term paper promotions mgt

8/8/2019 Term Paper Promotions Mgt

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TERM PAPER

OF

PROMOTIONS MANAGEMENT

(MGT401)

TOPIC:- VIP luggage

SUBMITTED BY:- ANUJ KUMAR

ROLL NO.:- R1814A13

REG NO.:- 10800700

SEC:- R1814

COURSE:- BBA-MBA(5TH SEM)


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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.

Sales Promotion consists of a diverse collection of incentive tools, mostly

short term, designed to stimulate quicker and/or greater purchase of particular

products/services by consumers or the trade.

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.

Whereas advertising offers a reason to buy, sales promotion offers an incentive

to buy. Sales promotion include tools for consumer promotion (samples,

coupons, cash refund offers, prices off, premiums, prizes, free trials, crosspromotion, point-of purchase displays, and demonstrations); trade promotion


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(price off, advertising and displays allowances and free goods); and business

and sales-force promotion (trade shows and conventions, contests for sales

representatives, and specialty advertising). These tools are used by most

organizations, including nonprofit organizations.

Over the past two decade, the popularity of sales promotion has

been increasing. Two reasons for this increased popularity are

doubtedly the increased increase pressure on management for

Short-term result and the emergence of new purchase tracking

Technology. For example, many supermarket cash register are

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 spendingpromotional dollars on already-loyal Coke drinkers.


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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:

When directed at consumers:

1. To obtain the trial of a product.

2. To introduce a new of improved product.

3. To encourage repeat or greater usage by current users.

4. To bring more customers into retail stores.

When directed at sales people:

1. To motivate the sales force.2. To educate the sales force about product improvements.

3. To stabilize a fluctuating sales pattern.

When directed at resellers:

1. To increase reseller inventories.

2. To obtain display and other support for products.

3. To improve product distribution.

4. To obtain more and better shelf space.


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TOOLS FOR SALES PROMOTION:

Aimed at final consumers or users:

Contests

Coupons

Aisle display

Samples

Trade shows

Point-of-purchase materials

Banners and streamers

Sponsors

Aimed at middlemen:

Price deals

Promotion allowances

Sales contests

Gifts

Trade shows

Meetings

Catalogs

Merchandising aids

Aimed at companys own sales force:

Contests

Meetings


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Portfolios

Displays

Sales aids

Training materials

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-

Promotion schemes have to be carefully configured. They should be relevant.

The promotional gifts should hold synergies with brand and the product. It is

better if it has strategic value like SAMSUNG. But, ultimately, no promotion


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scheme can salvage a product. Eventually, the product has to fend for itself. A

support should not be mistaken for a crutch.

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


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Sampling:

Sampling involves a variety of procedures, whereby consumers are given some

quantity of no charge to induce trial. Sampling is generally considered the most

effective way to generate trial, although it is also the most expensive. As a salespromotion technique, sampling is often used to introduce a new product or

brand to the market.

Manufacturers of packaged-goods products such as food, health care items,

cosmetics, and toiletries are heavy users of sampling since their products meet

the three criteria foe an effective sampling program:

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 brands 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.


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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:

Redemption of coupons by consumers for a product or size not specified

on the coupons.

Redemption of coupons by salesclerks in exchange for cash.

Premiums:


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A premium is an offer of an item of merchandise or services either free or at a

low price that is an extra incentive for purchases. The two basic types of offer

are the free premium and the self-liquidating premium.

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 McDonalds and Burger King, which use

premium offers in their kids 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 brands image.

Contests & Sweepstakes:

A contest is a promotion where consumer competes for prizes or money on the

basis of skill or ability. The company determines winners by judging the entries

or ascertaining which entry comes closest to some predetermined criteria.


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Contests usually provide a purchase incentive by requiring a proof of purchase

to enter or an entry form that is available from a dealer or visit a store display to

gather information needed to enter. Marketer must be careful not to make their

contests too difficult to enter, as doing so might discourage participation among

key prospects in the target audiences.

