Sales-Promotion.doc

8/11/2019 Sales-Promotion.doc

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INTRODUCTION

Marketing is a social and managerial process by which individuals and groups obtain

what they need and want, through creating, offering and exchanging products of value

with others.

- Philip Kotler.

Marketing includes all those activities having to do with effecting changes in the

ownership and possession of goods and services. t is that part of economics which

deals with the creation of time, place and possession utilities and that phase of

business activity through which human wants are satisfied, by the exchange of goods

and services for some valuable consideration.

- !merican Marketing !ssociation.

Marketing is the process of discovering and translating consumer wants into product

and service specifications and then in turn helping to make it possible for more and

more of consumers to en"oy more and more of these products and services.

Marketing consists of analy#ing marketing opportunities, researching and selecting

target markets, designing marketing strategies, planning marketing programs and

organi#ing, implementing and controlling marketing effort.

$ompanies have to identify long and short term marketing opportunities and research

the selected market by measuring and forecasting attractiveness of the given market.

%aving selected the market, the companies need to develop a differentiating and

positioning strategy for the target market. &he marketing strategy must be transformed

into marketing programs by deciding on marketing expenditures and the marketing

mix. &he final step is organi#ing the marketing resources and implementing and

controlling the marketing plan.


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Marketing Mix

Marketing mix is the set of marketing tools that a firm uses to pursue its marketing

ob"ectives in the target market.

Mc$arthy has populari#ed a four factor classification of marketing tools known as the

'P(s of the marketing mix. &hey are)

Product

Price

Place

Promotion

Product:

Product stands for the firm(s tangible offer to the market, including the product

*uality, design, features, branding and packing. t deals with new product

development, product life cycle, product mix, product lines, branding and associated

services to a product. +rom the customer(s point of view, it helps in satisfying the

customer(s needs and wants.

Price:

Price is the monetary value of the product. Price deals with selecting the pricing

ob"ectives, setting the price, discounts, allowances, payment policies and credit terms.

t is very important to the customers as it decides the cost the customer has to pay to

gain the product value.

Place:

&his marketing tool stands for the various activities the company undertakes to make

the product accessible and available to the customer. t involves market si#e, channel

selection and management, storage and physical distribution with the ultimate purpose

of efficiently supplying the company(s offer to the target market. &o the customer, this

marketing tool refers to convenience.


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Promotion:

Promotion stands for various activities the company undertakes to communicate and

promote its products to the target market. t involves communication programs i.e.

direct marketing, advertising, sales promotions, public relations and motivation of

sales force. &o the customer this tool provides knowledge and information.

&he Promotion Mix of a company includes the following tools

Advertising:

t is any paid form of non-personal presentation and promotion of ideas, goods or

services by an identified sponsor.

Direct Marketing:

t refers to the use of mail, telephone and other non-personal contact tools to

communicate with or solicit a response from specific customers and prospects.

Personal Selling:

+ace to face interaction with one or more prospective purchasers for the purpose of

making a sale refers to personal selling.

Pulic Relations and Pulicit!:

t refers to the variety of programs designed to promote and or protect a company(s

image or its individual products.


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Sales Promotions:

&he short-term incentive to encourage trial or purchase of a product or service

refers to sales promotion. hereas advertising offers a reason to buy sales promotion

offers an incentive to buy. /ince sales promotion directly push up the sales, increasing

number of companies are undertaking sales promotion activities.

/ales promotion refers to the short-term incentives to encourage sales of a product or

service. t consists of a diverse collection of incentive tools, mostly short-term,

designed to stimulate *uicker and greater purchase of products or services by

consumers.

/ales promotion describes promotional methods using special short-term techni*ues

to persuade members of a target market to respond or undertake certain activity. !s a

reward, marketers offer something of value to those responding generally in the form

of lower cost of ownership for a purchased product 0e.g., lower purchase price, money

back1 or the inclusion of additional value-added material 0e.g., something more for the

same price1.

/ales promotions are often confused with advertising. +or instance, a television

advertisement mentioning a contest awarding winners with a free trip to a $aribbean

island may give the contest the appearance of advertising. hile the delivery of the

marketer(s message through television media is certainly labeled as advertising, what

is contained in the message, namely the contest, is considered a sales promotion. &he

factors that distinguish between the two promotional approaches are)

2. whether the promotion involves a short-term value proposition 0e.g., the

contest is only offered for a limited period of time1, and

3. the customer must perform some activity in order to be eligible to receive the

value proposition 0e.g., customer must enter contest1.

&he inclusion of a timing constraint and an activity re*uirement are hallmarks of

sales promotion.

/ales promotions are used by a wide range of organi#ations in both the consumer and

business markets, though the fre*uency and spending levels are much greater for


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consumer products marketers. 4ne estimate by the Promotion Marketing !ssociation

suggests that in the 5/ alone spending on sales promotion exceeds that of advertising.

