10.

Promotion policy (II)

1. Advertising as a promotion tool. 2. Sales promotion as a promotion tool. 3. Public relations as a promotion tool. 4. Personal selling as a promotion tool. Kotler Ph., Armstrong G. - Marketing an introduction, Prentice Hall, 1990 ( !"- "9# Pride $. Marketing conce%ts and strategies, &oston, Houghton Mi''lin (om%an), 1991 ( 0*- 9+# ,lorescu (. Marketing, &ucure-ti, 199!, ( ..- +0#

1. Advertising as a promotion tool.

Advertising is an) %aid 'orm o' non%ersonal %resentation and %romotion o' ideas, goods, or ser/ices 0) an identi'ied s%onsor. 1he to% 100 23A national ad/ertisers account 'or a0out one-'ourth o' all ad/ertising. Phili% Morris is the leader 4ith o/er 51.. 0illion, or +.. %ercent o' its total 2.3. sales. 1he other ma6or s%enders are 'ound in the auto, 'ood, retailing, and to0acco industries, Ad/ertising as a %ercentage o' sales is lo4 in the auto industr) and high in 'ood, drugs, toiletries, and cosmetics, 'ollo4ed 0) gum, cand), and soa%s. 7rgani8ations handle ad/ertising in di''erent 4a)s. 9n small com%anies, ad/ertising might 0e handled 0) someone in the sales de%artment. :arge com%anies set u% ad/ertising de%artments 4hose 6o0 is to set the ad/ertising 0udget, 4ork 4ith the ad agenc), and handle direct-mail ad/ertising, dealer dis%la)s, and other ad/ertising not done 0) the agenc). Most large com%anies use an outside ad/ertising agencies Marketing management must make 'i/e im%ortant decisions in de/elo%ing an ad/ertising %rogram.1hese decisions are listed in ,igure 1 and discussed 0elo4.
Message decision Message generation Message evaluation and selection Message execution Campaign evaluation Communication impact Sales impact Media decision Reach fre!uency impact Major media types Specific media vehicles Media timing

Objectives setting Communication objectives Sales objectives

Budget decisions Affordable approach Percent of sales Competitive parity Objective and task

Setting Objectives 1he 'irst ste% in de/elo%ing an ad/ertising %rogram is to set advertising objectives. 1hese o06ecti/es should 0e 0ased on %ast decisions a0out the target market, %ositioning, and marketing mi;. 1he marketing %ositioning and mi; strateg) de'ines the 6o0 that ad/ertising must do in the total marketing %rogram. An advertising objective is a s%eci'ic communication task to 0e accom%lished 4ith a s%eci'ic target audience during a s%eci'ic %eriod o' time. Ad/ertising o06ecti/es can 0e classi'ied as to 4hether their aim is to inform, persuade, or remind. Informative advertising is used hea/il) 4hen introducing a ne4 %roduct categor) and 4hen the o06ecti/e is to 0uild %rimar) demand. 1hus, %roducers o' com%act disc %la)ers 'irst in'ormed consumers o' the sound and con/enience 0ene'its o' (<s. Persuasive advertising 0ecomes more im%ortant as com%etition increases and a com%an)=s o06ecti/e is to 0uild selecti/e demand. ,or e;am%le, 4hen com%act disc %la)ers 0ecame esta0lished and acce%ted, 3on) 0egan tr)ing to %ersuade consumers that its 0rand o''ers the 0est >ualit) 'or their mone).

3ome %ersuasi/e ad/ertising has 0ecome comparison advertising, 4hich com%ares one 0rand directl) or indirectl) 4ith one or more other 0rands. ,or e;am%le, in its classic com%arison cam%aign, A/is %ositioned itsel' against market-leading Hert8 0) claiming, ?$e=re num0er t4o, so 4e tr) harder.? Reminder advertising is im%ortant 'or mature %roducts@it kee%s consumers thinking a0out the %roduct. A;%ensi/e (oca-(ola ads on tele/ision are designed to remind %eo%le a0out (oca-(ola, not to in'orm or %ersuade them. Budget Decision A'ter determining its ad/ertising o06ecti/es, the com%an) can ne;t set its advertising budget 'or each %roduct. 1he role o' ad/ertising is to a''ect demand 'or a %roductB 1he com%an) 4ants to s%end the amount needed to achie/e the sales goal ,our commonl) used methods 'or setting the ad/ertising 0udget 4ere discussed in the >uestion Co 1. Message Decision A large ad/ertising 0udget does not guarantee a success'ul ad/ertising cam%aign. Co matter ho4 0ig the 0udget, ad/ertising can succeed onl) i' messages gain attention and communicate 4ell. Good ad/ertising messages are es%eciall) im%ortant in toda)=s costl) and cluttered ad/ertising en/ironment. 1hus, 6ust to gain and hold attention, toda)=s ad/ertising messages must 0e 0etter %lanned, more imaginati/e, more entertaining, and more re4arding to = consumers. (reati/e strateg) 4ill there'ore %la) an increasingl) im%ortant role in ad/ertising success. Ad/ertisers go through three ste%s to de/elo% a creati/e strateg)B message generation, message evaluation and selection, and message execution. essage !eneration (reati/e %eo%le ha/e di''erent 4a)s to 'ind ad/ertising message ideas. Man) creati/e %eo%le start 0) talking to consumers, dealers, e;%erts, and com%etitors. 7thers tr) to imagine consumers using the %roduct and 'igure out the 0ene'it consumers seek 4hen 0u)ing and using it. Generall), although ad/ertisers create man) %ossi0le messages, onl) a 'e4 4ill ultimatel) 0e used. essage "valuation and #election 1he ad/ertiser must e/aluate the %ossi0le messages. 1he a%%eals used in messages should ha/e three characteristics. ,irst, the) should 0e meaningful, %ointing out 0ene'its that make the %roduct more desira0le or interesting to consumers. 3econd, a%%eals should 0e distinctivethe) should tell ho4 the %roduct is 0etter than com%eting 0rands. ,inall), the) must 0e believable. 9t ma) 0e hard to make message a%%eals 0elie/a0le 0ecause man) consumers dou0t the truth o' ad/ertising in general. 7ne stud) 'ound that, on a/erage, consumers rate ad/ertising messages as ?some4hat un0elie/a0le.? essage "$ecution 1he im%act o' the message de%ends not onl) on what is said 0ut also on how it is said@its message e;ecution. 1he ad/ertiser has to %ut the message across in a 4a) that 4ins the target market=s attention and interest. 1he ad/ertiser usuall) 0egins 4ith a statement o' the o06ecti/e and a%%roach o' the desired ad. Here is such a statement 'or a Pills0ur) %roduct called 1+*9 &rand &iscuitsB
1he o06ecti/e o' the ad/ertising is to con/ince 0iscuit users that no4 the) can 0u) a canned 0iscuit that=s as good as homemade@Pills0ur)=s 1+*9 &rand &iscuits. 1he content o' the ad/ertising 4ill em%hasi8e that the 0iscuits look like homemade 0iscuits, ha/e the same te;ture as homemade, and taste like homemade 0iscuits. 3u%%ort 'or the ?good as homemade? %romise 4ill 0e t4o'oldB (1# 1+*9 &rand &iscuits are made 'rom a s%ecial kind o' 'lour (so't 4heat 'lour# used to make homemade 0iscuits 0ut ne/er 0e'ore used in making canned 0iscuits, and (!# the use o' traditional American 0iscuit reci%es. 1he tone o' the ad/ertising 4ill 0e a ne4s announcement, tem%ered 0) a 4arm, re'lecti/e mood coming 'rom a look 0ack at traditional American 0aking >ualit).

