MARKETING Term Paper
MARKETING Term Paper
MARKETING Term Paper
OF
MARKETING MANAGEMENT
Thanks.
EXECUTIVE SUMMARY
Promotion and Advertising and are an integral part of our social and economic
system. In our complex society, advertising has evolved into a vital communication
system for both consumers and business. The ability of advertising and other
promotional methods to deliver carefully prepared messages to target audiences
has given them a major role in the marketing programs of most organizations.
The project emphasizes a lot on the recent trends in promotion activities that are
now-a-days full flow to attract customers by new varieties of media and promotion.
It emphasize on the consumers different perception about the advertising trends
and objectives, and different types of promotion. It shows how consumers react to
a certain promotion activity.
Efforts have been made to make this record of practical help to those involved in
the strategic thinking in similar field/industry. The presentation has been
intentionally kept brief for easier understanding and retention of the facts.
Illustration has been added where necessary for better presentation and support
facts.
SALES PROMOTION
Sales promotion can be gimmicky come-ons or solid marketing strategies. They can
attract new customers to your business or keep loyal customers from being wooed by
the competition. This project defines sales promotions and discusses the way by which
sales promotions help in rewarding the loyal customers.
D
O sales promotion deserves a place in your marketing plan? If you are
interested in keeping the customers you’ve got, the answer is yes. It costs much
more to acquire a new customer than it does to retain one you’ve already got. So
reward their loyalty. Sales promotions are an excellent way to stay in touch with
current customers and to give them incentives for containing their relationship with
your business.
Most sales promotions have a specific duration. They produce result quickly, but
once the promotional period is over, those incentive-induced sales tend to taper off.
A properly designed sequence of sales promotions can accomplish several
marketing objectives:
• Encourage an initial purchase.
• Foster increased purchases.
• Reward repeated purchases and thus encourage even more shopping activity.
In some professions, sales promotions are rare – you hardly ever see a lawyer offer
a two –for-one price on divorce, even in services professions. Most service
business rely on long term customer relationship.
Over the past two decade, the popularity of sales promotion has
been increasing. Two reasons for this increased popularity are
Existing
doubtedly the increased increase pressure on management for Customer are
often the best
Short-term result and the emergence of new purchase tracking
prospects for
Technology. For example, many supermarket cash register are future sales
growth
now equipped with a device that dispenses coupons to a
Customer at the point of purchase. The some objectives of
Sales promotion type, and cash amount of the coupon will
Very from customer to customer based on their purchases.
In essence, it is now possible for the Coca-Cola company to dispense coupons will
vary from customer who purchase Pepsi Cola, thus avoiding spending promotional
dollars on already-loyal Coke drinkers.
SOME OF THE TARGETS OF SALES PROMOTION
ARE:
The objective of the sales promotions are different for different targets. The
objectives for the consumers, sales people and resellers are as follow:
Aimed at middlemen:
Price deals
Promotion allowances
Sales contests
Gifts
Trade shows
Meetings
Catalogs
Merchandising aids
PROMOTION STRATEGIES:
Sales promotion encourages consumers to seek more promotion rather than more
products. For instance, several TV manufacturers gave a 14-inch TV free when a
bigger TV was bought. Schemes like this prod the consumers to look at the gift
rather than the product. Sometimes companies are taken to court by competitors for
giving gifts costlier than the product itself. At others, companies fall into what
might be called “Festival Promotion Trap”. The customers know that the company
gives a hefty discount on festival sales.
So, he/she waits till Diwali and buys the product. Unwittingly, the company trades
down its own product.
CONCLUSION-
The trends in sales promotion can widely be divided into two parts, trends in trade
promotions and trends in consumer promotion. The objective of both the
promotion are same, to fasten the sales of the goods and services, they differ in
their promotional tools and procedures. These are discussed in detailed below:
Promotions built around price discounts and advertising or other allowances are
likely to have higher distributor/retailer participation levels than other type
promotions because there is a direct economic incentive attached to the promotion.
