INTEGRATED MARKETING COMMUNICATION TOOLS

A marketing communication tool can be anything from: advertising, personal

selling, direct marketing, sponsorship, communication, promotion and public
relations.
"Marketing communications are the means by which firms attempt to inform, persuade,
and remind consumers - directly, or indirectly - about the products and brands that they
sell." (Kotler and Keller)
Personal and non-personal communication channels can be used for marketing
communications. Within both of them there are many sub-channels. The marketing
communications mix is presented as mix of eight major modes or types of
communication alternatives.
1. Advertising
2. Sales promotion
3. Events and experiences
4. Public relations and publicity
5. Direct marketing
6. Interactive marketing
7. Word-of-mouth marketing
8. Personal selling
Personal Communication Channels
Personal communication is communication between two or more persons with a specific
person communication with others. The message emanates from a specific person. It can
be done face to face, or by a person to audience, over telephone, or through post or
couriers or through emails or through mobile messages.
The personal communications in the case of marketing can also be categorized as
communications from advocate, expert and social contacts. The company salespersons'
communication to customers is communication from advocates of the product.
An independent expert communicating to prospective buyers about the merits of the
product is classified as expert communication. A neighbour saying good things about a
brand is social channel of communication.
 Companies take various steps to stimulate personal communications about their products
and brands.
1. They identify influential individuals and devote extra effort on them.
2. Create opinion leaders by supplying possible opinion leaders with the product on
attractive terms.
3. Use influential or believable people in testimonial advertising.
4. Develop word of mouth publicity by requesting satisfied clients to promote their
product among their friends.
5. Establish online discussion groups and communities
Non-Personal Communication Channels
They include media, atmospheres, and events.
Media channels include print media (newspaper, magazines, souvenirs, proceedings of
conferences), broadcast media (radio, television), display media (billboards, signs,
posters) and electronic media (audiotape, videotape, videodisk, CD-ROM).
Atmosphere is what firms create in their office environment. The office interiors and
exteriors have a meaning to the potential buyers.
Events are occurrences designed to communicate particular messages to target audiences
or audiences. Company arranged news conferences, opening ceremonies of various
kinds, and sponsorships of various events come under event communications channels.
Communication through mass media stimulates personal communication channels.
The Promotional Tools
The characteristics of various promotional tools are as follows: 1. Advertising
Advertising is any paid form of non-personal presentation and promotion of ideas,
goods, or services by an identified sponsor (Kotler).
Advertising is aimed at a target market and buyer motives have to be considered in
developing the advertisement strategy or program.
Five Major Decisions in Advertising
Five major decisions are to be made developing the advertisements.
• Mission: the objectives of the advertisement
• Money: how many needs to be spent or how much can be spent?
• Message: What is the message to be sent to get the desired response?
 • Media: What media should be sued?
• Measurement: What are the evaluation criteria for results of the
advertisement?
Objectives of Advertising
• One classification of objectives is to inform, persuade or remind or
reinforce.
• Informative advertising aims to create brand awareness and knowledge of new
products or features of existing products.
• Persuasive advertising aims to create liking, preference, conviction, and purchase
of a product or service. Persuasive advertising uses comparative advertising also.
• Reminder advertising aims stimulate repeat purchase of products and
services.
• Reinforcement advertising aims to convince current purchasers that they made
the right choice.
Advertising Budget Decision
Five specific factors are considered in this decision.
 Stage in the production life cycle
 Market share and customer base size
 Competition and clutter
 Advertising frequency
 Product substitutability
In adaptive-control method of setting advertising budgets, the company tests in some
market segments with low advertising, and in some market segments with high
advertising. In most of the market segments, the normal advertising expenditure is
incurred. The results give the response of the market to advertising expenditure by the
company. These results will help the company to adjust the advertising expenditure.
Advertising Elasticity
The success rate of advertising was higher on new products or line extensions than on
established products/brands. When advertising was successful in increasing sales, its
impact lasted up to two years after peak spending. The long term incremental sales
generated were approximately double the incremental sales observed in the first year of
advertising spending increase.
