PROMOTION INTRODUCTION Promotion is communication that builds and maintains favourable relationship by informing and persuading one or more

audiences to view an organisation more positively and to accept its products. OBJECTIVES OF PROMOTION Promotional activities vary considerably from one organisation to another and within organisations over time. Large firms with multiple promotional programmes operating simultaneously may have quite varied promotional objectives. 1. Create Awareness A considerable amount of promotion focuses on creating awareness for organisations introducing a new product or a line extension making customers ware of the product is crucial to initiating the product adoption process. A marketer that had invested heavily in product development strives to create product awareness quickly to generate revenue to off set the high costs of product development and introduction. 2. Stimulate Demand When an organisation is the first to introduce an innovative product it tries to stimulate PRIMARY DEMAND- demand for a product category rather than for a specific brand of product through pioneer promotion. Pioneer promotion informs potential customers about the product: what it is, what it does, how it can be used, and where it can be purchased. To build SELECTIVE DEMAND, demand for a specific brand a marketer employs promotional efforts that point out the strengths and benefits of a specific brand. Building selective demand also requires singling out attributes important to potential buyers. 3. Encourage Product Trial When attempting to move customers through the product adoption process, marketers may successfully create awareness and interest, but customers may stall during the evaluation stage. In this case, certain types of promotion much as free samples, coupons, test drives or limited free use offers, contents and games are employed to encourage product trial. 4. Identify Products Certain types of promotional efforts are directed at identifying customers who are interested in the firms product and are most likely to buy it. A marketer may use a magazine advertisement with a direct response information form, requesting the reader to complete and mail the form to receive additional information. Some

advertisements have toll free numbers. The organisation can respond with phone calls, follow up letters or personal contact by salesperson. 5. Retain Loyal Customers Clearly maintaining long term customer relationships is a major goal of most marketers. Such relationships are quite valuable. Promotional efforts directed at customer retention can help an organisation control its costs because the costs of retaining customers are usually considerably lower than those of acquiring new ones. To retain loyal customers, marketers not only advertise loyalty programs but also use reinforcement advertising, which assures current users they have made the right brand choice and tells them how to get the most satisfaction from the product. 6. Facilitate Retail Support Retailers support is a two way street. Producers generally want to provide support. To resellers to maintain sound working relationships and in turn they expect resellers to support their product. When a manufacturer is introducing a new customer brand in highly competitive product category, it may be difficult to persuade supermarket managers to carry this brand. However if the manufacturer promotes the new brand with free samples and coupon distribution in the retail areas, a supermarket manager views these actions as strong support and is much more likely to handle the product. To encourage wholesalers and retailers to increase their inventories a manufacturer may provide them with special offers and buying allowances. 7. Reduce Sales Fluctuations Demand for many products varies from one month to the other because of such factors like climate, holidays and seasons. A business, however, cannot operate at peak efficiency when sales fluctuate rapidly. Changes in sales volume translate in to changes in production, inventory levels, personnel needs, and financial resources. When promotional techniques reduce fluctuations by generating sales during low periods, a firm can use its resources more efficiently.

THE PROMOTION MIX The promotion mix consist of the specific blend of advertising, sales promotion, public relations, personal selling and direct marketing tools that a company uses to pursue its advertising and marketing objectives. -Philip Kotler

Promotion mix is also called the marketing communication mix. Communication is an important function in marketing and constitutes one of the 4Ps of the marketing mix, i.e. promotion, the other three being product, price and place. It carries out the task of informing the target customers about the nature and type of products and services available in. Marketing communications are persuasive in nature, aimed at influencing the consumer behaviour in favour of a companys product offerings. The marketing success of any product, whether it is toothpaste, T. V, or any other product depends to large extent on appropriate use of the promotion mix by companies.

