Promotion Mix and

Consumerism
Unit 3
Syllabus
● Promotion: Methods of promotion,
● Advertising, Meaning, Importance,
● Advertising media,
● Ethics of good advertising.
● Publicity, Meaning, Types and Techniques,
● Consumer Vs Customer,
● Consumer Behaviour,
● Factors affecting Consumer behaviour,
● Customer loyalty and Retention,
● Basics of CRM
Promotion
Promotion is a marketing tool, used as a strategy to
communicate between the sellers and buyers.

Through this, the seller tries to influence and

convince the buyers to buy their products or
services.

It assists in spreading the word about the product

or services or company to the people.

The company uses this process to improve its

public image. This technique of marketing creates
an interest in the mindset of the customers and can
also retain them as a loyal customer.
Promotion Methods

■ Sales Promotion
■ Consumer Sales Promotion
■ Traders Sales Promotion
■ Salesforce Sales Promotion
■ Business / Company Sales promotion
■ Advertisements
■ Public Relations
■ Publicity
Sales Promotion
Consists of a diverse collection of incentive tools, mostly short term, designed to
stimulate quicker or greater purchase of particular products or services by
consumers or trade.

Advertising offers “reason” to buy whereas sales promotion offers “incentive” to

buy.

Includes consumer promotion, trade promotion & business & sales force
promotion.
Objectives of Sales Promotion

● To launch a new product

● To stay competitive
● Make existing customers buy more
● Sell during the off season
● To increase brand awareness
Purpose

1. Stimulates trial
2. Increases repurchase
3. Rewards loyal customers
4. Promotes greater consumer awareness of prices
5. Leads to blips in sales volumes
6. Leads to consumer satisfaction

*Warning: excessive use may dilute brand equity!

Major consumer promotion tools

Samples: free amount delivered D-T-D, sent in mail, picked up in store, attached
to another product or featured in advertising offer

Coupons: certificates entitling bearer to stated saving on purchase of specific

product: mailed, enclosed in other products, inserted in newspapers/magazine
ads

Rebates: consumer sends “proof of purchase” to manufacturer who refunds part

of purchase price by mail (not at retail shop)

Price-packs: offers to consumers of savings off regular price of product, flagged

on label or package (2 for 1, banded pack i.e. toothbrush free with toothpaste etc.)
Premiums (gifts): merchandise offered at relatively low cost or even free as an
incentive to purchase a particular product

Frequency programs: frequent flyer, loyalty programs etc.

Prizes (contests, sweepstakes, games): sweepstakes is a lucky draw

Free trials: inviting prospective purchasers to try product without cost, as

incentive to purchase

Product Warranties

Tie-in promos: 2 or more brands/companies tie up on offers

Cross promo: using one brand to promote another non-competing brand

POP :Point of purchase (POP) sales promotions are marketing strategies that aim
to encourage customers to buy products at the point of sale.
Price-off – straight discount on invoice/list price. Also known as primary
scheme in India.

Allowance – Window displays, in-shop campaign etc.

Early-bird or first-purchaser specials: These specials offer discounts to first-

time purchasers as a way of welcoming them as customers.
Sales Promotion Strategy
6 Stages Involved in Sales Promotion Planning

1. Establishment of objectives:

Sales-promotion objectives vary according to the target market. If the target is

the customer, objectives could include the encouragement of increased usage or
the building of trial among non-users or other brand users. For intermediaries,
objectives could be to encourage off-season sales or offsetting competitive
promotions. Sales-promotion activity could also be aimed at internal personnel,
making up part of the reward system
2. Selection of promotional tools:
Promotional objectives form the basis for selecting the most appropriate sales-
promotion tools. The cost and effectiveness of each tool must be assessed with regard
to achieving these objectives in respect of each target market. The tools available to
the service marketer are described in more detail in the next section.
3. Planning the sales-promotion programme:
The major decisions that need to be made when designing the sales-promotion
programme relate to the timing of the promotion and how long this tool is to be used.
Also important are the size of incentive, rules for eligibility and, of course, the overall
budget for the promotion.
4. Pre-testing:
This needs to be undertaken to ensure that potentially expensive problems are
discovered before the full launch of a promotion. Testing in selected market segments
can highlight problems of ambiguity, response rates and give an indication of cost
effectiveness.
5. Implementation: This stage is about putting the planned sales promotion strategy
into action. It involves executing the tactics and activities designed in earlier stages to
engage customers and boost sales. Key tasks during this phase include: Distributing
promotional materials: This could include things like brochures, coupons, or online
ads. Training staff: Sales teams or customer service reps need to understand the
promotion's details to properly communicate it to customers. Launching the
promotion: Officially starting the promotion and ensuring all channels (social media,
retail, email, etc.) are aligned and functional. Coordinating logistics: This involves
managing stock levels, timing, and ensuring any technology (like apps or websites) is
ready to handle the promotion.
6. Control & Evaluation: Once the promotion is in motion, it's crucial to monitor its
performance and make adjustments as needed. This stage helps determine whether
the sales promotion has been successful and meets the predefined objectives. Tasks
in this phase include: Tracking performance metrics: Monitor key performance
indicators (KPIs), like sales volume, customer engagement, website traffic, etc.
Feedback collection: Gather customer feedback and responses to the promotion to
gauge their satisfaction. Analyzing results: Compare the results with the set goals
(such as sales targets, brand awareness, etc.) to assess effectiveness.
Advertisements
The definition of advertisement is the means of communication in which a product,
brand or service is promoted to a viewership in order to attract interest, engagement,
and sales.
According to Kotler - Advertising is any paid form of non-personal presentation ( not
for an individual ) & promotion of ideas, goods, or services by an identified sponsor.
5M’s
1. Mission – sales goals/advertising objectives
2. Money – how much to spend? (Budget)
3. Message – message creation attributes message purposes to rational, sensory
and social values of a customer.
4. Media – what media to use?
5. Measurement – how to evaluate results?
Evolution of Advertising
Setting advertising objectives
1. Informative – Awareness/Knowledge: The goal here is to introduce the product or service
to the audience. You want to make potential customers aware of your brand, product, or
service, often used when launching a new product or entering a new market. It focuses on
providing information to build knowledge.
2. Persuasive – Liking/Preference/Conviction/Purchase: Persuasion is key at this stage. Once
awareness is established, you work on building preference for your brand. This includes
making the audience like the product, choose it over competitors, develop conviction
(believing it's the best choice), and ultimately, lead to a purchase decision.
3. Reminder – Stimulate Repurchase:This objective is about staying top-of-mind with
existing customers. It's used primarily for established products or services, encouraging
repeat purchases by reminding customers of the brand's benefits and keeping them
engaged.
4. Reinforcement – Reinforce Choice: After a purchase is made, this objective aims to
reassure the customer that they made the right choice. It helps reinforce the brand's value
and can increase brand loyalty by making customers feel good about their decision.
Deciding advertising budget
1. Stage in Product Life Cycle (PLC)
New Products: When a product is in the introduction stage of its PLC, it needs heavy advertising
to raise awareness and establish a foothold in the market. The budget tends to be higher to
generate buzz and educate potential customers.
Example: Think of a new tech gadget, like a smart speaker from a new brand. The company
will need a big budget to introduce it to the market, run commercials, and invest in influencer
marketing to create awareness.
Established Brands: For mature products in the growth or maturity stages, advertising budgets
are typically lower because the product is already well-known, and the goal shifts to reinforcing
brand loyalty rather than creating awareness.
Example: Coca-Cola or Apple’s iPhone don’t need huge budgets to remind people of
their existence. Their ad budgets are focused more on reinforcing brand values or seasonal
campaigns like holiday ads.
2. Market Share & Consumer Base

