UNIT III: PROMOTION MIX

Study Notes

1. Concept of Promotion Mix

Meaning
• Promotion is a key element of the marketing mix — it encompasses all activities that
create awareness, stimulate interest, generate desire, and lead to a purchase.
• The promotional mix is a blend of communication tools chosen by marketers to help a firm
reach its goals.
• It is a subset of the overall marketing mix (4Ps: Product, Price, Place, Promotion).

Definitions
• Definition 1: "A promotion mix is a set of different marketing approaches marketers
develop to optimise promotional efforts and reach a broader audience."
• Definition 2: "Promotion mix is a combination of promotional tools marketers use to
communicate with their target audience."

Importance of Promotion Mix

• Improves Effectiveness of Campaigns:
◦ Ensures promotions reach the right audience at the right time and place, optimising
the budget.
• Helps Segment the Audience:
◦ Different customer groups (by age, gender, preferences) require different
approaches. E.g., a luxury brand targets affluent adults differently from how a gaming
company targets teens.
• Improves Communication with Clients:
◦ Builds trust and loyalty. Automated email campaigns, for instance, respond to
customer behaviour instantly, nurturing leads.
• Informs Subscribers:
◦ Different channels educate customers differently — Instagram showcases products
visually, while SMS highlights local offers.
• Stands Out from the Crowd:
◦ With so many ads competing for attention, a well-designed mix focuses on quality
over quantity — promoting at the right place and time.

2. Advertising
Meaning & Definition
• Derived from the Latin word 'advertise' meaning 'to turn to'; it means giving public notice.
• AMA Definition: "Any paid form of non-personal presentation and promotion of ideas,
goods, and services of an identified sponsor."
• Advertising disseminates information to induce action in accordance with the advertiser's
intent.

Key Features of Advertising

• Paid Form:
◦ The advertiser pays for space or airtime. E.g., a TV ad for Coca-Cola during a prime-
time show is purchased airtime.
• Non-Personal Presentation:
 ◦ No face-to-face contact. Known as 'non-personal salesmanship' — complements
personal selling.
• Identified Sponsor:
◦ The source is disclosed. Without this, it can lead to deception or manipulation.
• Mass Communication & Speedy:
◦ Reaches millions in a matter of hours (TV, digital), keeping cost-per-message low.
• Commercial Purpose:
◦ Ultimately aimed at driving sales and ensuring long-term business viability.

Objectives of Advertising
• Introduce new products and create awareness. E.g., Apple's launch campaigns for new
iPhone models.
• Support personal selling — open doors for the salesforce.
• Reach customers inaccessible to salespeople (rural or remote audiences).
• Fight competition and increase sales — e.g., the intense advertising battle between Coke
and Pepsi.
• Enhance goodwill and improve dealer relations by boosting product credibility.
• Warn the public against imitation products (counterfeiting).

Functions of Advertising
• Promotes Sales:
◦ Wins new customers both nationally and internationally.
• Introduces New Products:
◦ A new firm cannot make an impact without advertising. Quick publicity enables faster
market entry.
• Creates Good Public Image:
◦ Builds reputation and goodwill, strengthening the firm's competitive position.
• Facilitates Mass Production:
◦ Large-scale advertising encourages large-scale production, reducing per-unit costs.
• Stimulates R&D:
◦ Competition through advertising pushes firms to innovate continuously to stay
relevant.
• Educates Consumers:
◦ Informs the public about new products and their uses. E.g., dental hygiene ads
changed public habits on brushing.
• Supports Press & Media:
◦ Ad revenue allows newspapers, magazines, and TV channels to keep subscription
costs low.

3. Sales Promotion
Meaning & Definition
• Short-term campaigns designed to spark interest and create demand for a product or
service.
• Blattberg & Neslin (1990): "An action-focused marketing event whose purpose is to have
a direct impact on the behaviour of the firm's customers."
• Sales promotion is temporary and a 'call to action' — the only promotional tool solely
focused on a direct call to buy.
• Can target intermediaries (push strategy) or consumers directly (pull strategy).

Importance / Functions
• Spreading Information:
◦ Effectively promotes new products and creates awareness in new markets. E.g., a
free sample drive for a new shampoo.
 • Stimulates Demand:
◦ Gives customers an immediate incentive to buy. E.g., 'Buy 1 Get 1 Free' on pizza.
• Increases Customer Satisfaction:
◦ Promotions make customers feel valued; they perceive a higher deal quality.
• Stabilises Sales Volume:
◦ Tactics like time-limited offers (e.g., flash sales) drive purchases by deadlines and
help firms meet sales targets.