Academic literature review reveals that advertising elasticity's were estimated to be
higher for new (0.3) than for established products.
Advertising Message
An advertisement has to gain attention of the reader or listener to generate sales. So the
quotation to keep in mind is "Until it's compelling, it isn't selling."
Advertisers use four-step process to generate advertising messages and select the
appropriate message.
1. Message generation
2. Message evaluation and selection
3. Message execution
4. Message social responsibility review
1. Message generation
Inductive and deductive methods are used to generate messages.
In inductive method, creative people talk to customers, dealers, experts and competitors
to know the strengths and weaknesses of the product or brand, their
uses, the personalities of potential users and related demographic and
psychographic variables.
Deductive framework says buyers expect four types of reward from a product: rational,
sensory, social, or ego satisfaction. Buyers might visualize these rewards from results-
of-use experience, product -in-use experience, or incidental-to-use experience. The
combinations from these give twelve types of advertising message themes. The
advertiser with the now available computer facilities can prepare advertisement
messages for each of the themes and provide them for evaluation.
2. Message evaluation and selection
The advertisement messages are to be rated on desirability, exclusiveness and
believability. They have to be tested in the market to find determine which message is
having the maximum desired effect.
3. Message execution
Style, tone, words and format etc. are to be decided in executing an advertising message.
4. Message social responsibility review
Advertising ethics and codes need to be followed by advertisers and advertising
agencies. Social and legal norms are to be followed. Advertisers must not make false
promises. They should not show false demonstrations.
Deciding on the Media
Media selection involves finding the most cost-effective media to deliver the desired
number of exposures to the target audience.
Evaluating Advertising Effectiveness
Advertisers try to measure the communication effect of an advertisement - its effect on
awareness, knowledge or preference. Ad's sales effect can also be measured and Kilter
says emphatically that sales effect also needs to be researched.
2. Sales promotion
Sales promotion consists of a diverse collection of incentive tools, mostly short term,
designed to stimulate quicker and/or greater purchase of particular products/services by
consumers or the trade.
Advertising offers a reason to buy. Sales promotion offers an incentive to buy. Sales
promotion tools for consumer promotion include cash refund offers, prices off,
prizes, patronage rewards etc. Sales promotion tools for trade promotion include
prices off, advertising and display allowances and free goods based on sales. Sales
promotion tools aimed at salesmen of the company are contests, incentives for sales
in fixed periods, trips to tourist locations etc.
Rapid Growth of Sales Promotion
In comparison to growth in advertising sales promotion has grown more rapidly and in
many consumer packaged goods company it now accounts for 65% to 75% of the total
budget (Kotler, 1997).
Purposes of Sales Promotion
Free sample stimulates consumer trial and some of the consumers may feel good and
start purchasing. A free advisory in any activity may help some persons and they may
come to the advisory firm in future. Incentive to buy increase the rates of use by
occasional users and attract new triers. Incentives could be used as rewards to loyal
customers also.
Incentive type promotions are used to attract new buyers or triers, to reward loyal
customers, and to increase the repurchase rates of occasional users.
Major Decisions in Sales Promotions
Setting the objectives selecting the tools
Developing the sales promotion program
Pretesting the program Implementing and
controlling the program Evaluating the Results of
the program
Main Consumer Promotion Tools - Kotler
1. Samples
2. Coupons
3. Cash Refund Offers
4. Price Packs (cents off deals)
5. Premiums (gifts)
6. Frequency programs
7. Prizes (contests, sweepstakes, games)
8. Patronage awards
9. Free Trials
10. Product warranties
11. Tie-in Promotions
12. Cross Promotions
13. Point-of-Purchase Display and Demonstrations
Decisions in Creating Sales Promotions
The marketers first have to decide the size of the incentive. A certain minimum is
necessary to motivate a person to act and buy. The marketing manager has to decide the
target people for the incentive. The frequency of promotions can be another issue.