Pur"ose o# Sales Promotion

/ales promotion tools vary in their specific ob"ectives. &hey may be used to attract

new customers, to reward loyal customers and to increase the repurchase rates of

occasional users. /ales promotion usually targets brand switchers because non-users

and users of other brands do not always notice a promotion. /ales promotions are thus

also seen as a tool for breaking down loyalty to other products.

/ales promotions also let manufacturers ad"ust to short term changes in supply and

demand and differences in customer segments. &hey also let manufacturers to

experiment by varying prices. /ales promotions also lead to greater consumer

awareness of prices.

&o use sales promotion, a company must set ob"ectives, select the right tools, develop

the best program and implement it and evaluate the results.

Classification of Sales Promotion

/ales promotion can be classified based on the primary target audience to whom the

promotion is directed. &hese include)

Consumer Market Directed- Possibly the most well-known methods of

sales promotion are those intended to appeal to the final consumer. $onsumers are

exposed to sales promotions nearly everyday, and as discussed later, many buyersare conditioned to look for sales promotions prior to making purchase decisions.

Trade Market Directed6 Marketers use sales promotions to target all

customers including partners within their channel of distribution. &rade

promotions are initially used to entice channel members to carry a marketer(s

products and, once products are stocked, marketers utili#e promotions to

strengthen the channel relationship.

$usiness%to%$usiness Market Directed6 ! small, but important, sub-set ofsales promotions are targeted to the business-to-business market. hile these


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customers are in possession of loyalty cards, have the ability to match customer sales

data to coupon use. &his information can then be sold to coupon marketers who may

use the information to get a better picture of the buying patterns of those responding

to the coupon

Sales Promotion Trends: Internet Communication

+or many years consumers typically became aware of sales promotions in passive

ways. &hat is, most customers obtained promotions not through an active search but

by being a recipient of a marketer(s promotion activity 0e.g., received coupons in the

mail1. &he nternet is changing how customers obtain promotions. n addition to

websites that offer access to coupons, there are a large number of community forum

sites where members share details about how to obtain good deals which often include

information on how or where to find a sales promotion. Monitoring these sites may

offer marketers insight into how customers feel about certain promotions and may

even suggest ideas for future sales promotions.

Sales Promotion Trends: Clutter

n the same way an advertisement competes with other ads for customers( attention,

so to do sales promotions. &his is particularly an issue with inserted coupon

promotions that may be included in mailing or printed media along with numerous

other offerings. &he challenge facing marketers is to find creative ways to separate

their promotions from those offered by their competitors.

O&ectives o# Sales Promotion


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/ales promotion is a tool used to achieve most of the five ma"or promotional

ob"ectives discussed in the Promotion 8ecisionstutorial)

$uilding Product A'areness6 /everal sales promotion techni*ues are highly

effective in exposing customers to products for the first time and can serve as key

promotional components in the early stages of new product introduction.

!dditionally, as part of the effort to build product awareness, several sales

promotion techni*ues possess the added advantage of capturing customer

information at the time of exposure to the promotion. n this way sales promotion

can act as an effective customer information gathering tool 0i.e., sales lead

generation1, which can then be used as part of follow-up marketing efforts.

Creating Interest6 Marketers find that sales promotions are very effective increating interest in a product. n fact, creating interest is often considered the most

important use of sales promotion. n the retail industry an appealing sales

promotions can significantly increase customer traffic to retail outlets. nternet

marketers can use similar approaches to bolster the number of website visitors.

!nother important way to create interest is to move customers to experience a

product. /everal sales promotion techni*ues offer the opportunity for customers to

try products for free or at low cost.

Providing In#ormation6 9enerally sales promotion techni*ues are designed

to move customers to some action and are rarely simply informational in nature.

%owever, some sales promotions do offer customers access to product

information. +or instance, a promotion may allow customers to try a fee-based

online service for free for several days. &his free access may include receiving

product information via email.

Stimulating Demand6 :ext to building initial product awareness, the most

important use of sales promotion is to build demand by convincing customers to

make a purchase. /pecial promotions, especially those that lower the cost of

ownership to the customer 0e.g., price reduction1, can be employed to stimulate

sales.

Rein#orcing t(e $rand6 4nce customers have made a purchase sales

promotion can be used to both encourage additional purchasing and also as a

reward for purchase loyalty 0see loyalty programs below1. Many companies,

including airlines and retail stores, reward good or preferred customers with
http://www.knowthis.com/promotion-decisionshttp://www.knowthis.com/promotion-decisions


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special promotions, such as email special deals and surprise price reductions at

the cash register.

Sales Promotion Tools

Many tools can be used to accomplish sales promotion ob"ectives. 8escriptions of

the main promotional tools are as follows

Consumer Promotion Tools

&he main consumer promotion tools are as follows

Sam"les:

&hey are offers of a trial amount of a product. t consists of inviting

prospective purchasers to try the product without cost or at a lower cost in the

hope that they will buy the product. /amples may be free or discounted.

Cou"ons:

$oupons are certificates that give buyers a saving when they purchase a

specified product. $oupons can be mailed, placed in advertisements or included with

other products.

