Tag: Product Lifecycle

Channel selection is influenced by several key factors that determine how effectively a product reaches the customer. One major factor is the nature of the product—perishable goods require faster, shorter channels, while durable goods can use longer ones. Market characteristics, such as geographic location and customer preferences, also shape the choice. Company resources play a role; firms with strong distribution networks may prefer direct channels. Competitor practices influence decisions to remain competitive. Cost and profitability considerations affect whether a business chooses wholesalers, retailers, or direct sales. Additionally, the nature of intermediaries, their reach, reputation, and willingness to cooperate, is crucial. Overall, channel selection aligns with company objectives, target market needs, and product type.

Factor affecting channel selection

(A) Considerations Related to Market

• Number of Buyers: If the number of buyer is large then it is better to take the services of middlemen for the distribution of the goods. On the contrary, the distribution should be done by the manufacturer directly if the number of buyers is less.
• Types of Buyers: Buyers can be of two types:- General Buyers and Industrial Buyers. If the more buyers of the product belong to general category then there can be more middlemen. But in case of industrial buyers there can be less middlemen.
• Buying Habits: A manufacturer should take the services of middlemen if his financial position does not permit him to sell goods on credit to those consumers who are in the habit of purchasing goods on credit.
• Buying Quantity: It is useful for the manufacturer to rely on the services of middlemen if the goods are bought in smaller quantity.
• Size of Market: If the market area of the product is scattered fairly, then the producer must take the help of middlemen.

(B) Considerations Related to Manufacturer/Company

• Goodwill: Manufacturer’s goodwill also affects the selection of channel of distribution. A manufacturer enjoying good reputation need not depend on the middlemen as he can open his own branches easily.
• Desire to control the channel of Distribution: A manufacturer’s ambition to control the channel of distribution affects its selection. Consumers should be approached directly by such type of manufacturer. For example, electronic goods sector with a motive to control the service levels provided to the customers at the point of sale are resorting to company owned retail counters.
• Financial Strength: A company which has a strong financial base can evolve its own channels. On the other hand, financially weak companies would have to depend upon middlemen.

(C) Considerations Related to Government

Considerations related to the government also affect the selection of channel of distribution. For example, only a license holder can sell medicines in the market according to the law of the government.

In this situation, the manufacturer of medicines should take care that the distribution of his product takes place only through such middlemen who have the relevant license.

(D) Others

• Cost: A manufacturer should select such a channel of distribution which is less costly and also useful from other angles.
• Availability: Sometimes some other channel of distribution can be selected if the desired one is not available.
• Possibilities of Sales: Such a channel which has a possibility of large sale should be given weight age.

(E) Considerations Related to Product

When a manufacturer selects some channel of distribution he/she should take care of such factors which are related to the quality and nature of the product. They are as follows:

• Unit Value of the Product: When the product is very costly it is best to use small distribution channel. For example, Industrial Machinery or Gold Ornaments are very costly products that are why for their distribution small distribution channel is used. On the other hand, for less costly products long distribution channel is used.
• Standardised or Customised Product: Standardised products are those for which are pre-determined and there has no scope for alteration. For example: utensils of MILTON. To sell this long distribution channel is used. On the other hand, customised products are those which are made according to the discretion of the consumer and also there is a scope for alteration, for example; furniture. For such products face-to-face interaction between the manufacturer and the consumer is essential. So for these Direct Sales is a good option.
• Perishability: A manufacturer should choose minimum or no middlemen as channel of distribution for such an item or product which is of highly perishable nature. On the contrary, a long distribution channel can be selected for durable goods.
• Technical Nature: If a product is of a technical nature, then it is better to supply it directly to the consumer. This will help the user to know the necessary technicalities of the product.

Factors for the selection of channel of distribution

(i) Product:

Perishable goods need speedy movement and shorter route of distribution. For durable and standardized goods, longer and diversified channel may be necessary. Whereas, for custom made product, direct distribution to consumer or industrial user may be desirable.

Also, for technical product requiring specialized selling and serving talent, we have the shortest channel. Products of high unit value are sold directly by travelling sales force and not through middlemen.

(ii) Market:

(a) For consumer market, retailer is essential whereas in business market we can eliminate retailing.

(b) For large market size, we have many channels, whereas, for small market size direct selling may be profitable.

(c) For highly concentrated market, direct selling is preferred whereas for widely scattered and diffused markets, we have many channels of distribution.

(d) Size and average frequency of customer’s orders also influence the channel decision. In the sale of food products, we need both wholesaler and retailer.

Customer and dealer analysis will provide information on the number, type, location, buying habits of consumers and dealers in this case can also influence the choice of channels. For example, desire for credit, demand for personal service, amount and time and efforts a customer is willing to spend-are all important factors in channels choice.

(iii) Middlemen:

(a) Middlemen who can provide wanted marketing services will be given first preference.

(b) The middlemen who can offer maximum co-operation in promotional services are also preferred.

(c) The channel generating the largest sales volume at lower unit cost is given top priority.

(iv) Company:

(a) The company’s size determines the size of the market, the size of its larger accounts and its ability to set middlemen’s co-operation. A large company may have shorter channel.

(b) The company’s product-mix influences the pattern of channels. The broader the product- line, the shorter will be the channel.

If the product-mix has greater specialization, the company can favor selective or exclusive dealership.

(c) A company with substantial financial resources may not rely on middlemen and can afford to reduce the levels of distribution. A financially weak company has to depend on middlemen.

(d) New companies rely heavily on middlemen due to lack of experience.

(e) A company desiring to exercise greater control over channel will prefer a shorter channel as it will facilitate better co-ordination, communication and control.

(f) Heavy advertising and sale promotion can motivate middlemen in the promotional campaign. In such cases, a longer chain of distribution is profitable.

Thus, quantity and quality of marketing services provided by the company can influence the channel choice directly.

(v) Marketing Environment:

During recession or depression, shorter and cheaper channel is preferred. During prosperity, we have a wider choice of channel alternatives. The distribution of perishable goods even in distant markets becomes a reality due to cold storage facilities in transport and warehousing. Hence, this leads to expanded role of intermediaries in the distribution of perishable goods.

(vi) Competitors:

Marketers closely watch the channels used by rivals. Many a time, similar channels may be desirables to bring about distribution of a company’s products. Sometimes, marketers deliberately avoid channels used by competitors. For example, company may by-pass retail store channel (used by rivals) and adopt door-to-door sales (where there is no competition).

(vii) Customer Characteristics:

This refers to geographical distribution, frequency of purchase, average quantity of purchase and numbers of prospective customers.

(viii) Channel Compensation:

This involves cost-benefit analysis. Major elements of distribution cost apart from channel compensation are transportation, warehousing, storage insurance, material handling distribution personnel’s compensation and interest on inventory carried at different selling points. Distribution Cost Analysis is a fast growing and perhaps the most rewarding area in marketing cost analysis and control.

The buying decision process, also known as the consumer decision-making process, is a series of steps that individuals go through when making purchasing choices. Understanding this process is crucial for retailers as it helps them tailor their marketing strategies, enhance customer experiences, and influence consumers at each stage of the journey.

