes a complete sense of positive in all aspects with a fair vision for a
better and prospective future., ie., a can- do- attitude but not cannot- do attitude.
Preparedness is the sixth P which initiates for the possession of advanced preparedness on the
part of the salesperson. This stresses the need for a confident homework on the part of the
salesperson before facing a prospect.

Professionalism is the seventh P which stresses the need for more professional approach

by

containing punctuality and discipline in conducting their sales efforts. This certainly adds value
to the sales programme and creates more soft delivery

with more adequate service to the

customers.
TIPS TO IMPROVE PERSONAL ABILITY AND SKILLS FOR SALESMEN
A sales & Marketing Management survey of 209 salespeople representing 189 companies in
37 industries determined that the following traits characterize top sales performers:
1. Ego strength: a healthy self-esteem that allows one to bounce back from rejection.
2. A sense of urgency: wanting to get it done now.
3. Ego drive: a combination of competitiveness and self esteem.
4. Assertiveness: the ability to be firm, lead the sales process, and get ones point across
confidently.
5. Willingness to take risk: willing to innovate and take a chance.
6. Sociable: outgoing, friendly, talkative, and interested in others.
7. Abstract reasoning: ability to understand concepts and ideas.
8. Skepticism: a slight lack of trust and suspicion of others.
9. Creativity: the ability to think differently.
10. Empathy: the ability to place oneself in someone elses shoes.

PLANNED SELLING SYSTEM


Personal selling is all about locating a potential buyer, making an effective sales pitch and
getting the order. Personal selling is in fact a complex communication and learning process for both
the sales person and the prospective customer. There are many different ways of making a sale,
since every sales person has his/her unique manner of attaining the objectives. The following are
the steps found to be an integral part of the effective sales process:-

Prospecting,
Identifying and
Qualifying

Follow up

Pre Approach and


Call Planning

Close

Presentation
Approach and
Demonstration

Handling of
Objections

Fig. Selling Process


The selling process begins with prospecting (or), finding qualified potential buyers.
Except in retail selling, in all other modes of selling salesperson must approach the customer.
Hence two major activities are involved in prospecting: identifying potential customers (sales
leads), and qualifying these potential customers to determine if they are valid prospects. The
planning work which is essential in eliminating non-buyers is called prospecting. The most
important part of the entire selling process is lying in locating the most promising prospects. Some
companies use specialized personnel for prospecting, but most regard it as one of the salespersons
responsibilities.
Steps in Prospecting includes.
1) Formulating prospect, which includes finding the willingness, the financial capacity, the
authority to buy, and the availability of the customer/prospect to the salesperson.
2) Searching out potential accounts , which is nothing but combining different sources for the
names of the probable prospects or suspects. Sources of prospect information include
directories of all kinds, news and notes in trade papers and business magazines, credit reports,
membership lists of chambers of commerce and trade and manufacturers associations, lists
purchased from list brokers, and records of service requests, other sources are responses to
company advertising, sales personnel of no competing firms calling on the same general classes
of trade, conventions and meetings, bankers and other Centers of influence and the
salespersons own observations.
3) Qualifying prospects and determining probable requirements of each for the types of
products sold by the company.

Relating company products to each prospects requirements , is the final step is to plan the

4)

strategy for approaching each prospect. From the information assembled it is usually possible to
determine each prospects probable needs.
Qualifying the prospects
An excellent sales presentation will fail when it is delivered to a person or a company that has no
real need for the product or the service, cannot afford to buy it, or is very satisfied with its present
long term supplier.
Thus, for a successful sales presentation the following things regarding the prospect should be
kept in mind :
1. He has clear and well defined need for the product or service;
2. He has adequate financial resources to pay for it;
3. He is in a position to buy large enough a quantity to result in a profitable sale ;
4. He has the authority to make a decision.
These factors which one has to consider in order to qualify a prospect can be summarized in the
acronym MAN, i.e.,
Money

: The ability to pay for a product/service

Authority : The authority to make a commitment on his own


Need

: The need for the product/service exist.

II. Pre-approach and call planning :Once a prospect has been identified, the salesperson should not show haste in making an
appointment soon and delivering their sales pitch.
Pre Approach
This approach is based on the principle of the marketing concept that stresses customer
orientation. The more the sales person knows about the prospect, the better the chances of making a
sale.
The sales person should try to gather information like :

What is the financial position of the prospect?

What are his special needs or problems?

How might the companys products or services satisfy these special needs?

Who will get involved in making the buying decision?

What type of motivation or appeal is most likely to be effective?

What are the buyers personal characteristics and outside interests?


The information gathered should help the salesperson :

to ascertain the prospects needs and ability to buy the product or service;

to give a tailor-made presentation;

to keep from making serious tactical errors;

to increase the salespersons confidence in handling the sales


pitch.

Call planning, is basically a specific planning sequence. First, the sales person has to define the

objective of call, secondly, devise a selling strategy to achieve this objective and lastly make the
appointment. Besides the ultimate objective of getting the order there might be certain intermediate
objectives, some of which may be:-

To gain more information about the prospect;

To relate the prospects needs and concerns to the attributes and benefits of the product or
service;

To obtain permission for the demonstration of the product;

To introduce a new distributor;

To settle past collect disputes;

III. Presentation, Approach and Demonstration


Presentation is all about explaining to the consumer how the products meet their
requirements. The sales person should inform the prospect about the characteristics, capabilities
and availability of goods and services. The sales person should be well dressed and should posses
excellent communication skills.
The sales person should also have an understanding and helpful attribute towards the
prospective consumer.

