INTEGRATED MARKETING

COMMUNICATION
MRKT 632

Chapter one
Introduction to Integrated Marketing
Communication
What is communication study?”

• Academic field whose primary focus is:

– who says what, through what channels (media) of
communication, to whom, [and] what will be the
results.
• Communication study
– Who?
– What?
– What Channel?
– To Whom?
– What Are the Results?
Communication

• The process of people sharing thoughts, ideas, and

feelings with each other in commonly understandable
ways
• The process of transmitting, receiving, and processing
information
– Sender,
– Receiver
– Encoding,
– Decoding
– Transmission Device
Essential Points about meanings of communication
1. Communication is a process
– It refers to a series of activities to be accomplished in a sequences
2. Communication is purposeful
• purposeful transfer of messages between senders and receivers
3. Communication involves people
• shows the degree of understanding among senders-receivers and how they
relate to each other
4. Communication involves shared meaning
• ensure equal or similar understanding between them
5. Communication is symbolic
• letters, numbers, words, gestures, sound, etc can only represent or
approximate the ideas they are meant to communicate
Discussion points

Discuss about characteristics/nature of communication

How communication helps business organization/

marketing manager?

What will happen if no communication in

organization
Nature/Characteristics of Communication

 Dynamism
– Communication is affected by prior attitudes, planned thoughts and people to whom
the message is addressed.
– It is thus a dynamic phenomenon without beginning, without end, continually
responding, and continually changing.
 Uniqueness
– No two communication events are a like because of the change in the sender, the
audience, delivery, time situation etc.
 Transactional Nature
– In communication all persons are engaged in sending (encoding) and receiving
(decoding) messages simultaneously.
– Each person is affecting the other.
– Each communication transaction involves reciprocal exchanges of feelings, meanings,
ideas and responses
Significance Of Communication
• Communication is important for the following reasons:
 To Inform:
– about the organizational goals, objectives, procedures, processes, systems,
plans and strategies.
 To Educate:
– to disseminate knowledge, develop skills and attitude
– to familiarize workers with the systems, procedures and processes
 To Train
– Communication is an integral component of any training program
– Training sessions involve teaching, instruction, demonstration, practice and
discussion
 To Motivate:
– Through talks, lectures, films, meetings, workshops and non-verbal messages
 To Integrate:
– provides the means for the integrated approach in pursuing organizational
goals
 To Promote:
– advertising, publicity, public relations and communications and customer
retention
 To Entertain
 To Advice
 To Persuade
 To Facilitate Decision Making
 To Raise Morale
Communication Goals

To change
behavior

To get and
give To get action
Information

To ensure
To persuade
understanding
Marketing Communications
• The MC refers to the means adopted by the
companies to convey messages about the products
and the brands they sell,
– either directly or indirectly to the customers with the
intention to persuade them to purchase.
• MC is the different medium that company adopts
to exchange the information about their goods and
services to the customers.
• MC is coordinated promotional messages delivered
through one or more channels such as print, radio,
television, direct mail, and personal selling.
• Marketing communication offer solutions to the
following questions:
– Why shall the product be used?
– How can the product be used?
– Who can use the product?
– Where can the product be used? ,and
– When can the product be used?
Elements of Marketing Communication Mix
Marketing Communications (Marcom)

Integrated Marketing
Communication (IMC)
Programs

Business-to-Consumer Business-to-Business Integrated Marcom

(B2C) (B2B) B2C&B
The Tools of Marketing Communications
1. Media Advertising 5. Trade- and Consumer- 6. Event Marketing and
• TV Oriented Promotions Sponsorships
• Radio • Trade deals and buying • Sponsorship of sporting
• Magazines allowances events
• Newspapers • Display and advertising • Sponsorship of arts,
allowances fairs, and festivals
2. Direct Response and
Interactive Advertising • Trade shows • Sponsorship of causes
• Direct mail • Cooperative advertising 7. Marketing-Oriented
• Samples Public Relations and
• Telephone solicitation
• Coupons Publicity
• Online advertising
• Premiums 8. Personal Selling
3. Place Advertising
• Billboards and bulletins • Refunds/rebates
• Posters • Contests/sweepstakes
• Transit ads • Promotional games
• Cinema ads • Bonus packs
4. Store Signage and Point- • Price-off deals
of-Purchase Advertising
• External store signs
• In-store shelf signs
• Shopping cart ads
• In-store radio and TV
Definition of IMC
• Integrated Marketing Communications (IMC)
• Is a communications process for planning, creation, integration,
and implementation of diverse forms of marcom delivered to a
brand’s targeted customers and prospects
• Has as its goal influencing or affecting behavior of targeted
audience
• Considers all touch points a customer/ prospect has with the brand
as potential delivery channels for messages
• Requires that all of a brand’s communication media deliver a
consistent message
• Has customer/prospect as its starting point for determining types of
messages and media to inform, persuade, and induce action
• The concept under which a company carefully integrates and co-
ordinates its many communications channels to deliver a clear,
consistent message about the organisation and its products.
Factors Affecting IMC

