Advertisement And Sales Promotion Notes

Advertisement and Sales Promotion: Chapter: 1

Introduction to IMC (Integrated Marketing Communication) What is Marketing? Think of marketing for some seconds. Two things would come to your mind: 1. Sales 2. Advertisement Marketing is the process of maximizing the profitability and sales of the organization by identifying the needs and wants of the customers and convincing them how they can fulfill their needs though our product. Past Marketing: In past advertisement used to be done on the mass media like televisions, newspapers, etc. Mass media was very popular and useful as the marketing medium till late 80s but after that it lost its grip. 21st Century Marketing: The advertisement done today is far more different then the old era. Now, the emergence of new technology, the growth in the internet usage, rapidly changing environment, changing way of communications, fragmentation of mass markets, growing economies, and globalization has changed the overall marketing to use different other communication mediums and techniques with the old ones (newspapers, TV, Radio, etc.). These new techniques are as follow: 1. 2. 3. 4. 5. 6.

Advertisement on Internet Relationship Marketing Event Sponsorships Direct Marketing Sales Promotion Publicity (Press Releases, Public Relation, Reviews)

What is Marketing Mix (4 Ps)? Marketing is basically exchange process and development of good relationship with customer. Marketing mix is to providing value to the customer. Providing right product, at right price, at right time at right place and to right customer is the marketing mix. Basically these are the elements of marketing mix:

1. 2. 3. 4.

Product Price Place Promotion

What is IMC (Integrated Marketing Communication)? IMC is a plan through which we check and analyze different communication disciplines (like direct marketing, sales promotion etc) according to our product target market and strategy so that we could get maximum communication impact. In IMC we don’t rely only on one media. We choose different variety of promotional tools. The American Association for Advertising Agencies (4A) definition for IMC is as follow: “A marketing communication plan that evaluates the strategic role of different communication disciplines and combines these disciplines to provide clarity, consistency, and maximum communication impact” The above definition tells us two things: a) Identify the best fit of advertisement disciplines b) Build positive and consistent relationship to the customers and stakeholders c) Build and sustain brand identity and equity IMC requires that firm should develop the overall marketing strategy that requires how all of a firm’s marketing activities, not just promotion, communicates with its customers. (Don Schultz)

Brand Identity: Brand Identity is the brand impression that comes in the customer’s mind while thinking about that very brand. Its basically logo, symbols, organization culture, design, and performance of the product.

Brand Equity: Brand Equity is the status of the brand with respect to other brands available in the market. So, generally, IMC is basically identifying the best communication method and building relationships with the stakeholders and customers. There are a lot of choices available for the customers but limited time to think. Therefore IMC builds the impression of the brand in the mind of the customer. Because of this positive brand impression, customers take no time and choose the product with brand image in his mind.

IMC is being vastly adopted by almost all of the marketers because it makes the marketers to answer the changing environments, trends, globalization, customer priorities and a lot more. A recent survey showed that these advancements are effecting the mass media a lot so that Newspapers, TV, Radios are getting to smaller and smaller audiences. On top of all it is also proved that new people are very less responsive to the TV, newspapers, radio ads. Now here comes the IMC. You know the way how PUMA advertise? Yes, PUMA is advertised by the big players as its printed on their shirts. People love to buy their favorite match winning player brand. Now, Organizations are understanding the change in the environment variables and therefore changing their promotion and marketing styles with respect to that changing environment. Rather then to stick with only one method of promotion, they are diversifying their options for better attractions for the customers.

What is Successful IMC? In IMC the main thing is to choose the effective promotion discipline efficiently and coordinate their use. For this better understanding of the IMC tools is required.

What is Promotional Mix? Promotion is dissemination of information about the product, product line, brand or company (Wikipedia). Promotion mix is the process of making channels of information and persuasion to sell a product, service or an idea. We can also say that Promotion Mix is basically the tool that helps organization in getting its communication objectives. Following are the items of Promotion Mix: 1. 2. 3. 4. 5. 6.

Advertising Direct Marketing (Not traditional part but important part of IMC) Internet Marketing Sales Promotion Publicity Personal Selling

Advertising: Advertising is basically paid form of non personal communication about the product, organization, service or idea. Always remember that the nature of advertisement differs from one industry to another. Non personal communication means that getting the immediate feedback from the audience is not possible.

But second thing that favors advertisement is its “Cost Effectiveness”. Its cost is very low if we calculate the number of people watching the advertisement and getting the information. Advertisement is very useful in creating the positive brand images in the mind of customers when differentiation between the products is very low. If you see that there is very little you can do in terms of Marketing Mix (Price, Product, Distribution, and Promotion) for a product then you use the special advertisement strategy to differentiate your product from other products and compel the customer to buy your product.

Direct Marketing: In direct marketing the marketers communicate directly with the customers to sell their products. Traditionally its not included in Promotion Mix but now its becoming an important part of IMC (Integrated Marketing Communication). In direct marketing the main thing is not only have direct mailing to the customer but also database management, contact management, telemarketing, direct response, direct mail, direct email, shopping through company catalog list, and websites are also included. The most important thing in Direct Marketing is Direct Personal Response where manufacturers compel the customers to buy the products directly from them. Customer watches the ad on TV, or Newspaper and contacts the manufacturer for the product. Direct Mail used to be the primarily medium for the Direct Personal Response but now email, Internet, TVs has taken its place. Direct Marketing is very helpful for the people those have money and they don’t have the time to go to the store and buy the thing. Direct Marketing provides them a way to directly contact the manufacturer and buy the thing at convenience.

