314-ADVERTISING AND SALES PROMOTION

MANAGEMENT
UNIT-1
[1].What is the types of Advertising or classification of users?
[A] INRODUCTION:
Advertising has become so much a part of our lives that we barely give it a thought, except to be annoyed
at it from time to time. However, advertising is a complex field of study, and involves innovation and
creativity as a stale of its existence. This Buzzle article attempts to shed some light on the types of
advertising used as a means of promoting, both products and ideas.

Thus, there are several reasons for advertising. Similarly, there exist various media which can be
effectively used for advertising. Mentioned here are the various categories or types of advertising.

Radio Advertising
Radio advertising is one of the oldest forms of advertising. In the early 20th century, as radio began to
take center stage in a lot of American homes, businesses realized that they could use this medium to
reach a huge audience for their products, and not merely rely on print media such as newspapers and
pamphlets.
Advertisers can buy airtime from a radio station to air their ads, and prices depend upon the duration,
time of the day, and the programs during which the ads are aired. According to market research firm
Arbitron, over 240 million people in the United States tune in to the radio at least once a week. Radio has
been given a much-needed boost as a medium of communication, and therefore of advertising, with the
advent of online radio broadcasts.
Television Advertising
The holy grail of advertising for more than 50 years, television advertising remains the most sought-after
mode of advertising even in the 21st century. It reaches the maximum number of target customers, and
has a variety of programming schedules which can be effectively used for the insertion of ad content.
This is an expensive type of advertising, as reflected by the high price for ad spots during sporting events
such as the Super Bowl. There is also a trend of placing banners in the background while a program is
playing, to increase the visibility of ads. Computer-based graphics are also used to generate ads, which
run in the backdrop of high-profile events such as sporting events and movie premiers. Television jingles
for popular products such as 'Here comes the King' (Budweiser) and 'I am stuck on Band-Aid' (BandAid), are already of legendary status.

Modern Types of Advertising

Online Advertising
Broadcast advertising is a very popular advertising medium that constitutes several branches like
television, radio, or the Internet. Television advertisements have been very popular ever since they were
introduced. The cost of television advertising often depends upon the duration of the ad, the time of
broadcast (prime time/lull time), sometimes the show on which it will be broadcast, and of course, the
popularity of the television channel itself. The radio might have lost its charm owing to new-age media,
however, it remains the choice of small-scale advertisers. Radio jingles has been very a popular
advertising medium, and has a large impact on the audience, which is evident in the fact that many people
still remember and enjoy old popular radio jingles.

Covert Advertising - Advertising in Movies

Covert advertising is a unique kind of advertising, in which a product or a particular brand is
incorporated in some entertainment and media channels like movies, television shows, or even sports.
There is no commercial advertising as such in the entertainment, but the brand or the product is subtly (or
sometimes evidently) showcased in the entertainment show. Some of the famous examples for this sort of
advertising have to be the appearance of brand Nokia which is displayed on Tom Cruise's phone in the
movie Minority Report, or the use of Cadillac cars in the movie Matrix Reloaded. Pay attention next
time, you're sure to come across a lot of such examples.
Surrogate Advertising - Advertising Indirectly
Surrogate advertising is prominently seen in cases where advertising a particular product is banned by
law. Advertisement for products like cigarettes or alcohol, which are injurious to health, are prohibited by
law in several countries. Hence, these companies come up with several other products that have the same
brand name, and indirectly remind people of the cigarettes or alcohol of the same brand, by advertising
the other products. Common examples include Fosters and Kingfisher beer brands, which are often seen
to promote their brand with the help of surrogate advertising.
Public Service Advertising - Advertising for Social Causes
Public service advertising is a technique that makes use of advertising as an effective communication
medium, to convey socially relevant messages about important matters and social causes like AIDS,
energy conservation, political integrity, deforestation, illiteracy, poverty, and so on.
David Ogilvy, who is considered to be one of the pioneers of advertising and marketing concepts, had
reportedly encouraged the use of the advertising field for a social cause. Ogilvy once said, "Advertising
justifies its existence when used in the public interest - it is much too powerful a tool to use solely for
commercial purposes." Today, public service advertising has been increasingly used in a non-commercial
fashion in several countries across the world in order to promote various social causes. In the United
States, radio and television stations are granted to bidders on the basis of a fixed amount of public service
advertisements aired by the channel.
Celebrity Advertising
Although the audience is getting smarter and smarter, and the modern-day consumer is getting immune to
the exaggerated claims made in a majority of ads, there exists a section of advertisers that still bank upon
celebrities and their popularity for advertising their products. Using celebrities for advertising involves
signing up celebrities for campaigns, which consist of all sorts of advertising including television or even
print ads. How effective these ads are, is something that each consumer himself can determine.

In-store Advertising
This is also a popular advertising method for large malls and departmental stores, popularized by stores
such as Walmart. Also known as 'point of purchase advertising', the products are usually displayed
prominently at checkout counters and packaged attractively. They aim to influence the customer to make
an impulse purchase, rather than actively create a need for the product. Other forms of in-store
advertising can be placing the product where the customer can easily see them, and banners inside the
store announcing price cuts or new launches.
Coffee Cup Advertising
A relatively new form of mass advertising is the placement of small ads or promotional material on paper
cups for coffees or onto the tabletops of the diner or cafe. Its origins can be traced to Australian
companies, and is now gaining popularity in Asia and the Americas.
Digital Out of Home Advertising
This is a new type of advertising, which is gaining in popularity and effectiveness as a quick way to get
the customers' attention. Digital out of home advertising can take many forms, but is essentially a
systematic arrangement of media at different venues across a geographic location, where there is a lot of
foot
traffic
such
as
cafes,
bars,
gyms,
gas
stations,
and
many
others.
The advent of digital video recorders such as TiVo has enabled viewers to skip through ads shown on
television causing advertisers and sponsors significant loss in revenue. This is being tackled by using
digital broadcast systems in outdoor public places. Kiosks equipped with LCD screens and customized
software can be found in public locations like parks, subways, and gas stations, along with digital
televisions. This has also been integrated with Point of Purchase advertising, with many stores having
LCD equipped stand-alone systems, where the customer can gain product information and even make a
purchase using his credit card.
The Future of Advertising
Digital Signage
Already a very widely used form of information dissemination in both public and private areas, digital
signage is growing ever more prevalent, as it is a cheap alternative to the costly excesses of television
commercials. It is primarily done through the installation of LED or plasma screens in public places, such
as railway and subway stations, cafes, airports, retail stores, hotels, and many other similar locations.

Smartphone Advertising
The world of smartphones is an ever-growing and changing one. The mobile connectivity it offers to
consumers makes it fertile ground for advertising. Applications from both network carriers and phone
manufactures carry branding and product information for services they offer. Also, games downloaded to
mobile platforms display ads when connected to the internet.
Niche Advertising
Niche markets are specific areas of consumer demand which a company tries to fulfill with customized or
innovative products. Niche advertising deals with targeting these select group of customers with tailored
ads. Companies are taking advantage of online blogs and websites which cater to exclusive content such
as exotic travel or wines or regional cuisine, and using these as platforms to advertise their products. The
use of Internet marketing for these niche offerings ensure that potential customers are exposed to the ads
whenever they search for related terms or log on to a particular site.
User-generated Advertising
This is a radically new form of advertising, that is interactive to the point of letting customers create their
own ads for the brand, one of which is chosen as the brands official ad for a particular time period. This
was successfully done by PepsiCo for its Doritos brand of snacks during the Super Bowl 2007, and again
in 2009 and 2010. User-generated ads are not cost prohibitive, and allow the company to generate a lot of
publicity via word-of-mouth.

[2].Advertising Campaign planning and decision making and organization?