Reates:

;ebate is also known as cash refund offers. ;ebates are offers to refund part

of the purchase price of a product to its customers who send a proof of

purchase to the manufacturer. &hese are like coupons except that the price

reduction occurs after the purchase and not at the point of sale.

Price Packs:

$ents-off deals or price packs offer consumers savings by way of reducing

prices that are marked by the producer directly on the package.

Premiums:


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&hese are the goods offered either free or at a low cost as an incentive to

buy a product. Premiums may be in-pack or on-pack 0outside the pack1.

Pri)es:

&hey are offers of chance to win something such as cash, trips or goods 6 by luck

or through extra efforts. $ontests of talent and sweepstakes or draws the most

popular pri#e offering promotions.

Tie%in Promotions:

&ie-in promotions involve two or more brands or companies that team up on

coupons, refunds or contests to increase their pulling powers.

Cross Promotions:

$ross promotions involve using one brand to advertise non-competing brand.

Advertising S"ecialties:

&hese are useful articles imprinted with an advertiser(s name, given as gifts to

consumers.

Patronage Re'ards:

&hey are cash or other awards for the regular use of company(s products or

services. &hey are values 0in cash otherwise1 that are proportional to one(s

patronage of a certain vendor or a group of vendors. &hey aim at building brand

loyalty.

PoP Promotions:

Point of purchase 0PoP1 includes displays and demonstrations that take place at

the point of purchase or sale.

Trade Promotion Tools

More money is spent by companies on trade promotion 01 than on consumerpromotions 0'3>1. &he ma"or trade promotion tools are as follows


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Discounts:

t is also known as price-off or off-invoice or off-list. 8iscounts price cut off the

list price on a particular *uantity purchased during a stated time.

Allo'ances:

&hey are the amount offered in return for an agreement by the retailer to feature

the manufacturer(s products in some way displays, advertising or otherwise.

*ree +oods:

+ree goods are the extra merchandise offered to middlemen who buy a specificamount of a product.

$ompanies also offer push money and specialty advertising items to the

middlemen.

$usiness Promotion Tools

$ompanies spend huge amount on promotions focused on industrial consumers.

&he ma"or business promotion tools are as follows

&rade /hows and $onventions.

/ales $ontests.

$learly, sales promotions play an important role in the total promotion mix. &o use itwell, the marketer must define the sales promotion ob"ectives, select the best tools,

design the sales promotion program, pretest and implement the program and evaluate

its results.

Promotion and Selling

T(e term "romotion is ver! o#ten used as a s!non!m #or selling, $ut selling is a

narro' term '(ic( includes onl! trans#er o# title or "ersonal selling, Promotion


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on t(e ot(er (and is roader in its outlook and includes a variet! o# activities

used ultimatel! #or increasing sales volume,

Promotion and Sales Promotion

/imilarly the terms sales promotion can not be taken to mean what is commonly does.

/ales promotion, is only a part of the promotion. 7asically promotion is an ?exercise?

in information persecution and influence. Promotion has come to mean the over all

co-ordination of advertising selling, publicity and public relations. Promotion is a

helping function designed to make all other marketing activities more effective and

efficient. 7ut sales promotion as such helps only the selling activity still, there exit

same difference of opinion on the real connection of the term sales promotion.

Acc, to A,-,R, Delons :%

?/ales promotion means any step that are taken for the purpose of obtaining or

increasing sales?.

Acc, to .,/, 0ell! O"ines :%

?Muddled misused misunderstood that is sales promotion !cc. to him the field of

sales promotion as a marketing activity is still vaguely defined and organi#ed.

Sales Promotion and Advertising

&here is no universally accepted distribution between these two terms. &o same

advertising includes all forms of mass media communication directed towards

influencing the end consumer. /ales promotion on the other hand, includes the form

of mass communication directed towards information and influencing the channel of

distribution 0e.g. distributors, retailers etc.1. %ence a price of product literature

distributed by retailers in sales promotion. &hese sales promotion merges on one side


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in to advertising and on the other in to personal salesman ship. t is concerned with

the dissemination of information to whole salers, retailers, customers 0both actual and

potential, and to the salesman1.

/ales promotion is concerned with the creation. !pplication and dissemination of

material and techni*ues that supplement advertising and personal selling. /ales

promotion makes use of direct mail, catalogues, trade shows, sales contests,

premiums, samples, windows displays and other aids. ts purpose is to increase the

desire of salesman, distributors and dealers to sell a certain brand to make consumers

more eager to buy that brand. Personal selling and advertising do include prospects to

make these decisions. /ale promotion provides an extra stimulus.

Sales Promotional at di##erent levels

1, Sales "romotion at Dealers 2evel :%

t may include various schemes some of which are discussed here.

3i4 Advertising Materials :%

&he advertising material prepared by the company such as store signs, banners, shelf

signs, board etc. are distributed to sub dealer for display purposes this is in fact a

method of advertising.