High Market Share Brands: These brands don’t need to spend as much on
advertising since they already have significant brand recognition and customer
loyalty. They can afford to maintain or slightly increase their budget based on their
market dominance.

Example: Nike has a massive market share in sportswear. Its ads are not as
frequent or heavy in comparison to smaller brands because it has a strong consumer
base that already knows and trusts the brand.

Low Market Share Brands: Smaller or newer brands need to spend more on
advertising to grab attention, build market share, and compete with larger,
established brands.

Example: A new, small startup selling athletic shoes will need a much larger
marketing budget to compete with Nike and Adidas, focusing on increasing its
presence and convincing customers to try their brand.
3. Competition & Clutter
More Clutter = More Budget: When there’s high competition in a market, ads
can get lost in the noise (clutter), so more budget is needed to stand out,
differentiate, and grab attention.
Example: During the holiday season, companies like Amazon, Walmart, and
Target all heavily advertise their deals. The market is flooded with ads, so each
brand has to increase its ad spend to make sure its voice is heard above the rest.
Less Clutter = Less Budget: In a less competitive market with fewer ads, brands
can spend less and still maintain visibility.
Example: A new brand in a niche market (say, eco-friendly home products)
might need a smaller budget because fewer competitors are advertising in that
specific category.
4. Advertising Frequency

More Frequency = Higher Budget: If a brand wants to run its ads more frequently to
ensure they’re seen multiple times by the target audience, it will need a higher
budget.

Example: A fast-food chain like McDonald's or Taco Bell often runs frequent
ads, particularly during prime times or in regional markets. The more often they
want their ads to appear (TV, digital, etc.), the higher the budget required.

Less Frequency = Lower Budget: If a brand only wants to advertise occasionally or

through more selective channels, the budget may be lower.

Example: A boutique coffee shop in a local area may only run a few digital ads
per month, spending less overall than a larger chain like Starbucks, which
continuously runs national campaigns.
5. Product Substitutability
Commodities (Low Differentiation) Need More Budget: Products that are more
commodity-like and have little differentiation from competitors (e.g., basic groceries
or utility services) require more advertising to stand out and maintain a consistent
customer base.
Example: Generic brands like store-brand cereal or cleaning products spend
heavily on advertising to convince consumers that their products are as good (or
better) than the brand names.
Unique Products (High Differentiation) Need Less Budget: Highly differentiated
products, which stand out due to their uniqueness, quality, or brand value, often
require a lower budget because they have a natural appeal and established customer
base.
Example: Tesla spends relatively little on traditional advertising, relying instead
on word of mouth, their strong brand reputation, and influencer marketing. People
are willing to pay a premium for their unique electric vehicles.
Choosing the advertising Message
1. Message Generation: When generating a message, how many alternative ad themes should the
advertiser create before making a choice?

Number of Alternatives: There’s no strict rule, but typically, 3-5 alternative ad themes are developed
during the message generation stage. This gives enough variety to explore different approaches but isn’t
too many that it becomes overwhelming or unproductive. The idea is to test out different creative
directions and concepts to identify which resonates best with the target audience.

Creativity vs. Cost Trade-Off: There is always a balance between being highly creative and keeping
costs under control. More elaborate or innovative ads might cost more in terms of production, but they
could potentially generate a bigger impact. Simpler ads may be more cost-effective but might not be as
engaging. The goal is to find a creative idea that achieves the objective within the available budget.

Example: For a campaign promoting a new eco-friendly product, one creative theme might be a
humorous angle (e.g., "Save the planet, one laugh at a time"), another might focus on the product's
environmental impact (e.g., "The future is green with our eco-friendly product"), and a third could
highlight customer testimonials. You’d evaluate which one best resonates with your target audience.
2. Message Evaluation & Selection: A good ad normally focuses on one core selling proposition.
Research is critical here to ensure the ad will resonate with your audience and achieve the
desired outcome.

Focus on One Core Selling Proposition: The most effective ads tend to focus on one central idea
or benefit. This ensures clarity and prevents the message from becoming diluted. By honing in
on one key benefit, the ad becomes more impactful and memorable.

Research-Based Selection: Research helps determine which appeal—emotional, rational, or

something else—will work best for the audience. It can be qualitative (focus groups, interviews)
or quantitative (surveys, ad testing). Understanding what drives consumer behavior (whether it’s
a need for convenience, status, or excitement) informs the final decision.

