What factors should an organization consider while designing the promotion mix?

Creating a proper blend of promotion mix tools is one of the most critical decision for marketing managers. One organisation can rely on television advertising and the other can remain dependent on the efforts of its sales team.

The marketing managers are forced to select certain promotion mix tools (advertising, sales promotion, publicity, personal selling, and direct marketing)depending on large number of factors. We will look at these factors in brief–

1) Promotion Budget allocation, objectives and policies– Depending on the market research done for making a product of consumer’s choice, budget is allocated for various promotion activities. The organisations do alter the budget basis their marketing strategies. For many organisations, the budget allocated is the final deciding factor in selecting the promotion tools. The company has to decide on the reach (number of target customers to reach) and frequency (how often to spread the message to the target customers). For example, a low budget may not let an organisation promote its product on TV shows that have maximum viewership. In such cases they opt for newspaper ads, fliers or promotion activities like free samples at crowded locations in the target market.
The objective of the Promotion also determines the selection of appropriate promotion tool – Whether the objective is sharing information or persuading the customers to buy the product,
– Creating an image about the product in the minds of customers (positioning),
– How frequently the message is to be disseminated in the target market.

2) Product and its stage in the life cycle – Consumer products are promoted differently as compared to industrial products. Similarly, FMCG products are products that are promoted heavily through television advertisements and supported by sales promotion activities. Complex products like technical products need personal selling as educating the customer and answering questions form an integral part for convincing customers to buy such items.

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3) Buyer characteristics – Marketers try to answer this question – How the byers in the target market become aware of the new products? Young people in the market spend most of their time on the internet. Senior citizens like reading newspapers and watching television. The marketer should have the complete data for analysis from the target market for selecting appropriate promotion tools. The right tool will create awareness with the target customers. For example, in India, majority of the population consists of youngsters who go to college or are in the early stage of their career. This generation from the urban areas likes to buy latest and trendy smartphones. Motorola entered the Indian market by launching its Moto G model of its handset only through the ecommerce giant “flipkart”. The launch was supported by newspaper ads and online promotions. The launch was such a hit that the company ran out of its stock of 16 GB model within 20 minutes of its launch.

4) Target market – The size of the target market and the reach of media in different parts of the target market affect the promotion mix strategy. There are different kinds of buyers in each market. Depending on the buying characteristics like early adopters, early majority, late majority, etc., a right promotion tool needs to be adopted that appeals to that group. For example, a college student in India from an urban area is likely to buy a motorbike that is recently launched and has trendy features and looks. The same kind of college student from a rural area would prefer a motorbike that is already a success (late majority). A college student in America would buy a pre-owned car.

5) Competition and environmental factors – The market share of the competitor and its strategies also force an organisation to adopt promotion tools to win customers. Sales promotion activities like free sampling, price cut displays, events at crowded places, etc. are used to counter competition supported by advertising campaigns.

There is no perfect promotion mix. Everyone has to devise a mix depending upon the situation. It has to be tailor-made depending upon the characteristics of the situation.

1. Push and Pull Strategies:

The purpose of promotion is to motivate and persuade not only the ultimate consumers, but also to the intermediaries who are available involved in making available goods finally to consumers.

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If the strategy adopted is to motivate and persuade the intermediaries’ to make effort to increase the sales the strategy is called push strategy. It of personal selling along with advertising and other trade promotional measures. The-manufacturer promotes goods to wholesalers, wholesalers in turn promote to the retailers and retailers persuading the consumers to buy.

On the other hand, if the customer demands particular goods from the retailer and the retailers want the same from the wholesalers and the wholesalers in turn asking the manufacturers to provide that kind of goods. Thus here it is the customer to wholesaler who is pulling the cord. The advertising by the manufacturer may persuade the consumer to ask for the goods to their retailers. Retailers in turn will ask the wholesalers and the wholesalers to manufacturer. The marketing manager will have to decide whether to use push or pull strategy.

