 Promotion Decision: concept, elements and Objectives.

Advertising, sales
promotions, Public Relations and Publicity, Personal Selling. Types of
intermediaries: Wholesaler and Retailer
 Introduction to Promotion
 Promotion is one of the four core elements of the Marketing Mix, often
referred to as the 4 Ps (Product, Price, Place, Promotion).
 It is the process of communicating the value of a product or service to
customers, with the primary goal of generating sales and building brand
loyalty.
 Advertising is a paid, non-personal form of communication used by
businesses and organizations to inform, persuade, or remind customers
about their products, services, ideas, or brands.
 It is transmitted through various media such as television, newspapers,
radio, social media, internet, billboards, and magazines.
 In essence, promotion is about storytelling and persuasion. It's how a
company informs, reminds, and persuades potential buyers about its brand and
products. A successful promotional strategy:
 Informs consumers about the product's features, benefits, and availability.
 Persuades them that this product is the best choice to satisfy their needs or
desires.
 Reminds existing customers about the brand and encourages repeat purchases.
 Differentiates the product from competitors in the market.
 Promotion is not just about short-term sales; it's a crucial tool for building long-
term brand equity and shaping customer perceptions.
 The Promotional Mix: Major Promotional Tools
 Companies don't rely on just one method to promote themselves. They
use a blend of tools, known as the Promotional Mix. The five major
components of the promotional mix are:
 1. Advertising
2. Sales Promotion
3. Public Relations (PR)
4. Personal Selling
5. Direct Marketing
Advertising
 Any paid form of nonpersonal presentation and promotion of ideas,
goods, or services by an identified sponsor.
 Even if today’s challenging media environment, goods ads can pay off.
 In developing an advertising program, marketing managers must always
start by identifying the target market and buyer motives.
 Advertising Goal
 Is a specific communications task and achievement level to be
accomplished with a specific audience in a specific period of time.
 They can make five major decisions
 Mission (Objective of advertising)
 What is the purpose of the advertisement?
 Objectives may include:
 Creating awareness
 Building brand image
 Informing about a new product
 Persuading customers to buy
 Reminding customers about the brand
 Example: A new smartphone ad’s mission may be to inform
customers about advanced features.
 Money (Advertising Budget)
 How much should be spent on advertising?
 Budget decisions depend on:
 Stage in product life cycle (new products need higher budgets).
 Market share and competition.
 Type of media selected.
 Frequency of advertising.
 Example: A multinational may spend millions on TV ads, while a
startup may rely on social media.
Factors Affecting Budget Decisions
1. The Stage in the Product Life Cycle (PLC)
 New products typically merit large advertising budgets to build awareness
and to gain consumer trial.
 Established brands usually are supported with lower advertising budgets,
measured as ratio to sales.

 2. Market share and Consumer Base

 4. Advertising frequency
 The number of repetitions needed to put across the bran’s message to
consumers has on obvious impact on the advertising budget
 5. Product Substitutability
 Brands in less well differentiated or commodity like product classes (soft
drinks, banks, airlines) require heavy advertising to establish a differential
message.
 Message (Content of advertising)
 What message should the ad communicate?
 It includes:
 Appeal (emotional, rational, moral).
 Theme (tagline, slogan).
 Format (storyline, demonstration, humor, celebrity endorsement).
 Example: Nike’s “Just Do It” conveys motivation and empowerment.
 Media (Advertising Channels)
 Media selection is finding the most cost effective media to deliver the
desired number and type of exposures to the target audience.
 Where and how will the message be delivered?
 Types of media:
 Traditional: TV, radio, newspapers, magazines, outdoor (billboards).
 Digital: social media, websites, search ads, influencer marketing.
 Direct: email, SMS, brochures.
 Example: Coca-Cola uses TV + social media + outdoor hoardings for
maximum reach.
 The effect of exposures on audience awareness depends on the exposures’
reach, frequency, and impact.
 Reach (R). The number of different persons or households exposed to a
particular media schedule at least once during a specific time period
 Frequency (F). The number of times within the specified time period that
an average person or household is exposed to the message.
