Unit 5 – QBA

Course Name: Advertising & Sales Promotion

Module V: Trade and Professional Marketing Associations and Groups

Q 1. Explain General Marketing?

 American Marketing Association *Leading professional society for those with interest
in the practice, study and teaching of marketing.

 The Chartered Institute of Marketing *UK-based marketing association with strong

emphasis on training and professional accreditation.

 CMO Council *Aimed at the chief marketing officer, this association has a heavy
Internet/technology leaning. The site does have market reports, white papers and a
newsletter that may be accessible to non-members.

 The Marketing Institute *A professional trade organization in Ireland.

Q 2. Explain in brief Advertising & Promotion?

 Advertising Research Foundation *Association that provides resources aimed at

helping to create more effective marketing and advertising communications.

 American Association of Advertising Agencies *Trade organization representing the

advertising agency business.

 Association of Marketing Service Providers *Supports the interests of mailing service

companies.

 Association of National Advertisers *This appears to be a fairly exclusive group

whose membership consists of mostly large brand marketers who spend big money
advertising on a national and international level.

 Brand Activation Association *Trade group that mostly focuses on consumer and
trade promotions. Home of the annual Reggie Awards for top promotions.
Q 3. Write types of Marketing?

Ans Customer-Focused Marketing

 Professional Association for Customer Engagement *Trade group that is focused

mostly on offering help to companies using contact centers (e.g., telemarketing) for
marketing.

 Word of Mouth Marketing Association *Supports those using referral methods to

achieve marketing objectives.

Internet Marketing

 Digital Analytics Association *Newer group that looks to make sense out of data
gathered through website traffic reports.

 Interactive Advertising Bureau *Not-for-profit trade association focusing on advertising

issues across all interactive formats.

 Mobile Marketing Association *Focus of this group is on marketing via wireless means
including advertising and SMS messaging through cell phones and PDAs.

 Search Engine Marketing Professional Organization *Professional group site that is

dedicated to improving the understanding of search engine marketing.

Marketing Research

 Council of American Survey Research Organizations *Trade group whose mission is

to improve the ethics and practice of survey research.

 Marketing Research and Intelligence Association *Canadian-based group with

comprehensive site direct towards marketing, advertising, social and political
researchers.

 Marketing Research Association *US-based organization dedicated to promoting

excellence in marketing and opinion research. Offers news/event information, links to
leading research firms and more.

 The Marketing Research Society *UK group which claims "largest professional body
for individuals employed in market research."

 Society of Competitive Intelligence Professionals *This association's site includes

FAQs about CI, job opportunities, chapter listings and educational options.
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:Q. 4. Explain Sales & Sales Management in trade and professional marketing?

 Center for Exhibition Industry Research *The main benefit offered by this group is the
wide range of fee-based research reports available to both members (cheaper) and non-
members covering many industries.

 Exhibit & Event Marketers Association *Association whose objective is "to engage
exhibit and event professionals". While members get access to special services, there
are many free areas including case studies and articles, glossary of terms and more.

 National Association of Sales Professionals *Relatively new group that is pushing for
salesperson certification.

 Society of Incentive and Travel Executives *Association for those in the incentive
industry.

Q 5. Explain Comprehensive Sales Promotion in trade and promotions?

The Steps in Planning an Effective Sales Promotion Program

Small business owners rely on sales promotions to communicate product information to

customers in a target market. A sales promotion is an element of the marketing mix that
differentiates a product from competing products in the mind of a potential customer. For
example, a small business can promote a product using advertisements, press releases and
trade fairs. Planning a sales promotion program begins by defining objectives based on
marketing opportunities and ends with the creation of budgets and timetables.

Assess Communication Opportunities

To understand marketing communication opportunities, you must profile your target

market and identify the likely benefits of your product to current potential customers.
 Determine the target market's economic and cultural characteristics, such as potential
customers' income level and ethnicity, which will determine the effectiveness of your sales
promotion.Also,pinpointcurrentandpotentialcustomerswhoarethemarket's―deciders‖
and―influencers.‖Adeciderhasthepowerandfinancialresourcestopurchaseyourproduct and an
influencer is a buyer or third party, such as a journalist or industry analyst, that sways the
purchase decisions of others.
Select Communication Channels

You use information about the target market, your products and business environment to
decide the channels -- personal or non-personal -- you'll use to launch the promotional
campaign. A personal channel uses two-way communication to deliver a marketing message
and receive customer feedback. Such communication may occur face to face, over the
telephone, through the mail or email. A sales promotion for a tablet computer might involve a
sales representative, a system expert and a satisfied customer. The tablet computer
manufacturer might also choose non-personal communication channels, such as television
broadcasts, mobile billboards or transit advertising.
Select Objectives