Types of Sales Promotions

A. Retailer Promotions
• Offered by retailers to consumers to increase sales. Key types:
◦ Price Reduction: Temporarily lowered prices. E.g., end-of-season sales at clothing
stores.
◦ Retailer Coupons: Issued via advertisements or shelf displays.
◦ Free Goods (BOGO): Buy one get one free. E.g., buy a pizza, get the second at half
price.
◦ Loyalty/Discount Cards: Track purchases and reward regular buyers with exclusive
discounts.
◦ Sweepstakes: Consumers enter a draw to win prizes. E.g., McDonald's Monopoly
game.
◦ Free Trial: Free samples encourage purchase of new products.
◦ Rebates: Partial refund after purchase on submission of proof. E.g., mail-in rebates
on electronics.
◦ Bundled Promotion: Discount for buying complementary items together. E.g.,
burgers and ketchup combo offer.
B. Trade Promotions
• Offered by manufacturers to channel members (distributors, retailers) to stimulate them to
pass on deals to consumers.
• Typical objectives: gain/maintain distribution, obtain temporary price discount, gain market
share, increase sales, sell off old inventory.
• Trade Promotion Vehicles:
◦ Off-Invoice: Discounts on invoice price for units sold over a set period.
◦ Co-op Advertising: Manufacturer funds retailer's advertising of the manufacturer's
products.
◦ Display Allowances: Funds to support retailer displays.
◦ Slotting Fees: Manufacturer pays for shelf space for new product introductions.
◦ Free Goods: Extra stock offered free to induce the retailer to stock a product. E.g.,
buy 10 cases, get 2 free.
C. Consumer Promotions
• Offered directly by manufacturers to consumers, bypassing intermediaries.
• Coupons: Reduce price and prompt immediate purchase. Can be printed, digital, or
mobile. E.g., Domino's app discount coupons.
• Samples: Most effective for new products. Distributed in stores, at events, or by mail.
E.g., perfume testers at malls.
• Contests: Skill-based competitions for prizes. Increases engagement. E.g., a slogan-
writing contest for a new snack brand.
• Sweepstakes: Chance-based draws. E.g., 'Buy any product and enter a lucky draw to win
a car.'
• Loyalty Programs: Points-based rewards for repeat spending. Mostly app-based. E.g.,
Starbucks Rewards.
• Point-of-Purchase Displays: Eye-catching displays in-store to stand out. E.g., Nutella's
branded display stand at checkouts.
 • Rebates: Partial cost reimbursement after submission of proof. Perceived as cheaper
price, but many consumers don't redeem them.

4. Personal Selling
Meaning
• One-on-one interaction between a company representative (salesperson) and the buyer.
• Goal: Uncover the prospect's needs and explain how the product/service satisfies those
needs.
• Aims to build lasting relationships and convert prospects into customers.

Advantages & Disadvantages

• Advantages: High customer attention, customised message, interactivity, persuasive
impact, potential for lasting relationships, adaptability, opportunity to close the sale.
• Disadvantages: High cost, labour-intensive, expensive, can only reach a limited number
of customers.

