Advertising management and sales promotion

Que1. Define Sales promotion. Explain the tools and techniques of consumer sales promotion. Ans. Meaning and Importance of Sales Promotion Sales promotion is a collection of tools that stimulate quicker or greater purchase of products by consumers or trade in the short run. The American Marketing Association defines sales promotion as media and non-media marketing pressure applied to a pre-determined, limited period of time in order to stimulate trial, increase consumer demand or improve product quality. Tools and Techniques of Consumer Sales Promotion Consumer sales promotions are aimed at the end users of the product typically individual shoppers in the local market. But the same techniques can be used to promote products sold by one business to another, as done in trade fairs, which target resellers and wholesalers. These are designed to sell more of machinery, capital goods, intermediary industrial products, etc. over the competitors.Let us now look at the tools and techniques of sales promotions: Price discounts Bonus or banded packs Refunds/Rebates Coupons Sweepstakes Contests Special events Premiums Continuity programmes Sampling

Price discounts Discounts offer the product at less than the marked maximum retail price. The purpose is to induce the consumer to try the product immediately. For example, 20% discount offered by a clothing store during Diwali or Rs. 5/- off on a pack of toothpaste are price discounts that can greatly lure consumers. Price-offs are intended to encourage trial use of a new, improved or re-launched product, to attract new buyers (especially switchers) to a mature brand or to clear up inventory. Price-off works best when price is the customers foremost concern, as in daily use household goods where brand loyalty is extremely low.Bonus or banded packs In a banded pack two or more products are packed together, as in toothbrush-and-toothpaste packs, where the consumer is actually buying a toothpaste, but gets a toothbrush of the same brand along with it. It is not uncommon to band a slow moving product in the companys range with a fast moving product. This helps in clearing the unsold stock of slower moving products. Banded packs are also used to introduce a brand extension, when a new product is introduced under the same brand name in the same line of a very successful and established brand. For instance, a small pack of Lux shampoo banded with Lux soap will ride on the back of the phenomenal popularity of the Lux bath soap. Consumers would get to try the shampoo and could start using it regularly if they like it.

Refunds/Rebates Refund/Rebate is an offer by a marketer to return a certain amount of money when a product is purchased. It aims to increase the quantity or frequency of use, to encourage customers to load up on the product. For instance, for X brand of cooking oil, Rs. 40 refunded in exchange of every empty packet. Offer valid for two weeks. An ordinary family may not use that much oil in two weeks, but the housewife will buy it anyway and stockpile it. Like bonus packs, this strategy also dampens competition by temporarily taking all consumers of that product category out of the market, especially in FMCG. Refunds and rebates are generally perceived as a reward for purchase.

Coupons Coupons are legal certificates offered by manufacturers and retailers. They grant specific savings on selected products when presented for redemption at the point of purchase. Manufacturers sustain the cost of advertising and distribution of coupons, redeeming their face values and paying retailers the handling fee. Sometimes the retailer offers double or triple of the printed coupon price, shouldering the extra cost. Sometimes retailers offer their own coupon and of course bear the total cost.

Sweepstakes Sweepstake is a random drawing or chance contest that does not have an entry requirement like buying a product or magazine. The use of sweepstakes as a promotional tactic is popular now, offering prizes like cars, foreign holidays, electronic equipments, etc. It makes no demand on the entrant but offers tempting prizes. The participation is high in such contests and the cost per entrant is quite low now, due to computerised processing. Sweepstakes are a useful tool to build excitement around the brand, especially by tying it with events and offering attractive prizes. For instance, recently Ddamas had initiated an exciting lucky draw contest for Vapi city. The popular celebrity, Sonakshi Sinha, announced the names of the lucky winners who won a car as a bumper prize. BlackBerry phones and diamond pendants were offered as other prizes. Contests Contests require the entrant to perform a certain task like playing a game, answering questions accurately; completing a tagline, etc. to demonstrate a skill, which is judged in order to qualify for a prize. Because consumers are required to complete some task and submit an entry for winning prizes, contests do not get as much participation as sweepstakes do.Special events Many marketers arrange special events, especially for products that cannot be advertised, such as alcoholic beverages and tobacco. Special events may feature a lot many activities from music, sports and games to childrens events, etc. Religious festivals like Durga puja in Bengal and Ganesha Chaturthi in Mumbai or national celebrations are popular occasions for marketers to organise events. Premiums They are gifts given for free along with the product purchased, for example, a small toy in a cereal box or a free mug along with a pack of Bournvita. Incentives given free at the time of purchase, called direct premiums, offer instant gratification and require nothing from the customer such as coupons, box tops, barcodes or proof of purchase. If the gift is attractive enough, it may even encourage switchers. Premiums can be on-pack, in-pack or with-pack. For instance, cereal boxes have cartoon masks printed on the pack itself that can be cut and used.