Example: If you're promoting a luxury watch, the core selling proposition could focus on
"exclusivity and craftsmanship" rather than other features like "timekeeping accuracy." Research
might show that emotional appeals about status and success resonate most with high-end
consumers.
3. Creative Brief: The Creative Brief is a crucial document that guides the
creative development of the ad campaign. Typically, it’s 1-2 pages long and
serves as an elaboration of the positioning statement. Here’s what it includes:
Key Message: The main takeaway the brand wants the audience to remember.
Target Audience: A detailed description of the demographic, psychographic, and
behavioral traits of the audience. Understanding the audience allows for tailored
messaging.
Communication Objectives: What do you want the ad to achieve? Whether it’s
raising awareness, changing perceptions, or driving a specific action.
Benefits/Promises: What’s in it for the consumer? This is where you highlight
the tangible or emotional benefits of the product or service.
Media Choice: Which channels will be used to deliver the message? Will it be a
TV ad, social media campaign, print, or a combination?
Example: Let’s say you’re promoting a health drink. Your creative
brief might read:
Key Message: "Stay energized all day with [Brand’s] healthy, natural ingredients."
Target Audience: Active individuals, ages 25-40, who are health-conscious and care
about what goes into their bodies.
Communication Objectives: Increase brand awareness, drive traffic to the website
for more info, and encourage trial.
Benefits/Promises: "Packed with vitamins and minerals to keep you going without
the crash."
Media Choice: Social media ads (Instagram, Facebook), YouTube, and influencer
partnerships.
 4. Message Execution: Once the creative concept has been selected and the brief is in place, it’s
time for Message Execution. This involves translating the creative idea into a finished ad,
including choosing the appropriate tone, language, and style.

Choosing the Tone: The tone of the ad should align with the message and appeal you want to
convey. Tone can be:

Humorous: Light-hearted, fun, and often used for consumer goods.

Serious: More somber and used for issues like health or social causes.

Inspiring: Motivating and uplifting, often used in ads that target personal growth or success.

Empathetic: Compassionate tone, useful for products or services that provide care or support.

Example: A charity organization might use an empathetic, serious tone for an ad about child
hunger, while a sports brand like Nike would use an inspiring and motivational tone to empower
athletes.
Memorable & Attention-Getting Words: Word choice is crucial for making an
impact. Certain words evoke emotion, provoke curiosity, or instill a sense of urgency.
Words like "exclusive," "limited-time," or "guaranteed" are often used to create
excitement.
Example: A campaign for a new smartwatch might use words like “innovative,”
“sleek,” and “transform your day” to communicate the unique benefits and create a
sense of anticipation.
Rational vs. Emotional Positioning: Depending on your product, the ad could take a
rational positioning (focusing on facts and logic, like savings, features, and utility) or
an emotional positioning (appealing to feelings, aspirations, or desires).
Example: Rational: A detergent ad could focus on its ability to remove tough
stains or save money.
Emotional: A travel company ad might focus on the emotional experiences
and memories that come from vacations, positioning the brand as a gateway to
unforgettable moments.
Deciding on Media

It’s about finding the most cost-effective way to deliver the right number and
type of exposures to the target audience. The effect of exposures is crucial in
determining how much the ad will impact audience awareness and subsequent
behavior.

The effect of exposures on audience awareness depends on reach, frequency &

impact.
1. Reach: Reach refers to the total number of different individuals or households
exposed to a particular media schedule at least once during a specific time
period.
Importance:
Reach is essential when the goal is awareness, especially for new products or
flanker brands (a brand introduced to fill a gap in the market without competing
directly with the main brand).
It’s also crucial when promoting extensions of well-known brands or
infrequently purchased items (like furniture or high-end electronics).
Example: When launching a new soda brand, the advertiser’s goal will be to
maximize reach to create broad awareness about the product. The more people
who know about it, the higher the likelihood of attracting customers.
Example Formula: If an ad reaches 80% of homes in a market and you want
to evaluate its reach over a month, the reach would be the total number of
unique individuals in those homes who are exposed to the ad at least once.
2. Frequency: Frequency refers to how many times an average individual or
household is exposed to an ad within the specified time period.
Importance:
Frequency is crucial when there are strong competitors, a complex storyline,
high consumer resistance, or when the product has a frequent-purchase cycle
(e.g., consumables like toothpaste or shampoo).
Example: In a highly competitive market (e.g., soft drinks, mobile phones), if
you want consumers to remember your product amidst the noise, high
frequency is key. More exposure increases the likelihood that your message will
stick in their minds.
Example Formula: If a media schedule reaches 80% of homes and the
average frequency of exposure is 3 times per week, it means that the same
audience is being exposed to the ad 3 times, helping to build familiarity and
recall.
3. Impact: Impact refers to the qualitative value of an exposure through a given
medium. It’s about how effective the medium is in conveying the message and
the extent to which it captures the attention and leaves an impression on the
audience.
Importance:
Impact is critical when you want to ensure the exposure is meaningful, like
with premium or aspirational brands.
For example, an ad for Revlon in Cosmopolitan magazine might have a
higher impact because Cosmopolitan’s readers are likely to be more interested
in beauty products, and the environment is conducive to delivering the brand’s
message. Ads in highly regarded, niche media can drive greater attention and
engagement than ads in less-targeted or more general media.
Example Formula: If an ad in Cosmopolitan is more likely to engage the
audience because it aligns with their interests (compared to an ad in a general
magazine), then the impact is higher.
Total Exposures (E) = Reach (R) x Frequency (F)
This formula is used to calculate the gross rating points (GRP), which represent
the total exposure a media schedule provides to the target audience. It’s a way to
quantify the cumulative impact across a schedule.

GRP Example:

If a media schedule reaches 80% of homes, and the average exposure frequency
is 3 times, then:

E = 80 x 3 = 240 GRPs.