The 7-Step Personal Selling Process

Step 1: Prospecting & Qualifying
• Find and identify strong potential customers (leads) through lead generation.
• Lead generation methods: digital advertising campaigns, trade shows, referral programs,
third-party lists.
• Qualify leads: filter out those who recently bought from competitors or can't afford the
product.
• Example: A premium skincare brand uses Instagram ads to attract sign-ups, then
qualifies them by income range and location.
Step 2: Pre-Approach
• Thorough research on the prospect — product needs, current brands used, brand
awareness, decision-makers, financial standing.
• Sources: interviews with existing clients, financial reports, credit histories, CRM data.
• Example: A salesperson visiting an office furniture prospect should check recent news
about the company before meeting — outdated research (like congratulating a company
that actually downsized) can badly damage credibility.
Step 3: Approach
• Make initial contact, build rapport, and gather more information on needs.
• A soft approach works best — the goal is to build the relationship, not immediately push
the product.
• The salesperson's role: ask questions and listen intently. Hard-sell tactics are often
rebuffed.
• Key mistake to avoid: Talking too much and not listening. E.g., Ramesh immediately
pitching features without understanding the client's needs led to the client ending the
conversation early.
Step 4: Presentation
• Showcase the product benefits most relevant to the prospect's uncovered needs.
• Presentation formats:
◦ Stimulus-Response: Scripted approach where the salesperson anticipates
customer responses and counters with pre-planned stimuli.
◦ Formula Selling (AIDA): Takes the buyer through Attention → Interest → Desire →
Action. E.g., a car salesperson first gets attention with a test drive, then builds desire
through features.
 ◦ Need/Satisfaction Format: Opens with probing questions to identify needs, then
tailors the pitch. E.g., a scheduling software rep asks a café owner about staffing
challenges, then demonstrates how the software solves them.
◦ Adaptive Selling: Rapidly customises approach and even the product offering to
each customer's unique needs.
◦ Consultative Selling: Salesperson acts as an advisor, building a relationship and
helping solve problems — not just sell a product.
Step 5: Handling Objections
• Objections are inevitable; well-prepared salespeople can minimise them through research.
• Common strategies: Listen → Restate the objection → Respond with clarifying questions.
• Price is the most common objection. Knowing this in advance and preparing a response is
critical.
• Example: When a customer says 'Your product is too expensive,' the salesperson should
not immediately defend with 'But ours is better quality!' — instead, first listen, restate, and
ask: 'What features are most important to you for this price range?'
Step 6: Closing
• Asking for the order — the most feared but most critical step.
• Use a trial close (discussing financial terms, delivery) to gauge the prospect's readiness
before making the formal ask.
• Asking for the order is the step that converts a prospect into a customer.
Step 7: Follow-Up
• Post-sale onboarding and ensuring smooth product delivery/service.
• Critical for creating Lifetime Customer Value (LCV) — retaining current customers is far
cheaper than acquiring new ones.
• Leads to repeat business, referrals, and upsells in future order cycles.

5. Public Relations (PR)

Meaning & Definition
• PR is the set of techniques and strategies for managing how information about a company
is disseminated to the public and media.
• Goals: disseminate news, maintain brand image, and put a positive spin on negative
events.
• CIPR Definition: "PR is a strategic management function that adds value to an
organisation by helping it manage its reputation."
• Unlike advertising (paid), PR is often meant to look organic and not necessarily promote a
product directly.
• PR is a continuous, planned activity — press releases, news conferences, social media
posts, journalist interviews.

Functions of PR
• Press Relations: Projects a positive company image to the media and public.
• Product Publicity: Creates events and activities that generate attention for
products/services.
• Effective Communication: Promotes the organisation's working style through internal
and external communication.
• Developing Content: Newsletters, blogs, speeches, and press releases.
• Counselling: Advises management on public issues, protects image during crises, and
improves positioning during good times.

Objectives of PR
• Promote smooth business functioning and help achieve organisational goals.
 • Build corporate image and create favourable impressions of the company's
products/services.
• Generate buzz for new product launches and sustain public curiosity until launch.
• Decrease promotional costs by leveraging free media channels.
• Overcome misconceptions and negative perceptions about the company or product.

Tools of PR
• Press Release: Newsworthy announcements issued to the media. Written like a story
with an attractive headline. E.g., McDonald's press release for their 'Why Waste Me?' anti-
food-waste charity campaign.
• Press Kits: Comprehensive promotional packages for journalists — includes company
biography, product photos, senior management profiles, customer comments.
• Brochures: Booklets with background, vision, mission, goals, and projects. Published
annually or half-yearly.
• Newsletters: Periodical publications targeting specific customer groups. Written
informally. E.g., H&M and Daniel Wellington send email newsletters.
• Annual Reports: Comprehensive reports on operations and financial performance for
shareholders and interested parties.
• Conferences & Seminars: Regular events/webinars to keep the public aware of the
organisation. E.g., an IT firm hosting a cybersecurity webinar.
• Events: Build the organisation's image through opening ceremonies and high-profile
launches. E.g., a publishing house hosting a star-studded book launch.

6. Publicity
Meaning
• Gaining public visibility or awareness for a product/company via media. Unlike advertising
(paid), publicity is earned — it comes about because something is deemed newsworthy.
• Forms: news stories, press releases, event sponsorship, influencer partnerships,
customer testimonials.
• Channels: newspapers, TV, radio, online blogs, social media.

Objectives of Publicity
• Increasing Brand Visibility: Creates widespread awareness through media coverage
and exposure.
• Enhancing Credibility: Coverage through credible media/influencers is seen as unbiased
endorsement — more trusted than ads.
• Influencing Consumer Perception: Positive publicity shapes attitudes, influences
purchasing decisions, and builds brand loyalty.
• Generating Buzz: Well-executed campaigns create excitement around launches or
initiatives.
• Managing Brand Reputation: Addresses crises, corrects misinformation, and responds
to negative publicity.

