Advertising Sales Promotion

In advertising sales promotion - it is apparent that companies communicate with their customers in a number of ways. It is important that we distinguish between the two main varieties of communication. 1. Impersonal communication e.g. point of sale, promotions, advertising, promotions and public relations; 2. Personal communication ( or direct person to person) e.g. the face to face meeting between a sales person and the customer. The problem faced by the company planning a communication plan is that firstly there usually is more than one person responsible for making the purchase decision; secondly, there is the important fact that the buyer is influenced by more than one form of communication. For example, the buyer might use the following four sources of information: 1. 2. 3. 4. Trade and technical press Salesperson calls Exhibition Direct mail

A review of the facts above reveals the following: 1. More than one person in the purchasing company has an influence on what is bought 2. Sales people do not see all the influencers 3. Companies get the information for their decisions from a variety of sources. It can be seen then that the buying process is quite complicated. 1. The purchasing manager in an organization realizes the need for a specific product to be purchased as a solution to a problem identified; 2. The characteristics and quantity of what is needed are worked out. This is the outline design process such as deciding performance, weight, size, operating conditions, and so on; 3. A specification has to be drawn up based on the above; 4. A search is made for suppliers. This may merely involve the browsing through of a suppliers catalogue; 5. Potential suppliers will submit products and plans for evaluation; 6. After the necessary trials the suppliers are selected; 7. The supplier delivers the product after the order is duly executed; 8. The goods delivered are checked against specification;

Not all of these steps are followed in every buying decision. When something is being bought for a new project, all the phases would be followed. Where it is simply the replacement of something that has been bought before, the search and even the tender processes may not be necessary. The newness of the product being purchased also plays a role in the product being purchased. The newness of the product is determined by; 1. The complexity of the product; 2. The commercial uncertainty surrounding the outcome of the purchase.

Preparing the advertising plan

For many years it was believed that advertising was very simple in the sense that the company advertised and the customer received the message and understood it. Now however, we know that the process is much more complicated than first suspected! Before setting the objectives for advertising we need to check what we need to set the objectives: 1. 2. 3. 4. 5. 6. The budget for advertising Determine who the target audience is Advertisement content Media to use Advertising frequency Measure the effectiveness of advertising

The decisions can be summarized as follows: 1. objectives (why) 2. Target (who) 3. Copy platform (what) 4. Media (where) 5. Creative platform (how) 6. Timing (when) 7. Budget (how much) 8. Schedule 9. Response 10. Evaluation The whole process rests primarily on the first item of the list - which is the advertising objectives.

Advertising Objectives
Research has shown that many companies set objectives for advertising which advertising cannot achieve on its own.

A machine toll company could not understand why after an expensive advertising campaign in Germany in which they emphasized the extremely high quality and reliability of their products they made little headway in the market. Subsequent market research showed that their target customers already concerned about and why they were not buying was their dissatisfaction over delivery and customer service. This is yet another example of advertising wasted because of ignorance of customer beliefs. The first step is to decide on reasonable objectives for advertising. The question that needs to be asked is can the objective be achieved by advertising alone? If the answer is 'yes' then it is an advertising objective otherwise it cannot be made an advertising objective. Media advertising can achieve the following:

Alter perception/ attitudes Convey information Create desires Establish connections Direct actions Provide reassurance Remind Give reasons for buying Demonstrate Generate enquiries

Setting reasonable achievable objectives, then, is the first and most important step in the advertising plan. All the other steps are a putting together a plan to achieve the advertising objectives.
target audience, - what do they already know about the product or service? Who What do they know about the competitors? What kind of people re they? How do we describe identify them? Response do we wish to achieve through advertising? What Are these specific communications objectives?

How can we embody our communications objectives in an appealing form? How What is the evidence that we have is that is acceptable and appropriate and acceptable to our audience?

Where

Which are the most cost effective places to make our communications? When are communications going to be made to clients? What is the reasoning for our scheduling of advertisements/ communications over time What results do we expect?

When

Result

How are we planning to measure the results? Do we intend to measure results and if so do we need to do anything beforehand? How much money do the activities need?

Budget

How much money is available? How is expenditure going to be controlled? Who is to do what and when?

Schedule

How much is to be spent on what, where and when?

The usual assumption about advertising is that advertising is deployed in an aggressive manner and that changes over time is the creative content. But the role of advertising changes over the life cycle of the product. For example, the process of persuasion itself cannot usually start until there is some level of awareness about a product or service in the marketplace. Creating awareness is, therefore usually one of the most important objectives early on in a life cycle.

Sales Promotion
The term advertising is constantly referred to as 'above the line expenditure' and can be defined as all non-personal communication in measured media. This includes television, cinema, radio, print and outdoor media. Sales promotion for which the term 'below the line expenditure' is used as a synonym, is not easily defined. In practice sales promotion is a specific activity, which can be defined as the making of a featured offer to certain customers within a specified time period. This means that to qualify as sales promotion, someone must be offered something which is featured rather than just being an aspect of trade.

Sales promotion in practice

Sales promotion is a problem-solving activity designed to get customers to behave more in line with the economic interests of the company. Typical tasks for sales promotion are: rectifying slow stock movements; counter-acting competitive activity; encouraging repeat purchase; securing marginal buyers; getting bills paid on time; inducing trial purchase etc. However, it is important to realize that, on its own, sales promotion will not replace selling, change long term trends, or build long term customer loyalty.

Types of Sales Promotion

Money Target market Consumer Direct Price reduction Indirect coupons vouchers money equivalent competitions Extended credit Delayed invoicing sale or return coupons vouchers money equivalent Direct Goods Indirect Stamps coupons Free goods premium vouchers money offers free gifts tradeequivalent in offers competitions Free gifts Trial offers Trade-in offers Services Direct Indirect Guarantees group co-operative advertising participation events stamps coupons special exhibitions and vouchers for services displays Guarantees group participation events Free services Risk reduction schemes Coupons Vouchers Points systems Money equivalent Free services Group participation events Stamps, coupons Vouchers for services Competitions Coupons Vouchers points systems for services Event admission Competitions

Trade

Dealer loaders loyalty schemes incentives

Sales force

Bonus commission

Coupon vouchers Points system Money Free gifts equivalent

Strategic role of sales promotion

Because sales promotion is essentially used as a tactical device, it often amounts to a series of unconnected gimmicks to lacking any coherence. Contrary to this advertising has been always considered as a strategic process of building brand value over the longer term. Compare this against sales promotion which is commonly used to help the company retain a tactical advantage. There is no reason why there should not be a strategy for sales promotion, so that each promotion increases the effectiveness of the next.

Sales promotion of industrial products

Industrial goods are always sold to other businesses and this has the effect of changing the emphasis placed on certain elements of the marketing mix.

It will not be surprising then to learn that suitably adapted most consumer goods sales promotional techniques can be applied to industrial goods.

Sales promotion plan preparation

There is wide acceptance that sales promotion is one of the most mismanaged of all marketing functions. This can be attributed to the confusion as to what sales promotion really is - which often results in expenditures not being properly accounted for. Some companies record it as advertising expenditure, others as sales force expenditure and others as general marketing expenditure - while the loss of revenue from special price reductions is not recorded at all. The companies can no longer afford not to set objectives or to evaluate results after the event, or to fail to have some company guidelines. For example, a 1 Euro case allowance on a product with a contribution rate of 3 Euro per case has to increase sales by 50% just to maintain the same level of contribution. In order to manage a company's sales promotion expenditure more effectively, there is one essential step that must be taken. First, an objective for sales promotion must be established in the same way that an objective is developed for advertising, pricing, or distribution.