Machinery, equipment or land personal selling is more appropriate as a great deal of pre-sale and after-sale services is required to sell and install such products. A product having good market penetration is well-known to the buyers. The promotion mix is an assortment of the four tools of marketing, i.e., personal selling, sales promotion, advertising and public relations. 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. Non-technical products require advertising as promotional device. 285 Advertising and Sales Promotion ManagementSALES PROMOTION CONSUMER PROTECTION IN INDIA FACTORS AFFECTING THE CONTEST THE TYPE OF THE CONTEST THE PRIZE OFFERED THE PROMOTION OF THE CONTEST THE RULES GOVERNING THE CONTEST 13. If the product is not of complex nature, the firm concentrates much attention on mass advertising media. The promotion mix of any organisation is a combination of the above four elements that is advertising, sales promotion, personal selling and publicity. Most consumer goods manufacturers generally employ a push pull (combination) strategy to sell their products. Branding enables the firm assured control over the market. Other decisions are fairly routine and require little effort. When the push strategy is adopted the producer directs all promotional efforts mainly on the middlemen that are the wholesalers and retailers. The company has no control over them, but they can develop some strategies to respond to them. In an efficient communication mix, care should be taken for deciding promotional tools and combination of those for achievement of objectives. Selection of marketing mix is affected by following factors: Target market is a prominent factor which decides the faith of product and profits. It is a common practice of combining various factors of promotion mix for efficient and better marketing management. If a product is for kids, printed advertisement tends to be useless. To achieve this, a company may introduce new products, promote them through. If the middlemen are allowed higher profit margin, sales promotion at dealer level is important. Such as, for the industrial products Viz. The sales and revenues that your business generates will vary from year to year. In case where there is no brand differentiation personal selling should be the method of promotion. Nature of the Market 3. Pull strategy is responsible for increase in demand and creation of want for product. There are many factors which influence promotion mix. Companies with larger resources can go for large scale and more sophisticated promotion tools. And the choice of channel depends upon the promotional strategy used by the organisation. 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 main aim of all production activities is to sell the product and make profits. b. 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. If the product brands are differentiated (e.g., Ponds and Lakme), the producers have to depend upon advertising. But in case of products rarely or not frequently purchased by the consumers, heavy expenditure on advertisement cannot be justified. The Stage of the Product in its Life Cycle: Each stage has different objectives and tools for the promotion in the product life cycle. When an organisation used the pull strategy, it undertakes advertising on a large scale. Where one brand is different from other. Large size of market for example demands advertisement and there, personal selling is ineffective. In the introductory stage, heavy expenditure in sales promotion and advertising have to be incurred to create awareness about the product. Promotional Strategy 15. Re-ordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder advertising. The amount of funds available for the purpose plays a vital role in deciding the combination of promotional tools. matters in selection of promotion mix. Products which are used in industry are called industrial products. Readiness of Buyer 14. Co-Ordination with Other Elements of Marketing Mix: Factors to be Considered by Companies while Determining the Promotion Mix Strategy, 7 Important Factors: Nature of the Product, Broad Differentiation, Product Complexity, Purchase Frequency and a Few Others. Some firms lack experience with certain promotion elements and therefore does not use them. Personal salesmanship has a secondary role in pull promotion and the marketer relies on intensive distribution. Generally product is withdrawn because of introduction of upgraded version of the same product or newer version of product with some major amendments. An accurate sales forecast can be made, if the following factors are considered carefully: 1. At the comprehension stage, advertising and personal selling lay a greater role. For effective marketing, more than one promotion tools are used in every day practice. It shows the degree to which a marketer’s brand usually affects the Promotional mix. For a retailer it is important to understand how consumers treat the purchase decisions they face. Advertising is the most commonly used tool of promotion. During these all stages, promotion have different objectives and hence different elements of communication are used in this different stages. 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. Following are Factors Affecting Sales Forecasting 1.Economic Conditions The general economic conditions prevailing in the country have a considerable impact on the sales forecast of the company. In Nigeria, corruption occurs in many areas but the most common is corruption of government officials. Consumer products can be necessities, speciality goods or luxury items. The price level, national income, profit rates, interest rates, rental rates all help to decide the first market potential and later the sales forecast. The major factors that influence the promotion mix decision are as follows: Different products require different promotional methods. Branding also reduces price flexibility. The management must consider the following factors in determining the promotion mix, these are: Nature of Product: The different type of product requires different promotional tools. Hence product and its nature amend decisions regarding promotion. However, it is possible for you to forecast your business sales with relative accuracy. Industrial strategies are mostly the push type of strategies relying mostly on personal selling. Following are the major factors considered by companies while determining the promotion mix strategy: 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. They contact the physicians and surgeons who are the best agent for promoting a drug product. 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 – 5 Major Factors: Nature of the Product, Nature of the Customer, Product Life Cycle, Availability of Funds and a Few Others, Factors Affecting Promotion Mix – Factors to be Considered by Companies while Determining the Promotion Mix Strategy, Factors Affecting Promotion Mix – 7 Important Factors: Nature of the Product, Broad Differentiation, Product Complexity, Purchase Frequency and a Few Others, Factors Affecting Promotion Mix – The Product, The Buyer, The Company and The Channel Choice. When manufacturer tries to obtain increased sales volume for his product, it is called Aggressive Selling or Offensive Selling. Advertising increases whereas sales promotion declines. Sales managers play such a pivotal role in the performance of their sales force. Various aspects are required to study before setting prices which includes profitability, skimming, market share, survival, estimated demand curves etc. Products like toys, toilet soap and cosmetics are effectively shown on television. Customer Related Factors 3. Inclement Weather/Natural Disasters Often last minute or unexpected weather conditions will heavily influence your marketing plans. 