[A].INTRODUCTION:
Planning an advertising campaign
Certain businesses choose to advertise when their target audience is most likely to buy their product or
service. Sometimes this can be seasonal - a toy retailer, for example, will focus much of its advertising
efforts around the run-up to Christmas. If you're selling to other businesses, it's worth identifying when
your customers and potential customers will have the budget to spend.
However, some businesses choose to focus more attention on their quieter times on the basis that the
busier times will naturally see an increase in sales. Advertising during quieter times might mean you
won't have to work as hard to stand out from other competitors, as they won't be advertising, but there
may be fewer customers to target.
DEFINITIONS:
To manage is to forecast and plan, to organize, to command, to co-ordinate, and to control.
Henri Fayol

The needs of large-scale organization have to be satisfied by common people achieving uncommon
performance.
Peter F. Drucker

Gaining a greater market share during these periods could not only help during the busier times - as you
will have already developed a bigger customer base - but will improve your cashflow and minimise your
reliance on certain trading periods.
The reasons behind a campaign
Many businesses launch advertising campaigns simply to boost sales or increase brand awareness.
The launch of a new product will almost certainly require you to step up your advertising.
New businesses will want to consider some form of advertising just to let people know they exist. You
could consider an introductory offer to give people an incentive to visit or call.
Can you plan the campaign yourself?
You need to think carefully about what you want to achieve and the message you want the reader, viewer
or listener to take away. Remember - advertising is only effective if you reach your target audience with a
message that makes them want to buy or at least find out more.
RESEARCH AND DISCOVERY FOR CAMPAIGN PLANNING
We start the development of every campaign with an initial kickoff meeting to determine our clients
goals and objectives. After we feel as though weve gained a thorough understanding, we begin to do the
necessary research that will inform our marketing or advertising strategy. Successful research often
involves primary research, target audience surveys and interviews with both customers and internal
stakeholders. We also conduct secondary research including competitor analysis. This comprehensive
approach arms us with the information we need to execute an original, dynamic and effective campaign.
STRATEGIC DEVELOPMENT FOR CAMPAIGN PLANNING
Once the research & discovery phase is complete, we move forward with developing the strategy that
will guide our ad campaign. This strategic development occurs on two levels. First, we develop the overarching messaging for the campaign. This is driven by a creative brief, which outlines the objectives,
target audiences and a positioning statement. We also develop the tactical plan that dictates when and
where this messaging will be communicated to the clients target audiences.
EXECUTION FOR CAMPAIGN PLANNING
After the game plan is complete, we begin to execute it. We work at varying levels during the
execution phase. In some cases, we handle all aspects of campaign execution. Other times, a marketing
director or vice president of marketing oversees the execution and we handle creative duties.

MEASUREMENT OF SUCCESS FOR CAMPAIGN PLANNING

Measurement in the form of tracking and analytics is critical both to ensure success of the campaign as
well as to obtain intelligence that lets us adjust a campaign for maximum results. How do we do it?
Campaign monitoring, web analytics, social media monitoring and engagement we have an entire
toolbox full of tactics to help us gauge how well our marketing campaigns are working and this allows us
to continually make adjustments for improvement.
TSGs Marketing Campaign Development Experience
If youre interested in seeing some examples of our ad campaign services including development,
planning and execution, read about some of our recent campaigns planning projects:
MARKETING CAMPAIGN SERVICES FOR AAA MONSTER MILE
TSG recently worked with AAA on a campaign that aimed to give them an opportunity to engage with
NASCAR fans. We created an intensive 30-day social media campaign to encourage fans to interact with
AAA, including online banner ads, custom Twitter and Facebook content and Facebook sweepstakes that
gave entrants the chance to win an Ultimate Raceday Package. We even supported the Facebook
sweepstakes with a comprehensive Facebook advertising campaign. Overall, the campaign was a monster
success! Check out this Monster Mile sweepstakes ad campaign planning project.
MARKETING CAMPAIGN SERVICES FOR THE IRS
We recently worked on a comprehensive marketing plan for a division of the Internal Revenue Service
which included developing materials for, branding and creating excitement around an internal employeebased knowledge management program.
MARKETING CAMPAIGN SERVICES FOR CRTC
For the Chesapeake Regional Technology Council, TSG developed not only a brand for the entire
marketing campaign, but also a comprehensive promotional strategy that included social media, public
relations, digital marketing and traditional marketing (flyers at events, etc) . With our help, the CRTC
was able to raise thousands of dollars for a non-profit organization in need. See our Tech Out the
Lighthouse campaign planning project!
Looking for campaign planning and development services in the Maryland, Washington, DC and
Virginia area? Contact The Sutter Grouptoday! Bring your marketing to the next level with our campaign
planning services.

Decision inventory A comprehensive list of the key decisions that must be made by an
organization, leaders, team, business unit or function
Decision rights model The hierarchy of decision makers or decision-making groups who own the
defined decisions. The model is designed by defining guiding principles, assigning decision-making
accountability, and designing committees and advisory groups
Decision making processes The defined roles and procedures that support delivery of decision
making (e.g., meeting procedures and protocol, issue and action tracking tools, escalation processes)

Steps of Decision Making Process:

Following are the important steps of the decision making process. Each step may be supported by
different tools and techniques.

Step 1: Identification of the purpose of the decision:

In this step, the problem is thoroughly analysed. There are a couple of questions one should ask when it
comes to identifying the purpose of the decision.

What exactly is the problem?

Why the problem should be solved?

Who are the affected parties of the problem?

Does the problem have a deadline or a specific time-line?

Step 2: Information gathering:

A problem of an organization will have many stakeholders. In addition, there can be dozens of factors
involved and affected by the problem.
In the process of solving the problem, you will have to gather as much as information related to the
factors and stakeholders involved in the problem. For the process of information gathering, tools such as
'Check Sheets' can be effectively used.
Step 3: Principles for judging the alternatives:
In this step, the baseline criteria for judging the alternatives should be set up. When it comes to defining
the criteria, organizational goals as well as the corporate culture should be taken into consideration.
As an example, profit is one of the main concerns in every decision making process. Companies usually
do not make decisions that reduce profits, unless it is an exceptional case. Likewise, baseline principles
should be identified related to the problem in hand.
Step 4: Brainstorm and analyse the different choices:
For this step, brainstorming to list down all the ideas is the best option. Before the idea generation step, it
is vital to understand the causes of the problem and prioritization of causes.
For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect
diagram helps you to identify all possible causes of the problem and Pareto chart helps you to prioritize
and identify the causes with highest effect.
Then, you can move on generating all possible solutions (alternatives) for the problem in hand.
Step 5: Evaluation of alternatives:
Use your judgement principles and decision-making criteria to evaluate each alternative. In this step,
experience and effectiveness of the judgement principles come into play. You need to compare each
alternative for their positives and negatives.
Step 6: Select the best alternative:
Once you go through from Step 1 to Step 5, this step is easy. In addition, the selection of the best
alternative is an informed decision since you have already followed a methodology to derive and select
the best alternative.
Step 7: Execute the decision:
Convert your decision into a plan or a sequence of activities. Execute your plan by yourself or with the
help of subordinates.
Step 8: Evaluate the results:

Evaluate the outcome of your decision. See whether there is anything you should learn and then correct
in future decision making. This is one of the best practices that will improve your decision-making skills.

Conclusion
When it comes to making decisions, one should always weigh the positive and negative business
consequences and should favour the positive outcomes.
This avoids the possible losses to the organization and keeps the company running with a sustained
growth. Sometimes, avoiding decision making seems easier; especially, when you get into a lot of
confrontation after making the tough decision.
But, making the decisions and accepting its consequences is the only way to stay in control of your
corporate life and time.

UNIT-2
[3].Media planning and strategy and Developing, Implementing and Evaluation of
Media Strategies?
[A] INTRODUCTION:
The two basic tasks of marketing communications are message creation and message
dissemination. Media planning supports message dissemination. Media planning helps you determine
which media to use--be it television programs, newspapers, bus-stop posters, in-store displays, banner ads
on the Web, or a flyer on Facebook. It also tells you when and where to use media in order to reach your
desired audience
Media Objectives
How is a media plan developed? Media planning is a four-step process which consists of 1) setting media
objectives in light of marketing and advertising objectives, 2) developing a media strategy for
implementing media objectives, 3) designing media tactics for realizing media strategy, and 4) proposing
procedures for evaluating the effectiveness of the media plan.
Let's take a look at the planning process through an example: P&G's launch of the Gillette Fusion
shaving system for men in early 2006. First, P&G's media objectives called for a $200 million media blitz
to reach men in the U.S.

