4 Ps of Marketing Mix

Product Price

Place Promotion
Utilities created by marketers for
customers:
 Product or service utility
 Possession utility / price utility
 Time utility
 Place utility
What is promotion……?
 Modern marketing calls for more than
just developing a good product, pricing
it attractively, and making it available to
target customers. Companies also must
communicate with their customers, and
what they communicate should not be
left to chance. For most companies, the
question is not whether to
communicate, but how much to spend
and in what ways.
What is promotion……?

 “ Promotion is the co-ordination of

seller’s efforts to set up channels of
information and persuasion to facilitate
the sales of goods/services or
acceptance of an idea. ”
What is promotion……?

To Inform To Persue
PROMOTION

To Modify Behavior To Remind

What is promotion……?
 “Promotion is an act of communication”
 “It includes all those activities which are
aimed at creating and stimulating
demand”

In our daily life we all are exposed to

various tools of promotion aiming at
communicating one thing on other to us.
For our convenience, all those
promotional tools can be categorized in
five major components, constituting the
promotion mix
PROMOTIONAL TOOLS
(THE PROMOTION MIX)

Advertising Publicity
PROMOTION

Sales Direct Personal

Promotion Marketing Selling
THE PROMOTION MIX

 The Promotion Mix (5 tools of promotion) is the

company’s primary communication activity, the
entire marketing mix (4 Ps) - promotion and
product, price and place - must be coordinated
for greatest communication impact.
 Actually, communication goes beyond the 5
specific tools of promotion. The product’s
design, its price, the shape and colour of
package, and the stores that sell it - all
communicate something to buyer.
ELEMENTS OF
PROMOTION MIX
Five Major methods used for
promotion (Promotion Mix)
1.Advertising : Any paid form of non-personal
presentation and promotion of ideas, goods or
services by an identified sponsor.
2.Publicity : Non-personal stimulation of demand for
a product or service or business unit by planting
commercially significant news about it in a
published medium or obtaining favorable
presentation of it upon radio, T.V., or stage that is
not paid for by the sponsor.
ELEMENTS OF PROMOTION
MIX
3.Personal Selling : Oral presentation in a conversation
with one or more prospective purchasers for the
purpose of making sales.
4.Sales Promotion : All those marketing activities –
other than advertising, publicity and personal selling
that stimulate consumer purchasing and dealer
effectiveness such as displays, shows & exhibition,
demonstrations and various non – recurrent selling
efforts. These are usually short term activities
ELEMENTS OF PROMOTION
MIX

5.Direct Marketing : Has several forms - direct mail,

telemarketing, electronic marketing and so on. It has a
few distinctive characteristics non – public / customized /
Up- to- Date (Messages can be prepared very quickly for
an individual) .
NATURE OF EACH
PROMOTIONAL TOOL
 Each Promotional Tool has unique
characteristics and costs.
1. ADVERTISING
 Public Presentation (Public mode of
communication)
 Pervasiveness (Permits seller to repeat the
message many times. It also allows buyer to
receive and compare the massage with
competitors.)
NATURE OF EACH
PROMOTIONAL TOOL
(1. ADVERTISING…….contd.)

• Amplified Expressiveness (Provides

opportunities for dramatizing the company and
its products through the artful use of print,
sound, colour etc.)

• Impersonality (It can not be as compelling as a

co’s sales representative.)
NATURE OF EACH
PROMOTIONAL TOOL
2. PUBLICITY
 High credibility (news features and stories
seem more authentic and credible to
readers/viewers than ads do.)
 Off guard (can reach many prospects who
might avoid sales people and ads. The
message gets to the buyers as news.)
 Dramatization (like advertising it also has a
potential for dramatizing a co. or its
products.)
NATURE OF EACH
PROMOTIONAL TOOL
3. PERSONAL SELLING
 Personal confrontation (Both way
communication)
 Cultivation (all kinds of relationships -
short time or long time)
 Response (makes the buyer feel under
some obligation)
NATURE OF EACH
PROMOTIONAL TOOL
4. SALES PROMOTION
 Communication (they gain attention and
usually provide information that may lead
the consumer to the product)
 Incentives (gives value to the consumer)
 Invitation (to engage in the transaction
now)
NATURE OF EACH
PROMOTIONAL TOOL
5. DIRECT MARKETING
 Non–public (message is addressed to
specific person/group)
 Customized (to appeal to the addressed
individual )
 Up–to–date (messages can be prepared
very quickly for delivery to an individual)
ADVANTAGES AND DISADVANTAGES
OF PROMOTIONAL COMPONENTS