According to a research, the optimal frequency is three weeks in a quarter and the
optimal duration for the promotion is one purchase cycle. The vehicle through which the
incentive is offered is also to be decided. The total promotion budget needs to be decided
and it has to be related to the objectives of the promotion.
Pretests can help in determining the appropriate incentive size and presentation method.
The promotion programs are evaluated on awareness by the target people, their response
to the promotion and the subsequent consuming behaviour.
Sales Promotion Methods - A Listing
Advertising Specialties
1. Cash refund offer
2. Contests
3. Coupons
4. Game
5. Novelty
6. Patronage reward
7. Point of Purchase Promotion
3. Public relations and publicity
News stories and feature articles are more authentic and credible than advertisements to
readers. The articles act as testimonials. The message gets through to the potential
buyers as news and they may not turn away from it as they turn away from the
advertisements.
4. Personal selling
Personal selling as a communicative channel involves a live, immediate, and interactive
relationship between persons. Personal selling leads to relationships. The listener feels
obligated to respond to the salesman at least with a polite "thank you."
5. Direct Marketing
The alternatives are direct mail, Email, and telemarketing. In these cases the message is
addressed to a specific person. The message can be customized. Even though mailing
folders and email are normally standardized to gain efficiency. The message can be up to
date. In case of telemarketing, message can be altered depending on the response. In the
case of other alternatives subsequent communication can be altered depending on the
response.
6. Events and Experiences
They include sponsorships of sports, arts, entertainment and cause events as well as
activities that create novel interactions of consumers with product or brand. An example of
experience can be providing air-conditioned bus ride to potential consumers to make them
excited about buying an air conditioner. Another example is internet companies providing
internet at airports for free use by travellers.
Marketing Communication Process Steps:
There are certain steps that should be involved in the effective marketing communication
process. The marketing and promotional activities should focus on these steps in order to
attract a huge portion of long run customers. Following are the steps that make
communication process effective.
1. Identification of the Target audience
2. Determination of the communication objectives
3. Designing of Message
4. Message Content
5. Message Structure & Format
6. Choosing Media
7. Collecting Feedback
1. Identification of the Target Audience:
The first step in the effective marketing communication process is to identify the target
audience. These audiences may be potential customers or other people that can influence
the decisions of these customers. The audience may include the individuals, groups,
general public or special public. The audience has a direct effect on the decisions of the
communication, like what to say? How to say? And when to say? Etc.
2. Determination of the Communication Objectives:
In this step the marketing communicator should clear the objectives of the
communication process. In most of the situations, the purchase is required by the
marketing communicator, but purchase is made after a prominent customer decision
making process. The communicators should also understand the standing position of the
customer. Generally there are six Stages of Customer Readiness through which a
customer pass to make a purchase which are as follow.
Awareness
Knowledge
Liking
Preference
Conviction
Purchase
The target group of the marketing communicator is not much familiar with the new
product or its silent features. So the marketing communicator should create the awareness
and knowledge of its new product and features. But this is not the surety to the success;
the new product should also provide superior customer value too.
3. Designing of the Message:
In this step the marketing communication, communicator focuses upon the design of
the message. Any message that can attract the attention, develop the interest, arousal of
desire and stimulate the action is the effectively designed message. This procedure is
best known as AIDA model that can make any message effective and potential. Besides
this the marketing communicator also decides about the content and structure of the
message.
4. Message Content:
In this step of the marketing communication process the content of the message is
decided. The theme or an appeal is suggested that can bring the desired response from
the audience or receiver. Following are the three appeals that should be used in this
regard.
Rational appeal:
The self-interest of the audience is focused on the rational appeal in which the benefits
availed by the usage of the products or services.
Emotional Appeal:
In this case positive or negative emotions are stimulated to encourage the purchase of
the product.
Moral Appear-
In this situation the morality is included in the message to influence the targeted
customers.