The components of promotion mix are the following: 1. Advertising 2. Sales promotion 3. Personal selling 4. Public relations 5. Publicity 6. Direct Marketing

1. Advertising: Advertising any form of non personal mass communication through various media to present and promote products, services and ideas etc by an identified and sponsor. Advertising can be extremely cost effective because it can reach a large population at low cost per person and the message can be repeated several times. T.V commercials combine movement, visuals, sound and colour. A company can attempt to enhance its own image and that of its brand by including celebrity endorsers in its ads appearing in various media.TV advertising is expensive in terms of actual target audience reached.TV commercial are usually brief to furnish meaningful information to audience. Advertising can rarely provide rapid feedback, measuring its effects on sales is difficult. Advertising clutter in almost all media is making advertising less capable of attracting consumer attention.

2. Sales Promotion: More recently the council of sales promotion agencies has offered a more comprehensive definition Sales promotion is a marketing discipline that utilises a variety of incentive techniques to structure sales related programs targeted to customers, trade, and/or sales levels that generate a specific measurable action or response for a product or service. E.g. of sales promotions include free samples, discounts, rebates, coupons, contests, sweepstakes, premiums, scratch cards, exchange offers, early bird prizes and various trade deals. All such offers generally include specified limits, such as offer expiry dates or limited quantity of merchandize. Sales promotion is generally aimed at either increasing immediate sales, to increase support among marketers sales force, or gain the support of resellers of company products. 3. Personal Selling: Personal selling is a face to face paid personal communication and aims to inform and to persuade prospects and customers to purchase products, services or accept ideas of issues. It involves more specific communication aimed at several persons. Personal selling is more effective but also more expensive than other promotional mix elements. It provides immediate feedback, allowing sellers to adjust their sales messages to improve the impact on customers. Personal selling helps sales people to determine and respond to customers information needs and also interpret body language. 4. Public relations: Public relation is a broad set of communication activities employed to create and maintain favourable relationships with employees, shareholders, suppliers, media, educators, potential investors, financial institutions, government agencies and officials, and society in general, such as annual reports, brochures, event sponsorship, and sponsorship of various programmes beneficial for the society. 5. Publicity: Publicity is a tool of public relations. It is non personal mass communication, but not paid for by the benefiting organization for the media space or time. It appears in the form of new story about an organization, its products, or activities. Some common tools of publicity include news releases press conferences, and feature articles. Unpleasant situations arising as a result of negative events may precipitate unfavourable public relations for an organization. To minimize the negative effects of such situations leading to unfavourable coverage, companies have policies and procedures in place to manage help any such public relations problems.

6. Direct marketing: Direct marketing is vending products to customers without the use of channel members. It is a system by which firms communicate directly with target customers to generate the response or transaction. The response may be to generate an inquiry, a purchase, or even a vote. Direct marketing uses a set of direct response media, such as direct mail, telephone, interacting TV, print internet, etc. Through these media, direct marketers implement the communication process. Most companies use primarily conventional promotion mix elements to move products through intermediaries, many companies are adopting direct marketing as well to reach customers directly to generate immediate behavioural response.

SALES PROMOTION It is essentially a direct and immediate inducement. It adds extra value to the product and hence the dealer /consumer to buy the product. The committee on Definitions of the American Marketing Association defines Sales promotion as follows: In a specific sense, sales promotion includes those sales activities that supplement both personal selling and advertising and coordinate them and make them effective, such as displays, shows, demonstrations and other non-recurrent selling efforts not in the ordinary routine.

TOOLS AND TECHNIQUES OF SALES PROMOTION: For a marketer resorting to sales promotion, a variety of tools and techniques are available. Point of purchase displays, product demonstrations, premiums, free offers, coupons, discounts, free product samples, gifts, contests, sweepstakes, product exchanges, easy financing schemes, etc, are the commonly resorted methods of sales promotion.