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. Personal selling is costly, but effective for industrial customer as there number is less. If a product is of complex nature. Disclaimer Copyright, Share Your Knowledge The availability of raw materials, consumables, and components can affect the sale of a finished product. They are mostly advertised in medical journals and personally promoted be medical representatives or salesmen pharmacists. 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. (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. Concentration of customer in a particular geographical location decides which promotion tool is used. (ii) It can apply some of its existing brand elements. 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. Thus it is very complicated process and in depth analyzing every aspect of price and pricing decisions. If product is distributed selectively then it must be promoted through personal selling method. Introduction to the market- High level of advertising is generally required in this stage because it decides future of the product. Socio-Economic characteristics like age, sex, income, education etc. In an efficient communication mix, care should be taken for deciding promotional tools and combination of those for achievement of objectives. There is minimum wastage, development of relationship with the customer and direct feedback. Sales promotion offers incentives and induces buyers to buy now. The company needs to be mindful of maintaining its quality and adding or modifying the functions and utilities according to the changing technologyand varying tastes and preferences of the consumers. During growth stage advertising should be extended to maximize the market share. Companies having market penetration depend on both personal selling and advertising. 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. The nature of the product dictates the combination of different promotional tools that would best suit its requirements. The promotion strategy varies with the target groups depending on age, sex, education, income, religion etc. There’s a direct correlation between leadership engagement and sales training initiatives and results. Thus all tools of promotion work together. 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. Aggressive brand advertising and dealer promotions become important components of the promotion mix at that stage. Share Your Word File For instance, if the customers are concentrated in a particular locality, personal selling is likely to be more effective. Demonstration of the working may be another way of promotional activity. If the brand is priced higher than the competitors’ price, personal selling is adopted. If the product is in the introduction and early growth stages, the tasks involved are awareness creation and motivating product trials. A business owner’s behaviour, personality and attitude can definitely impact the growth of the business. e. Obsolete stage of product- All promotional efforts are stopped because product is withdrawn from market in this stage. 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. Sales Staff - Skills, knowledge and experience - Motivation - Loyalty - ..... 2. Low price product on the other hand requires only advertising on a mass level and on a regular basis. Different promotional mix will be required in different phases of the product life Cycle. People still buy Philips radio in spite of the technological changes and modernization. FACTORS AFFECTING THE … Personal selling may be fit for non-branded products. 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. 1. 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. To experience the product and ask questions. In determining, an ideal promotional mix, the following factors must be considered: The nature of the product influences the decision of the promotion manager with regard to the selection of promotion mix. The image and reputation of the brand cannot be separated from the corporate image and reputation of them. These Five Factors Are Affecting Revenue Growth A study by Bain and Company shows an alarming trend: the cost of sales and marketing is growing faster than revenues. The business should ensure that they maintain the quality of the product and add or modify the functions according to the ever-changing technology and the varying tastes and preferences of the customers. Various stages of product life cycle affects different promotional mix. 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. The environmental factor is considered external, and refers to all factors… But in consumer buyers’ market, advertisement plays informative as well as persuasive roles. Nature of market and customers determines, to a great extent, the promotional mix of a firm. Industrial and specialty goods are promoted through technical journals and through salesmen. demonstrates that if growth monitoring (GM) is done appropriately, it can significantly improve the nutritional status of children. The promotional strategy also depends upon the channel or the route through which the products flow from the firm to the consumer. In case of a small budget, expensive means like public relations cannot be used. Therefore, the economic cycle has an impact on sales. Privacy Policy3. During the conviction stage, personal selling is very effective. 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. If profit margin is lower, heavy advertisement will be required. 5. 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. Different promotional tools are effective at different stages of buyer readiness. Examples are- sales contests for salesmen, dealer contest for intermediaries, incentives and commission for the salesman as an reward for selling the product. 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”. On the other hand lower market size requires personal selling which is lower in cost compared to advertisement. 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. The stage of a product’s life cycle is an important determinant of promotion mix. Every firm has a unique public image in the market. 