5. Message Structure & Format:
In this step the important issues of the message structure together with the message
format is analysed. In marketing communication of a product, it must be decided that
the message must include the conclusion or may keep to the audience to get a
conclusion from them. Or the massage presents either only the strengths of the product
or both the strengths and weaknesses. Moreover the format of the message is also
focused on which the size and shape use, eye-catching colours, and headlines etc. are
decided in the most effective manner.
6. Choosing Media:
The channels of communication are decided in this step of a marketing communication
process, which may take the following two forms.
Personal:
In this channel of communication two or more persons directly communicate with each
other like face to face, through the mail, on the telephone, or through a chat on the
internet. Personal Addressing and feedback is allowed in the personal communication.
Non Personal:
Non personal messages are spread through these channels which also excludes the
option of feedback. Such channels include print media, display media, broadcast media,
online media etc.
7. Collecting Feedback:
This is the last step of the marketing communication process in which the feedback from
the target customers. This can help the marker to alter the promotion program or other
marketing activities. For this purpose the buying behaviour of targeted customers is
analyzed in the light of the new product. Questions may also be asked to the customers
to collect their views about the positive and negative aspects of the new product.
Marketing Communication Objectives
1. Increase Awareness
Increased brand awareness is not only one of the most common marketing
communication objectives, it is also typically the first for a new company. When you
initially enter the market, you have to let people know your company and products or
services exist. This might include broadcast commercials or print ads that depict the
image of your company and constant repetition of your brand name, slogans and jingles.
The whole objective is to become known and memorable. Established companies often
use a closely-related goal of building or maintaining top-of-mind awareness, which
means customers think of you first when considering your product category.
 1. Change Attitudes
Changing company or brand perceptions is another common communication objective.
Sometimes, misconceptions develop in the market about your company, products or
services. Advertising is a way to address them directly. In other cases, negative publicity
results because your company is involved in a business scandal or unsettling activities.
BP invested millions of dollars in advertising to explain the company's clean up efforts to
the public following its infamous Gulf of Mexico oil spill in mid-2010. Local businesses
normally don't have that kind of budget but local radio or print ads can do the trick.
2. Influence Purchase Intent
A key communication objective is to motivate customers to buy. This is normally done
through persuasive advertising, which involves emphasis of your superior benefits to the
user, usually relative to competitors. It is critical to strike a chord with the underlying
need or want that triggers a customer to act. Sports drink commercials showing athletes
competing, getting hot and sweaty and then taking a drink afterward is a common
approach to drive purchase intent. The ads normally include benefits of the drink related
to taste or nutrients.
3. Stimulate Trial Purchase
Two separate but closely related communication objectives are to stimulate trial use and
drive repeat purchases. Free trials or product samples are common techniques to persuade
customers to try your product for the first time. The goal is to take away the risk and get
the customer to experience your brand. Once you get them on the first purchase, you
have to figure out how to convert that into a follow-up purchase. Discounts on the next
purchase or frequency programs are ways to turn one-time users into repeat buyers and,
ultimately, loyal customers.
5. Drive Brand Switching
Another objective closely tied to stimulating trial use is driving brand switching. This is
a specific objective of getting customers who buy competing products to switch to your
brand. Tide detergent is normally pitted against "other leading brands" in comparative
ads intended to motivate brand switching. The advantage with this goal is that customers
already buy within your product category. This means need is established. You just need
to persuade them that your product or service is superior and induce them to try it out.
 TRADE PROMOTIONS
Trade Promotion refers to marketing activities that are executed in retail between these
two partners. Trade Promotion is a marketing technique aimed at increasing demand
for products in retail stores based on special pricing, display fixtures, demonstrations,
value-added bonuses, no-obligation gifts, and more.
Types of Trade Promotions
Some of the major kinds of sales promotion are as follows:
I. Consumer sales promotion
II. Dealer sales promotion
III. Sales force promotion.
I. CONSUMER SALES PROMOTION:
Activities aimed at reaching the consumer at his home or in his office may be called
consumer sales promotion. It is aimed to inform or educate the consumers and to
stimulate the consumers. Success in sales depends on consumers' cooperation.