 Impact (I). The qualitative value of an exposure through a given medium.
 Measurement (Evaluating effectiveness)
 How to measure if advertising worked?
 Tools for evaluation:
 Sales figures before & after the campaign.
 Brand recall and recognition surveys.
 Website traffic, clicks, and conversions.
 ROI (Return on Investment) of ad spend.
 Example: A company may track how many leads or sales increased
after running a digital ad campaign.
 Summary:
 Mission → Why advertise?
 Money → How much to spend?
 Message → What to say?
 Media → Where to say it?
 Measurement → Did it work?
 Functions of Advertising
 Informing – Provides information about new products, services, prices, uses, or
availability.
 Persuading – Influences customers’ buying decisions by creating preference
and desire. Aims to create liking, preference, conviction, and purchase of a
product or service.
 Some persuasive advertising uses comparative advertising which makes an
explicit comparison of the attributes of two or more brands.
 Reminding – Keeps the brand or product alive in the consumer’s mind.
 Educating – Educates customers about how a product can solve problems or
improve life.
 Brand Building – Develops brand image, identity, and loyalty among
consumers.
 Supporting Sales Efforts – Assists salespeople by preparing the market
and creating awareness before personal selling.
 Expanding Market – Reaches large audiences, including potential new
markets.
Informative Advertising
 When Colgate introduces a new toothpaste with herbal ingredients, its
advertisement may focus on:
 Explaining that the toothpaste contains natural herbs like neem and
clove.
 Highlighting benefits such as "fights bacteria naturally" or "provides long-
lasting freshness."
 Giving details about how it is different from regular toothpaste.
Persuasive Advertising
 When Coca-Cola runs an ad campaign with the slogan “Open Happiness”,
it doesn’t just inform you about the drink. Instead, it persuades you to
choose Coke over other soft drinks by emotionally connecting the brand
with happiness, friendship, and good times.
 Here the purpose is to influence customer preference and create
brand loyalty, not simply to provide information.
Place Advertising
 Place advertising or out of home advertising, is a broad category including
many creative and unexpected forms to grab consumer’s attention.
 The rationale is that marketers are better off reaching people where they
work, play and shop.
 Some options include bill boards, public spaces, product placement, and
point of purchase.
 Bill boards
 Billboards – hoardings, at traffic junctions and high ways are important
reminder medium
 Electronic display are being increasingly used for outdoor hoardings.

 Public Spaces
 Advertisers are placing ads in unconventional places such as movies, airlines,
and lounges, sports arenas, office and hotel elevators, and other public places.
 Point of purchase
 In store advertising includes ads on shopping carts, cart straps, aisles, and
shelves etc.
 Advertorials are print ads that offer editorial content reflecting favourably
on the brand and are difficulty to distinguish from newspaper or
magazine content. Many companies include advertising inserts in
monthly bills.
 Advantages of Advertising
 Wide Reach – Can reach a large number of people at the same time.
 Brand Awareness – Helps in establishing and maintaining brand image.
 Educates Consumers – Provides knowledge about product features,
benefits, and usage.
 Cost-Effective (per person) – Though overall cost may be high, the cost
per person reached is usually low.
 Supports Sales & Distribution – Prepares customers to buy, making
personal selling easier.
 Encourages Innovation – Competitive advertising pushes companies to
innovate and improve products.
 Influences Buying Behavior – Creates emotional appeal and motivates
customers to choose one brand over another.
 Long-Term Impact – Builds lasting goodwill and customer loyalty.
Direct Marketing
 Involves delivering goods and services straight to the consumer without
using intermediaries or distributors.
 Direct marketing is a promotional method in which a company
communicates directly with potential customers without using
intermediaries (like wholesalers, retailers, or mass media).
 Its main aim is to generate an immediate response — such as a purchase,
inquiry, or request for more information.
 Key Features:
 Direct interaction between seller and buyer.
 Personalized communication.
 Seeks immediate response (buy, call, click, register).
 Results are measurable (response rate, sales).
