Showing posts with label Advertising. Show all posts
Showing posts with label Advertising. Show all posts

Promotion Decisions in Nepal for Successful Marketing

The promotional works give information to target market about the organization and its products, influence them and remind them about the company and its products. Promotion gives complete information to the prospective customers about quality of goods, price, using/handling methods, benefits etc.
Like in other countries, the customers are provided information about products, so is in Nepal also. Promotion is an important element of marketing. Its role is increasing daily. The main elements generally used in practice are as follows:


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Meaning and Objectives of Promotion



1. Advertising


Sellers make various artistic presentations in order to sell their goods, the same is called advertisement. It makes flow of information about goods or services and gives necessary information and knowledge and reminds the customers of the goods or service. So, advertisement has become very popular in promotion of goods or services. This generally used by business firms, social organizations, government and governmental organizations. In order to have mass selling, mass communication is necessary. Nepalese entrepreneurs/producers use different types of advertising media which are mentioned as follows:

a) Print media:

Print media are used to give information to the customers or consumers about products or services. This media include newspapers. Notice, attitudes, ideas/views, descriptions etc. can be published. The many potential customers study such materials. Gorkhapatra, Kantipur, Nepal Samacharpatra etc. are its examples. A large number of customers or consumers look at such newspapers in city areas. But in remote villages, the customers or consumers cannot read such materials since most of them are illiterate.

Magazine is also included in print media. Information about goods or services can be given to the customers or consumers by publishing poems/verses, articles, notices, descriptions etc. in commercial booklets, fortnights, bulletin, journal etc. Such publications attract attention of all customers. House magazine, business journal etc. of the Chamber of Commerce and Industry, Nepal, Himal, New Business Age Core Express, are some examples of Nepalese magazines. Information, advertisement and messages of business firms become comparatively long, descriptive, analytical and explanatory in such type of print media. They may be difficult to understand for the customers living in villages.

b) Audio media:

Information and messages about goods or services also can be broadcasted/ disseminated through radio. So, this medium is also called radio advertisement. Consumer goods, sports goods, household goods, small equipment, etc. are advertised. Radio advertisement has become very popular in Nepal. All the potential customers of all parts of the kingdom can hear and understand notices, messages, description, etc. at a time. So, the Nepalese business firms give priority to radio advertisement.

c) Audio-visual media:

Audio-visual medium is also used to advertise goods or services in Nepal. Information is given about the quality, utility, price, benefits, using methods etc. of the goods which is intended to sell. Colored pictures, scenes of the products are attractively presented decorating at right place through this modern media. Such type of presentation attracts potential customers and wins their heart. Nepal Television is the strong example of audio-visual media in Nepal. Nowadays advertisements are given in front, in the middle and in the end of news.

d) Visual media:

Information and messages about goods or services can also be communicated by pasting posters. Posters can be prepared by writing or printing information or messages with colored pictures and pasted on walls, public places etc. Posters attract the attention of the customers. Such posters are also pasted and exhibited at Tripureshwor Stadium, Pokhara Stadium, Airport, Highways, Bypass roads bus stops etc. Advertisements can be made through bill boards, hoarding boards, etc. at different places such as airport, bus stops, super markets and other important public places. But such boards are located only in some city areas. Electrical signs are also used for advertising goods. Generally, such advertising media are in practice in Nepal.

2. Publicity


The function of providing information and messages about products, company's policy, programs etc. without any fee to the customers is called publicity. Such publicity is made by other sectors than the concerned organization. Such advertisement done through any person, organization, or group becomes reliable and trustworthy for the customers. This type of publicity has also become very effective as well as popular in Nepal. Programs such as press conference, display/exhibition, inauguration by ministers or socially respectable persons etc. are also used for publicity. Organizing annual ceremony of business firm, presenting annual reports etc. also become effective to publicize any company's products or services. This method of advertisement is also practiced in Nepal.

3. Personal Selling


Personal selling is also an important as well as effective tool for promotion. In this method, customers are directly contacted and communicated the messages about company and products. Potential customers are met and the goods are described to them. This is also supposed to be very effective means of promotion. It creates demands in potential customers. The personal seller should be skillful. Personal selling is Nepal has become effective in city areas and has begun to enter in some villages.