Continuity programmes These reward loyal brand users by giving them higher and better incentives when they buy more of a brand. Consumers can become members of the brand club and keep accumulating points every time they make a purchase. These points can then be redeemed for free gifts, discounts, etc. If the customer keeps buying the product, he/she gets more and more rewards. Sampling When a product is new, a sample given for trial, free or for a small fee, is a good way to lure customers who use other brands. However, in order to change peoples future purchasing behaviour, the product difference must be obvious during the trial or the competing brands must lack that benefit. Samples are distributed through mail or door delivery such as newly launched newspapers or magazines. If the sample is bulky or of odd size, door-to-door distribution can be used, especially if a reliable distribution organisation exists. This allows split sampling or selective trials of different samples in different neighbourhoods, according to their resident profile.

Que2. Discuss the DAGMAR approach in setting objectives and measuring effectiveness of advertising.

Ans. Defining Advertising Goals for Measured Advertising Results (DAGMAR) is a model devised by Russell H. Colley in 1961 in which advertising objectives can be set in a way that the results of an ad campaign can be measured and quantitatively monitored. The key premise of the report is that advertisings prime job is to communicate to a specific target audience and bring them to a state that stimulates action. Hence, communication-related objectives are the valid basis for setting advertising goals. It is against these objectives that the effectiveness of advertising should be measured.Colley has proposed that all commercial communication aimed at the ultimate objective of a sale should move a prospect through four levels of understanding:1. Awareness The prospect must be aware of the existence of the brand or company.2. Comprehension The prospect must understand what the product is and what it will do for him/her.3. Conviction The prospect must develop a mental disposition to buy the product.4. Action The prospect must stir him/her into action, that is, buy the product.Colley proposed that the communication-related goals for advertising should also be based on the above hierarchical model outlining the communication process. He argued that unlike marketing goals, which are almost exclusively concerned with achieving a desired action, the effectiveness of advertising should be judged based on the extent to which it moves the consumer upward on the hierarchy rather than solely on its ability to generate sales. This framework allowed marketing communication managers to analyse the long-term effects of advertising more strategically. While the four-step hierarchical model was proposed by Colley to outline the communications response process, he also developed a checklist of 52 specific advertising tasks that can be used in goal setting and in leading to the ultimate objective of generating sales.Colley also set standards for what can be termed as a good objective. According to Colley, objectives should have the following features:1. Concrete and measurable communication tasks Colley proposed that communication objectives should precisely state the task to be achieved. For instance, clear misconception regarding price among nonusers, develop conviction among the target audience that brand A has ingredient Y, etc. are precise or concrete tasks. An emphasis on movement up the communications hierarchy offered the advantage of being able to set more narrowly defined advertising objectives and to effectively measure progress towards them

2 .Well-defined target audience Objectives should clearly define the target audience for the communication based on the situation analysis for the product. If the target audience is not well defined, the entire promotional effort may go waste. For instance, in the above example of FairGlow fairness soap, the brand defined its target audience as follows to explain the Natural Oxy-G process of its soap in a convincing and appealing manner:3 Users of beauty creams and soaps and fairness products, who are, young girls in the age group of 18+, currently use products to enhance their complexion. They are very rational in their choice of products and would try new products only if they are completely convinced about them.3. Benchmark and determination of degree of change sought Colley proposed that objectives should be based on knowledge of the current status of response variables such as awareness, liking, attitude, purchase intention, etc. For instance, if it is known that currently only 10% of the prospects are aware of the presence of ingredient Y in brand A, it may be decided to increase this awareness level to 70%, which may be the required awareness level for a desired sales goal. If on the other hand, 70% or more prospects are already aware, the ad campaign need not focus on generating awareness.4. Pre-determined time period Objectives should clearly specify the time period in which the results are to be achieved. Gaining 50% awareness in a year is not the same as gaining it in two months. Campaigns that keep on running endlessly till results are achieved are a drain on the companys resources. Timings for most campaigns run from a few months to a year based on the communication task and the circumstances. Achieving objectives becomes more difficult as advertising takes consumers up through the response hierarchy. Hence, the time period required for achieving 90% awareness may be shorter than for achieving 10% sales. The DAGMAR approach has been successful in presenting the case for communications-related objectives as opposed to sales-related objectives.

