MARKETING MANAGEMENT

WELCOME
TO
THE CLASS
OF
PROMOTION MIX
BY
DARA RAJENDRABABU
TOPICS TO DISCUSS
LEARNING OUTCOMES
PROMOTION MIX
In a business' total marketing communications program is called the
"promotional mix" and consists of a blend of advertising, personal selling,
sales promotion , public relations tools and direct selling program that
maximizes the impact on consumer and other end users at a minimal
cost.”
It refers to the use of communication with the twin objectives of
informing potential customers about a product and persuading them to
buy it
FACTORS AFFECTING PROMOTION MIX
 A business’s total marketing communications programme is called the
“promotional mix”.
 It consists of a blend of advertising, personal selling, sales promotion and
public relations tools. The particular way in which a marketer combines
promotional activities is known as promotion mix.
 Designing a proper promotion mix is called promotional strategy. There
are many factors which influence promotion mix. These factors are called
product-market factors.
FACTORS AFFECTING PROMOTION MIX
 The factors affecting promotion mix can be studied under the following
heads: 1. Product Related Factors 2. Customer Related Factors 3.
Organisation Related Factors.
 The factors affecting promotion mix are:-
 1. Nature of the Product 2. Nature of the Market 3. Stages in the Product
Life Cycle 4. Market Penetration 5. Market Size 6. Characteristics of
Buyers 7. Distribution Strategy 8. Pricing Strategy
 9. Cost of Promotion 10. Availability of Funds 11. Effectiveness of
Promotional Tools 12. Nature of Technique 13. Readiness of Buyer 14.
Promotional Strategy 15. Co-Ordination with Other Elements of
Marketing Mix and a Few Others.
FACTORS AFFECTING PROMOTION MIX
 Factors Influencing Promotion Mix: Nature of the Product, Nature of
the Market, Stages in the Product Life Cycle and a Few Others.
 1. Nature of the Product: Promotion mix will vary according to the
nature of the product. Consumer goods require mass advertisement. But
industrial goods require personal selling, advertising, displays etc.
Complex and technical products like computer need personal selling.
 Non-technical products require advertising as promotional device. In case
where there is no brand differentiation personal selling should be the
method of promotion. Where there is brand differentiation advertising
should be emphasized.
FACTORS AFFECTING PROMOTION MIX
 2. Nature of the Market:
 For industrial market, advertising plays an informative role, but for consumer
market it plays as informative as well as persuasive role. The promotion
strategy varies with the target groups depending on age, sex, education,
income, religion etc.
 3. Stages in the Product Life Cycle: The marketing objectives and
strategies are different at each stage of the product in its life cycle. During
the introductory stage intensive advertising and personal selling are required
for effecting product awareness.
 During growth stage advertising should be extended to maximize the market
share. During maturity stage persuasive advertising and sales promotion
techniques are beneficial. But at the declining stage advertisement and sales
promotion are reduced to the minimum.
FACTORS AFFECTING PROMOTION MIX
 4. Market Penetration:
 A product having good market penetration is well-known to the buyers. In
that situation, middlemen are motivated to spend more an advertising.
 5. Market Size:
 It there is limited number of buyers, direct selling is enough. But if the
market size is large the promotional tool is mainly advertising.
 6. Characteristics of Buyers:
 Experienced buyers of industrial product need personal selling. The
experience of buyers, the time available for purchase, influence of friends,
retailers etc. are the factors affecting promotion mix.
FACTORS AFFECTING PROMOTION MIX
 7. Distribution Strategy:
 If the products are directly sold by the manufacturer personal selling is the
tool of promotion.
 Advertising is only a supporting tool. Personal selling and advertising is
required for market penetration. If the product passes through a longer
channel more importance should be given to advertising and less
importance to personal selling.
 8. Pricing Strategy:
 Pricing influences promotion strategy. If the brand is priced higher than
the competitor’s price, personal selling is used. If the price is
comparatively low only little promotion is needed. If the middlemen are
allowed higher profit margin, sales promotion at dealer level is important.
FACTORS AFFECTING PROMOTION MIX
 9. Cost of Promotion:
 The cost of the media of advertising and sales promotion tools should also
be considered while deciding the promotional mix.
