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Advertising and Promotion

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Advertising and Promotion (MKT621)
VU
Lesson 25
SALES PROMOTION
OVERVIEW
This lecture will review the features of sales promotion as described in the last lecture.
Moreover the types of sales promotion activities its growing importance and the way to use
consumer promotion and the trade promotion, the push pull strategy of trade promotion will be
explained with its primary goals. The tools of trade promotions and how to deal with it and
other promotional techniques besides loyalty programs and their mandates will be addressed.
FEATURES OF SALES PROMOTION:
Following the feature of sales promotion:
·  Involves inducement to provide incentive to buy.
·  Incentive is the key element in a promotional program.
·  Attempts to add value to the product or service by appealing to "value" (pocket).
·  Acts as an acceleration tool. Designed to speed up sales.
·  Targeted at different parties with different types & levels of incentives.
TYPES OF SALES PROMOTION ACTIVITIES:
There are different types of sales promotion activities and the two main categories in this
regard are explained below, while the consumer oriented promotion is known as Pull strategy
and the Trade oriented promotion is known as Push strategy:
Consumer Oriented Promotion:
Also known as PULL strategy. Targeted to Consumers, e.g. samples, coupons, refunds, rebates,
contests etc.
Trade Oriented Promotion:
Also known as the PUSH strategy. Targeted to Dealers / Distributors., e.g. contests and dealer
incentives, trade shows, trade allowances, point of purchase displays etc.
GROWING IMPORTANCE OF SALES PROMOTION:
The reasons of growing important of the sales promotion is explained below:
·  Retailers' Power: In these days there is the shift at the market place from manufacturer to
retailer.
·  Declining brand loyalty: Over the last few years brand loyalty is on the decline and the
customers are purchasing more on the basis of price value and convenience. When they
view all brands equal they may shift from one brand to another.
·  Brand proliferation:
·  The market has become saturated with new brands across all product categories.
·  Competition: To maintain competitive advantages manufacturers are increasingly using
sales promotion.
·  Increased accountability: The companies now demand results from sale promotions
expenditures.
·  Short term focus: The brand managers receive requests from the sales force retailers and
wholesalers for sales promotional activities to meet short term targets.
·  Fragmentation of consumer market: The large numbers of marketers are also using sales
promotion techniques to target ethnic markets. As consumers markets are getting
fragmented, the fragmentation due to which mass media advertising is becoming less
effective.
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Advertising and Promotion (MKT621)
VU
HOW TO USE CONSUMER PROMOTION:
Following are the way to use consumer promotion:
1. Awareness: In order to make a consumer promotion successful it is essential to create
awareness in the minds of the target audience.
2. Trial: By creating awareness the mind set of the target audience to convince them to at least
try the product which will lead to their using the product.
3. Maintain market presence: It is essential that effective advertising campaign is backed up
by product supply chain to maintain market presence.
4. Brand Reminder: Necessary advertising will be required to remind consumer about a brand
ensuring that it doesn't go out of the mind of the consumers.
HOW TO USE TRADE PROMOTION:
There are three primary goals to be taken into consideration for using trade promotion:
·  To stimulate in-store merchandising. e.g. feature pricing, superior store location, or shelf
space.
·  To create a high level of excitement about the product among those responsible for its sale.
·  To manipulate levels of inventory held by whole sellers & retailers & expanding product
distribution to new areas of the country or new classes of trade.
The following chart explains the push pull strategies for trade promotion from promotional
effort to demand creation:
PUSH - PULL STRATEGIES
PUSH
PULL
Promotional
Manufacturer
Manufacturer
Effort
Reseller
Reseller
Consumer
Consumer
Demand
Creation
TOOLS OF TRADE PROMOTION:
There are different tools used for trade promotion which are described as below:
·  Point of Purchase (POP) Displays: A manufacturer designed display distributed to retailers
for customers' attention is called POP display.
·  Merchandise Display: Another popular POP form is the merchandizing display which
retailers used to show case their products and create a personality for their stores.
