Sales Promotion and PR

What is Sales Promotion??

Refers to many kinds of incentives and techniques directed towards
consumers and traders with the intention to produce immediate or
short term sales effects.
Incentive offering
Interest creating
Referred to as extra purchase value or below the line selling!!
3 Distinctive characteristics:
Communication
Incentive
Invitation

Reasons for rapid growth in Sales Promotions

Increasing competition
Customers have become more price sensitive
Products have become more standardised
Consumer acceptance
Emphasis on sales volumes
Increase of impulse buying
Excess Stocks
Element of interest
Possibility of price discrimination
Easy Measurement

Disadvantages:
Short term
Affects quality image
Dealer support
Sales Promotion strategies:
Pull
Push
Combination

Pull Strategy:
Flow of demand- Consumer to Manufacturer
Advertising strategy directed to Ultimate consumers
Use:
Product demand is high
Possible to differentiate products on the basis of real features
High involvement in product purchase
Reasonable brand loyalty
Push Strategy:
Manf- wholesaler- retailer-consumer
Use:
Low brand loyalty
Many acceptable substitutes are available
New product launches
Brand choice is response to displays in stores
Impulse purchase

Consumer sales Promotions

Objectives:
Stimulate trial purchase- new brand
Stimulate repeat purchase
Stimulate larger purchase
Techniques:

Price discounts or price off deals

Price pack deals- Bonus pack, Banded Pack
Refunds and Rebates
Coupons
Contests and Sweepstakes
Sampling- In-store, Door to door, Newspaper, On package
Premiums and advertising specialities
Continuity/Frequency programmes
Exchange offers
Internet promotions

Trade Promotions:
Objectives:
Obtain initial distribution
Increase order size
Increase store traffic
Techniques:

Allowances- Off invoice, Buying, Display/Slotting,

POP displays
Cash rebate
Free goods
Dealer meetings
Spiffs

Salesmen Oriented Sales promotions:

Bonus- sales quota- if achieved- bonus-paid in cash

Merchandise prize
Free travels
Honour /recognition
Sales meeting/conference
Sales literature
Demo kits

Sales Promotion Budget:

Budget factors: Type of product, stage in PLC, Market situation, level of
competition etc
Methods:
Percentage of sales
Unit of sales
Competitive parity method
All you can afford method
Objective end task method

Sales Promotion evaluation:

Pre testing:
Percieved value? Risk?- Focus groups, panels. Portfolio test, trial tests
Concurrent testing:
Modify in process, extend,
Post testing:
Telephone calls, questionnaire, personal interviews

Public relations - Building good relationships with the

companys various publics by obtaining favorable publicity,
building up a good "corporate image," and handling or
heading off unfavorable rumors, stories, and events.
Public Relations, or PR, is the overall term for marketing
activities that raise the public's consciousness about a
product, service, individual or issue..
Every communication to the outside world (and even the
world inside your organization!) creates an impression,
causes an emotional reaction, or makes a statement about
who you are and what values you hold dear. Managing
those impressions, reactions, and statements should be
taken seriously by operating within a carefully planned,
executed, and measured PR strategy.
Publicity: An important part of PR

The Publics
Employees
Shareholders
Trade unions
Members of the general public
Customers (past and present)
Professional research bodies and policy-forming organisations
The media

Establishment of Relations with Public

The world stands divided into 3 sets of people:
There are those who know you and like you
There are those who know you and dont like you
There are those who dont know you and who dont care
PR aims at
To reach a position where those who know you and like you stay that
way
Where those who know you and dont like you- change their opinion
To those who neither know you nor care- wish to meet u and do
business with you!

Objectives of PR:

To promote mutual understanding

To win friends
To influence people
To avoid the risk involved in misunderstanding
To change behavior, attitude of public
To help in fund raising
To persuade individual or groups
To promote goodwill
To forestall attack by competitors or opponents
To improve internal staff relations
To provide information about the activities of the company to press/
news agencies

Drop Sugar for a Healthy Honeylicious Life

Challenge - To consistently create fresh news around honey as a category

Campaign focus- The Indian housewife and her desire to experiment with
healthier food options for her family.

About the Campaign

Dabur strategized to tap huge potential of the honey market in India to
emerge as the market leader with the first-mover advantage.
'Drop Sugar for a Healthy Honeylicious Life' campaign was launched
in 2008
PR campaign strategy focused on raising a debate on the 'sugar
versus honey' issue while building awareness on the goodness of honey
for a healthy life.
Thus, linking goodness to the brand of Dabur Honey, and emphasising its
purity.

