LESSON-17 ADVERTISING AND SALESMANSHIP

Dr. Subhanjali Chopra

STRUCTURE
17.0 Introduction 17.1 Objectives 17.2 Meaning and objectives of Promotion 17.3 Promotion Mix 17.3.1 Factors influencing promotional mix 17.4 Advertising 17.4.1 Functions of Advertising 17.4.2 Need and significance of Advertising 17.4.3 Criticisms of Advertising 17.4.4 Advertisement and Publicity 17.5 Salesmanship or Personal Selling 17.5.1 Importance of Personal Selling 17.5.2 Steps in Effective Selling 17.5.3 Requisites of Effective Salesmanship 17.5.4 Qualities of a Successful Salesman 17.5.5 Advertising and Salesmanship 17.6 Summary 17.7 Glossary 17.8 Self Assessment Questions 17.9 Further Readings

17.0 INTRODUCTION
An important element of marketing mix of a business firm is the organization of promotion. The function of promotion is concerned with establishing the contact with the members of the society. They are shown how the products offered by the firm will satisfy their needs. In this chapter, we shall study in detail two important techniques of promotion, i.e., advertising and personal selling.

17.1 OBJECTIVES
After reading this chapter you should be able to: Explain the meaning and objectives of promotion. State the elements of promotion. Explain the meaning of advertising. 259

Describe the benefits of advertising to manufacturers, consumers and society. Explain the meaning of personal selling and examine its importance. Differentiate between: (i) Advertising and publicity, (ii) Advertising and personal selling.

17.2 MEANING AND OBJECTIVES OF PROMOTION

Promotion is an important part of the marketing mix of a business enterprise. The purpose of promotion is to inform, persuade and influence the prospective customers. Advertising, salesmanship, sales promotion and publicity are often used to inform the people about the availability of products and create among them the desire to buy the products. No business enterprise can market its products unless it undertakes promotional activities effectively. The prospective customers have to be informed about the product, its features, utility and availability. The need for promotional activities has increased because of stiff competition, widening of market, rapid changes in technology and tastes of customers The objectives of promotional activities are as follows:1 1. To spread information: The main purpose of promotional activities is to inform the prospective customer about the availability, characteristics and use of particular product. 2. To stimulate demand: Promotional activities create awareness and build people interest in new products. 3. To differentiate the product: Promotion helps in differentiating a particular product of the firm from the competing products of other firms. 4. To highlight the utility of the product: Promotion helps people to know the utility of the new product. It tells them how the firms product will be helpful in satisfying their specific demands. 5. To stabilize sales volume: It assures the customers about the quality and price of the product. It is likely that a customer using a particular brand of a product may buy another one next time because other brand is advertised heavily.

17.3 PROMOTION MIX

The term promotion mix refers to the combination of different kinds of promotional tools used by a firm to advertise and sell its products. The main promotional tools, which make a promotion mix, are: personal selling, advertising, publicity and sales promotion. They are also known as elements of promotion mix and are briefly discussed below2: 1. Advertising: Advertising is an important form of promotion. Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services of an identified sponsor. The message, which is disseminated, is known as advertisement. 2. Personal selling: Personal selling is the process of assisting and persuading a prospective buyer to buy a commodity in a face-to-face situation. It involves direct and personal contact between the seller and his representative with the prospective buyer.
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Advertisement

Personal Selling

Promotion Mix

Sales Promotion

Publicity

3. Publicity: Publicity is any non-paid mention of an organization or its products in the news media. It is non-personal stimulation of demand for a product by planting commercially significant news about it in a published medium or obtaining favourable presentation of it upon radio, television or stage that is not paid for by the sponsor. 4. Sales Promotion: Sales promotion includes all those activities that stimulate consumer purchasing. The examples of sales promotion are distribution of samples, coupons, premium on sale, trading stamps, displays, shows and exhibitions, holding contests, increasing public relations, etc. These techniques are designed to supplement and coordinate personal selling and advertising efforts. The mechanisms available to a small firm to promote a product include direct face-toface selling, telephone selling, direct mail, exhibitions and demonstrations. It has to be very careful about its advertising costs if it plans to move from direct to indirect promotion. The choices range from television, cinema, radio, newspapers, magazines, trade journals, posters, leaflets, classified advertisements, gifts and sponsorships. The costs associated with advertising through these media are roughly distributed in descending order from television being most expensive to sponsorships the cheapest. It is likely, therefore, that small firm owners will find themselves generally confined to the later part of the list. A low cost method for small firms is to make use of press releases to increase their companys profile. An alternative method is writing articles for journals, public speaking, conference participation and setting up seminars, all of which help small business firms gain credibility and win respect.