·  Dealer Display: Dealers displays the product to attract customers.
·  Trade Deals: Similar to consumer price deal a manufacturer may reward a reseller
financially for purchase of a certain level of a product or support of a promotion.
·  Contests: Advertisers can develop contests to motivate resellers.
·  Trade Shows and Exhibits: The trade show is where companies with in the same industry
gather to present and sell their merchandize as well as to demonstrate their products.
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Advertising and Promotion (MKT621)
VU
Dealing with the Trade:
There are various methods of deal with the trade to lure them for increasing sales.
·  Bonuses: A monitory bonus is paid to a sales person who sells units/product over a period
of time.
·  Dealer Loaders: These are premiums that a manufacturer gives to a retailer for buying a
certain amount of a product.
·  Buying Allowances: A manufacturer pays a reseller a set amount of money or a discount
for purchasing a certain amount of the product during a specified period of time.
·  Advertising Allowances: The manufacturer pay the wholesaler and retailer a certain amount
of money to advertise the manufacturers' product.
·  Cooperative Advertising: The manufacturer agrees to pay a part or all of the advertising
expenses incurred by the retailer under a contractual agreement.
·  Display Allowances: A direct payment of cash and goods is given to the retailer agreeing to
setup the point of sale display.
OTHER PROMOTION TECHNIQUES:
Following are the few other promotional techniques being used now days.
·  Sponsorships.
·  Event Marketing.
·  Aerial Advertising Support.
·  Interactive and Internet Promotions.
·  Loyalty Programs.
·  Partnership Programs.
·  Licensing.
·  Tie ­ Ins.
Loyalty Programs:
Amongst the other promotional techniques an important technique being used these days is
called loyalty program which also called a continuity or frequency program (such as airline
frequent flyer programs) in fact these programs are a promotional activity to increase customer
attention. Following are the four mandates of loyalty programs.
·  Identify your best customers.
·  Connect with those best customers.
·  Retain the best customers, usually by rewarding them for their patronage.
·  Cultivate new "best customers."
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Table of Contents:
  1. INTRODUCTION TO ADVERTISING:Its growing importance, Explanation of Personal and non-personal selling
  2. INTRODUCTION TO ADVERTISING:ADVANTAGES, Communication, Information, Various Media
  3. INTRODUCTION TO ADVERTISING:FUNCTIONS OF ADVERTISING, IMPACT OF ADVERTISING
  4. ADVERTISING AND SOCIETY:PRACTICAL BENEFITS, ETHICS IN ADVERTISING, Marketplace & Market space
  5. MARKETING TOOLS:COMPONENTS OF MARKETING MIX, PRODUCT LIFE CYCLE (PLC) CURVE
  6. MARKETING TOOLS:SWOT Analysis, Contents & Structure, ROLE & FUNCTION OF ADVERTISING
  7. ROLE AND FUNCTIONS OF ADVERTISING:Structure of an Advertising Agency, How to Select an Advertising Agency
  8. ADVERTISING PLANNING:ADVERTISING OBJECTIVES, Types of Advertising, Positioning Strategies