 Examples:
 Telemarketing (sales calls).
 Direct mail (letters, brochures, catalogs).
 Email and SMS marketing.
 Door-to-door sales.
 Online targeted ads with response links (like "Buy Now" or "Sign Up").
Telemarketing
 Telemarketing as a Direct Marketing Method
 Telemarketing is a direct marketing technique where businesses contact
potential or existing customers over the telephone to promote
products, services, or gather information.
 It involves:
 Outbound calls – where the company’s sales team calls customers to
introduce or sell a product/service.
 Inbound calls – where customers respond to advertisements, toll-free
numbers, or promotions and call the company for more details.
 Features of Telemarketing:
 Direct interaction – Immediate two-way communication with the
customer.
 Personalization – The sales representative can tailor the conversation to
the customer’s needs.
 Immediate feedback – Customers can ask questions or raise concerns
right away.
 Lead generation – Often used to qualify leads or fix appointments for
sales teams.
Direct Mail Marketing
 Direct mail marketing is a form of direct marketing where businesses send
promotional materials physically through postal mail to targeted
customers. Instead of advertising through mass media (like TV, radio, or
newspapers), companies directly reach out to specific individuals or households.
 It usually involves sending items such as:
 Brochures
 Catalogs
 Postcards
 Newsletters
 Promotional letters or discount coupons
 Guerrilla marketing is a marketing strategy that uses unconventional,
innovative, and often low-budget tactics to promote a product, service, or
idea and create maximum exposure.
 Key Features:
 Relies on creativity, not a big budget.
 Surprises the audience and creates buzz.
 Often carried out in public places with high visibility.
 Builds strong word-of-mouth and virality.
 Aims for emotional connection and memorability.
 Examples:
 Flash mobs promoting a brand in a mall or railway station.
 Creative street art or graffiti that advertises a product.
 Placing unexpected props in public areas (like Coca-Cola’s “Happiness
Vending Machine”).
 Ambient marketing (e.g., McDonald’s painting a pedestrian crossing
like french fries).
 Social media “stunts” that go viral.
Email marketing
 1. E-Mail Marketing
 Email marketing is a form of direct digital marketing where businesses send
commercial messages through email to a targeted group of people.
 Key Features:
 Personalization – Emails can include the recipient’s name, purchase history, or
interests.
 Cost-effective – Much cheaper than physical direct mail.
 Automated – Companies use email marketing tools to send bulk or scheduled emails.
 Trackable – Marketers can measure open rates, click-through rates, and conversions.
 Example: An online store sends you a "Welcome Email" with a 20% discount
coupon after you sign up.
 2. SMS Marketing
 SMS (Short Message Service) marketing is another direct marketing method
where companies send promotional or transactional messages directly to
customers’ mobile phones.
 Key Features:
 High open rate – SMS messages are usually opened within minutes.
 Short and clear – Limited to 160 characters, so the message must be precise.
 Instant delivery – Suitable for time-sensitive offers or alerts.
 Permission-based – Customers usually need to opt-in to receive SMS.
 Example: A restaurant sends an SMS saying “Get 15% OFF today on all
online orders! Use code: FOOD15”.
Kiosk Marketing
 A Kiosk is a small building or structure that might house a selling or
information unit
 The name describes newsstands, refreshment stands, and free standing
and rail stations and along aisles in a mall.
Online targeted Ads
 Online targeted ads are digital advertisements that appear only to a
specific audience, based on factors like age, gender, location, interests,
search history, or online behavior.
 When these ads include a response link (call-to-action link), they
encourage the viewer to take immediate action—such as clicking to visit a
website, filling out a form, downloading an app, or making a purchase.
 Key Features:
 Targeted Audience – Ads are shown only to people who are most likely to
be interested.
 Response Link (CTA) – A clickable button or hyperlink like “Shop Now”,
“Register Here”, “Learn More”, or “Download”.
 Measurable – Marketers can track how many people clicked the link,
signed up, or bought something.
 Interactive – Unlike traditional ads, customers can directly engage with
the ad in real time.