The campaign kicked off with special features and television tie-ups in
national and regional media on the use of honey in Indian cooking.
Spectacular book-launch of a Dabur coffee table book on creative honey
recipes authored by nutritionist Komal Taneja. The campaign received a
fantabulous media response during the launch.
Amitabh Bachchan as the brand ambassador helped enormously.
The post-launch strategy saw a stream of honey recipes and placement
of authored articles emphasizing the goodness of honey and its healthy
benefits.
As the ambit of honey grew, in these features and articles, it came to
establish itself as substitute for sugar.
The success of Dabur Honey PR campaign achieved a dramatic
turnaround by growing the Indian honey category, making Dabur Honey
the numero uno in the market place.
The brand saw a growth of 26% in sales in a single year, leading to an
increase in the brand revenue by Rs. 200 million (US$ 4 million) from the
previous year.

Weber Shandwick India. The agency won the inaugural AsiaPacific SABRE (Superior Achievement in Branding and Reputation)
Award for its Dabur Honey PR campaign. , 2009
The campaign- "Drop sugar for a Healthy Honeylicous Life!" was adjudged as the 'Best campaign across the Indian Subcontinent', a category which attracted close to 400 entries from
across the Asia Pacific region.

Case on PR in India

General Motors, USA filed for bankruptcy in 2009.

India-based subsidiaries forced to decide their own fate. Either
follow suit and shut shop, or quickly find a way out.
GM India refused to just give up after being 14 years in the country
Rolled out an effective and immediate PR campaign to retain its
brand value and image despite financial odds
It was an assurance-building campaign aimed at informing
consumers that India and the US were two separate operations for
GM.
The Indian arm was debt-free, self- sufficient and capable of great
after-sales service

Launched an online advertising campaign and started using online

reputation management techniques to counter negative word-of-mouth
A banner ad campaign, titled There for you, There for India went
live across all major sites, such as Yahoo.co.in, Rediff.com,
Moneycontrol.com and IBNLive.com.
To imbibe a sense of credibility within the advertising, the company
used the image of Karl Slym, president and managing director of GM
(India) in their banner ads
Highlighted that GM had already invested over $1 billion in India
The launch of the Cruze brand would be absolutely on schedule
Expressed commitment by inaugurating 250 new sales and service
outlets in India by the end of the year.
On clicking the banner, consumers were redirected to a microsite
where a special FAQs section had been set up to answer various
queries related to the impact of the bankruptcy on India. Will the US
bankruptcy filing in any way impact the Indian operations?, How
about spare parts and service? and What are GMs future plans in

Next, the automobile giant re-sharpened its set of marketing tools

Google.
In just a matter of days, people looking for GM India results were
immediately offered a sponsored link, titled Chevrolet Confidence
(microsite), presented to them along with other results.
Finally GM set up a team of five members, entrusted with tracking
various blogs and online forums, that discussed automobiles and GM
related matters in India.
Interacted with the editorial teams of various automobile sites, such as
Carwale.com, Gaadi.com and Zigwheels.com, to put across the reality
that GM India was not going to be affected by the bankruptcy claims of
its US counterpart.
GM India did the unthinkable and managed to make themselves the
most commercially sought-after car brand in the country, that year !!!

PR disasters!!

The Cricket World Cups shortage of tickets in March 2011

A disappointing image of police officials beating innocent cricket
lovers, looking to buy tickets to one of the World Cups most high
profile matches, enraged the nation. While the authorities attempted
to save their collar by merely tagging the incidents as a product of
mismanagement, no official actually stepped out of their way, to end
the chaos. Despite colossal investments by the ICC, fans were still
seen sitting dejected outside the stadium due to misallocation of
tickets.

The CWG gaffe in April, 2011

The much awaited arrest of the former OC chairman, Suresh Kalmadi,
took place for his alleged financial graft and large scale
mismanagement during the biggest international sporting event that
the country hosted. Intensifying the already dented image of India as
a host-country to international biggies, the incident marked a turning
point in the history of graft arrests in the world.

The anti-graft issue in April 2011

The anti-corruption movement stirred by Anna Hazare and his
followers rocked the very mismanaged foundation of the UPA
government, and saw many politicians run for cover in the wake of
an uprising that rapidly spread over the entire subcontinent. The
incompetent nature of the Lokpal Bill drafted by the government did
not go down well with disgruntled protesters. The dubious intent
and wavering approach adopted by the leaders in power led to their
inability to cope with the mass unrest.

The Digvijay era of politics

Digvijay Singh was a favourite for many a journalist, to fill their
pages with sensational salt and pepper, i.e news. Be it the eye-brow
raising remarks towards opposition leaders, tagging a peaceful
protesters like Anna as violent and linking his roots and those of
Ramdev and Sri Sri Ravi Shankar to that of RSS or calling the most
wanted terrorist as Osamaji; Diggi Raja got it all wrong. The
minister has left behind some serious not to use PR quotes for
other politicians to observe in the future.