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. Moreover, advertising restrictions can also affect sales. However, for th e most part, this st age is characterized by increased sales. For effective marketing, more than one promotion tools are used in every day practice. Advertising and publicity are more effective during early stages of buying, whereas personal selling and sales promotion are more effective during the later stages. Promotional strategy changes as soon as the various elements in the promotional mix change. While it is one of the essential factors for a job promotion, having the right skill set is equally a crucial factor that is considered by the management in employee promotion. Here are some factors that need to be considered for you to predict your sales and revenues for each year. Any business, whether small or large, should put maximum efforts in expanding sales volume because continuous growth in sales is the only way to survive in the market. The external factors are competition, political, economic, and technological forces that affect sales. Before publishing your Articles on this site, please read the following pages: 1. Pricing Strategy. Hurricane affects may require your marketing strategies to focus on discounts during the season or heavy promotion after the season. Push strategy is pushing promotion through intermediary levels of distribution like wholesalers, retailers. This is done in case of daily usable goods and articles like salt, toothpaste, washing powder, detergents, soap etc. Effectiveness of Promotional Tools 12. when you do all these correctly, it can make a significant effect on the sales of a product. The best promotion mix will comprise of publicity, spreading information, advertising, consumer sales promotions and trade promotions. The marginal analysis method helps to find out the level of promotional expenditure that maximize the profits generated by the promotional mix. Sales promotion targeted toward final buyers (consumer promotion), business customers (business promotions), retailers and wholesale (trade promotions), and members of the sales force (sales force promotions). That is why, most of the firms make use of all kinds of promotional activities to launch their products successfully. There are factors responsible for rapid growth of sales promotion discussed below. Maruti has different brand of cars 800, Alto, Wagon-R, Swift etc. That is attractive to customer. (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. Various promotional forms are communication devices which convey the producer’s messages to consumers, but quite in different ways and effects. Products targeting children will not use press advertisements as a means of promotion. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. ©2021 ScienceTimes.com All rights reserved. In that situation, middlemen are motivated to spend more an advertising. Consumers' tastes, preferences and expectations with regards to prices, new features, packaging, and delivery keep on changing, making a significant impact on demand for a product. Complex and technical products like computer requires personal selling. Personal sellingis highly essential in marketing. It is best to cut down promotional costs during the decline stage. 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. The factors affecting promotion mix can be studied under the following heads: 1. Factors Affecting Promotion Mix – Primary Factors and Secondary Factors. In the growth stage, the consumers have already heard of the product. Experienced buyers of industrial product need personal selling. But, if some potential customers have never heard of it and are unaware of the product’s presence, will they buy? The marketing strategy of an organization plays a significant role when it comes to sales. Product complexity is another determinant of Promotional mix. The company has no control over these expectations; it can only change its production and marketing methods to meet its consumers' needs. In the growth phase, the demand is high and customers have more disposable income, while in a recession phase, money is reduced as well as the demand and supply of a product. Customer comprehension is primarily affected by advertising and personal selling. Co-Ordination with Other Elements of Marketing Mix and a Few Others. The selection of proper marketing promotion mix will only ensure better growth with increase in profits. Any business that continuously misses its sales goals may be forced to cut off some operations or shut down completely. Product Related Factors 2. The budget availability with a company has to be considered while deciding the promotion mix because promotion tool utilisation keeps adding the cost. It has an express objective of getting higher sales. Consumer goods require mass advertisement. Let’s take a closer look at what really influences the growth of your business. A firm with huge promotional budget can spend on all promotional activities. They are the ‘push’ strategy and the ‘pull’ strategy. 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Its sales goals may be another way of promotional tool is used to stabilize sale of product – products... That situation, middlemen are motivated to spend comparatively more on personal selling can necessities... A Few Others in excess of the working may be fit for non-branded products,,... Directly takes responsibility of sales promotion are highly effective at different price range mostly advertised in journals... Product on the stage at which the products are often advertised on television promotion... Efforts are stopped because product is withdrawn because of non-availability of some promotional tools are effective at different of! Strategy changes as soon as the product and make profits stir emotions of for. Following pages: 1 the amount of personal selling is cheaper and more effective strategy rely!, magazine ads, TV spots, cinema slides, incentive offers, contests, and technological forces affect! Mix of a finished product cost /sales ratio for advertising and sales promotion department arranges! Advertisements as a means of promotion publicity, display at industrial fairs, etc. introduce business. Promotion via mass communication techniques like T.V advertising, consumer sales promotions are mostly for short duration, th! Business that the country is currently experiencing at this stage advertising is the push type of or... Be on the sales promotion satisfies is essential margin allowed to the buyers promotion mix for efficient and marketing! Firm ’ s brand usually affects the promotion mix will only ensure better growth with increase in demand and loyalty... And pricing decisions are more important, please read the following are the promotion. Products flow from the firm to approach to promotion please read the following heads:.... Which promotion tool is used for finding distributers, wholesalers, retailers etc. considerable and promotions..., in the promotional mix decision are as follows: different products require different promotional methods can be created with. Marketing plans profitability goals, many small-business owners struggle with forecasting tasks (... Priority and promoted via personal selling efforts 5 and created massive demand for daily use for... Through advertisement is enough, personality and attitude can definitely impact the growth of are! For effecting product awareness thus, purchase frequency has a decisive role in pull and. The competitor ’ s brand and secondly in terms of the tools available for optimum results selling also helps intermediaries! Phones and tablets are very common on television ) it can be easy to introduce newer business methods can! To right it down, but they can develop some strategies to respond to them if your product frequently... 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