• Information Technology
• Changes in Channel Power
• Increases in Competition
• Brand Parity/similarity
• Integration of Information
• Decline in Mass Media Effectiveness
Integrated marketing communications success
factors
• Coherence – different communications are logically
connected.
• Consistency – multiple messages support and
reinforce, and are not contradictory.
• Continuity – communications are connected and
consistent through time.
• Complementary – synergistic, or the sum of the parts is
greater than the whole!
• IMC and Synergy
– Using multiple communication tools in conjunction
with one another can produce greater results
(synergistic effects) than tools used individually and
in an uncoordinated fashion.
Five Key Features of IMC

1. Start with the customer or prospect.

2. Use any form of relevant contact or touch point.

3. Speak with a single voice.

4. Build relationships.

5. Affect behavior.
Key IMC Feature # 1
• The Consumer or Business Customer Must Represent
the Starting Point for All Marketing Communications
Activities
• Takeaway:
– Consumers in Control
• Outside-in approach: learn the media preferences
and lifestyles of customers/prospects to know the
best contexts to reach them with brand messages.
– Reduced Dependence on Mass Media
• Consumers are increasingly in control of their
media choices for acquiring information about
Key IMC Feature # 2
• Use Any and All Marcom Tools
That Are Up to the Task
• Takeaway:
– 360-Degree Branding
• A brand’s touch points should be
everywhere the target audience
is.
– Not All Touch Points
Are Equally Engaging
• Surround customers/prospects
with the message, but not to the
point of being irritatingly present.
Key IMC Feature # 3

• Multiple Messages Must Speak

with a Single Voice
• Takeaway:
– A brand’s positioning statement must:
• Present a clear idea of the
brand in its target market’s mind
• Consistently deliver the same
unified message across all
media channels on all occasions.

© Richard B. Levine / Newscom

Key IMC Feature # 4

• Build Relationships Rather Than

Engage in Flings
• Takeaway:
– Loyalty programs promote long-
term relationships between
customers and brands that lead to
customer retention.
– Experiential marketing programs
can create brand experiences that
make positive and lasting
impressions on customers.
Key IMC Feature # 5

• Don’t Lose Focus of the Ultimate Objective: Affect

Behavior
• Takeaway:
– The goal of IMC is to influence the target audience
in such a way that the audience engages in a
specific desired behavior.
– The effectiveness of an IMC program is judged by
its success in terms of its ultimate influence on
behavior.
Marketing Communications

• Marketing Communications’ Objective

– To enhance brand equity by moving customers to
favorable action toward the brand—trying it,
repeat purchasing it, and becoming loyal toward
the brand.
• Brand Equity
– The degree to which consumers favorably perceive
the brand’s features and benefits as compared to
competitive brands and how strongly these views
are held in memory
Making Brand-Level Marcom Decisions and
Achieving Desired Outcomes
Fundamental Marcom Decisions

Fundamental
Marcom Program
Decisions

Setting
Targeting Positioning Budgeting
Objectives
Fundamental Marcom Decisions (cont’d)

Top-down
(TD)

Top-down/Bottom-up
(TD/BU)

Budgeting
Procedures

Bottom-up/Top-down
(BU/TD)

Bottom-up
(BU)
Fundamental Marcom Decisions:

All marketing
1. Directed to a specific
communications target market
should be:

2. Clearly positioned

3. Created to achieve
a specific objective

4. Undertaken within
budget constraints
Marcom Implementation Decisions

Marcom Program
Implementation
Decisions

Mixing Creating Selecting Establishing

Elements Messages Media Momentum
Marcom Outcomes

Marcom
Outcomes

Enhancing Affecting
Brand Equity Behavior
Marcom Program Evaluation

Marcom Program
Implementation

Measuring Results Taking Corrective

for Accountability Action
Behavioral Greater Investment
Impact
Providing
Different
Communication Feedback Communication
Outcomes Combinations
Revised Strategy
Revised Allocations
Contemporary Perspective of IMC

Recognized
Recognized as
asaabusiness
businessprocess
process

IMC
IMC Importance
Multiple
Multiple of
ofrelevant
relevant
Importancerelevant audience
audiences
relevant audience
audiences

Demand
Demandfor
foraccountability
accountabilityand
and
Demand
Demand for
for accountability
accountability
measurement
measurementof ofoutcomes
outcomes
• There are several important aspects of of IMC:
– Recognized as a business process – rather than just
tactical integration of various communication
activities.
– Importance of relevant audiences – externally these
include customers, prospects, suppliers, investors,
interest groups, and the general public. Employees are
an example of an internal audience.
– Demand for accountability – increased emphasis on
the outcomes of marketing communication programs.