The buying decision process typically involves five stages: Problem recognition, Information search, Evaluation of alternatives, Purchase decision, and Post-purchase behavior.

Understanding the intricacies of the buying decision process is fundamental for retailers aiming to succeed in a competitive marketplace. By aligning marketing strategies, product offerings, and customer experiences with the various stages of consumer decision-making, retailers can enhance their appeal, build customer loyalty, and drive sustainable business growth. The integration of technology, the emphasis on personalization, and a commitment to ethical practices further contribute to a positive and impactful retailing experience.

1. Problem Recognition

This is the initial stage where consumers recognize a need or problem that can be satisfied by making a purchase. It could be triggered by internal stimuli (e.g., running out of a product) or external stimuli (e.g., advertising).

Implications for Retailing:

• Retailers must understand the factors influencing problem recognition and identify triggers that prompt consumers to consider a purchase.
• Effective advertising, promotions, and product displays can stimulate the recognition of needs.

2. Information Search

Once the need is recognized, consumers seek information to find possible solutions. This can involve internal sources (memory, past experiences) and external sources (friends, family, online reviews).

Implications for Retailing:

• Retailers should provide accessible and relevant information through multiple channels, including websites, social media, and in-store displays.
• Reviews and recommendations play a crucial role, so encouraging and showcasing positive customer feedback is beneficial.

3. Evaluation of Alternatives

Consumers evaluate various product options based on attributes such as quality, price, brand reputation, and features. They create a consideration set of alternatives.

Implications for Retailing:

• Retailers need to ensure their products or services stand out in terms of quality, value, and uniqueness.
• Creating product bundles, offering discounts, or providing personalized recommendations can influence the evaluation process.

4. Purchase Decision

At this stage, the consumer makes the final decision and selects a particular product or service. Factors like pricing, availability, and promotions influence this decision.

Implications for Retailing:

• Retailers should optimize pricing strategies, provide transparent information about costs, and offer convenient purchasing options (online, in-store, mobile).
• Promotions, discounts, and loyalty programs can be effective in nudging consumers towards a purchase.

 

5. Post-Purchase Behavior

After the purchase, consumers assess their satisfaction. If expectations are met or exceeded, it leads to positive post-purchase behavior; otherwise, dissatisfaction may occur.

Implications for Retailing:

• Ensuring a positive post-purchase experience is critical for customer loyalty and repeat business.
• Effective customer service, easy returns, and follow-up communication can enhance customer satisfaction.

Additional Considerations:

Digital and Omnichannel Influences:

• The digital landscape has transformed the buying decision process. Consumers often use online channels for information search, reviews, and comparisons.
• Retailers must have a strong online presence, ensuring that their websites are user-friendly and mobile-optimized.

Social Media Influence:

• Social media platforms play a significant role in shaping consumer perceptions and decisions.
• Retailers should engage with customers on social media, use influencers, and leverage user-generated content to enhance brand image.

Personalization and Customer Relationship Management (CRM):

• Personalized experiences cater to individual preferences, enhancing the overall customer journey.
• Retailers can use CRM systems to track customer interactions, personalize marketing messages, and offer targeted promotions.

Supply Chain and Inventory Management:

• An efficient supply chain ensures product availability, reducing the likelihood of consumers choosing alternatives due to stockouts.
• Retailers need robust inventory management systems to optimize stock levels and fulfill customer demands promptly.

Post-Purchase Communication:

• Continued communication post-purchase, through newsletters or loyalty programs, can reinforce the customer’s decision.
• Retailers should encourage customer feedback and address any concerns promptly to build trust.

Customer Reviews and Ratings:

• Online reviews heavily influence the evaluation stage of the buying process.
• Retailers should actively manage and respond to customer reviews, showcasing a commitment to customer satisfaction.

Sustainability and Ethical Considerations:

• Growing consumer awareness about sustainability and ethical practices impacts purchasing decisions.
• Retailers adopting sustainable practices and communicating these efforts can appeal to environmentally conscious consumers.

Challenges and Opportunities for Retailers:

• Increased Consumer Empowerment

Consumers now have access to vast information and options, making it challenging for retailers to influence decisions. However, it also provides opportunities to engage and educate consumers through effective marketing and communication.

• Rise of E-commerce

The growing prominence of online shopping has altered traditional retail dynamics. Retailers must invest in seamless online experiences and omnichannel strategies to remain competitive.

• Data Privacy Concerns

While personalized experiences can enhance the buying process, concerns about data privacy and security are on the rise. Retailers need to be transparent about data usage and implement robust security measures.

• Globalization and Cultural Sensitivity

Retailers expanding internationally must be mindful of cultural differences and adapt their strategies to resonate with diverse consumer preferences.

• Dynamic Consumer Trends

Rapid changes in consumer preferences and trends require retailers to stay agile and responsive. Regular market research and monitoring of industry trends are essential.

New Product Development (NPD) is the process of bringing a new product to market, involving a series of stages from idea generation to commercialization. It includes researching customer needs, creating innovative product concepts, designing and testing prototypes, and launching the final product. NPD is crucial for companies to stay competitive, meet changing customer demands, and drive growth. The process ensures that the product is technically feasible, financially viable, and well-suited to the market. By following structured stages like idea screening, concept development, and market testing, businesses can minimize risks and enhance the chances of a successful launch.

Stages of New Product Development:

• Idea Generation

This stage involves systematically searching for new product ideas. A company must generate a wide range of ideas to find those worth pursuing. Major sources include internal sources, customers, competitors, distributors, and suppliers. Approximately 55% of new product ideas come from internal sources, where employees are encouraged to contribute ideas through incentive programs. Around 28% come from customers, often through observing or engaging with them. For example, Pillsbury’s Bake-Off has provided several new product ideas that became part of their cake mix line.

• Idea Screening

The purpose of idea screening is to filter out ideas generated in the first stage, retaining only those with genuine potential. Companies may use product review committees or formal market research for this process. A checklist can help evaluate each idea based on key success factors. This ensures management can assess how well each idea aligns with the company’s capabilities and resources before moving forward with the most promising options.

• Concept Development and Testing

An attractive idea must be developed into a product concept. While a product idea is an initial notion, a product concept presents it in detailed terms that are meaningful to consumers. Once concepts are developed, they are tested with consumers through symbolic or physical presentations. Companies gather consumer feedback, asking them to respond to the concept and project potential market sales based on this input.

• Marketing Strategy Development

The next step involves developing a marketing strategy. This strategy is typically divided into three parts: first, the target market and product positioning along with sales, market share, and profit goals; second, the planned product price, distribution, and marketing budget; and third, long-term goals and marketing mix strategies to ensure the product’s success over time.

• Business Analysis

After developing a marketing strategy, business analysis reviews projected sales, costs, and profits to evaluate the business potential of the product. If these financial projections meet the company’s objectives, the product proceeds to development. This analysis helps the company gauge the overall viability of the product.