Que3. Advertising is a paid form of communication. It has gained its significance since it attempts to build a positive attitude towards a product. Explain the characteristics and objectives of advertising. Advertising is defined in Webster's Dictionary as the action of calling something to the attention of the public especially by paid announcements; or, to call public attention by emphasising desirable qualities so as to arouse a desire to buy or patronise. As is commonly defined and understood, advertising is any paid form of non-personal presentation and promotion of ideas or products by an identified sponsor. Characteristics of advertising: The fact that it is a paid form of presentation emphasises that advertising space or time must be purchased. Its non-personal nature emphasises the fact that it is not a direct or personalised presentation to one individual but to the masses. Presentation signifies the format in which advertisements communicate. Promotion indicates the objective of advertising. Identified sponsor refers to the identification of the brand or the advertiser who is communicatingThe objectives of advertising are as follows: Inform Let people know what the product is, where it would be available, what problem it would solve, etc. Informative advertising is most rampant in the introductory stage of the product or product category because maximum information has to be given when something is new. Persuade This becomes more important as the product grows or faces increasing competition. The advertiser now needs to give more reasons or enticements to lure consumers. One way of establishing superiority is by comparative advertising, where you evaluate your brand vis--vis a competitors brand directly or indirectly. The better-than competitor claim can be made subtly by telling the consumer how your brand addresses his/her need and convincing him/her that no other brand does that in the same fashion. For example, a television commercial for Captain Cook persuaded consumers by depicting how its salt was better flowing compared to Tata Salt. Remind This kind of advertising is widespread with mature products, that is, products that are well past their introduction and rapid growth phases. Everyone knows about the products what they do, how beneficial they are, how they are different from other products, etc. There are hardly any new consumers who need to be persuaded. Hence, an advertiser needs to remind the consumer that his/her product exists and that it is there when he/she needs it. For example, with its witty, well-timed and creative print ads on current topics, the mature brand Amul Butter stays on top-of-the-mind. Reinforce This seeks to convince current consumers that they have made the right choice. By reinforcing key benefits and depicting satisfied consumers of the brand, an advertiser can reassure current consumersthat they have indeed spent their money well.

QUE4. What is above the line and below the line activities with respect to marketing communications? Explain the concept in detail.

Marketing communication activities can also be loosely classified as abovethe-line (ATL) or below-the-line (BTL). The promotional activities carried out through mass media like television, radio, newspaper, etc. typically qualify as ATL, whereas BTL refers to forms of non-media communication, including non-media advertising, such as an event, a sponsorship, a salespromotion activity, point-of-purchase advertising, etc. BTL also involves some extent of interaction with the consumer. The most frequently used structured ATL mass media include the following: Print Newspapers, magazines, journals, weeklies, etc. add up to about 50,000 publications. With the entry of television in India in 1990s, doomsayers predicted the death of this powerful medium. That did not happen, although its reach and advertising share did reduce. It even showed growth due to increased literacy in semi-rural areas. Television Due to cable, DTH and satellite technology, television reaches out to more than 50% of the population. Radio Has declined and reaches out to less than 20% of the population. The medium has however seen a great revival recently due to private and FM radio stations with segmented programmes like classical, oldies, Hindi movie music, rap, pop, Western, etc. which allow the advertiser to narrowcast to his clearly defined target segment. Cinema Is a popular medium for advertisers in a country that has the largest film industry in the world, releasing more than 800 films a year. Internet Is gradually gaining popularity with the increase in PC penetration, literacy and availability of Internet connection. This medium is popular for certain product categories, especially with the urban audience

Que5. Explain Advertising standards council of India(ASCI)and also discuss the Forms of ethical violations in Advertising. Explanation of ASCI Forms of ethical violations The Advertising Standards Council of India (ASCI) The advertising community of India is by and large responsible and keeps out of blatant alpractices. Like most service industries, advertising too has its own Code of Ethics. Set up in 1985, ASCI, the watchdog organisation of advertising, consists of representatives from the advertising industry, media and experts from other relevant professions. It is one of the most important organisations that lays down ethical standards for the advertising industry, although there are several other media and agency-related bodies that also do the same. ASCIs overarching goal is to enhance public confidence in advertising. For this purpose, ASCI has adopted a Code of Conduct for selfregulation in advertising, which it propagates amongst advertisers, agencies, media and others involved in the creation and distribution of advertising. The Code applies to all these bodies and professionals. ASCIs job is to make sure that Indian advertising in any medium conforms to the following: Truthfulness and honesty of representations and claims Fairness to consumers and competition Norms of public decency and propriety Safeguarding of the public, particularly the minors, against hazardous, harmful or violent advertisements (Tobacco and alcoholic products come in this group)

