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Advertizing is today one of the most widespread tools of a communicative policy of the company. The increase in a commodity turn, distribution or strengthening of image of the goods, firm, acquaintance with a product, the information on functions and product cost, trust strengthening to a product can be the advertizing purposes.
Introduction
Advertizing is today one of the most widespread tools of a communicative policy of the company. The increase in a commodity turn, distribution or strengthening of image of the goods, firm, acquaintance with a product, the information on functions and product cost, trust strengthening to a product can be the advertizing purposes.
Advertizing draws attention of consumers to the goods, causes desire it to get. But additional stimulating influence that the desire turned into real purchase of the goods is necessary, it is necessary to achieve steady long-term sale. The following component of communication policy is directed on it - sales promotion (sales promotion) which includes diverse ways of the stimulating influences accelerating response of consumers.
Public relations along with advertizing and sales promotion are one of important instruments of marketing. This kind of activity is directed on formation and maintenance of favorable image of firm, on belief of the public in need of activity of firm and its beneficial influence on society life.
The company should have the constructive relations not only with clients, suppliers and dealers, but also with wide layers of the interested public which in this case is understood as any group, actually or potentially interested in successes or failures of this or that company or having influence on its activity. Work with the public, as well as advertizing, is the tool of communicative policy of the enterprise and is based on principles of mutual understanding, truthfulness, the clarity full of knowledge and cooperation.
Advertising is a message that tries to sell something. Companies advertise everything from cars to candy. Advertising is also used to change people's ideas. For example, an ad (advertisement) could try to make voters choose a certain candidate for president. Ads appear almost everywhere you look. You find them on the radio and on TV, in magazines, shop windows and on T shirts. They show up inside elevators, on school buses and even in schools. About 600 billion dollars are spent on advertising around the world every year [2].
Advertising does two main jobs. It tells people about something, like a product or a service and it also works to make people want to buy the product or service.
Ads (advertisements) do their jobs in many different ways. Many printed ads have headlines or boldly printed words that make people stop and read them. The headline may promise something that the reader wants, like a good price. Other headlines may carry the announcement of a new product.
Some ads use slogans that are used over and over again .They are easy to remember and often use a catchy phrase. Sometimes slogans are not related to the product.
In many ads a famous person talks about a product and tells why they use it. This person may be an actor, a model or a well-known athlete. Or they may just be an average user of a product [4].
Ads also compare a product with another one of the same type. The ad points out why a product is better.
Some ads feature cartoon or product characters. They may appear in an ad over a long time. The characters become well known and people identify them with a product.
Repetition is one of the most basic techniques used in the advertising business. Advertisers broadcast their commercials several times a day for days or weeks to get the message across. When people see an ad more often they may be more likely to accept the message and want the product [3].
Advertising media.
Advertising gets to people through different forms of communication. Newspapers, magazines and direct mail belong to print media. TV, radio and the Internet are among the most important electronic media.
Newspapers.
Almost half of a newspaper is made up of ads. Local papers have ads of local companies, but nationwide newspapers also advertise products that are sold all over the country. Most papers are published daily so new ads, like products on sale or movie openings can be placed every day. Newspapers sell advertising space in all sections of their paper. In most cases ads of products will be put in the section they are related to.
Display ads are big ads that can take up from a few cm to a full page. They have illustrations, headlines and lots of information on a certain field.
Classified ads appear in a separate section of a newspaper. Most of them only have a few lines and list homes, cars for sale, furniture or other things that private people want to sell or buy [3].
Magazines.
Magazines mostly appear all over the country and are used by national advertisers. In contrast to newspapers they are read when people have more time. They are kept for a few weeks or even months. Better printing quality and colour ads are among the advantages of magazines.
Many special magazines are made for groups of people. The ads that appear there are especially for these groups. A computer magazine, for instance, may have many ads related to computers, printers or scanners.
Direct mail.
Direct mail consists of leaflets, brochures, catalogs or letters, that are mailed directly to people. Mail-order companies profit from this kind of advertising. Some mailing lists send information to all the people others only have special lists according to the jobs that people have or their age or income. Direct mail costs a lot of money, but advertising companies can be sure that they will reach the people.