Promotional Scope Cost Advantages Dis -Advantages

compo.

Advertising Mass Relativity Allows Hard to measure

Inexpensive per expressiveness results
contact and control over
message
Publicity Mass Inexpensive Has high degree Not as easily
of credibility controlled as other
forms

Personal selling Personal Expensive per Permits flexible Costs more than all
contact presentation & other forms per
gains immediate contact
response

Sales Mass Can be costly Gains attention Easy for others to

Promotion and has imitate
immediate effect

(***Packaging and public relations also play Imp.

role in promotion mix.)
OBJECTIVES OF
PROMOTION
 To Increase Sales
 To Increase Market Share
 To Build Brand Loyalty
 To Build Product Differentiation in
Consumers’ mind
DETERMINING THE
PROMOTION MIX
(FACTORS IN SETTING THE PROMOTION MIX)
I. Type of Product :
 For consumer products – Heavy Advertising
 For Industrial products – More Personal Selling

Personal
Personal Selling
Selling
Sales
SalesPromotion
Promotion

Publicity
Publicity

Advertising
Advertising

Consumer Products Industrial Products

DETERMINING THE
PROMOTION MIX
(FACTORS IN SETTING THE PROMOTION MIX)
II. Nature of Market :
 Locational Characteristics of consumers
 Demographics of the customers
 Intensity of the competition
 Requirements of channel members
DETERMINING THE
PROMOTION MIX
III. Buyer
(FACTORS Readiness
IN SETTING stage : MIX)
THE PROMOTION
 Un-aware Informed Aware
 Interested Not-interested
 Having full knowledge
 Comprehension
 Conviction
 ordering
 Reordering etc
DETERMINING THE
PROMOTION MIX
(FACTORS IN SETTING THE PROMOTION MIX)
IV. Product Life Cycle Stage:

Sales

Intro. Growth Maturity Decline

Time
DETERMINING THE
PROMOTION MIX
(FACTORS IN SETTING THE PROMOTION MIX)

V. Push v/s Pull strategy:

Marketing
Activities Demand
Push Mfr Intermediaries End User

Demand

Marketing
Activities

Demand Demand
Pull Mfr Intermediaries End User
DETERMINING THE
PROMOTION MIX
(FACTORS IN SETTING THE PROMOTION MIX)
VI. Co. Market Rank : (Top ranking
brands derive more benefit from
advertising than sales promotion.)
VII. Available Budget
VIII. Company Policy and Objectives
IX. Competitive Promotional
Strategy(Competitors’ role and reaction)
X. Market Trend and Consumer
Attitude
“PROMOTION IS AN ACT OF
COMMUNICATION”
 The word ‘communication’ is based on the Latin
word meaning “COMMON”. Thus the term
communication has come to mean sharing
something of common use.
 Since, marketing communications aim at
influencing the consumer behavior in favour of
the firm’s offerings, these are persuasive in
nature. These persuasive communications are
more commonly called “PROMOTION” and
constitute one of the 4Ps of the marketing mix.
 “PROMOTION IS AN ACT OF
COMMUNICATION”
 Modern marketing calls for more than developing a good
product, pricing it correctly and making it easily
available to the customer. The company that wants more
than ‘walk in’ sales must develop an effective program
of communication & promotion.
 Persuasive communication is said to take place when a
communicator very consciously develops his messages
to have a calculated impact on the attitude and/ or
behavior of a target audience.
 A study of ‘Marketing communication’ is a study of
promotion function of marketing.
THE COMMUNICATION MODEL

