a. If the middle­men are allowed higher profit margin, the middlemen are motivated to stock and push the brand and very little advertisement may be required. These Five Factors Are Affecting Revenue Growth A study by Bain and Company shows an alarming trend: the cost of sales and marketing is growing faster than revenues. Customer Related Factors 3. During the maturity stage, the emphasis will be on switching the customers from competitors and hence more of sales promotion is used. Low price product on the other hand requires only advertising on a mass level and on a regular basis. Convenience goods require salespersons to sell. Disclaimer Copyright, Share Your Knowledge Creating well-defined marketing strategies, promotion ideas, using the right sales enablement platforms, and staying updated with current market trends can help the organization to achieve higher sales volume. Push strategy is pushing promotion through intermediary levels of distribution like wholesalers, retailers. (vi) Promotional strategy – Promotion mix depends to a great extent on whether a company follows push or pull strategy to create sales. The tools of sales force promotion are bonus, sales force contests, and sales meetings and conferences. Bonus is usually offered to salesmen who sell in excess of the quota. The business should ensure that they maintain the quality of the product and add or modify the functions according to the ever-changing technology and the varying tastes and preferences of the customers. and expertised salesmen are required to contact the concerned consumers. If customers are scattered over different areas then mass advertisement campaign is useful and essential and in that case personal selling becomes ineffective. Some firms lack experience with certain promotion elements and therefore does not use them. Example- Coupons and consumers sweepstakes. Promotional strategy and promotional mix change from market to market. Experienced buyers of industrial product need personal selling. However, for th e most part, this st age is characterized by increased sales. In stage 1 i.e., introduction to basic promotion objective is to inform, which helps the customer to create awareness and interest in the product. Factors Affecting Promotion Mix – Primary Factors and Secondary Factors. Different promotional tools are effective at different stages of buyer readiness. If you take care of them, your business will be on the right track for success. Sales Promotion Strategies. 4 Leadership Factors. Consumer marketers are likely to spend comparatively more on sales promotion and advertising; business marketers tend to spend comparatively more on personal selling. After the product has been launched, advertisement and publicity are more important to create continued patronage of the customers, to create a good image of the product and its manufacturer and to meet competition in the market. Aggressive selling answers the question —how much does the firm gain (in terms of sales volume with profit) by employing the various resources? The message through advertisement is relatively simple and easily understands. Non-technical products require advertising as promotional device. 9. Growing trend in respect of using an optimum mix of both personal selling as well as advertising with additional concentration on technological aspect is applied so that product lasts for a long time in the market. Sales promotion targeted toward final buyers (consumer promotion), business customers (business promotions), retailers and wholesale (trade promotions), and members of the sales force (sales force promotions). If a product is frequently purchased by the end-consumers. Long-term success in the retail business depends on company performance on key variables that ultimately determine prospects for growth and profitability. To achieve this, a company may introduce new products, promote them through. Prehistoric "Hell Ant" Encased in Amber Seen Biting its Prey for Over 99 Million Years, Top Things to Consider Before Buying an Electric Car, Mars Curiosity Rover: What You Should Know About Its Long Mission on Mars, Researchers Report Progress on Greener, More Sustainable Hydrogen Extraction from Water, French Man Dies From Rabies After Contracting Bat Virus, Coral Reef Restoration Needs Researchers Help, Water May Have Been Recently Carried by Meteorites From the Dawn of the Solar System, The Legendary Sports Handicapping Expert Cody Vaujin Shares His Best Tips for Scaling a Business, SpaceX Kicked Off 2021 With First Launch This Year Sending Turksat 5A to Orbit. If the brand is priced higher than the competitors’ price, personal selling is adopted. Pricing influences promotion strategy. The promotion mix used by the marketer also depends upon the type and nature of the buyer. Organisation Related Factors. Marketing management should use the combination of the tools available for optimum results. When a firm introduces a new product it has three main choices: (i) It has developed new brand elements for the new product. 