UNIT-V

Promotion-Meaning and objectives- forms of promotion- advertising, personal selling, sales promotion, publicity and public relations. Marketing of services-concept, Characteristics and classification of services- marketing mix for services.

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ADVERTISEMENT MEANING

The word advertising is derived from two Latin Words Ad and Verto. Ad means towards and Verto means I turn. It means to turn the people’s attention to a specific thing.

DEFINITION

According to Stanton, “ Advertising consists of all the activities involved in presenting to a group of non personal, oral and visual, openly sponsored message regarding a product, service or idea. This message called an advertisement is disseminated through one or more media and is paid for by the identified sponsor.”

ELEMENTS OF ADVERTISING

1. Non personal Communication: Advertising is a non personal communication reaching a large group of buyers. The communication is speedy permitting the advertiser to speak to hundreds or thousands of people with in a shorter period.

2. Matter of Record: It is a matter of record furnishing information for the benefit of the buyers. It guides them to make a satisfactory purchase.

3. Paid form of publicity: Advertising is a paid form of presentation. The sponsor must pay for it other person whose media is employed.

4. Persuasion of the Buyers: The advertisement must be capable of persuading the buyers to purchase the goods advertised. It is an art of influencing the human action, the awakening of the desire to possess one’s product.

5. Identifiable with the sponsor: Advertisements are identifiable with their sponsor. The producer sponsors advertisement campaign by employing a suitable media.

FUNCTIONS OF ADVERTISING

1. Cheapening of Prices: Amongst the various modes of selling, advertising is considered as the cheapest method of selling. The advertiser can appeal to the public on a very wide scale with a comparatively lesser expenditure.

2. Widening of the Market: Effective advertisement stimulates the demand for the producer to find out the new markets for his product, by influencing the minds of the public.

3. Reduction of distribution expenditure: Mass advertising brings a reduction in the distribution costs by relieving the manufacturers from incurring expenditure on sales promotion staff.

4. Maintenance of better quality and services: Advertising enables the businessmen to build up the goodwill for his undertakings. It makes him to enjoy high reputation. 5. Promotion of Social Welfare: Advertising not only ensures success to business men but also brings benefits to the society and thereby promotes the welfare of the society. ADVANTAGES OF

ADVERTISING (IMPORTANCE OF ADVERTISING)

1. ADVANTAGES TO THE MANUFACTURERS a. Advertisement increases the volume of sales. It leads to increased production. This necessitates the installation of new plants. Increased sales reduces the marketing costs and thereby reduces the cost per unit. b. Increased volume of sales leads to large scale production. The producers are in a position to avail the economies of large scale production and also distribution. c. Advertisement enables the manufacturers to build up goodwill for his firm and his product but also maintains the demand throughout the year. d. Advertisement not only increases the demand for the product but also maintains the demand throughout the year. So, the producer can avoid the seasonal slumps. e. The producer can easily stabilize and retain both the wholesale and retail prices of his goods. This would create confidence in the minds of the public.

2. ADVANTAGES TO THE SALESMEN a. Advertising is considered as an effective tool in the hands of the salesman. It enables him to secure more sales in a comparatively shorter period of time. b. The task of the salesman becomes easier since the customers readily accept the goods widely advertised. In most cases, he can reach the quota fixed for him and even exceed it. c. No special efforts need to be taken by the salesman in selling his products as they are widely advertised.

3. ADVANTAGES TO THE RETAILERS a. Advertising quickens the turnover of the retailer. Quick turnover in its turn reduces the risk of dead stock and brings down the expenses. b. Advertising not only offers publicity to the product but also to the retailers. The retailer himself is known to public, only through the manufacturer’s advertising. c. Since advertising creates new wants, the retailer need not take much efforts to push up the sales of the product. d. Advertising enables the producers to control both wholesale and retail prices. The retailers need not afraid of unfair competition and price wars. e. The retailer can also forecast the sales for the current year and also plan his stock accordingly.

4. ADVANTAGES TO THE CONSUMERS a. Generally, well advertised goods are better in quality. If the goods are not upto the quality, the consumers shall switch over to some other product. The manufacturer is compelled to maintain the quality of the product advertised. b. The existence of different varieties of the products, their prices and their peculiar qualities are made known to the consumers only through advertising. The consumer can select the product best suited to his tastes, requirements and his purse. c. Advertising also acts as an information service and helps him in intelligent buying. The consumer can exactly know where the product is available and at what price. The consumer can make an intelligent buying without taking any extra effort. d. Modern advertising stabilizes the price of the products. In majority of the cases, the retail prices are also advertised so as to make the buyer aware of the prices. e. Advertising also makes it possible to sell direct to the consumers by mail order business. The consumers in rural areas and the interior parts of the country can also enjoy the comforts and luxuries available only in cities.

5. ADVANTAGES TO THE SOCIETY a. Advertising has educative value. It educates the public and enables them to make an intelligent buying. b. Mass advertising always leads to mass scale of production and distribution. Consequently, business firms tend to grow. c. Advertising creates mass demand and leads to large scale production. Large scale production, in its turn create more employment opportunities.