Consumer sales promotion increases the use of product by the consumers, attracts new
customers and stands straight among the competitors, to introduce new products and to
promote established products.
The following are the various sales promotion schemes used at the consumers'
level:
1. Sampling:
Free samples are given to consumers to increase their interest in the product. They are
also given to introduce a new product and expand the market. It increases the sales
volume when the product is a new one to the customers. It is an effective device when
the product is purchased often, e.g., soaps, detergents, tea or coffee etc.
It is a method of demand creation. Sampling gives a chance to the consumers to compare
the products with other substitutes. Samples are given to doctors by medical
representatives. Specimen copies of books are given to professors. The idea behind this
is that they recommend their products for use to patients or students.
The samples may be delivered door to door, sent by mail, picked up in a store, attached
to another product etc. It is the most effective way to introduce a new product. It is
costly to produce a sample. It is the most expensive method. It is costly to distributors
also. It is not justifiable for well-established product, a product with slow turnover, a
product having less profit, perishable products etc.
2. Coupons:
Coupons are supplied along with a product. It is a certificate that reduces prices.
Coupons can be mailed, enclosed in the packets or printed in the advertisements. The
purpose is to attract the customers and bring them to a particular shop to increase the
sales of a particular brand.
The coupons are used:
(1) To introduce new products,
(2) To increase the sale of an established product,
(3) To sell new and larger size of a product,
(4) To encourage repeated sales, and
(5) To switch on consumer from one brand to another brand. It is a short-run stimulus.
3. Demonstration:
It is the instructions to educate the consumers in the manner of using the product. It is a
promotional tool to attract the attention of the consumers. When products are complex
and of a technical nature, demonstration is necessary, e.g., computers, field machinery,
electrical pumping set etc. Demonstration is done in front of consumers for mix, wet
grinder in retail shops etc.
Further examples:
Demonstration at retail shops:
Sometimes, the demonstrations are organised at the retail stores by company salesmen for
the benefit of retailers as well as consumers.
School Demonstrations:
When the products happen to be a costly one and a hi-tech one, companies arrange
demonstrations in schools or hotels. Here the consumers are invited to a particular place
and demonstrations are arranged.
Door-to-door Demonstrations:
Consumer products companies quite often resort to house- to-house demonstrations. It is
considered a highly specialized field of sales promotion. Eureka Forbes, the consumer
appliances firm etc. popularized their products through door-to-door demonstrations.
Demonstrations to key people: Sometimes, demonstrations are organised for the benefit
of key people and influential persons. It is a good selling technique.
4. Contests:
These are conducted to attract new customers or to introduce new products. The
consumers are asked to state in a few words why they prefer a particular product. To
enter into the contest, the consumers must purchase a product and submit the evidence (a
label or package or a card attached to the product) with the entry form for contest.
To take part in the contest the consumers must be interested in the product.
Consumers' skill and their ideas are tested and the prize is given to the best entry. It
stimulates sales at the retail level. Entry forms correctly filled are submitted to the
panel of judges. They will select the best and prizes will be
given to the successful consumers. Like contest, sweepstakes and games are also
employed in sales promotions, and prizes are offered to the winners.
5. Money Refund Offers:
If the purchaser is not satisfied with the product, a part or all of the purchaser's money
will be refunded. It is stated on the package. It will create new users and strengthen the
brand loyalty. Sometimes, the money will be refunded if 10 top covers or 10 empty
bottles or 10 packages are sent back to the manufacturers.
6. Premium Offers:
It is a temporary price reduction which increases the instinct of the buyers. Products are
offered free or at a reduced cost as an inducement for purchasing. It is offered to
consumers for consumer goods like soap, brush, paste, washing powder, glucose etc.
For instance, when the customer buys two soaps, a soap box is given free along with the
soaps. The soap box is a premium. In certain cases, the price is reduced. The reduced
amount is a premium.