Sweepstakes is a promotion where winners are determined purely by

chance; it cannot require a proof of purchase as a condition for entry. Entrant

needs only submit their names for the prize drawing. While there is often an

official entry form, handwritten entries must also be permitted. One form of

sweepstakes is a game instant winner is a popular promotional tool. Some

games occur over a longer period and require more involvement by the

consumers. Promotions where consumers must collect game pieces are popular

among retailers and fast-food chains as a way to build store traffic and repeat

purchase.

Refunds & Rebates:

Refunds are offers by the manufacturer to return a portion of a new product

purchase price, usually after the consumer supplies some proof of purchase.

Consumers are generally very responsive to rebate offers, particularly as the

size of saving increase. Rebates are used by the makers of all types of products,

ranging from packaged goods to major appliances, cars, and computer software.


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Packaged-goods marketers often refund offers to induce trial of a new product

or encourage users of another brand to switch. Consumers may perceive the

savings offered through a cash refund as an immediate value that lowers the

cost of the item, even through those savings are realized only if the consumers

redeems the consumers redeem the refund or rebate offer.

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 competitors

promotion or introduction of a new brand.


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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; thepoints can be redeemed for gifts and prizes.

Trade-Oriented Promotion:

10.Contests and dealer Incentive

11.Point-of purchase Display

12.Training Program

13.Trade Allowance


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TYPE OF MESSAGE USED: - The message formats are a template for

determining the advertising strategy that will be told in the form of story. In case

of VIP luggage, I will try to use various types of messages such as factual, teaser

and emotional.

a) Factual:-It will be information rich advertisement telling about the product. It

is usually a devoid of an emotional appeal, special effects or any other thing that

distracts the audience from the main message content.

b)TEASER:-As the teasers are the mystery advertisements in which only a little

bit is told about the product and by this way a curiosity is generated among the

consumers and the consumers purchase the product ,so this thing can also be

used in case of theluggages.

c) EMOTIONAL: Emotions will be used in the ad which will be in the form of

happiness appeal which will generate interest among the buyers

MESSAGE APPEAL:-The message appeal used in the case of VIP luggage will be

emotional appeal. The emotional appeal tends to arouse the positive as well as

negative feeling in a person. Customers usually buy the products based on their

feelings and not on the basis of information the product is providing. The

emotional statements work more than a pure logic. Humorous appeal will be

used in my ads.

Communications Analysis

Marketing Communication strategies for are almost fully concentrated on print

advertising and electronic ad. Depending on how the differentiates and positions itself

the print ads can be found in newspapers and local community magazines or high-end

regional magazines and electronic ad will be shown on entertainment channels like

star plus, Sony, zee etc. Besides these channels the ad will also be shown on movie


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channels and sports channel. Internet will also be used as a medium of

communication.

Competitive AnalysisVIP has direct competition with other luggage companies like

aristocrat,safari,American touristor make and local luggage companies. Thus the

consumers have a lot of choice in the market as far as luggage companies are

considered. Most of the competitor gives their ad on magazines and news paper etc.

Thus the role of IMC becomes very important in establishing a strong brand

presence in the market which can differentiate our brand from the competitors.

ADVERTISING CAMPAIGN

ADVERTISING OBJECTIVE

To develop knowledge and liking for VIP luggage as a best brand and persuasive

advertising.

To attract more people to buy VIP luggage.

Objective 1

Create awareness among 90% of the target audience.

Objective 2

Use simple messages.

Objective 3


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Providing detailed description about various communication modes for reaching the

destination.

Objective 4

Build favourable attitudes

ADVERTISEMENT BUDGET

To advertise we need funds for the same. The preparation of budget i.e. allocation of funds to

various cost centres is very much necessary before proceeding for the designing of the

campaign. It is a very critical aspect of the designing of the advertisement campaign. After

all the reason behind this is the profit motive of the advertising agency.

We have considered some of the underlying factors while setting the advertisement budget:

1. Since our product, VIP luggage, is in its introductory stage in its life cycle so we plan

to put it in an aggressive advertising campaign.

2. In order to achieve an aggressive campaign we have selected an effective media mix

comprising local newspapers, cable, radio and FM stations, internet, billboards and

national dailies.