1he creati/e %eo%le must 'ind a st)le, tone, 4ords, and 'ormat 'or e;ecuting the message. An) message can 0e %resented in di''erent execution styles, such as the 'ollo4ingB

1. Slice-of-life. 1his st)le sho4s one or more %eo%le using the %roduct in a normal setting. A 'amil) seated at the dinner ta0le might talk a0out a ne4 0iscuit 0rand. !. Life style. 1his st)le sho4s ho4 a %roduct 'its in 4ith a li'e st)le. ,or e;am%le, a Cational <air) &oard ad sho4s 4omen e;ercising and talks a0out ho4 milk adds to a health), acti/e li'e st)le. . antasy. 1his st)le creates a 'antas) around the %roduct or its use. ,or instance, De/lon=s 'irst ad 'or Eontue sho4ed a 0are'oot 4oman 4earing a chi''on dress and coming out o' an old ,rench 0arn, crossing a meado4, meeting a handsome )oung man on a 4hite horse, and riding a4a) 4ith him. ". !ood or image. 1his st)le 0uilds a mood or image around the %roduct, such as 0eaut), lo/e, or serenit). Co claim is made a0out the %roduct e;ce%t through suggestion. Man) co''ee ads create moods. .. !usical. 1his st)le sho4s one or more %eo%le or cartoon characters singing a 0out the %roduct. Man) cola ads ha/e used this 'ormat. *. "ersonality symbol. 1his st)le creates a character that re%resents the %roduct. 1he character might 0e animated (the Eoll) Green Giant, (a%=n (runch, Gar'ield the (at# or real (the Marl0oro man, Morris the 9-:i/es (at#. F. #echnical expertise. 1his st)le sho4s the com%an)=s e;%ertise in making the %roduct. 1hus, Hills &rothers sho4s one o' its 0u)ers care'ull) selecting co''ee 0eans, and Gallo tells a0out its man) )ears o' 4inemaking. +. Scientific evidence. 1his st)le %resents sur/e) or scienti'ic e/idence that the 0rand is 0etter or 0etter liked than one or more other 0rands. ,or )ears, (rest tooth%aste has used scienti'ic e/idence to con/ince 0u)ers that (rest is 0etter than other 0rands at 'ighting ca/ities. 9. #estimonial evidence. 1his st)le 'eatures a highl) 0elie/a0le or lika0le source endorsing the %roduct. 9t could 0e a cele0rit) like &ill (os0) (Eell-7 Pudding, Kodak 'ilm# or ordinar) %eo%le sa)ing ho4 much the) like a gi/en %roduct. 1he ad/ertiser must also choose a tone 'or the ad. Procter G Gam0le al4a)s uses a %ositi/e toneB 9ts ads sa) something /er) %ositi/e a0out its o4n %roducts. PGG also a/oids humour that might take attention a4a) 'rom the message. &) contrast, ads 'or &ud :ight 0eer use humour and %oke 'un at %eo%le 4ho order ?6ust an) light.? Memora0le and attention-getting words must also 0e 'ound. ,or e;am%le, the themes listed 0elo4 on the le't 4ould ha/e had much less im%act 4ithout the creati/e %hrasing on the rightB THEME F-2% is not a cola. Dide in our 0us instead o' dri/ing )our car. CREATIVE COPY ?1he 2ncola.? ?1ake the 0us, and lea/e the dri/ing to us?.