1. CONSUMER PROMOTION TOOLS: The main consumer tools includes Demonstrations, coupons, premiums, gifts, sweepstakes, games, exchange offer, money back offer, contests etc. 1. Demonstrations: Companies resort to product demonstrations for sales promotion especially when they are coming up with a product new to the market. In India, in recent years, several productslow unit price products like beverages and washing powders as well as high unit price products like washing machines and personal computers- have utilized product demonstration as a tool of sales promotion. Demonstration at retail store: Sometimes, the demonstrations are organized at the retail stores by company sales men for the benefit of retailers as well as consumers. School demonstration: When the product happens to be a costly one and a hi-tech one, companies arrange school demonstrations. In this case, consumers are invited to a particular place, say a hotel and the demonstrations are arranged. In products like computers and computer software, such demonstrations are often used. Door-to-door demonstration: Consumer products companies quite often resort to house-tohouse demonstration. It is considered a highly specialized field of sales promotion. Salesmen used for such demonstrations are given special training to handle the peculiar situations involved in this field. Eureka Forbes, the consumer appliances firm, popularized their vacuum cleaner through door-to-door demonstrations.

A demonstration is a good selling technique because it enlists the involvement of the prospective consumers in the process. Participation persuades the consumer to learn more about the product and it serves as a persuasion to try the product. 2. Coupons: Coupons are distributed through newspaper and magazine advertisements or through the package of the merchandise or by direct mail. Coupons normally perform two specific functions for the manufacturer. Firstly, they enthuse the consumers to exploit the bargain. Secondly, they serve as an inducement to the trade for stocking the items. The manufacturer thus succeeds in attracting consumers as well as in promoting the channel to stock the merchandise through the insertion of coupons. They are useful for introducing a new product as well as strengthening the sale of an existing product. 3. Premiums and free offers: Premiums are goods offered either free or at low cost as an incentive to buy a product, ranging from toys included with kids products to phone cards and CDs. A premium may come inside the package (in-pack) outside the package (on-pack), or through the mail. Ex: Colgate offered 125 gm in a tube for the price of 100 gm. 4. Gifts and advertising specialty: Companies also distribute gifts to customers, dealers and influential and key people. These gifts include pen, calendars, diaries, table decorations, T-shirts, mouse pads, coolers and caps. Gifts normally carry the companys name and logo. The gifts are intended to create goodwill towards the company and indirectly further the companys sales interest. Ex: Pepsi offered their company name branded names. 5. Exchange Schemes, Money Back Offers: In the consumer durables market, this has become the latest sales promotion tool. Customers can surrender their old models of TV, or gas stoves for a price and take home new models. Cash refund offers (money back offers) are the offer to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer.

Example: Videocon-money back offer: Videocon came with a unique scheme, a money back offer. The offer ran like this Own a Videocon 21 inch free, Greatest Money Back offer, Bring your old 20 inch or 21 inch CTV in working condition, with remote. 6. Contests, sweepstakes, games: Contests, sweepstakes and games give consumers the chance to win something, such as cash, trips or goods, by luck or through extra effort. A contest calls for consumers to submit an entry-guess, suggestion- to be judged by a panel that will select the best entries. A sweepstakes calls for consumers to submit their names for a drawing. A game presents consumers with something- bingo numbers, missing letters- every time they buy, which may or may not help them win a prize. A sales contest urges dealers or the sales force to increase their efforts, with prizes going to the top performers.

2. TRADE PROMOTION TOOLS: Manufacturers use several trade promotion tools. Many of the tools used for consumer promotions-contests, premiums, displays- can also be used as trade promotions 1. Discount: Discount is a straight reduction in price on purchases during a stated period of time. It is also called as price off, off-invoice or off-list. Ex: Hawkins pressure cookers have come up with several sales promotion programmes during the last few years. In one of their programmes, Hawkins announced an attractive price reduction up to Rs 150 off on a new Hawkins in exchange for any old pressure cooker. And the advertisement specified that the offer was open only up to a particular date. 2. Allowance: Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturers products in some way. A display allowance compensates them for using special displays. Manufacturers may offer free goods, which are extra cases of merchandise, to resellers who buy a certain quantity or who feature a certain flavor or size. They may offer push money- cash or gifts to dealers or their sales forces to push the manufacturers goods. Manufacturers may give retailers free specially advertising items that

carry the companys name, such as pens, pencils, calendars, paperweights, matchbooks, memo pads and yardsticks.