4. Sales promotion


Besides personal selling, advertisement, publicity, propagation, and other activities can also be conducted for sales promotion. Among them efforts for creation of demand, promotion of company etc. can be taken. Consumers' promotion, trade promotion, sales force promotion etc. methods should be used to make it effective. Gifts, price-off discount coupon distribution etc. can be provided to attract customers towards goods or services. Most of the Nepalese businessmen have used these methods.

Trade promotion is the second method of trade promotion. In this method, middlemen/intermediaries and channels are encouraged. Allowances, cost free goods, price cut/discount facilities are given to different channel members and sellers to encourage them in selling. Producer can also encourage dealers, wholesalers and retailers by providing facilities. Such activities have become successful to increase sale quantity in target markets in Nepal. Sales force promotion is the third method of sales promotion. It encourages the manpower/sales force involved in selling. The employees/sales forces are encouraged through arrangement of gifts, bonus and commission, sales contest etc. The promotional methods become very effective in sale of goods or services. So, most of the business organizations have used these methods of sales promotion.

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Advertising: Meaning, Objectives and Importance of Advertising

Meaning of Advertising

Advertising is done in order to provide meaningful information about products. Advertisement is an important factor of promotion mix. Government organizations, business organizations, persons, groups, service oriented organizations etc. use this. As every product or service needs advertisement, this age  
is also called the advertising age. Similarly, the business age of today is also the age of competition. Different substituting goods are found in markets. They keep on competing with one another. So, the main objective of producers is to attract the consumers' attention towards their products.

The task of providing all the necessary information to the consumers about the quality, features, price, utility and importance of goods or services through different means of advertisement such as radio, newspapers, magazines, television etc. is called advertising. Television, video, cinema etc. are audio-visual means of advertisement. Radio, newspapers etc. also can be used to advertise goods. Goods are advertised through suitable media according to their nature, condition, cost, time, availability etc.

Different experts and writers have defined advertising. Important ones are given as follows:

Prof. Philip Kotler has defined advertising as, "Advertising is paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor."

 

Mason and Rath have defined it as, "Advertising is a salesmanship without a personal salesman."

 

The above mentioned definitions make it clear that giving information to customers about goods or services through press, audio-visual media is advertising. Non-personal presentation of goods or services by well-known sponsor paying certain fee is called advertisement. It plays an important role in promotion of goods or services. In comparison to other factors of promotion mix, advertisement is very popular and effective factor used in all sectors. Small or big, governmental or non-governmental, sole or non-personal/joint businesses all use advertisement for sales promotion of their goods or services. The features of good advertisement are as follows:

1. Non-personal


Advertisement is of purely non-personal nature. In this interaction, face to face or contact or talks between person to person does not take place.

2. Message


In advertisement, the main content is message. It motivates / inspires the customers to buy goods. The advertisement message may be in any form such as oral, written, or symbolic or codes.

3. Sponsored


Advertisement is sponsored by any person, organization, or group. The sponsor should pay certain amount of money for advertisement.

4. Objective


Advertisement is done to achieve certain objective. Without objective, no advertisement of any product or service can be done. Giving assurance, information, notice, message, or reminding etc. is the main objective of advertisement.

5. Cost


Different expenses are needed for advertisement. It is called advertisement expense. Development cost, production cost, media cost, administrative cost etc. are the main examples of cost.

Objectives of Advertising


Although advertising seems simple, it is very challenging and difficult task. It motivates / inspires target groups to buy goods or services by making flow of information. Advertisement has some important objectives, which are given as follows:

1. To inform about product and organization


Many objectives of advertisement can be determined. One of them is to give information to potential customers about goods or services and organization. Information can be given about brand, feature, utility, price importance etc. of the product. It may also be about the location of organization and warehouse. Some short information can be given through press, audio visual etc. considering the availability, cost, situation, nature of product etc. The main objective of advertisement is to give knowledge to potential customers about products and their reliability.