3ii4 Store Demonstration :%

n the promises of the whole saler or the retailer the products sales personnel will

conduct special demonstration for the companies product. ! personal demonstration is

good to introduce a new product at its peculiar advantage can be high lightened and

the consumer(s doubt clear. t can be used to restimulate an old product. ! good

demonstration with a great dealer of action will draw heavy crowds in to the store and

will attract attention to the product.

3iii4 S"ecial Dis"la! and S(o's :%

&hese are in seasonal in character but could be arranged in an elaborate manner andfor all the products of an company. 5sually these are arranged along with trade fair


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and exhibition. 7esides effecting sales these shows impress the company(s name

generally on the public.

Sales "romotion at consumer5s level

&he various schemes of sale promotion at $onsumer(s @evel may include.

1, Cou"ons 3A C(it o# Stated 6alue4 :%

&hese are given directly to the consumer these coupons are in most cases kept inside

the package. &he consumers many receive a price reduction of the stated values of the

coupon at the time of purchase. &he retailer receives reimbursement for the value of

the coupon form the manufacturer. $oupons act as a short run stimulus to the sale of

the product, since they are directly tied with the purchase of the item. &hey encourage

the retailer to stock the product.

hat is important is that a coupon offer does not spoil the named price of the brand

nor does it un pair the margin of the dealers. 7ut it is not easy to measure the

effectiveness of a coupon offer. 4ne over knows how many customer would have

bought the product without the incentive. t is also difficult to find out how many

customers were held after the coupon offer expired.

7, Price%o##%o##er 3Also kno'n as argain o##er "rice "acks4 :%

&his offer is intended to stimulate the sales during a slump season. n this method the

customer is offered a reduction from the printed price list. t is also used when a

substitute for competing product enters the market.

Many experts on sales promotion fed that A4ff /chemes( are among the weaker and

less desirable methods of promotion. &hese can be trade resentment particularly when

the retailer raises the price to retain his margin. /econdly that is not conductive to

building up brand loyalty. $onsumers may simply shift to the products that offer this

scheme.

8, Sam"les :%


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n the hope of converting a prospect into a customer a sample 0/ome *uantity of the

product1 may be given. &his helps the consumer to verify the real *uality of the

product. Barious pair manufacturing companies offer this method. +or developing

brand loyalty this method is *uite useful. /ampling is a fast method of demand

creation because one knows the result as soon as the consumer has had time to use the

sample and buy the brand.

Disadvantage o# Sam"ler :%

4ffering sample in *uit expensive. &here is the cost of producing samples. &he

distribution costs are also high. /ample have to be mailed to potential customers or to

be distributed through retail shops. &here are also problems when the real productdoes not resemble the sample supplied.

9, Mone! Re#und O##er :%

!n offer usually stated on the package is that manufacturers will return with in a

stated period part or all of the purchaser(s money if he is not completely satisfied with

the product.

, Trading Stam"s :%

! premium in the form of stamps is given by the sellers to consumers while selling

goods. &he number and value of stamp that the buyer receives depends on the values

of the purchase. &hese stamps are redeemable through premium catalogues at the

stamp redemption centres.

;, $u!%$ack Allo'ance :

&his an allowance following a previous trade deal not offer a certain amount of

money for new purchases based on the *uantity of purchases on the first trade deal. t

extends the life of a trade deal and helps to prevent part deal sales decline. t greatly

strengthens the buyer(s motivation to co-operate on the first deal.


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&here are various forms of premiums provided by the manufacturer as sales

promotional devices )-

0a1 $oupons are supplied for effecting price reductions.

0b1 +actory in pack premium these are popular in the case of 7ody food and &in food

items, /poons, $ups, Measuring, 9lass etc. and such other items are packed with the

product in the box itself. +actory in pack premium are particularly goods for product

meant for children. &he 7inaca &oothpaste packs contain animal shape toys. &hese are

very attractive and *utie popular among the children.

3c4 Sel# 2i=uidating Premiums :%

&he cost of the premium is collected from the buyer himself. 7ut when the buyers

pays for it he has to pay only a considerably low price for the premium. &his is

possible for the manufacturer purchases the items in bulk at a premium and his cost

per unit as is substantially low.

Ot(er Ste"s ! Manu#acturer #or Promoting Sales

Dealers can e (el"s in di##erent 'a!s :%

1, Communicating Market Ne's :%

4ften this service is reciprocal the manufacturer may ac*uaint his dealer with the fact

relating to his production and prices while the dealer may familiari#e him in return

with the information bearing on charges in the consumerCs demand, their like and

dislike complaints and criticism, substitutes etc.

7, Inviting to Sales Con#erence and Convention :%

&he gestures of regard and respect pave the way for better relation and co-operation.

8, O##ering Reasonale Terms o# Sale :%


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4f all the forms of encouragement, the monetary incentive evokes immediate

response. %ence every producer must offer the most responsible terms of sale such as

longer periods of credit and higher rates of descants.

'. /upplying suitable packages and useful things.


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Acc, to -, .(ite(ead :%

?n case of an expanding market all the firm may stand to gain by following the

methods of aggressive selling but if the market is static manufacturer of a new market

will have to be much more aggressive to capture the established market of

competitors?.

