Everything you need to know about the factors affecting promotion mix. A business’s total marketing communications programme is called the “promotional mix”.
It consists of a blend of advertising, personal selling, sales promotion and public relations tools. The particular way in which a marketer combines promotional activities is known as promotion mix.
Designing a proper promotion mix is called promotional strategy. There are many factors which influence promotion mix. These factors are called product-market factors.
The factors affecting promotion mix can be studied under the following heads: 1. Product Related Factors 2. Customer Related Factors 3. Organisation Related Factors.
The factors affecting promotion mix are:-
1. Nature of the Product 2. Nature of the Market 3. Stages in the Product Life Cycle 4. Market Penetration 5. Market Size 6. Characteristics of Buyers 7. Distribution Strategy 8. Pricing Strategy
9. Cost of Promotion 10. Availability of Funds 11. Effectiveness of Promotional Tools 12. Nature of Technique 13. Readiness of Buyer 14. Promotional Strategy 15. Co-Ordination with Other Elements of Marketing Mix and a Few Others.
Factors Influencing Promotion Mix: Nature of the Product, Nature of the Market, Stages in the Product Life Cycle and a Few Others
Factors Affecting Promotion Mix – 10 Main Factors: Nature of the Product, Nature of the Market, Stages in the Product Life Cycle, Market Penetration and a Few Others
The following are the factors influencing promotion mix:
1. Nature of the Product:
Promotion mix will vary according to the nature of the product. Consumer goods require mass advertisement. But industrial goods require personal selling, advertising, displays etc. Complex and technical products like computer need personal selling.
Non-technical products require advertising as promotional device. In case where there is no brand differentiation personal selling should be the method of promotion. Where there is brand differentiation advertising should be emphasized.
2. Nature of the Market:
For industrial market, advertising plays an informative role, but for consumer market it plays as informative as well as persuasive role. The promotion strategy varies with the target groups depending on age, sex, education, income, religion etc.
3. Stages in the Product Life Cycle:
The marketing objectives and strategies are different at each stage of the product in its life cycle. During the introductory stage intensive advertising and personal selling are required for effecting product awareness.
During growth stage advertising should be extended to maximize the market share. During maturity stage persuasive advertising and sales promotion techniques are beneficial. But at the declining stage advertisement and sales promotion are reduced to the minimum.
4. Market Penetration:
A product having good market penetration is well-known to the buyers. In that situation, middlemen are motivated to spend more an advertising.
5. Market Size:
It there is limited number of buyers, direct selling is enough. But if the market size is large the promotional tool is mainly advertising.
6. Characteristics of Buyers:
Experienced buyers of industrial product need personal selling. The experience of buyers, the time available for purchase, influence of friends, retailers etc. are the factors affecting promotion mix.
7. Distribution Strategy:
If the products are directly sold by the manufacturer personal selling is the tool of promotion.
Advertising is only a supporting tool. Personal selling and advertising is required for market penetration. If the product passes through a longer channel more importance should be given to advertising and less importance to personal selling.
8. Pricing Strategy:
Pricing influences promotion strategy. If the brand is priced higher than the competitor’s price, personal selling is used. If the price is comparatively low only little promotion is needed. If the middlemen are allowed higher profit margin, sales promotion at dealer level is important.
9. Cost of Promotion:
The cost of the media of advertising and sales promotion tools should also be considered while deciding the promotional mix.
10. Availability of Funds:
If the funds are adequate the firm can spend more for advertising and sales promotion. But small firms with limited resources can depend on personal selling.
Factors Affecting Promotion Mix – Nature of Product, Nature of Market, Stage of Products Life, Availability of Funds, Distribution Strategy, Pricing Strategy and a Few Others
Designing a proper promotion mix is called promotional strategy. There are many factors which influence promotion mix. These factors are called product-market factors.
These factors are briefly explained below:
Factor # 1. Nature of Product:
Promotion mix will vary according to the nature of the product. Consumer goods like grocery items, drugs etc. require mass advertisement. Industrial goods like machine tools require personal selling, advertisement, publicity, display at industrial fairs, etc. Convenience goods require salespersons to sell. Specialty goods like refrigerators require good amount of personal selling to dealers and retailers. Complex and technical products like computer requires personal selling.