• Product Development

In this stage, R&D or engineering teams develop the concept into a physical product. This involves significant investment and tests whether the product idea can become a practical, marketable solution. Prototypes are created and tested for safety, functionality, and consumer appeal. Laboratory and field testing ensures the product performs effectively before moving forward.

• Test Marketing

Once the product passes development tests, it enters test marketing, where the product and marketing strategy are tested in real market settings. Test marketing helps refine the marketing mix before a full launch. While test marketing can be expensive, it provides valuable insights. However, some companies bypass this stage to avoid competitor intervention or reduce costs.

• Commercialization

The final stage is commercialization, where the product is officially launched in the market. High costs are associated with manufacturing, advertising, and promotion. The company decides on the timing and location of the launch based on market readiness and distribution capabilities. Many companies now use a simultaneous development approach, where different departments collaborate to speed up the process, enhancing flexibility and effectiveness in product development.

Market Segmentation is the process of dividing a broad consumer base into smaller, more manageable groups based on shared characteristics like demographics, behavior, geography, or psychographics. This helps businesses tailor products, messaging, and strategies to meet specific customer needs, improving targeting, efficiency, and customer satisfaction. Effective segmentation enhances marketing ROI and competitive advantage.

Market Segmentation

• Market segmentation is a marketing concept which divides the complete market set up into smaller subsets comprising of consumers with a similar taste, demand and preference.
• A market segment is a small unit within a large market comprising of like minded individuals.
• One market segment is totally distinct from the other segment.
• A market segment comprises of individuals who think on the same lines and have similar interests.
• The individuals from the same segment respond in a similar way to the fluctuations in the market.

Basis of Market Segmentation

1. Gender

• The marketers divide the market into smaller segments based on gender. Both men and women have different interests and preferences, and thus the need for segmentation.
• Organizations need to have different marketing strategies for men which would obviously not work in case of females.
• A woman would not purchase a product meant for males and vice a versa.
• The segmentation of the market as per the gender is important in many industries like cosmetics, footwear, jewellery and apparel industries.

2. Age Group

Division on the basis of age group of the target audience is also one of the ways of market segmentation.

The products and marketing strategies for teenagers would obviously be different than kids.

• Age group (0 – 10 years) – Toys, Nappies, Baby Food, Prams
• Age Group (10 – 20 years) – Toys, Apparels, Books, School Bags
• Age group (20 years and above) – Cosmetics, Anti-Ageing Products, Magazines, apparels and so on

3. Income

Marketers divide the consumers into small segments as per their income. Individuals are classified into segments according to their monthly earnings.

The three categories are:

• High income Group
• Mid Income Group
• Low Income Group

Stores catering to the higher income group would have different range of products and strategies as compared to stores which target the lower income group.

Pantaloon, Carrefour, Shopper’s stop target the high income group as compared to Vishal Retail, Reliance Retail or Big bazaar who cater to the individuals belonging to the lower income segment.

4. Marital Status

Market segmentation can also be as per the marital status of the individuals. Travel agencies would not have similar holiday packages for bachelors and married couples.

5. Occupation

Office goers would have different needs as compared to school / college students.

A beach house shirt or a funky T Shirt would have no takers in a Zodiac Store as it caters specifically to the professionals.

Types of Market Segmentation

• Psychographic segmentation

The basis of such segmentation is the lifestyle of the individuals. The individual’s attitude, interest, value help the marketers to classify them into small groups.

• Behaviouralistic Segmentation

The loyalties of the customers towards a particular brand help the marketers to classify them into smaller groups, each group comprising of individuals loyal towards a particular brand.

• Geographic Segmentation

Geographic segmentation refers to the classification of market into various geographical areas. A marketer can’t have similar strategies for individuals living at different places.

Nestle promotes Nescafe all through the year in cold states of the country as compared to places which have well defined summer and winter season.

McDonald’s in India does not sell beef products as it is strictly against the religious beliefs of the countrymen, whereas McDonald’s in US freely sells and promotes beef products.

Not all individuals have similar needs. A male and a female would have varied interests and liking towards different products. A kid would not require something which an adult needs. A school kid would have a different requirement than an office goer. Market Segmentation helps the marketers to bring together individuals with similar choices and interests on a common platform.

• Market Segmentation helps the marketers to devise appropriate marketing strategies and promotional schemes according to the tastes of the individuals of a particular market segment. A male model would look out of place in an advertisement promoting female products. The marketers must be able to relate their products to the target segments.
• Market segmentation helps the marketers to understand the needs of the target audience and adopt specific marketing plans accordingly. Organizations can adopt a more focussed approach as a result of market segmentation.
• Market segmentation also gives the customers a clear view of what to buy and what not to buy. A Rado or Omega watch would have no takers amongst the lower income group as they cater to the premium segment. College students seldom go to a Zodiac or Van Heusen store as the merchandise offered by these stores are meant mostly for the professionals. Individuals from the lower income group never use a Blackberry. In simpler words, the segmentation process goes a long way in influencing the buying decision of the consumers.

An individual with low income would obviously prefer a Nano or Alto instead of Mercedes or BMW.

• Market segmentation helps the organizations to target the right product to the right customers at the right time. Geographical segmentation classifies consumers according to their locations. A grocery store in colder states of the country would stock coffee all through the year as compared to places which have defined winter and summer seasons.
• Segmentation helps the organizations to know and understand their customers better. Organizations can now reach a wider audience and promote their products more effectively. It helps the organizations to concentrate their hard work on the target audience and get suitable results.

Steps in Market Segmentation

1. Identify the target market

The first and foremost step is to identify the target market. The marketers must be very clear about who all should be included in a common segment. Make sure the individuals have something in common. A male and a female can’t be included in one segment as they have different needs and expectations.

Burberry stocks separate merchandise for both men and women. The management is very clear on the target market and has separate strategies for product promotion amongst both the segments.

A Garnier men’s deodorant would obviously not sell if the company uses a female model to create awareness.

Segmentation helps the organizations decide on the marketing strategies and promotional schemes.

Maruti Suzuki has adopted a focused approach and wisely created segments within a large market to promote their cars.

• Lower Income Group – Maruti 800, Alto.
• Middle Income Group – Wagon R, Swift, Swift Dzire, Ritz.
• High Income Group – Maruti Suzuki Kizashi, Suzuki Grand Vitara.

Suzuki Grand Vitara would obviously have no takers amongst the lower income group.

The target market for Rado, Omega or Tag Heuer is the premium segment as compared to Maxima or a Sonata watch.

2. Identify expectations of Target Audience

Once the target market is decided, it is essential to find out the needs of the target audience. The product must meet the expectations of the individuals. The marketer must interact with the target audience to know more about their interests and demands.

Kellogg’s K special was launched specifically for the individuals who wanted to cut down on their calorie intake.

Marketing professionals or individuals exposed to sun rays for a long duration need something which would protect their skin from the harmful effects of sun rays. Keeping this in mind, many organizations came with the concept of sunscreen lotions and creams with a sun protection factor especially for men.