.(en Aggressive selling is resorted >

Usuall! manu#acturer o# a ne' "roduct (as to do aggressive selling :%

2. hen the product has been improved.

3. hen the manufacturer(s product is supervisor in *uality to the product of the

established competitor.

E. hen the total market for the product or line of product to expanding.

'. f the manufacturer(s share of the market is comparatively small.


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5nder trade promotion methods special incentives are offered to the trader to buy

products of the firm. /uch incentive may take one or more of the following firm )-

3a4 Cas( Allo'ance :%

! definite percentage of discount is allowed on the purchase of given unit of a

product.

34 ?xtra Product :%

nstead of giving any cash allowance extra product is given with each unit of product

ordered. +or instance if a box normally contains 3F $akes of /oap, special box

contains 3< cakes may be made and sold at the same price as that of the box of 3F

cakes.

3c4 +i#ts :%

Barious gifts are awarded in return for an order of a particular magnitude.

7, Consumer Promotion :%

5nder consumer promotion method special incentives are offered to the consumers to

buy the firms product. &he more prominent amongst such incentives are as following.

3a4 Cou"ons :%

! coupon of a giving value is sent to the consumer. 7y presenting this coupon to the

retailer consumers can purchase a particular product mentioned on the coupon at a

reduced price. &he retailer sells the products mentioned. n the coupon to such

consumer 0consumers presenting the coupons1 under and agreement with the

manufacturer at a price lower than the user retail price. &hus the consumer get the

benefit of reduced price to the extent of the value of the coupons.

34 Sel# 2i=uidating O##ers :%


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5nder this system, the firm offers an article at an attracting price if the consumer send

a given sum of money accompanied by a given number of box tops from the packages

of a particular product the benefit to the consumer is that he receives the articles at a

bargain price.

3c4 $argain Packs :%

5nder this system a product is sold at a reduced price for a short period 7argain pack

method encourages new consumers to try the product. t is also helpful in obtaining

large displays in the shops.

3d4 Sam"ling :%

&he method involves giving the product or a small *uantity of the product to a

consumer free with the hope that the customer will be favourable impressed with its

actual use and will eventually become a regular purchaser of the product.

! firm selling new product or an extensively improved product finds this methods

useful. !lso a firm whose market is hold by competitors whose free sampling almost

expensive.

&he above mentioned methods may be reinforced by adopting.

0i1 8irect method of selling through.

0ii1 4ffer of door to door selling.

0iii1 %ire purchase and installment payment methods of selling and by forming

combination.

Ot(er Met(ods o# Aggressive Selling :%

0i1 Gmployment of AMissionary /alesman also known as Promotional /alesman(.

&hese salesman call upon retailers and aggressively promote a product.

0ii1 nstead of using wholesalers, the firm may develop its own sales force to call

directly on retailers.


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0iii1 &he firm may follow a compromise method by employing a manufacturer(s agent

and giving him a large enough commission to encourage him to sell product

intensively and aggressively.

0iv1 :ew territory exploitation sales promotion has a particularly important role in

developing the company(s product in new territories.

0v1 ncrement and promotions.

0vi1 @etters to dealer and $ustomer.

n fact, an ingenious sales manager can devise any number of incentives schemes for

promoting the sales volume.

Sales Promotion Sc(emes

4ne of the most difficult marketing decisions facing companies is how much to spend

on promotional Hohn anamaker, the departmental - store maga#ine, said, ? know

that half of my advertising is wasted but donCt know which half.?

&hus it is not surprising that industries and companies vary considerably in how much

they spend on promotion. Promotional expenditures might amount to EF- of sales

in case in cosmetics industry and only 2F-3F> in the industrial e*uipment industry.

ithin a industry, a low and high spending companies can be found.

%ow do companies decide on

their promotion budgetI &here

are mainly four methods ofsales promotion )

@ A##ordale Met(od :

Many companies set the

promotion budget at what they

think the company can afford.

4ne executive explained this

Advertising ?##ectiveness Pro&ect Re"ort

Internal Customer Satis#action Pro&ect Re"ort
http://www.allprojectreports.com/MBA-Projects/Marketing-Project-Report/advertising-effectiveness/advertising_effectiveness.htmhttp://www.allprojectreports.com/MBA-Projects/Marketing-Project-Report/internal-customer-satisfaction/internal_customer_satisfaction.htmhttp://www.allprojectreports.com/MBA-Projects/Marketing-Project-Report/advertising-effectiveness/advertising_effectiveness.htmhttp://www.allprojectreports.com/MBA-Projects/Marketing-Project-Report/internal-customer-satisfaction/internal_customer_satisfaction.htm


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method as follows ) ?hy, it(s

simple. +irst go upstairs to the

controller and how much they

can afford to give us this year.

%e says a million and half.

@ater, the boss comes to me

and asks how much we should

spend and say A4h about a

million and half.?

t is a method which is

uncertain one and makes long

term planning difficult.

@ Percentage o# Sales

Met(od :

Many companies set their

promotion expenditures at a

specified percentage of sales.