There are many types of premium offers:
a) Direct premium
b) A reusable container
c) Free-in-mail premium
d) A self-liquidating premium
e) Trading stamps.
(a) Direct Premium:
A with-pack premium accompanies the product inside (in pack) or outside (on- pack)
the package e.g., one plastic spoon in Taj tea or one steel spoon inside glucose-D or
Cadbury sweets inside the bourn-vita refill pack etc.
(b) A Reusable Container:
It is a container which can be reused after the product is used. Point soap powder,
sway soap powder etc. are in plastic buckets or plastic containers.
(c) Free in Mail Premium:
Premium items are sent by the company by mail to consumers who are requested to send
the proof of their purchase. For instance cigarette companies offer a packet of 10
cigarettes against 10 empty covers.
(d) A Self-liquidating Premium:
It is an item sold below its normal retail price to consumers. The cost of the additional
product is collected from the buyer at a concessional rate. For instance, a steel tumbler is
given free of cost if you buy a packet of 200gms of sunrise instant coffee; or a soap
powder manufacturer offers two kilograms of soap powder along with a plastic bucket at
50% off price. This method increases sales and brings benefits.
(e) Trading Stamps:
It is given for purchasing the product in a particular shop. It is a premium given to the
consumers by the seller in the form of stamps. These stamps are redeemable at the
stamp redemption centres. To attract customers the retail shops use trading stamps.
7. Price off Offer:
It stimulates sales during a slump season. It gives a temporary discount to the
consumers, i.e., goods are offered at a rate less than the labelled rate. Fans are sold at a
reduction rate in rainy season.
8. Consumer Sweepstakes:
Consumers submit their names for inclusion in a list of prize-winning contest. A ticket (like
a lottery ticket) is given to the consumer of a specific brand. At the specified time, lots will
be drawn. The prize-winner gets the prize. This system is followed by retail businessmen to
promote sales.
9. Buy-back Allowance:
Allowance is given following a previous trade deal. That is, trade deal offers a certain
amount of money for new purchases based on the purchased quantity. It prevents decline
in post-trade deal. Buyers' motivation is increased because of their cooperation on the
first trade deal, e.g., when cinthol and marvel soaps are concerned, the salesmen give
one mug and two coupons free. If we purchase the two soaps by giving the coupons to
the shop, the seller will reduce Rs. 2/- from the original price.
10. Free Trials:
It consists of inviting prospective purchasers to try the product without cost, in the hope
that they will buy the product. Thus, buyers are encouraged by free trial to stimulate
purchase interest.
11. DEALERS SALES PROMOTION:
The other name for dealer promotion is trade promotion. Manufacturers use a number of
techniques to secure the co-operation of wholesalers, retailers or the middlemen. These
activities, which increase the interest and enthusiasm of dealers and distributors, are
called dealer or distributor sales promotion. It is the middlemen who are important
persons for the fast movements of products. Hence this must be offered with some
incentive.
Following are the dealer sales promotion devices:
1. Buying Allowance:
It is an offer of money off or temporary reduction to dealers for purchasing in stipulated
period of time. It is a very effective method to introduce new products in the market. It
encourages the dealers to buy a quantity that they will not buy in ordinary time. This
buying allowance gives the dealers immediate profit, and price redemption. A wet
grinder producer will give one grinder free if one purchases five wet grinders at a time.
2. Merchandise Allowance:
An advertising allowance is given to the dealers for advertising the features of the
manufacturer's product. A display allowance is given to them for arranging special
displays of the product. After verifying the promotional work of the dealer, the
manufacturers will give a certain amount of money for promotional activities.
They hope that additional efforts will be taken to increase the sales at retail level. Some
manufacturers, as an encouragement, offer additional quantities of merchandise. This
technique is known as merchandise deal e.g., Godrej company offers the dealers one
extra soap cake, free of cost, when one purchases a dozen soap cakes.
