PROMOTIONAL

STRATEGY

What is meant by
Promotion?
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What is meant by
promotion?
.
..
It is PERSUASIVE
COMMUNICATION.
Promotion
is communication
with a
deliberate
deliberate
attempt to
attempt
persuade consumers to buy a
companys
or services.
.. . it aims togoods
communicate
information in a
persuasive manner in order to
induce a desired response, which is purchase.
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#Maggi In A Soup: A case study of how

not to handle a crisis
By Ravi Balakrishnan & Amit Bapna, ET Bureau | 10 Jun, 2015,
05.20AM IST

The 2-minute noodle, Maggi,

got its goose cooked in as
much time, when Nestle
decided to stay mum during a
crisis of mammoth
proportions.
NESTLE INDIA Ltd
For nearly three decades, Nestle's MAGGI noodles was the ultimate
success story: an unlikely product embraced wholeheartedly by a difficult
market. Over the last few weeks, it's become a case study of an entirely
different sort a textbook example of how not to handle a crisis.
To give you some estimate of the size of the problem facing Nestle and
Maggi here are a few statistics: according to the World Instant Noodles
Association, India consumed 5,340
3

Maggie Noodles,
Source: Livemint

Following the reports of high content of lead in Maggi, FDA

Maharashtra conducted its own tests and banned the sale of
Maggi in the state on 6 June. Photo: Reuters
Mumbai: Nestle India Ltd on Thursday filed a case in the Bombay
high court for a review of orders passed by the Food and Drug
Administration (FDA) in Maharashtra and the Food Safety and
Standards Authority of India (FSSAI) banning the sale,
distribution and production of Maggi noodles.
The company has also raised issues of interpretation of the Food
Safety and Standards Act 2011.

Recent Challenges facing the

Promotional Manager.

. Emergence of
new kinds of
promotional
activity like..

. Emergence of
new forms of Promotional
Activity:

known as the THE IMC REVOL

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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 TV/PC/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.

Sponsorships of Events. (Fashion shows, Sports

events, ..

`PRODUCT PLACEMENT IN FILMS:

Mahindra Flyte Power Scooter in 3 Idiots Film.

Product Placement in Films: Canon

Equipment in Film `Jab Tak Hai
Jaan.

What is meant by BELOW THE LINE ADVERTISING

(BTL ADVERTISING)

A company does not have to purchase Ad

space.
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
Companys Brand.
5.
Sales Personnel inside Retail Outlet deployed
near store shelves (Logo on Uniforms).
6. Store Banners given to Retailers by
Companies.
Companies are looking at non-conventional advertising (BTL)
7.media
Nike
Logo
on Air Deccan
as well
as Advertising
Media, Aircraft.
as they get more focused
on Integrated Advertising.
9 9
8. Personalized e-mails useful for targeting high value
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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.

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EXISTING Promotional Techniques Used

by Marketing Managers
TRADITIONAL MEDIA ADVERTISING
- TV,
-Radio,
- Newspaper, Magazines, Cinema

Outdoor Advertising (Billboards, Posters)

Consumer Promotions
Trade Promotions

NEWER MEDIA: NEWER Promotional

Techniques that have been added
Direct Response Advertising :
marketing, Interactive TV

Direct Mail, Tele-

Event Marketing (Sponsorships)

Mobile Phones
Public Relations/Publicity

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MARKETING INFERENCE:
There is a Need for Integrated Marketing
Communications

Recent Concerns in
Promotional
Strategy.
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.

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FLOW CHART MODEL for INTEGRATION OF

ADVERTISING COMMUNICATIONS & PROMOTIONS
ADVERTISING &

SALES PROMOTIONS
PUBLIC RELATIONS
MANUFACTURER
2
PUBLICITY COMMUNICATIONS
PROMOTIONS
1

Which May be:

ADVERTISING

Brand Advertising
Corporate Advertising
Direct Response Ads
PUBLIC RELATIONS

Sponsorships
Event Marketing
PUBLICITY

May be:

Consumer
Promotions
Trade
Promotions
3

Trial Promotions
Repeat Purchase Promotions
POP Displays
Price-Off Promotions
TV /PC Interactive Shopping

RETAILER
PROMOTIONS

All IMC
Activities
Contribute
What is the Difference between
To Brand
Advertising and Promotions? Equity

Customer

Brand Equity in
the form of13
Consumer

DIFFERENCE BETWEEN ADVERTISING

AND Sales PROMOTIONS in the Flow Chart
ADVERTISING
COMMUNICATIONS

Indirect

SALES PROMOTIONS

direct
Cons
umer
Prom
otion
s

Trade s
io n
t
o
m
o
Pr

vertising is Indirect, based

Consists of Direct Externa
On Mental Impressions
Incentives
The Proportion of Expenditure on Advertising
versus Promotions:
(For

Consumer Products): 53%(Adv) : 47% (Sales Prom)

(MacCann-Erickson, U.S. Guide to Marketers)

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The Challenge facing Companies for IMC:

W hat Activities are we integrating? Traditional

with New Forms of Promotional Activity.
Need for
Reason for Integration?
SYNERGY in the
There must be a Common Promotional Mix
Communication Objective underlying
the different forms of Promotional
Activity:
The Communication Objective may be:

Awareness (Through PR, Publicity, Advtg.)

Attitude (Likes/ Dislike toward the Brand)
Conviction

Purchase Intention (Here, more Emphasis is given15to

Consumer Promotions)

WHAT DO WE MEAN BY INTEGRATED

MARKETING COMMUNICATIONS ?