3. The kind of frequency which we have planned has also played a determining factor in

apportioning the budget.

In this present scenario, our team has followed the Build-Up approach in calculating the

advertisement budget. The Build-Up approach refers to the process of calculating the

advertisement budget by following the said steps:

1. Setting of advertising objective.


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on our

target

audience

)

Radio Rs. 36,000 Rs. 27,000 Rs. 45,000 Rs. 18,000 Rs. 18,000 Rs. 18,000 Rs.

1,62,000

Local

channels

Rs. 2,000 x 2

x 50 = Rs.

2,00,000

Rs. 2,000 x

2 x 50 = Rs.

2,00,000

Rs. 2,000 x

2 x 50 = Rs.

2,00,000

Rs. 2,000 x

1 x 50 = Rs.

1,00,000

Rs. 2,000 x

1 x 50 = Rs.

1,00,000

Rs. 2,000 x

1 x 50 = Rs.

1,00,000

Rs.

9,00,000

Local

news

channels

Rs. 3,000 x 2

x 50 = Rs.

3,00,000

Rs. 3,000 x

2 x 50 = Rs.

3,00,000

Rs. 3,000 x

2 x 50 = Rs.

3,00,000

Rs. 3,000 x

1 x 50 = Rs.

1,50,000

Rs. 3,000 x

1x 50 = Rs.

1,50,000

Rs. 3,000 x

1 x 50 = Rs.

1,50,000

Rs.

13,50,000

Billboard

s and

posters

Rs. 5,000

x 50 = Rs.

2,50,000

NOTE: Full Page 52 cm x 33 cm (Size); Half Page - 26 cm x 33 cm (Size)

Unit for newspapers: cost/cm2 is to be Rs. 360. A total of Rs. 25,000 for the half page

advertisement (approximately) is to be charged

Unit for radio: Rs. 300/10 seconds everytime.

Total budget for the advertisement campaign comes out to be Rs. 47,02,000 for the period

October to December. The tender which we have filed is of Rs. 70,00,000. Thus our margin

will be Rs. 18,00,000 after apportioning Rs. 4,00,000 to various miscellaneous expenditures.

MEDIA STRATEGY

Demographics of our target audience, their attitudes, etc. have suggested us to take the media

mix of the following type.


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1. Print Media Newspapers (PUNJAB KESARI & The Times of India)

2. Electronic Media Local cable channels

3. Radio FM stations have tie-ups with the local newspapers so we have selected these

media vehicles which are BIG FM, Radio Dhoom & Radio Mantra.

4. Outdoor media Billboards, posters.

Newspaper has the widest reach among the various media vehicles. The cost for advertising

via this media is relatively less. The reach of this media to our target audience is estimated to

be the largest. One of our objectives is to make 90% of our target audience aware about the

tourist destinations in INDIA and newspapers in the form of local and national dailies can

very well comply with this objective as it has the benefit of mass coverage. It is basically an

awareness based campaign so we are required to provide the details and specifications about

VIP luggage. security concerns, communication aspects, expenses involved and other such

details. For all this we require a large media space and newspapers does a good job in this

regard. The pamphlets which we have designed to promote VIP luggage can be inserted in

the newspapers and thus circulated in the country. It involves lesser cost, more information

and larger reach. So newspapers are our first priority in our media mix. we have planned to

focus three of the premier stations of india through which we can grab the attention of people.

We have selected various cities of the state where billboards and posters can be put up. In

this regard we have chosen locations where the density of our target audience is the

maximum. Our research has shown that the people of the country prefers VIP luggage. Thus

the number of billboards and posters to be put up is decided to be the maximum in the

country.


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Next three months i.e. January to March Our media scheduling will that be of flighting.

This has been decided keeping in mind the various festivals that would take place in the first

three months of our campaign. In the first part we can see that there are lots of vacations like

winter holidays, Christmas and Diwali when people break their daily monotonous routine and

plan to purchase things. Thus our objective would be grabbing the attention of those people

in this favourable time period the most. Hence continuity has been chosen to support the

aggressive campaign in the first half.

In the second half the frequency of ad insertion will be less and will focus on developing the

linking for buyers.