Target Audience
The first objective of a media plan is to select the target audience: the people whom the media plan
attempts to influence through various forms of brand contact. Because media objectives are subordinate
to marketing and advertising objectives, it is essential to understand how the target audience is defined in
the marketing and advertising objectives. The definition may or may not be exactly the same, depending
on the marketing and advertising objectives and strategies.
Demographics and Psychographics
The target audience is often defined in terms of demographics and psychographics. Syndicated research
services such as Simmons Market Research Bureau (SMRB or Simmons) and Mediamark Research Inc.
(MRI) provide national data on a number of demographics of U.S. consumers, including gender, age,
education, household income, marital status, employment status, type of residence, and number of
children in the household. Using demographic variables, for example, the target audience of a media plan
could be "individuals who are 26-to-45 years old with yearly household income of $50,000 or more" or
"all households with children age 3 years or younger."
Generational Cohorts
In addition to demographics and psychographics, generational cohort is another useful concept for
selecting the target audience. Because the members of a particular generational cohort are likely to have
had similar experiences during their formative years, they maintain analogous social views, attitudes, and
values.
product and Brand Usage
Target audiences can also be more precisely defined by their consumption behavior. Product usage
includes both brand usage (the use of a specific brand such as Special K cereal or Dove soap)
andcategory usage (the use of a product category such as facial tissue or chewing gum). Product use
commonly has four levels: heavy users, medium users, light users and non-users. The levels of use
depend on the type of product. For example, Simmons defines heavy domestic beer users as those who
consume five or more cans in the past 30 days, medium beer users as those who consumer two to four
cans, and light users as those who consume one can in 30 days. For travel, Simmons' definitions are:
three foreign trips per year indicate heavy travel users, 2 foreign trips per year are medium travel users,
and 1 trip per year are light travel users.
Primary and Secondary Target Audience
The target audience in a media plan can be either primary or secondary. A primary target audience is one
that plays a major role in purchase decisions, while a secondary target audience plays a less decisive role.

In the case of video game players, for example, children's requests often initiate a purchase process;
parents often respect their children's brand selection.
The Size of Target Audiences
In the process of defining a target audience, media planners often examine and specify the actual size of a
target audience -- how many people or households fit the definition. Knowing the actual size helps
advertisers to estimate the potential buying power of the target audience. For example, if the target
audience of a campaign is defined as working women 26-to-44 years old who are interested in receiving
daily news updates on their mobile phones, media planners should estimate the number Communication
Goals
After media planners define the target audience for a media plan, they set communication goals: to what
degree the target audience must be exposed to (and interact with) brand messages in order to achieve
advertising and marketing objectives. For example, one communication goal can be that 75 percent of the
target audience will see the brand in television commercials at least once during a period of three months.
Another communication goal is that 25 percent of the target audience will form a preference for a new
brand in the first month of the brand launch.
Media Strategies
Media planners make three crucial decisions: where to advertise (geography), when to advertise (timing),
and what media categories to use (media mix). Moreover, they make these decisions in the face of
budget constraints.
Media Mix Decisions
Which media should the advertiser use? Media planners craft a media mix by considering a budgetconscious intersection between their media objectives and the properties of the various potential media
vehicles. That is, they consider how each media vehicle provides a cost-effective contribution to attaining
the objectives, and then they select the combination of vehicles that best attain all of the objectives.

Geographic coverage

rage

Media Planning -A series of decisions involving the delivery of messages to audiences.

-Goals to be attained by the media strategy and program.
-Decisions on how the media objectives can be attained.
-The various categories of delivery systems, including broadcast and print media.

[4].Evaluation of broad cost print media and other support media?

[A] INTRODUCTION:
"Broadcast Media" usually refers to media such as TV & Radio, hence the term broadcast. Webcasts are
also usually considered broadcast media.
"Print Media" usually refers to hard copy media, such as a newspaper or a magazine.
"Mass Media" usually refers to any type of media designed to reach "the masses". It could be said, for
example, that a movie like Borat is "mass media".

Broadcast and electronic media today are portable sources of entertainment and information distributed
by wired and wireless radio and television stations and networks, sound and video recordings, and the
mobile Internet.
They offer informative and entertaining content of both general and special interest.
Their competitors include the traditional print media: books, newspapers, magazines and newsletters.
However, today many radio and television stations and networks publish digital electronic editions or
versions on the Internet alongside the publishers of books, newspapers, magazines and newsletters.
This coming together on global networks has been called convergence.
Radio

Radio media transmit audio content wirelessly.

Radio broadcasting is one-way communication to a broad audience.
There are more than 12,000 radio stations in the U.S.

Radio stations can be linked together in networks.

Their content can be information and/or entertainment.
Program content can be produced quickly.
Broadcasts of audio content also can be sent via cable, satellite and the Internet.
Most radio stations broadcast music although some transmit news, sports, talk and religious
programs.

Television

Television media transmit audio and video content wirelessly.

Telecasting is one-way communication to a broad audience.
There are more than 2,000 television stations broadcasting in the U.S.
Their content can be information and/or entertainment.
Program content can be produced relatively quickly.
Hundreds of channels also are available to subscribers via cable and satellite.
Television stations can be linked together in networks.
Broadcasts of audio and video content also can be sent via cable, satellite and the Internet.

Audio Recordings

Sound recordings of music are produced by the music industry.

There are more than 20,000 record labels.
Most music is distributed via the digital Internet.
Billions of copies of music recordings have been sold.
Non-music sound recordings include speeches, sermons, sound effects, advertising, spoken word,
etc.

Video Recordings

Video recordings are produced by the video production industry.

Hundreds of millions of video recordings have been sold.
Video recordings have been delivered on tape and disc and now via Internet download and
streaming.
The contents of video recordings have included movies, TV shows, commercials, speeches,
corporate videos, event videos, wedding videos, special-interest videos, etc.

Mobile Web or Mobile Internet

Mobile Web and Mobile Internet employs a Web browser on a mobile device such as a smartphone,
laptop or tablet computer to access the Internet via a wireless network.

The Seven Mass Media

1.
2.
3.
4.
5.
6.
7.

Print media - books, newspapers, magazines, newsletters

Recordings media - music, records, tapes, cartridges, cassettes, discs
Film media - cinema, movies, tapes, cassettes, discs
Radio media - music, information, drama, comedy, wired, wireless
Television media - drama, comedy, music, information, wired, wireless
Internet media - websites, downloading, streaming
Mobile media - websites, downloading, streaming to cellphones and laptops

The fourth and fifth media are referred to as broadcast media.

The sixth and seventh media are referred to as digital media.

Each medium has its own content, creative artists, technicians and business model.
The Seventh Mass Medium

is personal
is always with you
is always turned on
is at hand when you have creative inspiration
captures the social context of media consumption
allows augmented reality in media
comes with a built-in payment mechanism
gives an accurate audience measurement

The seventh mass media channel sometimes is referred to as the fourth screen:

1.
2.
3.
4.
5.
6.
7.
8.
9.

Film was the first screen

TV was the second screen
Personal computers were the third screen
Mobile is the fourth screen
How you will evaluate the broadcast, print & support media.

Evaluation of Advertising Media:

1) PRINT MEDIA:Print media is also known as press advertising. It is one of the media of communication also with
broadcast media and outdoor advertising media. It mainly include the advertisement through
newspaper and magazines. Print media is mainly of two types:10. a) Newspaper
11. b) Magazines & Jurnals
12. a) Newspaper: - Newspaper are brought largely for their news values. Newspapers are
13. published in various languages. In India, maximum newspapers are published in Hindi

14. and English. Newspapers include following types of advertisement:

15. Local Advertisement
16. National Advertisement
17. Classified Advertisement
18. Special Ads and Inserts Advantages
19.
20. Advantages
21. Wide cov erage
22. Lo w cost per reader
23. Flexibility
24. Quick delivery of message
25. Geo graphical Selectivity
26. More Credibility
27. Most Suitable for Comparative Advertising.
28.
29. Disadvantages
30. Short life span
31. Limited coverage
32. Advertisement Overload
33. Poor Production
34. Wasteful Circulation
35. Proves Costly if Number o f Customer is less
UNIT-3

[5] The advertising Agency functions?