 Examples:
 A Facebook ad for a fitness app targeted at users interested in health,
with a link: “Start Free Trial →”.
 A Google search ad for flight tickets that shows when someone searches
“cheap flights,” with a link: “Book Now”.
 An Instagram ad for a clothing brand, showing new arrivals with a link:
“Shop the Collection →”.
Personal Selling
 Personal Selling is a face-to-face, two-way communication between a
sales representative and a potential customer with the goal of persuading
them to buy a product or service.
 Unlike advertising (which is one-way and mass-oriented), personal selling
is interactive, personal, and relationship-based.
 Definition:
Personal selling is a promotional method in which a salesperson directly
interacts with customers to understand their needs, provide information,
and convince them to make a purchase.
 Key Features:
 Personal interaction – direct contact between buyer and seller.
 Two-way communication – customers can ask questions, clarify doubts.
 Tailored approach – messages are adjusted to individual needs.
 Relationship building – helps in long-term customer loyalty.
 Immediate feedback – seller understands customer’s reaction instantly.
 Examples:
 A car salesperson explaining different models to a customer.
 A financial advisor selling insurance or investment plans.
 Sales executives in a showroom demonstrating electronics.
 Door-to-door sales of household products.
Sales Promotion
 Definition:
Sales promotion is a short-term marketing strategy that uses incentives
to encourage customers to buy a product or service immediately.
 It complements advertising and personal selling by stimulating quick
sales.
 Key Features:
 Short-term and temporary in nature.
 Provides extra value or incentive.
 Aims to boost immediate sales.
 Often used during product launches, festivals, or when facing
competition.
 Examples:
 Discounts & price reductions.
 Coupons & vouchers.
 Buy-One-Get-One (BOGO) offers.
 Free samples.
 Contests, lucky draws, and loyalty programs.
 Common Steps in the Sales Process
 The sales process refers to the sequence of steps a salesperson follows to
convert a prospect into a customer.
 Here are the 7 common steps:
 Prospecting & Qualifying
 Identifying potential customers (prospects) and evaluating if they have the
need, authority, and ability to buy.
 Pre-approach
 Gathering information about the prospect (preferences, needs, background)
before making contact.
 Approach
 Making the first contact with the customer (in person, call, email) and
creating a good first impression.
 Presentation & Demonstration
 Explaining and showing how the product/service meets the customer’s
needs (sometimes through demos).
 Handling Objections
 Listening to customer concerns (like price, quality, or doubts) and
addressing them convincingly.
 Closing the Sale
 Persuading the customer to make the purchase decision (asking for the
order).
 Follow-up & After-sales Service
 Maintaining relationship, ensuring customer satisfaction, solving post-
purchase issues, and encouraging repeat sales.
Public Relations(PR) in Marketing
 Definition:
Public Relations (PR) in marketing refers to the planned and sustained
efforts of a company to build and maintain a positive image,
goodwill, and strong relationships with its target audience, media,
employees, investors, and the general public.
 Unlike advertising (which is paid), PR relies on earned media and
credibility. It focuses more on trust-building than direct selling.
 Example: When Apple launches a new iPhone, it gets massive media
coverage not just from ads but from news articles, press events, and
reviews — all part of PR.
Key Activities of Public Relations
 Press Relations / Media Relations – Building relationships with journalists
and media to ensure favorable coverage.
 Product Publicity – Promoting specific products through press releases,
events, or reviews.
 Corporate Communication – Maintaining communication with employees,
shareholders, and the public (e.g., newsletters, reports).
 Lobbying – Influencing policymakers, government, or regulatory bodies.
 Counseling – Advising management on public issues, image building, and
crisis handling.
 Event Management – Organizing press conferences, trade fairs, sponsorships,
CSR activities, etc.
Objectives of Public Relations
 Create and maintain goodwill for the organization.
 Build brand credibility and trust among the public.
 Promote new products and services effectively.
 Manage crisis situations and protect company reputation.
 Support marketing efforts by generating positive buzz.