Categories of Presentations
Sales presentations can be classified into FIVE different categories. They are:a) Fully Automated Category , which is based on a highly structured approach and is usually
done with the help of films or slide projections. It is mostly used to sell intangible services
,like life insurance to rural or semi-urban prospects.
b) Semi Automated approach is that in which sales person takes help of brochures or literature
and keeps on adding his comments where necessary. It is useful in selling Pharmaceutical
Products.
c) Memorized presentation approach is that in which the company message is presented by the
sales person with a few changes. Its also called as canned sales presentation.
d) Organized approach is the most popular and effective sales presentation. The sales person is
given a complete flexibility of words but has to follow the company prepared outline or
checklist. The prospect is taken through the four stages i.e., Attention, Interest, Desire and
Action(AIDA) to a purchase decision.
e) Unstructured approach is the problem solving approach of presentation. Here the prospects
and the sales person get together to explore the prospects problems and find solutions.
Sometimes because of not too well focused and much time is wasted. Here, there is a need for
experienced sales persons who can quickly clear the doubts and complaints of the customers.
Requirements of a presentation are :1) Effective planning by obtaining customers/prospects information.
2) There should be a step by step logical sequence that should guide the customer to accept the
product;
3) The sales person should posses enthusiasm, self confidence and the skill of persuading
people;Adequate proof should be supplied to the customer by way of letters from satisfied
customers etc.
4) Pictorial and visual presentations which is mostly important to create stimuli.
5) Participation of a represent/salesperson includes both observation, communication,
explanation, demonstration etc.

Besides possessing above required aspects, the salesperson should also try to assess the buying
motives of the consumer. They are:- Fear of being left behind;
- Envy of others achievement;
- Vanity recognition from others for having made a wise decision;
- Love and approval of family, friends and colleagues;
- Entertainment, enjoyment or relaxation;
- Sentiments, like family tradition or patriotism;
- Pride, of being associated with a successful presentation;
- Pleasure, derived from the product or service;
- Profit, of increased efficiency;
- Health, consideration in acquiring a less hazardous or strenuous product;
- Security, derived from buying the product of a well known firm or a famous brand name;
- Utility, like increased ease of usage;
- Cautiousness, in buying a product that requires lesser amount of servicing or a durable product
with a long life.
Thus, the sales person should try to sell the idea behind the product and not the product itself.
Hence the objective of a presentation is to convince the buyer that :
1) the need for the product exists;
2) the product in question can satisfy that need;
3) the prospect can afford to purchase the product;

So a sales presentation is made up of two activities : approach and demonstration.


APPROACH:It is the approach that makes or breaks presentation. If the approach fails, the sales person
cannot proceed to give a presentation or demonstration. The sales person should try and dress
similar to what the buyers wear and should be courteous and polite in manners.
A good approach should:1) Attract the prospects attention;
2) Arouse his interest in the conversation;
3) Make it easy to have a transition into the demonstration phase.
There are four basic approaches :1) In introductory approach the sales person introduces himself and his company to the prospect;
2) In product approach the sales person hands over the product to the prospect for examination
after briefly explaining it to him;
3) In the consumer benefit approach the sales persons starts the sale by informing the prospect
about the benefits that can be derived from the product;
4) In the referral approach the salesperson can give the name of a present satisfied customer to
the prospect as a reference during the meeting;
In the Demonstration the core activity is the presentation and conduct of selling process. There
are two stages.
The first stage, involves a description of the features and benefits of the product and an
explanation of how it works.
The second stage, is the actual demonstration itself. This process is mainly directed at converting
the prospect into a customer.

An effective product demonstration should be:


- Well prepared and referred
- should be designed to give a hands on experience with the product.
IV. HANDLING OF OBJECTIONS
Prospects generally resist during the process of selling by showing several objections,
which may be real, or imaginary hurdles and by voicing objections. Objections should be met with
utmost courtesy. The customer needs should be met by the sensitivity and availability of the sales
person. Otherwise it is a difficult job. Hence it is very much important to explore the hidden
objections of the prospect. There are two major techniques to discover hidden objections.
-

1) Keep the prospect talking and observing and noting down the concepts;

2) Use the insight gained by experience.

The sales person should always adopt a low pressure approach or the customer may feel that
he is pressurized into taking a decision. The objections are of many kinds like price, quality,
service, quantity, expectations, colour or a mix of all these related to the product. These objections
resist a sale proceed and there by cause postponement, hindrance, and even leads to the rejection of
a product completely.
In the view of the risk attached at handling of objections, a suggested five step approach can
be handled:1

I step :- Prospect states objection


(Question or concern is posed)

II step :- Listen carefully


(Make sure you know what has been said)
III step:- Ask questions

(Clarify the objection so that there is no misunderstanding)


IV step:- Respond to the objection
(Use an appropriate technique: be tactful and honest)
V step :- Confirm your response
(Make sure that the prospect understands and accepts the response)
Responding to the objections:This is a very critical juncture of the selling process. However the fundamental requirement
of this stage heavily stresses the complete product knowledge to be on the part of a sales person.
Besides the product knowledge, a salesperson should adopt an optimum strategy with lot
carefulness not only the objection is cleared but also respect the ego level of the prospect.
Hence different approaches may be either one or more of the following can be adopted or
being adopted by most of the experienced sales professionals:A) YES but method :Its a sales technique in which the salesperson agrees with the prospects objection,
but then makes a statement that offsets the objection.
B) Boomerang method :Its a sales technique that converts a prospects reason for not buying into a reason for
buying.
C) Comparison method :Its a sales technique that minimizes the prospects objection by comparing it with
something that is acceptable.
D) Compensation method:-

Its a sales technique in which the sales person recognizes the prospects objection, but
then points out advantages that compensate for the problem raised.