1. Market Size 6. b. The stages of the product life cycle have to be analysed to determine the promotion mix. Complex and technical products like computer need personal selling. Sales managers play such a pivotal role in the performance of their sales force. FACTORS AFFECTING THE … Personal selling may be fit for non-branded products. Pricing affects choice of promotional tool for a product. Store owners should consider implementing an inventory management software to manage their stock and in the right way. Due to this kind of intense mass communication, the consumers demand the product to such an extent that they literally pull the product from the retailers who in turn demand the product from the wholesalers, and the wholesalers on their part are forced by pressure of demand to stock the product. Any business, whether small or large, should put maximum efforts in expanding sales volume because continuous growth in sales is the only way to survive in the market. There is no direct contact between the advertiser and the promotion target. Promotional Strategy 15. Your management ability and leadership style deeply affect the performance and outputs of the team, not to mention the retention of your best employees. The product type i.e., industrial or consumer affects the promotion mix. © Copyright 2021 The Science Times. ©2021 ScienceTimes.com All rights reserved. Advertising and publicity play the most significant and crucial roles in the awareness-building stage. Advertisement may also be undertaken at this stage as it has its informative value. Personal selling also helps reach intermediaries to ensure adequate distribution. Personal selling and advertising is required for market penetration. Before publishing your Articles on this site, please read the following pages: 1. Chapter No. Every firm has a unique public image in the market. Some decisions are more complex than others and thus require more effort by the consumer. But in case of products rarely or not frequently purchased by the consumers, heavy expenditure on advertisement cannot be justified. Instead of that, colorful, simple but attractive advertisement is useful. raw material, plant and machinery, furnace, equipments, tools and parts etc. General Economic Condition: To demonstrate complex idea personal selling and sales promotion are emphasized such as display at point of purchase (POP) demonstrations and printed brochures. If the product is not of complex nature, the firm concentrates much attention on mass advertising media. In general, there are two factors affecting plant growth and development : genetic and environmental. Expertise requires for production and sale of such types of products hence personal selling is done with the help of experts as salesmen. There is minimum wastage, development of relationship with the customer and direct feedback. To make the factors easier to understand, they are divided into two groups – leadership and management. In an efficient communication mix, care should be taken for deciding promotional tools and combination of those for achievement of objectives. A pull strategy the manufacturer stimulates the consumer to ask the retailers for the product. Immediate Profits. a. In this situation, we assume that the market of the product is state (or the total demand of all the brands of the product in the market is static) one can increase one’s sales only by snatching the market from ones competitors. If the business has the money at its disposal, it can be easy to introduce newer business methods that can positively affect sales. 1. Sales promotion strategies can be divided into three broad types. Personal selling is cheaper and more effective in the short-run. A product having good market penetration is well-known to the buyers. When this strategy is used, all channel members are forced to stock the product due to incessant demand and hence the dealer margins are lower in pull promotion. E.g. Heavy competition requires all factors of promotion in order. To make personal selling highly effective, sales force promotion is essential. The promotion strategy varies with the target groups depending on age, sex, education, income, religion etc. The management must consider the following factors in determining the promotion mix, these are: Nature of Product: The different type of product requires different promotional tools. In case of a small budget, expensive means like public relations cannot be used. If the competitor has a reputable brand controlling a significant market share, its presence may negatively affect the sales of the rival's products. Thus it is very complicated process and in depth analyzing every aspect of price and pricing decisions. The stage of a product’s life cycle is an important determinant of promotion mix. It creates an exclusive market for the product. Specialty goods like refrigerators require good amount of personal selling to dealers and retailers. The Sales Promotion Offer The design of the sales promotion offer has been ex-amined in one or two studies. The Stage of the Product in its Life Cycle: Each stage has different objectives and tools for the promotion in the product life cycle. In the growth phase, the demand is high and customers have more disposable income, while in a recession phase, money is reduced as well as the demand and supply of a product. Hence the flow of promotion and flow of goods move from the producer to the wholesaler and from the wholesaler to the retailer and from the retailer to the consumer. In case where there is