Types of Publicity
• Media Coverage / PR: Press releases, media interviews, press conferences, news
articles. E.g., Elon Musk appearing on news channels for Tesla.
• Social Media Publicity: Influencer partnerships, social mentions, viral campaigns. E.g., a
food influencer reviewing a restaurant on YouTube.
• Event Publicity: Sponsorships, product launches, event coverage. E.g., Red Bull
sponsoring extreme sports events.
• Celebrity Endorsements: Partnering with celebrities to generate attention. E.g., Virat
Kohli promoting MRF tyres.
 • Guerrilla Marketing / Publicity Stunts: Unconventional campaigns for buzz. E.g., flash
mobs or unusual public installations that go viral.
• Content Marketing: Shareable content (videos, infographics, blogs) distributed across
channels to attract media attention.

Advantages & Disadvantages of Publicity

• Advantages: Credibility and trust (seen as unbiased), cost-effective (earned not paid),
wider reach, third-party validation.
• Disadvantages: Lack of control (media can alter the message), uncertain results
(negative publicity is possible), time & resource intensive, limited message control.

7. Direct Marketing
Meaning & Definition
• Direct communication or distribution to individual consumers without a third-party
intermediary (mass media).
• DMA Definition: "An interactive system of marketing which uses one or more advertising
media to effect a measurable response and/or transaction at any location."
• Key characteristics: Interactive (1-to-1), uses multiple media, measurable response, and
transactions can occur anywhere.
• Channels: mail, email, social media, SMS, phone.

When is Direct Marketing Ideal?

• When the company distributes primarily through mail or shipping directly to customers.
• When standard advertising is not reaching the target segment effectively.
• When a longer message is needed to explain the product's full value proposition.
• When customer retention and repeat purchases are the primary goal.
• When the company has a well-defined universe of customers with accessible contact
data.

Direct Marketing Techniques

• Telemarketing: Phone calls to customers using automated systems or staff. Reaches a
large audience quickly. E.g., banks calling customers about new credit card offers.
• Email Marketing: Direct communication via email — company-owned lists or purchased
lists. E.g., Amazon's personalised product recommendation emails.
• Text (SMS) Marketing: High response rates due to widespread phone usage. Cost-
effective. E.g., Swiggy sending SMS offers for local restaurant deals.

Advantages & Disadvantages

• Advantages: Focused on targeted promotion, personalised messaging, easy to measure
response and success, easy to test different messages, cost-effective with a well-
managed database.
• Disadvantages: Privacy and information security concerns, variable response rates,
ineffective campaigns can be costly, negative image of spam/junk mail, database
maintenance is expensive and requires constant updating.

8. Factors Affecting the Promotion Mix

1. Nature of the Product:
◦ Consumer goods → mass advertising. Industrial/technical products → personal
selling. E.g., computers need personal selling; biscuits rely on advertising.
2. Nature of the Market:
 ◦ Industrial markets → advertising is informative; consumer markets → advertising is
both informative and persuasive. Strategy varies by target demographics (age, sex,
income, education).
3. Stage in Product Life Cycle (PLC):
◦ Introduction: Heavy advertising + personal selling for awareness. Growth: Extended
advertising for market share. Maturity: Persuasive ads + sales promotions. Decline:
Minimal promotion.
4. Market Penetration:
◦ Well-known products motivate middlemen to advertise more. E.g., Coca-Cola's
distributors actively run local ad campaigns.
5. Market Size:
◦ Limited buyers → direct selling sufficient. Large market → advertising becomes
essential. E.g., a local bakery uses personal relationships; FMCG brands use TV
ads.
6. Characteristics of Buyers:
◦ Experienced industrial buyers need personal selling; general consumers need
advertising. Buyer behaviour, social influence, and time available affect the choice.
7. Distribution Strategy:
◦ Direct manufacturer-to-customer → personal selling is primary. Longer distribution
channels → advertising takes precedence.
8. Pricing Strategy:
◦ Higher price than competitors → personal selling to justify value. Low price → little
promotion needed. Higher dealer margins → dealer-level sales promotions.
9. Cost of Promotion:
◦ Media costs vary significantly. Firms must compare ROI across different promotional
tools before committing.
10. Availability of Funds:
◦ Larger budget → can afford advertising and sales promotion. Small firms with limited
resources rely more on personal selling. E.g., a startup may rely on word-of-mouth
and social media rather than TV ads.

— End of Unit III Notes —