Simple and non-technical products require advertisement. When a producer’s brand is not differentiated from that of competitor’s (e.g., sugar), the producer has to depend on personal selling. If the product brands are differentiated (e.g., Ponds and Lakme), the producers have to depend upon advertising.
Factor # 2. Nature of Market:
Nature of market and customers determines, to a great extent, the promotional mix of a firm. For instance, if the customers are concentrated in a particular locality, personal selling is likely to be more effective. But if they are scattered widely in different parts of the country, advertising publicity, sales promotion and personal selling—all are necessary to push up a product. Advertisement and publicity are also important to attract the status- conscious customers.
Factor # 3. Stage of Product’s Life Cycle:
The stage of a product’s life cycle is an important determinant of promotion mix. During the introduction stage, the customers are to be informed about the availability of the product and educated about its benefits and uses. That is why, most of the firms make use of all kinds of promotional activities to launch their products successfully.
After the product has been launched, advertisement and publicity are more important to create continued patronage of the customers, to create a good image of the product and its manufacturer and to meet competition in the market. But during the last stage of the product when its sales are declining, it may be decided to make drastic cuts on promotional efforts.
Factor # 4. Availability of Funds:
The allocation of funds by the top management for the promotional activities must be kept in mind by the marketing manager while determining the promotional mix of a firm. 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. Personal selling is cheaper and more effective in the short-run. Advertising in reputed magazines and journals is very costly, but can attract the status conscious customers towards the product of the firm.
Factor # 5. Distribution Strategy:
Companies having market penetration depend on both personal selling and advertising. Companies having market penetration directly depend heavily on personal selling and advertising plays a supporting role. If the product passes through a longer channel of distribution, the marketer will have to give more importance to advertising and less importance to personal selling.
Factor # 6. Pricing Strategy:
Pricing strategy influences the promotion mix in two ways. Firstly in terms of the price of the competitor’s brand and secondly in terms of the margin allowed to the middle-men. If the brand is priced higher than the competitors’ price, personal selling is adopted.
If the brand is priced lower than the competitors’ price, only little promotion is needed. If the middlemen are allowed higher profit margin, the middlemen are motivated to stock and push the brand and very little advertisement may be required. If profit margin is lower, heavy advertisement will be required.
Factor # 7. 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 lay a greater role. During the conviction stage, personal selling is very effective.
Personal selling and sales promotion are highly effective at closing the sale stage. Thus, advertising and publicity are more effective during the early stages of the customer buying decision process, whereas personal selling and sales promotion are more effective during the later stages of the customer buying decision process.
Factors Affecting Promotion Mix – 7 Important Factors: Nature of Product, Stage of Product’s Life, Availability of Funds, Nature of Technique and a Few Others
(i) Nature of product – Different products require different tools of promotion. In case of industrial goods (like plant, machinery etc.) personal selling is most effective. On the other hand, advertising and publicity are more important in case of consumer goods, particularly low-priced convenience goods for daily use.
(ii) Nature of market – If the number of potential buyers is small and the customers are concentrated in a particular locality, personal selling is likely to be more effective. Where the numbers of customers are large and they are scattered widely in different parts of country, advertising and sales promotion are required to sell the product.
(iii) Stage of product’s life – During the introduction stage of a product, main aim of promotion is to create primary demand by emphasising the product’s features, utility etc. Therefore a combination of advertising and publicity is required. During the maturity stage, advertising and personal selling are needed to meet competition. During the decline stage sales promotion is used to push up sales.
(iv) Availability of funds – If funds are large, a combination of promotional methods can be used. But in case of financial constraints the firm has to be selective in use of promotional tools.
(v) Nature of technique – Each technique of promotion has its unique features. Advertising is an impersonal method of promotion, therefore, it can be used for both building a long-term image of the product and selling it. Personal selling involves face to face presentation. Sales promotion offers incentives and induces buyers to buy now.