• Note :
• Understand that IMC involves more than just coordinating the various
elements of a marketing and communications program into a “one
Growing Importance of IMC
• Strategic integration of communications
functions
– Avoids duplication
– Synergy among promotional tools
– More efficient and effective marketing
• Rapidly changing environment: the driving forces
behind the communications environment
– Consumers
– Technology
– Media
Behind the Growing Importance of IMC
• A major reason for the growing importance of the IMC approach is the
ongoing revolution that is changing the rules of marketing. These
changes include:
– A shift in dollars from media advertising to other forms of promotions
particularly consumer and trade oriented sales promotion.
– A movement away from mass media and advertising toward more targeted
communication tools such as event marketing and sponsorship, direct mail,
and the Internet.
– A shift in marketplace power from manufacturers to retailers resulting in
retailers demanding larger promotional fees and allowances from
manufacturers.
– Technology facilitated a rapid increase in database development and
information sharing. Marketers are using this information to improve market
targeting.
– Greater accountability from advertising agencies and changes in agency
compensation. Companies are moving toward incentive-based systems of
compensation.
– Rapid growth of the Internet. The interactive nature of the Internet has made
it a vital part of any communications strategy.
Behind the Growing Importance of IMC

From Toward
Media
Media advertising
advertising Multiple
Multiple forms
forms of
of communication
communication

Mass
Mass media
media Specialized
Specialized media
media

Manufacturer
Manufacturer dominance
dominance Retailer
Retailer dominance
dominance

General
General focus
focus Data-based
Data-based marketing
marketing

Low
Low agency
agency accountability
accountability Greater
Greater agency
agency accountability
accountability

Traditional
Traditional compensation
compensation Performance-based
Performance-based compensation
compensation

Limited
Limited Internet
Internet availability
availability Widespread
Widespread Internet
Internet availability
availability
The Role of IMC in Branding
• Brand identity is a combination of
– Name
– Logo
– Symbols IMC plays a major role in
– Design developing and sustaining
– Packaging brand identity and equity
– Performance
– Image or associations
The Communication Process
• Communication process consists of some interrelated
steps or parts through which messages are sent from
sender to receiver.
• The process of communication begins when the sender
wants to transmit a fact, idea, opinion or other
information to the receiver and ends with receiver’s
feedback to the sender.
• Communication process is a chain made up of
identifiable links.
• The communication process is the method by which the
sender transfers information and understanding to the
receiver.
Elements Of The Communication Process

• The process of communication involves five

main elements:
» sender-encoder
» message
» medium
» receiver-decoder
» feed back
• An effective message does three things
– Gains the receiver’s attention
– Achieves understanding by both sender and
receiver
– Stimulates receiver’s needs and suggests
appropriate methods of satisfying them
Elements Of Communication Process:
Sender
• the person who transmits, spreads, or communicates a
massage
• the one who conceive/encode and initiates the message
with the purpose of
– informing, persuading, influencing, and changing the
attitude, opinion, or behavior of the receiver or
audience listener
• He /she decide
– the communication symbols,
– the channel, and
– the time for sending the message
Encoding

• Is changing the raw idea from its mental form into

symbols,
– that is, patterns of words, gestures, pictorial forms or signs
(physical or sounds) of a specific visual /oral language.

• The sender must choose certain words or non verbal

methods to send an intentional message.
– This activity is called encoding.
Message
• The result of the encoding is the message-either verbal or
nonverbal.
• Message is a meaningful idea that people want to share
with others, with the following purposes
– to have others understand their ideas,
– to understand the ideas of others
– to gain acceptance of ideas, and
– to produce action
• The form the message takes depends on the medium used
to carry it.
Channel
• The channel is a path, route or medium through which a
message is transmitted.
• variety of channels, including face-to-face
communication, telephone, group meetings, computers,
memos, policy statements, reward systems, production
schedules, sales forecasts, and videotapes.
• The choice between oral and written communication
channels may be determined by:
– Background of the audience such as education, gender, age,
experience, etc.
– Availability and cost of the channel
– Nature of the message such as confidentiality, length, etc.
Decoding
• the act of translating symbols of communication into their
ordinary meanings,
– Process through which receiver interpret/ perceive the message
Receiver
– is the targeted audience of the message/decoder.
– a receiver is any person who notices and attaches some
meaning to a message.
Feed back
• connects the receiver in the communication process with the
sender, who, in turn receive feedback and,
– thus, gets to know that communication has been accomplished.
• make communication complete
Process of Communication
Interactive Communication Model
Verbal ; Non-verbal And Visual Communication

