q ADVERTISING V/S SALES PROMOTION
q BUILDING A SALES PROMOTION PLAN

By
Prof. Shravan Rungta
B.Com, MMS, PGDEM, NET
Faculty - Advertising
N L Dalmia Institute of Management Studies and Research
Mumbai
9820572046
E-mail : facultyshravan@yahoo.co.in
 

Advertising v/s Sales Promotion

The debate concerning expenditure on advertising versus that on sales promotion has been an interesting topic of conversation among marketers for decades. The primary reason for the emergence of this debate is that both advertising and Sales promotion aims to achieve objectives that are many a times overlapping and complimentary.

Advertising or "Mainline" as it is also called, helps an enterprise to launch a product or service, increase market share and to compete in the market place by influencing consumer and their decision making process. Sale promotion or "Below-the-line" activities as it popularly know as also helps an enterprise inducing trials, increasing off take and thereby enhance the topline.

Both the promotional activities aims at achieving the firms marketing and business objective, however the duration of results and magnitude of impact varies.  

This debate could also be analysed from another view point, the financial commitment and returns. The advertising agencies demand for more budget to make advertising more effective, through wider reach and longer campaign duration; whereas the sales and distribution channel demand more spend on sale promotions to increase off take in the market during a particular period and thereby increase market share.

Traditionally it has been believed that advertising has much longer term effect on the brand whereas, sales promotion has more immediate impact on sales figure. Thus, the spend on both these activities depends upon the goals of the marketing department and the decision maker.

However, in a practical scenario it is observed that, firms advertising and Sales promotion budget depends upon the influencing power of the agencies on one hand and Channel partners on the other hand. The ratios of advertising expenditure to that of sales promotion in developed countries like US and Europe is 30: 70. Whereas in developing countries like China and India is reverse (70: 30), but the trend seems to be changing in India too, and it is predicted that the ratio would undergo a dramatic shift in years to come. This would primarily be due to the growing power of retailers on one hand and immense competition on the other hand, which forces the competing firms to opt for short term gains as against potential long term profits.

Either way the customer would ultimately have more and more say in the determination of price and performance of the brand, and the firm which delivers on both counts by judiciously using all forms of promotion would ultimately stand to gain.
 

Sales Promotion

Definition

Sales promotion is a short term activity carried out at regular intervals, to provide direct inducement to customers, dealers or sales force in order to add value to the product and thereby stimulate immediate or increased purchase.

While advertising explains the Logic behind buying, sales promotion offers us the incentive to buy "NOW".

Sales promotion operates basically at two levels:

1. Customer Promotion.
2. Trade Promotion.

Building a Sales Promotion Plan

• Nature of Market: A promo for a rural audience could be completely different from one designed for the urban market. Media penetration is not high in rural areas; therefore promos work well towards building the brand. Bajaj India launched a rural promo for its scooters, the top two prizes being 100gm of gold, and a Colour TV, both on the rural aspirational list.
   
• Timing: The right time is when the consumer has the desire to spend. The turn of the millennium was the perfect launch pad for many urban campaigns. Festivals, occasions, events may be ideal for a rural promo.
   
• Be on Shelf: Let there be no loopholes in the promo! Inventory Depletion should not be a problem. The minute the consumer sees the promo; the product should be made easily available. Bad timing can be disastrous. A leading publication was giving away ten cassettes with a subscription. Many of the subscriptions were cancelled because it took more than twelve weeks for the Cassettes to reach the consumer.
   
• Duration of the Promotion: The duration should be right! It should not last too long to let laggards in, and also not too short for the early adopters to get a chance to try it out.
   
• Construct: A "construct" is the way a promo is designed. Promotions should be constructed keeping in mind brand objectives and consumer behaviour. What is the effort a consumer or a dealer has to put in to get the benefits? Does he/she have to return crowns to win a free trip, or enter a contest to win something?
   

Prof. Shravan Rungta
B.Com, MMS, PGDEM, NET
Faculty - Advertising
N L Dalmia Institute of Management Studies and Research
Mumbai
9820572046
E-mail : facultyshravan@yahoo.co.in
 

Source : E-mail May 29, 2004

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