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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Marketing Communication Process and Elements of Marketing Communication

The task of providing information and instruction to their customers and intermediaries is called communication. Such communication may be written or oral or figurative / symbolic. Communication should be very strong, effective in promotion. In the absence of effective communication, no any activity including promotion can be done efficiently. So, in every
stages of communication, different activities should be conducted. Only then the handing over process of information about goods or services becomes effective. The following stages should be gone through to complete this process.

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Marketing Communication Process


1. Sender


The side that sends message is called sender. Sender is also a source of communication. Sender may be a person, group or organization. Such group or organization or person at first should select target market. After this, task has been completed, message to be sent to market is prepared and dispatched. Marketing expert becomes the sender of message in marketing. He / she sends true information and message to the customers of target market about the services or products.

2. Encoding


The process of changing the message or information into words, sign, symbol, sound or picture is called encoding. While encoding in this way, receiver's feeling, experience, ability, and idea should be considered. Generally, the responsibility of encoding is taken by advertising agencies. They become successful professionally in encoding in a manner of enticing the customers. Generally, marketing information is encoded in language or audio-video means.

3. Message media


The channel to send information or message from sender to receiver is called media. Such media may be television, newspapers, magazines, internet, fax, computer, telephone, seller, etc. according to the nature of message. Media for sending message should be selected suitable to the nature of the message that it may reach the target customers effectively. If proper media could be selected for sending message, it can reach the right persons at right time and place. Such message / information becomes effective.

4. Decoding


The task of understanding or making out meaning of the message send through any media correctly is called decoding. While translating signs, they should understand or made out the exact meaning what the sender has meant. If the translation of the sign becomes wrong, it adversely affects the business firm itself. Correctness of translation of the signs or symbols depends on the experience, ideas, feeling, knowledge and ability of the receiver. Age group also brings differences in translation of the signs.

5. Receiver


The group or person who gets sent message is called receiver. The side who receives message sent by other side is receiver. Under marketing communication system, those who see or hear advertisement are receivers. Message should be sent by understanding the need / wants, feeling, ability, thought etc. of the targeted receivers. If the message cannot be sent, such message becomes ineffective.

6. Response


When the message has been received, it should be carefully understood. What the sender has intended should be exactly understood from the message. Then the receiver reacts, reaction may or may not be according to the message. So, it is said that message may get hundreds of reactions. Positive reaction motivates to buy goods or services and give impetus to perform any work.

7. Feedback


The reaction which a receiver communicates to the sender after understanding the meaning of any message is called feedback. Feedback greatly helps to make future communication effective. In marketing communication system understanding messages, making positive attitude towards products, increasing sales quantity etc. are feedback. In short, expression of reaction towards received message or show any behavior is called feedback. It helps the sender to improve message, if any, and implement it.

8. Noise


While making flow of message, different disturbances and problems may arise due to various external causes, this is called noise. Problems may appear due to language, style and competitors. Such disturbance or problem should be immediately overcome. Otherwise, it adversely affects communication.

Elements of Marketing Communication


The task of exchanging information about goods or services between sellers and buyers is called marketing communication. In this, one person or group of persons makes flow of message, thoughts / ideas, facts, efficiency, feeling or information to other person or group of persons. Full or partial description or message can be communicated to right place and right person through words, figures, graph, signs, symbols etc. Such message should be clearly understandable and can be implemented. This activity should be given continuity, by which the objective of sales department can be achieved.

Generally, marketing communication makes flow of information relating to goods, price, place and promotion. So, goods, price and place are called the chief elements of marketing. However, the important elements relating to communication are:
  • Personal selling
  • Advertising
  • Sales promotion
  • Publicity
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Meaning of Promotion and Its Objectives in Marketing

Meaning of Promotion

Promotion provides sufficient information to the consumers of target market about the features, quality, price and place of availability of goods. Promotion is taken as an important element of marketing mix. Marketing experts may give valuable suggestion to producers to produce goods, according to the interest, wants and needs of the customers by studying and researching markets.
After producing such goods prices, also should be determined. Doing only these activities, the goods should not be distributed; the target customers also should be given necessary information about such goods. Giving information to the target customers about the products is called promotion. Promotional activities create demand for goods. This promotion includes the activities such as personal sale, advertisement, sales promotion and propagation.

Promotional activities make a flow of information about products and persuade the customers to buy the products. Such type of function is also known as the marketing communication. This makes the potential customers know about the products or services. Effective communication persuades the customers to buy the products. These types of promotional activities also create demands as it explains necessity to the customers. So, this can also be defined as the art of creating demand. Different writers and experts have defined promotion; important definitions are given as follows to make its meaning clearer:

Prof. Philip Kotler has defined promotion as, "Promotion includes all the activities the company undertakes the communication and promote its products to the target market."

 

Prof. William J. Stanton has defined it as, "Promotion in the element in an organization marketing mix that serves to inform, persuade and remind the market of the organization and or its products."

 

E. J. McCarthy has defined promotion as, "Promotion is any method of informing, persuading or reminding consumers, wholesalers, retailers, users or final consumers about the marketing mix of product, place and price which has been assembled by the marketing manager."

The above mentioned definitions make it clear that promotion is one of the important tools of marketing. It creates demand in target markets and gives information to the customers about products. Promotional activities should be conducted to give information, make believe, motivate or persuade, influence, and remind the customers about products. Such activities greatly as well as positively affect sales and distribution of the products. So, nowadays, almost all the business companies or firms conduct promotional activities attractively. So, the modern age is also called the age of promotion.