3. Create Subgroups

The organizations should ensure their target market is well defined. Create subgroups within groups for effective results.

Cosmetics for females now come in various categories.

• Creams and Lotions for girls between 20-25 years would focus more on fairness.
• Creams and lotions for girls between 25 to 35 years promise to reduce the signs of ageing.

4. Review the needs of the target audience

It is essential for the marketer to review the needs and preferences of individuals belonging to each segment and sub-segment. The consumers of a particular segment must respond to similar fluctuations in the market and similar marketing strategies.

5. Name your market Segment

Give an appropriate name to each segment. It makes implementation of strategies easier.

A kids section can have various segments namely new born, infants, toddlers and so on.

6. Marketing Strategies

Devise relevant strategies to promote brands amongst each segment. Remember you can’t afford to have same strategies for all the segments. Make sure there is a connect between the product and the target audience. Advertisements promoting female toiletries can’t afford to have a male model, else the purpose gets nullified.

A model promoting a sunscreen lotion has to be shown roaming or working in sun for the desired impact.

7. Review the behavior

Review the behavior of the target audience frequently. It is not necessary individuals would have the same requirement (demand) all through the year. Demands vary, perceptions change and interests differ. A detailed study of the target audience is essential.

8. Size of the Target Market

It is essential to know the target market size. Collect necessary data for the same. It helps in sales planning and forecasting.

Sales promotion is an important tool of promotion which supplements personal selling and advertising efforts. According to American Marketing Association, “Sales promotion includes those marketing activities, other than personal selling, advertising, and publicity, that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and expositions, demonstration, and various non-recurrent selling efforts not in the ordinary routine.”

Sales promotion includes techniques like free samples, premium on sale, sales and dealer incentives, contests, fairs and exhibitions, public relations activities, etc. Sales promotions are those activities, other than advertising and personal selling that stimulate market demand for products. The basic purpose is to stimulate on the spot buying by prospective customers through short-term incentives. These incentives are essentially temporary and non-recurring in nature.

Sales promotion is different from personal selling which is persuasion of customers by the sales persons to buy certain products. It is also different from advertising. Except for advertising through direct mail, advertising deals with media owned and controlled by the firm itself.

Usually, sales promotion deals with non-recurring and non-routine methods in contrast to personal selling or advertising. As a matter of fact, sales promotion activities aim at supplementing and co-ordinating personal selling and advertising.

Sales promotion includes activities of non-routine nature to promote sales, e.g., distribution of samples, discount coupons, contests, display of goods, fairs and exhibitions, etc. But it does not include advertisement, publicity and personal selling.   

Techniques of Slaes Promotion

1. Distribution of Samples

Many big businessmen distribute free samples of their products to the selected people in order to popularise their products. Distribution of samples is popular in case of books, drugs, cosmetics, perfumes and other similar products. As the distribution of samples is very costly, this system is confined to those products of small value which have often repeated sales.

2. Rebate or Price-Off Offer

In order to increase sale, many producers introduce price off offer to the customers. Under this, the product is offered at a price lower than the normal price. For example, during off season (winter), ceiling fans, coolers and refrigerators may be offered at 20 to 30% off price.

Rebate offer is given for a limited period only, for example, Coca cola offered 2 litre bottle at Rs. 35 only during winter 2009. Khadi Gram Udyog offers rebates on Khadi cloth and readymades to coincide with the month of Gandhi Jayanti every year.

3. Partial Refund

A firm may use the strategy of refunding a part of the price paid by the customer on the production of some proof of purchase of its product. For instance, the buyer of two cakes of a branded soap may be refunded Rs. 5 on returning the empty packages to the dealer.

4. Discount Coupons

A discount coupon is a certificate that entitles its holder to a specified saving on the purchase of a specified product. Coupons may be issued by the manufacturers either directly by mail through sales-force or through the dealers. The coupons are also issued through newspapers and magazines. The holders of coupons can go to the retailers and get the product at a cheaper price.

The retailers are reimbursed by the manufacturer for the value of coupon redeemed and also paid a small percentage to cover handling cost. But many retailers do not patronise this method because it involves financial and accounting problems for them.

5. Packaged Premium

Under this, the seller offers premium to the buyer by way of supplying a gift along with the product or inside the product package. Premium on sales helps the salesman to make effective presentation, stimulate sale in a particular area, lead to enlistment of new customers and have the way for introducing new brands in the market. Premiums are generally given in the case of customer convenience goods such as packed tea leaves, blades, tooth-pastes and toilet soaps.

6. Container Premium

Several firms use container premium to push the sale of their products. For instance, Taj Mahal tea leaves, Ariel detergent powder, Bournvita, Kissan jams, etc. are made available in special containers which could be reused in kitchens after the product has been consumed. The reusable containers for packaging often have special appeal to the consumers who don’t have to pay anything extra for the product.

7. Contests

There may be consumers’ contests, salesman’s contests and dealers’ contests. Contests for salesman and dealers are intended for inducing them to devote greater efforts or for obtaining new sales idea in the task of sales promotion.

Contests for consumers may centre around writing a slogan on the product. Such slogan centres around the questions as to the liking of a customer for the product, or formulation of new advertising idea for the product. Such contests are held through radio, T.V., newspapers, magazines, etc.

8. Public Relations

Public relations activities strive for creating a good image of the enterprise in the eyes of the customers and the society. These activities are not aimed at immediate demand creation. It is very common that big business enterprises convey their greetings and thanks to the people through newspapers and other media.

9. Free Gift

The customer does not get any benefit at the time of purchase, rather he gets it through mail. For this he has to send the proof of purchase (e.g., cash memo and wrapper) to the manufacturer to claim the gift which might be a diary or book or any other item. The gift is sent by the manufacturer by mail or through courier.

10. Exchange Offer

It means exchange of an old product with the new one after payment of the exchange price fixed by the manufacturer. Such offers are very common these days in case of electric irons, TVs, refrigerators, scooters, gas stoves, washing machines, etc.

11. Product Combination or Gift

It refers to giving a free gift on purchase of a product. Generally, the free gift is related to the product but it is not necessary. For example, Mug free with Bournvita, Toothbrush free with Toothpaste, DVD free with TV, Vacuum cleaner free Fridge, etc.

12. Instant Draws and Assured Gifts

Some sectors offer instant draws and assured gifts to their customers when they make purchases. The scheme may be like – “Scratch a card (or burst a cracker) and instantly win a car, A.C., fridge, T.V., computer or electric iron on the purchase of a T.V.”

13. Full Finance @ 0%

Manufacturers of durables like bikes, T.V., A.C., etc. offer easy financing schemes even at 0% rate of interest e.g., “Pay Rs. 10,000 in cash and Rs. 30,000 in 12 equal instalments of 2,500 each by post-dated cheques and get a bike on the spot.” This tool of promotion misleads the customers and so should be avoided by the marketers.

Objectives of Sales Promotion

(i) It improves the performance of middlemen and acts as a supplement to advertising and personal selling.

(ii) It motivates sales force to give desire emphasis on new accounts, latent accounts, new products and new territories.