E) Case history method:A sales technique in which the sales person uses an example of a satisfied buyer to
offset the prospects objection.
Whatever may be adopted from the above mentioned strategies, it is required to handle
objections carefully and successfully such that, it leads to the closing of a sale.
V. CLOSING THE SALES
It is the culmination of the sales presentation when the sales person tries to get an order or
achieve some other goal. Well planned and structured closing techniques move the prospect into
making a decision after the prospect is convinced with the respective wants and needs for the
product and of the product closing is the sum total of the steps from the contact to the satisfied
condition of a purchaser. Here two questions are raised in the consciousness of a sales person
namely :1) When & 2) How to close
When to close?
Trying to close a sale too early or too late will generally result in a lost sale. It may be an over
aggressive or a too lethargic effort by the salesperson responsibility. Hence sales persons will
adopt different strategies to find an optimum time for closing the sale proceeds. Either it would
proceed for closing or for re-presentation for convincing more the prospect. So they adopt the
observation method or the trial close method.
a) The observation of buying signals for a probable or possible buying environment is the key
effort of a sales person. The prospect may give either the verbal or the non-verbal or
sometimes both the signals.

The verbal signals may include comments, questions, suggestions etc The non-verbal
signals in the form of body language consist of facial expressions and physical actions
- Gestures & Postures, movements.
Positive actions include.
Moving forward in the chair, nodding ones head up & down, using open handed gestures, and
stroking ones chin, offering coffee, tea & snakes etc
Negative actions include.
Arms crossed over the body, clenched hands, or movement away from the salesperson etc...
After observing the various above like buying signals appropriate actions should be executed by
the salesperson.
b)Trial close is a sales technique that asks for an opinion. The sales person after observing the
positive buying signals, the opinion of the prospect should be tested. There is an important
difference between a trial close and a close. The earlier is as king for an opinion, where as the later
asks for a decision. Here the prospect is induced for asking questions and forced to comment,
regarding product, demo & presentation etc
HOW TO CLOSE?Closing is simply asking for the order. There are many ways to do this. The professional
salesperson knows several techniques from which to select a close that fits the specific prospect
and selling situation. Some effective closing techniques are as follows:1) Alternative proposal close is a technique in which a salesperson offers the prospect a
choice between details.
2) Assumptive close is that which assumes the prospect will make commitment.
3) Gift close is that which provides the prospect an added inducement for taking
immediate action.

4) Action close is that technique which suggests the sales representative take an action
which will consummate the sale.
5) One-more-yes close is that technique in which the salesperson restates the benefits of
the product in a series of questions that result in positive responses, then asks for the
order.
6) Balance sheet close is that in which the salesperson and the prospect list the reasons
for acting now against the reasons for delaying, aimed at pointing out the advantages of
prompt action.
7) Direct close involves the salesperson simply asks the prospect for a decision.
VI. FOLLOW UP
It is the salespersons after sales activities. Effective sales follow up reduces the buyers
dissonance, or doubt, and it improves the change that the person will buy again in the future.
Hence follow up is very essential for every sale proceed. Effective follow up shows that a
salesperson is honest, dependable and concerned with the customers long-term needs and
problems.
Reasons for follow up:-

To establish long term relationship with buyers.

To get repeated sales.

To establish trust, confidence, & brand/product loyalty in the market with post sale
action.

To assess and evaluate self performance of a salesperson.

With the fulfillment of the execution of above steps by a salesperson effectively and efficiently
leads to the business transaction.
Tips and suggestions for better sales performance in field sales

The following concise list represents 40 critical sales ideas that can contribute to
consistent and long-term success. There are obviously many more than 40 - sales do's and don'ts
- that could have been included. This list contains those actions, which when practiced or
eliminated will help to rise above the rest of the field and beat the competition, while
successfully serving the needs of the clients.
DOs

1. Compartmentalize the issues in your life


and career.

2. Spend regular time in self-improvement 3. Ask for the business.


and reflection.
4. Close a relationship, not just the sale.

5. Study the competition.

6. Know your product/service better than 7. Set goals and monitor your progress.
anyone.
8. See rejection as a tool to learn about 9. Sell value not low price.
yourself.
10. Keep accurate and consistent sales 11. Cultivate your support staff.
records.
12. Work hard as hard to keep the business as 13. Listen more than you talk.
you did to get it.
14. Tailor your sales message.

15. Listen between the lines.

16. Carefully observe early prospect/client 17. Let poor prospects go earlier rather than
signals.

later.

18. Get information before you give it.

19. Focus on what you want not what you


don't.

20. Keep your ego out of the sales process.

DON'Ts

1. Talk too much.

2. Give information before you get it.

3. Give redundant presentations.

4. Assume everyone buys for similar reasons.

5. Be afraid of rejection and failure.

6. Waste time on unimportant non-sales


issues.

7. Promise a little and deliver less.

8. Sell low price.

9. Assume all sales resistance is negative.

10. Try and do it all yourself.

11. Give product focused presentations.

12. Deal in negatives; what you can't do.

13. Spend time with poor prospects.

14. Advertise your willingness to make


concessions.

15. Assume selling and negotiating are the 16. Lose control of the sales process.
same.
17. Just cultivate your client organization 18. Cold call before you have done some
contact.

research.

19. Assume a verbal yes, means yes.

20. Assume you will have the business


forever.

Customer psychology and selling


The Psychology of Selling recognizes that each purchaser has their own buying
strategy and unless the sales person understands and meets the criteria of this strategy the sale
will be lost. The sales professional equipped with the ability to understand the purchasers
psychology will demonstrate how their product or service dwill enhance the purchasers life in a
way that allows them to buy.
Using an inside out approach this training starts with the sales persons own frames of mind
so that they operate with positive beliefs about the sales process. Interactive exercises and
techniques from NLP develop the sales persons ability to read the customer through non-verbal
cues and precision questioning. Graduates of this program find that with gentle probing they are

easily able to uncover the values and buying strategy of anyone they meet. Understanding the
psychology of selling is important to sales people at all levels and this training is an important
soft skills add-on to existing methodologies such as Target Account Selling (TAS).
Benefit of the Psychology of Selling:

A positive approach to the process of selling

Overcome fear of rejection with cold calls

Develop the ability to read a customer

Quickly identify who is ready to buy your product/service and who is not

Shorten the sales cycle

Increase the number of satisfied customers

Be perceived as a professional and trusted advisor

Buying motives
The Six Buying Motives
People buy for their own reasons. They may not necessarily be sensible, intelligent, or
even rational reasons. But the sales person need to be aware of which ones are motivating ther
prospect at any given time, so that we can tailor your sales approach accordingly. The Six
Buying Motives are:
1. Desire for Gain
2. Fear of Loss
3. Comfort and Convenience
4. Security and Protection
5. Pride of Ownership
6. Emotional Satisfaction
No one Buying Motive is any more important than any other. And they don't come in any
particular order. But rest assured that at least one of these motives - and often more than one

- applies to every purchase, every time. The sales persons job is to find out which best suits
the needed selling activity.
Meaning of Buying Motives: A learner once quoted for Buying Motive as A motive can be
defined as a drive or an urge for which an individual seeks satisfaction. It becomes a buying
motive when the individual seeks satisfaction through the purchase of something. Motive is inner
urge that prompts a person to perform some action. It can be a strong desire, feeling, a drive or
any emotion which plays a role in the consumers decision to purchase a product or a service.
Characteristics of Buying Motive

There is a process by which individual decides whether, what, when, from whom, where & how
much to buy.

It comprises of mental and physical activities of a consumer.

Individual behaviour is also influenced by internal and external factors.

There is drastic change in the attitude and behaviour of consumer

The stages to Consumer Buying Decision Process:


Not all decision processes lead to a purchase. All consumer decisions do not always
include all stages, determined by the degree of complexity.
1. Problem Recognition: (Awareness of Need)-Consumer recognizes a problem or need. The
need can be triggered by internal stimuli when one of the persons normal needs rises to a level
high enough to become a drive. Hunger-Food. A need can also be triggered by external
stimuli (such as advertisement).
2. Information Search- a stage in which the consumer is aroused to search for more information;
the consumer may simply have sharp attention or may go into active information search. This
is usually done on higher ticket purchases such as cars, pianos, computers, etc.
3. Evaluation of Alternatives The consumer uses information to evaluate alternative brand
choices. Different process for every consumer, involves weighing product attributes and their
ability to deliver benefits.
4. Purchase Decision Choose buying alternatives, includes product, package, store, method of
purchase, etc.

5. Post-Purchase Evaluation Outcome; Satisfaction or Dissatisfaction. Was the decision made


was right? This is the buyers doubts shortly after a purchase about whether it was the right
decision. This can be reduced by warranties, after sales communication, etc.
A customers perception of relationship between buyer and seller: ( Trade Relations)
It is impossible to set up any yardstick for relationship between a buyer and a seller. No
two organizations can have similar set of rules for maintaining relationship. Even if on a
particular occasion a situation prompted a particular behavior, it is not necessary that a similar
behavior is necessary on another occasion. The time, place and group of person might be the
same but behave in different way, though circumstances and situations might be identical.
To a great extent relationship depends upon the: character of contracting parties. This is
thus a study of human behavior and forms part of the behavioural science. Here the contracting
parties do not mean only those who are in direct contact but also include those who might be
present around. No person is acting in isolation. Therefore, there is always an influence of
surroundings on human behaviour.
A buyer is also a seller. A seller is also a buyer. Both could also be customers. To make
the point clear let us take the example of a trader who buys goods for resale or a buyer who buys
goods and then sells it after value addition. Therefore , he cannot show same behaviour when he
is in the role of a buyer as then his priorities are different then when he is in the role of a seller.
Looking purely from the viewpoint of a customer the relationship could be short time or
long time. It is Primarily dependent on the objective of the customer and the supplier or vendor..
A customer will always wish for a long term relationship with the vendor. The vendor on the
other hand has his own values and objectives. The whole talk about customer satisfaction or
customer delight turn meaningless when all over the place we see customers not satisfied with
the service level provided by the vendors. Whether it is sellers market or buyers market in India
generally the customer is taken for granted and his endurance is tested to breaking limit. We
have live examples of customer taken for a ride all around us. The voter is customer to the
Government elected by him. In return he is entitled for certain basic fulfillments of promises by
the elected members of the Government. This is the guarantee clause attached to the democratic
system. But where are we in customer satisfaction. What about a builder who has taken advance
from persons who booked the flats and then fails to provide the flats by scheduled dates? Or if he

has provided the flat then the work is not done as promised.
When thinking of customer focused management, who is the customer we are talking
about? It is the ultimate user of goods and services? It is an intermediate customer like trader or
value adder? Or it is the internal as also external customer? Perhaps we are referring to the
ultimate customer. Who so ever it may be, there is a foundation laid to build up or develop
relationship on business objectives. The business objectives are based on the return on the
investment. Speaking as a matter of fact no businessman will extend any facility without
charging the price to remain remunerative on the investment made. The talk about the customer
focus is a mere slogan and a jargon used by management pundits. To explain the points precisely
let us see some of the motives kept in mind to set objectives for customer satisfaction.
1. Personal Gains: 0ne of the parties for its hidden desire of some personal gain develops
relationship by showing friendship, nearness and some advantage. The personal gain is so
intense that the party pretend to be a well wisher of the other. In more than 60% cases innocent
people fall prey to the cunnings of one party and repent later. There are several cases in Indian
industry where for personal gains deals have been finalized both in public and private sectors.
Some have been termed as scams other as scandals. This does not require any further
explanation.
2. Mutual Gains: The two parties in this situation joint together for mutual gain irrespective of
the fact that by their personal gains the organization they serve and the ultimate customer is
going to suffer. This involves a give and take policy. One is giving advantage to the other for
mutual gains at the cost of their organizational interest. Both are cheats and form an unholy
alliance. The organization should see through their game plan and take corrective action in time
lest loose the ultimate customers. Unfortunately such mutual gain programmes are on rise in
present day economic scene. Many a time dealership is awarded on consideration of mutual
gains. This is very common in large variety of consumer durable, projects floated for investments
in mutual funds, plantation programme etc. Where every day we read in newspapers that
customers are left with hardly any avenue for relief. The principal party and agents just disappear
in thin air. Very little legal remedy is available against such unholy alliances. Many eminent
personalities have formed such unholy alliances for mutual gains to attract simple customers.
3. Social Gains: Alliance formed for social gains are those where society at large is the gainer.
Nationalization of banks, petroleum companies, coal-mining industry are few examples of