[A] INTRODUCTION:
Functions of advertising agency
Advertising agency is an independent service-rendering organization. It delivers various services and
performs many functions for its clients, who are advertisers. It is mainly involved in activities
like planning, preparing and placing of ads in media. It also performs non-advertising functions for them.
It offers them advisory and creative services. It does so to make a profit.
Following image depicts the major functions of advertising agency.

Eleven main functions of ad agency are as follows:

1. Attracting clients,
2. Research function,
3. Advertising planning,
4. Creative function,
5. Media selection,
6. Advertising budget,
7. Coordination,
8. Sales promotion,
9. Marketing research,
10. Non-advertising functions, and
11. Public relations.
Now let's discuss above main functions of an advertising agency.

1. Attracting clients
Advertising agency needs clients (advertisers). Without them, it cannot survive.
Ad agency always tries to attract clients usually by giving ads in trade journals. It also seeks their
attention by offering them various services. It offers expert, cheap and quick services. It maintains good
relations with them. It tries to give them full satisfaction. It strives harder to attain their goodwill and
customer-loyalty.
2. Research function
Advertising agency gathers information related to the client's product.
It collects following information about a product under its research function:
Features, quality, advantages and limitations of a product,
Present and future market possibilities,
Competition in the market,
Situation in the market,
Distribution methods,
Buyers' preferences, so on.
Ad agency analyses (studies) all this collected information properly and draws conclusions for its
research. It helps in planning an advertising campaign, selecting proper media and creation function.
3. Advertising planning
Advertising agency plans the entire ad campaign of its client.
Advertising planning is a primary function of an ad agency. It is done when its research function is
completed. That is, after analyzing the client's product, its competitors, market conditions, etc. It is done
by experts who use their professional experience to make a result-oriented advertising-plan.
After making the advertising plan, it is shown to the client. If the client likes and approves it, then the
plan is executed (put into action).
4. Creative function

Advertising agency put the advertising-plan into action under its creative function.
Creation of ads is the most important function of an ad agency. Generally, it involves activities like:
Copy writing,
Drawing photographs,
Making illustrations, layouts, an effective ad message, etc.

These jobs are done by experts like copy writers, artists, designers, etc. These people are highly skilled
and creative. They make an advertisement more appealing. Attractive ads help to increase the sales of the
product.
The ad agency must always use fresh ideas for creating ads. It must neither use old tactics nor copy the
ad-campaign of other products.
5. Media selection
Advertising agency helps an advertiser to select a proper media (ad platform) to promote his
advertisement effectively.
Media selection is a highly specialized function of an ad agency. It must select the most suitable media
for its client's ad. It must choose media, which has a potential to give best results for the lowest cost. It
must select more than one media for the ad. For example, an advertisement can be put on television, the
Internet, newspapers, magazines, etc.
After selecting the media, the ad agency must maintain goods contacts with the media.
6. Advertising budget
Advertising agency helps an advertiser to prepare his ad budget. It helps him to use his budget
economically and make the best use of it.
Without a proper advertising budget, there is a risk of client's funds getting wasted or lost. If an advertiser
suffers a loss, he may not bring new projects. As a result, there is a possibility of losing a potential client
that can bring more business to an ad agency.
7. Coordination
Advertising agency brings a good coordination between the advertiser, itself, media and distributors. This
is a very important function. If coordination is proper, it will increase the sales of the product.
8. Sales promotion
Advertising agency performs sales promotion. It helps an advertiser to introduce sales promotion
measures for the dealers and consumers. This helps to increase the sales of the product.
9. Marketing research
Advertising agency helps its clients to solve their marketing problems. It does so by conducting a
marketing research for them.

10. Non-advertising functions

Advertising agency also performs many non-advertising functions:

It fixes the prices of the product,

It determines the discounts,
It designs the product,
It also designs its package, trade marks, labels, etc.
These non-advertising services help an advertiser to increase its sales.
11. Public relations
Advertising agency does the public relations (PR) work for its clients. It increases the goodwill between
its clients and other parties like consumers, employees, middlemen, shareholders, etc. It also maintains
good relations between the client and media owner.

[6].What is the Establishing Objectives and Budgeting for Advertising?

[A] INRODUCTION:
Advertising?
The rule of business is that whatever they are investing is giving them any benefits or is it just the sunk
cost. Marketer wants to know that advertisements belong to which category. First we should know why
do we need advertisements? Advertisements make the people aware of the product. If Wilsdorf had never
advertised about that Mercedes Gleitze wore Rolex watch while swimming across the English Channel,
no one would know that Rolex came up with the latest technology of waterproof watches. Advertising
about delivering/ communicating what a company can offer to its consumers through various products
and services. It reinforces the products message.
What is the significance of advertisements?
The answer to this question could be explained through the picture of two fishes in two different pots. If
we assume the two pots are different companies and both of them have equal number of consumers. Pot
B has advertised about the products by providing more and more information may be it has more to offer.
Pot B can attract the consumer of the other company as they fail to make aware their consumer how their
brand is different from the other and what more they can offer.
What is the Value of the Advertisement?
It is very difficult to determine the value of the advertisement. The success can be measured by marketing
and communication objectives. Then what is the value of objectives? It will guide to develop the
integrated marketing communication program. It is very essential to set the realistic objective and

sometimes companies dont recognise the value to set the specific objectives for their program and fails
in order to achieve their goals.
To set the objectives communication plays a vital role. The interaction and sharing of the ideas among
the group makes easier to set objectives accurately. There should be coordination within the company and
the advertising agency while making plans for advertisement and promotion of the brand/product/service.
If there are more parties then they should be involved too wherever necessary.

All phases of a firms promotional strategy should be based on establishing objectives, including
budgeting, creative, media decisions, direct marketing, public relations, sales promotion, and re-seller
support. These objective can also enables the decision making process easier. There will be many options
and management will make choices based on which of the particular strategy matches the firms
promotional objectives.
Objectives provide benchmark, by which one can analyse the success or failure of the promotional
campaign.
One of the characteristics of good objective is that they are measurable. By the measuring property of the
objective can specify the method, evaluate how well the promotion program is working and how
effective is the marketing communication program is.
The other character of good objective is the specified target audience. The target audience could be
segregate on the basis of geography, demographics, and psychographics and behavior patterns.
Then to determine the target markets present position one should set the benchmark measure. The
benchmark could be on different parameters like awareness, knowledge, image, attitude, intention and the
how frequently the advertisements should be changed so as to have an effective impression on their
minds.
Lastly, specified time period is the characteristic of good objectives. Depending on the situation an
advertisement could run for a month or for a year. One should understand the target audience demand for
new advertisements.
How do we determine the promotional objectives?
Marketing objectives are built upon the foundation of thorough situation analysis and hence the
marketing plan is developed. The evolution of promotion objectives is from the companys marketing
plan and it exists in its marketing objectives.

Marketing objectives are defined in terms of specific, measurable outputs (sales volume, market share,
profits, and return on investment). They should be quantifiable, realistic and attainable. However the
integrated marketing communications objectives are based on certain communication tasks. It should
align with the message that is to be delivering to the target audience. The company should be able to
translate their marketing goals into communication goals and promotional objectives. The primary role of
IMC is to communicate the brands knowledge and interest, favourable attitudes and image and purchase
intentions. Consumer will not necessarily respond immediately therefore advertiser should provide most
relevant information and create favourable disposition towards brand before they react.

Some of the managers consider that the promotional program is sales oriented objectives. For them if the
firm has spent money on advertising and promotion it should influence the sales. There are many factors
that influence the sales.

Sometimes advertisements play vital role in companys marketing program and then sales oriented
objectives help. They refer advertising and sales promotion as the key determinants of brands market
share. Sales may not play a vital role but managers are needed to keep a closer eye on the sales and
market shares and make changes in the promotional programs if needed.

Sometimes advertisements play vital role in companys marketing program and then sales oriented
objectives help. They refer advertising and sales promotion as the key determinants of brands market
share. Sales may not play a vital role but managers are needed to keep a closer eye on the sales and
market shares and make changes in the promotional programs if needed.

There are various steps in the Lavidge and Steiner hierarchy of effects model as the consumers is made
aware of the product through advertisement to the time he makes a decision to buy a particular product.