(iii) It increases sales and makes sales of slow moving products faster and stabilize fluctuating sales pattern.

(iv)It attracts channel members to participate in manufacturer promotion effort.

(v) Motivating the dealers to buy high volumes of products and push more of the brands that are on promotion.

(vi) Supporting and supplementing the advertising and personal selling efforts.

(vii) Making consumers to switch brands in favour of firm.

(viii) To overcome the seasonal fluctuation of products.

(ix) Inducing retailers to promote the brand by local advertising and POP display.

(x) Sales promotions motivate the salesmen to sell more and to sell the full line of products.

(xi) To reduce the perception of risk associated with the purchase of a product.

Need and Importance of Sales Promotion

Sales promotion acts as a bridge between advertising and personal selling. Due to the adversity of markets, the importance of sales promotion has increased tremendously. Sales promotion helps remove the consumer’s dissatisfaction about a particular product, manufacturer, and create brand-image in the minds of the consumers and the users.

Sales promotional devices are the only promotional devices available at the point-of-purchase. An advertising medium reaches the prospects at their homes, offices, etc. and may soon be forgotten. The sales promotional devices at the point-of-purchase stimulate the customers to make purchase promptly on the spot.

Business firms use promotional tools to achieve the following benefits:

(i) Attracting Attention

The first aim of sales promotion is to attract the attention of the prospective buyers and inform them about the availability, characteristics and uses of a particular product.

(ii) Highlighting Utility of Product

Promotion helps in letting the people know about the utility of the new products. It also tells them how the concerned products will be helpful in satisfying their specific demands.

(iii) Stimulation of Demand of New Product

Promotional activities are used to create interest in the new product and to persuade people to buy the same. This helps in launching the new product.

(iv) Product Differentiation

Promotion helps in differentiating a particular product of the firm from the competing products of other firms. A firm can also use data revealing how its product compares with the other products.

(v) Synergy in Promotional Activities

Sales promotion activities supplement personal selling and advertising efforts of the firm. They add to the overall effectiveness of the firm’s promotional activities.

(vi) Stabilisation of Sales Volume

In the modern age of competition, it is an important purpose of promotion to help in stabilising sales volume by reassuring the customers about the quality and price of the product. It is possible that a customer using a particular brand, may buy another because the other brand is promoted in an effective manner.

(vii) Performance Appraisal or Marketing Control

The management of a company can keep an effective check on the results achieved through sales promotion schemes, because it is in a position to analyse the costs incurred and the benefits derived.

There are many bases on which advertising may be classified. It may be categorized according to media, type of products, type of appeals and so on. There is no streamlined methodology to differentiate different kinds of advertising.

Advertisements are a good way for a company to increase awareness of its name, phone number, and or brands.

Since the advent of the early form of advertising, advertising communication objectives have diversified considerably, and different forms of advertising can be identified while using the same media.

1. Display Ads

This includes digital and newspaper advertising. Digital ads are the updated version of newspaper advertising; it’s the same concept but in 21st-century form. It means buying ad space on sites that are of interest to your target demographic. You can create text ads, which essentially look just like traditional print media ads, the floating banner above the site’s contact and even wallpaper with your product or service on the site background.

The major difference between display ads and the ads you find in newspapers is the use of search engine optimization techniques to reach your target audiences more effectively when they search for you. These types of advertisements are typically also Pay Per Click, which means you bid on keywords most associated with your service or products and pay for your results to be at the top of the search engine search. The another one is Cost Per Thousand, which means to pay a flat rate to show up in search results 1,000 times.

2. Social Media Ads

Pinterest, Instagram, Facebook and pretty much all social media sites offer relatively inexpensive advertising. Paid social media ads are the kind of advertisement that focuses on reaching your target audience with how much you pay adjusted to how many see it and engage with it. Organic social media ads are the kind of advertisement that generates lots of word-of-mouth. Say you post something to your business Facebook page that offers a free product if followers click Like and tag a friend — that is the type of advertisement that is free to post and makes people aware of what you have to offer.

3. Newspapers and Magazines

These kinds of advertisements are traditional yet no less effective. Combining this type of advertisement between local, statewide and national print media is a great marketing campaign strategy. Plenty of people still reach for their morning newspaper or love to settle down with a hard copy of a magazine. Also, most print media now has a digital presence and can combine these types of advertisements with its virtual version.

4. Outdoor Advertising

Now that billboards have gone digital it’s a huge way to make an effective statement. Transit ads are another kind of advertisement that falls under the outdoors umbrella — feature your product or service on buses, taxis, bike messenger services and pedicabs. Promoting this way gives you excellent brand recognition as these types of advertisements are seen everywhere daily and make your offering hard to forget.

5. Radio and Podcasts

Verbal promotion is a type of advertisement that can be repeated often as part of radio or podcast shows. You can have a traditional type of ad recorded to be played or there is also the chance of sponsorship. Narrow down the types of podcasts your target audience subscribes to or the station they most listen to for creating the kind of advertisement customers like and remember.

6. Direct Mail and Personal Sales

Direct mail, or the art of sending a compelling sales letter by snail mail to your target audience, can offer a healthy return on investment for small businesses. The starting point is to identify your target market, then send an enticing offer out to all of those prospects. Measuring the responses helps you to see which type of customers are responding to this format, so you can use even more precision targeting with your next mail shot.

In a similar vein, direct or personal sales is still a big area of advertising, especially for small businesses. A good salesperson can use his or her skills to persuade a customer to buy a product. If the salesperson is especially effective, the customer will continue to spread the word about your product through recommendations and referrals.

7. Video Ads

This type of advertisement engages with your target customers on a digital level. Create a short video and post it on your social media or pay to have it run on sites like YouTube, Hulu and blogs. A video ad can be created by experts from an agency or even done by your in-house team — even if that team is comprised of just yourself.

8. Product Placement

This kind of advertisement is seen more and more. If you pay for a podcast host to mention using your product or pay a television show to feature a character talking about or using your service, that is product placement. You can also talk to popular YouTube channel hosts about this type of advertisement.

9. Event Marketing

Paying to sponsor a sports team or a charity benefit falls under event marketing. These types of advertisements mean a large cross-section of people hear your brand name and associate it with that event. Many companies also look to conventions for this sort of niche advertisement.

10. Email Marketing

A kind of advertisement that is focused on your existing customers, email marketing involves them signing up for promotional sales or newsletters focused on your brand. Email marketing is an updated customer loyalty promotion and works very well when you treat customers as insiders with VIP knowledge.

There are as many ways to utilize types of advertising as there are kinds of advertising. By diversifying your approaches in both traditional and digital worlds as well as focusing on your core target market while getting the word out about your brand to the people at large, you can grow by leaps and bounds.

Advertising is a means of communication with the users of a product or service. Advertisements are messages paid for by those who send them and are intended to inform or influence people who receive them, as defined by the Advertising Association of the UK.