Most common ways to communicate

ag es
a l I m
Visu
pe aking
S

Bod
y L an
Writing gua
ge
Verbal communication
• Verbal communication is the use of sounds and words to
express yourself.
• VC includes oral communication, through words and
writing/the written word.
• Oral communication includes:
– face-to-face commn., interview, telephone
conversation, lectures, Meetings, Presentations and
Lectures, Conversations, conferences
• The effectiveness of oral conversations depends on
– the clarity of speech, voice modulation, pitch, volume,
speed, and even non-verbal communications such as
body language and visual cues.
– Written includes;
• emails, books, letters, magazines, newspapers,
notes, faxes, announcements, commercials etc.
• This type of communication is indispensable for
formal business communications and issuing legal
instructions.
• The effectiveness of written communication depends on
the writing style, grammar vocabulary, and clarity
Nonverbal Communication
Nonverbal communication
• Nonverbal communication is the process of sending and
receiving messages without using words,
– either spoken or written.
– also called manual language.
• Nonverbal communication entails communicating by sending and
receiving wordless messages.
• These messages usually reinforce verbal communication, but they
can also convey thoughts and feelings on their own.
• Physical nonverbal communication, or body language, includes
– facial expressions, eye contact, body posture, gestures such as
a wave, pointed finger and the like, overall body movements,
tone of voice, touch, and others.
Types of Nonverbal Communication
1. Facial Expressions
• The look on a person's face is often the first thing we see, even before
we hear what they have to say.
• The facial expressions for happiness, sadness, anger, and fear are
similar throughout the world.
2. Gestures
• Common gestures include waving, pointing, and using fingers to
indicate numeric amounts.
3. Body Language and Posture
6. Eye Gaze
• such things as looking, staring and blinking are important nonverbal
behaviors.
4. Haptics: Communicating through touch
• Touch can be used to communicate affection, familiarity, sympathy
5. Appearance
• Our choice of color, clothing, hairstyles, and other factors
Visual Communication
• It is a communication where the ideas and information
can be read or viewed through the means of visual aid.
• V/C includes visual displays of information, like
– graphic design, photography, signs, map, chart, poster,
illustration and animation, books, print, magazines,
screen-based media, interactive web design, short
film, design for advertising, promotion, corporate
identity and packaging design, symbols and designs.
• Television and video clips and computer displays are the
electronic form of visual communication.
Advantages of visual communication
– Effective for illiterate receiver
– Helps in oral communication
– Easy explanation
– Simple presentation
– Prevents wastage of time
– Helps in quick decision
– Popular
Disadvantages of visual communication:
• Costly
• Complex presentation: sometimes
• Incomplete method: not sufficient to communicate
effectively /it can be successfully used with oral
communication.
• Wastage of time: Sometimes it take much time to
communicate.
• Difficult to understand: may not be understandable for
some simple people.
• Problem for general readers: Sometimes it cannot create an
impression upon people or listeners. It is less influential and
cannot be used everywhere.
• Others: Ambiguity, situational problem, delays in taking
decision.
Types of Visual Communication
1. Chart: Charts are used extensively by engineers,
scientists and technical experts to covey any information
at a glance.

2. Graphs: of Graphs are used to support any explanation

and to clarify the meaning of written communication. It
also creates and holds interest among the audience.
3. Posters: Posters provide message or any information to
general people in terms of facts, figures and
photographs. It is used for advertising or for
Organizational or political issues.

4. Map: Map helps to identify or locate any location, place,

object so that we can gain advantage to understand any
situation or environment.
Group Assignment

• Take any real business organization, and if not

possible assume any hypothetical firm ;then
develop detail Marketing communications
planning for it.
Chapter Two
Sales Promotion
Definition of Sales Promotion:
• Sales promotions are the set of marketing activities
undertaken to boost sales of the product or service.
• Stimulation of sales achieved through contests,
demonstrations, discounts, exhibitions or trade shows,
games, giveaways, point-of-sale displays and
merchandising, special offers, and similar activities.
• Sales promotion refers to ‘those marketing activities that
stimulate consumer shows and expositions.
• Sales promotion consists of a diverse collection of
incentive tools, mostly short-term, designed to
stimulate quicker and/or greater purchase of particular
products/services by consumers or traders.
• Sales promotion involves non-routine promotional
devices to stimulate and re-stimulate demand of the
products.
• Sales promotion includes non-routine selling efforts
(incentives) for temporary period of time to maintain or
increase sales during particular time interval.
• Sales promotion is an inducement or incentive to
– the sales force, distributors, or ultimate customer with
the primary objective of creating immediate sales.
• There are three important aspects of sales
promotion:
– An extra incentive to buy, such as coupons, rebates,
premium provide extra reason to buy
– Acceleration tools to speed up sales and shorten the
purchase cycle
– Targeting different consumers or businesses
Sales Promotion

“A
“A direct
direct inducement
inducement that
that offers
offers an
an extra
extra value
value or
or
incentive
incentive for
for the
the product
product to
to the
the sales
sales force,
force, distributors,
distributors,
or
or the
the ultimate
ultimate consumer
consumer with
with the
the primary
primary objective
objective of
of
creating
creating anan immediate
immediate sale.”
sale.”