!ccordingly the sales is set on

the basis of sales.

n this a specified sales percentage is decided for the promotional budget !dvantages

of this method )

+irst, its use means that promotional budget vary with what a company can afford.

/econd, it encourages the management to think in terms of the relationship among

promotion costs, selling price, and profit per unit,

&hird, it encourages the competitive stability to the extent that competing firms spend

approximately the same > of their sales on promotion.


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nspite of the advantages, the > sales method has little to "ustify it. ts reasoning is

circular ) t views sales as the determiner of the promotion rather than as a result. t

leads to budget setting by availability of funds rather than by marketing opportunities.

@ Com"etitive Parit! Met(od :

/ome companies set their promotional budget to achieve share-of-voice parity with

other competitors. &wo arguments are made in support of competitive parity method.

4ne is that the competitors expenditure represents the collective wisdom of the

industry. &he other is that maintaining a competitive parity helps prevent promotional

wars.

:either argument is valid. &here are no grounds for believing that competition knows

better what should be spent on promotion.

@ O&ective and Task Met(od :

&he ob"ective J task method calls upon marketers to develop their promotion budgets

by defining their specific ob"ectives, determining the task that must be performed to

achieve these ob"ectives, and estimating the cost of performing these tasks.

Deciding on t(e "romotion mix :

$ompanies face the task of distributing the total promotion budget over the five

promotional tools )

Advertising

Sales romotion

ublic !elations and ublicity

Sales "orce

#irect Marketing.

hatever method a company adopt for promoting its product it must be from abovementioned method.


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INDUSTR PRO*I2?

A 2ook into t(e Indian ?conom! and *urniture Industr!


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ndia is the fourth largest economy in the world and it(s the largest democracy with

second largest 98P among emerging economies. orld 7ank(s President Hames 8.

olfensohn confirmed that ndia is not the world(s ' th largest economy after 5/!,

$hina and Hapan in PPP 0Purchasing Power Parity1. t is also one of the ten fastest

growing economies in the world.

ith 2 billion populations, ndia remains on the fastest growing economies and

even in the present worldwide economic slowdown, has maintained 98P 9rowth rate

of nearly D>.

ndia today is th most attractive destination for foreign direct investments, after

5/, $hina, 7ra#il, Mexico and 9ermany. 7esides, ndia offers higher rate of returns

and profitability than anywhere else in the world.

4ut of 2 billion population the upper and middle class constitutes 3F> or 3FF

million people 0or EF to 'F million houses1. 7y rent per capita)

3 percent of ndian has a per capita income in excess of 2',


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potential for growth. t is estimated that the furniture industry comprises 3 of the

construction industry and hardware comprises 'F> of total furniture industry, out of

this 3F> is replacement and 3F> is new.

ood and wooden products, furniture and fixtures carry a weight of 3.F2> in the

total manufacturing sector.

&he furniture industry employs a total of around EF,FFF workers. &he future on the

furniture sector in ndia seems positive. &alking about production, several agreements

have been signed between local producers looking for technology and Guropean and

!sian companies trying to reach a potential opportunity in costs.

+rom the commercial point of view, ndia shows good perspective to sell furniture

in the following years. +irst of all, because its si#e and secondly due to the newly

ac*uired taste as a result of exposure to western furniture style.

ndia is one of the largest consumers of wood in /outh Gast !sia. 5ntil a few years

ago the county had considerable *uantities of available tropical woods. &he most

common species in ndian forests are teak, rosewood, ebony, laurel, pine, cedar and

rubber trees. /upply of these ready to uses species became scarcer due to

unconditional and inappropriate exploitation and also due to growing concern about

the environment.

n ndia, natural rubber plantations covers


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&he total si#e of ndian furniture industry is estimated at ;s. E to 2 per annum.

&he share of the wooden furniture market is estimated at ;s. DFF million.

oodworking industry of ndia is one of the fastest growing in the county(s economy.

Much of this growth has been fuelled by the increasing access to modern machinery

and technology through easier import policies as a result of ndia(s entry into the

&4 in the year 2LLFs. &here is a noticeable shift in the preference towards

mechani#ed mass production and the up gradation of technology.

T(e ?merging Trend

&hough technology has made inroads in the industry with increasing stress on the

use of machines, overall scenario reveals that almost =F> of the products supplied in

local markets by indigenous manufacturers are labor intensive and handmade.

;esidential or household furniture accounts for over DF> of the overall domestic

and leading manufacturers have begun to reali#e the necessity of proper distribution

system in this area.

!mong other sectors where the demand is spiraling upwards is office furniture.

9rowth of & an &- enabled sector such as 7P4(s has created a huge demand in

metros and $lass cities all over ndia. &he old economy businesses are also

undergoing a makeover and this is reflected through changing looks of the offices.

Metal and plastic furniture production is gaining wider prominence but wood still

remains to be the most favored medium.

R?AS?ARC- D?SI+N

Title o# t(e Stud!