 10. Availability of Funds: If the funds are adequate the firm can spend
more for advertising and sales promotion. But small firms with limited
resources can depend on personal selling.
 11.Effectiveness of Promotional Tools:
 Different promotional tools are effective at different stages of buyer
readiness. At the awareness stage, advertising and publicity are more
effective. At the comprehension stage, advertising and personal selling lay
a greater role. During the conviction stage, personal selling is very
effective.
CUSTOMER RELATED FACTORS
 The factors influencing promotion mix are- (a) Characteristic of the target
market and (b) type of buying decisions.
 (a) Characteristic of the Target Market:
 Advertising is the most commonly used tool of promotion. It is an
impersonal form of promotion. There is no direct contact between the
advertiser and the promotion target. Personal selling is flexible and
personal form of promotion.
 There is minimum wastage, development of relationship with the
customer and direct feedback. When the market is large and wide
Advertising is suitable. If it is narrow and limited personal selling can be
effective.
CUSTOMER RELATED FACTORS
 (b) Type of Buying Decisions:
 Consumers are faced with purchase decisions every day. Some decisions
are more complex than others and thus require more effort by the
consumer. Other decisions are fairly routine and require little effort. For a
retailer it is important to understand how consumers treat the purchase
decisions they face.
 Because consumers often buy on emotions, ads can affect the buying
decisions. Consumer products are often advertised on television in a way
that tries to create an emotional tie with the buyer. For Ex- Car ads that
stir emotions of envy for racing the streets like a race car driver.
ORGANISATION RELATED FACTORS
 These factors take into account:
 a. Marketing Channel and Promotion Strategy: The factors that influence development of
a promotion is the push strategy and pull strategy. In the push strategy the manufactures
promotes its product through the middlemen such as wholesaler, who would actively promote
the product to retailers and the retailers would actively promote it to the final consumers.
 Examples are- sales contests for salesmen, dealer contest for intermediaries, incentives and
commission for the salesman as an reward for selling the product.
 A pull strategy the manufacturer stimulates the consumer to ask the retailers for the product.
Retailers will ask the wholesalers and they ask the manufactures for the product. This is with
consumer products where the consumers’ pull’ the product through the marketing channel.
 Example- Coupons and consumers sweepstakes. The marketer in case of push strategy may
ask the supermarket, discount stores, department stores to setup demonstrations and
encourage the retailers to give their brands more shelf space. In case of pull strategy marketer
also spends on advertising and on consumer sales promotion such as free samples:
ORGANISATION RELATED FACTORS
 b. Branding Strategy:
 A firms branding strategy implies using goodwill of its existing brand name to promote
new product.
 When a firm introduces a new product it has three main choices:
 (i) It has developed new brand elements for the new product.
 (ii) It can apply some of its existing brand elements.
 (iii) It can use a combination of new and existing brand elements.
 Branding enables the firm assured control over the market. Repeat sales are stimulated and
product substitution is not possible. It creates an exclusive market for the product.
Branding also reduces price flexibility. An image must be created for each brand in order
to accept the brand at each level of marketing channel.
 Maruti has different brand of cars 800, Alto, Wagon-R, Swift etc. Where one brand is
different from other. But under the Umbrella of Maruti different cars are launched at
different price range.
ORGANISATION RELATED FACTORS
 c. Pricing Strategy:
 Companies can use several pricing techniques to stimulate early purchase. The
manufacturer invests heavily in advertising so that the retailer suggests the retail selling
price. That is attractive to customer. This helps to build strong consumer demand and
brand loyalty. For the retailers the advertising helps fast turnover so that he can stimulate
sales.
 d. Budget:
 Determining the promotional budget is a significant task of the retailer. Retailers should
use the marginal analysis method for determining the budget, as it is the most appropriate
method for determining this budget which can accomplish the objectives of the retailer.
 The marginal analysis method helps to find out the level of promotional expenditure that
maximize the profits generated by the promotional mix. Retailers spend the largest
portion of their promotional budget on developing advertisement and on sales promotion
activities.
ORGANISATION RELATED FACTORS
 e. Employees:
 This organization related factor is related to the personnel of the firm. Some firms
lack experience with certain promotion elements and therefore does not use them.
To have strong influence of promotion powerful and resourceful executives should
be part of the firm to approach to promotion.