An
An extra
extra AA tool
tool to
to
incentive
incentive to
to buy
buy speed
speed up
up sales
sales

Targeted
Targeted to
to
different
different parties
parties
Objectives of Sales Promotion:
To increase sales volume
To disseminate information
To stimulate customers to make purchases
To promote existing customers to buy more
To introduce new products
To attract new customers
To meet competition from others effectively
To check seasonal decline in the volume of sales
To strengthen competitive position.
To offset price competition.
To speed up sales of slow moving products.
To induce consumers to switch from competitors’ brands.
To maintain or increase sales during off-seasons.
Characteristics of sales promotion:
It is a part of market promotion.
– It involves all the promotional efforts other than advertising, personal
selling, and publicity.
The primary purpose is to induce customer for immediate buying or
dealer effectiveness or both.
It is optional.
– Many companies do not practice it.
It is directed for multiple objectives, like
– to maintain sales during off season, to increase sales, to face competition, to
clear stocks, to improve image, to promote new products, etc.
It consists of offering, wide variety of tools/incentives.
Sales promotion efforts consist of special selling efforts for the
specific time period in forms of;
– short-term incentives and schemes undertaken at consumer level, dealer
level or at salesmen level.
It involves the non-recurrent selling efforts.
– They are not a part of daily activities. They are not undertaken repeatedly.
Sales promotion incentives are imitative.
– Competitors can easily imitate them.

Sales promotion is expensive.

– It may affect adversity the profitability of company.

Excessive use of sale promotion may affect sales and

reputation of company adversely.
It supports personal selling and advertising efforts.
– It is like a bridge between advertising and personal selling.

– It can increase effectiveness of other promotional efforts.

It includes impersonal incentives.

– They are offered openly to all.
The reasons for the growth in sales promotion. These are:
Growing power of retailers. Manufacturers used to have most of the power,
now retailers through technology, consolidation, and private labeling have
more.
Declining brand loyalty. Consumers are purchasing more on the basis of
price and value.
Increased promotional sensitivity. Consumers want to save money and
respond well to promotions that provide them the opportunity to do so.
Brand proliferation. Many new brands offer little differentiation.
Fragmentation of consumer markets. Traditional mass media advertising has
become less effective and promotions are a way to reach market segments.
Short-term focus. Sales promotion is seen as a way of generating an
immediate increase in sales.
Increased accountability. Managers are under pressure to produce sales
results.
Competition. Promotions are seen as way to gain a competitive advantage.
Clutter. Promotional offers can break through the clutter and attract
attention.
Sales Promotion Increases

Growing
Growingpower
powerof
ofretailers
retailers
Declining
Decliningbrand
brandloyalty
loyalty

Increased
Increasedpromotional
promotionalsensitivity
sensitivity

Brand
Brandproliferation
proliferation
Reasons
Reasons Fragmentation
Fragmentationof
ofconsumer
consumermarkets
markets

Short-term
Short-termfocus
focusof
ofmarketers
marketers

Increased
Increasedaccountability
accountability

Competition
Competition

Clutter
Clutter
Consumer Franchise-Building Promotions
• Consumer franchise-building (CFB) promotions are sales
promotion activities that:
– Communicate distinctive brand attributes
– Contribute to the development and reinforcement of brand identity
– Build long-term brand preferences
• Some of the CFB techniques and practices include:
– Frequency programs that encourage repeat purchases
– Contests and sweepstakes and increase involvement with the brand and help
build equity
– Premium offers that are consistent with the brand image help reinforce and/or
build equity
• For years franchise or image building was viewed as the exclusive realm
of advertising, and sales promotion was used only to generate short-term
sales increases.
• But now marketers are recognizing the image-building potential of sales
promotion and paying attention to its consumer franchise-building value.
Consumer Franchise-Building Promotions

Promotional
Promotional Objectives
Objectives

Communicate
Communicatedistinctive
distinctive Develop
Developand
andreinforce
reinforce Build
Buildlong-term
long-termbrand
brand
brand attributes
brand attributes brand
brandidentity
identity preference
preference

Techniques
Techniques and
and Practices
Practices

“Frequency” Premium
Premiumoffers
offersthat
that
“Frequency”programs
programs Sweepstakes
Sweepstakes&&contests
contests reinforce the brand
encourage repeat to reinforce the brand
encourage repeat tobuild
buildequity,
equity,increase
increase image
purchase
purchase involvement imageand
andhelp
helpbuild
build
involvement equity
equity
Nonfranchise-Building Promotions
• Nonfranchise-building promotions are designed to:
– Accelerate the purchase decision process and
– Generate an immediate increase in sales.
• These activities generally;
– do not communicate information about a brand’s unique
features or the benefits of using it,
• so they do not contribute to the building of brand
identity and image.
• Price-off deals, bonus packs, and rebates are examples of
non-FB sales promotion techniques.
• Trade promotions are criticized for being nonfranchise-
building because many of the promotional discounts
given to the trade are never passed on to the consumer.
Nonfranchise-Building Promotions

Objectives

Accelerate the
Generate an immediate
purchase decision
sales increase
process

Limitations

Do not identify unique Do not contribute to

brand features brand identity or image
Nonfranchise-Building Promotions

May
May Include
Include .. .. ..