(vi) Promotional strategy – Promotion mix depends to a great extent on whether a company follows push or pull strategy to create sales.
(vii) Readiness of buyer – Different tools of promotion are effective at different stages of buyer readiness. Advertising and publicity are more effective during early stages of buying, whereas personal selling and sales promotion are more effective during the later stages.
Factors Affecting Promotion Mix – Product Related Factors, Customer Relates Factors and Organisation Related Factors
Each element in a promotion mix should strengthen the messages of the others:
1. Product related factors.
2. Customer related factors.
3. Organisation related factors.
1. Product Related Factors:
The factors that influence the promotion mix related to product are:
a. Product Information:
To make the consumer aware of the product advertising is simple idea to be emphasised so that consumers easily observe the product. Advertising is also used for products that are familiar to consumers. The message through advertisement is relatively simple and easily understands.
To demonstrate complex idea personal selling and sales promotion are emphasized such as display at point of purchase (POP) demonstrations and printed brochures. To experience the product and ask questions. Ex- Advertisement of Pure it water purifier.
b. The Stage of the Product in its Life Cycle:
Each stage has different objectives and tools for the promotion in the product life cycle. In stage 1 i.e., introduction to basic promotion objective is to inform, which helps the customer to create awareness and interest in the product. Direct marketing sales promotion and publicity help reach potential customers and induce trail purchases by offering coupons and free samples. Personal selling also helps reach intermediaries to ensure adequate distribution.
The product type i.e., industrial or consumer affects the promotion mix. To give the customer detailed and personalized information in case of consumer products heavy emphasis is placed on advertising. Personal selling is more important industrial products. Advertising can reach large number at less cost. Personal selling is costly, but effective for industrial customer as there number is less.
2. Customer Related Factors:
The factors influencing promotion mix are- (a) Characteristic of the target market and (b) type of buying decisions.
Advertising is the most commonly used tool of promotion. It is an impersonal form of promotion. There is no direct contact between the advertiser and the promotion target. Personal selling is flexible and personal form of promotion.
There is minimum wastage, development of relationship with the customer and direct feedback. When the market is large and wide Advertising is suitable. If it is narrow and limited personal selling can be effective.
(b) Type of Buying Decisions:
Consumers are faced with purchase decisions every day. Some decisions are more complex than others and thus require more effort by the consumer. Other decisions are fairly routine and require little effort. For a retailer it is important to understand how consumers treat the purchase decisions they face.
Because consumers often buy on emotions, ads can affect the buying decisions. Consumer products are often advertised on television in a way that tries to create an emotional tie with the buyer. For Ex- Car ads that stir emotions of envy for racing the streets like a race car driver.
3. Organisation Related Factors:
These factors take into account:
a. Marketing Channel and Promotion Strategy:
The factors that influence development of a promotion is the push strategy and pull strategy. In the push strategy the manufactures promotes its product through the middlemen such as wholesaler, who would actively promote the product to retailers and the retailers would actively promote it to the final consumers.
Examples are- sales contests for salesmen, dealer contest for intermediaries, incentives and commission for the salesman as an reward for selling the product.
A pull strategy the manufacturer stimulates the consumer to ask the retailers for the product. Retailers will ask the wholesalers and they ask the manufactures for the product. This is with consumer products where the consumers’ pull’ the product through the marketing channel.
Example- Coupons and consumers sweepstakes. The marketer in case of push strategy may ask the supermarket, discount stores, department stores to setup demonstrations and encourage the retailers to give their brands more shelf space. In case of pull strategy marketer also spends on advertising and on consumer sales promotion such as free samples:
b. Branding Strategy:
A firms branding strategy implies using goodwill of its existing brand name to promote new product.
When a firm introduces a new product it has three main choices:
(i) It has developed new brand elements for the new product.
(ii) It can apply some of its existing brand elements.
(iii) It can use a combination of new and existing brand elements.
Branding enables the firm assured control over the market. Repeat sales are stimulated and product substitution is not possible. It creates an exclusive market for the product. Branding also reduces price flexibility. An image must be created for each brand in order to accept the brand at each level of marketing channel.