9' )ou drink much 0eer, 3chae'er is a good 0eer to ?1he one to ha/e 4hen )ou=re ha/ing more than one.? drink. $e don=t rent as man) cars, so 4e ha/e to do more ?$e=re num0er t4o, so 4e tr) harder? (A/is#. 'or our customers. ?&u) chea% socks and )ou=ll %a)through the toes.? Hanes socks last longer than less e;%ensi/e ones. Cike shoes 4ill hel% )ou 6um% higher and %la) ?Parachute not included.? 0etter 0asket0all. ,inall), format elements 4ill make a di''erence in an ad=s im%act as 4ell as its cost. A small change in the 4a) an ad is designed can make a 0ig di''erence in its e''ect. 1he illustration is the 'irst thing the reader notices, and that illustration must 0e strong enough to dra4 attention. 1hen the headline must e''ecti/el) entice the right %eo%le to read the co%). 1he copythe main 0lock o' te;t in the ad@must 0e sim%le 0ut strong and con/incing. Moreo/er, these three elements must also 4ork e''ecti/el) together. A/en then, a trul) outstanding ad 4ill 0e noted 0) less than .0 %ercent o' the e;%osed audienceH a0out 0 %ercent o' the e;%osed audience 4ill recall the main %oint o' the headlineH a0out !. %ercent 4ill remem0er the ad/ertiser=s nameH and less than 10 %ercent 4ill ha/e read most o' the 0od) co%). :ess than outstanding ads, un'ortunatel), 4ill not achie/e e/en these results Media Decision

1he ad/ertiser ne;t chooses ad/ertising media to carr) the message. 1he ma6or ste%s in media selection are (1# deciding on reach, fre$uency, and impact% (!# choosing among ma6or media types% ( # selecting s%eci'ic media vehicles% and ("# deciding on media timing. %&oosing among ajor edia 'ypes

1he media %lanner has to kno4 the reach, 're>uenc), and im%act o' each o' the ma6or media t)%es. 1he ma6or ad/ertising media are summari8ed in 1a0le -!
Medium Newspapers Television Direct mail Radio Magazines Outdoor Advantages "lexibility# timeliness# good local market coverage# broad acceptance# high believability Combines sight sound and motion# appealing to the senses# high attention# high reach Audience selectivity# flexibility# no ad competition &ithin the same medium# personali'ation Mass use# high geographic and demographic selectivity# lo& cost %igh geographic and demographic selectivity# credibility and prestige# high)!uality reproduction# long life# good pass) along readership "lexibility# high repeat exposure# lo& cost# lo& competition Limitations Short life# poor reproduction !uality# small $pass along$ audience %igh absolute cost# high clutter# fleeting exposure# less audience selectivity Relatively high cost( $junk mail$ image Audio presentation only# lo&er attention than television# non)standardi'ed rate structures# fleeting exposure *ong ad purchase lead time# some &aste circulation# no guarantee of position +o audience selectivity# creative limitations

Media %lanners consider man) 'actors 4hen making their media choices. 1he media habits of target consumers 4ill a''ect media choice@'or e;am%le, radio and tele/ision are the 0est media 'or reaching teenagers. 3o 4ill the nature of the productdresses are 0est sho4n in colour maga8ines, and Polaroid cameras are 0est demonstrated on tele/ision. <i''erent types of messages ma) re>uire di''erent media. A message announcing a ma6or sale tomorro4 4ill re>uire radio or ne4s%a%ersH a message 4ith a lot o' technical data might re>uire maga8ines or direct mailings. &ost is also a ma6or 'actor in media choice. $hile tele/ision is /er) e;%ensi/e, ne4s%a%er ad/ertising costs much less. 1he media %lanner looks at 0oth the total cost o' using a medium and at the cost %er thousand e;%osures@the cost o' reaching 1,000 %eo%le using the medium. Gi/en these and other media characteristics, the media %lanner must decide ho4 much o' each media t)%e to 0u). ,or e;am%le, in launching its ne4 0iscuit, Pills0ur) might decide to s%end 5 million on da)time net4ork tele/ision, 5! million on 4omen=s maga8ines, and 51 million on dail) ne4s%a%ers in !0 ma6or markets.

(. #ales promotion as a promotion tool.

Ad/ertising is 6oined 0) t4o other mass-%romotion tools@sales promotion and public relations. #ales promotion consists o' short-term incenti/es to encourage %urchase or sales o' a %roduct or ser/ice. 3ales %romotion includes a 4ide /ariet) o' %romotion tools designed to stimulate earlier or stronger market res%onse. 9t includes consumer promotion@sam%les, cou%ons, re0ates, %rices-o'', %remiums, contests, trading stam%s, demonstrationsH trade promotion@0u)ing allo4ances, 'ree goods, merchandise allo4ances, coo%erati/e ad/ertising, %ush mone), dealer sales contestsH and salesforce promotion@ 0onusesH contests, sales rallies. 3ales %romotion tools are used 0) most organi8ations, including manu'acturers, distri0utors, retailers, trade associations, and non%ro'it institutions. 3ales %romotions are usuall) used together 4ith ad/ertising or %ersonal selling. (onsumer %romotions must usuall) 0e ad/ertised and can add e;citement and %ulling %o4er to ads. 1rade and sales'orce %romotions su%%ort the 'irm=s %ersonal selling %rocess. Setting Sales-Promotion Objectives