Radio.
Local advertisers place about 70 per cent of advertising on the radio. An advantage of radio is that people listen to programs while doing other things. In some cases radios are on the whole day. Commercials last about 30 seconds. Radio stations are more specialized in what they broadcast. One radio station offers pop music and has a younger listening audience; the other may broadcast classical music with older listeners. The ads can be chosen according to the group of people who listen [3].
Outdoor signs.
Large colourful outdoor signs can easily catch the attention of by-passers. But these ads must be short and simple because viewers see them only for a few seconds.
The main signs are posters, billboards and electronic displays. Billboards are owned by local companies that rent them to advertisers. Sometimes ads are painted on buildings. Electronic billboards have large displays where ads change very quickly. They are the most expensive kind of outdoor signs.
Television.
Television combines sound and moving images. It is one of the most expensive forms of advertising, but on the other hand it reaches a very wide audience. Advertisers buy time from TV stations to broadcast their commercials. This time is cheaper at times when fewer people watch TV, as in the early morning hours and gets very expensive during prime time evening shows. Sometimes advertisers pay a lot of money to get their ads on TV during special programmes, like the Olympic Games or the Super Bowl.
Infomercials have become very popular in the last few years. They are normal TV shows that focus on the sales of certain products. Details on how to buy the product (telephone numbers etc.) are repeated many times during the programme [5].
Some TV stations also sell advertisers product placements. For example a brand of pizza can a car can appear in a scene of a TV show.
Internet.
Internet advertising is becoming more and more important. Especially young people spend less time watching TV and more time on the Internet. The Internet has the advantage of being available to people around the world at all times.
Ads range from banners to pop-ups. Companies that spend a lot of money on advertising often create their own Internet site for a certain product. Web users are often asked to fill out a form that asks them about their daily routines, where they live, how old they are, how much they earn etc. Companies use this information to find out what kind of people visit their websites. Sometimes ads are sent via email. Because a lot of unwanted emails (spam) are sent throughout the world many people don't like this [3].
Most companies hire special advertising firms that specialize in making ads.
The first step in making ads is to learn about the product and understand who uses it.
Information is gathered from customers. Market research takes a look at the customers' buying habits and conduct sample surveys. Researchers also try to find out how customers rate various brands of products [4].
Research also tries to find out why customers buy a product. For example, advertisers may find out that people buy a certain car because they want to impress their friends or show that they have a lot of money. The age, sex and social status of a consumer may also be important. They also try to find out where and when a product is sold best. Snowboards for example can probably be sold better during the winter time and in skiing resorts. It is also important to determine which kind of media is best to advertise the product.
People in the creative department develop ideas and themes. They prepare photos or images if an ad is to appear in newspapers or magazines as well as jingles and slogans if it appears on radio or TV.
When the ad is ready it goes to the media organization where it is run [4].
Governments have made laws that protect consumers from misleading advertising. There are also laws that ban certain kinds of advertising. Tobacco advertising, for example, is not allowed on TV in the USA and in many European countries. Some rules are directed at children's ads where the use of violence or dangerous activity is often not allowed [7].
Sales promotion is an important component of a company's marketing communication strategy along with advertising, public relations, and personal selling. At its core, sales promotion is a marketing activity that adds to the basic value proposition behind a product (i.e., getting more for less) for a limited time in order to stimulate consumer purchasing, selling effectiveness, or the effort of the sales force. As this definition indicates, sales promotion may be directed either at end consumers or at selling intermediaries such as retailers or sales crews.
Sales promotion stems from the premise that any brand or service has an established perceived price or value, the "regular" price or some other reference value. Sales promotion is believed to change this accepted price-value relationship by increasing the value and/or lowering the price. Familiar examples of consumer sales promotion tools include contests and sweepstakes, branded give-away merchandise, bonus-size packaging, limited-time discounts, rebates, coupons, free trials, demonstrations, and point-accumulation systems [1].