This means that the total exposure is the equivalent of 240 exposures reaching
the target audience, considering the reach and frequency.
Weighted Exposures (WE) = Reach (R) x Frequency (F) x Impact (I)
This formula is used to calculate the weighted exposures, which take into
account the impact of the exposure, not just the quantity of the exposure. This
helps provide a more refined estimate of how effective the exposures are,
factoring in quality along with the quantity.
Let’s assume the reach is 80% of homes, frequency is 3 times, and impact is a
factor of 1.5 (due to the quality of the medium, like a high-end magazine, for
instance).
Then, WE = 80 x 3 x 1.5 = 360.
The weighted exposure here accounts for not just the reach and frequency, but
also the added value that the high-impact media provides to the message.
Choosing Media
Television Yellow Pages

Newspapers Major Magazine

Kinds of
Media
Direct Mail Outdoor

Radio Internet
Newspapers
Best for: Local businesses, time-sensitive promotions, and campaigns requiring broad but
trusted reach.
Considerations: While they have broad credibility, their short lifespan and limited reach in terms
of younger audiences make them less appealing for long-term campaigns.
Television
Best for: High-impact, mass-market campaigns aiming to appeal to broad demographics (e.g.,
national product launches).
Considerations: High costs and fleeting exposure mean that you need strong creative to make an
impact, and a large budget to sustain a campaign.
Radio
Best for: Targeting specific demographics, local markets, or regional campaigns. It’s also useful
for shorter bursts of messaging or branding.
Considerations: While cost-effective, radio ads only use audio and have fleeting exposure.
Additionally, with radio, there’s less audience engagement compared to visual media.
Direct Mail
Best for: Personalized, one-to-one communication with a highly targeted audience. Great for
promoting offers, catalogs, or memberships.
Considerations: While very selective, it can be seen as “junk mail” if not done creatively or
relevantly, and it can be costly to send to a broad list.
Magazines
Best for: Niche markets, products that require credibility, and high-end or luxury goods where
quality reproduction is a key part of the appeal.
Considerations: Longer lead time for ad placement and the possibility of wasted circulation
(people outside your target group) can limit effectiveness.
Outdoor
Best for: Local, high-frequency exposure, especially in high-traffic areas. It’s perfect for simple,
clear messaging (e.g., billboards).
Considerations: Limited audience selectivity means it's not ideal for niche campaigns, and
creative options are often restricted due to the format.
Yellow Pages
Best for: Local businesses that rely on people searching for services (e.g., plumbing, auto repair,
legal services).
Considerations: Though they offer excellent local coverage, competition within each category is
high, and you don’t have flexibility in ad positioning.
Newsletters
Best for: Businesses with an established customer base or niche audience who prefer in-depth
or regular updates (e.g., B2B companies, nonprofit organizations).
Considerations: They allow for deep engagement, but costs can escalate if the distribution grows
or if they require frequent design and content creation.
Brochures
Best for: Product or service promotion where potential customers want to take home detailed
information. It’s effective for businesses that sell complex products or services.
Considerations: Overproduction can lead to high costs, and they may not be as effective if not
distributed to the right audience.
 Many Forms
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Seek Direct Response
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More Exposure
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Better Targeting
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Context Ads/Pointcasting
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Pay for Results
Many Forms: The internet offers a wide range of advertising formats, from display ads and search engine
marketing to social media and video ads. The diversity allows businesses to tailor their approach depending on
their audience and objectives.

Seek Direct Response: No matter the format (display, search, or social media), you should design your
campaigns to prompt a direct action—whether it’s a click, a purchase, or a sign-up. For example, search ads are
often used for direct response because they appear when users are actively searching for something.

More Exposure: Increasing brand visibility through ads is important for awareness. Display ads, social media
ads, and even video ads on platforms like YouTube can help you reach large audiences. More exposure sets the
foundation for driving traffic and conversions.

Better Targeting: The ability to target users with precision is one of the strongest advantages of online
advertising. With tools like Facebook’s audience targeting or Google’s keyword targeting, you can hone in on the
right people based on location, interests, behaviors, and more, ensuring your ads reach the right eyes.

Context Ads/Pointcasting: Contextual ads (like Google’s Display Network or native ads on websites) are shown
based on the content users are consuming. Pointcasting focuses on delivering ads to very specific segments of
an audience, making sure the ad is relevant to that individual’s current behavior or preferences. This helps
make ads feel more integrated and less intrusive.

Pay for Results: Internet advertising often uses performance-based pricing models, such as pay-per-click
(PPC), pay-per-conversion, or cost-per-action (CPA). This ensures advertisers only pay when a user takes a
specific action, making it a cost-effective approach.
Evaluating advertising effectiveness
● Consumer feedback method
● Portfolio test - Involves showing participants a set of advertisements
(including the one being tested) and evaluating which one they recall or
prefer. Measures effectiveness based on recall, message retention, and
overall preference.
● Laboratory test - Controlled experimental conditions are used to assess
consumer responses to advertisements. Tools like eye tracking, heart rate
monitoring, and EEGs may be used. The focus is on measuring attention,
engagement, and emotional response.
● SOV (share of voice):
Share of advertising expenditures produces a share of voice (% of company
advertising of that product to all advertising of that product) that earns a share
of consumers’ minds & hearts & a share of market.
 ● Share of Voice (SOV):
SOV is the percentage of total advertising exposure a brand gets compared to
competitors.

● Impact:
Higher SOV often correlates with a higher share of consumers' minds and
market share.
This strategy supports brand recall and competitive positioning.
AIDA
Hierarchy of Effects
● The hierarchy of effects theory
describes the impact of advertising
on customers’ decision-making on
purchasing certain products and
brands in a series of behavioral
stages.
● The hierarchy of effects model
consists of three major stages: the
cognitive stage (awareness,
knowledge); the affective stage (liking,
preference, conviction); and the
behavioral stage (purchase).
AIDA and the Hierarchy of Effects
Ethics of Good Advertising
Ethics means a set of moral principles which govern a person’s behavior or how the
activity is conducted. And advertising means a mode of communication between a
seller and a buyer.
Thus ethics in advertising means a set of well defined principles which govern the
ways of communication taking place between the seller and the buyer.
An ethical ad is the one which doesn’t lie, doesn’t make fake or false claims and is in
the limit of decency.
The main area of interest for advertisers is to increase their sales, gain more and
more customers, and increase the demand for the product by presenting a well
decorated, puffed and colorful ad. They claim that their product is the best, having
unique qualities than the competitors, more cost effective, and more beneficial. But
most of these ads are found to be false, misleading customers and unethical.
DISCLAIMER !!
Zara-2023
Lush - 2018
Nike -2018
Ethics in Advertising is directly related to the purpose of
advertising and the nature of advertising. Sometimes exaggerating
the ad becomes necessary to prove the benefit of the product.

