1. PROMOTIONAL STRATEGY What is meant by Promotion? 1

2. ……….. …It is PERSUASIVE COMMUNICATION. Promotion is communication with a What is meant by Promotion? …………. deliberate attempt to persuade consumers to buy a company’s goods or services. deliberate attempt... it aims to communicate information in a persuasive manner in order to induce a desired response, which is purchase. 2

3. …. Emergence of new kinds of promotional activity like….. Recent Challenges facing the Promotional Manager……. ………………. Emergence of new forms of Promotional Activity: This is known as the THE IMC REVOLUTION 3

4. THE IMC REVOLUTION New Forms of IMC ACTIVITIES Mobile Marketing. Telemarketing (Direct Response Advertising: (via Telephone calls) Eg. by Banks,Tourist Resorts; Consumer Goods; Water filter companies (Aquaguard). Personalized e-mail Ads to prospects. Direct Response Advertising (via PC/TV/Ordinary Mail)…yes, I want to know more about the product service… Product Advertising in Films / TV Programs: Ex Nike `Just do it’ campaign. Ex. Mahindra Flyte Placement in `3 Idiots’ film.`The aim here is to be associated with content which appears more authentic and desirable’. Event Sponsorships (Fashion shows, Sports events,.. Below- the- Line Advertising Activities. This leads to faster acceptance of Brands through more Exposure. 4

5. 55 `PRODUCT PLACEMENT IN FILMS: Mahindra Flyte Power Scooter’ in 3 Idiots Film.

6. 6 Product Placement in Films: Canon Equipment in Film `Jab Tak Hai Jaan’.

7. 7 1. Use of Interactive Games on company websites 2. Use of Shopping Carts for Ad Space. 3. Use of Helmets with the Company logo. 4. Getting Radio Jockeys of the local FM Radio Channels to promote and speak about a Company’s Brand. 5. Sales Personnel inside Retail Outlet deployed near store shelves (Logo on Uniforms). 6. Store Banners given to Retailers by Companies. 7. Nike Logo on Air Deccan Aircraft. 8. Personalized e-mails useful for targeting high value individuals. What is meant by BELOW THE LINE ADVERTISING (BTL ADVERTISING) A COMPANY DOES NOT HAVE TO PURCHASE AD SPACE FORMALLY THROUGH THE MEDIA (TV/ PRINT/OUTDOOR/) 7 7

8. 8 Why Use BTL? Need to get acceptance of their brands much faster. Therefore multiple media are used. It is most useful for small businesses for small target groups. Companies are looking at non-conventional advertising (BTL) media as well as Advertising Media, as they get more focused on Integrated Advertising.

9. 9 BTL (Below the Line) Advertising Companies are looking at non-advertising (BTL) media as well as Advertising Media, as they get more focused on Integrated Advertising. Why: Need to get acceptance of their brands much faster. Therefore multiple media are used. The Company does not purchase Ad Space in the Conventional Media. Vodafone’s Zoo-zoo character interacting with the sports players. Public relations and Publicity for Vodafone. This is Vodafone’s BTL: Catches people at play.

10. 10 Volvo has inserted its Ads in the Checkout counter.

11. 11 BTL : Greenpeace use of Carry bags for advertising.

12. Recent Concerns in Promotional Strategy…. There is a Need for Integrated Marketing Communications How do we go about Integrating the elements of the Promotional Mix Here we apply a Flow Chart Diagram to Illustrate this. See the 1 st Reading in the polycopy. 12 MARKETING INFERENCE:

13. 13 DIFFERENCE BETWEEN ADVERTISING AND Sales PROMOTIONS in the Flow Chart Advertising is Indirect, based On Mental Impressions Consists of Direct External Incentives ADVERTISING COMMUNICATIONS SALES PROMOTIONS Consumer Promotions Trade Promotions The Proportion of Expenditure on Advertising versus Promotions: (For Consumer Products): 53%(Adv) : 47% (Sales Prom) (MacCann-Erickson, U.S. Guide to Marketers) Indirect 13 Direct Inducement

14. ADVERTISING & PUBLIC RELATIONS PUBLICITY COMMUNICATIONS SALES PROMOTIONS MANUFACTURER PROMOTIONS ADVERTISING Brand Advertising Corporate Advertising Direct Response Ads Consumer Promotions Trade Promotions Trial Promotions Repeat Purchase Promotions POP Displays Price-Off Promotions TV /PC Interactive Shopping Customer FLOW CHART MODEL for INTEGRATION OF ADVERTISING COMMUNICATIONS & PROMOTIONS RETAILER PROMOTIONS Brand Equity in the form of Consumer Franchise All IMC Activities Contribute To Brand Equity 1 3 2 What is the Difference between Advertising and Promotions? Which May be: May be: PUBLIC RELATIONS Sponsorships Event Marketing PUBLICITY 14 +