Maruti has different brand of cars 800, Alto, Wagon-R, Swift etc. Where one brand is different from other. But under the Umbrella of Maruti different cars are launched at different price range.
c. Pricing Strategy:
Companies can use several pricing techniques to stimulate early purchase. The manufacturer invests heavily in advertising so that the retailer suggests the retail selling price. That is attractive to customer. This helps to build strong consumer demand and brand loyalty. For the retailers the advertising helps fast turnover so that he can stimulate sales.
Determining the promotional budget is a significant task of the retailer. Retailers should use the marginal analysis method for determining the budget, as it is the most appropriate method for determining this budget which can accomplish the objectives of the retailer.
The marginal analysis method helps to find out the level of promotional expenditure that maximize the profits generated by the promotional mix. Retailers spend the largest portion of their promotional budget on developing advertisement and on sales promotion activities.
This organization related factor is related to the personnel of the firm. Some firms lack experience with certain promotion elements and therefore does not use them. To have strong influence of promotion powerful and resourceful executives should be part of the firm to approach to promotion.
Factors Affecting Promotion Mix – 5 Major Factors: Nature of the Product, Nature of the Customer, Product Life Cycle, Availability of Funds and a Few Others
The promotion mix is an assortment of the four tools of marketing, i.e., personal selling, sales promotion, advertising and public relations. Companies should adopt a balanced combination of the four aspects taking into account the broad objectives of the business, the marketing policies and some other important issues.
The major factors that influence the promotion mix decision are as follows:
Factor # 1. Nature of the Product:
Different products require different promotional methods. The nature of the product dictates the combination of different promotional tools that would best suit its requirements.
Consumer products can be necessities, speciality goods or luxury items. Demand for daily use goods can be created easily with advertising while speciality items may require personal selling efforts.
Factor # 2. Nature of the Customer:
The nature of the customer, whether he is urban or rural, whether he belongs to the masses or elite class, and his degree of price sensitivity will influence the promotion mix. If the target customer belongs to the urban masses, he can be easily reached through traditional means of marketing, but if the target customer belongs to rural India, the company would have to approach him using a different marketing tactic.
Factor # 3. Product Life Cycle:
The stages of the product life cycle have to be analysed to determine the promotion mix. In the introductory stage, heavy expenditure in sales promotion and advertising have to be incurred to create awareness about the product.
When the product reaches maturity stage, reminder advertising would be enough as customers are already aware about it. It is best to cut down promotional costs during the decline stage.
Factor # 4. Availability of Funds:
The amount of funds available for the purpose plays a vital role in deciding the combination of promotional tools. In case of a small budget, expensive means like public relations cannot be used. When the marketing manager has to work within the constraints of a limited budget, he should make the best allocation of it by choosing low cost promotional methods.
Factor # 5. Co-Ordination with Other Elements of Marketing Mix:
Promotion mix is just one aspect of the overall marketing mix, so it has to be planned in a manner that fits together properly with the other marketing decisions related to product, price and distribution.
Factors Affecting Promotion Mix – Factors to be Considered by Companies while Determining the Promotion Mix Strategy
Companies must consider several factors in developing their communications mix.
Following are the major factors considered by companies while determining the promotion mix strategy:
1. Nature of Market:
When the target market is large and spread over a wide area across the country, advertising and sales promotion are considered to be more effective media of promotion. Though, selection of the promotional mix may depend on other market factors also, such as intensity of competition, consumer’s characteristics and requirement of channel members.
2. Type of Product:
The promotion task counts upon the type of product marketed. Low-priced, frequently purchased consumer goods such as toilet soap, toothpastes, soft drinks, etc., will require frequent repeat messages to influence and remind the existing consumers about the brand and to persuade new consumers to buy. Advertising is used for such products on a mass scale at a high frequency.
The promotion mix will consist of press ads, magazine ads, TV spots, cinema slides, incentive offers, contests, etc. Promotion mix and sales presentations, product demo, exhibition, personal selling becomes necessary for an industrial product of high value and high technology which is purchased infrequently.