The Blackberry service outage in October 2011

The smartphone manufacturer suffered a huge setback due to
failure to cope with their disruption in service for few days, in
India and many countries across the globe. The messaging and
browsing glitches experienced by its users were due to a core
switch failure within the RIM structure No matter how hard the
company tried to cover up their faulty services through a series of
vague communications, their tarnished image could just not be
brought back to its original shine.

Metallicas no-show in October 2011

Cancelling one of the greatest metal band concerts of all times
Metallica was all set to perform in the Capital for the first time,
turned into an event of national shame for the country. A wave of
disappointment swept across the city, angering not only local
Delhi-ites but all those people who had come in from different
corners of the country or for that matter, the globe. Be it
technical glitches, overcapacity at the venue, dismal
arrangement by the organisers, NOC issues or rowdy crowds, the
event had all the ingredients to make it an issue of national
embarrassment.

Paid fans welcome Tom Cruise in December 2011

Did anyone think India would get so insecure about hosting a movie
celebrity that they would actually bequeath the mob to welcome an
international star who is constantly chased by the paparazzi in most
parts the world. According to reports, during the recent visit of the
Hollywood actor to India to promote his upcoming flick Mission
Impossible 4, professional extras were paid to cheer and get
enthralled by the actors arrival. People were heard claiming that
they were paid some close to Rs. 150-300 and offered a
complementary buffet lunch, just to create the desired hype.

PR Fiascos That Were Handled Brilliantly By Management

Johnson & Johnson's cyanidelaced Tylenol capsules (1982 )

The crisis: Seven people died after taking extra-strength Tylenol

capsules that had been laced with potassium cyanide, a deadly poison.
The killer was never found.
How J&J responded: The company put customer safety first. It quickly
pulled 31 million bottles of Tylenol -- $100 million worth -- off the
shelves and stopped all production and advertising of the product. It
also got involved with the Chicago Police, FBI, and FDA in the search for
the killer, and offered up a $100,000 reward.
Post-crisis, the company reintroduced Tylenol with new tamper-resistant
packaging and $2.50-off coupons.
The result: A go-to case study in MBA classes worldwide, Tylenol's
response to the tragic 1982 Chicago murders is regarded as one of the
most successful sequences of crisis management in history.
The media appreciated the lengths J&J went to and its concern for the
public interest, so the company was portrayed generally in a good light,
helping the Tylenol brand to recover.

epsiCo's can tampering rumors (1993)

The crisis: A syringe was allegedly found in a can of Diet Pepsi in

Washington state. The following week, more than 50 reports of Diet
Pepsi can tampering sprung up across the country. It turned out to be a
hoax
How PepsiCo responded: Both PepsiCo and the FDA were confident
that the reports were fabrications, so the company came out hard,
defending itself staunchly against the accusations.
But PepsiCo didn't make vague statements telling the public to simply
trust it. The company produced four videos throughout the crisis, such
as a comprehensive report on its soda canning process. The most
compelling was a surveillance tape of a woman in a Colorado store
putting a syringe into a can of Diet Pepsi behind the store clerk's back.
PepsiCo North America CEO Craig Weatherup appeared on news
stations armed not only with visual evidence of the bogus reports, but
with the explicit support of the FDA. He appeared most notably on
Nightline with FDA Commissioner David Kessler, and they both assured
the public that Diet Pepsi was safe.
The result: The rumors fizzled out within two weeks following multiple
arrests by the FDA for filing false reports. Diet Pepsi sales had fallen 2%
during the crisis but recovered within a month.
The situation required an aggressive defense because PepsiCo hadn't

xaco's racial discrimination lawsuit (1994)

The crisis: Six of Texaco's African-American employees sued the

company for racial discrimination. Damning conversations between
Texaco executives that were secretly recorded seemed to confirm the
issue.
How Texaco responded: CEO Peter Biljur started off with a public
apology and admitted embarrassment. The executives involved were
suspended (with pay but without benefits), pending the result of the
investigations.
Texaco execs went on tour, visiting all branches and sites of the
company in person to apologize to the employees, and the company
hired African-American owned advertising agency Uniworld Group to run
an ad campaign to help douse the flames.
The result: The Reverend Jesse Jackson was the most vocal opponent
to the company, calling for a boycott, but softened his view after Biljur's
response. This was key to the company's image recovery.
Texaco settled the suit, agreeing to pay $176 million. Additional
discrimination checks for executives and managers put in place by Biljur
have prevented the problem from sprouting up again.