2. To persuade potential customers


The second main objective of advertisement is to reassure / persuade potential customers. The customers do not become ready to buy only getting information about goods or services. So, the customers should be persuaded and made confident towards goods or services. For this, it needs to give comparative information about price, utility, feature etc. of the product. Confidence brings changes in behavior, feeling, thinking, trend etc. of the potential customers. So, the customers get themselves motivated to buy the advertised goods or services. Hence, the main objective of persuading the potential customers is to investigate them to buy products or services at least for experiment or make them give priority to certain brand.

3. To remind customers


The third main objective of advertisement is to remind customers of goods or services. As different advertisements about different products and services can be seen or heard through various means, the customers feel difficult to remember every brand. Similarly, thousands of competing producers advertise their products to divert customers' attention towards their own products. So, customers should be reminded of goods or services through regular advertisement. While reminding them in this way, place of availability, quality, features, price, utility, benefits etc. should be clearly stated.

4. To increase the value of product


The objective of advertisement is also to increase the value of product. There are some advertisements which can increase the value of products and organization. Special advertisement program should be conducted in order to increase value and respect of the product. This sets indelible impression on them about the quality of the product and reliability of the organization.

5. To reassure customers


The fifth objective of advertisement is to reassure customers. They may express concern over their buying decision or feel uneasy. In such situation, if advertisement makes them clear about quality, feature, utility and reliability and importance of the product, they become confident if they are reassured. Such assurance makes them feel, "I am buying the best quality goods." This makes them more loyal to the product as well as to the organization.

6. To add other promotional tools


Helping to different promotional method is also another objective of advertisement. At first, advertisement helps to bring effectiveness in personal selling. Advertisement provides different information about product to the potential customers. So, it is not difficult to persuade the customers to buy goods or services by giving true information. As the customers can get prior information about goods or products through advertisement, they become ready to buy. Similarly, advertisement helps to bring effectiveness in sales promotion. Different methods need to be applied in sales promotion. Sales promotion can be made effective by advertising goods or products, for example, if coupons have been provided, exhibition has been held, discount has been provided, and the customers can be informed about such facilities / chances.

Importance of Advertising


The modern age is the age of advertisement. This task reflects different activities of marketing. It provides information, instruction and education / knowledge to all the customers of target market. So, importance of advertisement has become greater than before. To prove this, it becomes contextual to discuss on the following points:

1. Facilitates mass production


Effective advertisement makes flow of necessary information to the customers. Accordingly, the goods are distributed and sold. Such distribution and selling increase demand for product in different market segments. As a result, the company gets opportunity of mass production of the goods. Production of goods in mass quantity, per unit production cost becomes less, due to which per unit price does not increase and profit margin becomes more.

2. Educates the customers


Good advertisement provides true information to the customers about product or services. Along with this, which product is used for what and for what purpose is also clearly stated. Some products need care while handling / using. Such information is also provided by advertisement. Doing so, the customers get information and can decide which product is suitable for them and which unsuitable.

3. Introduction of new product


An effective advertisement makes the new products familiar to the customers. Short information about quality, features, price etc. of the product contains in it. After the flow of such information, the customers may take buying decision. Besides this, advertisement makes the customers feel necessity of the new product and draws their attention to it. So, the task of advertisement is equally important to give introduction of new product.

4. Information to the customers


Advertisement gives information to the customers about new products and its introduction in market. So, the customers make plan which product should be bought to maintain life standard. All the composition of the product manufacturing, involved elements, handling / using method, manufactured and expiry dates, information about the usability of the product etc. are also given. Quality of the product, price, utility, place of availability, etc. are also included in advertisement. As a result, the customers get clear information about the product. So, providing true information is other important function of advertisement.

5. Maintains the image of organization


Advertisement pays special attention to the brand of quality goods. After such goods have been advertised, the customers get them. When they have once used quality goods, they do not easily change the brand or do not buy goods of other brands. In this way, advertisement makes the customers loyal to the brand and maintains it. Customers demand for the goods of certain company only. It raises the dignity, respect and good image of the company. So, advertisement becomes important for maintaining image, reputation, dignity and respect of the organization.