Objectives of Promotion


Promotional activities give information, make believe, remind the customers of target markets about the products. Some important objectives are formed to conduct such activities effectively. The important objectives are:

1. Informing


At first the promotion aims to make flow of information to consumers about products. It provides information about features, benefits, price, utility, etc. of the products to the customers, wholesalers, retailers, consumers etc. Such information creates positive attitude in all customers towards the products. This also makes aware the potential customers and intermediaries. Promotion also provides buying alternatives to the ultimate users. So, the objective of providing information is given first priority.

2. Persuading


Producers should make customers believe in their products for expanding their markets. The second important objective is to make the customers believe in the products. Customers do not get motivated only by giving simple information about the products. It is compulsory to make the customers believe in products. For this, they should be made known about the quality, feature, price, utility etc. of the products. Trust can bring changes in behavior, feeling, thought, attitude and trend of the customers. Only then the customers are motivated to buy products of the newly promoted brand. The customers are not affected by any substitution goods due to the flow of impressive information of the promotion of the new brand goods.

3. Reminding


Different business firms product different types of products. Various kinds of goods appear in markets. In such situation, the customers should be reminded of the information once given. They may be confused in reminding because of different goods in the markets. All the customers may not have such memory power to remember brand of the goods. On the one hand, such situation exists, and on the other hand, many competitors try to divert customers' attention to other side. So, the customers should also be given regular information, information about the organization/firm and goods together. While providing such information about price, quality, utility features, and benefits etc. of the products also should be given to the customers.

4. Reassuring / assuring


The fourth objective of promotion is to give assurance to the customers. They express concern whether their decision has become right or wrong. Their problems should be solved through very simple way. In such situation, assurance should be given by making clear about the benefit of the product. Such assurance gives positive strength towards buying decision. It removes or minimizes their dissatisfaction or confusion. This develops a feeling in the customers that their buying decision is rational and the product is the best. It also plays an important role to maintain image and prestige of the company.
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Distribution Practices in Nepal || Physical Distribution and Distribution Channel ||

The functions of supplying / carrying goods or service from production center to sales centers are called distribution activities or practices. The goods demanded by consumers should be supplied in right quantity, at right place and at right time. Right agents, middlemen or right distributors should be selected for effective distribution. For this, the producer should select suitable channel for distribution.

Physical distribution makes marketing complete. The channels used in transporting goods for systematic and effective distribution are mentioned as follows:

1. Physical Distribution


Physical distribution is the simple process of supplying the product to the final consumer / customers. Physical distribution creates place utility, time utility and ownership utility. The main components of physical distribution are mentioned as follows:

a) Order Processing

At first the customers send order for purchasing goods. When such orders are received, they should be collected, sorted out and goods should be delivered as ordered. Such different activities are, on the whole, called order processing. This function is very important for physical distribution. Customers should be made happy and satisfied through systematic and effective functions. If the customers become happy and satisfied, the business becomes successful and business earns more profits. But the aspect/function of order processing is very weak in Nepal. So, more attention needs to be paid towards making such activities effective.

b) Warehousing

Storing products in right place until they are demanded or supplied to market is called warehousing. It creates time utility by providing goods at the right time when demanded by customers. The warehouse management should keep products in safe. They also should be kept in proper stock and be carefully looked after. Otherwise there remains possibility of theft, damage, robbery, or so on. So, the warehousing should perform the works such as collecting, packing, shipping, providing safety etc. Such warehousing activities are found centered only in city areas. But good warehousing management is lacking in the hilly areas of Nepal.

c) Material Handling

Bringing raw materials for production and keeping produced goods in warehouse is called material handling. Besides, goods need to be taken to airport, railway station, bus station etc. Moving goods from one place to another, they may get damaged or broken. So, right equipment, technology, or methods should be used to minimize loss or damage. Porters, labors, trucks, cranes etc. are used to move goods to warehouse from factory/production place. But in our country, Nepal, new technologies are not found in practice or are not available.

d) Inventory Management

Proper inventory of goods/products should be kept in balance for effective distribution. Both unnecessarily huge and least quantity of inventory may be dangerous. So, an ideal inventory should be managed. The same function is called inventory management. If the inventory is least, goods cannot be supplied according to demand and even regular customers go away. If the inventory is more than needed, capital, warehouse cost, insurance cost may increase. So, inventory management should be analytical and balanced. In our country, inventory management is not found scientific. Its management aspect is very weak.

e) Transportation

Transportation creates place utility of goods by supplying them to consumers from factory/production place. Surface/road airways, pipe lines, trucks, ships etc. can be used for transporting goods. So, while selecting means of transportation and using them, their cost, speed/pace, consistency, safety, availability, etc. should be seriously considered. As far as possible, safe and lesser costly means should be selected. Since, our country lacks navigation development, bus, park, train, place etc. are used.

2. Distribution Channel


Different business firms and companies produce goods of different quality. They should be transported to the places of end users. They way which is used to transport goods to the target markets is called distribution channel. The structure of distribution channel may be different due to nature of goods and environmental elements/factors. Some reputed companies involve producer – wholesalers – retailers in Nepal. Some other business firms use vertical channel system. Some companies supply their products to stock holders and the stock holders send the products to sales centers by appointing sales representatives. The sales representatives receive purchase orders and distribute the products to shop or sales centers according to the orders.

Due to difficult geographical region, distribution channel has not become systematic and effective. Nepal Liver Limited, Pepsi Company and Coco-Cola Companies are trying vertical distribution channel. Conflicts have also appeared in marketing channel due to inability to akin/fix the role of middlemen. However, it is expected that big companies will be able to solve such problems in near future. Products should be compulsorily carried to target markets through one or the other distribution channel. Suitable/proper channel should be selected according to the nature and condition of the goods. Generally, distribution channel for industrial goods becomes short whereas it may be long for consumer goods. Considering this matter, the distribution manager should select proper channel.
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