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&he title of the study is 6 ! /&58N 4: /!@G/ P;4M4&4: 4+ %4MG

+5;:/%:9/ !& *error Dek Pvt, 2tdB,

Statement o# t(e Prolem

&he pro"ect is mainly undertaken to study the sales promotional strategies at +error

8ek Pvt. @td. &he intention of the study is to find what attributes needs further

improvement in order to make the product more preferable in the market.

&he main aim of the study is to uncover new relationship and identify any problem

that may arise in future. %ence, exploratory research is been conducted. Gxploratoryresearch as its name implies endeavors of exploring the possibility of doing research

on a sub"ect where due to lack of existing knowledge framing and testing the

hypotheses is difficult. n today(s crowed marketplace where products and services

are touting themselves to be the best, it is vital to stand out in the crowd. &he study

was undertaken to explore how a company or brand can ensure a store that stands out

and not get lost in the crowd.

O&ectives o# t(e Stud!

2. &o study the various promotional strategy adopted by +error 8ek Pvt. @td.

3. &o find out the footage of +error 8ek Pvt. @td. ith respect to other players in the

market.

E. &o observe and understand the practice followed by +error 8ek Pvt. @td.

'. &o find out the communication linkages and de-linkages in the organi#ation.


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&his pro"ect was undertaken for a specific period in +error 8ek Pvt. @td., :ew

7G@ ;oad, ;MB /tage 7angalore. t is an exercise that is well planned into the

curriculum giving the researcher a valuable opportunity to understand the working

dynamics of the organi#ation and to experiment and exhibit the recently ac*uired

management and administration skills.

&he prospect of the furniture sector in ndia seems positive. &he ndian furniture

industry has awakened to interesting times &he last ten years have seen changes in

the shop windows of furniture retailers. $onsumers today no longer look for mere

practicality in furniture, instead, they look for theme furnishing, i.e. lifestyle living.

;eali#ing the tremendous market potential and to make the most of it, the study was

undertaken.

2imitations o# t(e Stud!

Gvery study is bound by limitations and as such this is no exceptions.

2. $hange is $onstant rule of nature. %ence, the study undertaken may not

hold good for longer duration.

3. &he study was conducted under the assumption that the information given by

the respondents is authentic.

E. &he analysis and suggestion are given only with respect to marketing aspects

as technical suggestion with respect to the product could not be given.

'. $onfidential matters were not disclosed by the company.


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! variety of methods of study have been adopted by the researcher to fulfill the

ob"ectives of the study.

n order to have a better grasp of the study, the researcher chose to become

a keen observer, studying the various aspects of the organi#ation.

&o have a broader perspective of the study, the researcher attended the

@ifestyle Gxhibition at Palace 9rounds wherein the products of +error 8ek

Pvt. @td. were displayed.

n order to fund out the market realities, the researcher visited the

showrooms of certain companies having almost similar product profile as

that of +error 8ek Pvt. @td. &o name a few Que#el, Beneto $osines,

&rident nter ood, etc.

ith a view to understand the crunch of the matter and to find out the

ground realities, the researcher formed a schedule specifically for the set of

respondents. &he researcher met the respondents personally, interviewed

them and made them to fill the *uestionnaire.

&he researcher has done the research in the following manner

a1 &ype of the research undertaken is analytical.

b1 &echni*ue used is random sampling.

c1 /ample si#e taken is EF.

d1 /ources of data used include both primary as well as secondary data.

e1 &ool used for the research is *uestionnaire.

f1 Plan of analysis are tables and graphs.

Data Collection Met(ods


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n this study, the foremost data collection instrument used is the *uestionnaire

method. &he *uestionnaire has been designed with both open ended and closed ended

*uestions. !part from this, the research instrument consists of primary and secondary

data collected for the study.

Primar! Data:

%ere first hand information is obtained by distributing printed *uestionnaire to the

marketing executives of the company. 8ata was also obtained from the observation

and interview techni*ue adopted by the researcher. Moreover, information was

disseminated by the departmental heads.

Secondar! Data:

%ere the information is obtained from the brochure of +error 8ek, books, websites,

newsletter, "ournals, maga#ines, newspapers, etc.

COMPAN PRO*I2?


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industry. 7acked by a rich and efficient vendor base along with diligent team of

employees, we strive to maintain our consistency by matching our productCs *uality

with the global standards. 5nshaken by difficulties and challenges, we believe to stay

ahead by offering impeccable *uality products whilst meeting customerCs

re*uirements.

ith the commitment to provide the most *ualitative products to our clients, we strive

to build our stance in the market. 4ur distinctive *ualities give us a competitive edge

over our competitors some of the *ualities are)

Gfficient logistic support system

Prompt delivery of the consignments

;eliable and efficient vendor base

ide distribution network.