no brand differentiation personal selling should be the method of promotion. This is with consumer products where the consumers’ pull’ the product through the marketing channel. Characteristics of Buyers 7. But, if some potential customers have never heard of it and are unaware of the product’s presence, will they buy? Nature of product undoubtedly affects promotion mix for some obvious reasons. That is why, most of the firms make use of all kinds of promotional activities to launch their products successfully. If you want to successfully earn a promotion, then make sure to identify the skills that are required for the position that you are looking to … Closing the sale is influenced mostly by personal selling and sales promotion. At introduction stage, personal selling method is preferred because the innovator wants to study more about the product and its features in relation to other similar products in the market, consumers’ behaviours. If the product passes through a longer channel more importance should be given to advertising and less importance to personal selling. If the product brands are differentiated (e.g., Ponds and Lakme), the producers have to depend upon advertising. Nature of Technique 13. Sales Promotions Generally Create An Immediate Positive Impact On Sales. But during the last stage of the product when its sales are declining, it may be decided to make drastic cuts on promotional efforts. They contact the physicians and surgeons who are the best agent for promoting a drug product. How to blend all these four elements of the promotion mix, the amount to be allocated for the various forms of promotion, such decisions are influenced by the following factors: The nature of the product determines the form of promotion undertaken by the marketer. (vii) Readiness of buyer – Different tools of promotion are effective at different stages of buyer readiness. If the product is satisfying customers' needs at reasonable prices, it will sell. Sales forecasting does involve crunching numbers, and you do need to base it on reliable information. of some seasonal products- Raincoats, umbrella, woolen garments, heater, A.C etc. These factors include: One of the top factors that can determine the business' sales growth is the capital itself. Sometimes because of non-availability of some promotional methods, marketer must select appropriate method from those which are available. There are many factors which influence promotion mix. External factors. Readiness of Buyer 14. All the promotional efforts of the company are targeted directly towards the consumer. It there is limited number of buyers, direct selling is enough. These elements thus play various roles in overall marketing strategy and if the management that has to decide a suitable promotional mix to suit the needs of the concern. If the product passes through a longer channel of distribution, the marketer will have to give more importance to advertising and less importance to personal selling. The following are the factors influencing promotion mix: Promotion mix will vary according to the nature of the product. Because consumers often buy on emotions, ads can affect the buying decisions. Again, the qualifications and experience of the company's marketing team plays a crucial role in winning more and more consumers. implementing an inventory management software, COVID-19 Can Cause Terrible Damage To The Brain, Autopsies Reveal, Severe Allergic Reactions to COVID-19 Vaccines Are Highly Unlikely, NASA Hubble Space Telescope Shares Photo Gallery of Colliding Galaxies, 3 Ways to Help Pets Overcome Separation Anxiety. Advertising increases whereas sales promotion declines. (iii) Stage of product’s life – During the introduction stage of a product, main aim of promotion is to create primary demand by emphasising the product’s features, utility etc. require mass advertisement. In general sales promotions can built on brand sales more rapidly than advertising. Promotion mix is subject to change on the stage at which the product is in the PLC. (ii) Nature of market – If the number of potential buyers is small and the customers are concentrated in a particular locality, personal selling is likely to be more effective. If the brand is priced higher than the competitor’s price, personal selling is used. Nature of market and customers determines, to a great extent, the promotional mix of a firm. The genetic factor is also called internal factor because the basis of plant expression (the gene) is located within the cell. The factors influencing promotion mix are- (a) Characteristic of the target market and (b) type of buying decisions. Advertising and publicity are more effective during early stages of buying, whereas personal selling and sales promotion are more effective during the later stages. Advertisement and publicity are also important to attract the status- conscious customers. Hence, the main objective of this study was to recognize the factors that influence the growth of SMEs in Sri Lanka. It is a common practice of combining various factors of promotion mix for efficient and better marketing management. It starts from introduction to the market and ends being obsolete. Direct marketing sales promotion and publicity help reach potential customers and induce trail