3ales-%romotion o06ecti/es /ar) 4idel). 3ellers ma) use consumer promotions to increase short-term sales or to hel% 0uild long-term market share. 1he o06ecti/e ma) 0e to entice consumers to tr) a ne4 %roduct, lure consumers a4a) 'rom com%etitors= %roducts, get consumers to ?load u%? on a mature %roduct, or hold and re4ard lo)al customers. 706ecti/es 'or trade promotions include getting retailers to carr) ne4 items and more in/entor), getting them to ad/ertise the %roduct and gi/e it more shel' s%ace, and getting them to 0u) ahead. ,or the salesforce, o06ecti/es include getting more sales'orce su%%ort 'or current or ne4 %roducts or getting sales%eo%le to sign u% ne4 accounts. 9deall), sales %romotion o06ecti/es are to 0uild long-run consumer demand rather than to %rom%t tem%orar) 0rand s4itching. Selecting Sales-Promotion Tools %onsumer)Promotion 'ools 1he main consumer-%romotion tools include sam%les, cou%ons, cash re'unds, %rice %acks, %remiums, %atronage re4ards, %oint-o'-%urchase dis%la)s and demonstrations, and contests, s4ee%stakes, and games. #amples are o''ers o' a trial amount o' a %roduct. 3ome sam%les are 'reeH 'or others, the com%an) charges a small amount to o''set its cost. 1he sam%le might 0e deli/ered door to door, sent in the mail, handed out in a store, attached to another %roduct, or 'eatured in an ad. 3am%ling is the most e''ecti/e@0ut most e;%ensi/e@4a) to introduce a ne4 %roduct. ,or e;am%le, :e/er &rothers had so much con'idence in its ne4 3ur' detergent that it s%ent 5" million to distri0ute 'ree sam%les to 'our out o' e/er) 'i/e American households. %oupons are certi'icates that gi/e 0u)ers sa/ings 4hen the) %urchase s%eci'ied %roducts. (ou%ons can 0e mailed, included 4ith other %roducts, or %laced in ads. 3e/eral %ackage goods com%anies are e;%erimenting 4ith %oint-o'-sale cou%on dis%ensing machines and com%uteri8ed %rinters that automaticall) %rint out cou%ons at the cash register 4hen certain %roducts %ass o/er the scanner. (ou%ons can stimulate sales o' a mature 0rand and %romote earl) trial o' a ne4 0rand. %as& refund offers (or rebates) are like cou%ons e;ce%t that the %rice reduction occurs a'ter the %urchase rather than at the retail outlet. 1he consumer sends a ?%roo' o' %urchase? to the manu'acturer, 4ho then re'unds %art o' the %urchase %rice 0) mail. (ash re'unds ha/e 0een used 'or ma6or %roducts such as automo0iles as 4ell as 'or small a%%liances and %ackaged goods. Price pac*s (also called cents)off deals) o''er consumers sa/ings o'' the regular %rice o' a %roduct. 1he reduced %rices are marked 0) the %roducer directl) on the la0el or %ackage. Price %acks can 0e single %ackages sold at a reduced %rice (such as t4o 'or the %rice o' one#, or t4o related %roducts 0anded together (such as a tooth0rush and tooth%aste#. Price %acks are /er) e''ecti/e@ e/en more so than cou%ons@in stimulating shortterm sales. Premiums are goods o''ered either 'ree or at lo4 cost as an incenti/e to 0u) a %roduct. 9n its ?1reasure Hunt? %romotion, 'or e;am%le, Iuaker 7ats inserted 5. million o' gold and sil/er coins in Ken-: Dation dog 'ood %ackages. 9n its recent %remium %romotion. (utt) 3ark scotch o''ered a 0rass tra) 4ith the %urchase o' one 0ottle o' (utt) and a desk lam% 4ith the %urchase o' t4o. A %remium ma) come inside (in-%ack# or outside (on-%ack# the %ackage. 1he %ackage itsel', i' reusa0le (such as a decorati/e tin#, ma) ser/e as a %remium. Premiums are sometimes mailed to consumers 4ho ha/e sent in a %roo' o' %urchase, such as a 0o; to%. A self-li$uidating premium is a %remium sold 0elo4 its normal retail %rice to consumers 4ho re>uest it. ,or e;am%le, manu'acturers no4 o''er consumers all kinds o' %remiums 0earing the com%an)=s nameB &ud4eiser 'ans can order 1-shirts, hot-air 0alloons, and hundreds o' other items 4ith &ud=s name on them at unusuall) lo4 %rices. Patronage re+ards are cash or other a4ards 'or the regular use o' a certain com%an)=s %roducts or ser/ices. ,or e;am%le, airlines o''er ?'re>uent 'l)er %lans,? a4arding %oints 'or miles tra/elled that can 0e turned in 'or 'ree airline tri%s. Marriott Hotels has ado%ted an ?honoured guest? %lan that a4ards %oints 'or users o' their hotels. 1rading stam%s are also %atronage re4ards in that customers recei/e stam%s 4hen 0u)ing 'rom certain merchants and can redeem them 'or goods either at redem%tion centres or through mail-order catalogs.