3. Stage in the Product Life Cycle:
Promotion mix is subject to change on the stage at which the product is in the PLC. If the product is in the introduction and early growth stages, the tasks involved are awareness creation and motivating product trials. The best promotion mix will comprise of publicity, spreading information, advertising, consumer sales promotions and trade promotions.
Later, as the product reaches the maturity stage, the objectives of maintaining brand loyalty and creating brand preferences become more important. Aggressive brand advertising and dealer promotions become important components of the promotion mix at that stage.
4. Budget Availability:
The budget availability with a company has to be considered while deciding the promotion mix because promotion tool utilisation keeps adding the cost. Companies with limited resources will have to go for localized activities like dealer display, wall paintings, and personal selling. Companies with larger resources can go for large scale and more sophisticated promotion tools.
5. Buyer-Readiness Stage:
Communication tools differ in cost-effectiveness at different stages of buyer readiness. Advertising and publicity play the most significant and crucial roles in the awareness-building stage. Customer comprehension is primarily affected by advertising and personal selling. Customer conviction is influenced mostly by personal selling.
Closing the sale is influenced mostly by personal selling and sales promotion. Re-ordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder advertising.
6. Type of Product Market:
Communications mix allocations vary between consumer and business markets. Consumer marketers are likely to spend comparatively more on sales promotion and advertising; business marketers tend to spend comparatively more on personal selling. Personal selling generally is used more with complex, expensive, and risky goods and in markets with fewer and larger sellers (hence, business markets).
7. Company Policy:
All the considerations given should fit in with the overall marketing and promotion policy of the company, while deciding the promotion mix. The conviction of the top management in the role of promotion, the product market strategy, and the type of corporate image it wants to project are the factors that influences the decision.
Factors Affecting Promotion Mix – 7 Important Factors: Nature of the Product, Broad Differentiation, Product Complexity, Purchase Frequency and a Few Others
Promotional mix includes an ideal proportion of each element of promotion i.e., advertising, personal selling and direct promotional activities.
In determining, an ideal promotional mix, the following factors must be considered:
1. Nature of the Product:
The nature of the product influences the decision of the promotion manager with regard to the selection of promotion mix. Many grocery items (generally mass consumption items) are best promoted primarily through mass consumer advertising combined with good display at retail level; while most of the drug products are not placed for mass advertisement in newspapers and popular general journals.
They are mostly advertised in medical journals and personally promoted be medical representatives or salesmen pharmacists. They contact the physicians and surgeons who are the best agent for promoting a drug product. Similarly, convenience items like gift packs are promoted through personal selling combined with window display, while many of industrial products most of high unit value require a quite different mix.
2. Broad Differentiation:
It is another variable in determining Promotion mix. It shows the degree to which a marketer’s brand usually affects the Promotional mix. Products having not much differentiation, say Modern bread or Britannia bread, personal selling will be the best way of promotion emphasising to get the product stocked in as many retail outlets as possible and to secure maximum and effective shelf space display. But in case of products having much differentiation like cosmetics, advertisement shall occupy a prominent position in the promotional mix.
3. Product Complexity:
Product complexity is another determinant of Promotional mix. If a product is of complex nature, highly trapped and expertised salesmen are required to contact the concerned consumers. Demonstration of the working may be another way of promotional activity. If the product is not of complex nature, the firm concentrates much attention on mass advertising media.
4. Purchase Frequency:
It shows how frequently the final buyer buys the product. If a product is frequently purchased by the end-consumers. The marketer may depend upon mass advertising media to develop brand recognition among consumers, which creates a favourable disposition towards the product.
But in case of products rarely or not frequently purchased by the consumers, heavy expenditure on advertisement cannot be justified. In such cases, personal selling may be the best promotional device, persuading the proper outlets to stock the product and to push it over competitive branch when final buyers come to buy. Thus, purchase frequency has a decisive role in the determination of promotion mix.