WHO…... SAYS WHAT….. HOW..… TO WHOM...…

(In what
channel)

Comm-
Message Channels Audience
unicator

With what effect

HOW COMMUNICATION WORKS .........? THE

PROCESS OF COMMUNICATION

Sender Encoding Message Decoding

(of and Of
(Source) message)
Media Message

Receiver
Noise

Response

Feedback
 ELEMENTS OF THE
COMMUNICATION
(1) Source or sender orPROCESS
communicator
 (2) Encoding (Putting the thought or idea in
symbolic form)
 (3) Message ( The set of symbols for
transmission)
 (4) Media (The path through which the
message moves) from Sender to Receiver.
 (5) Decoding (Assigning meanings to the
symbols transmitted by the sender)
 (6) Receiver or audience or destination
 (7) Response ( The set of reactions that the
receiver has after having been exposed to the
message)
 (8) Feedback
COMMUNICATION PROCESS (a view)

 In view of the new electronic technologies,

companies must ask not only “How can we
reach our customers?” but also “How can we
find ways to let our customers reach us?”
 For a message to be effective, the sender’s
encoding process must mesh with the
receiver’s decoding process. Thus the best
messages are essentially signs that are
familiar to the receiver.
COMMUNICATION PROCESS (a view)

The sender’s task is to get his or her

message through to the receiver. The
target audience may not receive the
intended message for any of three
reasons-
 Selective attention
 Selective distortion ( people may twist the
message to hear what they want to hear.Receivers have
set attitudes, they will hear what fits into their belief
system.)
 Selective recall
COMMUNICATION PROCESS (a view)

Fiske and Hartley have outlined some general

factors that influence the effectiveness of a
communication :
 1. The greater the monopoly of the
communication source over the recipient, the
greater the recipient’s change effect in favour
of the source.
 2. Communication effects are greatest where
the message is in line with the receiver’s
existing opinions, beliefs, and disposition.
(contd.)
COMMUNICATION PROCESS (a view)

 3. Communication can produce the most

effective shifts on unfamiliar, lightly felt,
peripheral issues, who do not lie at the center
of the recipient’s value system.
 4. Communication is more likely to be
effective where the source is believed to have
expertise, high status, objectivity, or likability,
but particularly where the source has power
and can be identified with.
 5. The social context, group, or reference
group will mediate the communication and
influence whether or not the communication
is accepted.
Models That Help to
Conceptualize the Buying
Process
 Two very specific models that aid in

understanding the buying process,

as well as in framing communication
are:-
(1) A I D A Model
(2) Hierarchy–of–effects model
(1) A I D A MODEL

Attention (awareness)

Interest
Desire
Action
According to ‘AIDA’ model, A marketer
should begin by winning attention or gaining
awareness, creating interest, inspiring desire
and precipitating the action for purchase, in
the prospects in order to enable its product to
be adopted by the target public.
(2) Hierarchy–of–effects
model
Awareness
Knowledge
Liking
Preference
Conviction
Purchase
(2) Hierarchy–of–effects
model
 The buyers’ purchase decision is
preceded by such as conviction about the
product benefits, preference for the
brand, liking for the brand, knowledge
relating to the benefits and features of the
product after an awareness of the product
has been gained.
PERSONAL SELLING

 Personal Selling consists of Individual

Personal Communication.
 It is oral presentation in a conversation for
the purpose of making sales.
 The successful salesperson cares first for
the customer, second for the products.
ADVANTAGES OF
PERSONAL SELLING
 Flexible in operation
 Minimum of wasted efforts
 Many times results in actual sales
 Sales persons can perform many other
services
 Recognizing and solving customers’
problems
LIMITATIONS OF PERSONAL
SELLING

 High cost
 High caliber of SRs is required
 Large number of SRs is required to to
cover the total market
 Administration is complex
THE PERSONAL SELLING
PROCESS
( consists of 5 Ps )