 Improve relations with employees, investors, and stakeholders.
 Educate the public about company policies, CSR activities, or
achievements.
Major Tools of Public Relations & Publicity
 Press Releases – Official announcements shared with media.
 Press Conferences – Meetings with journalists to share major news.
 Media Kits – Information packages for reporters (fact sheets, brochures,
company background).
 Publications – Company magazines, annual reports, newsletters.
 Events & Sponsorships – Trade shows, product launches, charity events,
sports sponsorships.
 Social Media PR – Engaging public via Twitter, LinkedIn, Instagram,
YouTube, etc.
 CSR Activities – Community services, donations, environmental
campaigns.
 Influencer & Opinion Leader Engagement – Building credibility
through experts or influencers.
 Crisis Management Communications – Handling negative publicity or
scandals through official statements.
Intermediaries
 In marketing, intermediaries are the middlemen between producers and
consumers.
 Meaning of Wholesale (Whole Sailing)
 Wholesale refers to the practice where goods are purchased in bulk
from producers/manufacturers and then sold in smaller quantities
to retailers, industrial buyers, institutions, or other intermediaries,
not directly to the final consumer.
 The wholesaler acts as a bridge between the producer and the retailer,
ensuring smooth flow of goods in the distribution channel.
 Wholesaling includes all the activities involved in selling goods or services
to those who buy for resale or business use.
Functions of Wholesale as an Intermediary
 Bulk Breaking
 Producers sell in very large quantities. Wholesalers buy these in bulk and
break them down into smaller lots suitable for retailers.
 Example: A biscuit manufacturer sells 10,000 cartons → wholesaler buys
them and supplies 50–100 cartons to each retailer.
 Storage
 Wholesalers maintain warehouses to store goods until demand arises. This
helps stabilize supply.
 Financing
 They often provide credit facilities to retailers and sometimes advance money
to producers.
 Risk Bearing
 They take risks of damage, theft, obsolescence, and price fluctuations once
they purchase goods from producers.
 Market Information
 Wholesalers collect data about market trends, demand, and consumer
preferences from retailers and pass it on to manufacturers.
 Transportation
 They handle the logistics of moving goods from producers to retailers in
various markets.
 Why do wholesalers used at all?
 Why do manufacturers not sell directly to retailers or final consumers?
 In general, wholesalers are used when they are more efficient in
performing one or more of the following functions.
 Selling and promoting
 Wholesalers’ sales forces help manufacturers reach many small business customers at
a relatively low cost. Wholesalers have more contacts, and often buyers trust
wholesalers more than they trust a distant manufacturer.
 Buying and Assortment building
 Wholesales are able to select items and build the assortments their customers need,
saving the customers considerable work.
 Bulk breaking
 Whole salers achieve savings for their customers through buying in carload and
breaking the bulk into smaller units.
 Warehousing
 Wholesalers hold inventories, thereby reducing inventory cost and risks to suppliers
and customers
 Transportation
 Wholesalers can often provide quicker delivery to buyers because they are closer to
buyers.
 Financing
 Wholesales finance customers by granting credit, and finance suppliers by ordering
early and paying bills on time.
 Risk bearing
 Wholesalers absorb some risk by taking title and bearing the cost of theft, damage,
spoilage, and obsolescence.
 Market information
 Wholesalers supply information to suppliers and customers regarding competitor’s
activities, new products, price developments, and so on.
Types of Wholesalers
 Merchant Wholesalers – Buy and resell goods on their own account.
Independently owned businesses that take title to the merchandise they
handle.
 Agents/Brokers – Facilitate sales without owning goods.
 Aents and brokers are intermediaries who help in buying and selling
goods without taking ownership (title) of the products.
 Unlike merchant wholesalers, they do not buy goods in bulk on their
own account.
 Instead, they act as middlemen who connect buyers and sellers,
earning a commission or fee for their services
 Specialty Wholesalers – Deal in a single line of products (e.g.,
electronics wholesaler).
 General Wholesalers – Deal in multiple product categories
 Full-Service Wholesalers
 Meaning: A type of merchant wholesaler that provides a complete
range of services to both producers and retailers.