MANU*ACTURIN+ *ACI2ITI?S:

$apacitors, ;esistors, $eramic $apacitors, /afety ;ecogni#ed !$ ;ated $ermic

$apacitors, Metal 4xide Baristors, Pie#o $eramic 7u##ers, Pie#o $eramic ;ingers,

D?PARTM?NTS

1, TD0% ?PC 7, Samtec( 2td, -ong 0ong

8, .att ?lectronics Pvt, 2td, 9, .ied! ?lectronic Industrial

, C?DICOM ?2?CTRONIC ;, A6 Cor"oration Co,


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&his department is broadly concerned with the ac*uisition and use of funds by the

company. t also analy#e, plan and control the company(s financial affairs. Moreover,

the in house administration of the company is also taken care of. t includes

maintenance of showroom and a look into the re*uirements and problems of day to

day administration. t also keeps a track of things with regard to civil construction,

architectural services, networking, pro"ect co-ordination, electrical work, etc. t is also

concerned with bank facility availed by the employees. !part from all these, it also

takes into account the installation part at the customer site after the dispatch of the

product. n a nutshell this department deals with the trouble shooting of any problem.

PRODUCT IND?

+ollowing a *uality and a customer centric approach, we are offering different

electronic components like !luminium electrolytic caps, leaded caps, metalised

polyster, tauxline chip and dip, M4B/ , chip #enar, chip #enar diode, etc. 4btained

from reliable and authori#ed vendors across and outside the country, we strive to

endow our customers with a wide spectrum of *uality tested electronic components.

7anking on the vendorCs expertise and our decade long experience, we have been able

to satisfy our customers by providing our products within the stipulated time frame.

7y supplying our esteemed clients with the supreme *uality electronic components,

we have carved a niche for us in this field. 4ur wide assortment of products include.

Ca"acitors

!$ Motorstart $apacitors@ug &erminal &ype !luminium Glectrolytic

$apacitors

!luminium Glectrolytic $apacitors Metalli#ed Polyester $apacitor-$hip $apacitor

7ox &ype +ilm $apacitor Motor ;unning $apacitor

$eramic $apacitors Multilayer $hip $apacitors 0M@$$1

$hip &antalum $apacitors/afety ;ecogni#ed !$ ;ated $eramic

$apacitors

Gxtra %igh Boltage $apacitors B $hip !luminum Gletrolytic $apacitors


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?lectronic Products H Com"onents

;esistors Membrane /witch

8iodes Metal 4xide Baristors

&hermistors Pie#o $eramic 7u##ers

G@ Panel J /tring Pie#o $eramic ;ingers+lexible P$7 $eramic /urge !rresters

+uses /ilicon ;ubber Keypad

$ &ransistors

&4 &ouch /creen

Quality $onformation and Bendor 7ase

e are an /4 LFF2)3FFF certified company engaged in ensuring complete customer

satisfaction. 4ur uncompromising attitude towards *uality of our products has

enabled us in establishing a strong foothold in this domain. &o ensure high *uality of

our products, we have employed strict *uality control personnel, who strive hard to

guarantee our productCs compliance with the set international standards. e have

associated ourselves with reputed vendors to obtain utmost customer satisfaction and

meet the growing expectations of the industry. 4ur associations with well known

vendors allow us to source best grade of chemicals that are well known for their high

*uality standards.

4wing to our authentic vendor base, we have been able to reach our clients with

*ualitative range within stipulated time frame. $onstant market research by our

procurement agents helps us to analyse various vendors and choose the best amongst

them. 4ur diligent efforts in holding cordial relations with our vendors assist us to

offer optimal satisfaction to our clients.

e assess our vendors on the factors such as)

2. Product *uality

3. Market presence

E. Past clients served

'. $ost effectiveness


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&hough the company does not have a separate %; 8epartment as it is in the

embryonic stage but the %; aspects are taken care of by Mr. Gugene Hoseph.

2eave *acilit! :

!ll employees are entitled to 23 days of casual leave and 3 days of sick

leave 0monthly1. n case of a long leave, say a week or more than that, one needs

to inform it before 2F- 23 days. n case of emergency, a prior intimation before 3

days is sufficient. 4ne can also avail the facility of working on holidays and

taking leave on the week days.

Recruitment :

&he $ompany spells out its re*uirements to the consultancies about the

suitable candidates. 5sually, Mr. Gugene or Mr. ;a"esh or Mr. Nesudas takes the

interview of the candidates.

Training :

! selectedcandidate is put on training for about 2< days. 8uring this

period, he is not given individual pro"ect.

o Rotation :

Hob rotation is adopted by the company so that there is development of

multi-faceted skills to fill in vacancies and to cope with increasing work load.

Movement is effected in the same grade

S.OT Anal!sis


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Strengt(

$ustomi#ed products

;easonable price

Quality

.eakness

! new entrant in the market

O""ortunit!

9rowth of furniture industry

seems positive

%uge potential

T(reats

! lot many players are existing in

the market

*uture Plans:

&he company has shown excellent growth since inception and is growing at a

rapid pace. !ll these contribute for the company(s future expansion plan.

t is going to open showrooms on Kerala. &he 2stone is coming up in $ochin.

t is going to open ' more showrooms in 7angalore.

ill involve 2F dealers in 7angalore.

Documents

Sales-Promotion.doc