For e.g. a sanitary napkin ad which shows that when the

napkin was dropped in a river by some girls, the napkin
soaked whole water of the river. Thus, the purpose of
advertising was only to inform women about the product
quality. Obviously, every woman knows that this cannot
practically happen but the ad was accepted. This doesn’t show
that the ad was unethical.
The Recent article which says ads should follow three moral principles -
Truthfulness, Social Responsibility and Upholding Human Dignity.

Honesty and Truthfulness:

Advertisements should be so framed that they do not abuse the trust of consumers or
exploit their lack of experience or knowledge. The elements affecting the purchase
decision of consumers should be presented in a proper way to the consumers.
Advertisements should be truthful and never have misleading messages.

Social Responsibility:

Advertisements should not give any message that promotes discrimination, based
upon race, nationality, religion, sex, age, social and economic status or disability.

Human Dignity:

Advertisements should not play on fear, appear to condone or incite violence, nor
abuse the suffering of people.
Truth is always said but not completely. Sometimes its better not to reveal the
whole truth in the ad but at times truth has to be shown for betterment.

Pharmaceutical Advertising - they help creating awareness, but one catchy

point here is that the advertisers show what the medicine can cure but never talk
about the side effects of that same thing or the risks involved in intake of it.

Children - children are the major sellers of the ads and the product. They have
the power to convince the buyers. But when advertisers are using children in
their ad, they should remember not to show them alone doing there work on
their own like brushing teeth, playing with toys, or infants holding their own
milk bottles as everyone knows that no one will leave their kids unattended while
doing all these activities. So showing parents also involved in all activities or
things being advertised will be more logical.
Alcohol - till today, there hasn’t come any liquor ad which shows anyone
drinking the original liquor. They use mineral water and sodas in their
advertisements with their brand name. These types of ads are called surrogate
ads. These type of ads are totally unethical when liquor ads are totally banned.
Even if there are no advertisements for alcohol, people will continue drinking.

Cigarettes and Tobacco - these products should be never advertised as

consumption of these things is directly and badly responsible for cancer and
other severe health issues. These as are already banned in countries like India,
Norway, Thailand, Finland and Singapore.
ASCI
In order to ensure ethics in advertising, in India we have the Advertising
Standards Council of India (ASCI), which has one major aim is to maintain and
enhance the public’s confidence in advertising.
The ASCI sees to it that all advertisements conform to certain basic principles,
like honest representations.
This implies that the ads should convey a truthful and honest message to the
consumers and even to competitors.
Advertisements should also remain within the bounds of generally accepted
standards of public decency and propriety and be non-offensive to the public.
Ads should not be used indiscriminately for the promotion of any products
which may be harmful to society or any individual.
Publicity
Publicity is a term that refers to public awareness of a company or person. The
ultimate goal of publicity is to create a positive public perception of a company to
inspire more people to engage with it.
Often, companies use publicity as a component of a marketing campaign. You can
generate publicity through media, which can include traditional news sources as well
as new media like blogs and podcasts.
“Publicity is any promotional communication regarding an organisation and/or its
products where the message is not paid for by the organisation benefiting from it.” –
William J Stanton
“Non-personal stimulation of demand for the product or service, or business unit by
placing commercially significant news about it in public medium or obtaining
favourable presentation of it upon radio, television, or stage that is not paid for by the
sponsor.” – Philip Kotler
Characeristics
● It is non – a paid form of communication that involves getting favorable
responses from the buyers for the positive information revolving in the mass
media. For example launch of new products by Reliance industries.
● There is no identified sponsor for publicity because it is non – paid and it
happens automatically after putting the newspaper, television news channels,
radio, magazines start publishing the news.
● The objective behind publicity can be to introduce new and positive changes in
the market or working of the organization, introduction of new products, display
special achievements, etc.
● The organization does not have any control over publicity. It is done by the third
party and the way it is presented, time, frequency, etc cannot be controlled.
● It is an effective form of promotion as it is more likely to be read, viewed, and
seen by the public and people tend to believe the news displayed.
Objectives
1. Improving or building corporate image: publicity is an important tool to
build the goodwill of the organization as people trust the information and
news displayed by the people by the new channels, radios, newspapers, etc.
When this news about the company and its products or policies is positive
then the image improves.
2. It is a less costly method of promotion. The companies who do not want to
spend much on promotion can go for publicity wherein they need to
organize the event and present the news and the news channels, reporters;
columnists, etc will display it to the public.
3. The news is credible and people will believe it and it also helps in
improving the product image in the market and thus helps in improving the
sales of the firm. This will attract the people towards other products of the
firm also.
4. It is a medium to clarify doubts and remove the bad image that may be created
in the market by removing the misunderstandings of people.

5. It helps in saving the efforts of the middlemen and the salesman as the
publicity speaks for itself. The publicity of the product will help in persuading
people to buy the product and thus fewer efforts will be required to attract the
customers.
Types of Publicity
■ Based on User Sentiments ■ Based on Information
■ Positive Publicity Propagation
■ Negative publicity ■ News
■ Product Release
■ Emergency
■ Offers
■ Conferences
■ Events
■ Partnerships
■ Digital Activity
■ Social Efforts
■ Marketing Communications
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Importance

1. Publicity is an effective medium to disseminate message to the mass with more

credibility. People have more trust on news given by publicity.

2. The credibility level of publicity is much higher than advertising and other
means of market promotion. People express more trust on what the third party
independently says. It appears directly through newspapers, magazines,
television, or radio by the third party. It is free from bias.