Point)of)purc&ase (P,P) promotions include dis%la)s and demonstrations that take %lace at the %oint o' %urchase or sale. An e;am%le is a 'i/e-'oot-high card0oard dis%la) o' (a%=n (runch ne;t to (a%=n (runch cereal 0o;es. 2n'ortunatel), man) retailers do not like to handle the hundreds o' dis%la)s, signs, and %osters the) recei/e 'rom manu'acturers each )ear. Manu'acturers ha/e thus res%onded 0) o''ering 0etter P7P materials, t)ing them in 4ith tele/ision or %rint messages and o''ering to set them u%. A good e;am%le is the a4ard4inning Pe%si ?ti%%ing can? dis%la). ,rom an ordinar) dis%la) o' Pe%si si;-%acks along a su%ermarket aisle, a mechanicall) rigged si;-%ack 0egins to ti% 'or4ard, gra00ing the attention o' %assing sho%%ers 4ho think the si;%ack is 'alling. A sign reminds sho%%ers, ?<on=t 'orget the Pe%siJ? 9n test market stores, the dis%la) hel%ed get more trade su%%ort and greatl) increased Pe%si sales. %ontests, s+eepsta*es, and games gi/e consumers the chance to 4in something@such as cash, tri%s, or goods@0) luck or through e;tra e''ort. A contest calls 'or consumers to su0mit an entr)@a 6ingle, guess, suggestion@to 0e 6udged 0) a %anel that 4ill select the 0est entries. A sweepstakes calls 'or consumers to su0mit their names 'or a dra4ing. A game %resents consumers 4ith something e/er) time the) 0u)@0ingo num0ers, missing letters@that ma) or ma) not hel% them 4in a %ri8e. A sales contest urges dealers or the sales'orce to increase their e''orts, 4ith %ri8es going to the to% %er'ormers. 'rade)Promotion 'ools 1rade %romotion can %ersuade retailers or 4holesalers to carr) a 0rand, gi/e it shel' s%ace, %romote it in ad/ertising, and %ush it to consumers. 3hel' s%ace is so scarce these da)s that manu'acturers o'ten ha/e to o''er %rice-o''s, allo4ances, 0u)-0ack guarantees, or 'ree goods to get on the shel' and, once there, to sta) on it. Manu'acturers use se/eral trade-%romotion tools. Man) o' the tools used 'or consumer %romotions@ contests, %remiums, dis%la)s@can also 0e used as trade %romotions. 7r the manu'acturer ma) o''er a straight discount o'' the list %rice on each case %urchased during a stated %eriod o' time (also called, price-off, offinvoice, or off-list'. 1he o''er encourages dealers to 0u) in >uantit) or to carr) a ne4 item. <ealers can use the discount 'or immediate %ro'it, to ad/ertising, or 'or %rice reductions to their customers. Manu'acturers ma) also o''er an allo+ance (usuall) so much o'' %er case# in return 'or the retailer=s agreement to 'eature the manu'acturer=s %roducts in some 4a). An advertising allowance com%ensates retailers 'or ad/ertising the %roduct. A display allowance com%ensates them 'or using s%ecial dis%la)s. Manu'acturers ma) o''er free goods, 4hich are e;tra cases o' merchandise to middlemen 4ho 0u) a certain >uantit) or 4ho 'eature a certain 'la/our or si8e. 1he) ma) o''er push moneycash or gi'ts to dealers or their sales'orce to ?%ush? the manu'acturer=s goods. Manu'acturers ma) gi/e retailers 'ree specialty advertising items that carr) the com%an)=s name, such as %ens, %encils calendars, %a%er4eights, match0ooks, memo %ads, ashtra)s, and )ardsticks. Man) com%anies and trade associations organi8e conventions and trade shows to %romote their %roducts. ,irms selling to the industr) sho4 their %roducts at the trade sho4. Kendors get man) 0ene'its, such as 'inding ne4 sales leads, contacting customers, introducing ne4 %roducts, meeting ne4 customers, and selling more to %resent customers.

-. Public relations as a promotion tool.

Another ma6or mass-%romotion tool is public relations@0uilding good relations 4ith the com%an)=s /arious %u0lics 0) o0taining 'a/oura0le %u0licit), 0uilding u% a good ?cor%orate image,? and handling or heading o'' un'a/oura0le rumours, stories, and e/ents. 1he old name 'or marketing %u0lic relations 4as publicity, 4hich 4as seen sim%l) as acti/ities to %romote a com%an) or its %roducts 0) %lanting ne4s a0out it in media not %aid 'or 0) the s%onsor. Pu0lic relations is a much 0roader conce%t that includes %u0licit) and man) other acti/ities. Pu0lic relations de%artments use man) di''erent toolsB "ress relations( Placing ne4s4orth) in'ormation into the ne4s media to attract attention to a %erson, %roduct, or ser/ice. "roduct publicity( Pu0lici8ing s%eci'ic %roducts.

&orporate communications( (reating internal and e;ternal communications to %romote understanding o' the 'irm or institution. Lobbying( <ealing 4ith legislators and go/ernment o''icials to %romote or de'eat legislation and regulation &ounselling( Ad/ising management a0out %u0lic issues and com%an) %ositions and image.