17.3.1 FACTORS INFLUENCING PROMOTIONAL MIX

Following factors influences the promotional mix of a firm: 261

a. Nature of Market: If the customers are concentrated in a particular locality, personal selling is likely to be more effective. But if they are widely scattered in different parts of the country, other promotional tools are necessary to push up a product. Advertising and publicity are particularly important to attract the status-conscious customers. b. Nature of Product: In case of sale of consumers goods, all the promotional tools are necessary. But in order to push up industrial goods, personal selling is much more effective because its market is easily identifiable. c. Stage of Products Life: The stage of product life cycle is an important factor in determining product mix. During the introduction stage, customers are to be informed about the availability of the product and educate about its benefits and uses. Most firms use all promotional activities to launch their products successfully. After launch, advertisement and publicity are more important to create continuous patronage of the customers. But during the last stage of the product when sales are declining, it may be proper to cut the promotional efforts. d. Availability of Funds: A firm with huge promotional budget can spend on all promotional activities. But a firm with financial constraints will be selective in the use of promotional activities. e. Effectiveness of Promotional Tools: Different promotional tools are effective at different stages of buyer readiness. At the awareness stage, advertising and publicity are more effective. At the comprehension stage, advertising and personal selling are important. During the conviction stage, personal selling is very effective. Personal selling and sales promotion are highly effective at closing the sale stage.

17.4 ADVERTISING
Advertising is an important tool of sales promotion. Advertising consists of all the activities involved in presenting a non-personal, oral or visual, sponsored message regarding a product, service or idea. This message called an advertisement is disseminated through one or more media and paid for by an identified sponsor. Advertising is used for communicating business information to the present and prospective customers. It usually provides information about the advertising firm, its product qualities, place of availability of its products, etc. Advertisement is indispensable for both the sellers and the buyers. In the modern age of large scale production, producers cannot think of pushing sale of their products without advertising them. American Marketing Association has defined advertising as any paid form of nonpersonal presentation and promotion of ideas, goods and services of an identified sponsor1. This definition reveals the following features of advertising: a. It is paid form of presentation: Advertisements appear in newspapers, magazines, television or cinema screens because the advertiser has purchased some space or time to communicate information to the prospective customers. b. It is non-personal presentation of message: There is no face-to-face direct contact with the customers. It is a non-personal form of presenting products and
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promoting ideas and is complementary to personal selling. It simplifies the task of the sales force by creating awareness in the minds of potential customers. c. The purpose of advertising is to promote idea about the products and services of a business: It is directed towards increasing the sale of the products and services of a business unit. d. Advertisement is issued by an identified sponsor: The public is informed who is behind the advertising in the advertisement itself.

17.4.1 FUNCTIONS OF ADVERTISING

Advertising performs the following functions: 1. It helps in the introduction of new products in the market. A business firm can introduce itself and its products to the public through advertising. 2. It promotes the sale of goods and services by informing and persuading the people to buy them. A good advertisement helps to win new customers for the products. 3. Advertising helps in building up the reputation and goodwill of a firm which is essential to face competition in the market. 4. Advertising educates the people about new products and their uses. It provides knowledge about the utility of a product. It has helped in improving the standard of living in society by developing new habits and better ways of life. 5. It facilitates large scale production, which in turn results in lower cost of production and in more economical use of resources. 6. Advertising provides an important source of revenue to the publishers of newspapers and magazines. It enables to increase the circulation of their publications by selling them at lower rates. 7. It stimulates research and development activities. Advertising has become a competitive marketing activity. Every firm tries to differentiate a product from the substitutes available in the market. This compels every business firm to do more and more research to find new products and their new uses.