First three months

Newspapers - Mentioning twice a week

Pamphlets Twice in a month in newspapers

Radio Mentioning everyday: 1st month - 4; 2nd month 3 & 3rd month 5

(In December people plan to visit more places of customer attraction so we have decided to

give the maximum mention)

Local channels Twice daily

News Channels Ad to be displayed twice daily at prime time (9 am and 9 pm).

Next three months

Newspapers - Mentioning once in a week


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Radio Mentioning twice a day

Local channels Twice daily

News Channels Ad to be displayed once daily

CREATIVE STRATEGY

Now we come down to the most vital component of the advertisement campaign i.e.

determining the creative strategy.

Message Theme

Our message theme has been a blend of emotional and rational approach. Numbers, letters,

words and concepts have been specified for ascertaining the rational themes. Feelings,

abstract ideas, images have been effectively designed to strike a balance for the message

theme.

We have tried to develop the relevance of VIP luggage for the audience of india in respect of

time and space boundary.

The selling strategy of ours has featured the following:

1. Benefits accrued (In our ads we have tried to focus on the value proposition involved

in choosing thevariety of luggages. For the incumbents it will always be cheaper to

go for the various types of luggages..

2. Attributes which give the distinctive difference to VIP luggage have also find a

mention in the various ads of ours through various media vehicles so we have applied

the concept of product differentiation to adhere to one of our objective of liking. And


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we have the various distinctive differences and we have tried to insert at specific

places keeping the target audience in our mind.

3.The USP of our product i.e. VIP luggage have found a mention in the punch lines of

our ad campaign. The biggest advantage which VIP luggage provides is that our

target audience can avail the benefits of quality and less cost.

4. Our focus will be on providing the distinctive differences, and advantages on the cost

front and touching the emotions of people.

PRE-TEST OF AD CAMPAIGN

As we have seen that a huge investment is involved in designing and launching an ad

campaign therefore pre-testing of an ad campaign is utmost essential and cannot be over

emphasised. Moreover if the error can be detected at an early stage a lot in terms of energy,

time and cost can be saved.

For print media:

We will go for the following

1. Direct questioning: We will go to the mentioned cities and through direct questions

we will try and get feedback about the effectiveness of the ad.

2. Order of merit: Respondents are shown alternative ads and asked to rank them

according to their preference. Respondents will be randomly selected across the

demographics of our target audience.

For Broadcasting:

1. Clutter test: We will try and measure whether our audios and videos are able to break

the clutter of varied advertising.


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POST TESTING

Once the ad is designed, pre-test done and the ad is released to generate an effective feedback

we sincerely advice for effective post testing technique. This will truly measure the

effectiveness of our ad campaign in respect of our objects met. We can follow the below post

test techniques:

1. Recall

2. Tracking studies

BIG IDEA

The campaign will be known as Feel your own soul campaign and should be designed in

such a way that it catches the attention of the target audience so that they have to stop look

and listen.

Undoubtedly its an original idea.

Relevance Festive season will attract more people. Moreover the idea talks about feeling

your own soul as our target audience are the inhabitants of Jharkhand itself.

The punch line which will transfer the selling strategy statement into an exciting attention

getting and memorable message.

There are many things in life that will catch your eye.

But only a few will catch your heart.... pursue those.

So this goes in making the big idea exciting.


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EFFECTIVENESS OF PROMOTIONAL

ACTIVITIES

The main purpose of the study is to know the effectiveness of the promotional

Activities in luggage 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 encouragethe repeat purchase. We also try to know the awareness of the sales promotional

activities as advertising plays an important role in sales Promotion.

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

Benefits of products can be demonstrated most effectively by advertising.

Advertisement gets the full attention of the people.

Advertising is done with a positive objective of awareness, persuasion or

reinforcement.

Advertising is the most visible marketing tool which seeks to transmit an

effective message from the marketer to a group of individuals.

Including the consumer to try the product,

rewarding the consumer for brand loyalty,

encouraging the consumer to trade up or purchase larger sizes of a

product,Stimulating the consumer to make repeat purchase of the product


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