3. BUSINESS PROMOTION TOOLS: Companies spend crores of rupees each year on promotion to industrial customers. These business promotion tools are used to generate business leads, stimulate purchases, reward customers and motivate salespeople. Business promotion includes many of the same tools used for consumer or trade promotions. Here, we focus on two additional major business promotion tools- conventions and trade shows and sales contests. 1. Conventions and trade shows: Many companies and trade associations organize conventions and trade shows to promote their products. Firms selling to the industry show their products at the trade show. Vendors receive many benefits, such as opportunities to find new sales leads, contact customers, introduce new products, meet new customers, sell more to present customers and educate customers with publications and audiovisual materials. Trade shows also help companies reach many prospects not reached through their sales forces. Some trade shows are huge. For example, at this years International Consumer Electronics show, 2400 exhibitors attracted more than 130,000 professional visitors. 2. Sales Contests: A sales contest is a contest for salespeople or dealers to motivate them to increase their sales performance over a given period. Sales contests motivate and recognize good company performers, who may receive trips, cash prizes or other gifts. Some companies award points for performance, which the receiver can turn in for any of a variety of prizes. Clearly sales promotion plays an important role in the total promotion mix. To use it well, the marketer must define the sales promotion objectives, select the best tools, design the sales promotion program, implement the program and evaluate the results. Moreover, sales promotion must be coordinated carefully with other promotion mix elements within the integrated marketing communication program.

PUSH AND PULL STRATEGIES Pull Strategy Of Promotion: Push-Pull strategies are two broad promotional strategies directed at either dealers or customers. The first strategy is called as pull strategy. Promotional activities like advertising or sales promotion are directed to end customers. The ultimate aim is to create a demand for the product. The customer is motivated to approach a retailer asking about the availability of a product. When several such enquiries come, the retailer is compelled to approach the wholesaler for the stock of the demanded product. Here the product has been sold because of the pull exercised by the customer on the distribution system. Push Strategy Of Promotion: Push strategy is an alternative to pull strategy. Here the product is pushed through the channel, instead of being pulled. In push strategy, the promotional effort is directed at channel members. Such promotional efforts could be personal selling, dealer promotion and advertising. The producer promotes the product to the closest level. The channel member then promotes the product to the next level. The process goes on till the final consumer is reached. Many industrial products and clothing are promoted by push method.

Push strategy
Another meaning of the push strategy in marketing can be found in the communication between seller and buyer. In dependence of the used medium, the communication can be either interactive or noninteractive. For example, if the seller makes his promotion by television or radio, it's not possible for the buyer to interact with. On the other hand, if the communication is made by phone or internet, the buyer has possibilities to interact with the seller. In the first case information is just "pushed" toward the buyer, while in the second case it is possible for the buyer to demand the needed information according to his requirements. Applied to that portion of the supply chain where demand uncertainty is relatively small Production & distribution decisions are based on long term forecasts Based on past orders received from retailers warehouse (may lead to Bullwhip effect) Inability to meet changing demand patterns Large and variable production batches Unacceptable service levels Excessive inventories due to the need for large safety stocks

Pull strategy
In a "pull" system the consumer requests the product and "pulls" it through the delivery channel. An example of this is the car manufacturing company Ford Australia. Ford Australia only produces cars when they have been ordered by the customers. Applied to that portion of the supply chain where demand uncertainty is high Production and distribution are demand driven No inventory, response to specific orders Point of sale (POS) data comes in handy when shared with supply chain partners Decrease in lead time Difficult to implement