5. Stage in the Product Life Cycle:
Different promotional mix will be required in different phases of the product life Cycle. At introduction stage, personal selling method is preferred because the innovator wants to study more about the product and its features in relation to other similar products in the market, consumers’ behaviours. Advertisement may also be undertaken at this stage as it has its informative value. But during maturity stage of the Product Life Cycle, demonstration effect works well and the consumers follow the crowd.
6. Nature of Market:
Promotional strategy and promotional mix change from market to market. The distinction is very conspicuous, in the case of industrial buyers’ and consumer buyers’ market. In industrial buyers’ market, advertising and personal selling both play important roles. Advertising play more of an informative role where as personal selling plays more of a persuasive role.
But in consumer buyers’ market, advertisement plays informative as well as persuasive roles. Similarly, other variables like sex, fashion, age, education religion, place of residence etc., are worth consideration whereas these variables have no meaning for industrial buyers. For industrial buyers, certain other variables like relative size, bargaining power, buying responsibility etc., influence the promotional mix decision.
7. Changes of Various Elements:
Promotional strategy changes as soon as the various elements in the promotional mix change. The promotion for a matured product, generally aims at reminding the existing customers of its nature and value, whereas the promotion for a radically different new product aims at providing the early buyers with the information, they need to make buying decisions. Various promotion mixes may differ in their effectiveness in attaining these two different aims under various conditions. Hence, Promotional Strategy changes from time to time.
In a nutshell, one can asset that promotion is a key element in overall marketing strategy. Various promotional forms are communication devices which convey the producer’s messages to consumers, but quite in different ways and effects. These elements thus play various roles in overall marketing strategy and if the management that has to decide a suitable promotional mix to suit the needs of the concern.
The main aim of all production activities is to sell the product and make profits. Manufacturer makes, all efforts to sell maximum amount of his product and in his efforts, he uses or tries to use an ideal promotional mix so that the main objective of the business to sell maximum amount of his product and earn profit. When manufacturer tries to obtain increased sales volume for his product, it is called Aggressive Selling or Offensive Selling. In this efforts, the manufacturer uses all his resources to get the objective of a higher sales volume by expanding the market for the product.
Aggressive selling answers the question —how much does the firm gain (in terms of sales volume with profit) by employing the various resources? It has an express objective of getting higher sales.
Higher sales can be obtained from both or any of the following two ways:
(a) By adding more customers, loyal to the product – It is possible when market of the product is expanding.
(b) By capturing larger share of the total market demand – This can be done by pursuing the users to switch over to company’s product. In this situation, we assume that the market of the product is state (or the total demand of all the brands of the product in the market is static) one can increase one’s sales only by snatching the market from ones competitors.
In the words of Whitehead “In case of an expanding market, the firms may stand to gain by following the methods of Aggressive Selling. But, if the market is static manufacturer of a new product will have to be much more aggressive to capture the established market of competitors”.
Factors Affecting Promotion Mix – Primary Factors and Secondary Factors
For effective marketing, more than one promotion tools are used in every day practice. It is a common practice of combining various factors of promotion mix for efficient and better marketing management. In an efficient communication mix, care should be taken for deciding promotional tools and combination of those for achievement of objectives.
Marketing management should use the combination of the tools available for optimum results. The selection of proper marketing promotion mix will only ensure better growth with increase in profits.
Selection of marketing mix is affected by following factors:
1. Primary Factors:
i. Nature of Target Market:
Target market is a prominent factor which decides the faith of product and profits.
Following are the characteristics of target market which affects promotion mix for particular product:
a. Size of Market:
Size of market affects target market and which in turn affects selection of appropriate marketing promotion mix. Large size of market for example demands advertisement and there, personal selling is ineffective. On the other hand lower market size requires personal selling which is lower in cost compared to advertisement.
Advertising is expensive but only apparently, but it reaches in wide range of customers and prospective buyers which results in lower cost per individual, so, number of audience decides which type of promotion strategy should be used.
b. Socio-Economic Considerations:
Socio-Economic characteristics like age, sex, income, education etc. matters in selection of promotion mix.
If a product is for kids, printed advertisement tends to be useless. Instead of that, colorful, simple but attractive advertisement is useful.