The importance attached to individual types of promotions may vary by the size of
distributor/retaile
Objectives of Consumer Promotion:
Consumer promotions can fulfill several distinct objectives for the manufacturer.
Some of the more commonly sought-after objectives include:
regular price.
Bonus packs. Additional amounts of the products are given to buyers
SALES PROMOTION-
Consumer-Oriented Promotions:
1. Samples
2. Coupons
3. Premiums
4. Refunds/Rebates
5. Bonus Packs
6. Price-Offs
7. Contests/Sweepstakes
8. Frequency programs
9. Event Marketing
Sampling:
The products are of relatively low unit value, so samples do not cost too
much.
The products are divisible, which means they can be broken into small
sample size that are adequate for demonstrating the brand’s features and
benefits to the user.
The purchase cycle is relatively short, so the consumer will consider an
immediate purchase or will not forget about the brand before the next
purchase occasion.
Couponing:
The oldest, most widely used, and most effective sales promotion tool is the prices-
off coupons. Coupons make it possible to offer a price reduction only to those
consumers who are price-sensitive. Coupons also make it possible to reduce the
retail price of the product without relying on retailers for cooperation. Coupons can
encourage repurchase after initial trial.
The product category where coupons are used most is disposable diapers, followed
by cereal, detergent, and deodorant. Some of the product categories where coupons
are used the least are carbonated beverages, candy, and gum.
But there are a number of problems with coupons. It can be difficult to estimate
how many consumer will use a coupons and when. Response to a coupon is rarely
immediate; it typically takes anywhere from two to six month to redeem one.
However, coupons remain less effective than sampling for including initial product
trial in a short period.
Another problem with coupon promotions is misredemption or fraud which can
occur in a number of ways, including:
Free premium are usually gifts or merchandise included in the product package or
sent to consumers who mail in a request along with a proof of purchase. Free
premium have become very popular in the restaurant industry, particularly among
fast-food chains such as McDonald’s and Burger King, which use premium offers
in their kid’s meal to attract children.
Self-Liquidating Premium require the consumer to pay some or all of the cost of
he premium plus handling and mailing costs. The cost marketers usually purchases
items used as self-liquidating premiums in large quantities and offers them to the
consumers at lower-than-retail prices. The goal is not to make a profit on the
premium item but rather just to cover costs and offer a value to the consumer.
In addition to cost savings, self liquidating premium offer several advantages to
marketers. Offering values to consumers through he premium products can create
interest in the brand and goodwill that enhance the brand’s image.
Rebate have become a widely used form of promotion for consumer durable s.
products such as cameras, sporting goods, appliances, television, audio and video
equipment, computers, and cars frequently use rebate offers to appeal to price
conscious consumers. Rebates are now common not only in the auto industry and
other durable products but for packaged-goods products as well.
Bonus Packs:
Bonus packs offers the consumer an extra amount of product at the regular price
by providing larger containers or extra units. Bonus packs result in a lower cost per
unit for the consumer and provide extra value as well as more products for the
money. There are several advantages to bonus pack promotions. First, they give
marketers a direct way to provide extra value without having to get involved with
complicated coupons and refund offers.
The additional value of a bonus pack is generally obvious to the consumers and
can have a strong impact on the purchase decision at the time of purchase.
Bonus packs can also be an effective defensive maneuver against a competitor’s
promotion or introduction of a new brand.
Event Marketing:
Another type of consumer oriented promotion that has become very popular very
in recent years is the use of event marketing. Event marketing is a type of
promotion where a company or brand is linked to an event or where a termed
activity is developed for the purpose of creating experiences for consumers and
promoting a product or service. Marketers often do event marketing by associating
by associating their product with some popular activity such as a sporting event,
concert, fair, or festival. However, marketers also create their own events to use as
a promotional purpose.
Price-Off Deals-
Another consumer oriented promotion technique is the direct price-off deal, which
reduce the price of the brand price-off reductions are typically offered right on the
package through specially marked price packs. Typically price-off range from 10
to 25 percent off the regular price, with the reduction coming out of the
manufacturer’s profit margin, not the retailer’s. Keeping the retailer’s margin
during price-off promotion maintain its support and cooperation.