17.4.2 NEED AND SIGNIFICANCE OF ADVERTISING

The significance of advertising has increased in the modern era of large scale production and tough competition in the market. There is no doubt about the fact that in the absence of advertising in our life, we shall be deprived of many valuable things. As such it is worthwhile to consider some of the benefits of advertising to different parties1: 1. Manufacturers and Traders: Advertising is helpful to manufacturers and traders in the following ways: a. Advertising helps in introducing new products. A business enterprise can introduce itself and its products to the public through advertising.
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b. c. d.

e.

f. g.

h.

It can create new taste among the public and stimulate them to purchase the new product through effective advertisement. It assists to increase the sale of existing products by entering into new markets and attracting new customers. Advertising helps to create steady demand of the products. For instance, the innovation of cold tea and cold coffee for use during summer has helped in increasing the demand for these beverages even in the summer season. Advertising helps in meeting the forces of competition in the market-place. If a product is not advertised continuously, the competitors may snatch its market through increase advertisements. Advertising is used to increase goodwill of a firm by promising improved quality to the customers. It increases the morale of the employees of the firm. The salesmen feel happier because their task becomes easier if the product is advertised and known to the public. It can thus inspire them to improved performance. Advertising facilitates mass production of goods, which enables the manufacturer to achieve lower cost per unit of product.

2. Customers: Advertising is beneficial to customers due to following reasons: a. Advertising makes purchasing easy for consumers by reducing the time and effort involved in shopping. People become aware of the source and availability of different products and need not search them out. b. It educates the people about new products and their diverse uses. c. Advertising increases the utility of existing products for many people. It emphasizes the qualities possessed by certain goods and leads consumers to appreciate more strongly the utility of such goods. As a result, the consumers may be willing to pay even more for certain products, which appear to have higher utility to them. d. By advertising his goods, a manufacturer may seek to establish a direct contact with the consumers. In this process the number of middlemen whose profits increase the price and reduce the manufacturers margin of profits may be considerably reduced. e. It induces the manufacturers to improve the quality of their products through research and development. This ensures supply of the products of better quality to the consumers. 3. Society: The society at large is also benefited because of advertisement: a. Advertising provides employment to persons engaged in writing, designing and issuing advertisements. Increased employment brings additional income with the people, which stimulate more demand. b. Advertising promotes standard of living of the people by increasing the variety and quality in consumption as a result of sustained research and development activities by the manufacturers. c. It sustains the press and other media. It provides an important source of income to the press, radio and television network. In the absence of income from advertising, the newspapers have to be produced at a higher cost. 264

d. Advertising educates the people about the various uses of different products and this increases their knowledge. It also helps in finding customers in the international market, which is essential for earning foreign exchange. e. Advertising does provide a glimpse of a companys way of life. It is, in fact, a running commentary on the way the people live and is also an indicator of some of the trends in this regard.