3. It provides more information as the valuable information is free from space

and time constraints. Similarly, publicity takes place immediately. No need to
wait for time or space in mass media. It enjoys priority.
4. The firm is not required to pay for publicity. The indirect costs related to
publicity are much lower than other means of promotion.
5. It is a part of public relations. It is free from exaggeration; it carries more
factual information about company. It is more trustable. It helps establish public
relations.
6. Generally, publicity covers the varied information. It normally involves name
of company, its goods and services, history, outstanding achievements, and other
similar issues. The knowledge is more complete compared to advertisement.
7. Publicity directly helps middlemen and sale persons. Their tasks become easy.
Publicity speaks a lot about products on behalf of middlemen and salesmen.
Sellers are not required to provide more information to convince the buyers.
8. It is suitable to those companies which cannot effort the expensive ways to
promote the product.
Publicity Vs Public Relations

■ Public relations: shape the public’s perceptions of

and attitudes towards the firm
■ Communicates with stakeholders in manners
other than advertising
■ Publicity: non-paid for media exposure for the firm:
both positive and negative
Consumer
Behaviour
Understanding Consumers
Customer VS Consumer
(self study)
Understanding consumer behavior is a key element of a marketing strategy. In
fact, before implementing a strategy, it is essential to fully understand the needs
and expectations of the consumers you want to influence. To do this, you need to
understand how the consumer will react and be influenced by your marketing
strategies.

To delve deeper into the preferences of your target market, some of the
questions you must answer are:

● How do the consumers perceive the information?

● How do you capture their paying attention?
● What are their needs?
● What factors influence them to make purchasing decisions? Are they price,
quality, commercial offer, or others?
Types of
Customers
1. Potential Customer
Kind of person who is very likely to buy the product or service offered by the
business. e.g. a customer looking for an apartment in a particular area becomes a
potential customer for the local realtors who would have a flat which will suit the
requirements of the customer.
The customer might end up buying the apartment.
Potential customers can present an opportunity for the business to sellers and after
qualification can convert into a quote stage and eventually result in an order or a sale.
2. Loyal Customers
Those who are loyal to one business and repeat the purchases irrespective of minor
changes in parameters like price, quantity etc.
e.g. a customer who buys the same airline's ticket irrespective of price.
3. New Customer
The customers who have used the product or service for the first time from a
particular organization. Such customers can be switching from a competitor
brand or may be new entrant into the market.
e.g. a person buying car for the first time after a salary raise. From the
perspective of the organization, a new organization would acquire new
customers from the market either by launching a new product category
altogether or launching a competitive product offering in the market.
4. Discount Customer
Those who only buy or use the offering because it was on discount or offered a
cashback. These people are more likely to switch brands easily if prices reduce
unlike loyal customers. e.g. A customer who takes a different flight based in the
discounts offered though the preferred airline brand was different based on past
travels.
5. Former Customers
Those who were once buyer of one business and became buyers of a new business because of
some reason. These people would still be potential customers as they have already tried the
product or service once.
e.g. A person who used to buy a specific beverage switched to a more healthier option offered by
a competitor.
6. Internal Customer
One who is connected to your organization and is internal to your organization. These for
example are your shareholders, employees & other stakeholders.
7. External Customer
An external buyer is a buyer of your services and products but external to your organization. An
example of your external consumer could be people buying your products in the marketplace.
8. Intermediate Customer
Those who purchases the goods for re-sale e.g. retailers. The customers are part of a longer
supply or value chain
Consumer & Business
Buyer Behaviour
Consumer Consists of all the individuals and

buyer households who buy or acquire goods

and services for personal

behaviour
consumption.
What's in the buyer's black box?

Buyer characteristics: The beliefs, values, motivations, and perceptions of the

buyer

Decision-making process: The process of considering past experiences, desires,

and objectives when making a purchase.

Why is it called the buyer's black box?

The model is called the buyer's black box because little is known about what goes
on in the human mind. Marketers need to understand how the stimuli are
transformed into responses inside the consumer's head.
Traditional factors affecting consumer purchasing behaviors

● Demographics (age, gender, income, etc.)

● Heredity and home environment
● Family life cycle
● Life changing events
● Cultural environment
● Social environment
● Situational environment
● Psychological Factors
High involvement implies that the consumer is more invested in the buying
process, while low involvement implies that the consumer is not very invested in
the buying process. For example, some consumers like to perform due diligence
on their own before making a purchase, whereas others just go with the flow.

In other words, high involvement implies that a consumer actively looks for
information that can enrich their buying process. High involvement behaviors
are usually observed when the purchase is infrequent, the product is costly, the
purchase might be risky overall, etc.

Low involvement implies that the consumer does not feel the need to actively
look for information about the purchase because it does not involve a lot of risks.
For example, when buying shampoos or detergents, a consumer is likely to just
go and buy a famous brand or one they have been buying since a long time
instead of researching the pros and cons of each competing brand in the market.
1. Complex Buying Behavior
Complex buying behavior is encountered, particularly when consumers are
buying an expensive product. In this infrequent transaction, consumers are
highly involved in the purchase decision. Consumers will research thoroughly
before committing to invest.
Consumer behaves very attentivetly when buying an expensive product or a
product that is unfamiliar to them. When the risk of buying a product is very high, a
consumer consults friends, family, and experts before making the decision.
For example, when a consumer is buying a car for the first time, it’s a big
decision as it involves high economic risk. There is a lot of thought on how it
looks, how his friends and family will react, how will his social status change
after buying the car, and so on.
2. Dissonance-Reducing Buying Behavior

In dissonance-reducing buying behavior, consumer involvement is very high.

This might be due to high prices and infrequent purchases. In addition, there is a
low availability of choices with fewer significant differences among brands. In
this type, a consumer buys an easily available product.

Consumers will be forced to buy goods with few choices, and therefore, they will
be left with limited decision-making. Based on the products available, time
limitations, or budget limitations, consumers buy certain products without doing
much research.