Pu0lic relations is used to %romote %roducts, %eo%le, %laces, ideas, acti/ities, organi8ations, and e/en nations. 1rade associations ha/e used %u0lic relations to re0uild interest in declining commodities such as eggs, a%%les, milk, and %otatoes. Ce4 Lork (it)=s image turned around 4hen its ?9 :o/e Ce4 Lork? cam%aign took root, 0ringing millions more tourists to the cit). Eohnson G Eohnson=s masterl) use o' %u0lic relations %la)ed a ma6or role in sa/ing 1)lenol 'rom e;tinction a'ter its %roduct-tam%ering scares. :ee 9accoca=s s%eeches and auto0iogra%h) hel%ed create a ne4 4inning image 'or (hr)sler. Cations ha/e used %u0lic relations to attract more tourists, 'oreign in/estment, and international su%%ort. Pu0lic relations can ha/e a strong im%act on %u0lic a4areness at a much lo4er cost than ad/ertising. 1he com%an) does not %a) 'or the s%ace or time in the media. 9t %a)s 'or a sta'' to de/elo% and circulate in'ormation and manage e/ents. 9' the com%an) de/elo%s an interesting stor), it could 0e %icked u% 0) se/eral di''erent media, ha/ing the same e''ect as ad/ertising that 4ould cost millions o' dollars. And it 4ould ha/e more credi0ilit) than ad/ertising. <es%ite its %otential strengths, %u0lic relations is o'ten descri0ed as a marketing ste%child 0ecause o' its limited and scattered use. 1he %u0lic relations de%artment is usuall) located at cor%orate head>uarters. 9ts sta'' is so 0us) dealing 4ith /arious %u0lics@stockholders, em%lo)ees, legislators, cit) o''icials@that %u0lic relations to su%%ort %roduct-marketing o06ecti/es ma) 0e ignored. And marketing managers and %u0lic relations %ractitioners do not al4a)s talk the same language. Man) %u0lic relations %ractitioners see their 6o0 as sim%l) communicating. Marketing managers, on the other hand, tend to 0e much more interested in ho4 ad/ertising and %u0lic relations a''ect sales and %ro'its. Major Pub ic Re ations Too s Pu0lic relations %ro'essionals use se/eral tools. 7ne o' the ma6or tools is news. PD %ro'essionals 'ind or create 'a/oura0le ne4s a0out a com%an) and its %roducts or %eo%le. 3ometimes ne4s stories occur naturall), and sometimes the PD %erson can suggest e/ents or acti/ities that 4ill create ne4s. Speeches can also create %roduct and com%an) %u0licit). :ee 9accoca=s charismatic talks to large audiences hel%ed to sell (hr)sler cars to consumers and stock to in/estors. 9ncreasingl), com%an) e;ecuti/es must 'ield >uestions 'rom the media or gi/e talks at trade associations or sales meetings, and these e/ents can 0uild or hurt the com%an)=s image. Another common PD tool is special events, ranging 'rom ne4s con'erences, %ress tours, grand o%enings, and 'ire4orks dis%la)s to laser sho4s, hot-air 0alloon releases, multimedia %resentations, and star-studded s%ectaculars that 4ill reach and interest target %u0lics. Pu0lic relations %eo%le also %re%are written materials to reach and in'luence their target markets. 1hese materials include annual re%orts, 0rochures, articles, and com%an) ne4sletters and maga8ines. )udio-visual materials such as 'ilms, slide-and-sound %rograms, and /ideo and audio cassettes are increasingl) 0eing used as communication tools. &orporate identity materials can also hel% to create a cor%orate identit) that the %u0lic immediatel) recogni8es. :ogos, stationer), 0rochures, signs, 0usiness 'orms, 0usiness cards, 0uildings, uni'orms, and com%an) cars and trucks@all 0ecome marketing tools 4hen the) are attracti/e, distincti/e, and memora0le. (om%anies can also im%ro/e %u0lic good4ill 0) contri0uting mone) and time to public service activities. ,or e;am%le, Procter G Gam0le and Pu0lishers= (learing House held a 6oint %romotion to aid the 3%ecial 7l)m%ics. 1he Pu0lishers= (learing House mailing included %roduct cou%ons, and Procter G Gam0le donated ten cents %er redeemed cou%on to the 3%ecial 7l)m%ics. 9n another e;am%le, &. <alton &ooksellers earmarked 5 million o/er a 'our-)ear %eriod 'or the 'ight against illiterac).

.. Personal selling as a promotion tool.

Do0ert :ouis 3te/enson once noted that ?e/er)one li/es 0) selling something.? 3ales'orces are 'ound in non%ro'it as 4ell as %ro'it organi8ations. Decruiters are a college=s sales'orce 'or attracting students. (hurches use mem0ershi% committees to attract ne4 mem0ers. 1he 2.3. Agricultural A;tension 3er/ice sends agricultural

s%ecialists to sell 'armers on ne4 'arming methods. Hos%itals and museums use 'und-raisers to contact donors and raise mone). 1he %eo%le 4ho do the selling go 0) man) namesB salespeople, sales representatives, account executives, sales consultants, sales engineers, field representatives, agents, district managers, and marketing representatives. 3elling is one o' the oldest %ro'essions in the 4orld. 3ales%eo%le are t)%icall) %ictured as outgoing and socia0le@ although man) sales%eo%le actuall) dislike unnecessar) sociali8ing. 1he) are 0lamed 'or 'orcing goods on %eo%le @although 0u)ers o'ten search out sales %eo%le. #alesforce management is the anal)sis, %lanning, im%lementation, and control o' sales'orce acti/ities. 9t includes setting sales'orce o06ecti/es, designing sales'orce strateg), and recruiting, selecting, training, su%er/ising, and e/aluating the 'irm=s sales%eo%le. 1he ma6or sales'orce management decisions are sho4n in ,igure - . Asta0lishing sales'orce o06ecti/es <esigning sales'orce strateg), structure, si8e and com%ensation Decruiting and selecting sales%eo%le 1raining sales%eo%le

