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The need for promotion 1. Tell customers about the nature of product, its price, and its distribution 2. Stiff competition among the manufacturers 3. To achieve reap the benefits of economy of scale – large scale production- large scale selling 4. Customers buy on the basis of promotional activities – not on the basis of product- differentiation Promotion Mix Promotion is all about companies communicating with customers. It is not enough for a business to have good products sold at attractive prices. To generate sales and profits, the benefits of products have to be communicated to customers. In marketing, this is commonly known as "promotion". A business' total marketing communications programme is called the "promotional mix" and consists of a blend of advertising, personal selling, sales promotion and public relations tools. The four main elements of the promotional are: (1) Advertising Any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to persuade and to inform. The two basic aspects of advertising are the message (what you want your communication to say) and the medium (how you get your message across) (2) Personal Selling Oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale". (3) Sales Promotion Short-term incentives to encourage the purchase or sale of a product or service. It means providing incentives to customers or to the distribution channel to stimulate demand for a product. (4) Public Relation The communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly. It seeks to build a good relation with the company’s various clients. Promotion- push and pull strategies (also called as Promotion Blends) For each component of promotional mix, management sets objectives, determines policies and formulates strategies. These promotional strategies are blended together to be known as “promotional blend’. This is blended with product-market, distributions and pricing strategies to become overall marketing strategies. Push Blend / strategy Here, products are pushed through the channels of distribution. A push promotional strategy emphasizes personal selling. A “push” promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product. The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers. Pull Blend / strategy A pull promotional blend emphasises on impersonal selling. A “pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers. Here, it is the producer who organizes advertising and sales promotion campaign. He spends a lot of money on advertising and consumer-promotion to build up consumer demand. Factors influencing promotional mix strategy 1. Nature of the product Product complexity Brand differentiation Purchase frequency 2. Nature of the market 3. Stages in the Product Life Cycle (PLC) 4. Market penetration 5. Market size and location 6. Characteristics of buyers 7. Distribution strategy 8. Pricing strategy Forms of Promotion 1. Personal selling 2. Advertising 3. Sales promotion 4. Publicity 5. Public Relation 6. Point of purchase display 7. Packaging 8. Direct mail 9. Other forms such as samples, coupons, trading stamps, special premiums etc.
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