Advertising is always present, though people may not be aware of it. In today’s world, advertising uses every possible media to get its message through. It does this via television, print (newspapers, magazines, journals etc), radio, press, internet, direct selling, hoardings, mailers, contests, sponsorships, posters, clothes, events, colours, sounds, visuals and even people (endorsements).

The advertising industry is made of companies that advertise, agencies that create the advertisements, media that carries the ads, and a host of people like copy editors, visualizers, brand managers, researchers, creative heads and designers who take it the last mile to the customer or receiver. A company that needs to advertise itself and/or its products hires an advertising agency. The company briefs the agency on the brand, its imagery, the ideals and values behind it, the target segments and so on. The agencies convert the ideas and concepts to create the visuals, text, layouts and themes to communicate with the user. After approval from the client, the ads go on air, as per the bookings done by the agency’s media buying unit.

Functions of Advertising

Advertising has become an essential marketing activity in the modern era of large-scale production and severe competition in the market.

It performs the following functions:

(i) Promotion of Sales

Advertising promotes the sale of goods and services by informing and persuading the people to buy them. A good advertising campaign helps in winning customers and generating revenues.

(ii) Introduction of New Products

Advertising helps in the introduction of new products in the market. A business enterprise can introduce itself and its products to the public through advertising. Advertising enables quick publicity in the market.

(iii) Support to Production System

Advertising facilitates large-scale production. The business firm knows that it will be able to sell on a large-scale with the help of advertising. Mass production will reduce the cost of production per unit by making possible the economical use of various factors of production.

(iv) Increasing Standard of Living

Advertising educates the people about the products and their uses. It is advertising which has helped people in adopting new ways of life and giving up old habits. It has contributed a lot towards the betterment of the standard of living of the society.

(v) Public Image

Advertising builds up the reputation of the advertiser. Advertising enables a business firm to communicate its achievements and its efforts to satisfy the customers’ needs to the public. This increases the goodwill and reputation of the firm.

(vi) Support to Media

Advertising sustains press. Advertising provides an important source of revenue to the publishers of newspapers and magazines and the producers of T.V. programmes.

6 MAIN CRITICISMS AGAINST ADVERTISING

(i) Increased Price of The Product

Advertising increases the cost of the product as the expenses on it form the part of the total cost of the product. The increased prices are borne by the consumers. But it cannot be denied that advertising leads to large scale production which considerably reduces the total and per unit cost of production. The consumer may pay less rather than higher.

(ii) Multiplication of Needs

Advertising creates artificial demand for the product and induces people to buy those products which are not needed by them. On account of its repetition, it allures and creates a desire in the minds of the people to possess an article not required by them.

(iii) Deceptive

Sometimes advertising is used as an instrument of cheating. In order to impress upon the people false statements are given with regard to different virtues of a product. Fraudulent means and deceptive practice are resorted to by various traders in order to sell their products. All these things adversely affect the public confidence in the advertising.

(iv) It Leads to Monopoly

Advertising sometimes leads to monopoly in a particular brand of a product. By investing large sums in advertising of his brand, a big producer eliminates small producers of the same product from the market and creates brand monopoly. This leads to exploitation of consumers.

But in reality this argument does not hold good. The monopoly powers are temporarily acquired by the manufacturers as they face strong competition by the rival producers of the same product. In the words of Marry Hepner “advertisement stimulates competition. It often enables the small businessmen to compete with large concerns as well as to start new business”.

(v) Harmful For the Society

Sometimes advertisements are un-ethical and objectionable. Most often, these carry indecent language and virtually nude photographs in order to attract the customers. This adversely affects the social values.

(vi) Wastage of Precious National Resources

A serious drawback levied against the advertisement is that it destroys the utility of certain products before their normal life. The latest and improved model of a product leads to the elimination of old ones. For instance, in the U.S.A., people like to possess the latest models of cars and discarding the old ones which are still in useable conditions. This leads to wastage of national resources.

Objective of Advertising

1. To introduce a new product by creating interest for it among the prospective customers.
2. To support personal selling programme. Advertising may be used to open customers’ doors for salesmen.
3. To reach people inaccessible to salesmen.
4. To enter a new market or attract a new group of customers.
5. To fight competition in the market and to increase the sales.
6. To enhance the goodwill of the enterprise by promising better quality products and services.

Significance of Advertising

Advertising helps in spreading information about the advertising firm, its products, qualities and place of availability of its products and so on. It helps to create a non-personal link between the advertiser and the receivers of the message.

The significance of advertising has increased in the modern era of large scale production and tough competition in the market. Advertising is needed not only to the manufacturers and traders but also to the customers and the society. The benefits of advertising to different parties are discussed in the following paragraphs.

Benefits to Manufacturers and Traders

It pays to advertise. Advertising has become indispensable for the manufacturers and distributors because of the following advantages:

(i) Advertising helps in introducing new products. A business enterprise can introduce itself and its products to the public through advertising.

(ii) Advertising develops new taste among the public and stimulates them to purchase the new product through effective communication.

(iii) Advertising assists to increase the sale of existing products by entering into new markets and attracting new customers.

(iv) Advertising helps in creating steady demand of the products. For instance, a drink may be advertised during summer as a product necessary to fight tiredness caused by heat and during winter as an essential thing to resist cold.

(v) Advertising helps in meeting the forces of competition in the market. If a product is not advertised continuously, the competitors may snatch its market through increased advertisements. Therefore, in certain cases, advertising is necessary to remain in the market.

(vi) Advertising is used to increase the goodwill of the firm by promising improved quality to the customers.

(vii) Advertising increases the morale of the employees of the firm. The salesmen feel happier because their task becomes easier if the product is advertised and known to the public.

(viii) Advertising facilitates mass production of goods which enables the manufacturer to achieve lower cost per unit of product. Distribution costs are also lowered when the manufacturer sells the product directly to the customers. Advertising also facilitates distribution of the product through the retailers who are encouraged to deal in the advertised products.

Benefits to Customers

(i) Advertising helps the customers to know about the existence of various products and their prices. They can choose from the various products to satisfy their wants. Thus, they cannot be exploited by the sellers.

(ii) Advertising educates the people about new products and their diverse uses.

(iii) Advertising increases the utility of existing products for many people adding to the amount of satisfaction which they are already enjoying.

(iv) Advertising induces the manufacturers to improve the quality of their products through research and development. This ensures supply of better quality products to the customers.

Benefits to Society

(i) Advertising provides employment to persons engaged in writing, designing and issuing advertisements, and also those who act as models. Increased employment brings additional income with the people which stimulate more demand. Employment is further generated to meet the increased demand.

(ii) Advertising promotes the standard of living of the people by increasing the variety and quality in consumption as a result of sustained research and development activities by the manufacturers.

(iii) Advertising educates the people about the various uses of different products and this increases their knowledge. Advertising also helps in finding customers in the international market which is essential for earning foreign exchange.

(iv) Advertising sustains the press, and other media. It provides an important source of income to the press, radio and television network. The customers are also benefitted because they get newspapers and magazines at cheaper rates. The publishers of newspapers and magazines are benefitted because of increased circulation of their publications. Lastly, advertising also encourages commercial art.