17.4.3 CRITICISM OF ADVERTISING

In fact, advertising by itself is useful and necessary. It becomes wasteful and objectionable when used by dishonest and unknowledgeable persons. Money spent on advertising yields results when used properly. Scientific and honest advertising is in the interest of all. It pays to advertise provided adverting is done rightly. Many people have often criticized advertising and some people find it a social waste. The main points of criticism are as follows: a. Promotion of wasteful consumption: Advertising creates tastes and desires for some products in such a way that many persons are forced to buy things beyond their means or requirements. Although advertising cannot force anybody to buy things, which he considers unnecessary, there is no doubt that advertiser, do provoke human instincts through various sales appeals. b. Misleads the consumer: Advertising fails to achieve its objectives and destroys public confidence in those cases where false and exaggerated claims are made about the virtues of products. Some sellers to defraud buyers by inducing them to purchase goods of doubtful value use it. c. Creates Monopoly: Advertising tends to develop brand monopoly by repeatedly promoting certain brand names. Brand monopolies restrict free competition to the detriment of the consumers interests. Although the particular brand may be similar to another brand in all respects including physical construction, yet the similarity is concealed from the public by the use of an exclusive name and an illusion is created that it is superior to the competing brands. d. Increase in the cost of product: Advertising is sometimes done in such an expensive and unbalanced manner that it increases the cost of marketing and the price of products rather than reducing the prices. This puts heavy economic burden on the consumers. However, if advertising is managed properly, it can reduce the cost and price of products by ensuring large scale production. e. Lack of dignity: Advertisers sometimes adopt objectionable themes and messages that are totally devoid of ethical sense, moral value or public decency. For example, use of nude poses of fair sex and vulgar language, excitement of base instincts, attack on the age-old values of society and similar undignified practices in some advertisements are offensive to public morality and decency. f. Wastage of national resources: A serious criticism against advertisement is that it is used to destroy the utility of goods before the end of their normal period of usefulness. For example, new models of automobiles with nominal improvements are advertised at such high pressure that the old models have to be discarded before they become useless.

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Though one cannot entirely ignore the objections, which are raised against advertising, most of the drawbacks of advertising are inherent in the competitive system of economy. As a tool of promotion, advertising is unparalleled in its appeal. However, the importance of advertising can be fully realized only if its abuses are stopped. In order to eliminate defects of advertising, the Government has devised by the businessmen as well as a number of measures. The usual measures that are applied may be stated as follows: a. Statutory ban on all obscene advertisements, as they offend public morality. b. Restrictions on noisy advertisements through the use of loudspeakers, etc, since they become a public nuisance. c. Prohibition on writings on the walls and other public places. d. Regulatory laws by the Government to guard against deceptive advertising. e. Movements and actions on the part of consumers association formed to protect consumers interests against unethical advertising.

17.4.4 ADVERTISEMENT AND PUBLICITY

Advertisement is different from publicity with respect to the following points: 1. Advertisement is a paid form of communication. Its cost is borne by the advertiser. Publicity is any non-paid mention of an organization or its ideas or products in the news media. 2. Advertisement is issued by an identified sponsor. Publicity does not need an identified sponsor.

17.5 PERSONAL SELLING OR SALESMANSHIP

Personal selling or salesmanship is an important method of selling. It is the process of assisting and persuading a prospective buyer to buy a product in a face-to-face situation. It involves direct and personal contact between the seller and his representative with the prospective buyer. It provides feedback and performs the complete job of selling. But it is more expensive and time-consuming. The purpose of personal selling is not to ensure the present sale alone, but winning a regular customer. The basic features of salesmanship are as follows: a. Salesmanship involves persuasion of customers: A salesman has the ability to convince the people to buy his product. b. Salesmanship involves winning buyers confidence: Modern salesmanship aims at educating the customer and providing a solution to his problems. This helps in winning his confidence. c. Salesmanship involves providing information: Salesmanship is an educative process. It tells customer the ways in which they can satisfy their needs. Salesman provides information about products available, their broad features and their uses and utility to the customers. d. Salesmanship aims at mutual benefit: Salesmanship is a two way process. It results in benefits not only to the sellers but also to the buyers. It helps in solving the problems of the buyers and satisfying their needs. Customer satisfaction leads to increase the profitable sales volume for the salesman. 266