  9. POSITIONING:BRANDING, 7 Steps of Creative Process, UNIVERSAL ADVERTISING STANDARDS
  10. ADVERTISING MESSAGE:Message Content, BASIC TERMS & CONCEPTS
  11. ADVERTISING BUDGET:4 Methods to determine, ADVERTISING RESEARCH, ADVERTISING RESEARCH
  12. ADVERTISING REACH:BROAD COMMUNICATION OBJECTIVES, ADVERTISING COPY METHODS, MEDIA RESEARCH
  13. PRE – PLACEMENT EVALUATION:ACCOUNT PLANNING, MARKET, COMPETITION
  14. WORKING OF ADVERTISING:12 Steps to develop effective campaign, SOURCE or THE ADVERTISER
  15. ADVERTISING RESPONSE HIERARCHY MODELS:AIDA MODEL, PROCESS REQUIRED TO GET BIG IDEA
  16. PROBLEM SOLVING STRATEGIES:Procedure to Handle Problems, In brief, Eight principles apply to consumer behavior
  17. CONSUMER BEHAVIOUR:ADVERTISING APEALS, MEDIA MIX DECISIONS, Target Rating Point (TRP)
  18. CREATIVITY IN ADVERTISING:Three aspects are most accepted, Four Rules of Creativity
  19. COPY WRITER:CHARACTERISTICS OF COPYWRITER, IMPORTANCE OF LANGUAGE
  20. WHY ADVERTISING:Advertising & Market Education, ADVERTISEMENT CAMPAIGNS
  21. METHODS TO APPRECIATE A PROBLEM:SPONSORSHIP—an important tool, Special Characteristics
  22. IMPORTANT TOOL OF ADVERTISING:TELEVISION ADVERTISING, TRANSIT ADVERTISING
  23. ONLINE ADVERTISING:Banners, Logos, Email Ads, Keywords on Search Engines, New Developments
  24. ONLINE ADVERTISING:Structural Challenges, Adobe Photoshop, JAVA, HTML, DHTML, ASP & JSP
  25. SALES PROMOTION:Consumer Oriented Promotion, HOW TO USE TRADE PROMOTION, Dealing with the Trade
  26. PUBLICITY:PERSONAL SELLING, ROLE OF SALES PERSON, FUTURE OF GLOBAL ADVERTISING
  27. MARKETING ENVIRONMENT:Competitors, The Target Buyer, Segmenting your Market, FUTURE OF MARKET GROWTH
  28. MARKETING PLAN:Situational Analysis, Macro – Environment Situation, Marketing Objectives, Financial Objectives
  29. MARKETING PLAN:PROMOTING BUSINESS IN LOW COST, SUPPLY CHAIN, BUYER IDENTIFICATION
  30. HOW TO BE GOOD CLIENTS:CHANNEL BUYERS, HOW TO BE GOOD CLIENTS 14 RULES
  31. CLIENT – AGENCY RELATIONSHIP:HOW TO KEEP CLIENTS (10 Ways), Three Points for Consideration
  32. CLIENT – AGENCY RELATIONSHIP:ADVERTISING WITHOUT AN AGENCY, LOGO AND CORPORATE IDENTITY
  33. NEWSPAPER ADVERTISING:AD PRODUCTION,TYPES OF NEWSPAPER ADS, CIRCULATION
  34. OTHER ADVERTISING MEDIUM:HOW TO USE MAGAZINES, HOW TO USE RADIO, Daypart buying options
  35. UTILITY OF VARIOUS MEDIA:TAPE OR FILM, UTILITY OF TV, DIRECT MAIL PACKAGE
  36. OTHER ADVERTISING MEDIA:POINT OF PURCHASE (POP), TRANSIT ADVERTISING, LIMITS OF ADVERTISING
  37. CONTINUOUS TRACKING:PLANNING CAMPAIGN, HOW TO UNDERSTAND ADS, ASK BASIC QUESTIONS
  38. SEASONAL ADVERTISING:MAXIMIZING IMPACT, THE WEB ADVERTISING, MEASURING ADVERTISING
  39. COMPONENTS OF ADVERTISING:BUY - OLOGY OF MIND, BUY - OLOGY OF MIND
  40. CRITICISM ON ADVERTISING:SHOULD ADVERTISING BE ABOLISHED,
  41. EFFECT OF ADVERTISING:HOW TO PROMPT AWARENESS, CREATING DESIGN THAT SELLS
  42. CREATING EFFECTIVE DESIGN:LANGUAGE OF TYPOGRAPHY, HEADLINES THAT COMMUNICATE
  43. WORKSHEETS:DEMOGRAPHICS OF YOUR TARGET, YOUR COMPETITOR
  44. GLOSSARY OF ADVERTISING:ACCOUNT EXECUTIVE, PROOF, VOICE OVER
  45. CONCEPT OF AN AD:HOW TO DEVELOP A CONCEPT OF AN AD