Advertising interacts with other

Marketing Mix Inputs such as the:

Product Performance
Packaging,
BRAND NAME,
Price,
Location,

retail Shelf Display

and other promotional Activities
The Ad Agency may be made responsible by the company for
the Coordinated Integrated Marketing Communications. 16

ALL these ARE

Examining the MARKETING MIX in the

context of INTEGRATED MARKETING
COMMUNICATIONS:
EVERY ELEMENT OF THE MARKETING MIX
COMMUNICATES
PRODUCT (Benefits)
PRICE (Prestige/Value)
PLACE/ LOCATION
(Store Atmosphere)
PACKAGING

INTEGRATED
MARKETING
COMMUNICATION
S & PROMOTION

PERSONAL SELLING

ADVERTISING &
SALES
PROMOTIONS

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All the Elements are Promotional Tools

There is a COMMUNICATION FLOW IN

INTEGRATED MARKETING COMMUNICATIONS
IMPLICATIONS
PRICE
OF IMC

PRODUCT

PLACE
INFORMATION FLOW
from
PROMOTION
each marketing mix element
PRODUCT
COMMUNICATION

PRICE
COMMUNICATION

PROMOTION
COMMUNICATION

PLACE
COMMUNICATION

THE PR
OMOTIO
N AL
MIX ELE
MENTS

INFORMATION FLOW
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PRODUCT OFFERING

ing down to DESCRIBING THE 4 ELEMENTS OF the Promotion

LEMENTS OF THE PROMOTIONAL MIX

How do these 4
Promotional Mix Elements
Differ from each other?

ADVERTISING
SALES PROMOTION
PERSONAL SELLING
PUBLICITY /PUBLIC RELATIONS
Refer to: Second Reading in Polycopy for differentiating characteristics.

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HOW DO THE PROMOTIONAL ELEMENTS DIFFER

FROM EACH OTHER? DEFINING CHARACTERISTICS
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
2020
for news items they carry.
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The Four DEFINING CHARACTERISTICS

OF THE PROMOTIONAL MIX ELEMENTS

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?

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Redefining
Advertising
. broader definition
A

See Reading 2 of
your Polycopy

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.
Q. `Are personalized e-mails sent to
prospects, advertising or direct
marketing? Are logos advertising or
sales promotion?
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Q. Which forms of promotion are not 22

RECENT ISSUES THAT HAVE BEEN RAISED

Defining/Redefining
Ref: Second Reading in Polycopy
`Oracles of Advertising.
Advertising.
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).

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How Important is PUBLICITY in

the Promotional Mix
It is possible for a Brand to be
built primarily on Publicity?
Tatas `Nano (Initial
Publicityprior to product
launch.)
Example:

Cricketis
Series
1.IPL
Publicity
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.
The
New relaunched `Beetle in the US

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market (1998) was also primarily built up

Example
of

CEO of Renault Nissan with Tamil Nadu CM and former

PM of Japan Yoshiro Mori, unveiling the India Plant at
Chennai.

Public
Relations

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Which Element of the

Promotional Mix is this?

Public
Relations

Flagging off Reva Electric Car

Companys new model. (2008)

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Which Element of the

Promotional Mix is this?
Flagging off
the I10
Kappa..

2009

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

2009
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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.

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Importance of PERSONAL SELLING

as an Element of the Promotional Mix:

Much of IBMs success (1980s

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.
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The Initial use of PR is generally

followed by Publicity..
EXAMPLE

Ford Motor in India

PRAlan(2009)
Chief Executive
MULALLY UNVEILED THE Figo in Chennai.

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EXAMINING the PLC Curve for THE

ROLE OF ADVERTISING versus SALES
PROMOTION
The Relative role of Advertising
versus Sales Promotions varies
according GROWTH
to stages
of the
plc
INTRODUCTION
MATURITY
DECLINE
SALES

Adv: High if Market Leader Brand

Sales Prom: Low if Market Leader Brand

Adv: High
Sales Prom: Low
Adv: High
Sales Prom: High

NITIAL Adv: May be Low/ High

NITIAL Sales Prom: May be
High to Induce Buyers

PLC STAGE

SOURCE: ROSSITER
& PERCY See Polycopy Reading
Pg.

The % of Expenditure on Advertising to Sales

Promotion will change as the PLC progresses.

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RELATIVE ROLES OF ADVERTISING AND PROMOTIONS ACCORDING

TO PLC STAGES
PLC STAGE
1.

ADVERTISING

INTRODUCTION

PROMOTIONS COMMUNICATION
OBJECTIVE

HIGH

HIGH

Awareness

2. GROWTH STAGE
MARKET LEADER

HIGH

Me-Too PRODUCT

LOW

LOW

Brand Identity
HIGH

Induce Trial

3. MATURITY
HIGH

HIGH BRAND LOYALTY

LOW

Brand

Image
LOW
HIGH
INTRODUCTION GROWTH MATURITY DECLINE

LOW BRAND LOYALTY

Buyers
4.

DECLINE

SOURCE: ROSSITER
& PERCY

NONE

Hold

LOW (Trade Promotions))

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How will the allocation of the Promotion

Budget in terms of Proportion for
Advertising vs Sales Promotion change
over time?
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.

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What are the

Product Life Cycle Promotional Implications
for the Manager?
Implications Regarding
Market Share?

Promotional Expenditure is decided on

the basis of the Companys Market Share
Objective of Brand:
Also whether it is an New Brand or Existing
Brand.
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PLC Promotional
Implications for Brand
Equity
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
(Next Time)

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En
d

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