17.5.1 IMPORTANCE OF PERSONAL SELLING

Salesmanship is an indispensable technique of promotion. The importance of personal selling may be described under the following heads: 1. Benefits to consumers: A salesman acts as a friend and guide to consumers. He informs them of new products and new uses of existing products. He helps them in choosing products, which match their needs and incomes. A salesman guides the customers in buying products that will provide maximum satisfaction. 2. Benefits to businessman: They help in the creation of demand for new products and in the extension of markets for existing ones. Through personal selling, a businessman can not only inform customers of his products but can know their tastes, attitudes and behaviour. Such information is helpful in the design and development of products that match market demand. By creating large scale and regular demand, salesmanship makes planned and regular mass production possible. Salesmen help to build up a favourable corporate image necessary to secure repeat sales. 3. Benefits to society: Salesmanship helps to expand employment and income of a country through large and rapid sales turnover. Salesmen provide marketing information to producers so that consumers can get new and better products. Salesmen perform several non-selling tasks, e.g., after sale service, meeting complaints, conducting marketing research, providing credit information, delivering goods, collecting payments, etc. Salesmen help minimize price fluctuations and trade cycles by matching demand and supply. Check your progress: Define the following terms in your own words: 1. Advertising 2. Sales Promotion 3. Personal Selling 4. Publicity

17.5.2 STEPS IN EFFECTIVE SELLING

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The process of personal selling consists of the following steps:1 1. Pre-Sale Preparation: The first step is the selection, training, and motivation of sales persons. The sales persons must be fully familiar with the product, the firm, the market and the selling techniques. They should be well informed about the competitors products and the degree of competition. They should also be acquainted with the techniques of effective selling and the policies of the firm. 2. Prospecting: It refers to searching out prospective buyers who have the need for the product and the ability to buy it. Social contacts, business associations and dealers can be helpful in the identification of potential buyers. 3. Approaching: Before calling on the prospects, the sales person should know their number, needs, habits, spending capacity, motives, etc. After this, the salesperson should approach the customer in a polite and dignified way. He should make the customer feel that he is getting proper attention of the salesperson. The salesperson should be very careful in his approach as the first impression lasts for long. 4. Presentation: The next step is to gain customers attention. For this purpose, the salesperson has to present the product and describe its features in brief. 5. Demonstration: In order to maintain customers interest and to arouse his desire, the salesperson must display and demonstrate the product. He has to explain the distinctive qualities of the product so that the prospect realizes the need for the product to satisfy his wants. 6. Handling objections: The salesperson should clear all doubts and objections without entering into controversy and without losing his temper. The salesperson should convince the customer that he is making the best use of his money by purchasing the product. For this purpose, the salesman should prove the superiority of his product over the competitors products. He should not lose patience if the prospect puts too many queries and takes time in arriving at any decision. 7. Closing the sale: The salesman should not force the customer but let him feel that he has made the final decision. He should guide the customer in making the choice without imposing his own view. He should assure the customer that he has made the right choice. Sales should be closed in a cordial manner so that the customer feels inclined to visit the shop again. In closing the sale, the article should be packed properly and handed over to the customer with speed and accuracy. 8. Post-sale follow-up: It refers to the activities undertaken to ensure that the customer is satisfied with the article and the firm. It helps to secure repeat sales, to identify additional prospects and to evaluate salesmans effectiveness.

17.5.3 REQUISITES OF EFFECTIVE SALESMANSHIP

Success in personal selling depends u [pm the salesman and the framework in which he works. In order to practice effectively the highly skilled profession of salesmanship, wide knowledge and experience is necessary. To be effective, a salesman should have knowledge of the following types2: 1. Knowledge of Self: The overall personality of the salesman is very important. To make the best use of his personality, a salesman must continuously assess himself and
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analyse his qualities in the light of the requirements of his job. Such assessment will make him fully aware of his strength and weaknesses. He should constantly try to overcome his weak points through training and experience. 2. Knowledge of firm: Salesman should be fully conversant with the history of the firm. He should have a thorough knowledge of the objectives, policies, standing and organizational structure of his firm. Such knowledge will help him to utilize the strong points of the firm in personal selling. 3. Knowledge of product: A salesman has also to convince customers about the features and utility of the product by removing their doubts and objections. Therefore, the salesman should have full knowledge about the nature of the product, manufacturing details, terms and conditions of sale, distribution channels used and promotional activities. 4. Knowledge of competitors: In order to prove the superiority of his product, a salesman must have full knowledge about the competitive products, their positive and negative features. Knowledge of competitors sales policies, their brands and prices, etc, is also helpful. 5. Knowledge of customers: In order to be successful, the salesman must use the right appeal and approach. He should be able to understand the prospects correctly and quickly and to motivate and win them permanently. He should, therefore, have complete knowledge of the nature and type of customers (their age, location, sex, income, education, etc.) and their buying motives (low price, convenience, prestige, fashion, etc). 6. Knowledge of selling techniques: Above all, a salesman should be well-versed in the principles and techniques of salesmanship. He should pay undivided attention to the customer, be courteous and sympathetic towards customers, never loose patience, consider customer as the king, serve the customer in the best possible manner, etc.