3u%er/ising sales%eo%le #"''I/! #A0"#1,R%" ,23"%'I4"#

A/aluating sales%eo%le

(om%anies set di''erent o06ecti/es 'or their sales'orces. 9&M=s sales%eo%le are to ?sell, install, and u%grade? customer com%uter e>ui%mentH A1G1 sales%eo%le should ?de/elo%, sell, and %rotect? accounts. 3ales%eo%le usuall) %er'orm one or more o' man) tasks. 1he) 'ind and de/elo% ne4 customers and communicate in'ormation a0out the com%an)=s %roducts and ser/ices. 1he) sell %roducts 0) a%%roaching customers, %resenting their %roducts, ans4ering o06ections, and closing sales 4ith customers. 9n addition, sales%eo%le %ro/ide ser/ices to customers, carr) out market research and intelligence 4ork, and 'ill out sales call re%orts. 3ome com%anies are /er) s%eci'ic a0out their sales'orce o06ecti/es and acti/ities. 7ne com%an) ad/ises its sales%eo%le to s%end +0 %ercent o' their time 4ith current customers and !0 %ercent 4ith %ros%ects, and +. %ercent on current %roducts and 1. %ercent on ne4 %roducts. 1his com%an) 0elie/es that i' such norms are not set, sales%eo%le tend to s%end almost all o' their time selling current %roducts to current accounts and neglect ne4 %roducts and ne4 %ros%ects. 1he old /ie4 is that sales%eo%le should 4orr) a0out sales and the com%an) should 4orr) a0out %ro'it. Ho4e/er, a ne4er /ie4 holds that sales%eo%le should 0e concerned 4ith more than 6ust %roducing salesthe) must also kno4 ho4 to %roduce customer satisfaction and company profit. 1he) should kno4 ho4 to look at sales data, measure market %otential, gather market intelligence, and de/elo% marketing strategies and %lans. 3ales%eo%le need marketing-anal)sis skills, es%eciall) at higher le/els o' sales management. A market-oriented rather than a sales-oriented sales'orce 4ill 0e more e''ecti/e in the long run. 5"#I!/I/! #A0"#1,R%" #'RA'"!6 Salesforce Strategy A/er) com%an) com%etes 4ith other 'irms to get orders 'rom customers. 1hus, it must 0ase its strateg) on an understanding o' the customer-0u)ing %rocess. A com%an) can use one or more o' se/eral sales a%%roaches to contact customers. An indi/idual sales%erson can talk to a %ros%ect or customer in %erson or o/er the %hone. 7r a sales%erson can make a sales %resentation to a 0u)ing grou%. A sales team (such as a com%an) e;ecuti/e, a sales%erson, and a sales engineer# can make a sales %resentation to a 0u)ing grou%. 9n conference selling, a sales%erson 0rings resource %eo%le 'rom the com%an) to meet 4ith one or more 0u)ers to discuss %ro0lems and

o%%ortunities. 9n seminar selling, a com%an) team conducts an educational seminar 'or technical %eo%le in a customer com%an) a0out state-o'-the-art de/elo%ments. 1hus, the sales%erson o'ten acts as an ?account manager? 4ho arranges contacts 0et4een %eo%le in the 0u)ing and selling com%anies. &ecause sales%eo%le need hel% 'rom others in the com%an), selling calls 'or team4ork. 7thers 4ho might assist sales%eo%le include to% management, es%eciall) 4hen ma6or sales are at stakeH technical %eo%le 4ho %ro/ide technical in'ormation to customersH customer ser/ice re%resentati/es 4ho %ro/ide installation, maintenance, and other ser/ices to customersH and o''ice sta'' such as sales anal)sts, order %rocessors, arid secretaries. Salesforce Structure 1he com%an) must also decide ho4 to structure its sales'orce. 1his decision is sim%le i' the com%an) sells one %roduct line to one industr) 4ith customers in man) locationsH here, the com%an) 4ould use a territorial salesforce structure. 9' the com%an) sells man) %roducts to man) t)%es o' customers, it might need a product salesforce structure or a customer salesforce structure. Salesforce Size 7nce the com%an) has set its strateg) and structure, it is read) to consider salesforce si*e. 3ales%eo%le constitute one o' the com%an)=s most %roducti/e@ and most e;%ensi/e@assets. 1here'ore, increasing their num0er 4ill increase 0oth sales and costs. Man) com%anies use the +or*load approac& to set sales'orce si8e. 2nder this a%%roach, a com%an) grou%s accounts into di''erent si8e classes and then 'igures out ho4 man) sales%eo%le are needed to call on them the desired num0er o' times. 1he com%an) might think as 'ollo4sB 3u%%ose 4e ha/e 1,000 1)%e-A accounts and !,000 1)%e-& accounts. 1)%e-A accounts re>uire * calls a )ear and 1)%e-& accounts 1! calls a )ear. 9n this case, the sales'orce=s workloadthe num0er o' calls it must make %er )ear@is *0,000 calls M(1,000 ; *# N (!,000 ; 1!# + *,000 N !",000 + *0,000#O. 3u%%ose our a/erage sales%erson can make 1,000 calls a )ear. 1he com%an) thus needs *0 sales%eo%le (*0,000P1,000#. Salesforce Compensation 1o attract needed sales%eo%le, a com%an) must ha/e an attracti/e com%ensation %lan. 1hese %lans /ar) greatl), 0oth 0) industr) and 0) com%anies 4ithin the same industr). 1he le/el o' com%ensation must 0e close to the ?going rate? 'or the t)%e o' sales 6o0 and needed skills. ,or e;am%le, the a/erage earnings o' an e;%erienced, middle-le/el sales%erson in 19++ in the 23A amounted to 5 +,900. 1o %a) less than the going rate 4ould attract too 'e4 >ualit) sales%eo%leH to %a) more 4ould 0e unnecessar). (om%ensation is made u% o' se/eral elements@a 'i;ed amount, a /aria0le amount, e;%enses, and 'ringe 0ene'its. 1he 'i;ed amount, usuall) a salar), gi/es the sales%erson some sta0le income. 1he /aria0le amount, 4hich might 0e commissions or 0onuses 0ased on sales %er'ormance, re4ards the sales%erson 'or greater e''ort. A;%ense allo4ances, 4hich re%a) sales%eo%le 'or 6o0-related e;%enses, let sales%eo%le undertake needed and desira0le selling e''orts. ,ringe 0ene'its, such as %aid /acations, sickness or accident 0ene'its, %ensions, and li'e insurance, %ro/ide 6o0 securit) and satis'action. Management must decide 4hat mix o' these com%ensation elements makes the most sense 'or each sales 6o0. <i''erent com0inations o' 'i;ed and /aria0le com%ensation gi/e rise to 'our 0asic t)%es o' com%ensation %lans@ straight salar), straight commission, salar) %lus 0onus, and salar) %lus commissions. A recent stud) o' sales'orce com%ensation %lans sho4ed that a0out 1" %ercent %aid straight salar), 19 %ercent %aid straight commission, F %ercent %aid salar) %lus commission, !* %ercent %aid salar) %lus 0onus, and 10 %ercent %aid salar) %lus commission %lus 0onus. R"%R7I'I/! A/5 #"0"%'I/! #A0"#P",P0" Ha/ing set the strateg), structure, si8e, and com%ensation 'or the sales'orce, the com%an) no4 must set u% s)stems 'or recruiting and selecting, training, supervising, and evaluating sales%eo%le.