 Advantages of Wholesale in Marketing
 Ensures large-scale production is possible (manufacturers sell huge lots at
once).
 Makes goods available to retailers in convenient quantities.
 Reduces storage burden for manufacturers and retailers.
 Facilitates wide market reach for producers.
Retailing
 Retailing in marketing refers to the final stage of distribution where
goods and services are sold directly to the ultimate consumers for their
personal, non-business use. It is the link between
producers/wholesalers and the end customers.
 A retailer or retail store is any business enterprise whose sales volume
comes primarily from retailing.
 Definition:
Retailing is the set of activities involved in selling products or services to
final consumers through different formats like shops, supermarkets,
malls, or even online platforms.
 Role in Marketing:
 Brings products closer to customers.
 Provides convenience of location, variety, and service.
 Acts as the “last touchpoint” in the distribution channel, influencing
customer experience and satisfaction.
Functions of Retailing
 Breaking bulk: Buying in large quantities from wholesalers/producers
and selling in small quantities to consumers.
 Variety & assortment: Offering different brands, models, and sizes in
one place.
 Convenience: Making goods available at locations and times suitable for
customers.
 Customer service: Providing after-sales service, home delivery, credit
facilities, etc.
 Information flow: Sharing consumer preferences and feedback with
manufacturers.
 Types of Retailing:
 Store-based retailing: Department stores, supermarkets, convenience
stores, specialty shops.
 Non-store retailing: Online shopping (e-commerce), direct selling,
telemarketing, vending machines, mail-order.
 Examples:
 Buying clothes from Reliance Trends (store-based retailing).
 Ordering groceries from BigBasket or Amazon Fresh (online retailing).
 Street vendors selling snacks (small-scale retailing).
 Department Stores
 Large retail establishments offering a wide variety of goods in separate
departments (clothing, electronics, cosmetics, home appliances, etc.).
 Provide customer service, credit, and shopping convenience.
 Example: Shoppers Stop, Lifestyle.
 Supermarkets
 Large, low-cost, self-service stores.
 Focus on food, groceries, and household items.
 Customers pick items themselves from shelves.
 Example: Big Bazaar, DMart.
 Convenience Stores
 Small neighborhood stores open for long hours.
 Sell essential, everyday items like milk, bread, snacks, and toiletries.
 Located in residential areas for quick and easy access.
 Example: 7-Eleven (globally), local Kirana stores in India.
 Specialty Stores
 Focus on a specific product category.
 Offer depth of variety and expert staff assistance.
 Example: Bata (shoes), Tanishq (jewelry), Croma (electronics).
 Discount Stores
 Sell goods at lower prices by reducing profit margins and offering fewer
services.
 Often stock large volumes of limited product categories.
 Example: Walmart (global), Factory Outlets in India.
 Off-Price Retailers / Factory Outlets
 Sell manufacturers’ surplus, irregular, or outdated products at discounted
prices.
 Example: Nike Factory Outlet, Brand Factory.
 Shopping Malls
 Large complexes with multiple retail stores under one roof.
 Offer shopping, entertainment, and dining facilities.
 Example: Lulu Mall, Phoenix Market City.
 Hypermarkets
 Very large stores combining supermarket + department store.
 Provide groceries, clothing, electronics, furniture, etc., in one place.
 Example: Carrefour (global), Big Bazaar Hypermarket.
 E-Retailing (Online Stores)
 Selling through digital platforms and mobile apps.
 Provide convenience, wider choice, and home delivery.
 Example: Amazon, Flipkart, Myntra.
 Retailers can position themselves as offering one of four levels of service:-
 Self Service – Self service is the cornerstone of all discount operations. Many
customers are willing to carry out their own locate-compare-select process to
save money.
 Self selection- Customers find their own goods, although they can ask for
assistance
 Limited service – These retailers carry more shopping goods, and customers
need more information and assistance.
 Full service – sales people are ready to assist in every phase of the loacate-
compare- select- process.