Odwalla Foods' apple juice E.coli

outbreak (1996)

The crisis: Washington state health officials confirmed a link between a

local E.coli outbreak and Odwalla's fresh, unpasteurized apple juice. One
child died and more than 60 people became sick, prompting more than
20 lawsuits.
How Odwalla responded: CEO Stephen Williamson immediately
recalled all Odwalla products containing apple or carrot juice, which cost
the company around $6.5 million. He accepted responsibility when
talking to the media and promised to pay all medical costs for those
affected by the outbreak.
Daily press briefings by Odwalla were used to update the public, along
with full-page newspaper ads and a website explaining the situation.
The result: The company had faced its worst-case scenario: death
caused by one of its food products. Odwalla lost a third of its market
value by the time everything subsided, and pled guilty to criminal
charges relating to the outbreak, which resulted in a $1.5 million fine
from the FDA.
But Odwalla was still standing. It focused on customer relations in the
months following, attempting to rebuild trust. Odwalla fixed the
contamination issue and improved its quality control and safety system.
Odwalla re-launched its apple juice two months later. In 2001, Coca-Cola
bought Odwalla for $186 million.

adbury's worm infested candy bars (2003)

The crisis: Two Cadbury chocolate bars were found infested with
worms in Mumbai, India. The Maharashtra FDA quickly seized the
chocolate stock at Cadbury's closest manufacturing plant in Pune.
How Cadbury responded: The company was slow out of the gates. It
released a statement claiming that the infestation was not possible at
the manufacturing stage, while the FDA disagreed, prompting a tussle
between the two. The media jumped on Cadbury, and the brand was
under widespread assault.
Cadbury took its advertising off the air and launched an educational PR
project that targeted retailers. It kept the media updated through press
releases on the specific measures it was taking to correct its
manufacturing and storage processes. The company also imported
new machinery and changed the packaging of its Dairy Milk bars.
Four months later, Cadbury began advertising more aggressively. By
then, the company's relationship with the media had improved greatly.
The result: Cadbury's sales in India plunged 30% in the wake of all
the negative media coverage, and this was during a season when its
sales usually increase by 15%. But over time, Cadbury began to
recover.
Within eight weeks of the introduction of its new packaging and
advertising campaign, sales had almost reached pre-crisis levels. The
company announced eight months after the incident that its consumer

JetBlue's week-long operational

breakdown (2007)

The crisis: JetBlue's operations collapsed after an ice storm hit the
East Coast of the U.S., leading to 1,000 cancelled flights in just five
days.
How JetBlue responded: CEO David Neeleman never blamed the
weather. He wrote a public letter of apology to JetBlue customers,
introduced a customer's bill of rights, and presented a detailed list -which included monetary compensation -- of what the company would
do to help all the affected passengers.
The result: JetBlue didn't dodge the backlash completely. Throngs of
enraged passengers toiled in airports for nearly a week, and they had
reached their boiling point by the time Neeleman spoke up.
But in the weeks that followed, JetBlue managed to quash much of the
uproar by being as public and straightforward as possible. Neeleman
went on YouTube, the Today Show, Letterman, and Anderson Cooper,
not pleading his case, but apologizing for his company's faults.
Though there was much reputational damage done, JetBlue's comeback
allowed it to regain some of its luster. For an airline that differentiates
itself so heavily on customer service, it was crucial that they did.

Toyota's recall fiasco (2010)

The crisis: Toyota recalled a total of 8.8 million vehicles for safety
defects, including a problem where the car's accelerator would jam,
which caused multiple deaths.
How Toyota responded: Toyota initially couldn't figure out the
exact problem, but it sent out PR teams to try and stop the media
backlash anyway. The upper management was invisible in the early
stages of the crisis, skewing public perception further against the
company.
Toyota's response was slow, with devastating results. But it served as
a wake-up call for the company, which somehow turned it around in
the months following the debacle.
The company failed miserably in its initial crisis management, but
that's what makes Toyota's case so intriguing. Despite its
monumental mistakes early on, Toyota still bounced back.
The company offered extended warranties and pumped up marketing,
leveraging its long-term track record and reassuring consumers about
safety.
Its ads in the following months were more thoughtful and sincere,
showing the company's dedication to fixing the problem. Toyota's
executives -- especially in the US became more visible, speaking to
the media and becoming active in the investigations.

The result: The Toyota brand showcased its resiliency, with its positive
reputation built up over decades of good performance. The company
leveraged this, focusing its marketing once again on safety and its
proven track record. It had to show that this disaster -- including its own
horrible mishandling of the situation -- was an aberration.
And it worked, with a little bit a of luck. Toyota was exonerated of the
blame for most of the accidents in 2011 and the company's brand
equity leapt 11% in 2011 according to WPP.