Price-off deals Bonus packs Rebates or refunds

Shortcomings
Shortcomings

Trade promotions If they do, they may Customers may “buy

benefits may not reach lead only to price price” rather than
customers reductions brand equity
Sales Promotion Methods:

• Sales promotional efforts are carried out at three levels

–
– consumer level sales promotion, dealer level sales promotion,
and salesmen level sales promotion.
Consumer Level Sales Promotion:
• To attract new consumers and maintain existing
consumers.
• Selection of sales promotion tools for consumers
depends on;
– objectives of company, types of products, company’s
financial position, consumer behaviour, market trend,
competition, and other relevant variables.
• Most popular tools of consumer level sales
promotion include:
– Free samples, Coupons, Credit facilities, Guarantee
and warrantee, Price discount and rebate or temporary
price-cut, Free trial, Money refund offer, etc
Objectives of Consumer-Oriented Promotions

To
Toincrease
increase
consumption
consumptionof ofan
an
established
establishedbrand
brand

To
Toobtain
obtaintrial
trialand
and To
Todefend
defend(maintain)
(maintain)
purchase
purchase Objectives
Objectives current
currentcustomers
customers

Enhance
EnhanceIMC
IMCefforts
efforts To
Totarget
targetaaspecific
specific
and
andbuild
buildbrand
brandequity
equity segment
segment
Dealer/Channel Level Sales Promotion:
• Some companies offer short-term incentives to
middlemen to make them active and interested.
– These incentives may be financial or non-financial.
– Such incentives encourage them to make more efforts
to sell particular brands.
• Most common dealer level sales promotion
tools are as below:
– Bonus, Training to staff, Trade discount and cash
discount, Credit facility, Gifts on excess sales, Parties
and meetings, Gifts on special social occasions and
festivals, Financial assistance during difficulties,
Awards, prizes, momentous, and certificates etc
Salesman Level Sales Promotion:
• In this type, salesmen are offered certain
incentives to encourage them to make more
sincere efforts.
– Such incentives are not offered in regular course.
– The incentives are offered for a short-period of time.
– These incentives may be financial or non-financial.
• They include:
– Extra commission, Free training, Sales materials and
samples for customers, Offering products at free-of-
costs or at concessional rate, Bonus, Profit sharing,
Customer entertainment allowances, Appreciation,
recognition, and praise, Awards, prizes and certificates
Importance Of Sales Promotion

• The importance of sales promotion may be

grouped as follows:
a. Importance to Consumers
b. Importance to Manufactures/Producers
c. Importance to Dealers/Middleman
d. Importance to Society & the nation
A) Importance To Consumer
• Sufficient product knowledge:-
– Various consumer promotion methods give sufficient product’s
knowledge to consumer with regard to uses, operations,
maintenance or upkeep of the product.
• Availability of product at reduced prices:-
– Sales promotional tools like prices-off deals, premium offers,
discounts, etc. reduce the price of the product when purchased
on notified occasions.
• Increase in consumers buying confidence:-
– Free samples offered under the sales promotion programme
give the potential consumers an opportunity to use the goods
and satisfy with the quality of product.
• Minimize exploitation :-
– avoid monopolistic problem
B) Importance To Producer / Manufacture
• Increases in sales :-
– sales promotion programme attracts the consumers & stimulates
them for larger purchases leading to increased sales.
• Regular sales of seasonal product :-
– The offer of off-season discounts, price cut etc. on seasonal
products are able to maintain continuous sales of such items.
• Improve effectiveness of advertisement and personal selling :-
– The sales promotion makes the advertisement more effective to
push the sales.
– It is effective technique to minimize the dissatisfaction of
customers that have been create by retail selling.
• Cooperation from middlemen :-
– The various promotional incentives offered to the dealers help
to achieve co-operations from them to sell the product on
priority basis and to maintain maximum stock with them.
• Demand for product and services :-
– The sales promotion techniques have proved successfully in introducing new
product & services.
– By the supply of free samples, the new product makes its place in the market.
• Able to capture new market :-
– The sales promotion programme facilitates the producer to capture new
markets for his products easily.
• Increase in goodwill :-
– The repeated uses of sales promotion tools facilitate the consumers to get a
special identification of the product as well as of the producer.
• Direct control :-
– the producer has full control over the promotional tools & therefore, can
achieve maximum results at minimum costs.
• Effective steps to face the competition:-
– Larger sales, reduce production costs, increase in profits, special identity and
goodwill of the producer, etc. achieved through sales promotion measures
can help to face the competition more effectively
C) Importance To Dealers/ Middle Men
• Facilitates larger sales :-
– The dealers get advantages of sales promotional
techniques for increasing their sales.
• More facilities and assistance :-
– Such as assistance to marketing research, providing
with display materials and managerial assistance, etc.
for maintaining regular stock for sales.
• Direct relation with customers :-
– A direct relationship between the dealers and the
consumers are established through the sales
promotion techniques which will continue for a long
time.
D) Importance To The Society & The Nation
– Increase in standard of living the people
– Increase in employment opportunities
– Development and expansion of transport,
communication, banking, insurance and warehousing
facilities
– Increase in Gross National Product and percapita
income
– Creation of healthy competition in national and
international trade, etc.
Types of Consumer Promotion
Premiums
• low-cost items given to consumers at a discount or for free
– Should be:
– low-cost