3. Price Deals:
Apart from the regular discount, special discounts are also allowed to the dealers for a
specified quantity of purchase. This special discount is over and above the regular
discount. For instance, a regular discount of Kshs. 10 per case is allowed; and if the
dealer purchases 100 cases at a time, he will be given a discount of Kshs. 12 per case,
i.e., Kshs. 200 extra for the purchase of 100 cases.
4. Push Money or Premium:
Manufacturers may offer push money. It is a payment in cash or gifts given to dealers or
to their sales force to push the manufacturer's product. To push his brand, the
manufacturer will offer free specialty items that carry company's name, such as pens,
pencils, calendars, match boxes, memo pads and yard sticks etc. This is a device for
aggressive selling.
5. Co-operative Advertising:
Dealers spend money in advertising manufacturer's product with the consent of the
manufacturers. The dealer can claim an allowance by giving the proof of the
advertisement. This is an indirect advertising for the manufacturer. It will increase the
sales of the manufacturer's product. But it is a burden on the manufacturer's budget.
6. Dealer Sales Contests:
This is an indirect way of boosting the sales. This type of contest is conducted at the
level of retailers and wholesalers. This is in the form of window display, store display,
sales (volume) etc. Prize is awarded to the outstanding achievements. This method is
aimed at stimulating and motivating distributors, dealers, sales-staff etc.
7. Dealer's Listed Promotion:
Listing dealer is an advertisement. It gives a list of dealers or retailers who stock the
product or who are engaged in its promotion. For example, the advertisement of
Bombay Dyeing in newspapers carries the names of the stockiest of their products. The
consumer can buy the product from anyone of the listed dealers. This method induces
 the dealers to stock the products; and the consumers are encouraged to buy the products
from the listed dealers.
1. Dealer's Gift:
Manufacturers give attractive and useful articles to dealers against their order. The
articles are transistor, radio, television set, clock, watch etc. Some manufacturers offer
free holidays family tours to dealers who place more orders. Ralli Fan Co., arranges for
free holidays tours to those who sell the maximum fans in a year.
2. Point-of-purchase:
This plays the role of silent salesman. Point-of-purchase is also known as dealer-aids,
dealer displays, and dealer hopes etc. The competition among the retailers or traders has
encouraged point-of-purchase advertising, which is a significant method for sales
promotion. It means advertising at the point of purchase by the consumers.
It is generally at the level of retailer's shop. For instance floor displays, stands, overhead
signs, wall signs, posters etc., are examples of point-of-purchase materials. Again, it
may be exterior or interior items. Exterior items like banners, displays are utilized by
firms like service station.
Interior items like floor display, end of counter displays, displays at walls, shelves,
hanging from ceiling etc. are found in the store. Retailers adopt this method to draw the
attention of customers and create an interest in the minds of the prospects. This method
is suitable for consumer goods as well as industrial goods.
III. SALES FORCE PROMOTION:
As dealer and consumer promotion, the sales force promotion also is a necessary one.
The activities of sales force must be induced. In the channel of distribution, the role of
salesman is very important. The idea of sales force promotion is to make the salesman's
effort more effective.
The tools for sales force promotions are:
1. Bonus to Sales Force-"
The manufacturer sets a target of sales for a year. If the sales force
sells the products above the targeted sales, bonus is offered to them. This is an
encouragement incentive given to the sales people to sell more products—to cross the
quota or targeted sales.
2. Sales Force Contests:
To increase the interest and efforts of sales by sales force over a specified time, these
contests are announced. The prizes are given to the salesman who secures the maximum
sales in sales contests. Thus it stimulates the salesmen to sell more products.
3. Salesmen Meetings and Conferences:
The idea behind these is to educate, inspire and reward salesmen. Encouragement is
given to them during the discussion. New selling techniques are described to them and
discussed in the conference.

Tools Of Sales Promotion

Consumer Promotion Dealer Promotion
Sales Force Promotion
4. Sampling 1. Buying allowances
1. Bonus
5. Coupons 2. Menhandise allowance
3.