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Promotion Mix and Factors Affecting Determination of Promotion Mix

Promotion Mix

Promotion is an important tool of marketing. Promotion is used to provide complete information to consumers about goods/products or services. Mostly, consumers are requested to buy goods by marking them clear about quality, service and operation method. In other word, the way or the media of presenting proposal to
customers for buying goods or services is called promotion. This needs various elements. The task of operating such elements as a whole is called promotion mix. Various types of elements are needed. Promotion mix is to provide information about price, quality, feature etc. of the products to the target customers. For this, personal selling, advertising, sales promotion, publication, propagation should be made.

Promotion is related to the communication process. This function plays an important role to fulfill the objectives of company or organization. Personal selling is an important part of promotion. It encourages potential customers to buy goods or services. Seller may directly go to buyers or buyers may go to sellers. Sellers give information about goods, price, quality features etc. to the customers. Personal sale is actually a conversation between seller and buyer. So, the seller should be skillful in his / her activity.

Advertisement is also equally important in promotion. It provides ample information or message to the customers about goods. Message about goods can be disseminated to maximum customers at minimum cost. Different media can be used for advertisement. Audio video, radio, television, film slide etc. can be used for advertisement. Newspaper, magazines, books, pamphlets, etc. also can be used. Hoarding boards, poster, mobiles etc. can be used for advertisement.

Giving information about goods and organization without any cost is called propagation. This creates demands and plays important roles in heightening dignity of the organization. Nowadays, promotional media have become very popular in Nepal. Propagation can be made through publication, photography, press conference, speech writings etc. Propagation is a kind of promotional strategy by which information and messages can be disseminated without any cost. Request to social and political persons also can be used for sales promotion.

Short term motivation to the potential customers for buying goods or services is called sales promotion. It encourages them to buy goods immediately. It becomes more effective if personal sale and advertisement help. Trade fair, exhibition, decoration, free sample, gifts, coupon, discount, credit facility etc. are provided. Attractive packaging also advertises by itself and encourages customers to take buying decision.

Main Elements of Promotion Mix


Factors Affecting Determination of Promotion Mix


Promotion mix consists of five elements / factors. Promotion mixing is very complicated strategic task. Proper promotion mix should be prepared to conduct marketing successfully. Promotion mix is directly affected by promotion objective, promotion budget, nature of market, product life cycle, marketing promotion strategy. They are mentioned as follows:

1. Promotion objective


One of the main factors affecting determination of promotion mix is promotion objective. If the customers are to be given clear information and make them aware about the goods intended to sell, special emphasis should be given on advertisement and propagation. Similarly, if the promotion objective is to make potential customers believe and give assurance to them, personal selling and advertisement become important. If the objective of promotion is to get order / demand, personal selling and sales promotion should be very active. If the promotion objective is to remind the customers, advertisement becomes more important. If the promotion objective is for brand loyalty, advertisement and propagation become important.

2. Promotion budget


Sufficient budget should be arranged for promotional functions. In the lack of budget, promotional works cannot be conducted. So, promotion budget also affects promotion mix determination. A lot of budget is needed for personal / individual selling and advertisement. If sufficient budget has been allocated for advertisement, highly responsive personal sale can be conducted, long term advertisement policy and high amount of budget is also not needed for publicity. It needs only good opportunity for propagation. This makes it clear that promotional activities can be determined on the basis of promotional budget. In this way, the fixed / prescribed budget affects promotion mix.

3. Nature of market


Nature of market also affects promotion mix. If the size of targeted market is very small one, way / method becomes effective, and if its size is big, other way / method becomes effective. If the targeted market is consumers' market, advertisement and sale promotional activities should be conducted. If it is industrial market, personal sales and promotional sale should be conducted. Similarly, if the targeted market is very small and is limited in a certain geographical area, personal selling and advertisement should be emphasized. If the market is big, national and international advertisement and business promotion should be emphasized.

4. Nature of product


Nature of product also affects the determination of promotion mix. Products may be consumer target or industrial. Their information cannot be effectively communicated through same activities. Generally, advertisement becomes important for consumer goods whereas personal selling becomes important for industrial goods. Similarly, advertisement and sale promotional activities become important for the low priced goods, whereas personal selling and local advertisement become important for high priced goods. In the same way, personal selling and propagation should be given emphasis for special goods.