alliances formed for social gain. The objective was to ensure proper and planned growth of core,
sector and save the customers and public at large from exploitation. The story is however,
different as desired objectives could not be reached due to formation of alliances in Government
and within organizations based on personal or mutual gains. Nowhere the focus is on customer.
Many of us have experienced rude and unbearable treatment at nationalized banks while drawing
our own money. We are drawing our money and not begging.
4. Organizational Gains: This is the area where we should have main thrust for long-term
benefit to customers. Customer focused management should be the only objective of every
organization. It is at this place that buyer, seller and customer should form a strategic alliance
without taking advantage of one or the other. If they join hand and work for all round gain then
the result would be great. The theory of organizational gain in many western nations, Japan and
some other southeastern countries has already been recognized. These countries have long back
focused their business on customer satisfaction and customer delight. Unfortunately, in India
even alliance made with industrial giants and premier brand names of these countries could not
show the same results. The only reason that comes to my mind is that we as Indian do not have a
sincere desire or managerial attitude towards customer focused business or trade. The Indian
entrepreneurs perhaps still not aware of market volatility and the foreign partners have studied
the Indian business mentality. Unfortunately, the economic planners and their mentor have not
seen the plight of ultimate customer both in the industrial or domestic consumables. There
remains a gap in programmes and implementation. This is again due to the relationship
developed for personal or mutual gains. It is for this reason that Indian economy is not able to
reach to a level where it should be after 51 years of independence and our rich heritage. None of
our programmes and policies are really customer oriented. It is therefore, right time that
management at least in Indian industry try and focus attention on the customers.
5. One Time Gains: There are situations where a relationship is made for one time gain. Both
the parties join together, fulfill the task expected from each and then depart with no obligation
what so ever on either side. All onetime contracts are example of such onetime gain. Once the
deal is concluded the relationship is severed.
6. Permanent Gains: Such alliances are made in business world for long time gain to both the
sides i.e., the buyer and seller. This is more or less lifetime alliance and therefore, permanent in

nature. The buyer or customer gets goods or services from a supplier for a life time use. The
seller on the other hand buildup a life time goodwill. This is based on zero defect principle. The
seller ensures that after sales service is provided to the customer for the life time utility of the
product, goods and services. The customer receives maximum return on his investment. A
satisfied customer is perhaps the best and least costly advertiser. A dissatisfied customer is
perhaps the worst enemy moving loose in the cruel world of business. Recommendation of a
delightful customer is having stronger unpack on prospective customers than any amount of
multimedia advertisements. A goodwill build upon satisfied customers will be more potent for
growth in sales than any sales promotion gimmicks adopted by any smart salesman. Several
examples of customers delight are available for goods and services. Customers makes sacrifice
and in return he expect that he is relieved of after purchase headaches and botherations. For the
sacrifices made the customer expects sound sleep in the night.
7. Promotional Gains: Such alliances are formed at the time of launching of a new products and
or a company. Glorious future is projected to lure the prospective customers. Alliance is made
between the launcher and brokerage agency or advertising agency. Both the partners to the
alliance are gainers. The customer may or may not be the gainer.
It is therefore, clear that objectively all relationships first of all have vested interest.
When we talk about the customer-focused management we implied to certain predetermined
objectives as narrated above. Organizational culture, the work environment and the perception of
seller about customer focus play a very important role in setting up the objective for customer
satisfaction. In the business world the relationship are not platonically constructed.
EFFECTIVE DISTRIBUTION NETWORK
(CHANNELS OF DISTRIBUTION)
Firm level objectives: It is not enough to simply state a firms goal as maximizing the present
value of total profit since this does not differentiate it from other firms and says nothing
about how this objective is to be achieved. Instead, a business and marketing plan should
suggest how the firm can best put its unique resources to use to maximize stockholder value. A
number of resources come into playe.g.,

Distinctive competenciesknowledge of how to manufacture, design, or market certain


products or services effectively;

Financialpossession of cash or the ability to raise it;

Ability and willingness to take risk;

The image of the firms brand;

People who can develop new products, services, or other offerings and run the needed
supports;

Running facilities (no amount of money is going to get a new microchip manufacturing
plant started tomorrow); and

Contacts with suppliers and distributors and others who influence the success of the firm.

Market balance: It is essential that different firms in the same business not attempt to compete
on exactly the same variables. If they do, competition will invariably degenerate into price
there is nothing else that would differentiate the firms.
Risk: In general, firms that attempt riskier venturesand their stockholdersexpect a higher
rate of return. Risks can come in many forms, including immediate loss of profit due to lower
sales and long term damage to the brand because of a poor product being released or because of
distribution through a channel perceived to carry low quality merchandise.
Brand level objectives: Ultimately, brand level profit centers are expected to contribute to the
overall maximization of the firms profits. However, when a firm holds several different brands,
different marketing and distribution plans may be required for each. Several variables come into
play in maximizing value. Profits can be maximized in the short run, or an investment can be
made into future earnings. Product profit can be measured in several ways. A decision that is
essential at the brand level is positioning. Options here may range from a high quality, premium
product to a lower priced value product. Note here that the same answer will not be appropriate
for all firms in the same market since this will result in market imbalancethere should be some
firms perceiving each strategy, with others being intermediate.
Distribution issues come into play heavily in deciding brand level strategy. In order to
secure a more exclusive brand label, for example, it is usually necessary to sacrifice volumeit