Education is also a major factor in selection of promotion mix.
If target customer is uneducated then, audio visual becomes effective rather than advertisement in newspaper.
c. Concentration of Customers:
Concentration of customer in a particular geographical location decides which promotion tool is used. If customers are scattered over different areas then mass advertisement campaign is useful and essential and in that case personal selling becomes ineffective.
Some promotional tools are effective in some areas only because of their special attributes.
For example, advertisement for woolen clothes are useless in deserts.
d. Methods of Distribution:
If product is distributed selectively then it must be promoted through personal selling method.
However, if intensive distribution is used, means firms appoints many distributers.
This is done in case of daily usable goods and articles like salt, toothpaste, washing powder, detergents, soap etc. where advertising is more effective.
ii. State of Product Life Cycle:
Product comes and goes from market. It is a cycle called as product life cycle which involves steps from which it passes. It starts from introduction to the market and ends being obsolete. During these all stages, promotion have different objectives and hence different elements of communication are used in this different stages.
It is explained below:
a. Introduction to the market- High level of advertising is generally required in this stage because it decides future of the product.
Personal selling is used for finding distributers, wholesalers, retailers etc.
b. Growth stage- In this stage advertising is used to stabilize sale of product. People are buying product and advertising ensures continuity in this sale.
c. Maturity of product- This stage is of high level of competition and hence advertising is assisted with sales promotion in the form of attractive offers and contests etc.
d. Decline stage- Personal selling is done in this stage because it is economical and because sales are declining so promotional expenses are stopped.
e. Obsolete stage of product- All promotional efforts are stopped because product is withdrawn from market in this stage.
Generally product is withdrawn because of introduction of upgraded version of the same product or newer version of product with some major amendments.
Various stages of product life cycle affects different promotional mix.
iii. Nature of Product:
Nature of product undoubtedly affects promotion mix for some obvious reasons. There are two types of products requiring attention by marketing department for selection of appropriate marketing promotion mix.
a. Consumer Products:
These products are directly consumed by customers hence, no of customers are very large and that is the reason advertising becomes essential and necessary. Mass communication techniques like T.V advertising, public campaigning etc. are applied for promotion.
Advertisement of various smart phones and tablets are very common on television.
b. Industrial Products:
Products which are used in industry are called industrial products.
E.g. raw material, plant and machinery, furnace, equipments, tools and parts etc.
Expertise requires for production and sale of such types of products hence personal selling is done with the help of experts as salesmen. Hence product and its nature amend decisions regarding promotion.
iv. Pricing Policy:
Pricing decisions are crucial in deciding promotional strategies to be used as a part of promotional mix.
Pricing affects choice of promotional tool for a product. High price products are seldom sold with one promotional tool. High price of a product requires advertising as well as personal selling.
High price catches risk of disinterest which should be removed by personal selling, while brand must be established with advertising. Low price product on the other hand requires only advertising on a mass level and on a regular basis. Various aspects are required to study before setting prices which includes profitability, skimming, market share, survival, estimated demand curves etc.
v. Pushing and Pulling Method:
Push strategy is pushing promotion through intermediary levels of distribution like wholesalers, retailers.
In pull strategy producer directly takes responsibility of sales promotion via mass communication and advertisement. Pull strategy is responsible for increase in demand and creation of want for product.
2. Secondary Factors:
i. Promotional Objectives:
Hero Motor corporation’s pleasure was introduced as a women’s scooter which was heavily advertised on mass level via T.V, Radio, Hoardings and on social media. Later new color range were introduced by the company in a same scooter, i.e. pleasure, which was advertised with low priority and promoted via personal selling with high priority. Thus promotion objectives matter how to promote a particular type of product in a market.
ii. Level of Competition:
Heavy competition requires all factors of promotion in order. If on the other hand level of competition is low then only mass communication of product is sufficient and personal selling may or may not be opted as a secondary way of promotion.
iii. Seasonal Product:
Some seasonal products are marketed via advertisement when on-season time and during off season when product demand is very low, personal selling is used as a promotional tool.