15. W hat Activities are we integrating?… Traditional with New Forms of Promotional Activity. Awareness (Created through Advertising, PR, Consumer Promotions, Publicity) Attitude (Likes/ Dislike toward the Brand) Conviction. Purchase Intention (Here, more Emphasis is given to Consumer Promotions). Reason for Integration? There must be a Common Communication Objective underlying the different forms of Promotional Activity: Need for SYNERGY in the Promotional Mix 15 The Challenge facing Companies for IMC: The Communication Objective may be:

16. The Ad Agency may be made responsible by the company for the Coordinated Integrated Marketing Communications. WHAT DO WE MEAN BY INTEGRATED MARKETING COMMUNICATIONS ? Advertising also interacts with other Marketing Mix Inputs such as the: Product Performance Packaging, BRAND NAME, Price, Location, retail Shelf Display and other p romotional Activities 16 A LL these ARE PROMOTIONAL TOOLS.

17. PRODUCT (Benefits) PRICE (Prestige/Value) PLACE/ LOCATION (Store Atmosphere) PACKAGING PERSONAL SELLING ADVERTISING & SALES PROMOTIONS INTEGRATED MARKETING COMMUNICATIONS & PROMOTION EVERY ELEMENT OF THE MARKETING MIX COMMUNICATES All the Elements are Promotional Tools Examining the MARKETING MIX in the context of INTEGRATED MARKETING COMMUNICATIONS: 17

18. PRODUCT PRICE PROMOTION PLACE PRODUCT COMMUNICATION PRICE COMMUNICATION PROMOTION COMMUNICATION PLACE COMMUNICATION INFORMATION FLOW from each marketing mix element INFORMATION FLOW PRODUCT OFFERING There is a COMMUNICATION FLOW IN INTEGRATED MARKETING COMMUNICATIONS THE PROMOTIONAL MIX ELEMENTS IMPLICATIONS OF the IMC 18

19. ELEMENTS OF THE PROMOTIONAL MIX ADVERTISING SALES PROMOTION PERSONAL SELLING PUBLICITY /PUBLIC RELATIONS Narrowing down to DESCRIBING THE 4 ELEMENTS OF the Promotional Mix How do these 4 Promotional Mix Elements Differ from each other? Refer to: Second Reading in Polycopy for differentiating characteristics. 19

20. 20 TRADITIONAL MEDIA ADVERTISING - TV, -Radio, - Newspaper, Magazines, Cinema Outdoor Advertising (Billboards, Posters) Consumer Promotions Trade Promotions Direct Response Advertising : Direct Mail, Tele-marketing, Interactive TV Event Marketing (Sponsorships) Mobile Phones Public Relations/Publicity BTL Advertising NEWER MEDIA: NEWER Promotional Techniques t hat have been added EXISTING Promotional Techniques Used by Marketing Managers 20

21. 21 Advertising : Paid for by the Company / Non-personal / Identifiable Sponsor / Long-term Brand building /Generally regarded as Indirect, building up mental associations. Sales Promotion: Paid for by the company / Impersonal / Identifiable Sponsor / Short-term Incentives to buy/Generally considered Direct inducement at Retail outlet. Personal Selling: Paid for by the Company / Personal / Identifiable Sponsor, Direct. Public Relations: Paid for by the company/ Identifiable sponsor. Publicity: Not paid for by the company. The media pay for news items they carry. HOW DO THE PROMOTIONAL ELEMENTS DIFFER FROM EACH OTHER? DEFINING CHARACTERISTICS 21

22. 22 1.Who Pays?: Is it paid for or unpaid by the sponsor? 2.Sponsor: Identifiable or not ? 3. Personal (Face to Face) or Nonpersonal/ Impersonal? Is it Direct or Indirect ? 4. Short-Term or Long-Term in Effects? The Four DEFINING CHARACTERISTICS OF THE PROMOTIONAL MIX ELEMENTS 22

23. 23 RECENT ISSUES THAT HAVE BEEN RAISED Advertising Defined: (ORIGINAL DEFINITION) -It involves Paid announcements in Print,Broadcast,Electronic media. -- It is Salesmanship in Print (1960). -It is A Symbol Manipulation activity (1964). (Semiotics) -- it is Selling Cornflakes to people who are eating Cheerios (Leo Burnett). Defining/Redefining Advertising…. Ref: Second Reading in Polycopy `Oracles of Advertising’. 23