The next step is establishing the desired effect of your promotional communication. If
promoting a new product, you'll seek product awareness. After you achieve awareness, your
promotion program can focus on conveying your product's benefits to deciders and influencers
to establish brand acceptance. Customers must then become convinced they prefer your brand
and that they want to own your product, which is brand insistence. Finally, the sales promotion
should convince the buyer to take action, such as brand trial or purchase, and confirm the
customers are satisfied with the purchase.
Determine Promotion Mix

After establishing promotion objectives, determine how to allocate company resources to

achieve sales goals. For example, decide to use advertisements, publicity or personal selling to
promote your product. A manufacturer of tablet computers might rely on incentives including
coupons, contests and tradeshows to promote sales. Inturn, the
 manufacturer might rely on advertisements to inform potential customers of the tablet's benefits,
persuade individuals to buy the tablet and inform the public of purchase locations. Primary
communication channels might include print and electronic media and press releases.

Develop Message

In developing the promotional message, you focus on the message content, its format
and likely appeal. The appeal, which is the reason the potential customer will purchase a
product, affects the relative position of your product in the market. In turn, the message
structure may or may not draw a conclusion for the customer regarding the desirability of your
product. For example, an advertisement regarding a laptop might refer to its relative size or
processing speed. You must also consider the message format, the script, sound and camera
angle for an electronic message or the headline, copy, color and illustrations for a print
advertisement.

Develop Promotion Program Budget

The budget is prepared after the promotion campaign planned. As the budget is created,
you break down the costs by territory and the individual promotion mix elements, such as
advertising. In creating the budget, allot money to the program based on probable amounts
spent by competitors, a percent of anticipated sales revenues or the estimated cost of each
program element.

Determine Program Effectiveness

The final step to create a sales promotion program is to create a formal sales- promotion
program document. Include in the document a situation analysis, copy strategy -- which
describes the theme of an advertisement campaign -- and a timetable that references both the
elements of the promotion mix and the marketing mix. Also include a means to evaluate the
program, such as the use of a focus group, to determine if an advertising message is
memorable, the message's selling points are recognizable and how individuals feel about the
message, product and company.
Programme Planning and Budgeting for Sales Promotion

Sales Promotion is a tool which comes after Marketing Policies, Systems and
Procedures are positioned. The promotion is a continuous process. It begins with the inception
of sale to attract customers, survive competition and increase sales volumes and consequently
revenues. Therefore a careful planning and budgeting of expenses have to be worked out for
sales promotion. No marketer can survive profitably without sales promotion. The process may
from company to company and product to product.

Q6. What are Assess Communication Opportunities?

To understand marketing communication opportunities, you must profile your target

market and identify the likely benefits of your product to current potential customers.

Determine the target market's economic and cultural characteristics, such as potential
customers' income level and ethnicity, which will determine the effectiveness of your sales
promotion.Also,pinpointcurrentandpotentialcustomerswhoarethemarket's―deciders‖
and―influencers.‖Adeciderhasthepowerandfinancialresourcestopurchaseyourproduct and an
influencer is a buyer or third party, such as a journalist or industry analyst, that sways the
purchase decisions of others.
Select Communication Channels

You use information about the target market, your products and business environment to
decide the channels -- personal or non-personal -- you'll use to launch the promotional
campaign. A personal channel uses two-way communication to deliver a marketing message
and receive customer feedback. Such communication may occur face to face, over the
telephone, through the mail or email. A sales promotion for a tablet computer might involve a
sales representative, a system expert and a satisfied customer. The tablet computer
manufacturer might also choose non-personal communication channels, such as television
broadcasts, mobile billboards or transit advertising.

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  Cable Television Advertising Bureau *Trade group site has information, research
reports and other materials related to advertising on cable television.

 Council of Public Relations Firms *Trade organization mostly for PR firms (as
opposed to freelancers). Site includes firm rankings, career resources and directory for
locating members.

 Direct Marketing Association *Leading professional association for direct marketers.

 Path to Purchase Institute *Focus is mostly on marketing promotions within retail

stores.

 Promotional Products Association International *Industry group focusing on the use

of products to aid promotional objectives.

 Public Relations Society of America *Society for those engaged in PR activities.

Q 7. Explain sales promotional planning in brief?

Ans: Sales Promotion Planning

The main stages which are involved in sales promotion planning are:

1. Establishment of objectives

2. Selection of promotional tools

3. Planning the sales-promotion programme

4. Pre-testing

5. Implementation and

6. Evaluation

As in the case of advertising, effective sales promotion involves an on-going process

with a number of stages.