For example, a consumer who is looking for a new collapsible table that can be
taken camping quickly decides on the product based on a few brands available.
The main criteria here will be the use and features of the collapsible table and
the budget available to him.
3. Habitual Buying Behavior

Habitual buying behavior is depicted when a consumer has low involvement in a

purchase decision. In this case, the consumer is perceiving only a few significant
differences between brands.

When consumers are buying products that they use for their daily routine, they
do not put a lot of thought. They either buy their favorite brand or the one that
they use regularly – or the one available in the store or the one that costs the
least.

For example, when a consumer buys an energy drink, he tends to buy the
flavor/taste that he likes without actually putting in a lot of research and time.
Many products fit into this category. Products such as chocolates, cakes, juices,
etc., all fit into this product category.
4. Variety-Seeking Buying Behavior

In variety-seeking consumer behavior, consumer involvement is low. There are

significant differences between brands. Here consumers often do a lot of brand
switching. The cost of switching products is low, and hence consumers might
want to try out new products just out of curiosity or boredom. Consumers here,
generally buy different products not because of dissatisfaction but mainly with an
urge to seek variety.

For example, a consumer likes to buy a cookie and choose a brand without
putting much thought into it. Next time, the same consumer might choose a
different brand out of a wish for a different taste. Brand switching occurs often
and without intention.
The Buyer Decision Process
Step 1. Need Recognition
Need Recognition
Difference between an actual state and a desired state

Internal Stimuli External Stimuli

• TV advertising
• Hunger
• Magazine ad
• Thirst
• Radio slogan
• A person’s normal
needs • Stimuli in the
environment 1-89
The Buyer Decision Process
Step 2. Information Search
Personal Sources • Family, friends,
neighbors
• Most influential source of
Commercial Sources • Advertising,
informationsalespeople
• Receives most information
from these sources
• Mass Media
• Consumer-rating
groups
• Handling the product
Experiential Sources • Examining the
product
• Using the product

1-90
The Buyer Decision Process
Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features

Degree of Importance
Which attributes matter most to me?

Brand Beliefs
What do I believe about each available brand?

Total Product Satisfaction

Based on what I’m looking for, how satisfied
would I be with each product?
Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes. 1-91
The Buyer Decision Process
Step 4. Purchase Decision
Purchase Intention
Desire to buy the most preferred brand

Attitudes Unexpected
of others situational
factors

Purchase Decision
1-92
The Buyer Decision Process
Step 5. Post-purchase Behavior
✔ Evaluation of product performance.

✔ Cognitive dissonance: Cognitive dissonance is a psychological

state that occurs when someone has conflicting beliefs, attitudes, or
actions. It can cause discomfort and motivate people to change their
beliefs or behaviors.

✔ Impacts future purchases.

The Buyer Decision Process
Step 5. Post-purchase Behavior

Consumer’s Expectations of
Product’s Performance

Product’s Perceived
Performance

Satisfied
Dissatisfied Customer
1-94
Customer!
Cognitive Dissonance
Buying roles

1-95
New Product adoption Process

The product adoption curve is a standard model that reflects who buys your
products and when.
Motivation
Id: The Primal Drive
The Id is the reservoir of our instinctual desires and drives, including Eros (The Life
Instinct) and Thanatos(The Death Instinct). It operates based on the pleasure
principle, seeking immediate gratification regardless of consequences.
Ego: The Mediator
The Ego is our conscious self, which negotiates between the Id’s demands and
reality’s constraints. It follows the reality principle, seeking to fulfill the Id’s desires
in a socially acceptable way.
Superego: The Moral Compass
The Superego acts as our moral compass, embodying societal rules and parental
guidance. It strives for perfection and judges our actions according to moral
standards.
Eros (The Life Instinct) and Thanatos(The Death Instinct) these primal drives steer
our behavior and determine our choices.
Perception
The process by which individuals select, organize, and interpret sensory inputs to form a
meaningful understanding of the world. It influences how consumers view products, brands, and
advertisements.

Selective Exposure – The tendency of individuals to actively seek out information that aligns
with their existing beliefs and avoid information that contradicts them. For example, a loyal
Apple user may ignore ads for Samsung phones.

Selective Distortion – When individuals interpret information in a way that reinforces their
preexisting beliefs. For instance, a brand-loyal customer may view a negative review of their
favorite brand as biased or unfair.

Selective Retention – The process where individuals remember only the information that
supports their attitudes and beliefs while forgetting the rest. For example, a consumer may recall
only the positive aspects of a brand they like while ignoring negative news about it.
Learning and Beliefs

● Changes in an individual’s behavior arising from experience.

● A belief is a person's perception of truth about a product, brand, or service,

formed through experience, knowledge, or marketing communication.
Beliefs shape consumer attitudes and decision-making.
Attitudes

An attitude is a learned tendency to evaluate things in a certain way, whether

positively or negatively. It influences how consumers think, feel, and behave
toward a product, brand, or service.
Personal Factors
■ Age
■ Life-Cycle Stage
■ Occupation

■ Economic Circumstances

■ Life Style

1-105
The concept of the family life cycle has gained popularity in the last
few decades due to its relevance in the consumer decision-making
process. For example, as a person grows older, his buying choices
depend less on his own needs and more on his family’s collectively.
Marketers by understanding the stage of a person in the family life
cycle can anticipate their needs and can shape marketing strategies
according to them. Furthermore, as stated by William (2018), the
family life cycle model helps to profile the consumer, using which the
businesses can determine which set of audiences they should appeal
to.
Family life cycle parameters
It was in the 1960s when Wells and Gruber (1966) came up with the concept of family
segmentation which they named a family life cycle. The family life cycle is used for
targeting and positioning consumers since it is mainly concerned with the different
phases and generations that a typical family passes through.
Formally the family life cycle can be defined as the series of stages typically through
which most of the family progresses, with different characteristics of the stages
(Fingerman, Smith and Berg, 2011). These characteristics are related to their
demographics such as:
● marital status
● size of the family
● age of the family members
● employment status of the head of the family
● income level
● disposable income.
Stage 1: Bachelor stage
At this stage of the life cycle, people are young and their earnings are relatively low
since most of the bachelors are just beginning their careers. They have few financial
responsibilities and thus tend to have relatively high discretionary incomes. People in
this stage are characterized as being more interested in appearance. Therefore they
tend to spend more on fashionable items such as clothing and electronic gadgets.
Impulsive and premium buying is a common characteristic of this group. This group
also tends to spend more on food, entertainment and vacations.
However, a major underlying fact is that all these purchases tend to be non-
systematic and minimal since possessions restrict their freedom of movement. Overall
it can be concluded that there is a presence of individuality at this stage of the family
cycle (Omazic, 2016).
Stage 2: Newly married couple