purchases by offering coupons and free samples. Personal selling is costly, but effective for industrial customer as there number is less. The amount of funds available for the purpose plays a vital role in deciding the combination of promotional tools. Re-ordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder advertising. The availability of raw materials, consumables, and components can affect the sale of a finished product. The largest single critical factor determining the company’s sales growth is the product itself. Product managers are under pressure to generate quarterly sales increases. It is best to cut down promotional costs during the decline stage. If the middlemen are allowed higher profit margin, sales promotion at dealer level is important. The nature of the customer, whether he is urban or rural, whether he belongs to the masses or elite class, and his degree of price sensitivity will influence the promotion mix. TOS4. The goal is to have sales managers with both the skill and the will to reinforce and support any sort of change or developmental effort. Therefore a combination of advertising and publicity is required. The distinction is very conspicuous, in the case of industrial buyers’ and consumer buyers’ market. Thus, purchase frequency has a decisive role in the determination of promotion mix. Later, as the product reaches the maturity stage, the objectives of maintaining brand loyalty and creating brand preferences become more important. Determining the promotional budget is a significant task of the retailer. During the introduction stage, the customers are to be informed about the availability of the product and educated about its benefits and uses. (i) Nature of product – Different products require different tools of promotion. When the market is large and wide Advertising is suitable. High price catches risk of disinterest which should be removed by personal selling, while brand must be established with advertising. People are buying product and advertising ensures continuity in this sale. It's crucial to build and maintain a good network of suppliers. Machinery, equipment or land personal selling is more appropriate as a great deal of pre-sale and after-sale services is required to sell and install such products. These factors are called product-market factors. The manufacturer invests heavily in advertising so that the retailer suggests the retail selling price. In the words of Whitehead “In case of an expanding market, the firms may stand to gain by following the methods of Aggressive Selling. Products targeting children will not use press advertisements as a means of promotion. Past Economic Performance The demand for a product depends on the economic cycle that the country is currently experiencing. Product complexity is another determinant of Promotional mix. Share Your Word File These products are directly consumed by customers hence, no of customers are very large and that is the reason advertising becomes essential and necessary. An image must be created for each brand in order to accept the brand at each level of marketing channel. The rapid growth of sales promotion is due to the fact that product managers are faced with greater pressure to increase their current sales and sales promotion as viewer as an effective short-term sales tools. The company needs to be mindful of maintaining its quality and adding or modifying the functions and utilities according to the changing technologyand varying tastes and preferences of the consumers. Levy, Webster, and Kerin (1983) attempted to assess the sales and profit impact of alternative push marketing strategies for a marga-rine product. Personal selling is more important industrial products. Advertising can reach large number at less cost. During these all stages, promotion have different objectives and hence different elements of communication are used in this different stages. In the growth stage, the consumers have already heard of the product. The present study was based on a sample of fifteen SMEs which may have positive or negative growth in sales. Retailers will ask the wholesalers and they ask the manufactures for the product. are applied for promotion. If a product is for kids, printed advertisement tends to be useless. What Can You Do With A Degree In Computer Science? Improvement in the growth monitoring can only be successfully undertaken if the There are factors responsible for rapid growth of sales promotion discussed below. Personal sellingis highly essential in marketing. If a product is of complex nature. But in case of financial constraints the firm has to be selective in use of promotional tools. Hurricane affects may require your marketing strategies to focus on discounts during the season or heavy promotion after the season. Low-priced, frequently purchased consumer goods such as toilet soap, toothpastes, soft drinks, etc., will require frequent repeat messages to influence and remind the existing consumers about the brand and to persuade new consumers to buy. That is attractive to customer. But at the declining stage advertisement and sales promotion are reduced to the minimum. when you do all these correctly, it can make a significant effect on the sales of a product. 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