Internet/Interactive Marketing: Internet market differs from all the markets because it provides everything on the click of the mouse. It provides the customer with the double sided flow of information. Internet Marketing gives the customer a lot of options: Customer who wants to buy a product can check a lot of other online stores for the same product in no time. Customer can check the reviews from the other users of the product. Customer can directly talk to the sales representative of the company. With huge number of stores online, customer gets best offers from the manufacturers

Customer can get online promotions Internet Marketing has combined all the elements of promotional mix. From purchasing of products to getting discounts, everything is on the customer’s finger tips. It conducts direct marketing, advertisement, publicity, public relation, and personal selling at one place.

Sales Promotion: Whenever we talk about sales promotion different things come to our minds, like Product Samples, Coupons, Rebates, Discounts, Free Stuff and lot more. Basically all of these benefits are given to the consumer side. It doesn’t mean that there is no part of retailers and wholesalers in sales promotion. Retailers and distributors also take their cut in the form of Price Deals, Sales Contests, Discounts, and different allowances. So, we can say that sales promotion is of two types. First one is the Customer Oriented Sales Promotion that deals with the customer and second is the Trade oriented Sales promotion that deals with the Retailers, Distributors, and Wholesalers.

Publicity: Publicity is the important part of promotional mix. In publicity no payment is made to the publisher. Basically publicity is done in the form of: Product Reviews Discussions about the product in different forums In local Events News and Editorials Publicity is actually the type of non personal communication regarding the product or the service. Publicities do an important role to make the decisions of the people about any product because the one who is publicizing a product is not directly involved with the company. In publicity the product is directly criticized and/or appreciated.

Personal Selling: In personal selling there is a direct contact between the buyer of the product and the seller of the product. Feedback is received very quickly and the seller can change the message according to the needs of the consumer. This is basically used in Business to Business models.

Chapter 4

Consumer Behavior Consumer Behavior is basically the process of influencing the behavior of the consumer towards the purchase of the product. The good knowledge of the behavior of the consumer makes the product sell. “Consumer Behavior is basically the process and activities that people do in order to search, select, purchase, use, and dispose a product to satisfy their needs.” A successful marketer needs to know the following things: 1. 2. 3. 4. 5. 6. 7. 8. 9.

What steps a consumer goes through before buying a product What type of decisions he/she likes to make to buy product What factors make the need of the product in market What factors can effect the purchase decision of the customer What are the needs of the consumer How the consumers gathers the information about a product to fulfill the need How consumer selects a specific product among alternatives How consumer makes purchase decision How the needs of different consumers vary

Customer vs. Consumer: Customer is the one to whom we are selling our product but the consumer is the one who takes decision to buy our product, and then uses our product.

Stages in Consumer Decision Making Process: The following are the stages that consumer passes through in purchasing a product: 1. 2. 3. 4. 5.

Problem Recognition (Problem is identified by the consumer) Information Search (Consumer searches how to solve the problem) Alternative Evaluation (Consumer comes across different alternatives) Purchase Decision (Consumer decides to select one product) After Purchase Product Evaluation (Consumer evaluates the product)

There are some concurrent psychological decision processes running in the consumer’s mind when doing decision making process for a product. These Psychological Processes are as follow: 1. 2. 3. 4. 5.

Motivation Perception Attitude Formation Integration Learning

Problem Recognition: In problem recognition the consumer realizes the need for some product and get motivated to buy the new product due to the following reasons: a) b) c) d) e)

Need of the product because the old one is out of the stock because consumer was not satisfied by old product because consumer has new needs because consumer is innovative and want innovative products Because of marketers influence consumer want to buy new product

How to Examine Consumer Motivation: In order to market the product well the marketer must know that what factors motivate the consumer to buy a product like when buying a watch: a) One sees functional perspectives of a watch b) One sees the price factor (low priced etc.) c) One sees the brand name and image

Maslow’s Hierarchy of Needs: One of the best ways to learn the consumer motivation is through the Maslow’s Hierarchy of Needs. a) Maslow says that a person first fulfills its Physiological needs (basic needs) like Hunger, thrust. b) After the successful fulfillment of these needs a person goes to the Safety needs like security and protection. c) After fulfilling Security needs a person fulfills his/her social needs like love, affections, and emotions. d) Then a person wants to fulfill Self Esteem needs like self recognition. Here the person becomes the status conscious. e) Next comes the Self Actualization needs where the person is confident on himself. The wrong point in Maslow’s Theory is that he says that the lower level needs like basic needs, safety needs should be fulfill first before fulfilling the higher level needs like self esteem and self actualization. Now we can see that especially in progressed countries people don’t actually move though the needs hierarchy. But the basic needs are the key to motivation for the higher needs. Therefore in the Cooking Oil (that is basic need) advertisement the love and affection of the mother is shown. Milk advertisement (basic need) the self confidence (higher level) of a person is shown.

Psychoanalytical Theory: Psychoanalytic theory is also one of the tools to identify the consumer behavior. It was presented by Freud and the main ingredients of psychoanalytic theory are Human Personality and Motivation. Therefore the consumer's behavior can be related to the psychoanalytic theory. But people those have done research on the consumer's behavior with Psychoanalytic theory, has realized that the consumer's behavior about buying a product is sometimes very unusual and brought many interesting results like:  

A man buys a car as a substitute of mistress A woman loves to bake cake because she thinks that its same like giving birth to baby