OBJECTIONS AGAINST ADVERTISING

1. ECONOMIC OBJECTIONS AGAINST ADVERTISING a. It is argued that skillful and forceful advertising tends to create semi monopolies particularly for branded goods. Their plea is that advertisements create new demands so that one product is preferred to the exclusion of others. b. It is often argued that advertising is unproductive since it does not produce any tangible products. c. Some people argue that advertising takes advantage of the emotion of the consumers and compel them to buy things which they cannot afford or things which are beyond their buying capacity. d. Producers generously spend huge money on advertising. This ultimately increase the cost of goods and the consumer has to bear the burden of huge expenditure. e. It is further argued that advertisement creates no new demand for the products. It simply takes away the business of one concern and gives it to another. f. Some critics plea that advertisement is unnecessary. Hence it is a waste.

2. SOCIAL OBJECTIONS AGAINST ADVERTISING a. Most of the advertisements are misleading and untrue. They contain all claims and exaggeration of facts. Such exaggerated advertising amounts to swindling. b. Advertising although makes newspaper cheaper, it enables the advertiser to influence the press so that the news may be so drafted to please the advertisers. c. It is also argued that advertising contains outraging sentiments, exciting emotions, rude poses of fair sex and lower down the morale of the younger generation.

3. ETHICAL OBJECTIONS AGAINST ADVERTISING a. Some of the advertisements are offensive to public decency. They are vulgar, silly and full of appeals to sex. b. Some advertisements induce the readers to use or consume goods which are injurious to their health. c. Advertising causes people to want things which they cannot afford. This makes a section of the community to remain discontented.

PERSONAL SELLING AND SALES PROMOTION PERSONAL SELLING

DEFINITION

Personal selling is a highly distinctive form of communication. Like other forms, it is basically communication, but unlike others, it is two way rather than one way communication. Personal selling involves social behaviour of both the seller and the prospect influencing each other.

According to Philip Kotler, ”Personal selling involves oral presentation in a conversation with one or more prospective purchaser for the purpose of making sales.”

QUALITIES OF PERSONAL SELLING

1. Personal Confrontation: Two or more persons come into contact into active relation and each party is able to observe at close quarters, the characteristics and need of the other and make immediate adjustments and thereby make the encounter successful.

2. Cultivation: Personal selling may lead to all kinds of relationships ranging from a matter of fact selling relationship to a deep personal friendship.

3. Response: Personal selling usually makes the prospect to feel a sort of peculiar obligation for having listened to the sales talk.

OBJECTIVES OF PERSONAL SELLING

Personal selling has both long term and short term objectives. The long term objectives are broad and general. The short term objectives are specific and relate to the roles which the management assigns as part of both promotional programme and overall marketing strategy.

According to Cundiff and Still, the objectives can be classified into two kinds viz.,

1. Qualitative Objectives: Qualitative objectives are long run objectives and depend largely upon the overall long term objectives of the firm and promotional mix. Such objectives change very little over a period of time. The important qualitative objectives are: a. To do the entire selling job. b. To serve the existing customers in such a way to maintain communication with the present customers, take orders etc. c. To search out and obtain new customers. d. To secure and maintain customer’s cooperation in stocking and promoting the product line. e. To keep the customers informed about the changes in the product line and other aspects of marketing strategy.

2. QUANTITATIVE OBJECTIVES: In addition to these qualitative objectives, certain quantitative objectives are generally assigned to personal selling. They are: a. To obtain a specified sales volume. b. To obtain sales volume in such a way that contribute to profit objectives. c. To keep personal selling expenses within the specified limits. d. To secure and retain a specified share of the market.

DIFFERENCE BETWEEN PERSONAL SELLING, ADVERTISING AND SALES PROMOTION

1. Personal selling and advertising are recurring in nature whereas, sales promotion is non recurring in nature.

2. In case of sales promotion, the firm has to depend on external agencies while, personal selling and sales promotion are activities organised by the firm itself.

3. Personal selling and advertising have become inevitable now a days while it is not so in the case of sales promotion. Sales promotional activities involve huge expenditure than the other two and only well established firms can practice this technique.

FACTORS TO BE CONSIDERED WHILE TAKING DECISION AS TO PERSONAL SELLING

1. Number of Potential Buyers: Personal selling is suitable when the number of potential buyers for a product is relatively low. On the other hand, of the number of potential buyers is large, personal selling is not possible.

2. Concentration of Potential Buyers: Personal selling is much easier if the number of buyers is highly concentrated in one geographical area rather than dispersed over a wider area.

3. Size of the Order Obtained: The average size of the order is another important factor in determining the economic feasibility of personal selling. If the chances for procuring a large order are possible, personal selling shall be feasible.

4. Heterogeneity: Personal selling is far more advisable in case of products that are produced according to individual specifications. But in case of standardized products, personal selling is not necessary at all times.