24. 24 A broader definition of advertising means that it is not necessarily impersonal,or only through the mass media as originally stated. It may be personal or non-personal, direct or indirect. Redefining Advertising…. See Reading 2 of your Polycopy Q. `Are personalized e-mails sent to prospects, advertising or direct marketing? Are logos advertising or sales promotion? Q. Which forms of promotion are not advertising? 24

25. 25 Example: Tata’s `Nano’ (Initial Publicity…prior to product launch.) IPL Cricket Series The New relaunched `Beetle’ in the US market (1998) was also primarily built up on publicity. 1. Publicity is most relevant in the first week of the official launch. 2. Publicity is also useful to influence Hard to reach audiences who are not heavy TV viewers. It is possible for a Brand to be built primarily on Publicity? 25 How Important is PUBLICITY in the Promotional Mix

26. CEO of Renault Nissan with Tamil Nadu CM and former PM of Japan Yoshiro Mori, unveiling the India Plant at Chennai. Public Relations Example of 26

27. 27 Ford Motor in India PR (2009) The Initial use of PR is generally followed by Publicity.. Chief Executive Alan MULALLY UNVEILED THE Figo in Chennai. EXAMPLE 27

28. 2009 28 Which Element of the Promotional Mix is this? Flagging off the I10 Kappa..

29. Richard Branson`s Public Relations and Publicity `The First Commercial Passenger Spaceship 2009 29 Importance of Publicity

30. 30 Impact of VIRAL MARKETING in Publicity The Power of Twitter to spread information both to Inform and Misinform. An unfounded report in a little known Blog by a liberal blogger went viral in a matter of minutes due to re-tweeting by several without checking the veracity of the news. A lie races across Twitter before the truth can boot up. Within 2 and a half hours period it gathers speed and embellishment. Media Outlets competing with Twitter may add to the confusion.

31. Much of IBM’s success (1980’s decade) was built on Personal Selling by its smart dedicated workforce. Subsequently on Customer relationships. Sales force served as a problem solver, consulting function to help customers. Importance of PERSONAL SELLING as an Element of the Promotional Mix: 31

32. The Relative role of Advertising versus Sales Promotions varies according to stages of the plc INTRODUCTION GROWTH MATURITY DECLINE PLC STAGE SALES Adv: High Sales Prom: High The % of Expenditure on Advertising to Sales Promotion will change as the PLC progresses. Adv: High Sales Prom: Low SOURCE: ROSSITER & PERCY See Polycopy Reading Pg. EXAMINING the PLC Curve for THE ROLE OF ADVERTISING versus SALES PROMOTION INITIAL Adv: May be Low/ High INITIAL Sales Prom: May be High to Induce Buyers Adv: High if Market Leader Brand Sales Prom: Low if Market Leader Brand 32

33. RELATIVE ROLES OF ADVERTISING AND PROMOTIONS ACCORDING TO PLC STAGES PLC STAGE ADVERTISING PROMOTIONS COMMUNICATION OBJECTIVE 1. INTRODUCTION HIGH HIGH Awareness 2. GROWTH STAGE MARKET LEADER HIGHLOW Brand Identity Me-Too PRODUCT LOWHIGH Induce Trial 3. MATURITY HIGH BRAND LOYALTY HIGHLOW Brand Image LOW BRAND LOYALTY LOWHIGH Hold Buyers 4. DECLINE NONE LOW (Trade Promotions)) INTRODUCTION GROWTH MATURITY DECLINE SOURCE: ROSSITER & PERCY 33 See p.17 of Polycopy

34. Varying Emphasis on Advertising & Sales Promotion in the PLC Introduction Stage : HIGH PROMOTION BUDGET. High Advertising + High Sales Promotion Growth Stage: Once Sales take off, the Promotion Budget is frequently reduced. However, PROMOTION BUDGET MAY BE HIGH OR LOW and will depend on whether the company is a Market Leader or Market Follower. Maturity Stage : Once sales slow down, a company will normally reduce its promotional budget. Here again, PROMOTION BUDGET MAY BE HIGH OR LOW. Decline Stage : Reduction in overall promotional budget. RATIONALE: How will the allocation of the Promotion Budget in terms of Proportion for Advertising vs Sales Promotion change over time? 34

35. What are the Product Life Cycle Promotional Implications for the Manager? Promotional Expenditure is decided on the basis of the Company’s Market Share Objective of Brand: Also whether it is an New Brand or Existing Brand. Implications Regarding Market Share? 35

36. Market Share is dependent on the Brand Equity, which in turn depends on how the consumer processes the advertising & brand related promotion. This is shown in THE SIX-STEP SEQUENCE OF EFFECTS (Continue next time) PLC Promotional Implications for Brand Equity 36

37. End 37