Three issues clarify sales promotion. First, sales promotion ranks in importance with advertising and requires similar care in planning and strategy development. Second, three audiences can be targeted by sales promotion: consumers, resellers, and the sales force. And third, sales promotion as a competitive weapon provides an extra incentive for the target audience to purchase or support one brand over another. This last factor distinguishes sales promotion from other promotional mix tactics. For example, unplanned purchases may be directly related to one or more sales promotion offers.
In order to understand the basic role and function of sales promotion, one must differentiate between sales promotion and other components of the marketing mix. Sales promotion usually operates on a short timeline, uses a more rational appeal, returns a tangible or real value, fosters an immediate sale, and contributes highly to profitability. The idea of contribution to profitability may be confusing. It is simply the ratio between what is spent on a promotional mix compared to the direct profitability generated by that expenditure. A few exceptions to the above characteristics do exist. For example, a sweepstakes might use a very emotional appeal, while a business-to-business ad may be very rational [1].
2.1 The state of sales promotion
Various estimates from the mid-1990s placed annual spending on sales promotion in the United States at $30 billion a year to well over $100 billion, depending on how it is defined. In any case, there is wide consensus that sales promotion enjoyed fairly rapid growth from the 1980s through at least the mid-1990s, rising by more than 10 percent a year for much of the period. There is some evidence that growth slowed after the mid 1990s; promotional spending in the business-to-business arena was being outstripped by advertising spending as of 1997, a reversal from the trend just two years earlier. Still, the steep growth of media costs for traditional advertising has offered an ongoing incentive for marketers to use sales promotions [5].
Several factors contribute to the strength of sales promotion in the United States. First, consumers have accepted sales promotion as part of buying-decision criteria. Primarily, sales promotion offers consumers the opportunity to get more than they thought possible. Product sampling, for example, allows consumers to try the product without buying it. Furthermore, many people are reluctant decision makers who need some incentive to make choices. Sales promotion gives them the extra nudge they need in order to become active customers. Finally, sales promotion offers have become an integral part of the buying process, and consumers have learned to expect them.
The progression of sales promotion has been spurred by business, especially big business. Top managers and product managers have played direct roles in encouraging the recent growth of sales promotion. The product manager's goals and desires have provided the initial impetus. Product managers are challenged to differentiate their product in a meaningful way from competitors' products because buyers have many choices among brands and products offering similar satisfactions. Sales promotion techniques provide solutions to this dilemma. Heads of companies today focus increasingly on short-term results. They want sales tomorrow, not next quarter or next year. Sales promotions can provide immediate hikes in sales [5].
New technology, especially the computer, has also created greater acceptance of sales promotion by managers wanting to measure results. For example, scanning equipment in retail stores enables manufacturers to get rapid feedback on the results of promotions. Redemption rates for coupons or figures on sales volume can be obtained within days.
The growth in power of retailers has also boosted the use of sales promotion. Historically, the manufacturer had the power in the channel of distribution. Mass marketers utilized national advertising to get directly to consumers, creating a demand for the heavily advertised brands which stores couldn't ignore. With consolidation, retailers have gained access to sophisticated information. For example, use of computers and bar codes on packages is shifting the balance of power in their favor. Custom designed programs will help retailers to complete and increase sales in their market area. Sales promotion is an effective and satisfying response to the demand for account-specific marketing programs. Increased sales volume provided through sales promotion enhances small profit margins. Retailers also benefit from the immediate feedback of sales promotion that readily reveals unsuccessful programs [1].
2.2 Limitations
Although sales promotion is a competent strategy for producing quick, short-term, positive results, it is not a cure for a bad product, poor advertising, or an inferior sales team. After a consumer uses a coupon for the initial purchase of a product, the product must then take over.
Sales promotion activities may bring several negative consequences, primarily clutter from increased competitive promotions. New approaches are promptly cloned by competitors, with efforts to be more creative, more attention grabbing, or more effective in attracting the attention of consumers and the trade.
Another increasingly perceived drawback occurs with distributed manufacturers' coupons, such as those inserted in Sunday newspapers. While ideally these are offered as an incentive for new or occasional customers to try the product in hopes of making them regular buyers, research has suggested that most coupons are redeemed by individuals who would normally buy the products anyway. In effect, the manufacturers are subsidizing their existing sales, as only a relatively narrow segment of the consumer market actively uses clipped coupons from the newspapers. To address this problem, manufacturers have found that in-store coupon devices or displays reach a wider cross-section of buyers and are more likely to entice targeted customers (in addition to the regular customers who will likely also use the coupons) [8].