The Promotion Mix refers to the blend of several promotional tools used by the business to create, maintain and increase the demand for goods and services.

The fourth element of the 4 P’s of Marketing Mix is the promotion; that focuses on creating the awareness and persuading the customers to initiate the purchase. The several tools that facilitate the promotion objective of a firm are collectively known as the Promotion Mix.

Gary Armstrong defines promotion mix as, “A company’s promotional mix includes advertising, personal selling, sales promotion, public relations, direct marketing. It also includes product design, shape, package, colour, label etc., as all these communicate something to buyer.”

Philip Kotler opines, “A company’s total marketing communication mix also called promotion mix consists of specific blends of advertising, personal selling, sales promotion, public relations and direct marketing tools that the company use to pursue its advertising and marketing objectives.”

Promotion is a process of communication involving information, persuasion, and influence. It includes all types of personal or impersonal communication by a producer with prospective customers as well as middlemen in the distribution network.

The purpose of promotion is to inform, persuade and influence the prospective customers. Personal selling, advertising, public relations, sales promotion and direct marketing are widely used to inform the people about the availability of products and create among them the desire to buy the products.

Promotion is a form of corporate communication that uses various methods to reach a targeted audience with a certain message in order to achieve specific organizational objectives. Nearly all organizations, whether for-profit or not-for-profit, in all types of industries, must engage in some form of promotion.

Such efforts may range from multinational firms spending large sums on securing high-profile celebrities to serve as corporate spokespersons to the owner of a one-person enterprise passing out business cards at a meeting of local business persons.

Promotion is communication from a marketers to the prospective buyers in the market. It tries to instil into buyer’s minds images (through advertising, personal selling, sales promotion and publicity) that make them buy the product.

The Promotion Mix is the integration of Advertising, Personal Selling, Sales Promotion, Public Relations and Direct Marketing. The marketers need to view the following questions in order to have a balanced blend of these promotional tools.

• What is the most effective way to inform the customers?
• Which marketing methods to be used?
• To whom the promotion efforts be directed?

Objectives of Promotion Mix

Promotion can be used for number of reasons for ex: Promotional activity can increase sales, raise awareness or concerns about particular issues develop a brand image or alter public opinion.

The possible objectives for promotion mix may include the following:

1. Build Awareness

New products and new companies are often unknown to a market, which means initial promotional efforts must focus on establishing an identity. In this situation the marketer must focus promotion to effectively reach customer and tell the market who they are and what they have to offer.

2. Create Interest

Moving a customer from awareness of a product to making a purchase can present a significant challenge. Consumer buying behaviour depends on the type of customer so the customer must first recognize they have a need before they actively start to consider a purchase.

The focus on creating messages that convince customers that a need exists has been the hallmark of marketing for a long time with promotional appeals targeted at basic human characteristics such as emotions, fears, humor, sex etc.

3. Provide Information

Some promotions are designed to assist customers in the search stage of the purchasing process. In some cases, such as when a product is so novel it creates a new category of product and has few competitors the information is simply intended to explain what the product is and may not mention any competitors.

In other situations where the product competes in an existing market, informational promotion may be used to help with a product positing strategy.

4. Stimulate Demand

The right promotion can drive customers to make a purchase. In the case of products that a customer has not previously purchased or has not purchased in a long time, the promotional efforts may be directed at getting the customer to try the product.

This is often seen on the internet where software companies allow for free demonstrations or even free downloadable trials of their products. For customer base products, promotion can encourage customers to increase their purchasing by providing a reason to purchase products sooner or purchase in greater quantities than they normally do.

5. Reinforce the Brand

Once a purchase is made a marketer can use promotion to build a strong relationship that can lead to the purchaser becoming a loyal customer. For instance, many retail stores now ask for a customer’s email address so that follow-up emails containing additional product information or even an incentive to purchase other products from the retailer can be sent in order to strengthen the customer marketer relationship.

Elements of promotional mix are also called as tools, means, or components. Basically, there are five elements involved in promotional mix. Some authors have considered more elements, too. However, we will consider five elements as shown in Figure 1.

1. Advertising

Advertising is defined as any paid form of non-personal presentation and promotion of ideas, goods, and services by an identified sponsor. It is a way of mass communication. It is the most popular and widely practiced tool of market promotion. Major part of promotional budget is consumed for advertising alone. Various advertising media – television, radio, newspapers, magazines, outdoor means and so forth – are used for advertising the product.

Characteristics of advertising are as follow:

(i) Adverting is non-personal or mass communication. Personal contact is not possible.

(ii) It is a paid form of communication.

(iii) It is a one-way communication.

(iv) Identifiable entity/sponsor-company or person gives advertising.

(v) It is costly option to promote the sales.

(vi) It can be reproduced frequently as per need.

(vii) Per contact cost is the lowest.

(viii) Various audio-visual, print, and outdoor media can be used for advertising purpose.

(ix) It is a widely used and highly popular tool of market promotion.

2. Sales Promotion

Sales promotion covers those marketing activities other than advertising, publicity, and personal selling that stimulate consumer purchasing and dealer effectiveness. Sales promotion mainly involves short-term and non-routine incentives, offered to dealers as well consumers. The popular methods used for sales promotion are demonstration, trade show, exhibition, exchange offer, seasonal discount, free service, gifts, contests, etc.

Characteristics of sales promotion are as follows:

(i) The primary purpose of sales promotion is to induce customers for immediate buying or dealer effectiveness or both.

(ii) Excessive use of sale promotion may affect sales and reputation of a company adversely.

(iii) It is taken as supplementary to advertising and personal selling efforts.

(iv) It involves all the promotional efforts other than advertising, personal selling, and publicity.

(v) It consists of short-term incentives, schemes, or plans offered to buyers, salesmen, and/ or dealers.

(vi) It involves non-routine selling efforts.

3. Personal Selling

Personal selling includes face-to-face personal communication and presentation with prospects (potential and actual customers) for the purpose of selling the products. It involves personal conversation and presentation of products with customers. It is considered as a highly effective and costly tool of market promotion.

Characteristics of personal have been listed below:

(i) Personal selling is an oral, face-to-face, and personal presentation with consumers.

(ii) Basic purpose is to promote products or increase sales.

(iii) It involves two-way communication.

(iv) Immediate feedback can be measured.

(v) It is an ability of salesmen to persuade or influence buyers.

(vi) It is more flexible way of market communication.

(vii) Per contact cost is higher than advertising.

(viii) It involves teaching, educating, and assisting people to buy.

4. Publicity

Publicity is also a way of mass communication. It is not a paid form of mass communication that involves getting favourable response of buyers by placing commercially significant news in mass media. William J. Stanton defines: “Publicity is any promotional communication regarding an organization and/or its products where the message is not paid for by the organization benefiting from it.”

It is the traditional form of public relations. Publicity is not paid for by the organization. Publicity comes from reporters, columnists, and journalists. It can be considered as a part of public relations. Publicity involves giving public speeches, giving interviews, conducting seminars, charitable donations, inauguration by film actor, cricketer, politician or popular personalities, stage show, etc., that attract mass media to publish the news about them.