would do no good, for Mercedes-Benz to create a large number of low priced


automobiles. Some firms can be very profitable going for quantity where economies of scale
come into play and smaller margins on a large number of units add upe.g., McDonalds
survives on much smaller margins than upscale restaurants, but may make larger profits because
of volume. Some firms choose to engage in a niching strategy where they forsake most
customers to focus on a small segment where less competition exists (e.g., clothing for very tall
people).
In order to maintain ones brand image, it may be essential that retailers and other
channel members provide certain services, such as warranty repairs, providing information to
customers, and carrying a large assortment of accessories. Since not all retailers are willing to
provide these services, insisting on them will likely reduce the intensity of distribution given to
the product.
Product line objectives: Firms make money on the totality of products and services that they
sell, and sometimes, profit can be maximized by settling for small margins on some, making up
on others. For example, both manufacturers and retailers currently tend to sell inkjet printers at
low prices, hoping to make up by selling high margin replacement cartridges. Here again, it may
be important for the manufacturer that the retailer carry as much of the product line as possible.

Distribution Objectives
Objectives: A firms distribution objectives will ultimately be highly relatedsome will
enhance each other while others will compete. For example, as we have discussed, more
exclusive and higher service distribution will generally entail less intensity and lesser
reach. Cost has to be traded off against speed of delivery and intensity (it is much more
expensive to have a product available in convenience stores than in supermarkets, for example).
Narrow vs. wide reach: The extent to which a firm should seek narrow (exclusive) vs. wide
(intense) distribution depends on a number of factors. One issue is the consumers likelihood of
switching and willingness to search. For example, most consumers will switch soft drink brands
rather than walking from a vending machine to a convenience store several blocks away, so

intensity of distribution is essential here. However, for sewing machines, consumers will expect
to travel at least to a department or discount store, and premium brands may have more
credibility if they are carried only in full service specialty stores.
Retailers involved in a more exclusive distribution arrangement are likely to be more loyal
i.e., they will tend to

Recommend the product to the customer and thus sell large quantities;

Carry larger inventories and selections;

Provide more services


Thus, for example, Compaq in its early history instituted a policy that all computers must

be purchased through a dealer. On the surface, Compaq passed up the opportunity to sell large
numbers of computers directly to large firms without sharing the profits with dealers. On the
other hand, dealers were more likely to recommend Compaq since they knew that consumers
would be buying these from dealers. When customers came in asking for IBMs, the dealers were
more likely to indicate that if they really wanted those, they could have themBut first, lets
show you how you will get much better value with a Compaq.
Distribution opportunities: Distribution provides a number of opportunities for the marketer
that may normally be associated with other elements of the marketing mix. For example, for a
cost, the firm can promote its objective by such activities as in-store demonstrations/samples and
special placement (for which the retailer is often paid). Placement is also an opportunity for
promotione.g., airlines know that they, as prestige accounts, can get very good deals from
soft drink makers who are eager to have their products offered on the airlines. Similarly, it may
be useful to give away, or sell at low prices, certain premiums (e.g., T-shirts or cups with the
corporate logo.) It may even be possible to have advertisements printed on the retailers bags
(e.g., Got milk?)
Other opportunities involve parallel distribution (e.g., having products sold both
through conventional channels and through the Internet or factory outlet stores). Partnerships
and joint promotions may involve distribution (e.g., Burger King sells clearly branded Hershey
pies).

Deciding on a strategy. In view of the need for markets to be balanced, the same distribution
strategy is unlikely to be successful for each firm. The question, then, is exactly which strategy
should one use? It may not be obvious whether higher margins in a selective distribution setting
will compensate for smaller unit sales. Here, various research tools are useful. In focus groups,
it is possible to assess what consumers are looking for an which attributes are more
important. Scanner data, indicating how frequently various products are purchased and items
whose sales correlate with each other may suggest the best placement strategies. It may also, to
the extent ethically possible, be useful to observe consumers in the field using products and
making purchase decisions. Here, one can observe factors such as (1) how much time is devoted
to selecting a product in a given category, (2) how many products are compared, (3) what
different kinds of products are compared or are substitutes (e.g., frozen yogurt vs. cookies in a
mall), (4) what are complementing products that may cue the purchase of others if placed
nearby. Channel membersboth wholesalers and retailersmay have valuable information, but
their comments should be viewed with suspicion as they have their own agendas and may distort
information.
Direct Marketing
We consider direct marketing early in the term as a contrast situation against which
later channels can be compared. In general, you cannot save money by eliminating the
middleman because intermediaries specialize in performing certain tasks that they can perform
more cheaply than the manufacturer. Most grocery products are most efficiently sold to the
consumer through retail stores that take a modest mark-upit would not make sense for
manufacturers to ship their grocery products in small quantities directly to consumers.
Intermediaries perform tasks such as

Moving the goods efficiently (e.g., large quantities are moved from factories or
warehouses to retail stores);

Breaking bulk (manufacturers sell to a modest number of wholesalers in large


quantitiesquantities are then gradually broken down as they make their way toward the
consumer);

Consolidating goods (retail stores carry a wide assortment of goods from different
manufacturerse.g., supermarkets span from toilet paper to catsup); and

Adding services (e.g., demonstrations and repairs).