1. Establishment of objectives:

Sales-promotion objectives vary according to the target market. If the target is the
customer, objectives could include the encouragement of increased usage or the building of trial
among non-users or other brand users. For intermediaries, objectives could be to encourage
off-season sales or offsetting competitive promotions. Sales-promotion activity could also be
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 aimed at internal personnel, making up part of the reward system

2. Selection of promotional tools:

Promotional objectives form the basis for selecting the most appropriate sales-
promotion tools. The cost and effectiveness of each tool must be assessed with regard to

achieving these objectives in respect of each target market. The tools available to the service
marketer are described in more detail in the next section.

3. Planning the sales-promotion programme:

The major decisions that need to be made when designing the sales-promotion
programme relate to the timing of the promotion and how long this tool is to be used. Also
important are the size of incentive, rules for eligibility and, of course, the overall budget for the
promotion.

4. Pre-testing:

This needs to be undertaken to ensure that potentially expensive problems are

discovered before the full launch of a promotion. Testing in selected market segments can
highlight problems of ambiguity, response rates and give an indication of cost effectiveness.

5. Implementation:

The programme for implementation must include two important time factors. First, it must
indicate the ‗lead time‘- the time necessary to bring the programme up to the point where the
incentive is made available to the public. Second, the ‗sell in time‘ which is the period of time
from the date of release to when approximately 90-95 per cent, of incentive material has been
received by potential customers.

6. Evaluation:

The performance of the promotion needs to be assessed against the objectives set. If
objectives are specific and quantifiable, measurement would seem to be easy. However,
extraneous factors could account for the apparent success of many sales-promotion activities.
For example, competitive actions or seasonal variations may have influenced customers‘ decision
making. It can also be extremely difficult to separate out the effects of sales-promotion activity from
other promotional activity-or indeed from other marketing-mix changes

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Q 8. Explain SALES PROMOTION BUDGETS?

Ans: In order to understand the concept of budget it‘s necessary to understand that the
budget that‘s taken in consideration is dependent on the organizations promotional strategy.

So first total amount of money for the promotion is determined and then the budgeting is
done for different promotional activities. But how do you determine the amount of money
involved in the promotional activities?

This is different to different business. It‘s more or less dependent on various factors that
play role in a products life cycle; the factors like different stages of PLC, the market condition (of
the company), the economy within the organization functions, the extent of competitive activities
etc. All these factors individually or together might affect the promotion budget to a great extent.
You just can‘t expect the company to have huge promotional budget in times of rescission.

 Direct Fixed and Variable Costs

The direct fixed costs are costs of physically distributing samples, placing
advertisements and point of purchase material, etc. Variable costs are payment made to the
retailer for each coupon redeemed.

 Likely market response

The marketer, it is suggested should analyze six types of market responses. These are:

a. Redemption rates
b. Displacement rates
c. Acquisition rates
d. Stock uprates
e. Conversion rates
f. Product line effects

Let us analyze the above types of responses in a greater detail.

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a. Redemption rates: This measure reflects the total number or percentage of potential /
target customers responding to the sales promotion programs. Generally, this is based
on how the incentive coupons have been distributed. Others factors that influence
redemption rate are:
 Popularity of the brand.
 Depth of distribution of a brand.
 Number of households using the product form.
 Frequency of purchase of the product form.
 The value of the incentive.
b. Displacement Rates: This is a measure that helps the marketer determine the amount
of lost contribution margin that results from selling to regular buyers at a discounted
price. Any sales promotion programs are bound to displace sales that would have
otherwise been made to regular buyers at the normal price. This rate is dependent on
the method of distribution of coupons or the method by which the target market is made
aware of these incentives. Generally, redemption rates will be a percentage somewhat
higher than the product‘s market share.
c. Acquisition Rates: This reflects the addition to the customer base of the company.
However, marketer should appreciate that displacement and replacement rates together
may not add up to 100 percent of redemptions. There is another category also called
stock up buyers.
d. Stock up Rates: This effect is desirable when sales promotion objective is to motivate
consumers to build up inventories. This will result in a decline in post promotion sales of
the product. Hence, the marketer should analyze lost contribution resulting from such
decline insales.
e. Conversion Rates: Here, the marketer has to analyze the rate of penetration in the
competitors market. The marketer has to also analyze penetration among the non-user
group. Accordingly, the marketer should attempt to estimate the level of post- promotion
sales that will come from customers acquired during the promotionperiod.
f. Product Line Effects: Managers should study cross elasticity of demand between
promotedproductandcomplementaryorsubstituteproduct,likeinthecaseof

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 shaving cream and after shave lotion. Retailers and other firms offering promotions on
such products should examine increase in sales of complementary products due to
increased sales in the promoted leader product.