What is DAGMAR? What is the relevance of this model in this chapter?

DAGMAR: Defining Advertising Goals for Measured Advertising Results.

1)
2)
3)
4)

It was developed by Russell Colley in 1961. This model is important to the

development of specified advertising goals and measuring advertising effectiveness.
There are four hierarchical steps: Awareness, Comprehension, Conviction and action. (Same is describe
through the diagram below)
Few criticisms of DAGMAR Model
Problems with the response hierarchy: consumers may not follow the same sequence
Sales Objectives: it doesnt include the sales of the product which sales oriented company needs
Practicality and Costs: Difficulties in implementing them
Inhibition of Creativity: This model is too concerned with quantitative assessment of a campaigns
impact on awareness, brand name recall, or specific persuasion measures
How do we establish and allocate the promotion budget?
The managers/ company who understand the value of advertisement and promotion rest assume it to be
an expense instead of investment. Most of the models used to establish advertising budgets can be
categorized as taking an economic or a sales response perspective
Marginal Analysis: as the expenditure increases for advertisement and promotion the sales and gross
margin increases too to a point.

Sales Response Model: there are 2 models under this; Concave Downward Function and S-Shaped
Response model.
Concave Downward Function Model talks about the diminishing law of microeconomics. The amount of
advertisement increases, its effect on consumers decision decreases. The S-Shaped Response Curve says
after certain amount of investment, the advertising and promotional efforts show the effect and the sales
increases.
Budgeting Approaches:

Top-Down Approaches: In this approach a budgetary amount is established and hen the monies are
passed to many departments. This approach includes
a)
The Affordable Method: The firm allocate the amount to be spent on all operations of a company apart
from advertisements and promotions; only leftover is allocated to these departments.

b) The Arbitrary Allocation: In this approach the firms allocate the

budgetary amount without any theoretical knowledge just on the intuitions.
c)
Percentage of sales: The budgetary amount if allocated on the basis of the sales of the product
d) Competitive parity: The managers allocate the budget by matching the competitions percentage-ofsales expenditure. The advantage of this method is that it uses the collective wisdom, takes competition
into consideration which establishes the stability in the market.
e)
Return on investment: The advertisements and promotions are considered as investment and these
firms expect return in terms of more sales.

2) Bottom-Up Approaches: It is more effective tool than the previous

approach. In this approach both the communication objectives and promotional objectives go hand in
hand.
a)
Objective and Task Method: It consists of three steps- by defining the communication objectives to
attain; by formulating the detailed strategies and tasks needed to accomplish them; assessing the costs
associated with performance of these strategies and tasks.
b) Payout Planning: In this method, first the firm will analysis the basic idea of the revenues generated
and the cost incurred in 2 or 3 years; and accordingly allocate the budget.

c)

Quantitative Model: In model uses the quantitative statistical technics to determine the relative
contribution of the advertising budget to sales.
When the managers determine the budget for advertising and promotion, they should consider many
other factors. Market size and potential, agency policies and preferences of the management do influence
the decision made in this regard.

UNIT-4

[7].Sales promotion Incentives to middlemen incentives to consumer?

[A] INTRODUCTION:
Although most marketers of consumer products focus on the retail market, many with desirable products
have discovered the almost $20-billion corporate market for incentives, gifts, and promotional products.
While there are important distinctions between incentives and promotional products, both markets are of
interest to any company whose products are used by

consumers. This article is designed to help companies explore and profit from the corporate market for
incentives and promotional products, and to teach managers and employees about this important, often
overlooked marketplace.
TABLE

OF

CONTENTS

Key Definitions
Scope of the Market
Today's Buyer
Resources Required
What it takes to Succeed
Sales and Marketing
Taxes and Legal Issues
Potential Competitors

Types of Suppliers
Directories of Suppliers
Associations
Conferences and Trade Shows
Seminars
Research
Books
Publications

KEY DEFINITIONS

incentive: any special offer used to spur an action by consumers, middlemen, salespeople, or
employees; can include cash, merchandise, travel, or services. Merchandise commonly used as
incentives includes high- or low-ticket goods desired by consumers, ranging from home
entertainment systems to windbreakers. Since the purpose of the incentive is to spur people to
action, it must be something that people desire; it usually has no imprinting or engraving. Prices
range from as little as $5 in consumer offers to thousands of dollars in programs for salespeople,
middlemen, or employees.

premium: any type of merchandise used as an incentive; in most cases, incentives and premiums
are used as part of a broad sales, marketing, or compensation program that has specific objectives
and a definite beginning and an end.

promotional products (also known as ad specialties): in contrast to incentives and premiums,

promotional products are given away with little expectation of immediate action on the part of the
recipient; they almost always bear a visible corporate imprint used to convey the giver's identity.
The most effective promotional products aren't designed to motivate but serve some sort of
purpose that maximizes their long-term visibility and marketing impact by, for example,
providing top-of-mind awareness and brand-building benefits. Examples of promotional products:
apparel, mouse pads, calculators, clocks and watches, and low-cost electronic items. Many
companies use promotional products on a year-round basis as part of consumer or employee
programs.

recognition awards: gifts or services given to employees or customers as a thank-you for

performance not related to an incentive program; they can range from low-priced commemorative
items like jewelry to heirloom wall clocks.

Return To Top
SCOPE OF THE MARKET
There hasn't been a comprehensive study of the incentive industry since the beginning of the decade, but
estimates put travel and merchandise sales at around $29 billion in 2005. The promotional products
industry, which has significant overlap with incentive merchandise, posted $18 billion in sales in 2005,
finally regaining the ground the industry lost with the recession and the fall-out from 9/11, according to a
study by Promotional Products Association International. U.S. businesses put those billions to work to
motivate consumers, employees, dealers, and salespeople (see Research). Businesses use incentives to:

motivate employees to work toward a common goal;

recognize performance;
get people to make a purchase they might not otherwise make;
reinforce a marketing message.

Noncash awards, such as merchandise, are used to avoid the pricing or compensation issues raised by the
use of cash. Merchandise is also used by companies and organizations in consumer promotions, such as
gift-with-purchase offers, contests/sweepstakes, self-liquidators, and continuity programs.
The Incentive Federation Survey of Motivation and Incentive Applications (2005) showed that most
American businesses deployed incentives in more than one way. These were the four basic ways
corporations used merchandise and/or sales incentive travel:

83 percent use travel and/or merchandise as sales incentives; they are given to sales management,
internal and external sales forces, dealer and distributor salespeople, independent sales reps and
sales support workers.
72 percent use these incentives for non-sales recognition and motivation; these programs include
safety, productivity, quality control, suggestion boxes, training/self improvement programs, ride
share, team work and attendance.
68 percent use them for consumer/user promotions for both products and services.
49 percent use them in dealer incentive programs where incentives are given to dealer principals,
distributors and wholesalers.

Cash is undoubtedly a motivator, but incentive professionals depend on the added-value their products
and services bring to justify their existence. Consider the Incentive Federation study, which interviewed
managers and executives from every size of American business including 18 percent who had more than
1,000 employees. The study seems to bear out the notion that cash is not king:

Nearly 80 percent of respondents say that travel and merchandise awards are remembered longer
than cash awards; in fact, 60 percent of employees see cash as part of their compensation package,
the respondents say.
Almost two-thirds of respondents say cash awards are remembered the shortest time.
About three-fourth agreed they can build a more exciting, memorable program around travel or
merchandise than cash."

According to The Incentive Federations 2005 study, buyers evaluated incentive programs the following
ways:

74 percent based success on total units or dollars sold

55 percent related success to profits on incremental sales
41 percent said it was increased market share
32 percent said it was the cost of the program as a percentage of incremental sales
7 percent said it was percent of partipants who reached their goal or quota.