2. Contests
6. Demonstrations Price deals
3. Meetings and conferences
7. Contests 4. Push money
8. Money Refund offer 5. Co-operative advertising
6. Sales contensts Fig. 17.1
9. Premeum offer
10. Price off offer
7. Dealers listed promotions
8. Dealers gift
11. Sweepstakes
12. Buy back allowances
9. Point of purchase ISSUES IN TRADE
13. Free trials PROMOTIONS
In 2004, less than 30% of Trade Promotions in the Consumer Packaged Goods industry
were profitable. Several issues cause such lack of profitability. Some potential
problems associated with trade promotions programs are costs, the potential impact on
small manufacturers, and the tendency to rely too much on trade promotions to move
merchandise.
i. Lack of accurate and timely information
Trade promotion decisions are often rushed and based on sub-par data. While Sales and
Marketing managers are surrounded by promotion information, questions on retail
commitment and product forecast accuracy can hinder the process. Multiple data sources
and conflicting needs from various departments further complicate the issue. Kurt Jetta, a
consumer researcher, has challenged the existing industry baseline sales forecasting
methodologies and has developed them. Dynamic Linear Model, which he states is "able
to capture structural changes that could be present in certain products after controlling for
seasonality and other predictable patterns".
ii. Inability to plan promotions based on analytics.
Historical trade promotion data should be analyzed in order to continually improve trade
promotions. If a company does not utilize processes and systems that measure trade
promotion performance, future trade promotion executions could be less effective than if
they'd been planned using past analytical information.
iii. Ineffective organization and partner integration
Lack of integration both internally and with external partners can hinder trade promotion
success. Key elements of organizational integration include standardized metrics, regular
information sharing, cross-functional department collaboration, and collaborative
processes. Integration with retail partners is important to executing promotions
successfully, as well as maintain strong relationships with retailers over time.
iv. Lack of appropriate Key Performance Indicators (KPI)
KPIs tell manufacturers and retailers how trade promotions performed relative to their
pre-determined objectives. A lack of understanding on what trade promotion data to
measure and how to measure performance can hinder the overall process. Manufacturers
and retailers will not know what made a promotion effective or ineffective unless they
have predetermined data points to measure and analyze.
Techniques of Trade Sales Promotion
Off-Invoice Allowances
Here marketers allow wholesalers and retailers to deduct a set amount from the invoice
they receive for merchandise.
The incentive for the trade with this programme is that the price reduction increases the
margin (and profits) a wholesaler or retailer realizes on the off- invoiced brand.
This scheme is in general available for many products, where if the bill amount is above
a certain amount you get a certain percentage discount. The % varies from around 2%
to 10%, from company to company and also from time to time.
Buying allowance (Trade Promotion Technique)
It is similar to the off-invoice allowance. It is a discount for the purchase of the
promoted product during the specified period on the purchase of certain minimum
quantity of the product. This trade incentive is often used to gain more distribution or to
maintain the existing one.
Display and advertising allowance
The retailer is required to arrange the product display in a prominent show- window or
offer discount to consumers and advertise this offer in the local newspaper or arrange a
point-of-purchase display on the shelf corner. The retailer earns the incentive only after
meeting the conditions set by the manufacturer.
Buy back allowance
Manufacturers sometimes announce a buy-back allowance to encourage restocking by
retailers. This promotion immediately follows another type of deal offered to resellers
and offered some incentive for new purchases. When the manufacturer realizes that
after the initial deal the inventory levels at the retail level are quite low or depleted, such
an offer helps in building the inventory level with retailers to normal. Eg. Bread,
perishable goods.
Bill back allowance
The manufacturer offers a discount for every item purchased during the promotion
period. At the end after the promotion is over, the dealer counts the discount per unit for
all the items bought during the promotion period, adds any additional promotional
allowances as stipulated by the manufacturer and submits the statement. He also needs
to submit the bill for all such items.
Slotting allowance