PREPARATION PROSPECTING

PRE-APPROACH

POST-SALES
PRESENTATION
ACTIVITIES
SPECIFIC TASKS TO BE
PERFORMED BY SALESPEOPLE
 Prospecting : (searching for prospects,or
leads)
 Targeting : (deciding how to allocate their
time among prospects and customers)
 Communicating : (communicating
information about the company’s
products and services)
(contd.)
SPECIFIC TASKS TO BE
PERFORMED BY SALESPEOPLE
 Selling : (approaching, presenting, answering objections,
and closing sales)
 Servicing : (providing various services to the customers -
consulting on problems, rendering technical assistance,
arranging financing,, expediting delivery)
 Information Gathering : (conducting market research and
doing intelligence work)
 Allocating : (deciding which customers will get scarce
products during product shortages)
RANGE OF POSITIONS COVERED
BY SALESFORCE

Mc Murry distinguished six sales positions, ranging from the

least to the most creative types of selling.
 Deliverer : (a salesperson whose major task is the delivery
of a product - milk, bread, cig., agarbatti etc.
 Order taker : (a salesperson who acts predominantly as an
inside order taker i.e. the salesperson standing behind the
counter, or outside order taker i.e. booking orders with
merchants in the market)
RANGE OF POSITIONS COVERED
BY SALESFORCE
 Missionary : (a salesperson who is not expected
or permitted to take an order but whose major
task is to build goodwill or to educate the actual
or potential user e.g.. Pharmaceutical selling)
 Technician : (a salesperson with a high level of
technical knowledge e.g.. The engineering
salesperson who is primarily a consultant to the
client companies)
RANGE OF POSITIONS COVERED
BY SALESFORCE
 Demand creator : (a salesperson who
relies on creative methods for selling
tangible products e.g.. Vacuum cleaners,
refrigerators, etc. or intangibles e.g..
Insurance, advertising services, and
education etc.)
 Solution vendor : (a sales person whose
expertise is in the solving of a consumer’s
problem, often with a system of the
company’s products and services e.g..
Computer and communications systems)
MEETING OBJECTIONS

 Salesmanship is a difficult job. It

is persuasion and inducement
of an unwilling buyer to make
him buy. Since majority of
buyers object, salesmen must
cope with objections.
REASONS FOR OBJECTIONS
 Natural Process
 Not appreciate the benefits of product
 Have not understood presentation
properly (Poor sales talk)
 Sometimes to test salesman
 In comparison to competitive products
 Un-pleasing experience with product
 unqualified prospect ( not fulfilling
requirements )
 Un-pleasing experience with tricks of
salesman
 To secure more information
SOME COMMON OBJECTIONS

 Price Objection : ( salesman can offer - some

substitute product, discount offer, justify
the price - show profits )
 Quality Objection
 Payment Objection
 Service Objection
HANDLING THE OBJECTIONS

 Listening attentively
 Cushioning the jolt (make the shock of
objection lighter by giving examples of
third party)
 Anticipating objection
 Preventing objection
METHODS OF HANDLING
OBJECTIONS
(1) Direct Denial Method
(2) Indirect Denial or Yes….But…..Method
(3) Reverse Position Method / Why Method
(4) Compensation Method
(5) Interrogation Method
(6) Pass up Method
THE SUCCESS OF
SALESMANSHIP DEPENDS ON
THREE MAJOR FACTORS

 Personality of the salesman

 Knowledge of the product

 Knowledge and psychology of

the customers
QUALITIES OF A GOOD
SALESMAN

Desired traits may be grouped under four categories :