TODAY'S BUYER
When it comes to incentives and promotional products, today's corporate buyer is not a purchasing
manager but a midlevel manager in sales, marketing, operations, customer service, production, training,
human resources, or product management who has the responsibility of motivating and recognizing key
people. Because of downsizing, the typical buyer has many duties that have little to do with incentives
and promotional products. In addition, many of these companies are only occasional buyers of incentives
and promotional items, and it's impossible to predict whether their orders will be large or small.
To make things more confusing, the market is filled with several types of middlemen with different levels
of involvement. These include incentive representatives, promotional products distributors, incentive
companies, retailers, meetings services companies, and promotion and advertising agencies (see Types of
Suppliers). Many of these companies have only sporadic involvement with various aspects of the
corporate market. Nevertheless, corporate customers still require current product and pricing information,
color spec sheets suitable for reproduction, access to samples, and other promotional support.
(Enlightened buyers pay for samples, often with a special credit when the business comes in.) Most
significantly, buyers demand the same high level of customer service that a major retail account requires
without necessarily offering the opportunity for a long-term relationship.
Return To Top
RESOURCES REQUIRED
Because there are 20,000 to 25,000 decision-makers and decision-influencers involved with significant
orders for incentives and promotional products, they can be sold and marketed to relatively inexpensively
(see Sales and Marketing). However, while the benefits of advertising, trade shows, e-mail, and direct
mail can be enjoyed for a relatively small budget, it requires a qualified sales manager with adequate
support to capitalize on the opportunity.
WHAT IT TAKES TO SUCCEED
Not just any company can make it in the incentive or promotional products business. Success starts with
having a product or service that people want. After all, how many people can you motivate, recognize or
communicate with using something like a pipe, a ball bearing, or a toilet bowl plunger? Suppliers that
succeed usually sell something that is (a) desired by at least an identifiable demographic group and (b)
has demonstrated that success at retail. Most companies, in fact, get into the corporate market simply
because some organization calls and asks to buy a large order for a business purpose. Despite the

potential, success doesn't come easily in incentives and promotional products. The highly fragmented
distribution of corporate business has frustrated many major suppliers, some of which have abandoned
the marketplace simply because they initially threw more resources than justified at an elusive target.
Here are the issues that your company has to address before expanding its effort in the corporate market:

Who wants your product? What demographic group or audience buys and enjoys the product or
service your company sells? Is it a large market? Difficult to reach? Answers to these questions
will help define your market potential.

Product positioning. Where do your products fall in the corporate marketplace? Would they be
used as gifts, recognition awards, promotional products, or items for sale in company stores? If
useful as incentives, would they work as prizes in sweepstakes or as high-end awards for
salespeople, dealers, or employees? Are they, perhaps, better suited for lower-priced awards,
midlevel awards, or even lower-priced items used in consumer promotions? Many companies
have products that fall into more than one of these categories.

Adaptability to the marketplace. Can your company handle the special requirements of the
incentive and promotional products market? Examples: having to offer multitiered pricing to
middlemen and end-users; using multiple distribution channels; meeting erratic and difficult-toproject volume and timing demands; having to live with big swings in order sizes and little or no
discernable seasonality. If a major corporate user depends on having a large quantity of your
company's products or services available at a certain time, you can't simply delay the order
because of demands made by a major retail customer. Management will also have to live with the
fact that a program sold this year may not result in actual redeemed sales until a year
later. Tip: Determine the average order size your company is prepared to handle. The corporate
market offers some high-volume prizes but also lots of small orders flowing through numerous
sources.

Going to market. Major companies with the most desirable products use incentive
representatives to reach customers in the corporate market (see Types of Suppliers). Others sell
primarily through promotional products distributors. Some sell direct. Most do all of the above
but won't necessarily admit it. However you decide to go to market, remember that success lies in
identifying the key people most likely to buy and resell your product or service, and giving them
meaningful benefits for doing business with you.

Developing the appropriate strategy. This step should precede the process of selecting specific
tactics. The tactics you use will depend on your overall plan, market positioning, and distribution
channels. The strategy should spell out such things as reasonable goals, market opportunity,
unique selling proposition, current and future market positions, projections, and methods of going
to market. Most of all, it must define your market positioning as specifically as possible.

Can you devote the necessary resources to the market? Many companies send a lone manager
out into the corporate business (often called special markets) with little in the way of staff or
marketing support. Others spend too much in wasteful marketing and end up abandoning the
market for the wrong reasons. The incentive and promotional products market demands more in
the way of management, sales and marketing savvy, and expertise than it does money, but savvy
and expertise sometimes are the rarest commodities of all.

Develop an account-based strategy. Since relatively few companies will make up a huge
percentage of your organization's revenues in this marketplace, every sales and marketing effort
should be entered in a continually updated database of your best prospects. Companies using
account-based management get far more mileage from advertising, trade shows, and direct mail
because they are able to translate the marketing into measurable sales.

How is your follow-up? Most companies in the corporate marketplace spend considerable sums
on advertising, direct mail, and trade shows, and almost nothing on making sure the leads are
followed up, tracked, and acted upon. Lead follow-up is so tedious and seemingly unproductive
that most salespeople would rather not do it at all, so you will have to consider outsourcing the
process or hiring part-time salespeople to do the job. Lead follow-up not only helps you find
golden opportunities amidst the considerable number of poor quality leads generated by any
marketing effort but enables you to determine your cost-per-customer, the best index for use in
determining how to apply your marketing dollars.

Return To Top
SALES AND MARKETING
Compared to most consumer markets, the incentive and promotional products businesses are relatively
inexpensive to penetrate in terms of sales and marketing dollars. The Internet and sales automation
software have reduced costs even more. The basic sales and marketing procedures differ little from those
that prove successful in any business-to-business situation. The best approach is to integrate print
advertising, permission-based e-mailing, direct mailing and other media you might chose into a
coodinated, consistent campaign. This includes the following:

Advertising. While not necessarily required, advertising offers a rapid way to get known in the
incentive and promotional products business. Advertisers that have a system for conscientiously
following up leads will invariably see their advertising break even, and they may even come out
several dollars ahead.

Direct mail. Because most corporate customers buy on an occasional basis, any type of responseoriented advertising yields relatively little return. There are few offers that will get a company to
do an incentive program when they don't want to do it. Direct mail in this business works best
when targeted at a specifically defined prospect list and fortified with useful information and
added-value offers that encourage people to sample the product.

The Internet. An attractive, easy-to-use Web site and an effective, permission-based mass e-mail
campaign might be the most cost-effective way to reach buyers.The Internet can also improve the
buying experience. Many Web sites are now selling logoed merchandise online, offering the
incentive buyer the chance to upload a logo, order products and pay over the Internet.

Trade shows. Because most of the industry's key middlemen and buyers go to The Motivation
Show at McCormick Center in Chicago in the fall or to the New York Premium Incentive Show
in the spring, suppliers who know how to exhibit can more than pay for their investment at these
shows. They also get invaluable names of future prospects and get the critical face-to-face contact
that has become increasingly difficult to get through sales calls. Critical steps for success include

a pre-show marketing plan to make sure buyers know you're there; some sort of at-show visibility
to direct them to your booth, and a post-show program to reach buyers looking for merchandise
throughout the year. Most important of all, however, is a lead follow-up program.

Lead follow-up. Most companies fail to follow up effectively on leads generated from
advertising, direct mail, and trade shows. Why? Nobody wants to do it. Most leads generated
from marketing efforts are not serious prospects, and many involve tedious phone-tag and calls
that go nowhere. However, the benefits of effective lead follow-up warrant finding a solution: If
only two leads in ten represent viable prospects (the average return of the best marketing
program), you can more than pay for your marketing investment and build a long-term,
continually updated database of serious prospects.

Database management. If your company doesn't use a contact- management program, you are
missing out on the lowest-cost way to identify and focus on the people most likely to buy. (The
software can be as basic as ACT, Maximizer, or Gold Mine.) By having your salespeople using
their contact-management programs and uploading their databases regularly into a central
location, you can significantly reduce your costs by identifying the organizations most likely to
buy your products and services, then communicating systematically with them.

Relationship-building. Many companies that manage to come up with a good database of serious
prospects do little more than send out brochures or trade show invitations. Savvy marketers go a
step further and send out informative newsletters or other forms of communication on a regular
basis. By providing potential customers with useful information in a concise, benefits-laden
format, you stand a better chance of being chosen when people are in a buying mode.

Long-term sales follow-up. Most suppliers leave it to salespeople to keep up with prospects;
often, there's no consistent plan for long-term follow-up. Developing a means of consistently
following up with prospects can pay off handsomely, since these are the people most likely to
buy. This sort of follow-up often can be provided by the same organization charged with doing
initial lead follow-up.