Also, consumers and resellers have learned how to milk the sales promotion game. Notably, consumers may wait to buy certain items knowing that eventually prices will be reduced. Resellers, having learned this strategy long ago, are experts at negotiating deals and manipulating competitors against one another, so that, for example, one company's product may be on sale one week and its competitor's the following week. Value-minded consumers then can regularly find an equivalent product on sale, which may increase their loyalty to the store at the cost of the manufacturers [8].
Consumer sales promotions are steered toward the ultimate product users—typically individuals—especially shoppers in the local supermarket. Some of the same general techniques may be used to promote business-to business sales, although they tend to be implemented in different ways given the contrasts between the consumer and the corporate markets. In addition, trade sales promotions target resellers—wholesalers and retailers—who carry the marketer's product. Following are some of the key techniques in the storehouse of varied consumer-oriented sales promotions [10].
A consumer price deal saves the buyer money when a product is purchased. The price deal hopes to encourage trial use of a new product or line extension, to recruit new buyers for a mature product, or to reinforce existing customers' continuing their purchasing, increasing their purchases, accelerating their use, or purchasing of multiple units of an existing brand. Price deals work most effectively when price is the consumer's foremost criterion or when brand loyalty is low. Four main types of consumer price deals are used: price discounts, price pack deals, refunds or rebates , and coupons .
Price discounts.
Buyers learn about price discounts and cents-off deals either at the point of sale or through advertising. At the point of sale, price reductions may be posted on the package or signs near the product or in storefront windows. Ads that notify consumers of upcoming discounts includes fliers, newspaper and television ads, and other media. Price discounts are especially common in the food industry, where local supermarkets run weekly specials.
Price discounts may be initiated by the manufacturer, the retailer, or the distributor. For instance, a manufacturer may "pre-price" a product and then convince the retailer to participate in this short term discount through extra incentives. Effectiveness of national price reduction strategies requires the support of all distributors. When such support is lacking, consumers may find that the manufacturer's price is covered by the retailer's price, bearing witness to the power of retailers [10].
Existing customers perceive discounts as rewards and often then buy in larger quantities. Price discounts alone, however, usually don't induce first time buyers. Other appeals must be available, such as mass media ad exposure or product sampling.
Price pack deals.
A price pack deal may be either a bonus pack or a banded pack. When a bonus pack is offered, an extra amount of the product is free when the product is bought at the regular price. This technique is routinely used for cleaning products, food, and health and beauty aids to introduce a new or larger size. A bonus pack rewards present users but may have little appeal to users of competitive brands. It is also a way to "load" customers up with the product.
When two or more units of a product are sold at a reduction of the regular single-unit price, a banded pack offer is being made. Sometimes the products are physically banded together, such as in toothbrush and toothpaste offers. More often, the products are simply offered in a two-for, three for, or ten-for format. In other cases, a smaller unit of the product may be attached to one of the regular size.
Refuds and rebates.
A refund or rebate promotion is an offer by a marketer to return a certain amount of money when the product is purchased alone or in combination with other products. Refunds aim to increase the quantity or frequency of purchase, to encourage customers to load up. This dampens competition by temporarily taking consumers out of the market, stimulates purchase of postponable goods such as major appliances, and creates on-shelf excitement or encourages special displays. Consumers seem to view refunds and rebates as a reward for purchase. They appear to build brand loyalty rather than diminish it [10].
Coupons.
Coupons are legal certificates offered by manufacturers and retailers. They grant specified savings on selected products when presented for redemption at the point of purchase. Manufacturers sustain the cost of advertising and distributing their coupons, redeeming their face values, and paying retailers a handling fee. Retailers who offer double or triple the amount of the coupon shoulder the extra cost. Retailers who offer their own coupons incur the total cost, including paying the face value. Retail coupons are equivalent to a cents-off deal. In 1859, Grape-Nuts cereal created this promotional technique by offering a $.01 coupon.