(1) Physical Qualities : Health, Posture, Voice,
Appearance
(2) Mental Qualities : Alertness, Imagination, Self
confidence, Initiative, Memory, Observation,
Cheerfulness
(3) Social Qualities : Ability and eagerness to meet
people, Effective speech, Courtesy, Tact, Co-operation,
Good manner, Patience and tolerance
(4) Character Qualities : Honesty, Courage, Loyalty,
Determination
STEPS IN SALES FORCE
MANAGEMENT
(1) Establishing sales force objectives
(2) Determining sales force strategy,
structure, size, shape and compensation
(3) Recruiting and selecting SRs
(4) Training SRs
(5) Supervising SRs
(6) Evaluating SRs
1. ESTABLISHING SALES FORCE
OBJECTIVES

 Prospecting
 Communicating
 Selling
 Servicing
 Information gathering
 Allocating
2. DETERMINING SALES FORCE
STRATEGY
(A.) Sales contact approaches to
customers
“5 Types”
- S.R. to buyer
- S.R. to buyer group
- Sales team to buyer group
- Conference selling
- Seminar selling
A co. can have its own Direct sales
Force or can hire the Contractual Sales
Force
2. DETERMINING SALES FORCE
STRATEGY
(B.) Sales Force Structure
The effectiveness of sales force depends on
how it is organized.
A sales force can be organized around -
Company Territories (Territorial Structured
Sales Force),
Products (Product Structured S.F.),
Customers (Customer Structured S.F.),
Some Mixture of the Three (Complex
S.F. Structure e.g. territory-product,
territory-customer, etc)
2. DETERMINING SALES FORCE
STRATEGY
(C.) Sales Force Size
Companies use the workload approach to
establish the size.
Steps :
i. Customers are grouped into size classes
according to their sales volume
ii. Number of sales calls on an A/C per year
iii.Average number of sales calls an S.R. can
make per year
iv. Divide ii/iii i.e. No. of sales calls on an A/C
per year / Average no. of sales calls an S.R.
can make
2. DETERMINING SALES FORCE
STRATEGY

(D.) Sales Force Functioning

(Territory Shape / Routing)

. Circular Territory (Head Quarter in the Centre)

Clover Leaf Pattern (S.R. travels in series of

. loops around his territory)

. Wedge Shaped Territory (When

total area is too large for one S.R.
to handle)
2. DETERMINING SALES FORCE
STRATEGY

(E.) Sales Force Compensation

(Components :)
i. Fixed Salary / Amount (income regularity)

ii. Variable Amount (bonus,commission,profit

sharing)

iii. Expense Allowances (T.A. , D.A.)

iv. Fringe Benefits

(medical,leave,accident benefits,LIC policies, pension,LTC, etc.)
3. RECRUITING AND SELECTING
SALES REPRESENTATIVES
 Mc Murry gave 5 traits for a super
salesman
I. High level of energy
ii. Abounding self confidence
iii. A chronic hunger for money
iv. A well established habit of industry
v. A state of mind that regards each
objection, resistance or obstacle as a
challenge
3. RECRUITING AND SELECTING
SALES REPRESENTATIVES
 Mayer and Greenberg gave shortest list of traits for a super
salesman (must have 2 major qualities)
i. Empathy (the ability to feel as the customer does)
ii. Ego drive (strong personal need to meet the challenges)
 Recruitment : seeking applicants by various means
 Selection : selecting suitable candidates by conducting
tests and interviews
4. TRAINING S.R.
5. SUPERVISING S.R.
6. EVALUATING S.R’S PERFORMANCE

4. TRAINING S.R.
(two approaches)
A. Sales Oriented
B. Customer Oriented
5. SUPERVISING S.R.
(supervision helps in directing and
motivating S.Rs)
6. EVALUATING PERFORMANCE
(quantitative and qualitative methods)
SALES PROMOTION
 Sales Promotion consists of a wide
variety of tools designed to stimulate
earlier and stronger market
response.
 Sales Promotions are short term

incentives to encourage purchase or

sale of a product or service.
SALES PROMOTION
 Sales Promotion deals with
promotion of sales by the offer of
incentives which are essentially non-
recurring in nature. It is also known
by the names of extra purchase value
(EPV) and below the line selling.
SALES
PROMOTION
Sales Promotion encompasses all the
tools in the marketing mix whose major
role is persuasive communication.
 Sales Promotion is an exercise in
information persuasion and influence.