Frequency Program:
One of the fastest-growing areas of sales promotion is the use of frequency
program (also known as continuity or loyalty programs). Many packaged-goods
companies are also developing frequently programs. Pillsbury, Nestle, Kraft, and
others have recently introduced frequency program that offers consumers the
opportunity to accumulate points for continuing to purchase their brands; the points
can be redeemed for gifts and prizes.
Trade-Oriented Promotion:
12.Training Program
13.Trade Allowance
14.Trade Shows
15.Cooperative Advertising
Reasons for Increase in Sales Promotion:
The reallocation of the marketing budget concerned many marketers who still
viewed media advertising as the primary tool for brand building and saw sales
promotion program as little more than gimmicks that contributed little to brand
equity. However, most have recognized that consumers may love certain brands
but often want an extra incentive to buy them.
A major reason for the increase in spending on sales promotion is that the
promotion the promotion industry has matured over the past several decades.
Increased sophistication and a more strategic role and focus have elevated the
discipline and its role in the IMC program of many companies. In the past, sales
promotion specialists would be brought in after key strategic branding decisions
were made. Promotional agencies were viewed primarily as tacticians whose role
was to develop a promotional program such as a contests or a coupon or sampling
program that could create a short term increase in sales.
there are also number of factors that have led to the increase in the importance of
sales promotion and the shift in marketing dollars from media advertising to
consumer and trade promotion. Among them are the growing power of retailers,
declining brand loyalty, increased promotional sensitivity, and brand proliferation,
fragmentation of the consumer market, short term focus of many marketers,
increased accountability, competition, and clutter.
RESEARCH METHODOLOGY:-
METHODOLOGY
1. Research Design
There two methods of data collecting first one is Primary method and second one
is Secondary method.
In this research Data was collected from secondary source
because the objective of the study was to find out the recent trends in sales
promotion and advertising. We can find these information through books,
magazines, journals, & Internet etc.
Findings-
Perhaps because coupons and temporary price reduction are most common form of
sales promotion, most research has assumed that monetary savings is the only
consumer benefit of sales promotions. Consequently while many studies have
examined the cost of promotion usages comparatively few have examined their
benefit to the consumer.
provide benefits that are congruent with those provided by the product being
promoted. Specifically, monetary promotions are more effective for
utilitarian products than for hedonic product than for utilitarian products.
Recommendations-
• This study help us to find out the best and cheapest advertising and sales
promotion methods.
• This study save our valuable time and money to choose a best advertising
method
• LG
• VIDEOCON
• SAMSUNG
• ONIDA
• BPL
LG ELECTRONICS
LG Electronics rightly understood the consumer motivations to create magneti
cproducts, price them strategically, position them sharply and keep making them
agnetism more potent. Having understood the finer differences in consumer
motivations, it opted for sharp- arrow ‘reasons-to-buy’ differentiation over the
‘blanket-all approach’ taken by most of the other players. It is an aggressive
marketer. It focuses on low and medium price products.
SAMSUNG
Initially the strategy of Samsung in India was to create premium image by
emphasising global brand. After facing stiff competition from another Korean
major- LG, Samsung also started playing price game. In 2004 it reverted back to its
premium positioning, although it resulted in some loss of market share. In line with
the Global Digital Initiative of the Parent Company, Samsung India is seeking to
acquire digital leadership in India by introducing its digital ready televisions like
the 40" LCD Projection TV, 43" Projection TV and the Plano series of Flat Colour
television
VIDEOCON
Videocon has always been a price player and has an image of a low price brand.
This entails providing more features at a given price vis-à-vis competitors. It has
taken over multinational brands to cater to unserved segments, like Sansui- to flank
the flagship brand Videocon in the low to mid priced segment, essentially to fight
against brands like BPL, Philips, Onida and taken over Akai- tail end brand for
brands like Aiwa. Videocon is one of the largest manufacturers of television and its
components in India and thus has advantages of economies of scale and low cost
due to indigenisation. It has the widest distribution network in India with more
than 5000 dealers in the major cities. It also has a strong base in the semi-urban
and rural markets. Due to its multi-brand strategy, it has at present multiple brands
at the same price point. This has led to a state of diffused positioning for its brands.