What Makes a Good Salesperson? 3electing sales%eo%le 4ould not 0e a %ro0lem i' the com%an) kne4 4hat traits to look 'or. 9' it kne4 that good sales%eo%le 4ere outgoing, aggressi/e, and energetic, these characteristics could sim%l) 0e checked among a%%licants. &ut man) success'ul sales%eo%le are also 0ash'ul, mild-mannered, and /er) rela;ed. 3uccess'ul sales%eo%le include some men and 4omen 4ho are tall and short, some 4ho s%eak 4ell and some 4ho s%eak %oorl), some 4ho dress 4ell and some 4ho dress sha00il). 3till, the search continues 'or the magic list o' traits that s%ells sure-'ire sales a0ilit). Man) such lists ha/e 0een dra4n u%. 7ne sur/e) suggests that good sales%eo%le ha/e lots o' enthusiasm, %ersistence, initiati/e, sel'con'idence, and 6o0 commitment. 1he) are committed to sales as a 4a) o' li'e and ha/e a strong customer orientation. Ho4 can a com%an) 'ind out 4hat traits sales%eo%le in its industr) should ha/eQ Eo0 duties suggest some o' the traits to look 'or. 9s there a lot o' %a%er4orkQ <oes the 6o0 call 'or much tra/elQ $ill the sales%erson 'ace a lot o' re6ectionsQ 1he success'ul sales%erson should 0e suited to these duties. 1he com%an) should also look at the characteristics o' its most success'ul sales%eo%le 'or clues to needed traits. Princi! es o" Se ing 7ne o' the ma6or o06ecti/es o' training %rograms is to teach sales%eo%le the ?art? o' selling. (om%anies s%end hundreds o' millions o' dollars on seminars, 0ooks, cassettes, and other materials. All the training a%%roaches tr) to con/ert a sales%erson 'rom a %assi/e order taker to an acti/e order getter. 7rder takers assume that customers kno4 their o4n needs, that the) 4ould resent an) attem%t at in'luence, and that the) %re'er sales%eo%le 4ho are %olite and reser/ed. An e;am%le o' an order taker is a sales%erson 4ho calls on a do8en customers each da), sim%l) asking i' the customer needs an)thing. 1here are t4o a%%roaches to training sales%eo%le to 0e order gettersa sales-oriented a%%roach and a customer-oriented a%%roach. 1he sales-oriented approach trains the sales%erson in high-%ressure selling techni>ues, such as those used in selling enc)clo%edias or automo0iles. 1his 'orm o' selling assumes that the customers 4ill not 0u) e;ce%t under %ressure, that the) are in'luenced 0) a slick %resentation, and that the) 4ill not 0e sorr) a'ter signing the order (and that, i' the) are, it no longer matters#. 1he customer-oriented approachthe one most o'ten used in toda)=s %ro'essional selling@trains sales%eo%le in customer %ro0lem sol/ing. 1he sales%erson learns ho4 to identi') customer needs and 'ind solutions. 1his a%%roach assumes that customer needs %ro/ide sales o%%ortunities, that customers a%%reciate good suggestions, and that the) 4ill 0e lo)al to sales%eo%le 4ho ha/e their long-term interests at heart. 9n one sur/e), %urchasing agents descri0ed the 'ollo4ing >ualities as the ones the) most disliked in sales%eo%leB %ush), arrogant, unrelia0le, too talkati/e, 'ails to ask a0out needs. 1he >ualities the) valued most included relia0ilit) and credi0ilit), integrit), inno/ati/eness in sol/ing %ro0lems, and %roduct kno4ledge. 1he %ro0lem-sol/er sales%erson 'its 0etter 4ith the marketing conce%t than the hard seller or order taker. T#e Se ing Process Most training %rograms /ie4 the selling process as consisting o' se/eral ste%s that the sales%erson must master. 1hese ste%s are sho4n in ,igure -". Prospecting and 8ualifying 1he 'irst ste% in the selling %rocess is prospecting@identi')ing >uali'ied %otential customers. 1he sales%erson must a%%roach man) %ros%ects to get a 'e4 sales. 9n the insurance industr), onl) one out o' nine %ros%ects 0ecomes a customer. 9n the com%uter 0usiness, 1!. %hone calls result in !. inter/ie4s leading to 'i/e demonstrations and one sale. Although the com%an) su%%lies some leads, sales%eo%le need skill in 'inding their o4n. 1he) can ask current customers 'or the names o' %ros%ects. 1he) can 0uild re'erral sources, such as su%%liers, dealers, noncom%eting sales%eo%le, and 0ankers. 1he) can 6oin organi8ations to 4hich %ros%ects 0elong or can engage in s%eaking and 4riting acti/ities that 4ill dra4 attention. 1he) can search 'or names in ne4s%a%ers or directories and use the tele%hone and mail to track do4n leads. 7r the) can dro% in unannounced on /arious o''ices (a %ractice kno4n as ?cold calling?#.