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Customer-targeted marketing communications are pull type of communications. The objectives of pull marketing communication are to build awareness, attraction, and loyalty and to reduce search costs. When pull communications are successful, customers will seek out certain products or services and, in essence, by the interest they create, and pull the product through the channel.

On the other hand, push communications are directed at channel intermediaries. The objective is to motivate channel intermediaries to carry certain products to make available to customers. If successful, push communication strategies result into a wider range of availability, fewer stockouts, greater merchandising (shelf space), and a greater marketing effort. It would have been achieved with little or no push communication. However, to be more successful, a combination of the two is required.

2. Product Features:

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Use of a particular tool of promotion mix depends upon the type of goods to be marketed. For industrial products more of personal selling is required. For consumer products like HUL’s Axe, more of advertising is required. For highly image- oriented products like fashion garment the presence of designers or celebrities inside the store is required. For goods where not much difference is there in features and performance more of sales promotion is required.

Where the organisation is equally important, the public relations become more important. For seasonal products, off-season sale is very important, but advertising is required for sale round the year sale. This is why the retailers of full sleeve shirts and sweaters and suits organise sale in the month of January. For high-priced products, personal selling is important to mitigate risk. For low convenience goods marketers use advertising rather than personal selling. For products, where customers do not want to talk with the salesperson like Viagra, condom, hair colour (by a senior citizen) the advertising is more important.

3. Stage of the Product Life Cycle:

In different phases of a product life cycle, different tools of promotion mix become more effective. In the introductory stage to create awareness among the customers including business customers and distributors advertising has to be undertaken in a big way. Free samples may be distributed to the consumers and trade promotion may be undertaken to motivate distributors to stock the goods.

In the growth stage, the consumers have already heard of the product. Promotion has to be directed at specifying product benefits. Advertising increases whereas sales promotion declines. During the maturity stage, the emphasis will be on switching the customers from competitors and hence more of sales promotion is used. In the decline stage the firm will be more interested in harvesting revenue as much as possible. There will be a great decrease in expenditure on promotion.

4. Buyer Readiness:

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If the customer is unaware of the product, advertising and public relations are more important, but when he is in the marketplace sales promotion and personal selling are more important to make a decision.

5. Type of Buyer:

Buyers can be of different types and promotion mix has to be devised accordingly. In case of Organisational or business buyers, ads published in specialised trade publications and personal selling are more important; whereas, consumers are swayed by glossy advertisements endorsed by some celebrities.

6. Type of Distribution:

For intensive distributable goods, more advertising is done and also the help of sales promotion is taken. For goods sold through selective distribution, the promotion mix would vary, and for exclusive distribution like Rado watch, high- quality furniture, it needs more of personal selling.

7. Objectives, Budget, Cost and Availability of Media:

Firm’s promotional objectives are the reflections of overall marketing objectives. If the objective is to make mass awareness, the firm may go in for advertising, sales promotion and public relation. Most of the food companies, like Nestle, HUL, PepsiCo not only go in for aggressive ad campaigning, but also distribute free samples and go in for public relations.

If the objective is to invite the customer to the store where demonstration can be shown, then a combination of small advertising (to inform), sales promotion (to attract) and personal selling (to persuade) is undertaken.

Apart from objectives the promotion mix would be determined on the basis of budget made available to marketing department. If it is small the firm it would concentrate on personal selling. If it is larger firm, then it can advertise through regional and national media like that of HUL in India.

Cost of promotional tools is important in determining promotion mix. To reach a larger audience advertising is used. Many a companies now a days do not buy ad slots in cricket tournaments as it has become a very costly affair. The small entrepreneurs make use of local directories, cable TV bands, radio, local newspapers, outdoor ads and other promotional methods.

Even if the budget is there and the cost is ok, the availability of media is equally important. No marketer of tobacco or alcohol products is permitted to advertise on TV channels in India.

Many ads are denied if they are against national dignity and interest and disrespect the motherland’s culture. In some of the countries ‘comparative advertising’ is not allowed.

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