With marriage comes responsibilities, therefore the requirement for resources

changes. This group can be considered to be in a better financial position due to
the absence of children. One of the major characteristics of this stage is that
people in this stage tend to have the highest purchase rate, particularly for
consumer durables. Their purchases tend to include refrigerators, television,
stereos, sensible and durable furniture, and vacations. Furthermore, they may
also start investing to build reserves for their future. Thus the marketers of such
goods and financial services tend to target them (Wells and Gubar, 2007).
Stage 3: Full nest 1 (Young married, with child)
When the first child is born, the full nest 1 stage begins. The arrival of a child
brings major changes in a family’s consumption pattern. At this stage, money is
majorly directed towards buying baby furniture, toys, medicines, vitamins, baby
food, and baby clothing.
Furthermore, the increased family size may necessitate more space which
requires the family to move into a bigger home. New parents explore baby
products extensively before purchasing, therefore advertising helps them. In addition
to this, in many cases, the mother may need to quit her job, which can cause a
significant reduction in family income. This leads to a sense of dissatisfaction in
the couple with their financial position and decreased disposable income (Raj
and Chandrasekar, 2013).
Stage 4: Full nest 2 (older, married, with children)

In this stage of the family life cycle, the family’s financial position tends to start
improving, possibly due to advancement in careers. With this improved financial
positioning, families still tend to remain new product-oriented but are now less
influenced by advertisements since they have more buying experience.

In this stage, the families tend to buy more food items, children’s clothing,
bicycles for the children, sports equipment for them, and so on. Furthermore, at
this stage, the children start going to school so expenses in terms of their school
fees, books, and stationary increase. The families also start saving for the future
education of their children (Barnhill, 2011).
Stage 5: Full nest 3 (older, married with dependent children)

In this stage, the family income continues to grow and their financial position
becomes more stable. This type of family has a high expenditure on consumer
durables, mainly because there is a need to replace older items. However, they
are more resistant to advertisements since they have become more experienced
buyers now and are harder to entice.

This group tends to buy items such as tasteful furniture, automobiles, non-
necessary appliances, magazines, dental services, and luxury items (Plagnol and
Easterlin, 2008).
Stage 6: Empty nest (older, married, with no dependent children)

At this stage of the family cycle, children are no longer living with their parents.
Thus with no burden of child-related expenses, the family’s financial position
stabilizes and their savings tend to accumulate. The couple is now free to
purpose their wants and desires and thus hobbies become an important source
of satisfaction for them.

More is now spent on luxury, self-improvement items, medical care, and health
products. Furthermore, expenses are done on homeownership and home
improvement (William, 2018).
Stage 7: Solitary survivor

This stage of the family life cycle involves retired people living alone after the
death of their partner. Thus, their life tends to become lonely and their income
reduces significantly due to retirement. This tends to bring drastic changes in
their consumption pattern and living style.

Healthcare services become an important factor in their life.

Culture & Subcultures

Cultures

The accumulation of values, knowledge, beliefs, customs, objects, and concepts

that a society uses to cope with its environment

Subcultures

Groups of individuals who have similar value and behavior patterns within the
group but differ from those in other groups
Customer Loyalty

Customer loyalty is when customers reward a company with repeat

business over time. Loyal buyers consistently choose to do business
with a particular brand and often defend it against its competitors.
For customer loyalty to happen, a company must create an
experience that inspires buyers to return again and again.
How to develop customer loyalty

1. Be as generous as your customers.

2. Show your gratitude.
3. Provide benefits to your customers with every purchase.
4. Scratch the program completely.
5. Build a useful community for your customers.
6. Communicate effectively with your customers.
7. Improve upon your customer loyalty program.
8. Continuously evolve your business over time.
Customer Retention
The customer retention definition in marketing is the process of engaging
existing customers to continue buying products or services from your business.
It’s different from customer acquisition or lead generation because you’ve
already converted the customer at least once.
The best customer retention tactics enable to form lasting relationships with
consumers who will become loyal to your brand.
They might even spread the word within their own circles of influence, which
can turn them into brand ambassadors.
CUSTOMER RETENTION
Customer retention refers to a company’s ability to turn customers into repeat
buyers and prevent them from switching to a competitor.
It indicates whether your product and the quality of your service please your
existing customers.
It’s also the lifeblood of most subscription-based companies and service
providers.
Customer retention is different from customer acquisition or lead generation. It
focuses on customers who have already signed up for a service or purchased a
product from the company.
Customer Retention formula
Customer churn rate

A less direct indicator of customer retention is the churn rate, the percentage of
customers lost during a period of time.

Companies that struggle with customer retention usually have a high churn rate.

Customer churn rate formula

(Y/X) *100 = Z

Low retention rates or high churn rates could be bad signs.

Customer lifetime value

Customer lifetime value measures the total revenue that can expect from a
customer, during their lifetime.
CRM (single source of truth)
CRM stands for customer relationship management, which is a system for
managing all of your company's interactions with current and potential
customers. The goal is simple: improve relationships to grow your business.
CRM technology helps companies stay connected to customers, streamline
processes, and improve profitability.
Doing business has become complicated. The average organisation uses close
to 1,000 different applications — but only 28% of these apps are integrated.
To stay ahead, your company needs to be centred around your customers
and enabled by the right technology.
Bases of CRM
CRM - Benefits