Q 9. Explain role of market response in Budgeting?

The marketer, it is suggested should analyze six types of market responses. These are:

g. Redemption rates
h. Displacement rates
i. Acquisition rates
j. Stock uprates
k. Conversion rates
l. Product line effects

Let us analyze the above types of responses in a greater detail.

g. Redemption rates:This measure reflects the total number or percentage of potential /
target customers responding to the sales promotion programs. Generally, this is based
on how the incentive coupons have been distributed. Others factors that influence
redemption rate are:
 Popularity of thebrand.
 Depth of distribution of abrand.
 Number of households using the productform.
 Frequency of purchase of the product form.
 The value of the incentive.
h. Displacement Rates: This is a measure that helps the marketer determine the amount
of lost contribution margin that results from selling to regular buyers at a discounted
price. Any sales promotion programs are bound to displace sales that would have
otherwise been made to regular buyers at the normal price. This rate is dependent on
the method of distribution of coupons or the method by which the target market is made
aware of these incentives. Generally, redemption rates will be a percentage somewhat
higher than the product‘s market share.
i. Acquisition Rates: This reflects the addition to the customer base of the company.
However, marketer should appreciate that displacement and replacement rates together
may not add up to 100 percent of redemptions. There is another category also called
stock up buyers.

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 j. Stock up Rates: This effect is desirable when sales promotion objective is to motivate
consumers to build up inventories. This will result in a decline in post promotion sales of
the product. Hence, the marketer should analyze lost contribution resulting from such
decline in sales.
k. Conversion Rates: Here, the marketer has to analyze the rate of penetration in the
competitors market. The marketer has to also analyze penetration among the non-user
group. Accordingly, the marketer should attempt to estimate the level of post- promotion
sales that will come from customers acquired during the promotion period.
l. Product Line Effects: Managers should study cross elasticity of demand between
promotedproductandcomplementaryorsubstituteproduct,likeinthecaseof

Q 10 What are Techniques Used To Allocate Funds

There are basic five techniques that are used to determine/ allocate funds to sales
promotion.

Percentage of sales method

In most cases and by most firms this―percentage of sales method is used to determine the
promotional budget of the company. So they more or less pull certain percentage of the sales
made in a fixed period. Remember when I say fixed it can be for say last year or for several past
years. This decision is more dependent on the current business scenario and current working of
the company. It might be that the company may consider just last year‘s sales figures under
consideration as they may have made great sales. (So you may take one year or an average of
several these depends on many conditions in which the org functions). This can also be a
forecasted sale of the year under certain conditions.
Unit of sales method

For Biggies that build big products like two-wheelers auto-manufactures, and other
consumerdurablethisismostpreferredmethodofsalespromotion–―UnitofSalesMethod‖ so here the
base is UNITS of sales that are made. Here the figures of units are multiplied by fixed amount of
money to reach the budge amount. For example: they might allocate $1000 per unit for sales
promotions. (I did say it‘s for Biggies so this amount might be big.)
Competitive parity method

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 Any marketers match or base their sales promotion budget to that of the major
competitors. The logic attributed to this method is that the collective minds of thecompanies

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 in the industry probably generate promotion budget that are close to optimal and any departure
from the industry norms may lead to promotion war.
All you can afford method

Here the amount used literally means―All you can afford in other words all you are left with.
So you pick all that is left after all other relevant allocations have been made. So normally this
approach is used by Small fishes (small companies with small budget) or may be by some other
firms that are big when they are introducing the new product. This approach is merely an
availability oriented budget and kina unsophisticated. Apparently, there is no realization that in a
competitive market situation, sales promotion mainframe sales in manyways.

Objective end task method

As said the promotional budget is determined by the overall promotional strategy of the
organization hence objective end task methods is the one which is strategy driven. This is even
the most popular technique to decide on sales promotions budget. So what do we do? We
(Marketing Managers) start by making a thorough study i.e. understanding the market, the
product, the offerings, the most crucial competition and consumer behavior in order to set the
ultimate promotion objectives. Remember these objectives may relate to reach short term sales
objectives .Remember this is sales promotions that are ultimately derives sales and sales and
sales. These objectives may even relate to introducing a new product, stimulate trial, increasing
distribution, etc., within a specified period of time. Now you determine how much money would
be required to fulfill each of these tasks in order to achieve the promotion objectives. If the cost
happens to be greater that money available then ether the objectives are refined or the funds
are made available the contingency reserve or by reducing the budgets of the other promotional
activities.

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