Integrated solutions. A growing number of suppliers, recognizing the need for an integrated,
multi-touch strategy to engage prospects and convert them into buyers, are turning to more
sophisticated customer relationship management (CRM) programs or a permission-based
integrated marketing and communications program like Solata (www.solatatech.com). Programs
like Solata offer even greater advantages. By having salespeople use their contact-management
programs to collect data and uploading their databases regularly into a central location, you can
significantly reduce your costs by identifying the organizations most likely to buy your products
and services, then communicating systematically with them via phone, e-mail and even RSS,
using a centralized contact management system that links with a robust sales- and leadmanagement tool. And with permission-based, integrated e-mail marketing, you have a low-cost
way to reach these potential buyers and update their contact information on a regular basis.

TAXES AND LEGAL ISSUES

From the supplier's standpoint, the most critical legal and tax issues involve sales taxes. Generally,
suppliers are required to levy sales taxes in every state in which they have a "nexus," or place of doing

business. However, the definition of nexus lies in a gray zone, and many states would like to take
advantage of this. Suppliers can avoid sales tax in many cases if they are drop-shipping products to an
out-of-state recipient.
For users of incentives and promotional products, the major issues involve games of chance and products
packaged with food. Federal Trade Commission regulations bar companies from running a promotion
that requires consumers or the trade to pay in order to participate. That is deemed to be a lottery. An
alternative entry vehicle must be offered with any sweepstakes or contest. Likewise, dealer incentive
programs using elements of chance are illegal if they require a purchase, but they are used frequently and
that never seems to attract the interest of the authorities.
Many other elements go into making sure a sweepstakes is legal, of course. The Food and Drug
Administration has regulations regarding shipment of premiums in packages of food. The use of
premiums with products associated with children requires great care. There are also many state
regulations involving use of premiums and incentives by gas stations and certain other industries, such as
pharmaceuticals, insurance, financial services, liquor, and tobacco. Certain industries have their own
practices. For example, the pharmaceutical industry agreed in 2002 not to give any incentive merchandise
to doctors unless the product could be used in the doctors' practice.
Companies may deduct up to $25 per person per year for incentives or business gifts. Generally,
imprinted products costing $4 or less are not counted toward that $25. Employers can deduct even greater
amounts for most employee achievement awards used for safety or length-of-service programs.
Companies can deduct $400 per employee per year as long as they meet certain rules, which mostly
forbid the use of these awards to replace compensation. A written plan approved by the IRS can allow up
to $1,600 deductions per employee per year. Deductions are generally not allowed for achievement
awards in the form of cash, travel or gift certificates. The IRA outlines rules in Section 274(j). The
Incentive Marketing Association has more information on taxes here.
Generally, if an employer keeps awards within the deduction limit, the awards are not taxable as income
on the employee's return. But many awards are considered taxable income for the recipient. Employers
are required to send an employee a Form 1099 form if the total of taxable awards is $600 or more.
Return To Top
POTENTIAL COMPETITORS
Other consumer products manufacturers may have "special markets" departments specifically designed to
handle the needs of corporate customers seeking volume orders of products for use in incentive
programs, meetings, training programs, as gifts, or for other company use. If they are doing the job right,
they have people on staff who understand corporate incentive needs, such as drop-shipping of
merchandise to recipients, wholesale prices, electronic art, and the critical need to have the merchandise
available when the client's program requires it.
Retail direct mail catalogs often offer gift certificate programs for the incentive business. Volume
discounts generally are available through corporate sales departments, along with dropshipping services.
Debit cards. The low cost of electronic point-tracking makes it possible for leading credit card
companies, such as American Express, Visa and MasterCard, to work in partnership with incentive
companies offering debit cards as employee and customer rewards. These programs offer a powerful

target marketing opportunity that make them highly appealing for incentive users and promise to garner
significant market share in the years to come. This will not reduce overall sales of merchandise for
corporate use but will shift it into traditional retail outlets where debit cards are used.
TYPES OF SUPPLIERS
The type of supplier you sell through depends on the precise nature of your product or service, and its
position in the marketplace. Obviously, companies whose products are most suitable as premiums and
recognition awards will use a strategy somewhat different from one focused mostly on promotional
products. Lists of incentive representatives, and other middlemen and agencies, are published in
SupplierFinder.com, the online directory of The Motivation Show, and the annual directories
of Incentive and Potentials magazines.
Incentive representatives are sales agents for the 1,000 or so top consumer products companies that sell
directly to corporate end-users and agencies, usually at wholesale prices (they are compensated by
commission from the manufacturers). Each representative usually handles between 30 and 50 product
lines, and covers a designated region of the country. There are probably between 200 and 300 incentive
representatives in the U.S. Most belong to the Incentive Manufacturers Representatives Association
(IMRA), which offers a free directory of representatives (see Associations). The relatively small number
of top incentive representatives and the large number of suppliers that want their attention make it
impossible for all but a few suppliers to use this channel.
Promotional products distributors (also known as advertising specialty distributors) can obtain and
sell just about any type of product from a key chain to a TV set. They act as middlemen and, depending
on the added-value services they provide, mark up the wholesale prices they receive from manufacturers.
Depending on the company, these services may include design, imprinting, communications, and
fulfillment. The number of advertising specialty distributors in the U.S. numbers more than 20,000, and
most are small companies; 95 percent have less than $2.5 million in sales. They handle the business of
top companies with huge promotion budgets as well as the thousands of smaller corporate customers that
will never spend more than $1,000 a year on merchandise. While there are thousands of advertising
specialty distributors that also buy programs involving premiums, the average order size is around
$1,000, making this a difficult market for many consumer products manufacturers to reach. Even more
daunting, these distributors might sell as many as 20,000 different items, making it easier for them to be
loyal to their relatively small number of customers than to the thousands of suppliers vying for their time.
To find distributors, look in the Yellow Pages under "Advertising Specialties," or, for a free directory,
contact Promotional Products Association International (see Associations).
Incentive companies range from small shops offering specialized services to large full-service agencies
offering merchandise, training, communications, reporting, catalogs, gift certificates, and travel. These
companies resell merchandise and travel to end-users as part of incentive programs and usually mark up
the products they buy. A few offer their own complete merchandise programs. There are probably no
more than 100 incentive companies in the U.S., and most don't do business with small users.
Promotion agencies range from boutique shops specializing in a few specific types of promotion to
high-powered companies of 100 people or more offering a broad range of services. These companies
often will mark up products, but sometimes they work on a cost-plus basis with their clients. There are
more than 1,000 companies calling themselves promotion agencies; probably fewer than 100 have annual
volume measured in the millions of dollars.
Return To Top

SUPPLIER DIRECTORY

The Motivation Show Directory provides the most comprehensive directory of premium
and incentive product suppliers. To find a supplier, go to #9520, Supplier Finder.
ASSOCIATIONS
For related associations go to the Industry Associations page.
Return To Top
CONFERENCES AND TRADE SHOWS
For a list of Industry Events, go to #9510, Calendar of Industry Events.
SEMINARS

Incentive Marketing Assocation seminars. Two annual seminars produced by IMA address the
basic issues of incentives in a program designed for both suppliers and users. Speakers include
representatives of suppliers, incentive companies, promotion agencies, and companies that use
incentives. Held in conjunction with the New York Premium Incentive Show and The Motivation
Show. Call 630-369-7780.

Motivation Show Seminars will be produced by the Incentive Marketing Association and the
Society of Incentive & Travel Executives (SITE) in conjunction with The Motivation Show in
Chicago. Courses will cover such topics as how to run an incentive program, trade incentive
strategies, employee incentive strategies, consumer promotions, award-winning incentive
programs, gift certificates, and achieving corporate objectives through incentives. Call 630-4347779.
RESEARCH
Relatively little research exists in the field of premiums and incentives. Following are studies that
provide useful information for those in the business:

Federation Study 2005: Incentive Federation Survey of Motivation and Incentive

Applications looks at how incentive buyers used incentives and what media they used. The study
looks at the four basic incentive programs (consumer promotions, dealer incentives, sales
incentives and non-sales recognition motivation) and examines what worked best for each
program in terms of how the program was communicated to the target audience, who provided the
merchandise and what products were used. The research also examines what incentive buyers
thought of as an incentive, how they judged a programs success, and the extent they were using
the Internet to run their programs. Available here.