– provide added value

– negate the target audience’s price issue

– effectively differentiate the product from the

competition
– create an immediate need to buy
• Premium is an offer of an item, merchandise, or service, either free
or at a low cost, that is an extra incentive for customers. There are
two basic types of premiums:
– Free premiums(Factory packs (in-packs)) are small gifts or
merchandise that is included in the product package.
– Self-liquidating premiums require the customer to pay for some
or all of the cost of the premium.
• Package carried premiums have high impulse value and provide an
extra incentive to buy the product.
• Self-liquidating premiums are designed, not necessarily to make
money, but to cover costs and offer value to the consumer.
Premiums

An
An offer
offer of
of an
an item,
item, merchandise,
merchandise, or or
service,
service, free
free or
or at
at aa low
low cost,
cost, that
that isis an
an
extra
extra incentive
incentive forfor customers
customers

Types
Types of
of Premiums
Premiums

Self-liquidating:
Self-liquidating:
Free:
Free: consumer
consumer required
required toto
Only
Only requires
requires purchase
purchase pay
pay some
some oror all
all of
of the
the
of
of the
the product
product cost
cost of
of the
the premium
premium
Loyalty Marketing Programs
• Frequent buyer programs
• Reward customers for making multiple
purchases
Point-of-Purchase Displays

• Placed in high-
traffic areas and
promote instinct
purchases.
Coupons
• Coupons are certificates that entitle customers to cash discounts
on goods or services.
• Coupons can be used as a way to attract new customers or to
develop customer loyalty.
• Mail coupons to targeted households as an incentive for someone
to shop at your store or purchase your product.
• The major benefit of a coupon is that only the holder can get a
discounted price.
• Coupons are one way to implement price discrimination as price
sensitive customers will be more willing to look for coupons.
• You can also attract new customers or get customers to switch
with coupons.
Pros and Cons of Coupons

Advantages Disadvantages

Hard to tell how many consumers

Appeals
Appealsto
toprice
pricesensitive
sensitiveconsumer
consumer use them and when

Can
Canoffer
offerprice
pricebreak
breakwithout
without Often used by loyal consumers who
retailers
retailersco-op
co-op may purchase anyway

Effective
Effectiveway
wayto
toinduce
inducetrial
trialof
of Declining redemption rates and high
products
products costs of couponing

Can
Canbe
beway
wayto
todefend
defendmarket
marketshare
share Misredemption and fraud
and
andencourage
encouragerepurchase
repurchase
Price-Offs
• Price-off promotions:
• a reduction in a brand’s regular price.
– A price-off is clearly labeled as such on a package.
– Effective when a marketer’s objective is to:
1. Reward present brand users
2. Get consumers to purchase larger quantities of a brand than they normally
would
3. Establish a repeat-purchase pattern
4. Ensure that promotional dollars reach consumers
5. Obtain off-shelf display space
6. Provide the sales force with an incentive to obtain retailer support
• Bonus packs:
• Extra quantities of a product that a company makes available to consumers at
the regular price.
Refunds and Rebates

Refund

• Cash reimbursement for purchasing

consumer packaged goods.

Rebate

• Cash reimbursement for purchasing a durable

good.
Product Samples
• Free trial-size sample
• Distributed through mail, door-to-door, or at a retail or
trade show
• Especially important with new products
Sponsorship
• The sponsoring company pays a fee for the right to
promote itself and its products or services at or on a set
location
Aspects of Consumer Promotions

Economic
Economic

Informative
Informative Affective
Affective
Trade Promotions

• Designed to gain:
– manufacturers’,
– wholesalers’, and
– retailers’ support for a product
Trade Oriented Promotions

Obtain
Obtain distribution
distribution for
for new
new
products
products
Objectives
Objectives
Maintain
Maintain support
support for
for established
established
brands
brands
Encourage
Encourage retailers
retailers to
to display
display
established
established products/brands
products/brands

Build
Build retail
retail inventories
inventories
Types of Trade Oriented Promotions

Contests
Contests and
and incentives
incentives

Co-op
Co-op Advertising
Advertising
Types
Types
Trade
Trade allowances
allowances

POP
POP displays
displays Buying
Buying
Sales
Sales training
training Promotional
Promotional
Trade
Trade shows
shows
Slotting
Slotting
Types of Trade Promotions

• Promotional Allowances
– a cash payment or discounts given by manufacturers
to wholesalers or retailers for performing activities to
encourage sales.
• Cooperative Advertising
– A manufacturer supports the retailer by helping to pay
for the cost of advertising its product locally.
• Slotting Allowances
– a cash premium paid for placing a product on a retailer’s shelves
• Sales Force
Promotions
– awards given to
managers and employees
who successfully meet or
exceed a sales quota.
Problems With Sales Promotion
• Consumer and trade promotions can be an effective tool
for generating short-term increases in sales.
– This is an easier route to profitability than is building
the brand’s image over time.
• However, sales promotions are becoming so over used
that they can be detrimental to a brand.
• For example:
• A brand that is over-promoted may lose perceived
value.
• If a promotion is successful, competitors may copy it.
• Once everyone is using the sales promotion, profit
margins fall.
Problems With Sales Promotion
How to Design a Sales Promotion Strategy
• For a sales promotion strategy to be successful there needs to be a
plan in place.
• When you design a sales promotion strategy, you need to make
sure that,
– the company is getting the best return on investment, and

– good marketing exposure in exchange for the promotional part of the

strategy.