Advertisement of Usha fans were only visible at times of summer just for 2 months and rest of the year only personal selling was used to promote the product.
E.g. of some seasonal products- Raincoats, umbrella, woolen garments, heater, A.C etc.
iv. Brand Value:
If Brand value is higher, then only reminder advertisement is enough but low brand product requires blending of advertisement and personal selling.
Apple only advertised date of its new product launch, viz- Apple i-phone 5.
Such is the high brand value of apple that people were actually looking forward for i-phone 5 and created massive demand for the same.
v. Availability of Promotional Tools:
Sometimes because of non-availability of some promotional methods, marketer must select appropriate method from those which are available.
Growing trend in respect of using an optimum mix of both personal selling as well as advertising with additional concentration on technological aspect is applied so that product lasts for a long time in the market.
People still buy Philips radio in spite of the technological changes and modernization.
Factors Affecting Promotion Mix – The Product, The Buyer, The Company and The Channel Choice
The promotion mix of any organisation is a combination of the above four elements that is advertising, sales promotion, personal selling and publicity.
How to blend all these four elements of the promotion mix, the amount to be allocated for the various forms of promotion, such decisions are influenced by the following factors:
Factor # 1. The Product:
The nature of the product determines the form of promotion undertaken by the marketer. Products like toys, toilet soap and cosmetics are effectively shown on television. Products targeting children will not use press advertisements as a means of promotion. Industrial and specialty goods are promoted through technical journals and through salesmen. Mass selling consumer goods are promoted through advertising, and sales promotion.
Factor # 2. The Buyer:
The promotion mix used by the marketer also depends upon the type and nature of the buyer. If the marketer has to provide realistic solutions to the problems of the buyers, they must know their customers, their needs, their desires, their attitudes, values, expectations and aspirations. Hence first the marketer must have an up to date information about who his buyer is and depending upon the characteristic and nature of his buyers the marketer decides upon that promotion mix which will most appeal to his class of buyer.
Factor # 3. The Company:
Every firm has a unique public image in the market. The firm’s image must be closely associated with the promotional strategy so that its goodwill can be exploited. The image and reputation of the brand cannot be separated from the corporate image and reputation of them. In fact just as every child has a reflected reputation of his family (that is his birth right) so also every brand has a reflected corporate image of its company. Thus the promotional mix of a company should be so designed that it matches the corporate reputation, as well as it gains the maximum mileage from the corporate image.
Factor # 4. The Channel Choice:
The promotional strategy also depends upon the channel or the route through which the products flow from the firm to the consumer. And the choice of channel depends upon the promotional strategy used by the organisation. Basically there are two promotional strategies that are used. They are the ‘push’ strategy and the ‘pull’ strategy. When an organisation used the pull strategy, it undertakes advertising on a large scale. All the promotional efforts of the company are targeted directly towards the consumer.
Due to this kind of intense mass communication, the consumers demand the product to such an extent that they literally pull the product from the retailers who in turn demand the product from the wholesalers, and the wholesalers on their part are forced by pressure of demand to stock the product. When this strategy is used, all channel members are forced to stock the product due to incessant demand and hence the dealer margins are lower in pull promotion. Personal salesmanship has a secondary role in pull promotion and the marketer relies on intensive distribution.
When the push strategy is adopted the producer directs all promotional efforts mainly on the middlemen that are the wholesalers and retailers. The product is pushed through the channel. Hence the flow of promotion and flow of goods move from the producer to the wholesaler and from the wholesaler to the retailer and from the retailer to the consumer. Industrial strategies are mostly the push type of strategies relying mostly on personal selling.
In the push strategy personal selling expenses are considerable and dealer margins are also higher. In the push strategy marketers rely on selective distribution. Most consumer goods manufacturers generally employ a push pull (combination) strategy to sell their products. The ratio of pull to push may differ according to the requirements of the market situation. Salesmen are used to push the goods through the marketing channel, while advertising and sales promotion pull the goods and support personal selling to accelerate sales. Thus all tools of promotion work together.