5. Product life cycle


Different stages of product life cycle also affect promotion mix. Every product goes through different four stages after it has been produced. At the introduction stage of goods / products, advertisement and propagation should be given emphasis. After the product enters growth stage, only advertisement becomes sufficient. Similarly, careful attention should be paid to the product at its mature stage. If the product has entered the last stage of its life cycle, personal selling, sales promotion and propagation are needed. Whatever tools can save products, the same should be used for promotion.

6. Promotion strategy


There may be several strategies of promotional activities. They also affect promotion mix. They are mentioned in short as follows:

i. Push strategy

The producers can push their products using their force. In this strategy, products are pushed to the final consumers through distribution channel. Personal selling and trade promotion become important.

Pushing Strategy

ii. Pull strategy

In this strategy, the customers demand goods from retailers. Retailers demand from wholesalers and wholesalers demand from producers. For such strategy, advertisement becomes very important.

Pulling Strategy


iii. Interpersonal strategy

Interpersonal strategy is also one of the strategies. In this strategy, personal selling becomes more important. So, this tool of promotion should be adopted.

iv. Mass communication strategy

If the promotion strategy is in favor of mass communication, sales promotion should be given special importance. Similarly, advertising and publicity are also equally important.

Factors Affecting Promotion Mix Determination


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Payoff Matrix in Game Theory

Game theory summarizes in a tabular way the possible choices available to firms in oligopoly. Game theory applied to oligopoly uses a table that indicates the profit of each firm given the choice of strategy chosen by each. All possible strategies are represented in the table, and so all possible outcomes can be considered at once. This table is called a payoff matrix. The profits listed in the payoff matrix represent / exemplify underlying cost and demand information.

Suppose again that there are two firms. For simplicity, suppose that price and costs are all taken as given and that the only decision for these two firms is how much to spend on advertising and both engage in high levels of advertising, neither will enjoy particularly high profits. If neither firm advertises at a high level, each will keep its respective market share, but both will make larger profits. However, if one advertises while the other does not then the firm that advertises will gain market share and get big increase in profits while the other incurs losses. Assume that advertising might increase on holding the firm’s share of the market but it has little effect in expanding total industry sales. Finally, assume that firms reveal their strategies simultaneously and do not change them. Although it is quite simple, this model contains monetary features of the recognized interdependence of oligopolists.

The model is depicted in the payoff matrix in table.

Payoff Matrix

Firm A’s strategy
High Level of Advertising                                   Low Level of Advertising
High Level of Advertising   X gets $ 5,000      A gets $ 2,000
                                         Y gets $ 5,000      B gets $ 2,000

Low Level of Advertising   X gets $ 2,000     A gets $ 10,000
                                         Y gets $ 20,000   B gets $ 10,000

Both firms choose high levels of advertising. They then earn profits $ 5,000 each. If both adopt low levels of advertising, they each enjoy profits $ 10,000. But of one firm advertises much and the other little, the firm with the high level of advertising earns profits of $ 20,000 and the other firm losses $ 2,000.

Now put yourself in the place of the Manager of firm B, the choice of B firm will depend precisely on what you think from A will do. If you think firm A will try to do you in, then you will assume that if you try to get the $ 10,000 profit available by going for a low level of advertising, Firm A will choose a high level of advertising in self-protection. This strategy assumes you of at least $ 5, 000.

Firm A has exactly the same choices, and so if Firm A assumes that firm B is not be trusted. Firm A also chooses a high level if advertising for his self-preservation. Thus, the conservative maximum strategy leads both firms to high levels of advertising. As a result, each gets a $ 5,000 profit.

Only of the firms cooperated can earn the $ 10,000. Profits that is available to each. If firm B assumes that firm A is a profit maximizing firm with managers who behave rationally, then firm B concludes that firm A will adopt a low level of advertising. If firm A makes the same assumption about firm B then each attains profits of $ 10,000.

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