A Study of the Incentive Merchandise and Travel Marketplace (2001) looks at the size and
scope of the incentive industry. Business executives were interviewed about why they did or did
not use incentives, and where they got them if they used them. The Incentive Federation
commissioned the Center for Concept Development, who used Ralph Head & Associates to
design the survey. Available here.

Linking Performance Strategies to Financial Outcomes The Interaction Between

Marketing & Human Resources and Employee Measurement & Incentives surveyed 175
executives about how marketing and human resources efforts affected the behavior of customercontact employees and thus on organizational performance. The study was performed by the
Forum for People Performance Management & Measurement at Northwestern University.
Available here.

Incentive magazines Facts Report 2006 Merchandise looks at budgets of incentive buyers,
per-recipient outlays and product choices. Available here.

Online Incentive Council: Incentive Survey 2005 looks at the use of Internet resources to run
an incentive program and the resistance of some incentive users to the concept. Available here.

The 2005 End Buyer Study provides information on the decision-making habits, technological
needs, purchasing trends and attitudes of promotional products buyers. Published by Promotional
Products Association International, the guide is available for $60 for non-members and $35 for
association members. Call 972-258-3087.

UNIT-5
[8].What is the consumer tools and samples-coupons-price offs?
[A].INTRODUCTION:
Consumer Tools
Informed consumers are usually more difficult for fraudsters to dupe. We work hard to give
consumers the tools they need to conduct research and make informed decisions about insurance.

Complaints
If you are in a dispute with an insurance company or agent in Minnesota and have been unable to
resolve it, we may be able to help.

Enforcement Actions
We routinely take action against companies and individuals for violating the law. Check out your agent
or company's record with us.

License Lookup
Use our License Lookup tool to make sure the company or individual you are or will be working with
is licensed.

Other Insurance Sites

In addition to the information provided on our site, we encourage you to visit other insurance-related
websites such as these.

Be specific: If you're disputing a creditor error, explain how you've dealt with the problem thus
far: "The company claims they never received the check I mailed in March. I called and spoke
with a manager when I first saw the overdue notice."
Be honest: Fudging the details to make yourself sound better has the potential to backfire in
disastrous ways.
Avoid emotion: Disclosing your bout with cancer may help lenders understand your late
payments, but they won't enjoy a sob story. Use straightforward language, like, "I spent the first
four months of 2008 undergoing treatment for breast cancer. Because I was unable to work during
that time, I was late paying a number of bills. Now healthy, I have caught up on all my payments
and am currently in good standing with my creditors."
Don't excuse the inexcusable: "We highly discourage writing, I went on vacation to Bermuda
and forgot to mail the check,'" says Rod Griffin, a spokesman for Experian. "Basically you're
confirming that the account payment was late and that it just slipped your mind. That won't be
helpful."

Call in an expert: If you're worried about wordsmithing 100 words to your advantage, consult a
lawyer or credit counselor.

Coupons are a great promotional tool and provide consumers from all walks of life and countries with
direct, honest and substantial savings. Indeed, over a billion dollars are saved with coupons every year by
savvy consumers. These savings benefit retailers, manufacturers and an entire industry employing
thousands of people across the globe. Ideally, it is a win-win situation and all participants benefit
accordingly.
Unfortunately, as with anything of real value, coupons are subject to misuse and fraud, just like
credit/debit cards, checks, currency and virtually every type of legitimate economic activity. Does this
mean you shouldnt use a credit card or coupon at your favorite store? Of course not! Most people are
honest and the CICs efforts to fight coupon fraud benefit everyone.
You can help the industry and yourself by:
1. Learning more about the legitimate use of coupons-browse our web site for news about new counterfeit
coupons
2. Using coupons as they are intended. We love it when you get a great deal!
3. Being patient with the occasional mistake after all, with billions of coupons in circulation at any given
time and tens of thousands of retailers each employing numerous cashiers, there is bound to be an
occasional glitch.
You can protect yourself from fraud by:
1. Never paying money for coupons. This includes buying coupons from companies/individual who sell
the service of clipping coupons instead of the coupons themselves. (Think about it, you really ARE
BUYING the coupons, yet the business will insist youre not. Does that make any sense? Does it inspire
your trust? Do you really want to provide them with your financial information?)
2. Beware of e-mails (even if they are from your friends and family) that attach coupons for free products
or other offers that seem too good to be true. They are almost certainly counterfeits. Legitimate
coupons are almost never visible on your computer screen.
If you have a hard time using coupons at your local store, suggest that the retailer attend the Association
of Coupon Professionals (ACP) couponing class, preferably in conjunction with the CIC Industry
Summit held every March.
Every month, government economists at the Bureau of Labor Statistics (BLS) of the U.S. Department of
Labor release the latest Consumer Price Index (CPI), which is a measure of the average change over time
in the price paid by urban households for a set of consumer goods and services. The expenditure items
are classified into some 200 categories that are arranged into eight groups (e.g., food and beverages or
medical care). The percent change in the CPI provides a measure of inflation.
The CPI reflects the spending patterns of each of two population groups: all-urban consumers and urban
wage earners and clerical workers, which include professionals, the self-employed, the unemployed, and
poor persons. The all-urban group represents about 87 percent of the U.S. population.
The price-change experience of the all-urban consumer group is measured by the traditional Consumer
Price Index for All Urban Consumers (CPI-U) and the newer Chained Consumer Price Index for All

Urban Consumers (C-CPI-U), the latter of which is closer to a cost-of-living index in that it adjusts for
consumers substitutions among expenditure items in reaction to relative price changes. The CPI-W is
based on the expenditures of households included in the CPI-U definition that get more than half their
income from clerical work and that have at least one earner who has been employed at least 37 weeks
during the previous 12 months. The CPI-W's population represents about 32 percent of the total U.S.
population, and is a subset of the CPI-U.

[9].What is the Sales force promotion?

[A]
A sales promotion designed to motivate the salesforce and make its selling efforts more effective. The
promotion may include bonuses, contests, prizes, or sales rallies

Objectives of a Sales Promotion

Sales promotion is one of the many tools used in a retailers promotional mix. Sales promotional tactics
include contests, coupons, freebies, loss leaders, point-of-purchase displays, premiums, prizes, product
samples, and rebates. Sales promotion may be referred to as "below the line" or "point of sale." For
example, price reductions at the cash register or complimentary gifts with purchases all fall under sales
promotional tactics. The objectives of a sales promotion is to increase consumer demand, stimulate
market demand, to get potential buyers to heed a call to action, increase the size of purchases and
improve product availability using media and non-media marketing communications. Figure 1
Sales Promotion Techniques
Sales promotions can be directed to consumers, sales employees, or other retailers. Sales and coupons are
some of the most common sales promotion tactics to stimulate interest and encourage consumers to
purchase products. Reward programs focus on customer retention and repeat purchases, awarding
customers points, miles, or credits for purchases and future redemptions. Besides price reduction and
loyalty programs, point-of-purchase displays are a common tactic used by brands to prompt "impulse"
customer purchases. For example, chewing gum and candy are often placed next to the register to
increase sales of those products.
Other promotional tools include coupon booklets, mobile couponing, on-shelf couponing, as well as
product signage and packaging, which are strategically placed to encourage immediate customer sales.
For new marketing initiatives, brands implement retail "mechanics" such as Buy One, Get One Free Or
Three for Two promotions to encourage consumers to buy new market releases.

Brands also use sales promotion techniques to encourage supermarkets and stores to stock and display
their products. Some of these trade promotion activities are:
Trade allowances - Short-term incentives offered to retailers to stock up on a product.

Dealer loaders - Incentives used to persuade retailers to purchase and display a product.

Trade contests - Contests used to reward retailers that sell the largest quantity or highest units of
a brands product.
Training programs - Training instructing dealer employees in selling the brands product.
Push money (also known as "spiffs") - Extra commission paid to retail employees to push products.

Trade discounts (also called functional discounts) - Payments to distribution channel members for
performing certain functions.