SALES PROMOTION
Increase Sales Communication Information

Persuasion Purchase &

Influence
Sale of goods
TYPES OF SALES PROMOTION

 Sales Promotion schemes can be used to

influence the three target groups : Consumers,
Dealers and Sales Force.
 Keeping in mind the objectives, company can
use the suitable sales promotion schemes.
Consumers- Sales Promotion Schemes
Dealers- Sales Promotion Schemes
Sales Force-Sales Promotion Schemes
SALES PROMOTION OBJECTIVES
(ROLE OF SALES PROMOTION)
1. To increase sales
2. To make the sales of slow moving items faster
3.To stabilize the fluctuating sales pattern
4. To launch a new product quickly (encouraging
customers for quick trial)
5. To educate customers regarding product
change / improvements
6. To identify and attract new customers
SALES PROMOTION OBJECTIVES
(ROLE OF SALES PROMOTION)

7. To motivate dealers to stock and sell more

8. To attract dealers for better display and sales contests
9. To get more and better shelf space
10. To bring more customers to dealer stores
11. To improve manufacturer dealer relationships
12. To motivate sales force for achieving set targets
13. To reward sales force for rendering better customer
services
14. To counter competitors’ sales promotion and marketing
efforts
SALES PROMOTION -
LIMITATIONS
1. May increase the price of the product
2. Consumers may feel that goods are
sub-standard
3. Consumers may feel cost of Sales
Promotion scheme has been included
in the prices
4. Gives short term results
5. Often misleading and confusing
6. Give rise to un-healthy competition
DIFFERENT TYPES OF SALES
PROMOTION SCHEMES
1. Price off offers
2. Quantity off offers
3. Premium / free gifts
4. Coupons
5. Refund offers
6. Trading Stamps (A kind of discount
coupons)
7. Consumer contests and lucky draws
8. Dealer stock display contests
DIFFERENT TYPES OF SALES
PROMOTION SCHEMES
9. Dealer sales contests
10. Discounts
11. Trade allowances / trade shows
12. Dealer gifts
13. Additional compensation to sales
force
14. Merchandise deals
15. Point-of-purchase promotions
16. Sales rallies / Exhibitions
 ……..(Immediate impact and delayed impact schemes)
WHY RAPID GROWTH OF SALES
PROMOTION IN INDIA
1. Market has become more competitive
2. Transformation from sellers’ market to
buyers’ market
3. S.P. makes an immediate effect on sales
4. Measurement of the effectiveness of S.P.
schemes are easier than other methods of
promotion
WHY RAPID GROWTH OF SALES
PROMOTION IN INDIA

5. Channels of distribution are emerging

as powerful entities and demand greater
use of incentives
6. Products are similar and non-price
factors help in increasing sales (greater
value to customers)
7. Impulse buying has increased. S.P.
helps in increasing the number of
marginal customers.
INGREDIENTS OF SUCCESS OF
SALES PROMOTION SCHEMES

 The right offer

 The right merchandising back-up
 The right timing
 The right outlet
 the right advertising (right promotion of
S.P. scheme)
 Projecting the right image
 Greater value for customers
 Competitive differential
SOME FINAL DOs AND DON’Ts

 Don’t do a promotion at all if the objective can be

achieved more cheaply by other means
 Don’t run promotions that you are not sure are going to
be successful
 Don’t promote the whole brand if the objective relates
e.g. only to one pack size
 Don’t promote the brand too often. Constant, small,
ineffective promotions communicate to the trade and
consumer that the brand is only worth buying when it’s
on promotion
SOME FINAL DOs AND DON’Ts

 Keep trade promotions to a minimum.

Otherwise they will become part of
what the trade regards as the brand’s
normal terms of business
 Keep it simple. Simple to understand
what’s being offered, simple to sell in,
simple to display, simple for the
consumer to practice
 Don’t let your competition do your
planning. Be proactive, not reactive