17.5.4 QUALITIES OF A SUCCESSFUL SALESMAN

To be successful, a salesman must possess several qualities: 1. Physical Attributes: A successful salesman must have sound health and pleasing personality. His job is demanding and his physique should be sturdy, free from disease and disability of all types. 2. Mental Attributes: A good salesman must have a high degree of intelligence and imagination. He should understand the customer quickly and read his mind accurately. He requires initiative to make additional sale and win permanent customers. 3. Social Attributes: A salesman has to deal with different types of customers. He should have the ability to get along with people of all types. Sociability implies good manners, a liking for people, sense of humour and conversational ability. Good salesmen need to be polite, self-disciplined and courteous. 4. Vocational Attributes: Salesmanship is a highly skilled vocation and requires ambition, aptitude and enthusiasm. A good salesman needs to have creative ability, leadership qualities, urge for excellence, optimism, etc. He must be fully familiar with his firm, its products and customers, competitors products and selling products.

17.5.5 ADVERTISING AND SALESMANSHIP

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As a method of promotion, personal selling is much more flexible and effective than advertising and sales promotion. Salesmen can more effectively convince buyers and procure sales. Salesmanship is essential to convert the effect of advertising into sale. Advertising can only bring customers to the sellers door. Personal selling is required to do the complete job of selling.

Advertising Impersonal Mass communication Creates demand Fast Less expensive Does not provide feedback

Salesmanship Personal Interpersonal Creates sale Slow More expensive Provides feedback

Advertising versus Salesmanship Check your progress Match the following: Advertising Sales promotion Publicity Personal Selling Includes short term and temporary incentives Paid form of non-personal presentation of message Face to face interaction between buyer and seller Not paid for by the sponsor

17.6 SUMMARY
Promotion is the process of communication involving information, persuasion and influence. It includes advertising, personal selling, sales promotion and publicity. The term promotion mix is used to refer to the combination of different kinds of promotional tools used by a firm to advertise and sell its products. 270

Advertising is an important form of promotion. It is useful not only to manufacturer and traders but also to the consumers and the society. Personal selling involves direct and personal contact between the seller and his representative with the prospective buyer.

17.7 GLOSSARY
The various key words, which arise in this chapter, are: 1. Goodwill: Goodwill is an intangible asset valued according to the advantage or reputation a business has acquired. 2. Innovation: An innovation refers to any good, service, or idea that is perceived by someone as new. The idea may have a long history, but it is an innovation to the person who sees it as new. 3. Monopoly: Monopoly is defined as a market situation in which there are many buyers but only one seller. It is characterized by a lack of competition for the good or service that they provide and a lack of substitute goods. 4. Unethical: An action or conduct, which does not conform to, approved standards of social or professional behaviour. 5. Statutory: Related to legislation or prescribed in law or regulation.

17.8 SELF ASSESSMENT QUESTIONS

1. Define advertising. What are its important features? 2. Advertising is a social and economic waste. Discuss. 3. Explain the characteristics of personal selling. 4. Describe briefly the various problems faced by the small scale entrepreneurs in marketing their products. 5. Distinguish between Advertising and Personal Selling.

17.9 FURTHER READINGS

1. 2. 3. Gupta, C.B. and Khanka, S.S., Entrepreneurship and Small Business Management, Sultan Chand and Sons, 2003. Holt, David H., Entrepreneurship: New Venture Creation, Prentice-Hall of India, New Delhi, Latest Edition. Kotler, Philip, Marketing Management: Analysis, Planning, Implementation and Control, 6th Edition, Prentice Hall of India, 1988.

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