Main characteristic of publicity include

(i) Publicity involves obtaining favourable presentation about company or company’s offers upon radio, television, or stage that is not paid for by the sponsor.

(ii) It is a non-paid form of market promotion. However, several indirect costs are involved in publicity.

(iii) It may include promotion of new product, pollution control efforts, special achievements of employees, publicizing new policies, etc., for increasing sales. It is primarily concerns with publishing or highlighting company’s activities and products. It is targeted to build company’s image.

(iv) Mostly, publicity can be carried via newspapers, magazines, radio or television.

(v) Company has no control over publicity in terms of message, time, frequency, information, and medium.

(vi) It has a high degree of credibility. Publicity message is more likely to be read and reacted by audience.

(vii) Publicity can be done at a much lower cost than advertising. Company needs to spend a little amount to get the event or activity publicized.

(viii) Frequency or repetition of publicity in mass media depends upon its social significance or the values for news. Mostly, it appears only once.

5. Public Relations

The public relations is comprehensive term that includes maintaining constructive relations not only with customers, suppliers, and middlemen, but also with a large set of interested publics. Note that public relations include publicity, i.e., publicity is the part of public relations.

William Stanton defines:

“Public relations activities typically are designed to build or maintain a favourable image for an organisation and a favourable relationship with the organization’s various publics. These publics may be customers, stockholders, employees, unions, environmentalists, the government, and people in local community, or some other groups in society.” Thus, public relations include organization’s broad and overall communication efforts intended to influence various groups’ attitudes toward the organization. Some experts have stated that the public relations are an extension of publicity.

Main characteristic of publicity are as under:

(i) Public relations is a paid form of market promotion. Company has to incur expenses.

(ii) Public relations activities are designed to build and maintain a favourable image for an organization and a favourable relationship with the organization’s various publics.

(iii) It is an integral part of managerial function. Many companies operate a special department for the purpose, known as the public relations department.

(iv) It involves a number of interactions, such as contacting, inviting, informing, clarifying, responding, interpreting, dealing, transacting, and so forth.

(v) Public relations covers a number of publics – formal and informal groups. These publics may be customers, stockholders, employees, unions, environmentalists, the government, people of local community, or some other groups in society.

(vi) Public relations activities are undertaken continuously. It is a part of routine activities.

(vii) All the officials, from top level to supervisory level, perform public relations activities.

(viii) In relation to modern management practices, the public relations is treated as the profession.

Thus, there are five major elements or promotion mix. Each tool/element has its advantages, limitations, and applicability. Depending upon company’s internal and external situations, one or more tools are used. Mostly, company’s promotional programme involves more elements, each element supplements others.

Promotion is a type of communication between the buyer and the seller. The seller tries to persuade the buyer to purchase their goods or services through promotions. It helps in making the people aware of a product, service or a company. It also helps to improve the public image of a company. This method of marketing may also create interest in the minds of buyers and can also generate loyal customers.

Promotions in marketing are generally the fourth and final P of the marketing mix. This is because before promotions, the product, price and place (distribution) should be ready. Promotions in marketing generally use integrated marketing communication. Integrated marketing communication is the use of different media vehicles to get the message of the brand from the company to the consumer.

So, if you are a jewelry brand, you will use TV commercials and other ATL media to promote your own products. Whereas if you are a small time brand, you will use print media or Internet and Out of home media to promote your brand. Thus, depending on the segmentation, targeting and positioning you are planning, your promotions can be planned.

Methods of Promotion

1. Advertising

Advertising means to advertise a product, service or a company with the help of television, radio or social media. It helps in spreading awareness about the company, product or service. Advertising is communicated through various mass media, including traditional media such as newspapers, magazines, television, radio, outdoor advertising or direct mail; and new media such as search results, blogs, social media, websites or text messages.

2. Direct Marketing

Direct marketing is a form of advertising where organizations communicate directly to customers through a variety of media including cell phone text messaging, email, websites, online adverts, database marketing, fliers, catalog distribution, promotional letters and targeted television, newspaper and magazine advertisements as well as outdoor advertising. Among practitioners, it is also known as a direct response.

3. Sales Promotion

Sales promotion uses both media and non-media marketing communications for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability.

4. Personal Selling

The sale of a product depends on the selling of a product. Personal Selling is a method where companies send their agents to the consumer to sell the products personally. Here, the feedback is immediate and they also build a trust with the customer which is very important.

5. Public Relation

Public relation or PR is the practice of managing the spread of information between an individual or an organization (such as a business, government agency, or a nonprofit organization) and the public. A successful PR campaign can be really beneficial to the brand of the organization.

The effect of promotions in marketing is:

(a) Awareness

The first and foremost role of promotions in marketing is to create Awareness. Whenever a new product is launched, or a company introduces a new scheme, awareness needs to be created. Thus, companies use promotions in the marketing mix which are ATL and BTL to promote the product.

(b) Brand building

The idiom “A brand is a promise” is one of the most commonly used ones in the world of marketing. However, a brand comprises both – The product as well as the marketing communications from the company to the customer. Thus brands like Apple and Coca cola are at the top of the brand equity table, because of their promotions and marketing communication efforts throughout the last few decades.

(c) Positioning

When you talk about premium cars, which is the product that comes in mind? Is it BMW, AUDI, FERRARI or any other? All these companies are trying to get the top positioning in your mind and similarly in other customers mind. The type of promotions from a company directly contribute to the positioning of the brand in the mind of the customer.

(d) Acceptance

A customer is more likely to accept a product, if he has heard the brand or the companies name. Thus, along with awareness, promotions also increase the acceptance of the product in the market. But, in some cases, how much ever promotions you do, if the product is not proper, the market will never accept the same. Thus, promotions in marketing has its own limitations.

(e) Targeting of customers

The promotions of a company help the company target their desired customer. For example – pepsi targets youngsters, Adidas targets healthy and sport loving people, so on and so forth. Thus, segmentation targeting and positioning can all be achieved with the right promotions.

(f) Brand recall

There are many objectives of promotions, one of the most common one being brand recall. Many brands over a time become so common in the market, that they might not need brand recall ads. On the other hand, sectors like pharmaceuticals, which have high competition and a line of generic products, regularly need to release promotions which promote the brand recall in the market. Thus, promotions in marketing can help the recall of your brand in the customers market, thereby promoting the sales and the brand equity of the product.

(g) Acquire new customers

The ultimate aim of promotions, or of any activity in marketing for that matter, is to attract new customers, convert them towards the company and gain better profit margins for the company. With ATL and BTL activities working simultaneously, and a proper marketing communication plan in place, it becomes easier for the company to acquire more customers.

Thus, there are many roles which are played by promotions in marketing. It is therefore no surprise, that many people are involved in promotions for the organization. In house marketing managers, executives, branding department, outsourced agencies are all involved in media buying and selling activities. These activities, on a whole, contribute to achieve the right promotions mix for the organization.