5. Need for Demonstration: Where it is necessary to convince the potential buyers of product’s merit, personal selling is almost compulsory. 6. Recognition of the Need: The need for personal selling arises only when the prospects does not recognize the need for the article. If there is already a recognized need for a product, personal selling has no role to play.

7. Buyer’s Resistance: The buyers are reluctant to buy certain products, particularly the consumer’s resistance is more in case of luxury goods or high price quality goods. Therefore, personal selling is compulsory in such cases.

8. Need for service: In some cases, considerable work must be done with the consumer before selling a product and certain items are frequently serviced after sales. In such a situation, personal selling is necessary.

SALESMANSHIP

DEFINITION

According to Paul W. Ivey, “ It is the art of persuading the people to purchase goods which will give off lasting satisfaction by using methods consuming least time and effort.”

According to D.D. Couch,” Salesmanship is the science of creating in the mind of your prospect a desire that only possession of your product will satisfy.”

ESSENTIALS OF SALESMANSHIP

1. The main aim of salesmanship is establishing sound and lasting relations between the sellers and the buyers.

2. It can create wants that never existed before by showing the prospective buyers how particular goods or services satisfy their demand.

3. It consists of one human mind influencing another human mind.

4. It involves not only selling the products and services but also providing the knowledge, technical assistance, counsel and advice.

5. It brings reasonable profit to the seller and definite benefit to the buyer in the effort of inducing the customers to buy the goods and services.

USES OF SALESMANSHIP

1. To Producers: An efficient salesmanship can alone ensure high profits to the producers. It is an incentive to higher production.

2. To Society: Salesmanship increases the production and thereby increases the profits. The shareholders get higher dividends. The middlemen also get higher profit due to increased sales. The employees get higher salary.

3. To the State: When industries earn high profit, the government also get higher amount of taxation. It derives income by way of excise duties on production and sales taxes, income tax etc.

4. To Consumers: Higher production brings competition and it results in reduced cost of production. Therefore, consumers are benefited by the products available at cheaper rates. 5. To Salesmen: Finally, the salesmen themselves are benefited directly and indirectly. Increased sales results in an increase in their commission and also lead to promotion to higher posts etc.

SALES PROMOTION

MEANING

The word Promotion is derived from the Latin word “Promovere” which means to move forward. Sales promotion is one among the three pillars of promotional mix. The other two pillars are personal selling and advertising. Sales promotion is the connecting link between personal selling and advertising. Sales promotion is an important and specialized function of marketing.

DEFINITION

According to W.J.Stanton, ”Promotion encompasses all the tools in the marketing mix whose major role is persuasive communication.”

OBJECTIVES OF SALES PROMOTION

Sales promotion is a vital bridge or a connecting link removing the gap between personal selling and advertising. The main objectives of sales promotion activities are:

1. To increase sales directly by publicity through the media which are complementary to press and poster advertising.

2. To disseminate information through salesmen, dealer etc so as to ensure the product getting into satisfactory use by the ultimate consumers.

3. To attract the prospective buyers towards the product and to induce them to buy the product at the point of purchase.

4. To enable the salesmen to achieve more sales in their territory in preference to another.

5. To ensure the cooperation of the retailers to sell one brand in preference to another. IMPORTANCE OF SALES PROMOTION

In recent years, the importance of sales promotion has increased. The amount spent on sales promotion now equals the amount spent on advertising. The importance of sales promotion increase is due to the thinking of new ideas for creating a favourable conditions of selling, promoting sales and future expansion of sales. For the birth of a new product or a new brand, sales promotion is very important.

Advertising reaches the customers at their homes, or at the place of business or in their travels, whereas sales promotional devices inform, remind or stimulate the buyers at the point of purchase. Hence it is the only device which is available to the consumers at the point of purchase. A good sales promotional programme will remove the consumer’s dissatisfaction.

MERITS OF SALES PROMOTION

1. It stimulates in the consumers an attitude towards the product.

2. It creates a better incentive in the consumers to make a purchase. It is a demand creator. 3. It gives direct inducement to the consumers to take immediate action.

4. It is flexible. It can be used at any stage of a new product introduction.

5. Sales promotion leads to low unit cost due to large scale production and large scale selling.

SITUATIONS WHEN SALES PROMOTION IS EFFECTIVE

1. A new brand is introduced.

2. We have to communicate a major improvement or attraction in product.

3. Enlarging the result of advertising.

4. Increasing the number of retail stores in order to sell out products.

5. Engaging or embarking upon aggressive sales campaign. LIMITATIONS OF SALES

PROMOTION

1. Sales promotions are only supplementary devices to supplement selling efforts of other promotion tools.

2. Sales promotion activities are having temporary and short life. The benefits are also short lived for three or four months. The demand will fall down.

3. They are non recurring in their use.

4. Brand image is affected by too many sales promotion activities. Consumers are of opinion that due to the lack of popularity and overstocking of products of a company, these sales promotional activities are conducted.

5. There is a feeling in the minds of the customers that sales promotional activity tools are used to sell inadequate or second grade products.