It has also led to a cannibalisation of sales among these brands. The flagship brand
Videocon has lost market share due to the presence of Sansui in the same segment.
Because of reduction in import duties on CPT the cost advantage of Videocon is
also on the
decline. Hence it is facing rough weather and also trying to boost exports. Besides
understanding the strategy adopted by different players, several other
factorsindustry growth, concentration and balance, corporate stakes, fixed cost, and
product differences need to be analysed to determine the extent of rivalry between
the existing Players.
ONIDA
Its popular devil ad although had engendered a strong emotional pull towards the
brand, technologically it represented no advancement. The company plugged the
gap by touting its digital technology. Like Videocon, it has also been able to hold
its market share. The world-class quality of Onida has enabled the company to
make a breakthrough on the export front. It has technical tie- up with the Japan
Victor Company, better known as JVC. So focused is Onida on positioning itself
on the premium, high- tech plank that it is even planning to push its own envelope
on obsolescence, much. The strategy is aimed at further broad basing the product
offering of the company, which has largely dominated the top-end of the television
market, across multiple market segments.
Sample unit:
Generally customers as a source of primary data collection have been
surveyed for the purpose of obtaining information.
Sample size
For this research work due to time constraint the sample size taken is 250.
Sampling procedure:
EFFECTIVENESS OF PROMOTIONAL
ACTIVITIES
The main purpose of the study is to know the effectiveness of the promotional
Activities in the home appliances (TELEVISION) industry. From the study we
Expect to know to what extent the promotional activity benefited to the industry
and what the things are that customer expects to do from the industry to improve
sales.
The effectiveness of promotional activities helps the company to increase the
sales and encourage the repeat purchase. We also try to know the awareness of
the sales promotional activities as advertising plays an important role in sales
Promotion.
L.G 107 43
SAMSUNG 55 22
ONIDA 53 21
VIDEOCON 50 19
BPL 48 17
Sales Promotions Outcomes
The simplest way to promote your product or service is to cut the price. The best
way to promote the product is by adding value to it. So to add the value, sales
promotions become the strategic tools when its not utilize for immediate response
solution. The actual saving on any promotions is determined by the original retail
price which can vary significantly between retailers. A sales promotion ‘trap’
develop when the competition start to imitate each other activities often based
In general, sales promotions work best when they attract competitors, customers to
try a superior product and the switched customers. So using the Sales Promotions,
the company must establish their objectives and select the strategic sales
promotions tools.
CONCLUSION
Sales promotion is a most important aspect in any company, the studywa
conducted in the home appliances industry regarding sales promotion. The
Researcher was helpful to gain some knowledge about the organization and also
about sales promotion conducted in the organization. The company is getting the
feedback from the respondents who are using the television.
Based on the study made the researcher has given few findings and suggestions
regarding the sales promotions of the industry.
All the five companies that are LG, SAMSUMG, ONIDA, VIDEOCON and B P L
companies will be able to face the steep competition from the local manufacturers
who are also quite competent with the Television manufacturing technology. Since
price is the main factor for most buyers, companies will be able to stay in the
market with competitive price and may be with a lower profit margin, which can
be compensated through flat screen. This technology is not readily available with
the local manufacturers. Companies will be able to convince the customers in a
dignified manner rather than buying their minds through gift schemes.
BIBLIOGRAPHY
Reference Books :-
Krishnaswamy K.N., Research methodology, II Edition, Published by
Dorling Kindersley (India) Pvt. Ltd .
Belch & Belch, Advertising & Promotion, III Edition, Published by TATA
McGraw-Hill Edition.
Magazines :-
Business Toady
Advertising Express
News Papers:-
Economic Times
Websites:-
Http: www.videconworld.com
• http: www.google.com
• http: www.wikipedia.org
• www.in.lge.com
http://en.wikipedia.org/wiki/Sales_promotion
THANK
YOU