Forms of Ethical ViolationsWhile talking of ethical violations, well refrain ourselves to the discussion of contraventions that are beyond the ambit of law and are usually left to be monitored through self-regulation on the part of advertisers. Some of the prominent ones are as follows. Misleading advertisingMisleading advertising means any advertising, which in any way deceives or is likely to deceive consumers, and is likely to affect their economic behaviour or injure a competitor. Thus, false or deceptive comparative advertising is also a type of misleading advertising. While obvious misleading advertisements are covered by the Consumer Protection Act of 1986, some ads can be so subtle that it is difficult to nail advertisers on legal grounds alone. Advertising can mislead consumers regarding product price, quality, features, country of origin, sponsorships, sales promotion offers, newness of the product, comparison with other products, etc.

Advertising to childrenIt is not without reason that advertisers are pursuing children as target audiences. Children are advertisements most vulnerable audiences who enjoy ads, often believe them literally and then use pester power by forcing their parents to purchase the advertised products. Above all, they are consumers of the future and marketers are in a hurry to catch them early. Children today hardly have any childhood, so invasive is the power of mass media. They are exposed to all kinds of inappropriate or unsuitable advertising messages and have become extremely savvy about assessing them. In urban settings, they know what products are available, what are their uses and prices and are quite capable of manipulating their adoring parents to buy them. Product endorsementsOften times, advertisers get their brands endorsed by reputed and credible persons or organisations. However, sometimes these people or organisations may be legally or ethically barred from product endorsements due to the influence they wield on people, which can hinder rational judgement. Advertisements and promotional strategies are based on consumer psychology and even the best-informed consumer cannot escape their influence. Their impact is heightened when medical associations endorse brands. This is because consumers look for credible sources and opinions to help them make purchase decisions and they are receptive to endorsements by health organisations. Thus, doctors cannot endorse any particular brand, but medical associations are not prohibited from doing so legally StereotypingThe Code for Commercial Advertising on Doordarshan states, Women must not be portrayed in a manner that emphasises passive, submissive qualities and encourages them to play a subordinate, secondary role in the family and society. The portrayal of men and women should not encourage mutual disrespect Stereotyping is portraying people in a way that is devoid of individuality. Men will earn the bread, women will clean the kitchen. Pigeonholing genders or feeding questionable cultural issues regarding them can be disastrous. With women assuming diverse roles in the society, ads that show them preoccupied with household duties, beauty and motherhood are bound to receive criticism. Cultural, religious and racial sensitivity in advertisingIn the interest of ethical advertising, it is important that advertisers are sensitive to ethnic and cultural issues. They should capture peoples attention without offending them in the process. Obscenity in advertisingAccording to the ASCI Code, Advertisements should contain nothing indecent, vulgar or repulsive, which is likely to cause grave or widespread offence in the light of generally prevailing standards of decency and propriety. Unfortunately, these standards and other legal regulations are subjective to the person or organisation judging the ad, time when the ad isreleased and culture of the society where the ad is released. Hence, what may be appropriate or acceptable on the television sets of households in South Mumbai may not be so in Badmer village in Rajasthan.

QUE6. Describe some of the strategies for effective marketing and advertising in rural market.

A rural marketing strategy will succeed if all the above factors are kept in mind. Therefore, advertising must keep in mind the decision, purchase and usage pattern that are peculiar to rural areas. Some strategies have been standardised by now. These include: Small packages Indians in general and rural people in particular are highly price conscious and demand value for money. Rural people not only have small budgets, they have even worse storage facilities in their small homes. Therefore small packaging, even single use packets, sell well. The runaway success of shampoo sachets is a textbook example. Lux sells 50 paisa sachets and is doing well. Strong visual images Brand names that are easy to remember and symbols in gaudy colours with images of animals, birds, flowers or children are more successful. Villagers do not read brand name and buy by recognising the symbol on the package. Ghadi detergent with a clock and fertiliser having a farmer with a heap of wheat on his head has been very successful. Free containers By nature Indians are frugal and rural people even more so. Buying kitchen containers is not a standard norm even in wellto-do urban homes and a nice and sturdy reusable container for storage of other food items is still a great attraction. Therefore a product that comes in a reusable container instead of a plastic bag will sell better. Door delivery In spite of Indias huge size and remoteness, taking the product to the customers home, when tried, has been successful. Small savings picked from homes and petty businesses every evening by Banks is as successful in rural areas as in urban markets. Anurag Verma