• If a company is using a buy one, get one free promotional strategy,

– then there needs to be sufficient return for the item that will be given for
free to make sales promotion a success.
Promotional Planning Process
• The Promotional Planning is a process of optimizing the
utilization of;
– marketing tools,
– strategies,
– resources to promote a product and service
• with the intent to generate demand and meet the set
objectives.
Stages Involved in Sales Promotion Planning
1. Establishment of objectives:
• Sales-promotion objectives vary according to the target market.
– The objectives could be to encourage the non-users to use the
product, increase the usage of the existing customers, or enter
into a new market segment with a modified product line.
– For intermediaries, objectives could be to encourage off-season
sales or offsetting competitive promotions.
• Sales-promotion activity could also be aimed at internal personnel,
making up part of the reward system
2. Selection of promotional tools:
• Promotional objectives form the basis for selecting the most
appropriate sales-promotion tools.
• The cost and effectiveness of each tool must be assessed with
regard to achieving these objectives in respect of each target
market.
3. Planning the sales-promotion programme:
• The major decisions that need to be made when designing the sales-
promotion programme relate to the timing of the promotion and
how long this tool is to be used.
– Also important are the size of incentive, rules for eligibility ,and the overall
budget for the promotion.
4. Pre-testing:
• This needs to be undertaken to ensure that potentially expensive
problems are discovered before the full launch of a promotion.
• Testing in selected market segments can highlight problems of
ambiguity, response rates and give an indication of cost
effectiveness.
5. Implementation:
• The programme for implementation must include two important
time factors
– First, it must indicate the ‘lead time’- the time necessary to
bring the programme up to the point where the incentive is
made available to the public.
– Second, the ‘sell in time’ which is the period of time from the
date of release to when approximately 90-95 per cent, of
incentive material has been received by potential customers.
6. Evaluation:
• The performance of the promotion needs to be assessed against the
objectives set.

• If objectives are specific and quantifiable, measurement would seem

to be easy.

– However, extraneous factors could account for the apparent

success of many sales-promotion activities.

– For example, competitive actions or seasonal variations may

have influenced customers’ decision making. It can also be
extremely difficult to separate out the effects of sales-promotion
activity from other promotional activity-or indeed from other
marketing-mix changes.
Techniques or Methods of Evaluation
Phases of Evaluation
• The evaluation of an effective sales promotion program is
generally divided into three phases:
1. Pre-testing: Before a sales promotion is offered.
2. Monitoring and Follow Up: When the sales promotion
is operational i.e. when it is going on.
3. Post-testing: At the end of the sales promotion event.
Pre-testing
• How sales promotion is to be communicated and what
would be communicated to the target groups is important
and can be pre-tested.
• For example the pre-tested may find out what is likely to
be the perceived value and the risk.
• To test consumers behavior responds such as trial
purchase, repeat purchase, etc., pretesting consists of
experimenting in certain markets for individual stores in
a market.
• All other factors remain the same; only the sales
• At times, it is advisable to gather and assess the
responses of resellers before launching a promotion
program.
• The best way is to visit certain retailers, dealers and
wholesalers, discuss the program with them and ask for
their valuable suggestions.
• Some of the methods employed during Pre-testing are
– Group Discussion: to know customer’s reaction towards an
idea or a concept
– Hall Tests: The incentives that are found to be most
attractive by customers are ranked, thereby ranking the
different promotions
– Experimentation: two stores where there is and no
promotion
Concurrent testing
• This testing is done when the sales promotion is in
progress.
• Concurrent testing permit the promotion manager to
modify the sales promotion, if needed.
• This type of testing is conducted in terms of sales data
which can be obtained on a weekly or monthly basis.
• It also gathers information related to competitors’ moves
and reactions; assesses the market conditions and the
problems encountered during sales promotion, if any.
Post-testing
• The post-testing phase is analytical in nature.
• Post-testing is done after the promotion period is over.
• To assess the changing consumer awareness and attitude, telephone
calls, questionnaire mailed to the consumers and personal
interviews can be used.
• In these methods, the most expensive is the personal interview
method and the least expensive is the mail.
• To measure the sales affect, sales figures before the promotion
period can be compared with figures at the end of promotion and
one month after the promotion ends.
• Emphasis must be laid on measuring and comparing the
incremental sales rather than the gross sales level and other related
attributes.