Direct marketers come in a variety of forms, but their categorization is somewhat

arbitrary. The main thing to consider here is each firms functions and intentions. Some firms
sell directly to consumers with the express purpose of eliminating retailers that supposedly add
cost (e.g., Dell Computer). Others are in the business not so much to save on costs, but rather to
reach groups of consumes that are not easily reached through the stores. Otherse.g., online
travel agents or check printersprovide heavily customized services where the user can perform
much of the services. Telemarketers operate by making the promotion in integral part of the
processyou are explained the benefits of the program in an advertisement or infomercial and
you then order directly in response to the promotion. Finally, some firms combine these roles
e.g., Geico is a customizer, but also claims, in principle, to cut out intermediaries.
There are certain circumstances when direct marketing may be more usefule.g., when
absolute margins are very large (e.g., computers) or when a large inventory may be needed (e.g.,
computer CDs) or when the customer base is widely dispersed (e.g., bee keepers).
Direct marketing offers exceptional opportunities for segmentation because marketers
can buy lists of consumer names, addresses, and phone-numbers that indicate their specific
interests. For example, if we want to target auto enthusiasts, we can buy lists of subscribers to
auto magazines and people who have bought auto supplies through the mail. We can also buy
lists of people who have particular auto makers registered.
No one list will contain all the consumers we want, and in recent years technology has
made it possible, through the merge-purge process, to combine lists. For example, to reach the
above-mentioned auto-enthusiasts, we buy lists of subscribers to several different car magazines,
lists of buyers from the Hot Wheels and Wiring catalog, and registrations of Porsche automobiles
in several states. We then combine these lists (the merge part). However, there will obviously
be some overlap between the different listssome people subscribe to more than one magazine,
for example. The purgeprocess, in turn, identifies and takes out as many duplicates as

possible. This is not as simple task as it may sound up front. Response rates for good lists
lists that represent a logical reason why consumer would be interested in a productare typically
quite low, hovering around 2-3%. Simply picking a consumer out of the phone-book would
yield even lower responsesmuch less than one percent. Keep in mind that a relevant
comparison here is to conventional advertising. The response rate to an ad placed in the
newspaper or on television is usually well below one percent (frequently more like one-tenth of
one percent). (More than one percent of people who see an ad for Coca Cola on TV will buy the
product, but most of these people would have bought Coke anyway, so the marginal response is
low).
Internet Marketing (Electronic Commerce)
Online marketing can serve several purposes:

Actual sales of productse.g., Amazon.com.

Promotion/advertising: Customers can be quite effectively targeted in many situations


because of the context that they, themselves, have sought out. For example, when a
consumer searches for a specific term in a search engine, a banner or link to a firm
selling products in that area can be displayed. Print and television advertisements can
also feature the firms web address, thus inexpensively drawing in those who would like
additional information.

Customer service: The site may contain information for those who no longer have their
manuals handy and, for electronic products, provide updated drivers and software
patches.

Market research: Data can be collected relatively inexpensively on the Net. However,
the response rates are likely to be very unrepresentative and recent research shows that it
is very difficult to get consumers to read instructions. This is one of the reasons why the
quality of data collected online is often suspect.

CHALLENGES IN RUNNING WEB SITES


There are a number of problems in running and developing web sites. First of all, the
desired domain name may not be available. There is also a question having your site identified

to potential users. Research has found that most search engines have a great deal of false hits
(sites irrelevant that are identified in a searche.g., information about computer languages when
the user searches for foreign language instruction) and misses (sites that would have been
relevant but are not identified). It is crucial for a firm to have its site indexed favorably in major
search engines such as Yahoo, AOL Find, and Google. However, there is often a constant
struggle between web site operators and the search engines to outguess each other, with the web
promoters trying to spam the search engines with repeated usage of terms and meta tags. The
fact that many computer users employ different web browsers raises questions about
compatibility. A major problem is that many of the more recent, fancier web sites rely on java
script to provide animation and various other impressive features. These animations have
proven very unreliable. Sites may crash on the user or prove unreliable, and many consumers
have found themselves unable to complete their transactions.
Channel Management and Conflict
Vertical integration. Generically speaking, products may come and reach consumers through a
chain somewhat like this:
Raw materials ---> component parts ---> product manufacturing ---> product/brand
marketing ---> wholesaler ---> retailer---> consumer
Business structures. A business can be squarely focused in just one area. On the other hand,
certain businesses are part of an assortment of businesses that all have common, or at least
overlapping, membership. In other situations, however, these "empires" may consist of unrelated
businesses that were bought not so much because they "fit" into management expertise, but
rather because they were for sale when the conglomerate had money to invest. With the tobacco
industry currently being relatively profitable but having a questionable future, a tobacco firm
might invest in a software maker. Generally, such investments are risky because of problems
with management oversight. In Japan, many firms are part of a keiretsu, or a conglomerate that
ties together businesses that can aid each other. For example, a keiretsu might contain an auto
division that buys from a steel division. Both of these might then buy from a iron mining
division, which in turns buys from a chemical division that also sells to an agricultural division.

The agricultural division then sells to the restaurant division, and an electronics division sells to
all others, including the auto division. Since the steel division may not have opportunities for
reinvestment, it puts its profits in a bank in the center, which in turns lends it out to the
electronics division that is experiencing rapid growth. This practice insulates the businesses to
some extent against the business cycle, guaranteeing an outlet for at least some product in bad
times, but this structure has caused problems in Japan as it has failed to "root out"
inefficient keiretsu members which have not had to "shape up" to the rigors of the market.
Motivations for outsourcing. While firms, as discussed above, often have certain motivations
for trying to "gobble" up as many business opportunities as possible, there are also reasons for
"outsourcing" or contracting out certain functions to others. Auto makers, for example, have
often found it profitable to buy a number of components from non-union manufacturers. Often
small vendors, run by entrepreneurs, are better motivated to perform certain servicese.g.,
insurance agents can have an incentive to build up and service a client base more effectively than
an internal staff could. It is also possible for outsiders to specializechemical firms, for
example, may be better able to research and develop paints than auto manufacturers. Smaller
independent firms may also operate more leanly, facing market competition better than large,
centralized firms. A firm specializing in just making nuts and bolts may have greater economies
of scale than Rolls Royce, which makes only a limited number of cars.
Channel Power. Some channel members need others more than others need them. For example,
Wal-Mart has a lot more power, given its large volume purchases, than many of its suppliers.
There are several sources of power. Reward power involves a channel member being able to
positively reinforce anothers performancee.g., Coca Cola may be able to give a price break or
pay a fee for additional shelf space. A retailer that meets a certain goal may receive a bonus. In
contrast, coercive power involves the threat of a punishment. A large retailer, for example, may
tell a small manufacturer that no further orders will be forthcoming unless a price discount is
offered. Expert power includes knowledge. Wal-Mart, for example, because of its heavy
investment in information technology, can persuasively argue about likely sales volumes at
different price levels."Legitimate" power involves government or other regulationse.g., auto
dealers have a great deal of power over auto makers because only they are allowed to sell to end
customers in the continental U.S. under most circumstances. Finally, referent power involves the

desire of the other side to be associatedmost manufacturers of upscale merchandise are highly
motivated to ensure their availability.
Channel conflict. We have seen throughout the term that conflict exists between channel
members. For example, Coca Cola would like to increase its sales by offering a discount on its
cans. However, the retailer knows that overall soda sales will not go up much when Coke is put
on saleconsumers who bought other brands will just switch, for the most part. Therefore, the
retailer might like to "pocket" any discount that Coke offers.
SALES ORGANISATION
Sales organization/department is a group of people working together to achieve the
objectives of sales which is to capture a certain share of market while satisfying the customers. It
undertakes the effective marketing of products produced by the undertaking or even products
purchased for resale. A sales organization is both an orienting point for cooperative endeavor and a
structure of human relationships. Its a group of individuals striving jointly to reach qualitative and
quantitative objectives and bearing formal and informal relations to one another. Existence of a
sales organization implies the existence of patterns of relationships among subgroups and
individuals established for purposes of facilitating accomplishments of the groups aim.
Organization is the basic management function of arranging the firms sales activities.
Organization represents a continuation of the companys strategic planning process. An effective
sales force organization provides the structure for achieving sales objectives by carrying out the
firms sales strategy.

TASKS OF THE SALES ORGANIZATION


1. Maintenance of order in achieving sales force goals and objectives;
2. Assignment of specific tasks and responsibilities;
3. Integration and coordination with other elements of the firm.
Objectives of the sales organization

1. To define the lines of authority;


2. To ensure that all necessary activities are assigned and performed;
3. To establish basis of communication;
4. For providing for coordination and balance;
5. To provide insight into avenues of advancement;
6. To economize on executive time.
Developing a sales Organization
Developing a sales organizational structure is not an easy task. The setting up of an
organization or the sales organization development takes place in a series of steps. (Fig) which is
as follows:1. Defining the sales organizations objectives;
2. Defining the various activities that need to be performed to achieve these objectives and
estimating the cost and volume of each of these;
3. Grouping of the activities and positions;
4. Assignment of personnel to positions;
5. Control and coordination by formal and informal means.
BASIC TYPES OF ORGANISATIONAL STRUCTURES
The sales departments structure evolves from the needs of the business. Different
companies have different organizational structure depending upon their needs. The structure is
affected by company size, practices of competitors, marketing channels, customers and the
personalities and abilities of personnel.
Whatever may be the structure of a sales organization, as mentioned above the organization of
such sales department is having a prime objective of maximum sales achievement. It is concerned
with the transfer of ownership or merchandise on terms of satisfactory to both the buyer and seller.
This has to be done at the lowest possible cost. The basic objective is obviously the achievement of
profit through service. A sales department consists of persons working together with a view to
market the products manufactured by the organization itself or products purchased for resale. It is
thus responsible for all that is necessary to market the product from the stage when the product is left
the manufacturing or purchasing department, as the case may be.

The sales force generally consists of two types of salesmen namely


1) the indoor or retail store salesman;
2) the traveling salesman;
Hence the above two types of salesmen under the sales organization hierarchy will function by
adopting different tasks and responsibilities for the fulfillment of the corporate objectives/sales
organization objectives.
Fig. I Line sales organization

General Manager
ASM = Assistant Sales Manager

Sales Manager

A.S.M

Fig. IIA.S.M
Customer channel division
A.S.Mof line

A.S.M

authority

Division

Division

Division

II

Sales People

Director
Product
Research &
Development

Manager
Lumber
Industry
Sales

Division

General Sales Manager


III

Sales People

Director
of Sales
Planning

IV

Sales People

Manager
Construction

Industry

Director
Of Sales
Training

Manager

Mining
Industry
Sales

Director
Sales
Promotio
n&

Advtg

BSM

BSM

BSM

Sales
Personnel

Sales
Personnel

Sales
Personnel

BSM = Brand Sales Manager

Fig. III

Functional sales organisation

Director of Sales Administration

Installation
& Service
Manager

Sales
Person

Manager of
Sales
Training

Sales
Person

Manager of
Sales
Supervision

Sales
Person

Manager of
Sales
Promotion

Sales
Person

Manager of
Dealer &
Distributor
Relations

Sales
Person

Manager of
Sales
Personnel

Sales
Person

Fig IV Line and Staff Sales Organisational


Structure
President

Vice President in charge of marketing

Advertising Manager

Director
of Sales
Training

Sales
Personal
Director

Manager of Marketing
Research

General Sales Manager

Assistant to
General
sales

Assistant to
General sales
Manager

Sales
Promotion
Manager

Director
Dealers and
Distribution

Manager
District Sales Manager

Branch Sales Manger

Sales Personnel

Fig. V Horizontal Sales Organisation

Chief Sales Executive

Sales
Management

Sales
Management

Sales
Management

Sales
Management

Sales
Management

East

West

Central

North

South

Fig. VI Vertical Sales Organization

Chief of Sales Executives

Regional or Zonal Sales Manager

Sales Supervisors

Sales Person

***